A new Life, A new Career, A new Dream - I am a Trader

[onlinegtrash]

"I was watching on TV how lions hunt and it was really inspirational for us traders. As traders we can learn a lot from the hunting process of big cats. "

Thank God! Lions and tigers in the forest don't have access to a trading account!
They may take over entire finance industry and enslave whole humanity!

Its ironic most traders lose because they can't control their animal brain (i.e fear/greed/impulsiveness etc) and in reality certain type of animals seem to be born traders!

 

[Taiki]

Hello All,

Right now few traders are here trying to incorporating with Lance begg's price action trading style. I am getting questions and pms for explaining my BPB/BOF setups and how I am trading with them. So I will write few setups with charts and explain my trading style. Its nothing new, all the rules can be found on Lance begg's book, and setup methodology can be found on web. There is no new invention from my sides.

Just writing what I have understood out of those context and how I am using it in my day to day trading.

Breakout Pullback/Breakout failure setups

I am using BPB and BOF setups near S/R lines and to trade the breakout from sideways range. When breakout occurs I wait for a confirmation if the breakout is a true breakout or just a false attempt. But both of these setups give good trading opportunity.

My trading frame is 3 min, I follow the candle's pattern in this frame, and define my trade setups, Once price is inside my setup area I switch to 1 min chart for deciding on the entry and exit. My friend Mr. Shasank was facing this difficulties few days back on how to trade the breakout near S/R lines.

Breakout Pullback (NF on July 18 2013)

On 18th July my S/R line was at 6000. Price was in a sideways range of 6000-5980 since morning. At around 1:23 candles in 3 min chart made an attempt of breakout of the S/R lines at 6000. So now price is in my trade area, and here is my candle by candle analysis.

3 min chart (18 July)

Candle A = This candle breaks the the 6000 line and closed above this. This is the 1st symbol I look for in every BPB setup, i:e a candle close above S/R lines in my trading frame (3 min chart)


Candle B = Candle B attempted to move higher but long upper shadow shows the selling pressures coming after breakout. Now I need to wait for a pullback to see if the breakout sustains at higher range or it will result in a breakout failure. Here selling pressures came in from 6006.5. This is my LTP and I would not like to chase price beyond this point if I am missing the entry

Candle C = Candle C is an inverted hammer, and shows the start of a pullback. I am ready now trade in whatever direction my chart will tell me to trade. In case of a weakness in pullback I will go long, and in case of weakness in continuing in the direction of breakout, I will go short.

Candle D = Candle D is a doji, showing indecision.

Candle E = Candle E is the candle where buyers came in below 6000 and the candle closed in green showing confirmed weakness in pullbacks

So far all my observations are going in on 3 min chart, and I have not looked at 1 min chart. Now after the sign of weakness in pullback I am switching to 1 min chart for deciding upon my entry and SL.

Study of 1 min chart (Entry & SL levels)

So if price will now move higher my buy SL order will be placed at 6007, and SL below 5999. I need to see what is the intentionj of price now .

Candle F = But the next candle in 3 min chart fell hardly and is the 1st candle to close below 6000 after the breakout. So chances are there breakout may fail resulting in short trade. In 1 min chart candle F is marked with F1, F2, F3.

The next candle is very important

Candle G = The next candle G in 3 min chart is bullish candle, and in 1min it is marked with G1, G2, G3. It shows buyers came in from 5996 for the 2nd time.
So here I am ready now with my trade area and SL levels.

On downside if price falling now below 5996, then its likely to result in breakout failure (BOF), So I will place my Sell SL order below 5996, and on upside sellers had came in from Candle F's high i:e 6004. So I will place my Buy SL order above this. My LTP on long side is 6006. This range is marked now with yellow dotted lines.

The next 3 candles in 3 min charts are all bullish, and it triggered my Long call. Please note that I used 1 min chart only for deciding the levels of my entry and SL. Once I am done with this part, I switched to 3 min chart for trade management.

@Shasank, in the chart you posted few days back, it seems like you had tried to trade the 1 min chart.

Finally the breakout succeeded and above is the chart for rest of the day. Price rallied beautifully post breakout.

This post only describes the entry, SL in an BPB setup. Trade management is another topic. Will write at some other time.

Regards
Taiki

 

[DanPickUp]

@Taiki

Thanks to invest your very personal time in such educational posts like the above one. It is not self-evident to do so :clapping: The same goes to all other members in the fourm which really spend a lot of there very personal time to educate others.

Take care / DanPickUp

 

[avny]

thanks Taiki........

explained very nicely....:thumb::thumb::thumb:

 

[trade2411]

Hello All,

Right now few traders are here trying to incorporating with Lance begg's price action trading style. I am getting questions and pms for explaining my BPB/BOF setups and how I am trading with them. So I will write few setups with charts and explain my trading style. Its nothing new, all the rules can be found on Lance begg's book, and setup methodology can be found on web. There is no new invention from my sides.

Just writing what I have understood out of those context and how I am using it in my day to day trading.

Breakout Pullback/Breakout failure setups

I am using BPB and BOF setups near S/R lines and to trade the breakout from sideways range. When breakout occurs I wait for a confirmation if the breakout is a true breakout or just a false attempt. But both of these setups give good trading opportunity.

My trading frame is 3 min, I follow the candle's pattern in this frame, and define my trade setups, Once price is inside my setup area I switch to 1 min chart for deciding on the entry and exit. My friend Mr. Shasank was facing this difficulties few days back on how to trade the breakout near S/R lines.

Breakout Pullback (NF on July 18 2013)

On 18th July my S/R line was at 6000. Price was in a sideways range of 6000-5980 since morning. At around 1:23 candles in 3 min chart made an attempt of breakout of the S/R lines at 6000. So now price is in my trade area, and here is my candle by candle analysis.

3 min chart (18 July)

Candle A = This candle breaks the the 6000 line and closed above this. This is the 1st symbol I look for in every BPB setup, i:e a candle close above S/R lines in my trading frame (3 min chart)


Candle B = Candle B attempted to move higher but long upper shadow shows the selling pressures coming after breakout. Now I need to wait for a pullback to see if the breakout sustains at higher range or it will result in a breakout failure. Here selling pressures came in from 6006.5. This is my LTP and I would not like to chase price beyond this point if I am missing the entry

Candle C = Candle C is an inverted hammer, and shows the start of a pullback. I am ready now trade in whatever direction my chart will tell me to trade. In case of a weakness in pullback I will go long, and in case of weakness in continuing in the direction of breakout, I will go short.

Candle D = Candle D is a doji, showing indecision.

Candle E = Candle E is the candle where buyers came in below 6000 and the candle closed in green showing confirmed weakness in pullbacks

So far all my observations are going in on 3 min chart, and I have not looked at 1 min chart. Now after the sign of weakness in pullback I am switching to 1 min chart for deciding upon my entry and SL.

Study of 1 min chart (Entry & SL levels)

So if price will now move higher my buy SL order will be placed at 6007, and SL below 5999. I need to see what is the intentionj of price now .

Candle F = But the next candle in 3 min chart fell hardly and is the 1st candle to close below 6000 after the breakout. So chances are there breakout may fail resulting in short trade. In 1 min chart candle F is marked with F1, F2, F3.

The next candle is very important

Candle G = The next candle G in 3 min chart is bullish candle, and in 1min it is marked with G1, G2, G3. It shows buyers came in from 5996 for the 2nd time.
So here I am ready now with my trade area and SL levels.

On downside if price falling now below 5996, then its likely to result in breakout failure (BOF), So I will place my Sell SL order below 5996, and on upside sellers had came in from Candle F's high i:e 6004. So I will place my Buy SL order above this. My LTP on long side is 6006. This range is marked now with yellow dotted lines.

The next 3 candles in 3 min charts are all bullish, and it triggered my Long call. Please note that I used 1 min chart only for deciding the levels of my entry and SL. Once I am done with this part, I switched to 3 min chart for trade management.

@Shasank, in the chart you posted few days back, it seems like you had tried to trade the 1 min chart.

Finally the breakout succeeded and above is the chart for rest of the day. Price rallied beautifully post breakout.

This post only describes the entry, SL in an BPB setup. Trade management is another topic. Will write at some other time.

Regards
Taiki

Very Very useful post taiki :clapping::clapping:.. Please keep it up and posting more such things when you get time.. I myself was back testing 3 different strategies for breakout and this post indeed is very useful for me..

In the above post the prices came back to 5996 helping you draw 2 yellow lines , but in some breakouts the prices dont come down at all and keep rallying in which case you cant find a lower level (5996) .. What do you do in such breakouts..
One more question.. Do you wait for a the candle to form completely ( 3 min or 1 min) or you start taking action even before the candle gets formed completely ( say 1.5 min candle of a 3 min candle or 30 sec candle of a 1 min candle)
Also what would have your trade been , if the canlde G instead of being a green one was a red one and had fallen further down say by 10 points..

 

[thanibee]

Hello All,

Its nothing new, all the rules can be found on Lance begg's book, and setup methodology can be found on web. There is no new invention from my sides.

Hi Taiki,

Please provide link to the setup methodology.

Thanks

 

[Taiki]

Hello trade2411,

In the above post the prices came back to 5996 helping you draw 2 yellow lines , but in some breakouts the prices dont come down at all and keep rallying in which case you cant find a lower level (5996) .. What do you do in such breakouts..

Yes, few time, the breakout comes so sharp, that price does not pull-back and keep on rallying. For example we can take the example of 30th Aug (Friday) when price rallied and crossed my S/R lines at 5420 at 3:10 PM. There was no pull-back setup available at that time. Here my set-up is breakout pull-back, and my trading style is trading against the weakness. And If price does not show any weakness and does not pull-back, then I will look out for better opportunities. Comparing this scenario to the big cat-hunting example, sometimes the prey saves it life from the predator by running fast, we have to just let it go, not betting too much where all the odds are not in our favour.

Another thing I have to mention here, that is what is a S/R line and why it is there in our trading chart??

A S/R line is a level where price has changed its direction previously in 30 min time frame. These are the levels where big time frame traders come into screen, So these levels are there to tell us that price will behave in a certain way as it has done so in past. So now lets say price is breaking a S/R lines and rallying continuously, it indicates strong demands and buyers are accepting higher price and it is likely to continue unless the sellers have absorbed all the buying pressure. That will be the line where sellers will come in.

Also what would have your trade been , if the canlde G instead of being a green one was a red one and had fallen further down say by 10 points..

In the above example you can seen the candle F fell hardly after a bullish candle E. So few traders would have taken short position there assuming a breakout failure. And price reversed immediately after candle F, and you can see how the short traders are trapped here. Their stops might have been placed above the high of candle B/C. And as price reached that level short players rushed to close their position by buying the NF contract, and how price rallied for the same action.

So if candle G would have fallen more 10 points, then I would have simple waited for my trade setup to form. As I can not rule out the possibility of a reversal just after my short entry assuming a BOF. So I will like to take the trade only from my properly developed trade setup area. As trade setup area is not only a range created by price action, but also an area where my risk is minimum, and odds are in my favour.

One more question.. Do you wait for a the candle to form completely ( 3 min or 1 min) or you start taking action even before the candle gets formed completely ( say 1.5 min candle of a 3 min candle or 30 sec candle of a 1 min candle)

Yes I wait for candle's closing in 3 min chart for price to breakout a level or to observe the weakness in ongoing trend. I do not use 1.5 min, 30 sec candles.

Regards
Taiki

 

[krist]

Thank you Taiki for the detailed explanation of your trade. Now I understand why they say trading is an art.
(Btw, I spent thousands of rupees in a class on learning basics of stock market. And got this valuable lesson for free!!!)
:thanx:

 

[Tlahuicole]

Taiki, all the best for september trades

 

[Taiki]

Trade Setups for 2 sept 2013

30 Min chart

On upside S/R lines are at 5480, 5520, 5600
On downside S/R lines are at 5420, 5350, 5300

3 Min chart

NF reversed quite strongly from day's low and closed near day's high with a strong bullish momentum. We need to see if the momentum is enough to cross the resistance at 5480 an 5520 above which we may see 5600.

Global Index
US and EU markets were closed on red . Asian markets are mixed, with SGX nifty is up by 0.07%. NF may open soft give a test for 5480

Trade Area
1. BOF/BPB at 5480
2. BPB/BOF at 5520
3. BPB/BOF/TST at 5420

Regards
Taiki