The Support Resistance Switch Method - Trade with one line

Hi Traders,

Trading is a lonely business. I started this thread to share with you guys a simple support and resistance switch method. Many of you have heard of the switch zone. You can simply google it and find many information about it. But most of the strategies given are very vague. Most of them are telling you to wait for the price to come into the switch zone and wait for a reversal pattern but i find that it will be too late and too objective. I am going to share how i trade the switch zone. I am not sure if anyone else is trading this way but i came up with this idea whilst combining all the information i learnt at this forum.

1) Draw a horizontal line upon the recent s/r switch zone WITH the trend. How to define a trend is very objective. I recommend Mr pip's thread for his insights on higher high and lower low definition.
2) Wait for price to come near the zone. I set a trigger alert 12 pips before the level. Set a limit order when it is closeby. Do not trade during red news hours. (common sense)
3) Trade the level.

The catch here is how do you draw the horizontal line. This is very important. I look for wicks with TWO touches at least. Then price must BREAKOUT from the wicks and close better higher/lower, the stronger it breaks out, the stronger the signal. Or a very strong reversal candle formation at the previous levels. Then i place a line at the top of the wick and set a limit order there.

I only use M30 and H1 to find the levels as it is clearer this way to me and the trend is quite established and not TOO established for my MM.

MM:- I use 11 pips stoploss and 10 pips takeprofit for Euro, USDCAD, USDJPY, AUDUSD and NZDUSD. I use 12 pips stoploss and 11 pips takeprofit for GBPUSD and all other minors. Except for GBPJPY, i use 16 pips stoploss and 15 pips TP for that pair.

Edited 2019: i am now using ADR as my stoploss instead of a fixed stoploss.

The pairs i am trading now are:-
euro, usdjpy, usdcad, audusd, nzdusd, gbpusd, euraud, eurcad, eurjpy, audjpy, cadjpy, audcad, audnzd, gbpjpy, eurgbp

Trading hours:- I trade from late asian session to NY lunch session which is around 1PM new york time.

I will post the charts as below. Arrows are my entries. These are the four most recent trades i took today and yesterday.

DISCLAIMER: I am at best a breakeven trader and a little in green for now. Please trade this method at your own risk. I DO NOT claim a 80% winning percentage of this method because that would be a lie like most of the thread starters here trying to get into commercial interest later. Always follow the 2% risk advice. I am currently using 1.8% and sometimes 0.9%(half) for each trade.

cadjpy long at 85.88. TP at 11 pips

eurusd short at 1.1817. TP 11 pips

nzd usd short

gbpjpy long 15 pips TP

i am currently watching these levels :-

yen

euraud

eurcad

audnzd was a miss earlier by few pips but i think the level is still strong enough for a second retest. It was not a miss if you put the limit higher at the most recent wick but nevertheless i missed it by 2 pips i think.

I'm sure it's a good method.
Your charts are so dark it's difficult to see the details.
90% of the systems posted have the same kind of dark black charts. I wonder why?

Not sure if you are being sarcastic or what but here, i have the cadjpy chart with a white background.

Purple line is the recent s/r zone with many wicks. I drew the line and wait for the breakout (b/o), then i put a limit order there yesterday and took the long.

just one thing
don't be so confident, the price follow the money not the chart

cheers

CrocodileRex,

A line drawn anywhere on a chart isn't going to have much hope of being any better than 55% winners.

You cannot trade a 1:1 risk/reward ratio with those kinds of winning pcts. IF you have a winning trading system here then you need to set your target and stop somewhere between 1.5x to 2.0x reward for 1x risk to gain a positive expectancy in your trading.

I would also add that if you did have a 70% chance of winning with whatever trading system you're using then 1:1 risk / reward is just about the best you can do. If you have a long-term 80% chance of winning then you start getting into upside-down trading where you have to risk 2x as much than you make per trade on average (i.e., risk $1 to make 50 cents...VERY tough way to trade but, really, NO ONE is having 80% winners long-term and having a 1:1 risk/reward ratio or better)

I trade very similar way and i am watching the same exact levels in USDJPY

I use EMA 100 and EMA 200 to determine trend basically then trade with the trend with limit orders.

good luck Croc with this thread. Many green pips to you

I rarely post on systems threads but I like this. However, maybe you should consider using stop orders for your entry.

Trade safe and prosper.

KP

Morning traders,

Eurcad was a TP but i was not awake to take it so i missed it. I forgot to mention i am using 15 pips SL and 14 pips TP for this pair since it's quite volatile. Other than this, most are 12 pips SL, 11 pips SL and only 16 pips SL for GJ.

audnzd should be triggered too if i was awake to take it (i didnt take it). But i would only take half position since this is a second retest and the level is kinda used the first time.

Anyway, limit order should be triggered but it didnt reach 11 pips TP yet. Maybe with slippage it would, but for the sake of argument, if i were still in this trade, i would move stop to last low to protect the trade.

On the daily TF on AudUsd, i am watching the 0.7640ish level for a limit sell order an bounces off ascending channel that has been broken to the downside

Currently watching this level yen, the breakout is not that strong but it is with strong trend overall, i will take it with half position 110.86. let's see how it goes.

I have a level there at 0.7658 sell. Since my stop and TP is very tight, i prefer to take the higher level to be safe.

You state you only use M30 and H1 on page one but the chart you just posted is M15?