oscillators dvd transcript
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8/14/2019 Oscillators DVD Transcript
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The following is a transcript of the Oscillation
portion from the Big Lights DVD’s. This is the
beginning dialogue between Mark McDonnell and
Susan Dufour.
Susan: The term oscillator is a technical analysis
term for an indicator that moves up and down,
wavelike, within a price range. Traders mightwant to consider this price range when analyzing
the trends of currency pairs. Mark, I know there
are many factors a trader has to consider whenthey look at the charts, but what is the first thing
that comes to your mind when you see that a
currency pair is oscillating?
Mark: I want to be able to identify it quickly and I
think that if you just look at the 3 major charts, theShort, Mid and Long, and if you see that they are
braided, or non trending, or a pacman – I want the
signal to go off in your mind “Hey, I think there is
going to be some oscillators over here on the lefthand minute charts, and I need to go look for
them, and find them and see if there’s an
oscillation that might be worth trading.”
I should be able to look at some minute lights and
see them oscillating and be able to tell what theLong, Mid and Short term charts look like. So, I
want people to be able to look at the charts on the
right and guess or surmise that there might besome oscillations on the left and go check it out,
or another good chart reading skill is to just look
at the minute lights only, big and small, and to see
the oscillations and then try to guess, or get reallygood with your chart reading and say – “I think
this is what the Short Term chart is going to look
like based on these oscillations over here” – whenyou reach that point, when you can look at the
charts on the left and try and guess what’s
happening on the right – and be right!! – and makea determination what is happening on the left –
then you have a complete grasp of the software,
and the oscillating pairs will just pop up all over
the place.
Susan: Mark, I think this is a good time for you to
go to the easel and show everyone what anoscillating chart looks like!
Mark: You know Susan – a picture’s worth athousand words, so, obviously by oscillating, we
mean the rolling action and we need it in a fixedrange, where you have tops and bottoms that are
pretty steady.
This is pretty common place in the Forex.
This is what you should look for:
If you see a pacman, skewed or braided curves on
your Long and/or Mid term chart – you should belooking for the oscillating waves on lights
between around the 600 minute light and the Short
term light.
If you see a pacman, skewed or braided curves onthe Short term light, you should be looking for
these oscillations on minute lights between 120 to
300.
This is because we now know that we can magnify
the charts - so if you see the braided or pacman
skewed on the longer term charts, you’re lookingfor bigger oscillations.
If you see a pacman or skewed light on the shortterm light, we know that we’re looking for smaller
oscillations.
It’s all a function of which light on the right has
the pacman or skewed look.
The thing you want to look for when consideringtrading these is what I call the amplitude of the
wave. This is from top to bottom – how many pips
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are we talking about? 30 pips? or are we lookingat . . . I’ve seen Short term oscillations with 300
pip oscillations - so if you find these oscillations,
you know – we’re talking about the Big Lights –we’re not trying for 10 pips, our potential on the
trades we’re looking at is much larger. That’s why
it’s called the Big Lights!
So, by looking at the oscillations, and knowing the
size of the chart, by rolling your mouse across the
curve and determining the amplitude, or size of
the oscillation, you can say – “Hey – I got thesecharts here that are oscillating, - - and I can see
that the oscillation is 150 pips – I can have somepotential here,”- because when you take a trade,
you have to put the same amount of money on the
table – so now you’re trying to increase the reward
part of your risk/reward ratio.
So, if you see a large oscillation, your risk reward
ratio is much higher than if you see some 30minute light oscillating, where you’re just going to
get a few pips to cover the spread. Things of thatnature, where you’re risking the same amount of
money, but where the payout potentially isn’tnearly as high.
Susan: OK – so you have to remember that theterm oscillation can mean just a trading range.
Trading range on the chart can be represented by
the peak at the top, going to the bottom, and thengoing back up to about that same level.
Mark: I think that it’s important to say one thing –There are 17 currency pairs Susan, all 17 of them
are either trending or oscillating. Once you
understand that and start believing it, then you’re
going to have to come and in your trading plan,you will write down oscillating. You’ll start
writing down “oscillating in this much of a range”
– and write down the support and resistance. Onceagain, you will start to see the trades better. That’s
the whole goal of what we’re doing here.
Susan: OK, and you mentioned support andresistance – Show everyone in this drawing that
you have, where support and resistance would be
shown.
Mark: It’s the peaks and the valleys! The supportlevels are at the low points,
and the resistance is at the high points.
And you roll your mouse across the curves andyou’ll look at the pip values – and you’ll realize
that the high’s here are matching.
Sometimes it won’t be perfect, as in this chart, but
it’ll be so close, and you’ll see in the charts we’re
going to look at, that it’s pretty darn close to thislook. So, a picture’s worth a thousand words, so
this is what the chart examples you’re about to
look at – do actually look like!
Susan: And, when we look at the support levels,
it’s where the red and the green line reached a low
point on the chart and then it went back up. Thereason it’s called support is because traders come
in and go – “Wow, - this is a pretty low price, I
think it’s going to go back up.” - - and people tendto buy into it, which then draws that price back up.
Once it goes back up and you see the charts, the
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red and the green lines come to a high point, onthe chart, and then fall back down, that high point
is called resistance – and people say “Wow – this
price is pretty high – I think it’s going to startheading down” – and they may start taking their
profits – and the lines do go down.
Mark: You buyers are going to come in here,
And if you can take advantage of it – that’s what
we’re trying to do here.
Susan: Just what is the difference between
oscillating and trending?
Mark: Well, when a currency pair is trending,you’re looking for strong directional movement,
straight up or straight down. I’m looking forstronger foundation lights. I think we always say
that if your Mid and Long are pointing straight up
or straight down, that’s a trending trade.
I would probably also be able to accept a Short
and Mid fully separated pointing straight up or
straight down – then I know that it’s a directional
trade. To get into these trades where it’s kindagoing sideways – they might be going sideways –
which is essentially going no where – but, they
might be channeling up and down in a fashion that
allows you to still trade them. So, if I say thatevery single currency pair out there is either
trending or oscillating – they’re either going
straight up or straight down, or they’re goingsideways. And if they’re going sideways – and I
can read the up, down movements clearly – then
they’re oscillating.
So, the next step in the process is to look at the
smaller minute lights – starting with the 480,
doing the standard drilling down – looking to see
which lights match up with the channels well, andgive us some early warnings you can see.
- how we would approach setting up a couple of
lights to the left of our main oscillation.
Drop it down till you start to see the peaks and
valleys popping up – and so we know we’re
starting to get close and might have a potentiallight. We’re looking for the peaks and valleys –
and how they’re building – you can see the
troughs, and you can see how the peaks are built.
You’re looking for the peaks and valleys on this
smaller light to match the peaks and valleys onyour oscillator. You are trying to get an early
warning set of lights into your oscillating channel.
You want the peaks and valleys to be staring at
you well on your entry (trigger) light.
That’s how you would manage your lights. You
can just keep the Short, Mid and Long on thescreen next to you main oscillator.
and decide they
want it at this price
(at the bottom) –and when it
reaches this price
here (at the top) –
the sellers are
going to come
right back in –and it just goes
into this range.
Example: We’ve
already determinedthat the pair is
oscillating on a large
minute light with somepretty big channels
We’re looking
for those valleysagain, and we’re
looking to see on
20 or 50intervals,
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