Immy's Corner [The Setup The Hunt - T20's and more]

[immy]

Bettina! As promised I'd explain an Addition Entry Technique using a Trade that I took on EJ. I took this short just after I filterd the initial Classic S1 short. As soon as Principle C was confirmed I got in. THIS is an ITB Principle C entry Technique. Any questions ...fireaway!

cheers

Principle C Pdf/ebook can be downloaded from Premium > Advanced Technique Section http://www.itradeaims.net/forum/viewtop ... f=34&t=618" onclick="window.open(this.href);return false;

note: I went short on EJ and took 17 pips while I was long with two positions on EU. IT dropped but I managed to stay in. (previous post) and then soon after I exited EJ short on m1, the m5 trade on EU went up nicely and I exited at spots which now seems to be a good decision.

There are couple more entry techniques that I shall discuss in the Advanced Techniques Section later.

30-01-2013 16-37-37.png

Another example during start of trend earlier today on EJ m1.

30-01-2013 17-22-47.png

One more example after the above setup. This is particularly useful to take advantage of strong continuing trends. "When its trending go mental"

30-01-2013 17-26-32.png

[immy]

What is BDC and How to Use it?

How to Take Advantage of Strong Trends and Maximise Profits using BDC
Some days the markets move really strong. Most of the time that happens when all the higher time frames create strong trends such as what's been happening on EUR/JPY past 2-3 months. (July 2012- current) We have seen quite often if we miss that initial entry we are kept out sitting on the sidelines while the trends are strong and going without stopping. I always believed in this statement

"When in sideways markets stay very conservative with your money management and opening new trades but become very aggressive when the trends are confirmed"

We'd like to take advantage of those trending situations. And for that we may use an Entry Mechanism that is in tune with the market. I've been watching Principle C for over 2 years now and always thought it was a good repetitive pattern that happens on all time frames and pairs. Likewise we are also aware of some repetitive candle patterns that are proven and already used by many other successful and professional traders.

Our observation is that there is a candle pattern called BDC that happens often around Principle C. So we may take trades based on Bearish or Bullish Divergent Candle. Bill Willaims uses this technique as their standard entry technique. Its very similar to Pin Bars too. Combine with another strong price pattern we already know Called Principle C and you are laughing. Now we know PC occurs in 3 situations:
1. At the end of Wave 2
2. At the End of Wave 4 of lower time frame but current time frame is in strong 3.
3. At the End of Wave 3 and mid or end of Wave 4 when current time frame has just completed a strong e.

We want to take advantage of 1 and 2. But most importantly no. 2. This is the situation that will help us take advantage of strong trending markets where we don't see an entry or re-entry using the sleeping gator. Principle C is explained in Advanced Technique Section. Simple concept but powerful.

We can now use BDC or PC and/or combination of both to get into strong trends and make more pips. We can also use this as an add-on if we have already hit S1 at the beginning of the 3rd/ strong move.

BDC Help with Principle C Entries.
Entries can be made using a Two Candle Pattern called
BDC - Bullish/Bearish Divergent Candle

This is a Two Candle Price Reversal Pattern. All waves end with
1. AIMS Level
2. A Bearish/Bullish Divergent Candle somewhere near the top.

A BDC may appear around the peak of Wave 1, bottom of Wave 2, once or twice within Wave 3 , then around Wave 4 and finally at the top of Wave 5. (We use eWave/AIMS Wave to analyse the waves within 1second)

A BDC might show at the End of any wave. But for us it has two most powerful uses

Use 1. Trend Continuation:

A BDC Appearing during Corrective Wave may spot the end of it. So you may Spot the End of Wave 2 or Wave 4.
Usually we see a Principle C around these areas
a. At the end of Wave 2.
Wave 2 is right before a good lovely Wave 3, and after a wave 1. A 1-2 formation is easy to spot and you can use AIMS levels to train your eyes to spot this. Once you know how to see 1-2's on your chart using AIMS levels and candles your trading will be different. We all want to trade Wave 3 and get the most out of it. With BDC/Principle Entries close to Blue line we will get in earlier in wave 3 and further use this technique to take more out of the Wave 3's.
BDC also appears at the end of Wave C of ABC during either of Wave 2 (abc) or Wave 4 (abc). We can also use this to get into a potential wave 5 using the end of Wave 4 BDC.

Use 2. Trend Reversal:
A BDC appearing during Impulse waves especially when price is stretched with angulation between price and gator lines marks reversal of trends. You may spot the Top of Wave 3 and Top of Wave 5 using BDC. Though, This is for Counter Trend and will be discussed some other time.

Interesting Point: Targeting BDC at the end of Wave 2 and Wave 4 is also a sort of reversal of a wave since Wave 2 and 4 are also waves.


A Bullish Divergent Candle: It is a two candle pattern where your current candle to the right has
1. Low of the Current Candle is Lower than previous candle low but
2. Close in the upper half (current candle)

BullishDivergentCandle.png

BDC-Green2.png

BDC-Red2.png

Bearish Divergent Candle: It is a two candle pattern where your current candle to the right has
1. Higher High than previous candle high.
2. Close in the lower half of the candle. (current candle)

BearishDivergentCandle.png

BDC-Green.png

BDC-Red.png

OK I've uploaded all this in a haste: I will check later if I made any mistakes, now time to put kids to bed. BBL
Edit: 03 Feb 2012 I've now re-read and amended it. Enjoy

[Bettina]

Immy !

Thanks a lot for this worthful information !
The ITB is a good idea, to reenter a running trend. Will watch it. What makes me hesitate is, if A0 is old or there was already divergence or even 3 and 5 and then it goes further in the same direction.

I also have problems to spot w2, because it often appears as w3 and w5 before principle c and then I don't dare to enter after that. I will try to collect examples. This is sometimes difficult, because the wave marks disappear rather quickly.

The BDC is interesting. I read about it in Bill Williams New Dimensions, but he probably goes deaper into that in Trading Chaos, which i haven't read yet.

Bettina

[Tomi]

Immy....nice!!

This is exactly what happened in EUR/JPY M1. I was watching for up move that didn't happen and it was a trend reversal. Your post was an eye opener.

Also I remember similar situation many previously. Sometimes continuing up also. I remember reading principle C document earlier but for some reason it didn't open to me. Now it did! (maybe )

Thank you for your efforts.

My understanding what happened:

pc_abc_trend_reversal.jpg

[immy]

Tomi!

yes exactly. My observation is that BDC usually marks the end of A WAVE. so if it appears the the end of what appears as 1-2, (Bettina, even though eWave might show as 3 sometimes, because during that period that wave may be the longest in the last 140 candles) we wait for PC confirmation then if the AIMS Box is tight we will still use the fractal entry otherwise use ITB sell using BDC and PC confirmation to enter with small stop exactly the other side of AIMS where you thought it was PC.

cheers

[Tomi]

Starting to like this baby. It's all over the charts. Now BDC was in the end of A wave.

pc_abc_trend_reversal_2.jpg

[immy]

Here is an example of a trade on EJ. It moved without setting up, we said ok fine, now we know its moving. Apply the Concept: Be very Conservative when its moving sideways and aggressive when its trending. So Find an Entry Technique to Take advantage of the trends. PC Its. Since 3rd candle was needed to confirm PC and AIMS level was near I took AIMS level and added on when it cleared the range. +15+8 = 23pips. recovered rents and some profit. At the time of writing there is still no exit signal and positions would be doing over +15 + 20.

We gotta take advantage of the trends and remain conservative during non trending markets.

31-01-2013 14-37-55.png

ps: Edit: just looked and there is our first green line close exit at 1647 that would get us if exiting both +12 + 20. or we have option to exit the addon for +12 and put SL at 123.66 locking 17 for the first entry. This would allow us to benefit from further moves if there are any.

[Bettina]

Great ! I would never have dared to take it because of AO.

[immy]

Starting to like this baby. It's all over the charts. Now BDC was in the end of A wave.

pc_abc_trend_reversal_2.jpg

Yes Tom , that BDC showed possible end of Wave 2 up but then again, it was a nice classic setup short anyway. but in trading Confidence (Belief System) is EVERYTHING! and anything that helps you boost confidence is good.

Good observation.

Remember though, it all depends on EXIT and exits are 2 types. Exiting with a loss and exiting with a profit. Exiting with loss is first thing to learn to keep it small then work on exiting with profit is a life long task. But to make things easier our first priority should be to keep exit with profit double of exit with loss and then think about increasing our return on investment using 1. Compounding 2. Add ons.

ps: At the time of writing both entries are doing: +24 + 30 = 54 pips. I got out too early due to my mind being stuck with recovering my rents. I should have at least left the first entry running and grabbed 30 right now. 17.01 close on green/red line and break of AIMS box. let me attach pic.

[immy]

Great ! I would never have dared to take it because of AO.

Remember my post about "Something Good is about to happen to you" Change is Always Good. ... let me copy paste the link. http://www.itradeaims.net/forum/viewtop ... =285#p9497" onclick="window.open(this.href);return false;