I am new to this forum and have greatly benefited from both the elite and general topics of discussion. I wanted to share a very basic setup for anyone who is interested in a very simple set up that occurs regularly and can prouduce nice winners. The best part is the stops are tight. Capital Preservation!!
In the attached picture of the Euro you can see a gold box around 4 individual (8Range) bars. It happens to be around a pivot level (S2) - the time is from about 11:15 to 11:30
My entry would have been around 2140 (yes i know it wasnt' complete yet but it had the look, i think you know what I mean. Also, since this is a countertrend trade (clearly) i would have had my stops around 33 for a seven pip risk.
ON the attachment you can also see a four brothers trade from earlier in the day around 10:30, this was a trade I passed on and am still cursing. It even gave me a pull back entry to big figure at the low of the four brothers. jees.
manage the trade as you see fit, but i like to split by taking half at 10 and then hopefully get some follow thru. I will almost always take a trade off if I see a 2 to 1 profit.
I should also note these setups at support and res. levels on a 20 range chart are very powerful. If i had the patience to trade a 20 pip chart I would use this setup almost exclusively. If anyone is interested I can post some examples.
Who am I? I am actually trader that gets paid to trade, so i guess that makes me a professional but (sometimes I wonder) - anyway I hope this helps at least one person see the market a little clearer.
(the tighter the four brothers are relative to consecutive bar highs and lows the better the setup. And the more brothers the better!
If this was overly simple for the forum I apologize, I am new to Mike's forum so please don't bash me to badly.
Please if you have any questions or feedback let me know. I am available most days (after trading)
All The Best.
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Some have expressed interest in knowing a little more or seeing more examples of the set up described in the first post so here are some more recent examples. In disclosure - I didn't take the swissy trades i'm talking about but the set ups are what I consider good examples of a winner and a loser.
8/1/2012 - Swissy, 10:15 to about 14:13 was the set-up. Normally I wouldn't trade past 12 or so (but you can don't neccessary buy into my belief system) - NY Time btw, but Big Ben was speaking its FOMC day so okay for me to trade thru the NY close. Escpecially with the World hanging on his every word seemingly. Also, the previous days price action really indicats to me the bigs are on the sidelines -
Anyway in this case we have just a mess as price ranges for really a couple of days - then at the above mentioned time the consolidation pattern (four brothers) starts taking shape, you can feel the tightening process. You'll notice the four to six bars took several hours to accumulate on the range charts but the break out bars literally took seconds, ( a drawback to Range charts) - order here would have been a bracket long at 9775 and short at 9760. You'll also notice that the four brothers (in this case six) formed literally on the pivot with the pivot being slighly above the middle of the range. This is something to watch, ideally it can clue to the break out side. But I have no stats to prove that. So - again not science. Price does break 75 if it were me im out 1 lot at 85 and probably fleeing on the reversal bar at 14:15. Two minutes it took to do that. Might have been hard to catch. If you couldn't get the trade on, don't berate yourself, it happens and is a pitfull of the range bar. To combat this bracket orders can work. I don't use metatrader btw for my orders. Unless Im going to do myfxbook which I haven't. (I pattern myself after my pet bulldog JOJO, only expend energy when absolutely neccessary .
An example of a losing 4 brothers is the second box on the swissy chart attached. Here we have a four bar consolidaton, nice reversal bar at previous days high, get a nice thorough break and then it turns around just like that not even getting the 10 pip out on 1 lot. "This is the businesses we have chosen" oh well. I would have my stop around 9808 i this case just above the body of the reversal candle and above previous days high. All told would have been a 10-13 pip loss. I most likely would have traded that trade had I been watching this pair, because i might have been thinking quick move up to draw buyers then slam, so would have outsmarted myself given the nice developing blue up wave on the Optimized MA system.
The second chart attached is the Euro$ from 7/26 using 12 tick mean renko. I almost exclusively trade the euro, so just an fyi. I do look at about 10 pairs, but habits are hard to break I guess. I really believe that mastering one pair (which i haven't) is better then scrambling around many pairs. Though I know alot of people disagree with that. Anway, we have a clear direction in this case as priced has moved firmly up - price pauses around the 2220 level and consolidated into the four brothers pattern. We have a nice break of R1 (daily) and price takes a nap from 6:37 until about 7:00 then continues on. A great continuation trade if you missed the breakout which I did. I did take this trade and took 10 on one lot and got spooked at 2260 and closed out, price continued up. Price continued up to the 2320 level. Does the 20 level sound familiar? It is a handle from the consolidation. I haven't studied this but on the great breaks handle moves (100pips) can and do happen. IF you have patience and discipline - I don't always thats for sure. Summertime price action spooks me because when I was first learning this business I bought into that limiting belief system. If i could burn that lesson from my head I would.
Anyway sorry for the length of this post please reply to the thread if you have any thoughts or questions. Or PM me if you are shy. thanks. Hope this helps someone.
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I didn't know if this would be of any benefit, but here's how my chart looks at days end. I took a bad trade on the pound today which was a long at 5620. if anyone is keeping score, which is unlikely. lol...
hindsight is usually correct but some nice four brothers set ups the best one forming around 5560 to 5550 level for the four brothers. I had the pound chart open after my loss saw this forming but got distracted and didnt put on the order. it happened at around 9:30, which is another confluent indicater, NY open. Alot of traders sit open's out, I don't agree. Especially if price is at a decision level like the 50 level and 00 level. This trade would have most likely been 10 pips out on one lot, then had I moved my stops to break even been taken out subsequently, if i didn't move my stops, most likely would have because 90% of the time I do, then a nice follow through run to the figure could have been had. looking back the stop would have been placed at around 63 entry being 48ish, so the stop approached 15 pips. That tells me the price is moving rapidly - may have traded lower amount of lots on this one because the stop was 15.
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Congrats on starting your journal, looking forward to it.
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describe what the four brothers is, what indies comprise the view here, and the basic interpretation? I have been around a long time and have never heard the term "four brothers".
I'm interested as the view is similar to a core method that I have used for years. It would be great to learn more or gain some new insight. Happy to share my view with you as well. I have not posted on it in a while but if you search "koy" you will find the thread.
It takes some courage to post like this so I applaud you for the courage to do so. I also love the humility and the interest in sharing to help. DB