Sunday, 8 March 2015

Trading the Tiger Time Lanes Band Shades: Trade set ups

How You Use the Tiger Time Lanes band shades to create effective forex strategies


There are a number of setups that are derived from the band shade formation and the white zone phases. Here we will look at the three most common.


Revision To The Mean Trade – Orange To White:


As we all know price doesn’t move in straight lines. It either moves within a range or it trends in either a long or short direction. But eve when it trends it tends (unless there is some major news event) to do so in a zig zag fashion, moving to a new high / low, then retracing back before continuing its trend and establishing another new high / low.


Why does this happen? Well as mentioned earlier, price is determined by the volume of buy and sell orders. Many traders place orders in the market at various points or levels that they think are important* so when price reaches these areas price can stall or reverse (depending on the number / size of orders). As price retraces or when it has retraced to a certain level, those traders who have been caught with positions on the wrong side of the move, often liquidate their positions, creating second / third wave of buying or selling momentum, pushing price to further highs / lows .


The Tiger Time Lanes grids are so good because the demarcation of the band shades predict, with stunning effectiveness, where these changes of direction will take place.


The most common trade is the Orange to White. It happens on the initial breakout or subsequent secondary move of price. The further the way price is from the white zone and the I minute L1 discs the greater the chance of reversal. The best way to think of it is as if price were attached to a piece of elastic, the further the stretch the more likelihood of it to come back unless the elastic breaks, which would then signify a significant breakout


*It you want to know why they cluster in specific areas you need to understand the concept of collective psychology to know why they cluster in specific areas.


The White Zone Trade:


As emphasized in the explanation of Orange To White trades, price reverses. But at what point does price stop reversing and the second / third wave start? Again the band shades are invaluable because what was once support often becomes resistance and vice versa. The most powerful level of all is the edge of the white zone. For scalping, the edge of the 1 minute is particularly important. As price breaks out and then retraces back to the white zone this has the effect of pushing price way again. Think of an analogy of refueling. The below video demonstrates this effect in action:



For it to be most effective it usually requires a new session high or low to have been made and that it is the first time that price has come back to the white zone from its break out. Think of a ball bouncing on the ground, the higher it is thrown the bigger the likely bounce.


Pre-emptive Reversal Trade:


This trade looks for clues of an ending of the move and a possible more substantial reversal. As pointed out above the white zone goes through a number of phase as it recalculates. More often than not when the white zone collapses, that is a signal that price, at this moment has finally stalled for the time being and that a possible retracement could happen. There are of course several courses of action that you could take. If you are out of the market you could consider this the moment to enter it against the trend. Alternatively, if you are trading with the trend you could take the opportunity to close your trade or to lighten you position (take some profit) obviously, this would be dependent upon your risk reward and your trading plan.






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