Support and Resistance, Swing / Long term trading

Hi guys,

I wanted to start a different, new thread from this one https://www.forexfactory.com/thread/...-vs-technicals and the reason being is that Im not a fundamental trader. I've created this thread to illustrate a point and I think I did.

Now, I just want to share how I trade. I cant call that my "trading method" because its just support & resistance trades with some fancy (not) price action, mainly Pinbar, Engulfing, market structure, basics things like that.

A little bit of background about myself. I've been trading since December 2019 (oh yes, 4 months before the covid crash lol). I will be completely honest here guys, I opened a 1k trading account after doing 1 month of learning on babypips and 1 month on demo. I didnt believe in demo because there is no emotions or attachment to the most difficult aspect of trading: losing money. So by the end of January I was trading live with my 1000$ account. I managed to not only get out alive in the crash, but double my account by PURE LUCK. I didnt know what I was doing. So now I had 2000$ to trade with and....within the first year I got it down to 500$ lol...Yup...I made all the mistakes in the book but most importantly, I didnt really understand risk management. I though I did but I didnt.

To this day, I have not blown an account and I still have that trading account BUT im at 400$. So I lost almost everything within one year (from 2000$ to 500$) and I managed to stay alive and only loose 100$ since then in 3 years. Now at the end of my fourth year, I opened another account 1 year ago and its up 15%. So nothing fancy here. I risk between 0.5% and 2% per position so between 5-20$. No need to risk more. It still hurts if I lose but it doesnt sting badly. I dont believe in risking a 10k account if I cant trade and manage well my 1k account. Its just stupid. Why would you lose more money than you need to actually learn. In retrospective, I should have opened a 2k account, its better for managing long term position (swing&position trading). Sometimes with a 150 pips SL, I can only open a 0.01 lot so I cant take partials and that might not help my trading but it is what it is.

Im now mostly a breakeven trader.

I really want to be transparent with this thread. Too many people are dishonest and seems to be making big bucks when in reality, this is a losers game. We all lose. Some more than others and a very few percentage of people manage to make it.

I see traders on the same level as a professional athlete like an NBA player. It takes years of dedication and hard work to make it to the top. Everyone wants to reach it, only 1% does. With all that being said, I currently see my journey as an academic one. I just finished my Bachelor's degree of trading and im beginning my Master's degree.

I want to welcome everyone to the thread and to share their chart. I have a couple of rules to follow though.

1. Respect first and foremost.
2. The charts have to be higher time frame (H1 and above). If you trade M15 or m5, great for you, but this is not the thread to share your charts.
3. Charts have to be clean. We must see price action. A cluttered chart filled with lines and indicators will be removed.

Thats all for now. I hope you enjoy the journey and come along the path of reaching the top of the moutain. Im probably halfway there.

I will kick this off by explaining how I trade. Im a strong believer in Monthly and Weekly charts. I've seen too many times the Daily being unreliable for SnR to trust it for long term move (im not talking about short term trading).

I trade pending orders when price get to a level im interested in (either a break&retest or a "pure" Support & Resistance) without pulling back just before reaching it. If it does indeed pull back before, I will for price action to give me confirmation (even if it might be completely useless once you understand order flow, a some reassurance that some buyers are at support helps in the confidence of your trade & set up.

My 3 confirmation signals MUST happen at a Monthly OR Weekly KL (key level) on any timeframe between Monthly-Weekly-Daily-H4. Obviously I wont enter at the close of an Engulfing bar on the Monthly or Weekly (too big of a stop), but it gives me direction and I will try to get in with a retracement (might use 618 fib for that). Anyway, here are my 3 patterns.

1. Very specific type of Pinbars. Lets say I want to sell at a resistance. My Pinbar has to be the highest bar of the previous ones.The Wick has to be at least 50% of the whole candle (not just the body). Close needs to be near the end. So if price is trading in a range at resistance, the Pinbar has to take out all the previous candles highs.
2. Very specific type of Engulfing: Again, lets say I want to sell a resistance, the Engulfing has to engulf the WHOLE previous candle (both the high and the low). So again, it has to be the highest bar.
3. Change of orderflow. Lets take a buy example this time. Let say price comes at support, meaning we are currently making lowers highs and lower lows. I need to see price breaks structure to the left, indicating buyers are in the place. So price needs to make a HIGHER high. Then I wait for a retracement either at my KL OR, and this is where I use fib (there is another instance, but not that much relevant right now). I draw a fib of that swing leg up, and I place a pending at 61% with a SL below the low of that swing leg.

Hope everything makes sense. If you have questions, feel free to ask.

Here are some charts example of my patterns:

1. Pinbar



2. Engulfing



3. Change of order flow / break of structure

Here is a trade im looking to get into:



We reacted from a Weekly resistance (yes im in, no I wont do hindsight trading here so lets forget about my first position). Lets look at the Daily for a better picture.




Price broke support AND the 200 day moving average (one of the only indicator I use and exclusively on the indices).

I currently have a pending order at the retest of the zone at 4200 with a stop at 4300

We are in.

It is often hard to analysis out which major support/resistance levels may cause a reversal for a good swing trade to run.

Weekly candle or monthly candle may lag a bit for good entry point.

It is all dependent on big players' decision or fundamental shift at key support/resistance level.

usd/jpy, usd/cny is near to its key resistance level.
Can these resistance cause USD to reverse down?
Today, Can Fed rate decision cause USD to reverse down?

Yesterday, Euro GDP data indicated European got clear recession in place. eur/usd reversed down near its daily resistance level. Euro may slip to pairity under US 10 yield normalization toward 6% in future weeks.

It is key issue what factors will make price (or trend) to reverse at major support/resistance levels? Then, you gamble on this factor unfold and drive price to reverse in your favour.

We always "gamble" on the probability of one thing happening over another. I dont really believe "economic calendar news" induce real trend changes. It may give some reversal, but not sustained move. BIG moves happen with major macro-econmic shift or divergence (like if BOJ would change its monetary policy, THEN this would cause major reversal), but the inflation and job data and things like that, not really. Again, unless it causes a major shift (like 3 negative GDP + increase in unemployment = recession), but thats major. Its not a "one news event". Same for big geo-political events like war.

For the technical question about which zone will hold and which wont. We dont know. Nobody does. Its a question of probability and for me, a Monthly resistance has a higher probability of creating SOME kind of move down than just keep pushing up. For the entry perspective, just placing a pending at the edge of the resistance (usually the wick), you can get very good results.

If price reverses before reaching that point, this is where my Weekly and Daily TF comes into play with one of my 3 signals confirmation. Oh, and in the "grand scheme of things", Weekly is pretty accurate, but requires a big SL. However, when your goal is to get into the trend reversals at the top or bottom and expect a 3000 pips move, unless you get taken out too soon, what is a 250 pips SL really?

I never caught a 3000 pips move lol but I never set a fix TP and always trail my SL or on the Daily or Weekly TF

We are out, SL hit, -1%



On to the next one

I believe you can do it. I believe we can all do it. Remember to do it calmly.

AUDCAD. I've been following this one closely since we are at Monthly and Weekly support printing bullish PB





Now that we have a break of the previous structure, I will try to get involved with a retracement (if next week gives me one)



The 50% retracement seems like a nice place to enter (for now). It aligns well with a break&retest of structure. I'll keep you guys updated

GBPAUD seems to be losing steams. Seems a little exhausted.



Flow is still UP as long as we remain above the blue box.

Weekly looking mostly the same. No signs of direction for fow (no Pinbars or Engulfing).



I will look at how the week closes tonight and what PA (price action) will do next week. If we have a DAILY close below the blue box, I will try a short until we reach the green box. Then, I will keep my short, close some profits (partials), and hedge long.

In my opinion, if price had to go up to continue its uptrend, if would have done so at the blue box, but that rally wasnt convincing.

EURUSD. This is an interesting one. For those of you that followed my previous thread (https://www.forexfactory.com/thread/...hnicals?page=3)

I took a long right here at support (yellow circle), but unfortunately got stopped out BE before the one as we can see




Shit like that happens. GBPAUD (previous chart) might do the same thing right now, stalling at support, giving us a weak rally to shake those weak long, to then shoot up. I was obviously long on EURUSD because Monthly-Weekly support, Bullish Pin bar on the weekly (green arrow), took a pending order on the retracement,



Its not over. If we have a nice bullish close on the weekly, I will look to re-enter next week. Overall flow is still up on the Monthly in my opinion, we bounced from support, breaking structure, printing bullish signs like pinbars, I will bet on a continuation. All depends on the Weekly close.

GBPCHF.

I was expecting a reaction from the break&retest on the weekly. We might still get it by the close, who knows. If the Weekly closes with a Pinbar (doubt it), I will look to sell next week. If we close above the KL, I will place a pending order just like so:



If we pullback just before we reach my pending, I will cancel my order. A lot of CHF pairs are near Weekly resistance (AUDCHF, EURCHF, NZDCHF). An ideal situation is the following: GBPCHF closes above the KL and during the next week, reaches my pending order at the same time as AUDCHF, EURCHF, NZDCHF reach their resistance.

I will keep you updated

Another pair on my radar for next week: USDSGD, the only "exotic" I trade.

Monthly flow is up with the last recent 10 months/candles breaking structure to the upside coming from Monthly support.



Possible Break&retest. I will try to get in early next week

GBPUSD

If weekly candle closes above my KL, I will look to enter on pullback to that KL

bearish view next week
is it ok h4 for trade entry?

H4 is perfect if you based your analysis on the Weekly. I personally wouldnt draw a KL on the Monthly and then drop down to the H4. With that being said, that seems like a good analysis. The odds of price dropping from there are good. However, be aware that in terms of flow, the Monthly says up. We are both up from a structure standpoint (price making higher highs and higher lows), but also from a PA standpoint (we just came off a Monthly support) If you are fine with that, then everything looks good.




Going against the flow, I personally would move quick to BE, but that is a good place for a short term pullback in order to get long. I wouldnt expect a very long term trade based on the Daily-H4 analysis. And I dont have a bearish view for next week with the Monthly pointing Up and the Weekly candle closing hard bullish.




On a side note, I see you are using some very wide zones (Supply&demand it seems). You will of course increase the odds of a reaction if you expect one in that 300 pips range lol I dont find this to be particularly helpful. I come from supply&demand and the number of times I saw a H4 Pinbar or Engulfing happening in the middle of the zone, just to keep going against it and smash it to finally reach the top of my zone (the resistance) and THEN have a decent reaction.

Just my opinion though.

One other pair I just noticed but wary to go against is USDJPY


Price at Monthly resistance. Printed a Weekly bearish PB.



However, with the divergence in monetary policies and the negative interest rates of the BOJ, I dont see myself getting involved short

UJ. Many analysts are convinced that the Fed is done raising rates. 10y yields have dipped. Maybe the USD has peaked?

Maybe. Who knows? But I know that analysts are wrong more times than they are right. A couple of things to note here. From a technical standpoint, UJ has a nice Weekly Pinbar happening at major resistance. Combined with the DXY Weekly Pinbar AND Engulfing.




This, coupled with the Yen at a 30 years low (and in the WCU and Currency indexes, it has never been lower as shown in the 2 pictures below) =



This gives good technical reason for a top in UJ and even a major reversal (and good reasoning for a bottom in the Yen). In fact, im avidly watting for the Yen to rise. This could be the trade of the year.

However, I do not know any sound investors that would invest in the Yen over the USD with the negative monetary policy. It makes no sense right now to be a Yen bull... Aside from the technicals of course. I am not a fundamental trader, but im no fool either. I do take them into account and I am aware that trying to catch the top can be costly. Even if the USD stop hiking their rates, they are still at 5.5 vs -0.1 for the BOJ. Why would you buy the Yen is the question to ask. Because its low? Because its oversold? Markets can remain oversold for a looooooooong time before price reverses for good. I will wait for further bearish signs before trying to short UJ

I like your charts. Very clean and easy to analyse! Hope to see you post more.