Thanks to @IvanLabrie who is constantly following and trading FOREX who pointed out this chart to me this morning, but it was so clear I felt it was worth showing all of you. The pattern here is as clear as you want to find in a trade setup. @IvanLabrie caught it nicely in his analysis and here it is plain and simple.
#1 - Start the trend at the lowest price on the chart. #2 - Find the most common price since the low (disregard all price action to the left, initially) #3 - Find the range around the most frequent price (aka - mode). #4 - Project up the range starting from the mode to get a target price. - Enter long when you see range expansion from the mode and a low > mode. #5 - Exit at the target.
You can exit and go short too at the target, but that is another style of trading that you may only want to do once you have piled up some profits first. The best way to sell at the extreme is to wait for the range of trading to contract, as it did in this example yesterday. And you you can sell with 1 average range as your stop loss and target the mid-point of the range initially. You can add to your position as the market falls under the highest low, as it has done today. You want to see "range expansion" to the downside to confirm your trade as soon as possible too, which is happening right now as I type. Range expansion is when the decline today is greater than the range of trading yesterday.
The KEY to this too is the Trend Indicator at the bottom which shows the path of least resistance of the market by looking for this indicator to be on a 2-month high to look for longs and a 2-month low to look for shorts. The key is that selling short up here is a contra-trade to the trend, so you don't get greedy when trading against the trend, rather, you look for fast profits and if they don't emerge, you walk away.
Feel free to send charts to me or to publish charts that set-up with this methodology so we can all find great trades together.
Very Powerful Illustration Once Again. I' m Taking Screen Shots To Print Out. Thank You, Master Chartist!
Timing_is_key
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Hello Tim & Ivan,
This is a great example of Time@mode and is the first time I got the "aha moment" with your method Tim ( and Ivan for spotting it ), very, very interesting guys and a great concept, please correct me if I am wrong, but from what I can see you are timing your entry based upon a rules set around the "Mode" and then exiting based upon a range repeat again using the Mode as the Zero point that you measure from.. I just have a question on entry, once the low is in and above the mode, when do you enter on the expansion bar ie, as it breaks the high's or on close? Thanks guy's for the chart, much appreciated
timwest
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Hello @Timing_is_key, I'm sorry I didn't see your question from a month ago! Feel free to Private Message me with a question if I fail to respond. I didn't mean to be rude. This trade didn't pan out as described since there were no additional confirmations to stay in the trade and it went over the high. So, although this chart and description gives you the majority of the information you need for your setup and executions, I didn't publish the follow up to say this trade wasn't working as laid out.
Timing_is_key
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Thanks Tim, that's ok will follow any future setups you publish
Justiceisfalse
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I can't help but think that this method of analysis is very close to what Gann was doing with squares on properly squared charts.
eb0b1852b8a04587a2caaf3b2b02a1
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Excellent explanation with very clear illustration. Thank you Tim!
EmranFx
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Great Analysis,,,,
Robski
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Thanks, Tim. Perfect explanation! I still need to get in touch with you regarding some questions I have... just been busy with the unpleasantries of life for the past few weeks. Rob.
The_Cannalyst
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Thx for this excellent analysis..here is my opinion about the pair:
We see uptrends of the Pair in every time horizon.
Now the Pair has reached ist MoB-Level @ 1,28, the strong resistance which was tested 2 times without any success.
All good things come in threes!
Because the ultrashorttrend is outbidded, i exspect a tiny dip to the trends lower edge, before the BIG LONG MOVE will appear.
The starting Signal for the Long run are Prices above ist resist @ 1,28.
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