Laying out a Diamond Grid

[ram]

I made some comments on envid's latest blog HERE.
and wanted to show what I was talking about.
Here is the diamond grid using trend lines for GBPUSD.
m30zoom.jpg

[Enivid]

Interesting. But a bit cluttered and a little far-fetched in my opinion .

[ram]

Zoomed out it's cluttered... agreed.
Once you zoom in.... it clears up.
Just a series of S&R horizontal lines
and the parallel ascending/descending lines to work with.
Here's how it worked out today:

m30.jpg

[ram]

The Yellow 'Working Lines' you create as needed
to frame a ranging price action and look for breakouts or pivots.

workinglines.jpg

[ram]

Using the working lines we finally see a breakout

entry.jpg

[ram]

stoploss.jpgtargets.jpg

[ram]

There have been (2) 25/30 pip midday swings
that could have been captured for shorter gains.
The market reversed on the GBPUSD w/o reaching the long targets.

The reversal hit the 5 pip stoploss so I reversed as well.
Long and Short targets are both in in the 65-75 pip range.

I let the 'system' play itself out and try not to second guess it once in play.
Typical stoploss is 5-7 pips... typical targets are 50-120 pips.

The London 8:00am drop on the pound to the diamond grid pivot
was 110 pips. The London reversal was about 120.
Those 2 points represent today's daily range.

Here is my current status short the cable.

Reverse.jpg

Cheers!

[ram]

The short trade still crawling towards the target.

2_26 EST.jpg

This system is more fun during London.

As far as exits...
you always know what your target is.... but not the price.
So,
you plan for the pivot.
If I can't monitor the progress (sit in front of the chart)
I set an alarm nearby the projected intersect,
when triggered, I watch the current candle.

Once you're getting close, say within 10 pips of the intersect:
you set your take profit price point.... at the exact intersect...
with you finger on the manual close order.

Plan for the pivot:
3 pips BELOW the intersect,
In this case, a short, I will set a limit buy with a 5-10 pip stop loss...
and watch it like a hawk.