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Fast and Slow Momentum


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#1 neddihrehat

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Posted 25 June 2016 - 02:19 AM

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Hi,

 

This strat is based on how fast or slow price moves (aka Momentum), thus helps you to learn various price actions in a different way. If we have to compare how fast or slow price is moving, we have to compare it against something. I'll use a VC indicator for that purpose.

 

TF:

Basically Any TF, I use this strat on M1 chart, M5 chart, even some H1 chart doesn't fail me either.

 

What's needed:

- A clean Chart.

- An Oscillator type indicator, possible choice are VC, RSI(3 or 5 applied to close), Stoch, TDI etc.

- Basic PA knowledge(Like Support Resistance etc).

Download the indicator from here or here, or use built in indicators from your MT4 terminal.

 

You can Add Fractals/Some SR indicators etc, but keep it clean. I prefer VC(Value Chart), if not then RSI.

Please don't worry about the settings too much because there are no optimal settings. You can just use the Hubba Hubba Strategy template for this strat. It doesn't matter. You just need visual confirmation.

 

Steps:

  1. Find a nice price moment in one direction.
  2. Then look for price to retrace very little like 25%-50%.
  3. Look for confirmation: Look at the VC for confirmation. Look if its hitting some possible SR zone or some TL or making divergence.
  4. Trade for 3x your TF.

A friendly warning, do demo, do learn. But use your real money, and it'll burn. <_< ...

 

Explanation with example: (For the sake of explanation, I'll assume that we are looking for a CALL)

  1. Price is going slowly upward, VC says Overbought after a while, you are like you almost want to do a reversal trade.
  2. Then price suddenly pulls back to 25% to 50%.
  3. There is a possible SR zone. I can see some kind of Divergence as an extra confirmation, but thats not necessary.
  4. Look at VC, it's almost OS in a few candles while it took more candles to be overbought. Here, VC moved too fast from OB to OS and price moved very slow compared to each other.
  5. I do a nice 15m trade.

drQHBiu.png

 

Here, more examples:

 

gbZAv4T.png

 

  1. Price went oversold, then it continued further down. We wait for the price to suddenly go near overbought region. Look for SR/TL/Div as extra confirmation. I could wait for that bearish bar or price to be more exhausted for more confirmation and enter one candle later. But I had enough confirmations. PUT for 15m, win it.
  2. Its a bit tricky, here I used my 100% movement policy. Price moved only a little and VC went too much, almost close to where previous VC movement was. I did 15m trade after that hanging man. I could trade the same on the recent swing too where there is another hanging man and a nice VC divergence is waiting for me.
  3. Price going upward, making some Overbought messages, then suddenly pulled back a few bars but VC moved like crazy and almost became OS. 15m call.

They look like EMA bounce, and you could use EMA as a guideline too. You can use whatever EMA, I prefer 14EMA or 21 EMA. But they are not necessary.

 

Now, three important things:

  1. Money Management: You can use whatever money management, this won't effect the performance of this strat. If you can do it perfectly, you won't have problems with martingale/snowballing etc. I can get almost 70-80% ITMs, but that might not be your case. You can enter early, enter late, and get OTMs or miss trades thinking that it's not the right setup.
  2. "I got OTMs": Perhaps, Avoid high impact news, Session openings or Learn some basics about Fundamental trading, for example what would happen to price if UK is not a member of Europe anymore type questions are usually easy to understand.
  3. "You didn't mark/show the OTMs": Well, yes, I know there are OTMs and I didn't mark them. Because its vital that you understand how to get ITM first. I'll mark them when I have the time but I leave it to you guys to tell me whats wrong with my strategy :) .

 


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#2 neddihrehat

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Posted 25 June 2016 - 02:22 AM

More Example (Using this with other Strats):

You can use this strategy with whatever strategy you already have. For example, I used a Hubba Hubba type template where you have EMA, SR etc etc.

Look at this chart, does it look similar to you? Just apply this knowledge on that chart.

K1mAV9M.png

 

 

More Example (Using this on different TF):

You can use this on any TF too.

 

Here, Look at this H1 chart, this was a huge movement, but apply the knowledge to this chart. Here I used RSI 3.

VNQixrb.png

 

You gotta use your own head to find the SPEED and enter based on that. Look at this chart, you are familiar with this movement if you watched it. If you study enough, you can use this knowledge anywhere, in spot, in trading, in gaming.. :P

 

M382zTA.png


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#3 neddihrehat

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Posted 25 June 2016 - 02:23 AM

Here, Look at this M1 chart,

PJvui23.png

 

Price moving upward, then within a few candle of movements VC moved very fast, Price was getting exhausted too while there was a nice SR zone there. No matter when I enter for a 3m CALL , it'd be ITM.

 

Example (Avoiding Possible OTMs):

Look at the chart below, it could be OTM if you entered right after the first OB alert, in cases like this where Candles are getting bigger and bigger, I prefer to wait for further confirmations like a doji/ Hanging bar etc. what tells me that price became exhausted.

kGaPeK6.png

 

Here, Look at this M1 chart from 6 month ago, mainly it was for the update of 2 bar continuation, but doesn't this strat looks similar too?

azE59UA.png

Here, Price moved downwards, then when it moved only a little, the VC became OB. It created a nice VC divergence.

 

Same thing on another chart. The arrows here represents VC OB and OS zones.

91itk4t.png

 

Similar trade again,

s08doLM.png

 

 

If you have a hard time remembering this strat, just keep this in mind. Price moved 25%, VC moved 75%.

 

Look at this chart Below: Can you find them here?

BXAXBR8.png

 

Oh, here they are,

3vgLTts.png

 

Oh, you do recognize that they are not same chart, but you see what I mean.


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#4 neddihrehat

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Posted 25 June 2016 - 02:46 AM

Here, Another example of this with a completely different strategy (Look for Trading Made Simple on ForexFactory). I'd enter after the cross from TDI or first bullish bar.

 

sJgRSjx.jpg

 

Example of an OTM, but look at how I marked the RSI, it'd be a nice ITM then.

ya4avHI.jpg


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#5 neddihrehat

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Posted 25 June 2016 - 02:53 AM

Another example, the almost perfect setup.

btqpH2Z.png

 

You do recognize that all of these charts are of different times, templates and colors. Thats because I've been using this and saving all these screenshots for a long time just to share them with you.


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#6 PG275

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Posted 25 June 2016 - 03:47 AM

A friendly warning, do demo, do learn. But use your real money, and it'll burn.  <_< ...

 

Hahaha Nice one Ned



#7 neddihrehat

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Posted 25 June 2016 - 05:20 AM

Hahaha Nice one Ned

 

I advice to do demo and not do real trades until someone is confident enough.

But who will listen?

Thus, big red warning.

:)


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#8 neddihrehat

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Posted 25 June 2016 - 08:31 AM

IF YOU ARE CONFUSED AFTER SEEING ALL THESE SCREENSHOTS, PLEASE READ THE FIRST POST AGAIN.


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#9 zac00001

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Posted 25 June 2016 - 02:00 PM

Interesting strat. Like how it can be used as a slide to further confluence existing strats. Thanks for the share and the effort you've put into this.



#10 tradesmart

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Posted 25 June 2016 - 05:47 PM

Thanks nedd , great contribution to the forum. I will take a look at this come Monday. ;)

#11 neddihrehat

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Posted 26 June 2016 - 01:41 AM

Interesting strat. Like how it can be used as a slide to further confluence existing strats. Thanks for the share and the effort you've put into this.

 

 

Thanks nedd , great contribution to the forum. I will take a look at this come Monday. ;)

 

I'll be glad if this helps anyone who is having a hard time dealing with Price Action based strategies.

Lets test this on Monday on some demo account.

 

Oh and share all trades (of one trading session) in one post rather than making several posts.

 

Ofc, There will be OTMs (and I hope we get more ITMs), and there won't be that much of UPDATEs we see in other strategy posts because I've already tested this for a long time.  I just shared one of the setups, there are 5-6 more setups/patterns for this strat.


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#12 neddihrehat

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Posted 26 June 2016 - 10:24 PM

(1) Day started with OTM. Not good at all.

 

sKe8cUD.png

 

So heres what happened, I went through all charts for possible entry, saw the red doji like bar (two bars before entry the one with fractal), I wanted to enter right away, but the MW platform needs time to load. Whatever, I did a LATE ENTRY, thus got OTM instead of ITM.

 

(2) After getting that OTM, I got into active mood, no more sleeping mind. Now, I saw this movement.

mFbjypS.png

This one is risky too. Because the downward movement was fast. The upward movement was fast too. Luckily Price moved around 50% while VC moved almost 90%.

 

Hmm, both time, the expiry was not right. Using MW for this demo is not good. Oh, I am treating $1 trades as demo trades.


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#13 neddihrehat

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Posted 26 June 2016 - 10:53 PM

I've attached the Indicators and templates I use for this purpose.

You'll find a minimal resource template which only has NVC as the only resource hogging indicator.

jJceFXp.png

 

And you'll get a Minimalist Template, so you can monitor upto 8 pairs at same time without problem. Careful, because your eye might not bear those small letters and bars.

zfLYqd2.png

Sadly, there are no magic arrows in there.

Attached Files


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#14 neddihrehat

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Posted 26 June 2016 - 11:17 PM

Getting 3m exp is impossible in sleepy mind. Anyway, got the timing right this time. What I do is, enter at the end of candle (for 4m exp) while still 5 seconds left. So I get 3m and 2-3 sec exp. Thats how I deal with this in MW. If you miss it by a few seconds, you are either going for 2m exp or 4m exp. Hmm, Also, I gotta post 4-5 trades in one post. That'd be best.

 

You might consider all of these trades as EMA/Bounce play, but look at them with this perspective:

  • Price did a downward move,
  • then while price did a small upward move,
  • it became OB in a very small time with greater momentum
  • and then it bounced at a resistance.

Good for a nice PUT.

 

8CYI0WD.png


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#15 neddihrehat

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Posted 27 June 2016 - 05:25 AM

I was watching the movements even since UJ gave OS alert. It was going down even though the VC was going up. Then within all those little movements, VC moved very fast and climed to OB zone.

 

7ULGFKJ.png

 

$1 trade,

lf1sKLr.png


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#16 neddihrehat

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Posted 27 June 2016 - 10:35 PM

For clarity purpose, this strat looks exactly like HH style. But you see the difference,

  • There are just a clean chart and a Osc which can be VC or RSI or CCI or anything.
  • This style can be adopted to any TF and EXP, and even Spot Fx.
  • This strat is focused on price speed and momentum.
  • There are a set of price movements. In confluence with Divergence, TL, SR etc.
  • And many more.

So while it looks like that, it's not that.

But while you trade it, you can use the knowledge you get here in any strat that somehow relies on Momentum/Speed.


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#17 neddihrehat

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Posted 28 June 2016 - 01:01 AM

Someone asked me how could they use it if they don't have MT4. This is only a first page thread and it started? People started to not to read the things in depth. Sigh, how will this journey continue? Well, look at what I wrote, I clearly wrote that you can do this if you have a Chart with a Osc.

 

Look at this near perfect setup. This is a chart from IQOption (I don't recommend any broker at this point, don't judge me), I'm sure you can do the same thing in MT4 Mobile, Or any kind of Mobile platform that has a chart with any Osc. A chart from Ducascopy, MT4 webtrader, Tradingview... Come on, you got a vast choice for it.

 

5u083Ro.png


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#18 neddihrehat

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Posted 29 June 2016 - 01:12 AM

A nice setup for folks.

Opx9yI1.png

Price is making lower highs all the way... Although it became risky after price made a higher low, Those divergence with fast and slow momentum going on, it was perfect for a PUT.

 

This trade is a good trade setup for 2 bar continuation trade, but we can look at it this way too.

iIqAAxa.png

  1. Price came UP very quickly.
  2. Then price started to go DOWN to fill up the space created by previous bigger bullish movement.
  3. Suddenly price does a retracement, while the VC almost comes to OB zone, and shows a divergence.
  4. We also see price struggled at this point prevously.
  5. We can enter after the pinbar, or after the bearish bar.

Now, Look at this movement,

m8Xa0P2.png

  1. Price came down very quickly.
  2. Then price started to go up to fill up the space created by previous bigger bearish movement.
  3. Suddenly price does a retracement, while the VC almost comes to OS zone, and shows a divergence.
  4. We also see price struggled at this point prevously.
  5. We can enter after the pinbar, or after the bullish bar.

You might be thinking why I nitpick the ITMs only, look here is a possible OTMs, but with consequences.

Srp2gI0.png

 

Do you understand why this came OTM? Any setup can be OTM because we do not know the future. So why it was OTM?

  1. Look at how it was a Double Top setup.
  2. Look at how we could trade this movement twice, we could call twice on this chart around 5:20 mark , and we didn't.
  3. We rather did a CALL after price already started to move down by breaking previous swing low. The best possible thing we can do now is to wait for a PUT setup formation.

So many things are wrong here. Why wouldn't we get OTM? Just because VC alerted and stuff happened doesn't mean we must trade them.


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#19 neddihrehat

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Posted 29 June 2016 - 01:33 AM

Some more setups from yesterday. All of these setups have a special characteristic.

 

1.

R0oPPlI.png

Price was moving down while VC was moving up. Then Price was moving up while VC was moving down. A certain Divergence after a certain divergence.

 

2.

lVSeyiB.png

Same here, a divergence after another divergence. Price was moving up, vc was moving down. Then VC started to move up while price started to move down. Entry was when price bounced to a support.

 

3.

otDveZ9.png

Meanwhile, a 3m exp trade I did. I jumped right after the Engulfing. Price was moving down, and started to range, but VC was going up. Then suddenly VC was OB.


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#20 neddihrehat

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Posted 29 June 2016 - 06:12 AM

This was a lucky shot, I tried to do it in Demo but accidentally I did it on a real account. I wanted to do it on demo because of those uncertain wicks.

 

Overall trend is down, Price made a lower low, then did a pullback, but the VC almost came to OB zone. It didn't do any VC divergence, but it was looking good enough. A 15m Put, a risky ITM.

 

Captured when trade taken:

2JdPfvR.png

 

The result is as follows:

oQCFhIt.png


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