Strategy Based On Chart Pattern

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fatdog1
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Postby fatdog1 » Tue Jun 27, 2006 7:34 am

This looks like a breakdown and the third pullback on the 10 minute chart working on the EURUSD.

TRO, what is the tunnel all about and can it be altered to plot a top and bottom once the EURO stops going vertical and begins to go horizontal?


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Postby fatdog1 » Tue Jun 27, 2006 8:08 am

fatdog1 wrote:This looks like a breakdown and the third pullback on the 10 minute chart working on the EURUSD.

TRO, what is the tunnel all about and can it be altered to plot a top and bottom once the EURO stops going vertical and begins to go horizontal?



Let's add in a stronger than expected IFO news announcement to the pullbacks and see what happens:


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Postby fatdog1 » Tue Jun 27, 2006 8:23 am

fatdog1 wrote:
fatdog1 wrote:This looks like a breakdown and the third pullback on the 10 minute chart working on the EURUSD.

TRO, what is the tunnel all about and can it be altered to plot a top and bottom once the EURO stops going vertical and begins to go horizontal?



Let's add in a stronger than expected IFO news announcement to the pullbacks and see what happens:



You have to stick with the sellers once the breakdown happens like Mr. Weinstein says.
Like TRO says, they keep handing out pips if this was the tunnel.
There has to be a way to put this together.


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Postby fatdog1 » Tue Jun 27, 2006 8:42 am

I went to a bar chart to find the breakout line that is acting as support each time the EURUSD sells off:




And as candles:


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Postby fatdog1 » Tue Jun 27, 2006 9:16 am

Here is a fresh bear flag with a breakdown line at 1.2587.
If 1.2575 gives way as support, the next breakout line is 1.2551.


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Postby TheRumpledOne » Tue Jun 27, 2006 5:29 pm

"TRO, what is the tunnel all about and can it be altered to plot a top and bottom once the EURO stops going vertical and begins to go horizontal? "

Don't need to alter the tunnel... IF IT WORKS, DON'T FIX IT!

I didn't create it, I just coded it in EasyLanguage.

All I know is IT WORKS LIKE A CHARM!

I have the documentation embedded in the attached indicators.
Attachments
INDICATORS_TUNNEL.ELD
(124.91 KiB) Downloaded 46 times

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Postby fatdog1 » Wed Jun 28, 2006 6:39 am

TRO,

I will work with the tunnel to see if I can get it to work for me.
So far all I get when I put it on my chart is a straight line accross the screen so I need to read the instructions lol.

I am thinking outside the box here.

What I meant to ask was if it was possible to code a program that
could trade long at the bottom of a trading range and short at the top of the range once the price started to go horizontal instead of vertical in a new range?

For example, GBPUSD is still stuck in the exact same range from Friday AM that I had marked off in a screen shot yesterday.
1.8175 low to 1.8262 high.

That is not a trading range that only I would be able to eyeball so it could be a formula.

Here is how I determined what that range would be.

The bottom of the range is formed by the first and second touch at the low of 1.8175 back on 6-23-06 at 3:30 PM Central time and has been the low for the last 4 days.

I know regular trendlines are drawn after 2 touches so it seems that this should be possible to draw and extend a horizontal trendline for the bottom of the range after the second touch and establish a long position on the second or third touch of the trendline.

The top of the range would automatically be the breakdown line from the bottom of the old trading range and that would be a stop and reverse to a short position target.

Just thinking to keep the old brain active.


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Postby fatdog1 » Wed Jun 28, 2006 7:48 am

Here is another view of how I see the 4 stages of the market that causes the trading ranges to form after vertical moves.
It also shows what happens when the normal
234 cycle is altered by a vertical trend move into a continuing 434 downtrend.



This next shot is what I imagine the tunnel is used for:


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Postby fatdog1 » Wed Jun 28, 2006 8:36 am

fatdog1 wrote:
fatdog1 wrote:Ali,
I am updating the smaller time frame RIMM chart.

There are 2 possible trades working.

For a long trade there is a bull flag pole below the congestion area which would make it a stage 1 basing area if we move higher from here.
It could just be a pause in the current little up trend on the smaller time frame. A breakout of the top line is a new stage 2 uptrend on this chart.

There is also a possible stage 3 top on the 10 minute chart because of a key reversal bear flag candle inside the congestion area.

The modified DarvasBox would have a bear flag pole and a congestion area working if there is a selloff from here.

The Weinstein strategy (if it is possible to code one) would take the breakdown trade at about the same price on a break below the bottom
line of the trading range. I should add that since we don't know if this is a stage 1 basing area or a stage 3 top area, a Weinstein strategy should also be ready to enter a breakout from the top into a 212 long breakout trade. The DarvasBox is coded to do this already.

Let's see how it plays out next week.

I'll attach the workspace with the trendlines on it. Version 3159





Here is a RIMM 10 minute chart screenshot showing the outcome of the breakout from consolidation today.
The breakout was to the top today.
So the breakout on RIMM is a continuation of the uptrend, or a bull flag breakout, or a Stan Weinstein stage 212 breakout.
It is sitting on the breakout line.


Rimm had a pullback yesterday. The breakout line on top was support at first.



Now we switch the breakout and breakdown text to show how RIMM
has broken the current up trend on this time trame and has entered a stage 4 downtrend on the 10 minute chart.

It even had a pullback to the new breakdown line and then sold off to the old breakout area below.

RIMM should be expected to move sideways here between the new breakdown area resistance down to the old breakout area for support.

If the support here fails, RIMM will move down to the next breakout area
at 64.32

Attachments
RIMM 10 Minute 6-22-06.tsw
(24.5 KiB) Downloaded 20 times

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Postby fatdog1 » Wed Jun 28, 2006 8:54 am

Just like the EURUSD finally moved down to the 1.2551 breakout area support I mentioned yesterday once the 1.2575 finally gave away.


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