فوركس ساتو

ADDITIONAL TIPS
MODIFIED SLANTED CHANNEL SURF ZONES
In the eBook “Forex Surfing” you learned about the concept called “Channel
Surf Zones”. There is a more advanced adaptation of this technique that I also
developed, however I thought it might be too much to include in that eBook as
I didn’t want to confuse you – there was more than enough for you to learn in
that eBook without adding more to overwhelm you. Well, needless to say
I’ve since decided to share some more about that technique for you to benefit
from.
You might want to reread the section explaining “Channel Surf Zones” in the
eBook “Forex Surfing” to get a refresher before you continue reading this.
The basic version of “Channel Surf Zones”, as you already know, is strictly
horizontal. Obviously this technique is suitable for within sideways
consolidations but not for slanted consolidations, nor even within
triangles. As I’ve introduced the concepts of trading within slanted
consolidations and triangles I figure that now is the time to introduce you to
the more advanced Modified Slanted Channel Surf Zones, which is suitable to
be used on slanted consolidations and triangles.
The main challenge of using the “Channel Surf Zones” concept on
consolidation patters (and triangles) that aren’t nearly perfectly horizontal is
how to calculate where you slanted line should be, and to set it at the
appropriate slanting angle. The solution is rather simple to implement once
you understand it.
I will show you how to do this once on a slanted consolidation. Doing this for
a triangle is pretty much the same thing.
forex sato

The above chart is explained in the steps below.
1. You start off by drawing your confinement trendlines (along the tops
and the bottoms).
2. What you do is you turn on the “cross-hairs” on your chart. You can
see the cross-hairs on my pointer in the chart shot above.
3. You then select a candle that is sandwiched between your confining
trendlines. This candle is now your “reference candle” so that you can
make calculation from this point in time. On the chart shot above I’ve
used the candle where my cross-hairs are over as my “reference
candle”. It is important that your reference candle be as close to the left
side, near the beginning of the consolidation, as possible.
4. Now grab a piece of paper and a pen to write down some numbers
used for your calculations.
5. With your cross-hairs over your reference candle, align the cross to
intersect with the top trendline. Write down the point value of where
your cross-hairs is now; this is your “top number”. Next with your
cross-hairs still on your reference candle align the cross to intersect
with the bottom trendlines. Write down the point value and this is now
your “bottom number”
6. Subtract the “bottom number” from the “top number”. This gives you
the range of your consolidation at the point of time where your
reference candle is. In the above example, the top number is 1.2384
and the bottom number is 1.2361, and so my range is 23 pips around
my reference candle.
7. Multiply the number of your “range” by 0.3 – this will tell you what
30% of the range is. In my example 23 pips X 0.3 = 6.9, but since you
need a whole number you simply round up, thus 6.9 becomes 7. We’ll
call this number the “reduction number”.
8. You add the “reduction number” to the “bottom number”, and you
subtract the “reduction number” from the “top number”. This gives you
the “inner top” and “inner bottom” numbers. In the example above
these “inner” numbers are now 1.2368 (inner bottom), and 1.2377
(inner top).
9. Then you place your pointer over the top trendline and “duplicate” the
line. This will give you a perfectly parallel copy of the top
trendline. Take the copied line and move it by grabbing it in the middle
of the trendline. If you accidentally grab the line close to an end point
you’ll then be changing the angle of the line. If you accidentally do this
then delete the line and copy the line again. It is important to keep them
parallel. While moving the line, align your cross-hairs over your
reference candle, then move up/down until your pointer is at your
“inner top number”. Release the line at that point. Repeat this step
with your bottom trendline to have a copy set at the “inner bottom
number”. Note that the starting points of your trendlines don’t have to
be vertically aligned because the lines are parallel, so it doesn’t matter
if it is somewhat misaligned.
10. For esthetics (optional) you may change the colors of
your external lines to be red, and the internal lines to be blue. At this
point your chart should now resemble the chart example shown above.
Note that the use for this modified version of the “Channel Surf Zones” has a
different use than the standard version. Because your outside trendlines won’t
be parallel to each other (most of the time for consolidations – but always for
triangles), as you move along to the right of your “reference candle” your
percentages will progressively change away from the standard 30-40-30
percentage zones. Because of this you don’t use the “blue line” (as described
in “Forex Surfing” as your entry/exit point. You simply use the area between
the blue line and the red line as the zone where you watch for reversals to
potentially enter/exit a trade within.
You’ll find that most often (in a sloping consolidation) that the lines converge
(move closer together), and obviously in a triangle the lines always
converge. The inner lines will always converge before the outer lines. It is
interesting to observe that particularly for triangles, but also applicable to
slanting consolidations, you’ll often notice that near where the inner lines
intersect (usually soon after) is often quite close to where the breakout occurs
– you can use this to predict roughly the time the breakout is likely to
occur. You’ll notice that there is a diamond shaped area, a parallelogram,
between where the inner lines intersect and the outer lines
intersect. Frequently this is the zone from which you’ll most often see a
breakout occur, and so for obvious reasons I think of this as the “diamond
zone”, with the obvious connotation that from the “diamond zone” I will catch
my diamond pips. Tip: If you have scalped an entry going through the range
when it is inside the “diamond zone” then secure a stop for at least some profit
and let it run (unless you see an obvious reversal). You’ll often be right and
thus you’ll end up catching the breakout early, resulting in more potential
profits.
(Cool story: Once while teaching someone a little about Forex I noticed a
triangle. I didn’t explain to him the “Channel Surf Zones”, nor did I draw the
lines on the chart; I simply imagined the lines. I mentally extrapolated the
inner lines and envisioned where they should intersect, and what time that
would be. I told him my prediction of what time I thought the breakout would
occur, and within a minute of my time it happened. I was impressed with
myself (as I’m not always right, or so accurate – ok, so I got lucky), but he
was shocked! For a while he acted bewildered like he was in the presence of
a god, or some kind of amazing psychic. I didn’t explain to him what I did, as
it was too advanced for him at the time, so I just let him keep his illusion of me
being a superstar Forex guru, but now you know my “secret”.) In the chart
above notice that where the blue lines intersect the market stagnated and then
soon after broke out. Now keep in mind that this doesn’t happen every time,
but you’ll observe this frequently enough to use that convergence as an early
warning of a potential breakout or some kind of change to the progression of
the pattern.
If you are using this technique just for the purpose of looking for the inner
convergence then you don’t always have to do all the math and the steps
above; you may just copy the trendlines and move them to the approximate
position by just “eyeballing” it, which is “good enough” (due to my inherent
laziness this is what I most often do anyways). Here is a triangle that I’ve
“eyeballed” on a EUR/USD daily chart.forex sato


Just one more tidbit of wisdom to share with you before I wrap up this
section. Though it happens less frequently, I’ve seen blue lines (after the
intersection and the blue lines are now moving apart) act as a
resistance/support trendline for the resulting breakout (more or less). This is
just an interesting thing to watch for when you use this technique. It could
possibly help you to notice a potential trendline earlier than you would
normally spot it waiting for two or three points to line up (what you would
normally consider to be an established trend). Notice that on the above
“eyeballed” chart the top-inner line acts as a very nice resistance trendline,
and furthermore the top-outer line acts as a secondary trend line, which in this
case crossed at exactly the point where it is obvious that the large trend has
reversed (also indicated on this chart by the crossing S.E.X. lines).
 forex sato