#1

Momentum trades versus Location trades

7th October 2013, 05:40 PM
We have to take into consideration a very important matter when trading any
multiple timeframe combination, Monthly/Daily, Weekly/H4, so on and so forth.

Refer to this previous lesson in order to understand the concepts

below: http://www.set-and-forget.com/forum/...s-combinations
There are 3 types of setups when trading supply and demand:

1. Momentum. High odds

2. Location (counter-trend). Lowest odds. Better odds IF level is got a great
imbalance, high/low in the curve, fresh & original
3. Momentum + Location (most powerful setup). Highest odds

For the sake of simplicity, we will choose the swing trade combo:

• Weekly/H4 combo
• Weekly is our bigger picture direction
• H4 is our entry/execution timeframe
This video explains in 15 minutes how the 3 time of setups are connected

MOMENTUM SETUPS
These are setups taken on your MTF combination's entry timeframe that GO
WITH with the bigger picture direction, which is trend trading, trading with the
momentum (new impulses).

SCENARIO 1:

• Weekly bigger picture is DOWN

o WK demand areas are being taken out
o WK supply areas are being respected
o WK descending trendline can be used to connect WK downtrend
ALL SAYS WE HAVE TO SHORT THE MARKETS
• H4 entry timerame is DOWN
o H4 demand areas are being taken out
o H4 supply areas are being respected
o H4 descending trendline can be used to connect H4 downtrend
o Still lots of room to reach opposing WK demand area

Sensitivity: Internal document for Union Bank

 SCENARIO 1: what action to take?

• Sell all H4 valid supply areas until we're closed to WK demand area, 10%
off the WK demand area maximum

SCENARIO 2:

• Weekly bigger picture is DOWN

o WK demand areas are being taken out
o WK supply areas are being respected
o WK descending trendline can be used to connect WK downtrend
ALL SAYS WE HAVE TO SHORT THE MARKETS
• H4 entry timeframe is UP
o H4 demand areas are being respected
o H4 supply areas are being taken out
o H4 descending trendline has been solidly broken to the up side
o We no longer have a sell direction on our entry timeframe
o H4 might probably be correcting, reverting to the mean to its higher
timeframe's supply in control

SCENARIO 2: what action to take?

• We can only sell:

o If price reaches a fresh level of supply very near or within the Weekly
supply
o OR if previous demand area and lows that broke the H4 downtrend
are taken out
• Buying is not high probability setup, it could work but it would not be a
swing trade since the Weekly is down so the swing trades with higher odds
will be the shorts

Sensitivity: Internal document for Union Bank

 LOCATION SETUPS
These are setups taken on your MTF combination's entry timeframe that GO
AGAINST the bigger picture direction, that is counter trend. This setup is the
one happening at turning points in the markets.

Location setups DO NOT take into account the direction of the bigger picture
timeframe, only how high or how low we are on that TF, the altitude.

SCENARIO 1:

• Weekly bigger picture is UP

o WK supply areas are being taken out
o WK demand areas are being respected
o WK ascending trendline can be used to connect a WK uptrend
o WK fresh and original supply zone has just been hit (this is the
crucial point in a location type of trade) ALL SAYS WE HAVE TO
SHORT THE MARKETS
• H4 entry timeframe is UP
o H4 demand areas are being respected
o H4 supply areas are being taken out
o H4 ascending trendline can be used to connect a H4 uptrend
o Lots of room though to reach opposing WK demand area

SCENARIO 1: what action to take?

Sensitivity: Internal document for Union Bank

 • Can we go long? Our WK bigger picture is UP, our entry TF H4 is UP, all
says we have BUY
• WE CAN'T, WE SHOULDN'T GO LONG no matter how good the H4
demand area looks like
• We're too high in the curve, we are not allowed to go long UNLESS the WK
supply is taken out OR price drops from the WK supply zone and reaches a
good HTF demand area
• Look for good H4 supply levels to short:
o Set and forget! Plan a short setup on fresh AND original H4 supply
zones (original levels are mandatory for counter-trend location
setups)
o If you have a more conservative approach to trading:
 Wait for brand new H4 supply levels to be formed to confirm
your short entry
 You can optionally wait for the ascending H4 TL to be solidly
broken before you decide to go short
 You can wait for a previous H4 demand or previous support to
be taken out before going short

LOCATION + MOMENTUM SETUPS

These are trades taken on your MTF combination's entry timeframe that GO
WITH the bigger picture direction AND are located right within a HTF SD area.

Sensitivity: Internal document for Union Bank

 Location + momentum setups are the most powerful setups because they have
both setups together in a trade, both the momentum (impulses) and being
located at a HTF are trading with the bigger picutre.

SCENARIO 1:

• Weekly bigger picture is UP

o WK supply areas are being taken out
o WK demand areas are being respected
o WK ascending trendline can be used to connect WK uptrend ALL
SAYS WE HAVE TO BUY THE MARKETS
• H4 entry timeframe is DOWN
o H4 demand areas are being taken out
o H4 supply areas are being respected
o H4 descending trendline can be used to connect H4 downtrend
o WK demand area is 50 pips away

SCENARIO 1: what action to take?

• Can we go short? NO
• WE CAN'T, WE SHOULDN'T GO SHORT no matter how good the
H4 CP or PEAK supply area looks like
• We're too low in the curve, WK is in an uptrend and we are approching a
fresh WK demand area
• Look for good H4 demand evels to go long:
o Set and forget! Plan a long setup on fresh H4 demand zones, if
original even better
o If you have a more conservative approach to trading:
 Wait for brand new H4 demand levels to be formed to confirm
your long entry
 You can optionally wait for the descending H4 TL to be solidly
broken before you decide to go long
 You can wait for a previous H4 supply or resistance to be
taken out before going long

Sensitivity: Internal document for Union Bank

 #2
24th October 2013, 08:44 AM
This post is a reply by Tyrone (Pro Trader) to Sharon. She had some questions
about the TF combinations and he kindly answered here in a very clear way, this is
why I have decided to include it in this lesson.

The original question and answer is here

Hi Sharon, I know its very difficult to put exact rules on supply & demand because
all times frames are relative within the whole supply & demand logic. The largest
time frame is the strongest (monthly) & the 60 min is the weakest. So that's why a
top down analysis is done. For example: If you are using the weekly/240 combo &
want to take the highest possible odds on a trade, & we are trading long with the
weekly trend (higher highs/higher lows), you would wait till price has retraced
back to weekly demand before looking for 240 long setups. Now there are two
ways to look for 240 long setups.

1. Aggressive - Counter trend 240 demand levels in sync with weekly trend
demand (see chart below)

Sensitivity: Internal document for Union Bank

 2. Confirmation - With trend 240 levels (wait for new 240 demand to form,
higher highs, higher lows) So the 240 trend demand is now in sync with the
weekly trend demand.

Now we still have to know where we are on the monthly time frame because what
if we are buying after price is reacting to a monthly trend supply where traders are
shorting daily trend supply levels. This is where it can get confusing or
contradictory. So what you have to do is make a rule: I will not trade into or near
any higher time frame supply or demand. Now in this example we are just trading
240/weekly combo, but we've hit monthly supply. What we can do is use the
weekly counter trend level within the monthly to trade back down to the weekly
demand with the added bonus of trading with the monthly trend. Now we would
watch to see if daily demand is taken out (daily/monthly combo) So we are using
240 levels to short, as long as the daily is in a down trend & producing supply
levels (lower highs/lower lows). But now your trading different rules to when your
where trading with the weekly trend. You just have to understand supply &
demand fully before you make or follow rules & that takes time. Now there are 3
types for trades

1. Location (240 levels not in sync with weekly trend & within weekly
counter trend supply & demand) - lowest odds (except when into higher
time frame trend levels i.e. Monthly trend supply)
2. Momentum (240 levels in sync with weekly trend after leaving weekly
supply/demand) - good odds
3. Location & momentum (240 levels in sync inside weekly trend
supply/demand) - highest odds

Each of the above have different rules on what type of levels qualify for a trade.

This is all explained within the classroom which is why you need to do your
homework thoroughly. Like I said, it's all confusing & contradictory that's why you
stick with one combo to start with & apply the 3 types of trades or you may decide
to only take number 2/ momentum & number 3/ momentum & location but never
take number 1/ location unless into monthly trend level. Its all down to your own
understanding & experience. Alfonso will trade all of them & he will analyze the
markets using all of them.

I hope this makes sense.

Tyrone

Sensitivity: Internal document for Union Bank

 #3
4th December 2013, 01:10 PM
Find below a screenshot that shows on a single chart all 3 types of trades described
in this lesson.

There is also a PDF file attached with some sticky notes (yellow), when you press
on them you will get extra descriptions. Both files have been kindly provided by
one of the members, Sharon (alias jettwoo).

This is what Set and Forget community is all about, sharing our knowledge,
helping each other and improving the methodology with everybody's help. We
worked together on this graphic, but she made the whole job. I am sure she's learnt
a lot throughout the process.

Sensitivity: Internal document for Union Bank

Sensitivity: Internal document for Union Bank