THE only Pattern

gu @h4 r. looking for sell setup.

gu had since gone up to a higher d1 resistance zone and came down.

ucad @h4 r zone. looking for sell setup.

Then it comes a time when one has to define what is a trend within one's strategy

And there is a fact, since markets are fractal and price action harmonically repeats the same type of patters throughout every timeframe, you must realize that what may seem to be a trend in a certain timeframe, it ill only be momentum on a higher timeframe, and vice-versa.

Therefore, impulse is quite relative to the timeframe you are looking at or the relationship between your current price action, your timeframe and the range you expect to trade.

But as in real life, there is also a potential energy within price, it may be positive or negative and it depends on the position of your price. So, besides inertia, position must also be convenient to trade.

Besides, price movement is not just up or down, it describes paths across 180 degress.

h4 support turned resistance.

found this in FF. maybe can help someone.

Hi, I have gone over the pdf.

You should be careful with it since the setups described are not high probability trades. These rejections in fact depict SR areas, but for instance, the first "non-proper rejection" would have been a good one if it would had happened on a resistance level. The problem there was not the rejection but the level it happened at.

I have found other inconsistencies. Like if you find two proper rejections you can start trading it just after the next time price comes back to that level. Allow me to disagree.

Finally, the author is not realizing that trendlines also apply and it is thinking trades may be happening upon SR rejection while it is a trendline the cause of that price swing. This has also other implications such as the number of rejections, how to decide when price is breaking out from a certain level, etc...

Another thing, the author is completely wrong about. SR lines completely depend on bar shadows. It is by chance that one of the SR lines touches the candle body but just the edge and it is for a very specific reason it happens, not being that bar defining a SR level but being rejected from a previous one. There are two reasons why a SR level touches a body: A teaser or a breakout. And none of these describe actual SR lines.

I am not giving a SR line drawing seminar here, only advicing to make your own research and find repeatable patterns accross multiple charts. SR lines drawn analyzing wicks and rejection trading is good business, but not exactly as described on that document.

Another topic important as opening trades is closing trades. Ok, very good, you have found a sound SR level and you decide to enter the trade.

So which will be your exit level? That level that you will establish at the same time you open your trade and you will without any exception respect unless price action changes and you understand completely which will be your new optimal exit level? Hint: it does not depend on your exit level spread, so it should not be calculated as a ratio of 1/2 or 1/1 upon your exit range. No, no. It should be one that gives you more winners than losers and and the end of the day you are consistently earning more than you lose to keep a positive income.

I have been years researching myself and studying other's research as well.

Try to trade using a trading simulator with the strategy of the third and next rejections and you will see how your balance is quickly burnt. SR levels are tradable with FX, commodities, stocks, indexes and cryptos as per my experience, so any simulator will probably be good.

Finally, trading is about 15% technique. The rest is not related to the market actually. 85% of what you need is knowing how the business works and then learn how to trade any specific asset.

thank you for your views. i know it's a passionate one.
choosing which sr zones to trade on is a subjective one depending on one's experience.
yes knowing superficially by reading once or twice is not enough. taking it all in per se is not right too.
so it's up to one to research further on.
ultimately the real test is the successful application based on personal style of the accumulation of all the knowledge on the subject concerned.

drawing sr lines on a m1 or m5 chart would have been messy and difficult to rely upon.
this thread shows the way to mitigate the difficulties is by drawing sr zones (instead solely depend on lines) from the higher time frame h1 upward.
immediately one can see like the d1 chart greatly reduced sr zones.
if one is using h4 as trading time frame, keep at it.
or if one is day trading, m5 m15 as trading time frame but using higher time frame sr zones.
all examples can be seen in my last few charts presented as h4, m15, m5 as trading time frame.
i especially like it when there is confluence of sr zone and trendline, like the last chart shown.
my preferred style i try to attain is trading from one level of sr zone to the next one or two level away.

I know drawing SR lines is relative the the connections the trader has made with reality. So the better your connection the more precise and meaningful the description one does about it.

I trade mostly 5m timeframes. I mostly like PA trading based on chart analysis, no indicators. I like trendlines since I have found these more frequent and easy to spot. But indeed, I also trade SR levels; but I it is safest not to go beyond the second rejection for instance.

One can indirectly spot SR lines just by paying attention to price swings from the very first time prices move into a particular swing range. Also, as you say, indirectly you will also be able to determine whether your prices are on a SR level on a higher timeframe. And you should avoid in fact selling when on a support on higher timeframes or buying on a resistance as well.

For instance, look this last week's 5m EURUSD chart.



I have drawn the most probable SR lines, which are not specific to my trading style but that actuall will define the almost exact levels that will act as SR levels.

Now let's move back to the past to see how is price reacting to these levels.


Now it comes the trick. You only buy on support, you only sell on resistance. You are never on a support unless the resistance has rejected once price above it as you correctly assess.

Pay attention and try to count how many times a candle that has closed with a SR line in the middle, not being a breakout, but a small one will be a cause of an attractive trade: none.

We can go to 1m as well on EURUSD last Friday on market close, I do not want to search "optimal" setups just what we have at our current market time.


Look that breakout of a resistance that then becomes a support level. Exact level, no doubt that is the precise level no matter your strategy price will turn at.

No bar body is involved at all, only shadows.

I used to trade also 1m charts, not in Forex, because spread+commission only allows me to trade from 5m and above, but there are other asset types that do not depend on range but on price only, so these levels apply the same.

Anyways, I prefer trendlines over SR levels, since these are more frequent and reliable statistically speaking.

The more one studies markets, the more connections one creates with these. When I have taught I usualy first show a naked chart so people do not see crap on it. Only bars they do not understand.

Then I show a weekly chart with a few SR and T lines and they're amazed when contemplating how these structures were present even before many of them where born, and they had not noticed such reality simply because they had not devoted time enough to look at the problem.

are there any websites that you recommend on trendlines?

the commodities currencies cad and nzd made a v shaped comeback, something to watch next week.
h4 usdcad, nzdusd, eurcad, eurnzd.

Not forex-related, but this caught my attention. I'm a fellow chinese too, lives in Hong Kong but I have been to Singapore many many times. In fact, I'm in Singapore right now.

Talking about trendlines are we talking about diagonal SR areas. If so I'm wondering if dynamic resistance/support is more appropriate especially on the 5 min chart. These areas are represented by appropriate EMA settings
Just my 2 cents worth!

Indebox:

Not sure. Read Alexander Elder's "Trades About to Happen" or something similar on trendline and SR basics if you want to. But it is not necessary, just check my picture below to get an idea of what you are looking for. You only have to print a few past charts and draw lines on these, then figure out hot to make a profit from it. I think the most important thing in FX is spending the required time outside the markets studying your charts.

For instance, look how you can shift trendlines for future price forecasting:



jmtini:


Not actually. Forex is completely fractal so any pattern will happen on every scale. You can trade Double tops, SHS, Harmonics, Japanese, Trendlines, Support/Resistance,... from 1-minute and above exactly the same. Timeframe does not really matter. What is important is a clean price action, a clean chart, especially when you are beginning. Confusing price action, very irregular bars and wicks or price moves are not recommended, only clear shapes.

I trade the 5m chart if I can. I prefer 1-minute but it is not profitable usually for Forex due to the low range price experiments on it.

But trendlines repeat themselves so often that I mostly trade these and Fibonacci.

.

support turned resistance with lower highs.

watching usdcad approaching d1 resistance.

eurusd coming down from h4 resistance. could be a gartley. a bit late and watching for retracement.