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Four Brothers Set Up


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Four Brothers Set Up

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  #11 (permalink)
phl pa. usa
 
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wow super job -well done

:when you cheat -you only cheat yourself
refer to post # 470 & 527 & 930
option traders refer to post 996 thru 1005
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  #12 (permalink)
Legendary Market Wizard
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you can post charts inline if you find that easier to view.

If you have screencast by Jing

Error retrieving image, please check URL again (matched: "")
produces



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  #13 (permalink)
Atlanta, GA
 
Experience: Intermediate
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Posts: 66 since Jul 2012
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"Four Brothers" is just a name that I gave a consolidation area that stand out to me especially on range charts.
The name has no other signficance except to my own imagination. (trading can be lonely) Four is a period I choose because to me it represents a "healthy' period of price stalling. You can use three or six or ten, but I have seen four repeat over and over and over again, so for me it's four.

I look for at least 4 consecutive range bars that stand in a horizontal line hopefully at a defined support or resistance point. I use as s/r: pivot points, previous obvious swing points, and former four brother consolidation areas, anything you want really. Again, don't be overly rigorous about areas just be consistent. I want to find congestion and capatalize on the energy it takes to break that congestion. I rountinely trade on the 8R chart but have recently been trading the 12 tick mean Renko. So in a sense its (4) bars (brothers) standing to defend or let price pass. IF you like football its almost like the 4 in the 4/3 dline-linebacker scheme. 4 defensive lineman - they will either stuff the run (price) or the back (price) will sqeak thru for a small gain or break one to the end zone.

My chart. You are really going to see all sorts of histograms on the bottom of my charts, I don't pay a great deal of attention to them, because to me the action is the bars. I like the trix because its one of the first indi's I learned. But this is not a determing factor in entry or even exit. The greatest determing factor for my trading this pattern is where the bars are forming. I have no tie to direction UNLESS its really obvious, which it rarely is in my opinion. I found tying myself to direction causes anxiety. On the other hand garnering an opinion about direction can save you money because you aren't trading both ways. To me, i like to minimize the anxiety of "determining the trend" - in fact when I hear that from educators and you tube's and systems, I really just turn my speakers down and look for songs to buy on Itunes. SOME TRADERS are amazing at pinning direction, im not. and it works for me so - i hope that makes sense.

I manually draw the boxes and a really fantastic excercise to do is to find a Four Brothers pattern then just move the box as another sets up, its eerie how the boxes fit perfectly, not so much on Range charts because the bars should be nearly all the same size but pull up an hour chart, find a four bar consolidation area and then move the box to the next one, you'll be amazed at the fitting. Its not a coincidence either. Anyway you might notice some triangles on my charts as well these are drawn at the end of the day as I am trying to add this as a set up in my trading. I am looking at trading breakouts of triangles also at points of interest like the S/R levels mentioned above.

The Waving MA study is new to my charts since I joined Big Mike's - this is hands down the most interesting indi MA type study i've ever scene if not only for its esthetic beauty and its COOL! This or any of a number of MA's I would use for just a visual enhancement for price movement. To be honest I don't leave these up I only apply them every now and then for confirmation or maybe at the end of the day to review how badly I hurt my account, lol...

Although i really like the one you see on my charts i got it in the elite download section. The trix you see on my chart is also a downloand from Big MIkes. If not trix i'd have RSI on perhaps If I spot the elusive thing other traders call divergence. You have an advantage if you as a trader can spot divergence real time, its a real talent, and not mine.



Im posting an NQ chart. this is a primo set up that happend yesterday 8/1/2012 whilst Big Ben blathered. The blue line emerging from the left is a "trace" line i use to show where previous four brother set ups happened. if you want to check the four brothers was from 7/28 around 11am - Notcie how price bounced up from that level found no steam then fell back to the former trace line of the previous four bro's set up, then formed the four brothers from roughly 2:15 to 2:19then the trade went on as at roughly 2:19 Price broke up to 2637. In this case s/r was evident as the four brothers formed between S2 and the trace line from the previous 4b's set up and a recent swing low. Some of you may also have noted this is also a MOF trade - I think. Oh Nqoos. But it clearly was part of a harmonic pattern as we can tell from hindsight.



Can you let me know how to use screencast, im just attaching charts the old fashioned way.

Please let me know if this shed's light on my posts, and please don't hesitate to ask any questions. I don't mind critique's either its how we all improve. so blast away with respect and we can all get better.

cheers.

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  #14 (permalink)
Legendary Market Wizard
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and love the way you communicate, but you are no novice. Screen cast is jingdotcom, I believe.

you use [] around the typed word screencast, then you paste your captured screen's url followed by[] around the word screencast with/ in front of the typed word.... that will post your chart inline in the text of your post.

Okay, IMO your trade logic is solid as a worst case scenario but I'm thinking much more optimistically than that....really good. This four brothers idea that you have created on your own is very compelling. I want to learn about your thought process and go over the trade logic and set up here in your journal.

I look forward to reading your posts and responding with both questions and ideas. Do not allow detractors to distract you or discourage you. This is a brilliant approach and I believe you will be very wise to pursue further refinement and development.

DB

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  #15 (permalink)
Atlanta, GA
 
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Thank You!

ill try to keep my posts interesting. Thanks for the support.

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  #16 (permalink)
Atlanta, GA
 
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Trading: Eur/usd
 
Posts: 66 since Jul 2012
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A nice trade set up overnight that i missed because I was sleeping. Oops.

Anyway a very cool chart on the eur/usd 12 mean Renko bar. The setup occurred at yesterday's low and took 12 hours to develop from yesterday at around 2pm until it broke up thru at 2:19 AM. A nice move followed.

Im going to swith over to the YM and NQ for the morning session, if I see anything I will post a chart.

- The lesson here is maybe quickly look at the chart before you go to bed, I should have done that and I could have set some type of chart alert, but and more importantly getting over missing trades is important and If I carry that into my trading right now I will make a revenge trade lose money - thats a part of developing imo. Im proud of myself for not getting to down about missing a sweet trade - but taking a lesson from it. So now, ill light a candle, kiss my wife, and try to catch the next one, lol.

thanks.

PS if you see the blue trace arrow its pointing at a harmonic pattern that is forming near at the level of a previous four brothers pattern. pretty cool.

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  #17 (permalink)
Atlanta, GA
 
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if you have a 12 mean renko chart check out the pound yen and pound dollar chart to follow.

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  #18 (permalink)
Atlanta, GA
 
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Trading: Eur/usd
 
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Both trades would have worked out. because its after the fact it doesn't matter whether I took the trades or not. What is important is that the trade set up was recognized and execution could have followed. To kill the suspense I did take the pound/usd trade got 10 on one lot and got stopped out on the second for +1. You'll see it could have been a homerun. I've put a trace arrow on the chart that shows where the entry was for the trade. i did post the setups while they formed. Next week I will start posting the trades when I enter, sometimes its hard because of the concentration on the actual trading to post entries but after a while it should get easier. So for today we will be contented with proper identification of the set up.

On the Pound/Jpy. In my opinion was the lessor of the two choices because of the overhead resistance at the 122.61 level.

Any comments please post these are good trades to discuss.

I am also posting a trade from the 8r Euro/ Usd chart. I did not take this trade because i was late to the desk today. I've been scattered today - alot of times I will only take one or two or maybe no trades on Friday. But that is changing because Friday afternoon is really the sit out time Friday morning has proven to be pretty decent over the past three quarters. The afternoon however is consistently poor.

Anyway- for the Euro / USd set up 8R chart, you see a really tight Four Brother's formation from 5:30 to about 6:15 Am (EST). The market was moving in a bullish direction the bands on the study were supporting price, the pattern was "tight" The only caution was the 50 level overhead. But since this literally formed across the daily central pivot- thats a lock and load go IMO. Enrty around the 47 level, stop below central pivot around 32 - 15 pip stop is more then enough to let this trade work or fail. Plus 10 easy. Trailer who knows I probably would have jumped ship at 79 which was a previous FBs level (noted by the trace arrow emerging from the left.


Please give me feedback if you are following that's the only way this exercise adds value to you or me.

Cheers Traders.

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  #19 (permalink)
Atlanta, GA
 
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I posted a chart in the previous message of the EurJpy but failed to discuss it so here goes.

Do you see the traingle pattern in the up move? Look at where it formed? If you said the 50 level you are right. I am noticing occuring more and more. To trade it, I look to trade the the stragiht edge of the triangle as my entry, working on it as a continuation pattern. Nothing earth shattering here, but wanted to look 1,2,3, and ABC, a little differently.

cheers.

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  #20 (permalink)
Atlanta, GA
 
Experience: Intermediate
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Posts: 66 since Jul 2012
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Okay, I have a schoolboy crush on Mean Renko charts that show the wicks to give trader clear picture of price action/range. so if you are inclined might want to investigate. I'm probably late to the game on mean Renko, as my original schoolboy crush is still hot and heavy with range bars. Seems techno guys are creating adaptive range charts that even re-size bar to market conditions. So that's pretty cool.

Anyway on to the ES review for today. CL and Ym to follow.

Pleas know I am analyzing this chart in with hindsight - but recognizing the set up even after the market is a good exercise for traders- I think subconsciously the brain records the infinite patterns we see everyday so like an athlete gaining muscle memory we advance our skills with study and review. Right?

The ES was straight up today ever since really 1pm yesterday. So as a trader what do we do, the chart I've posted lends us some clues. If we look left we see a four brothers pattern at 10:30am yesterday - I've drawn a trace pink arrow from that pattern to a pattern that formed around the London Open 4am EST today. It took over two hours to form and we finally broke around 7am EST time. (sorry i am using an Eight Tick mean Renko just to be clear) I would trading the ES by taking half probably at 4 to 5 ticks then see what happens. In this case, could have had a homerun day. Funny week this week, the first three days were widow-makers and the last too were just get aboard days. I got weary around Wednesday morning so the last two days I did not capitalize as much as possible. Lesson Learned keep the faith.

We can see in the purple box 4 bars that lined up right on the previous days open And R1 pierced the center of the 4B pattern. Perhaps we could interpret this as traders pausing - buyers gathered, price accelerated. You can't tell me that the jobs report wasn't leaked considering the overnight price action. but maybe not. It doesn't help my trading to speculate on conspiracy. The four brothers pattern that we are talking about really did form in an expected area of indecision considering all of the simple defined S/R lines that occurred in that area yesterday.

If you have any thoughts or questions please let me know. thank you.

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