Tim Fairweather – Using Encyclopedia with the FTSE 100

Kim Fairweather from Taiwan who's going  to talk about using the encyclopedia  with the footsie  hi everyone my name is Tim Fairweather  I'm an Aussie Trader based out of Taipei  I've been trading for about eight or  nine years and trading full time for the  past two and a half years and it's  really gives me great pleasure to share  some of what I've learned because part  of my I suppose successful transition  has been the use of not only the books  trading course but an encyclopedia so I  think it's great to be able to share  that and hopefully I can share something  that is beneficial to you and your  trading so I've got 15 minutes I'm going  to dive straight into it so what I'm  going to do is just record I've got a  couple of screens here I'm going to show  so one thing that I put together was a  bit of a slicer for the index to the  encyclopedia now if you're on the  Discord you would have seen this a  couple of times I've posted it I'm  really hoping to make an official  version with Al Richard and the team if  it's appropriate and if everyone thinks  it's useful but it's really valuable for  me to kind of cut through the data how  great I've seen it's a gap up okay and  I'm looking at a bull Trend and it sorts  the section and the area so what I'm  going to do today is kind of use this to  find the areas I want to look at with  the market I've got on my other screen  here and then we can take a look so  let's stop sharing that and let's get  a charter I'm going to use the ftse 100  which is what I trade in the Euro  session because there's a lot of Traders  on Discord that have asked hey can I use  the encyclopedia for other markets and I  believe you can use it for all markets  that use price action so this is the  ftse 100 on this chart I've got two  lines one is the extential moving  average on a five minute chart  and one is the hourly so similar setup  to ours now generally unless it's very  clear on the open you usually get a bit  of sideways price action so I've kind of  stopped the market the first year in the  first six bars and I'm thinking to  myself okay what comes next and that to  me is the kind of key encyclopedia  question and that's what I think it's  really valuable for so we've got a gap  up this little indicators just telling  me we gapped up 20 points and it's 28.95  of the daily ATR okay so Gap up beer bar  okay so not follow through big bull bar  that's confusing and then now we've got  three bear bars four bear bars below the  moving average but everything's  overlapping and nothing's really clear  so what can come next okay so now what  I'm going to do is I'm going to jump to  my  index  someone's got a cool name for it more  than happy to uh  to put that on there so we've got a gap  up so I click Gap up and now it's just  sorted through all the sides then  so what are the possible outcomes that  can happen well I'm trying to work out  whether this compression on the open is  the bottom of something the top of  something or the middle of something so  if it's the bottom of something then we  want Gap Up full trend  okay and I'm looking at okay what are  some of the possible outcomes here what  I'm going to do is because ours  organized the encyclopedia so that we've  got  ball and Bear versions and successful  and failed versions what I'm going to do  is I'm just going to copy those  abbreviations and I'm just going to drop  media that's nice and so that's if it's  going to be a gap Up full trend  what if it's a gap up in a bear Trend  well I need to know the section and I  need to know the abbreviations happy  days now we've got those  what are some other possible outcomes  well when I look at the chart the first  thing I think of these six bars is  trading range looks like a triangle so  let's go Gap up and let's click triangle  so now in less than a minute or so I've  got the areas of the encyclopedia that I  want to look at because I need to know  what section and it's helpful to have  the abbreviation because I can jump  there straight away so let's go  new share  okay so now I'm into the encyclopedia  now the most common sections to start on  I think or for anyone using it are going  to be the Gap up and gap down because  the way they're organized is very clear  you can start off with um  the four common outcomes  and then you can work through the 50 of  reversals that happen on the open and  then you can get into the section and  these are really valuable slides and I'm  sure yeah the presenters will touch on  this that here are the most common  outcomes so these are ones you need to  have in the back of your mind double  bottom double top wedge bottom wedge top  basically regressing to the EMA for a  swing  look at what breakouts are going to are  going to happen and fail breakouts on  the open and then your Trends from the  open so right away I'm going okay well  first six bars are sideways  so  it's not so bearish that looks like it's  going to be down all day  and it's not really bullish we have now  consecutive bull bars so the moment's  not really clear  what the outcome is going to be so I go  back to my Excel sheet and I go okay  if it's going to be a bull Trend we go  to part eight  and I've got three outcomes here so I've  got  all trend from the open  I've got  Apple Trend which reverses and then the  middle option which is Gap up bull Trend  and then trading range here's my three  possibilities and what I can do is if I  clear out  that the abbreviation I can now kind of  magnify my page and actually I can  actually see the opens so I can actually  jump to the slides they're going to make  the the kind of match the opening bars  if he opens three bull bars for example  anything that's going down on the start  I'm not really going to look at that's  going to help me identify where the next  swing is potentially going to be  so if I want to type in another one I  can go through triangle  okay triangle and pull breakout I'm  going to clear that out  I like the triangle section because they  talk about the reversals and it's got  these handy slides which has the four of  them okay so here we've got  uh compression and then we've got a  successful breakout and then fail  successful bear breakout and fail  so I'm working through okay so I want to  be patient  in these  break out and follow through  here the triangles in the middle of the  day so it's not as relevant and these  triangles take up many more bars I'm  looking for something which is like  instant compression so maybe that's not  going to be  another possible section  is the  low two high two on the open second  reversal up second reversal down so if  we go to section seven I'm just copying  the  abbreviations from the spreadsheet  because footsie does this a lot  on the open we have an attempt to hide  two or a low two and then that can be  the higher low of the day  so here's a low two we've got bear bars  and then bad follow through and then  we've got a breakout above a big bull  bar so I'm looking on the open for a  breakout pullback and then looking to  get long and if I take  get rid of that abbreviation there so  we've got sideways break out not above  the high and we've got a bare version  he is similar but we're above the moving  average on this slide  so I'm getting an idea of this triangle  and then  break out pullback  so I'm trying to work out what a good  entry is  let's assume that I haven't found what  I'm looking for and I want to go back to  my sheet  we've got the high too what about a low  two so we've got the low two what about  a high two  probably that back here paste okay so we  want section seven  and I'm going to copy that to use  and start that screen let's share this  one  okay so we're in section seven  Gap up height  so we've got a couple of options here  we've got a cell climax which became a  low of the day here we've got one Buy  Signal two buy signals  and at the moment this chart is the one  that's the most similar to what I'm  seeing  on my chart at the moment if I copy  that part of the chart over here you can  see  we've had a Buy Signal that did trade  above it  but then now we're going lower I'm about  to go below the lower that bar so okay  so I might be looking for a high two  bottom here's an explanation  that second signal doesn't have to work  here we created a third signal  so I'm looking at ideas he's also a  similar version except here we're above  the moving average and on the chart  today we're below so I'm getting an idea  of what a failed band move would look  like so even if I don't take those early  buy signals I'm looking for a bull bar  and then I'm looking to buy above that  bull bar for continuation  okay so now I'm getting some ideas let's  go back to the chart  and let's play through okay so now we've  got one two three four five bare bars  they're mostly overlapping but at this  point  the high twos and all the bull Trends is  looking pretty far away  another Buy Signal inside bar  okay so that now makes it a bit more  confusing so there were buyers below to  do  now we've got a second Buy Signal that  looks like it's failed  so at this point trading range I'm  looking for breakout and it's not really  clear on which kind of the patterns that  I've looked like might have shown up  now we've got a surprise bar tint  so  anyone that sold down here is now stuck  now this is looking more like that Hive  suit and even if it doesn't look like  that high two on the encyclopedia it's  going to trade in a similar way if I put  a box around that  trading range I'm thinking to myself  well  I don't necessarily want to buy in the  middle of this range  but this bar is a bit different from the  other ones  so I'm waiting for some kind of follow  through  and if it's kind of like 10 then it'll  look to get long and if it's nothing  like 10 then I'll wait for more  information  now I've got to break out and follow  through it okay so that's looking more  like  that high too and now I've got an  opportunity to get along  so by using the encyclopedia I was able  to be more patient well that's my  understanding of it to assess the  probabilities here maybe you could sell  but if you sell there you need to get  out with eight  and  two is Sideways from one it's not a  great buy Eight's a very small Bull Bar  after five beer bars I think it's low  probability there  10 as a surprise now has follow through  so now I've got higher probability  of taking a Buy Signal because now we've  got a new high of the day we're breaking  above one and so there's better context  for taking a long trade now of course  it's a little bit facetious here because  it's with hindsight so I know that the  the market goes up but even then I'm not  looking to sell that so I'm ruling out  possibilities while I'm looking at that  shot  now we've got follow through above that  so okay to buy  trade small use a wide stop and see if  we're going to have spike in Channel  so now we've got a spike above that  trading range expectations probably is  we're going to get a measured move but  also all this sideways price action  the next part of that's probably going  to be a channel okay well what's  what does the channel look like well  let's  stop sharing that let's go back to our  encyclopedia let's clear all these  and let's find Spike  Spike and channel bull trend  call scbl  I'm going to copy that  we'll get out of that  it's really handy when you've got  multiple screens  very very handy but um not essential  Spike  I might have made a misspelling on my  abbreviation sorry for that  so Spike enchantable so we've got a  strong ball leg that's breaking out of a  tight trading range and then we're  looking for a pullback probably a high  one high two a decent Buy Signal to get  long  here was kind of flat but it ended up  being  near the low of the day he was a tight  trading range breakout and then we're  looking for a pullback  to get longer by  a very strong move pull back to the  moving average so I'm getting an idea  that yes I want to be long I don't have  to buy the highs but I'm looking for a  pullback  to get into the market so I think the  encyclopedia is helping me select better  entries  now if I go back to my chart  okay let's say you didn't get long and  you waited for this okay that's all  right we're probably going to test the  breakout point  that was a pretty strong Bear bar so  balls that bought up here we traded  above the higher there so we've got  balls stuck up there  they need to look at exiting if this  comes down much further  but then we've got follow through so  reasonable leg down maybe we'll have a  little bit more down  and now we're starting to get buying  pressure so we're looking to buy a  pullback  we're looking to get long so I hope that  was helpful to at least explain a little  bit about how I use the encyclopedia I  know I've done 15 minutes so I tried to  cover a lot but it'll be a recording so  you can kind of slow down and look at  the parts that I used and uh if we can  make the index available  it'll be there to download as well happy  to answer any questions and uh yeah I'll  be looking forward to seeing the other  presenters  um how they use it so that uh yeah I can  put that into practice as well so thanks  very much for your time and good luck  with your trading cheers bye  foreign