Here are two different charts of Light Crude..Both 60 mins from last night Euro time
+24th+Mch+1020.png)
The E-signal chart is a continuous chart (CL #F) and the Metatrader chart is May 2010
(CL #K).......This presents various problems as the data and hence the Median Line sets rarely match perfectly. I use the more reliable e-signal chart for confirmation but both of these charts share the same P1 & P2. The E-signal chart ML set is a Mod Schiff and works like a treat! The same P0 in Metatrader is a disaster so i choose an obvious recent swing high for P0 (83.00$ on 3 March). Price had already interacted very nicely with this May chart in MT( and also well in the e-signal chart) and i was waiting for a chance to see if price tested the green down sloping UMLP.
I am extremely wary of trading Crude as it's an expensive contract to screw up and get wrong but i have a fascination with this market (and also its relationship the the precious metal Gold).
As i have mentioned in this blog i am always learning and practicing and it is simply madness to sell 'price' simply because it touches the UMLP or LMLP and have been trying to put together various trade setups /confirmation techniques that have been used by other more experienced traders but not in conjunction with ML's to produce a higher- high probability trade.
Price approached the UMLP on the Metatrader chart and did not hesitate to punch straight though the UMLP & the phyc level of 82.00 and making a high of 82.19$...the Metatrader chart simply looked messy and the UMLP was severely compromised as price continued to trade above it for several 60 min bars. However no new bar made a new high and all bars traded within the range of the first two high bars. On the other hand the E-signal chart look sweet as a nut. Price literally 'kissed' the UMLP and retreated. OK, Now to the reasoning for the trade- In two time frames ( 30 & 60 min) we had obvious and very pronounced divergence on the Macd (12,26,9 & 8,17,9) and also on the stochastic (slow & fast) and also on the RSI. So 3 out of 3 indicators all showing that although price was making a higher high (viz a viz the high made at 81.86 on 23/March) all indicators showed lower highs ( see chart below). We also had stochastic crossovers but i am wary of any crossover interpretation on any indicator so we will ignore that, but so far so good......
Next comes the setup. This is a setup called "Market Structure High and MS Low" i originally saw on Michael Jardines trading website Enthios.com (but i am not sure it is there now) but is reproduced below and on several sites and in many books (and apologies for any infringements on copyright). Remember this method is simply another 'string in the bow' of the trade entry confirmation. I have been shafted many times by divergence and you can pretty well get an indicator to show you what you want to see especially if you have already taken a position in your mind as to market direction and not remained objective.
Market structure High & Low are based on closing prices not traded highs and lows so candlesticks are used to illustrate my interpretation of this tool. This is a multi bar pattern but must have three consecutive candles and anything after that must remain within the range and be inside bars. So you need:
Bar 1. A new high.
Bar 2. A higher high ( remember it's the close that counts here)
Bar 3. A Lower high ( close px)
This is not an easy pattern to miss as you see them everywhere in every time frame and they can be broken through a few minutes/hours or whatever later. However, I have Median lines to give me what are KEY support and resistance levels so i hope that a new MSH formed on the UMLP will last long enough (in relation to whatever time frame you are trading) to give you a more than profitable trade and will remain a swing high of considerable importance for some time.
Bar 4 & after. All bars after these three should be mostly inside bars and the pattern would be instantly broken and null & void if we had a closing candle that took out the first closing highs.
So...there is was with all my indicators bubbling away and watching bar by bar ( yawn) as my dinner was going cold on the table and my wife getting seriously ****** off. price did maintain this pattern and i was itching to get short but what about the trigger rules for your short entry?
The trigger bar is a lower closing bar than the 3rd bar (with the blue tick) and the trigger point for a short entry is marked in a dotted white line just below the word pivot. Sadly i was hungry and would have been facing a divorce if i did not get short before midnight so took a position on the 7th bar (with the down arrow) with a nice tight stop of 26pts ( tight for Crude) above the 3rd bars highest traded point of 82.05. The stop should have been placed above the highest point of bar 1. So there you have it. Overcomplicated? I think not....a way of incorporating Median Lines & indicators and a pattern setup to give a higher-high probability trade. The trade objective is the 'O' on e-signal and i have now moved my stop down to 81.37 ...update on trade objective/market to follow (& the MSH scanned page)
+24th+Mch+1020.png)
The E-signal chart is a continuous chart (CL #F) and the Metatrader chart is May 2010
(CL #K).......This presents various problems as the data and hence the Median Line sets rarely match perfectly. I use the more reliable e-signal chart for confirmation but both of these charts share the same P1 & P2. The E-signal chart ML set is a Mod Schiff and works like a treat! The same P0 in Metatrader is a disaster so i choose an obvious recent swing high for P0 (83.00$ on 3 March). Price had already interacted very nicely with this May chart in MT( and also well in the e-signal chart) and i was waiting for a chance to see if price tested the green down sloping UMLP.
I am extremely wary of trading Crude as it's an expensive contract to screw up and get wrong but i have a fascination with this market (and also its relationship the the precious metal Gold).
As i have mentioned in this blog i am always learning and practicing and it is simply madness to sell 'price' simply because it touches the UMLP or LMLP and have been trying to put together various trade setups /confirmation techniques that have been used by other more experienced traders but not in conjunction with ML's to produce a higher- high probability trade.
Price approached the UMLP on the Metatrader chart and did not hesitate to punch straight though the UMLP & the phyc level of 82.00 and making a high of 82.19$...the Metatrader chart simply looked messy and the UMLP was severely compromised as price continued to trade above it for several 60 min bars. However no new bar made a new high and all bars traded within the range of the first two high bars. On the other hand the E-signal chart look sweet as a nut. Price literally 'kissed' the UMLP and retreated. OK, Now to the reasoning for the trade- In two time frames ( 30 & 60 min) we had obvious and very pronounced divergence on the Macd (12,26,9 & 8,17,9) and also on the stochastic (slow & fast) and also on the RSI. So 3 out of 3 indicators all showing that although price was making a higher high (viz a viz the high made at 81.86 on 23/March) all indicators showed lower highs ( see chart below). We also had stochastic crossovers but i am wary of any crossover interpretation on any indicator so we will ignore that, but so far so good......
Next comes the setup. This is a setup called "Market Structure High and MS Low" i originally saw on Michael Jardines trading website Enthios.com (but i am not sure it is there now) but is reproduced below and on several sites and in many books (and apologies for any infringements on copyright). Remember this method is simply another 'string in the bow' of the trade entry confirmation. I have been shafted many times by divergence and you can pretty well get an indicator to show you what you want to see especially if you have already taken a position in your mind as to market direction and not remained objective.
Market structure High & Low are based on closing prices not traded highs and lows so candlesticks are used to illustrate my interpretation of this tool. This is a multi bar pattern but must have three consecutive candles and anything after that must remain within the range and be inside bars. So you need:
Bar 1. A new high.
Bar 2. A higher high ( remember it's the close that counts here)
Bar 3. A Lower high ( close px)
This is not an easy pattern to miss as you see them everywhere in every time frame and they can be broken through a few minutes/hours or whatever later. However, I have Median lines to give me what are KEY support and resistance levels so i hope that a new MSH formed on the UMLP will last long enough (in relation to whatever time frame you are trading) to give you a more than profitable trade and will remain a swing high of considerable importance for some time.
Bar 4 & after. All bars after these three should be mostly inside bars and the pattern would be instantly broken and null & void if we had a closing candle that took out the first closing highs.
So...there is was with all my indicators bubbling away and watching bar by bar ( yawn) as my dinner was going cold on the table and my wife getting seriously ****** off. price did maintain this pattern and i was itching to get short but what about the trigger rules for your short entry?
The trigger bar is a lower closing bar than the 3rd bar (with the blue tick) and the trigger point for a short entry is marked in a dotted white line just below the word pivot. Sadly i was hungry and would have been facing a divorce if i did not get short before midnight so took a position on the 7th bar (with the down arrow) with a nice tight stop of 26pts ( tight for Crude) above the 3rd bars highest traded point of 82.05. The stop should have been placed above the highest point of bar 1. So there you have it. Overcomplicated? I think not....a way of incorporating Median Lines & indicators and a pattern setup to give a higher-high probability trade. The trade objective is the 'O' on e-signal and i have now moved my stop down to 81.37 ...update on trade objective/market to follow (& the MSH scanned page)
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