So many of these pins work that I often forget it's natural to get the odd losing trade.
This one looked good too - it's Royal Dutch Shell (FTSE 100)
Pin bar at a swing high (3 candles back from most recent)
It hit the 61 fib level dead on and after protruding through a major pivot price zone, it closed back below it.
The pin broke by 10 points and then it took off.
...has an 14B on daily on my charts, Im trying not to be biased but I see support from fib confluence and s/r not far under... have a nice w/e everyone, Raz
This is not present on the daily bar so you could drop down to lower time frames - 4hr or possibly 1hr.
Infact this is one of the main reasons I don't enter on retracements of the initial setup. I can see the benefit of
a) having a smaller stop
b) as Seeking once said, the coach often likes to come back to pick up the stragglers before moving off
However, it goes against my feeling lately which is to trade when I am as close to certain of something working as I possibly can be.
From my personal experience which is ultimately all that any of us can go on, if something doesn't work from the beginning, the chances of it turning diminish considerably.
Yes, I would play these on a straight break of the low.
Also, if that low coincides or is VERY near a strong TL or fib level etc, then I would wait for a break of that area too.
I personally like to have a larger stop at smaller size when I feel more certain the trade is going the right way.
How many reasons can you find to take a trade?
IB4 (slightly out on this chart but it is one on the chart I trade off)
a) On a bounce off the 150 AND the 365ema which are almost on top of each other here providing VERY strong support
b) Just above pivotal s/r (note: this is a zone not an actual number)
c) Just after a bounce off the rising TL on the daily
d) Just above the 50 fib level from the last major swing low (note: spike high was false so not included in the fib calculation)
e) At very strong support
f) Weekly is a pin too - indicating a move up (although the nose is fairly small on it)
There is strong support/resistance on either side of this setup so I would expect a sharp move one way. However, on the upside, I am wary of that congestion zone back in December and on the downside you have support zones coming back in from the sideways trading thoughout October, November and February.
James: First of all, I would like to thank you for all the work you have put in over the years that led to the formation of perhaps the most important thread I've ever seen on forex forums.
Anyway, down to business:
I've spent the last few days going over this thread and I have come up with a couple of questions:
1) Could someone be kind enough to explain if there's any difference between DBHLC(or DBLHC) and TBH(or TBL) formations?
I understand exactly what DBHLC(or DBHLC) is and how to play them but I'm not so sure how to play a TBH(or TBL)
2) James mentioned somewhere in this thread that he will be revamping the PF to make it better? Has that been done yet? I ask because I'm itching to join in on the fun. From what I've heard time and time again is that the PF is worth the cost anyway; but since some new stuff is expected, and I cant afford more than a month, I might as well get in at the best time (kinda like an FX trade eh? )
Thanks in advance for any replies.
Keep up the great work James, mbq, Seeking, Habeeb, Wizard and everyone else
A DBHLC is when we have Equal Highs but the current bar finishes with a Lower close then the previous bars Low. So a DBHLC is ALSO a TBH. BUT a TBH is not neccesarily a DBHLC. Again the important part of the DBHLC is that the current bar closes lower then the previos bars low.
So if you have matching highs, that is a TBH. And if you have matching lows that is a TBL
My understanding of these patterns is that DBHLC is a setup to go short.
Conversely, the DBLHC, is an opportunity to go long. (remembering to look for confluence to support the trades)
The two lows or two highs of this pattern show that the market found a support/resistance (hit it dead on) and then went the other direction and maintained that new strength into the close.
Now, a TBH or a TBL just means that the highs or lows are equal but the difference is it usually doesn't indicate a firm direction for the trade - it simply shows an interim support level.
The way I like to play these is to trade the breakout. So in Mike's chart above, I would look to enter as the market breaks down through this TBL. As you can see - this never happened, meaning your order would not have been filled.
To demonstrate another way to look at it, you could play that TBL on the strength of its support - especially if it had hit a trend line or a fib level and look to go long.
There are different ways to play these - PA is still discretionary and aggressive traders will react differently to some setups as opposed to very conservative traders.
This is just a TBL.
To be a DBLHC, the close must be above the high of the previous bar.
Gilt - June Future - 1 hour
I've posted a chart to show you how I would play these different setups.
As you can see, trading off of just PA alone with almost nothing else would have been hugely profitable here.
For ease of use, I have not used any confluence but remember to look for it - it increases the probability of your trades dramatically.
Thanks Mike and Wizard. That helped immensely. Makes a whole lot more sense now AND thanks for the quick replies!!
Regarding the other question I had: has James finished adding more stuff to the PF or...?
There is a constant flow of new information in the PF. It has absolutely changed the way I view trading and I highly recommend it.
Yea, this is a snake...monthly on this futures I have a IB which is moving/breaking down. No idea if this changes every month or what, seems sometimes gets shifted or what? Seems odd...
Anyway, taking it as "real". Then on weekly we had a DBHLC off that 66.50$ s/r which we tried to break for 6 weeks and failed.
Don't have that IB on daily, but general PB attempts and stalling around 61$. I think we're in a zone between 58-68$.
Interim TL went once we lost 64$, fell 3$, then was caught by the lower one.
These TLs are drawn on close(line chart), not from the lows.
Not very clear, but then again Oil isn't exactly user friendly. (most commods aren't imho except Gold)
Sure we could take off from here, but I have 59.25$ as well as 57.80$ as possible targets, too.
USDCAD Downtrend continuation?
Hi Seeking Light!
For your previous posts I know you've been short long time ago in this pair. I donīt know if you still are. However there is this daily PB that suggests a trend continuation. I like the way the Pin looks, and that is supported by the trend. However with the recent steep downtrend I would prefer a bigger retracement. I also like the fact that touched the upper bound of the channel. With such support at 1.1000 the risk reward is not the best. And fundamentally (what dirves this pair) it has never make sense to me... I never understand the way it moves.
Anyway I would like to hear your inputs. Thanks in advance!
I am no Seeking and it very well be that my opinion will be wrong (as it has happened before :-)), so please take it with a grain of salt.
We have had 4 days of higher close and in general it signaled a short term trend reversal. It takes time to finish a trend. I have been having a lot of mistakes thinking that a trend will reverse quickly. In fact, it won't. The pin that we are seeing could very well be the first retracement of this possible new upward movement. If the downward movement can't exceed the previous low, then we will have a good chance that USD/CAD will go up. For now, I am on the sideline to watch for the confirmation. If you want to play aggressively, you can short it but the room might be limited. I would either short when it breaks the previous low or wait for the upward PA signal when this latest downward retracement is done (again, the room might be limited on this one, too).
The oil fundamental indicates that there are so much inventory around. Oil will most likely go weak. It will translate into weakness on CAD or strength on USD/CAD.
Just my 2 cents.
I'm looking to get short again at some point, but this isn't feeling so great.
Basically I agree with all the points you made. So let's see. So far, I am not going to take this particular PB.
Maybe we'll swing back up quite a bit before we have enough height to drop the anvil from which will shatter 1.100, maybe we'll just move on through...I'd prefer more run at it.
Some really good points Melinni, keep it up
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