It came to my attention from various individuals in our community that at least 3 new startups in trading education in Singapore claimed that they were the ones to come up with a ‘box theory’ of forex trading.
First in 2011 in Singapore
I wouldn’t want to claim that We Are The First (I make no claims whatsoever) – I strongly believe that people operating on different tracks can converge on a good idea – a form of convergent evolution. In my opinion, the power of flight is a good example. The Bat and the Bird despite different lineages but given long enough time each evolved the ability to fly. Besides flight, convergent evolution can be found in technology innovation as well as many other human activities. At trading, painting time periods in boxes is a good way to visualise price action in different time periods which no doubt many experienced traders will come up with.
However I dare say that TerraSeeds might be the first trading educator in Singapore to incorporate these boxes in training. It is even more amazing coincidence that founders of those new trading setups spent time with TerraSeeds as students/paying participants of our forex course – just saying. I was spending some time doing housekeeping on this blog and came across these old posts that showcase our own version of applying those boxes so I put some of them here so that you can see and judge for yourselves.
10 December 2011 – This is one of the first references. Can’t go back much further since a lot of older content were deleted in previous housekeeping exercises.
26 December 2012 – Look at the pictures of this post closely – Binni was writing about multiple time frame trade manage and behold! in her charts, she already had a very comprehensive MT4 indicator called nBox that painted the boxes according to multiple time frames with overlays.
29 January 2013 – This is one of those earliest posting (there are so many more but I am really just picking out 1 for each year) where I did not just share the boxes but also laid out how they could be applied complete with trading rules.
A rule-based approach to price action trading
1. The start of a new trend is marked by price expansion in the opposite direction; previous lows (for bearish reversal) or previous highs (for bullish reversal) are penetrated
2. Downtrend is a series of lower highs and lower lows (marked by red line). In this daily chart, understanding highs and lows using monthly levels make it easy even for beginners.
3. Danger lurks when price makes false non-committal breaks. These give a semblance of reversal but could be wash N rinse movement.
4. There are instances when a period such as this inside month where price does not move out of both North and South boundaries. Instantly traders may recognise a consolidation pattern. Trading should switch to a range trading approach. If in doubt, trend riders should stick to previous trend i.e. down.
5. When a genuine reversal happens, it is marked by price expansion again. In this bullish reversal, price breaks the previous month high. Decisive breaks are often clear to recognise and not ambiguous.
6. As long as the previous low is not violated, the trend remains up.
20 November 2014 – Now this is another good post with overlays showing how versatile boxes are applied in WTI trading.
18 November 2015 – Finally I want to share this post done late last year that applies the boxes on a year to year analysis of the Dow Jones Industrial Average.
Choose based on merit but give us extra points if you are looking at boxes
So my word of encouragement to readers: please look at each forex educator according to fit. If he/she has a program that fits well with your learning requirement, go for it. If you are looking for ‘First to Forex Trading with Boxes‘, then I ask you to give TerraSeeds some more consideration for having a few years more of handling this topic :) – go to here for course program.
Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.
“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.