“GRaB” Candles : Getting more out of Candlesticks.

In light of tonight’s Interbank FX Live Webinar series kicking off the September schedule, let’s take a look at what I’ll be talking about tonight. The Wave as I call it is my bread and butter and knife.  It’s at the heart of how I analyze the markets and what I believe is the correct strategy to enter all my trades.

I certainly did not invent exponential moving averages, nor the 34 setting (that’s 100% Fibonacci) but the way I use them on a high/low/close setting and clock angles to measure market cycles (didn’t invent those either but learned of those from Charles Dow) is all me.   In my experience, there isn’t any other indicator out there that will identify market cycles on any time frame and in any market.

I don’t say this to brag nor to “lay claim” to the study…heck if I wanted to do that I would have named it after myself (which seems to be the trend with studies nowadays). For a short time I tried calling it the “RCI” because traders would confuse my referring to the Wave with Elliot Wave.  But “RCI” (Raghee’s Cycle Indicator) was just not something that rolled off the tongue and I’ve been calling my study the Wave for so darn long that I couldn’t ever get the hang of the name change.

I put this tool together at the urging of a student and we experimented, laughed, cried and broke more than a few keyboards in the process of testing the Fibonacci series to 144 and figuring out look-backs, and moving average settings, and angles…I shared these settings and ideas in my first book back in 2004 – at this time I had been using this tool for most of my trading career.

Lately, I’ve seen a lot of references to market cycles and can’t help but think that Charles Dow’s work is again finding a new audience.  I see the 34ema on the high/low/close being used a lot too and that makes me smile.

The Wave is designed to work with any trading strategy you use.  What the 34ema on the high/low/close will do for you is allow you to identify when to use your trending following, tend reversal, momentum, or range bound entry strategy.  I believe the Wave is going to help you analyze the market cycle and  regardless of whether you trade chart patterns, support/resistance, Elliot Wave, Fibonacci, (anything!!) you will have a greater knowledge of  what to do at the decision levels of your analysis.
In my office here we call my green, red, and blue charts “GRaB” candles or grab charts; Green, Red, and Blue.

 

*Results are not guaranteed, individual experiences may vary. Past performance is not indicative of future results

So since I have been having troubles with some blurry vision, all my charts right now are grab charts because they are easier on my eyes.  For those of you who have seen me present or been in the previous Interbank FX webinar over the past nine months these charts should be familiar.  I like using these charts because as I believe that candlesticks visually tell a better story about price action, I feel grab candlestick charts tell an even better story.  At a glance I can tell whether price action is trending or neutral and whether it’s on the strong or weak side of the Wave.  All good things.

I prefer to keep the Wave on my grab charts but since the color coding is there it’s not always necessary even though market cycles reading with the Wave are, in my experience, much more accurate.  I do realize though that for some traders, the clarity is helpful.

Over the next few weeks I will be outlining some nifty things I do with the grab charts and you can see how and whether you want to implement some of the ideas to your own trading.  Just remember, it’s nothing but a visual cue.  You don’t need the color coding to know whether price is trading above, below, or within the Wave.  but I won’t kid you…visually it’s easier to clarify with the grab charts.

*Trading in the off exchange retail foreign currency market is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose. Read the full risk disclaimer and privacy policy on trading at www.ibfx.com.

Similar Posts:

Share
September 6th, 2010 in Forex News

Leave a comment

Your comment