The use of "cascade time" ranges

In this thread discusses the tactics of using the "cascade ranges" (CTFT). You had to trade on multiple time ranges? What time range do you usually use while trading? The majority of veteran trader usually use several ranges when it comes to identifying areas of support and resistance. However, though many traders can use multiple time-frames, they often limit your horizons when you open trades and focus on only one time range.
This thread will be considered a strategy that is called "cascade ranges". Strategy based on the breakout of the consolidation zone and is a very useful technical analysis tools. If the right to use it, it will allow you to identify and make a lot of profitable trades in multiple time ranges. Under the best scenario, you'll be able to profit simultaneously from both the short and long term trades. When on a smaller time frame momentum is detected, it means that the trend is beginning to emerge for a longer time frame. CTFT – a technique that will allow you to profit from large price movements.
 
don't concentrate on one time frame.



Most technical traders use a technique known as "analysis across multiple time frames." In this technique, a larger time range to determine the trend on a smaller time range. For example, a trader can use a trend on the daily charts to confirm direction and momentum on the 30 minute chart. The idea is built on tactics, is that the long-term trend helps to make the right choice when determining the short term trend. However, many traders, identifying short-term trend, forget about the fact that the long-term trend may give a good opportunity to open positions.



This desire to use only one level of analysis often leads to the fact that players are missing a great trading opportunity. Many traders think that if they have opened a position, now they have nothing more to do but to sit and watch her in the time range in which the transaction was open. Using the suggested technique, you can analyze the outcome of the transaction and other time frames. In addition, you will be able to enter into new profitable deals that you would ignore in other cases.
 
Relay and champagne.



To imagine what the CTFT, imagine a relay race in which the 30-minute chart reports wand 4-hour, and he, in turn, transmits its daily schedule. Please note that in such a situation, a possible partial match where one runner (deal) continues to run, and the other one starts running. Another obvious example can give you several glasses of champagne, supplied by pyramid. When champagne is poured from the bottle, fills the first glass (time range 1), it begins to pour into the glass below. In this example, each Cup located on the lower level is a longer-term time range.



The sense just described is that, finding a consolidation pattern, such as symmetrical triangle on the longer-term time frame (TF3), you can predict the breakout of the consolidation range short-term time frames (TF1 and TF2). Identifying numerous targets at all three time ranges, you will get more opportunities to profit from price movement, which will move the cascade from one time range to another.



Trade on the cascade timeframes work best in Forex market because it is characterized by strong trending characteristics and inertial motion. Another reason that makes the Forex market the most suitable for the use of this tactic is the fact that trading on it go 24 hours, the resulting trends are evolving continuously, without breaks, which is typical for other markets.
 
Identification of the consolidation pattern
Key in CTFT is to identify a consolidation pattern is on the largest time range. The picture below shows a chart of USD/JPY for April 2006. Please note that on all three graphs (a 30-minute, 4-hour and daily) there is a consolidation model. On the daily chart we see a symmetrical triangle on 4-hour chart the upward channel trend, which had just been broken the support, whereas the 30-minute visible breakout of the horizontal consolidation range.
 
Template
Key for cascade trade is a trading pattern (figure below). This template presents a plan your attack and retreat. Remember - those who can't make a plan, always doomed to failure. Having designated goals, you can easily make trades. In this example, the template is compiled on the already considered by us above the April collision on the pair USD/JPY. Please note that all profit targets and stop losses are calculated in advance. Accordingly, you can calculate the ratio of risk to reward. When the transaction is triggered in the template are entered time and date.
Once you have identified the consolidation pattern on long term chart, we can try to catch the price movement on short time ranges. Please note that the deal for the third time-frame (very long) was the last of three that was struck. Ideally also previously concluded trades are closed before those who were imprisoned later. Profit objective should be stable. We should not fall into the temptation to correct them in the process when the position is opened.
 
Sample template
Let's look at the pattern in the figure below. In this example, the USD/JPY pair was trading at the rate of 118.48, when the analysis was carried out on 16 April 2006. TF1 is a 30-minute chart, the signal for the opening short position at a price of 118.40. On the pattern three goals arrived 118.15, 117.97 and 117.53. Stop loss at the level of 118.74. On the chart profit targets marked in green. Below shows that all three profit objective was reached in 16 hours and 15 minutes.
In this example, all profit objective was achieved for all ranges. 12 may 2006 the USD/JPY pair has formed a low of 109.39, down from a 3-m time range profit objective. The figure above shows the process of achieving targets.
The method of determining targets is beyond the scope of this article. Technical analysis is the combination of science and art. Every trader has their own way of defining goals for the levels of support and resistance, core points, Fibonacii, MA and so on.
During the settlement of transactions need to have an idea about how much time it will take to carry out the transaction at every price range. It is preferable that the targets were reached less than a third of the time required for the formation of the consolidation model (for example, if consolidation was 60 days, the target on the daily chart should be reached in about 20 days).
In trading nothing is impossible to predict with absolute precision. Of course, your model can not work. Can occur kickbacks movements and other troubles. You have to set stop losses, based on your tolerance for profit and trading plan.
 
How does CTFT step by step.



1. First, you need to have a clear pattern of consolidation in the largest time range (TF3).

2. Ideally, time periods TF1 and TF2 should also be identified consolidation patterns.

3. Define multiple targets for each time range.

4. Define stop loss for each time range.

5. Determine the amount of capital which you can risk for each time range.

6. When positions are open, watch how quickly you achieved your targets. Some orders can be filled quickly. On the other can occur pullbacks and consolidation, before the target is reached.

7. Achievement of targets should occur within reasonable time limits.



You can also use trailing stops for fixing the initial profit, however it is possible and to abandon them to allow profits to grow. Trailing stops is better to use if speed is fast and the momentum is strong and the situation is evolving in your favor.
 
Stop losses and sizing of positions.



Conservative traders prefer not to risk it with such a large hard-earned money. Stop losses on long time ranges must be greater than the smaller. The size of the stops is determined in such a way to be able to make a profit, even if profit target for the third graphics will not be taken. For example, in the case of a stop-loss order for the third time range is 156 pips. Combined profit for the first and second graphs is 195 pips. Thus, in the worst case revenue for all three schedules is 39 pips.



Cascade trade requires good skills of management of capital to limit the risks of the transaction for your Deposit. The key rule is to use no more than 10 % of your Deposit transaction. Since the approach includes three separate transactions for three different time ranges, you should have sufficient risk capital in your account. If your Deposit is $ 100,000, then you can place a maximum of $ 30,000 for all three transactions.
 
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