oscillators dvd transcript

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



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



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,

oscillators dvd transcript

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