June 16, 2011
- in Uncategorized by schooloftrade
Price Structure vs. Price Pattern…Which Is More Important?
Price Structure vs. Price Pattern
Price Structure is what the past price action has given us for support/resistance that we will use to look for price patterns.
Price patterns are used at the best locations using Price Structure. We use 3 simple but very high % price patterns at the very best locations within the price structure.
Example: Gold 08-11 89Range Chart
– Sideways Range(s)
– Price Wedge
– Bull Price Channel
Now use the 34range (faster) to give some more details to the price structure.
– Outside day turned inside day
– Below the BMT, below the OPEN
– Bear price channel
– Double bottom at the lows of the wedge
The structure is now clearly defined, and now I use this information to plan my price patterns.
We have three price patterns:
– Breaker
– Wave
– 2Step
If you know the 3 price patterns, all you need to know is where to look for them, and we use the price structure to tell us.
Sideways Range: avoid the middle, buy the lows, sell the highs
Price Channel: avoid the middle, buy the lows, sell the highs. Trade in the direction if the channel for high % trades
Price Wedge: avoid the middle, buy the lows, sell the highs. Trade in the direction if the channel that the wedge is developed in for high % trades
Failures: remember that every time we breakout of a specific ‘structure’ there is ALWAYS the potential for a failure. These failures are VERY high %.
Contract Rollover: we have contract rollover on Emini, Currencies, and Dollar today 09-11 contract for all of them.
Why use the 12am start time for your chart? Rather than the 6pm start? The markets are GLOBAL and they are only closed for 45 mins overnight (electronic)
I want to know where everything is at all times, so I use a 24 hour chart.
The markets tend to ‘like’ the 12am start, and I have never tried to see what the markets think about the 6pm start.
Trap Entry: when is the time NOT to use the trap? When you have not learned how to trade the fast track. When you are brand new to trading. Other than experience in when and how to use it, there is no time better than NOW to use it.
I use the OPEN off the 4range (fastest timeframe) b/c it’s the most accurate on the faster chart.
When does the Summer slow down?
4th of July Holiday (day before, the day after)
Last week of August and the first week of September everyone is on vacation.
