This journal is intended to chronicle an Stochastic trading egy I'm developing and testing out. 2-6-10 from the title is actually referring to this time that the H4 Time Frame (Tf) candle closes with the broker I'm using, hence this procedure is fundamentally a H4 Time Frame trading procedure. The egy is based on a concept I've devised. In other words, the sides that are oversold and overbought are the conclusion points of a bicycle. Price when moving in a direction proceed inside this cycle. As like the Time Frame I've chosen, H4 (mostly as a result of personal taste and suitability to my personality), in a bullish market motion of price by oversold to overbought complete a bicycle, the aim is to buy at the beginning of a cycle an exit at the end of it and vise versa for bullish market. For a bullish market situation the beginning (buying purpose) is an oversold Stochastic position and the end (exit stage) is overbought Stochastic place caked speaking (Most of the time I prefer to use the Fibonacci tool to place my take profit). The converse is true for a bearish shing market situation. Applying better comprehension of Price Action (PA) a position could be held longer beyond the conclusion of cycle as will be viewed as we move along. I apply the conservative egy to get a retracing market (when I must trade it) and place more aggressive goals when trading in direction of main market motion. The weekly Time Frame direction/PA represents my main/long term prejudice (bullish or bearish) while the Daily Time Frame is my medium term prejudice. I trade the H4 Stochastic Cycle wrt the Weekly Tf Stochastic management. Meaning when the Weekly Tf Stochastic of an instrument indies bullishness (and even if the Daily Tf indies Bearishness, it's just indiing retracement or temporary pull back) I begin looking for buying opportunities in the shape of H4 Tf Stochastic buying signs from any region below the 50 level to the oversold region. I'm aiming to create a simple but profitable method of trading.
For additional clarity within the next post I will use a current chart to explain how I deploy the egy.
In the AUDJPY Wk Tf below, on the long term perspective I'm bearish. But now I see it as being at a bullish retracement the second the candle I researched out using the vertical line forms. That is because at that point as can be seen the Stochastic signal line (blue) has crossed the from up below and this occurs withing the oversold area. I'm for the shot term bullish on this pair and could go to seek buying chances while also keeping your eye on the Daily Tf PA ans positions. In this situation my Take profits will be conservative.
In the H4 Tf of AUDJPY,beginning from where I ended up my short term bullish bias I've two buying chances, the first is at the first chat indied by the yellow vertical line and the next chart indies the second buying opportunity signaled by the blue vertical ine. The yellow arrow shows my Stop Loss (SL) point and the red shows my Take profit using Fibonacci too which can be on both of the preceeding or the swing of the trade itself (in this instance I used the swing preceeding). Provided that the Daily Tf Stochastic doesn't signal alteration I would hold my position untill either my Fib Take profit is hit or I see that a PA suggesting possible reversal about the Daily Tf.
For the next buy the take profit target was not met, remember we'd be operating with an eye on the Daily Tf, therefore viewing that Daily tf , I left the trade
As time continues, I'll be posting my transactions and giving more excuses. Let's see how things go. Cheers !!
Polonius: What do you see, my lord?
Hamlet: Words, words, words.
Polonius: what's the matter, my lord?
Hamlet: Between who?
Polonius: I mean, the thing that you read, my lord.
Hamlet: Slanders, sir: for the satirical rogue says here that old men have grey beards....
Polonius: [Aside] Though this be madness, yet there is method In't.
--Hamlet, Act II, Scene ii.
I am bullish on Crude Oil now as can be seen from the weekly Tf chart (1) - Bullish outdoor Bar (Buob) with powerful close above a really signicant resistance.
Chart 2 reveals my buy signal but I didn't take that trade because it is bellow that the resistance. I waited to buy H1 tf retest which happened but I missed
I am Bullish on AUDUSD right now, I am waiting for H4 Tf stochastic signal to buy. I hope it retraces to this Fib 50% 0.77250 Support confluence as that's very likely to be a demand hot zone
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