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Drawing correct resistance and support-lines

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  • #121
  • Feb 20, 2008 6:17pm Feb 20, 2008 6:17pm
I almost forgot that I'm bearish on gbp/jpy.. Please take that analyze lightly, it was drawn from a over-tired guy who have been staring at the screen too long now lol
Measure twice, cut once
  • #122
  • Feb 20, 2008 6:24pm Feb 20, 2008 6:24pm
Quoting aediaz1
I almost forgot that I'm bearish on gbp/jpy.. Please take that analyze lightly, it was drawn from a over-tired guy who have been staring at the screen too long now lol
and also the UJ is above pivot (bull bias). if the support holds true, we gonna see UJ goes up and taking GJ up to. am i right abt this?
  • #123
  • Feb 20, 2008 6:27pm Feb 20, 2008 6:27pm
Quoting sepak.orang
and also the UJ is above pivot. if the support holds true, we gonna see UJ goes up and taking GJ up to. am i right abt this?

Possible, but seems like we have more fuzz about the The Northern Rock scandal coming up tomorrow, in that case, it will pull both usd/jpy down.
Measure twice, cut once
  • #124
  • Feb 20, 2008 6:30pm Feb 20, 2008 6:30pm
Quoting aediaz1
Possible, but seems like we have more fuzz about the The Northern Rock scandal coming up tomorrow, in that case, it will pull both usd/jpy down.
oh.. i almost forgot... thanks for reminding me.
  • #125
  • Edited 7:00pm Feb 20, 2008 6:46pm | Edited 7:00pm
aediaz1, can u update for GU? i had weird trendlines on my chart.

which one is the correct one? the dotted or the other?

Attached Image (click to enlarge)
Click to Enlarge Name: gu.gif Size: 21 KB
  • #126
  • Feb 21, 2008 12:33am Feb 21, 2008 12:33am
Hi yuna,

good point. Trendlines are drawn in two ways, some attach tl to candle bodies (open / close prices) and some use heads and tails (highs and lows) for tls. The reason why i use the latter way, is that tls drawn in this way stay valid in any timeframe (my definition: valid tl = not cut by any bar).

Also, if you wish to change candles to barchart, no problems with tls.

R

Quoting yuna
hi Adeiaz1 and all fellow traders out there!

i've a question in mind here regarding drawing trendlines. most of the educational sources on the web suggest that trendline are drawn on the shadows instead of the close of price. however one book that i've read "Trading for a Living" suggest that trendline should be drawn on the close of price. As my trading experience is few, i'm not able to judge whether which is the proper way of drawing trendline. i hope u all can help answer my question and solve my confusion.

1)Which is the correct way of drawing trendline and why?

...
Yuna
  • #127
  • Feb 21, 2008 12:50am Feb 21, 2008 12:50am
Sometimes trendlining on ranging market works just fine. It really depends on price action. You need to find the best tf, which usually is 5M or even 1M in some cases. And you also need a good broker, fast execution and small spread.

R

Quoting aediaz1
...

Your right, stay of out ranging markets, sometimes I have experienced price just to walk tru S/R without any reaction.
Attached Image (click to enlarge)
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  • #128
  • Feb 21, 2008 12:58am Feb 21, 2008 12:58am
Noticed that you are using channels too... Fibo channels are nice, esp on longer tfs, and you can easily modify them as you like.

Quoting aediaz1
When I don't have any clear support as in this 4h downtrend example, it works taking the same angle as your confirmed resistance-line and just put it where you see price reverse. Of course, you will not trade it, but tend to be valid when retested. Easiest way of doing this is : double-click your line (so it get marked by 3 dots) and press Ctrl bottom and drag it down to your spot. Same angle achieved !

Example of wrong and right drawn lines.
Attached Image (click to enlarge)
Click to Enlarge Name: gu now.gif Size: 30 KB
  • #129
  • Feb 21, 2008 1:26am Feb 21, 2008 1:26am
There is certain pattern in price action that repeats over and over again when a tl is broken. In many cases the price still makes one final move in the direction of the old trend, and then starts to move to the opposite direction.

Here is an example of GU. To find out a good entry, add a short tl (the red one), and when this tl is broken, there is your entry.

R

Attached Image (click to enlarge)
Click to Enlarge Name: gu now.gif Size: 20 KB
  • #130
  • Feb 21, 2008 1:30am Feb 21, 2008 1:30am
Quoting aediaz1
Possible, but seems like we have more fuzz about the The Northern Rock scandal coming up tomorrow, in that case, it will pull both usd/jpy down.
Aediaz1 When it crosses the trend line i am targeting the 50%fib at 211.31.
I work on 4H but my entry is normally 1H or lower. and re-asses from there.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpjpy.gif Size: 15 KB
  • #131
  • Feb 21, 2008 2:20am Feb 21, 2008 2:20am
GM guys.

Let's have a look at the guppy. Why didn't I take this short ? Simply because we had a breakout from this bearish wedge on 4h. not much of action, but it could give a hint where the market is going. Starting to look bullish on 1h with higher highs and high lows. A break of lower high on 4h @ 211 would tempt me to take a long position.

A retest of (now) support-line on 4h @ 210 (also london pivot) before we go up is possible
Attached Image(s) (click to enlarge)
Click to Enlarge Name: gbp.gif Size: 24 KB
Click to Enlarge Name: gupopy.gif Size: 31 KB
Measure twice, cut once
  • #132
  • Feb 21, 2008 2:30am Feb 21, 2008 2:30am
Quoting sepak.orang
aediaz1, can u update for GU? i had weird trendlines on my chart.

which one is the correct one? the dotted or the other?

Attachment
My 4h chart didn't make any sense so I changed to 1h. Have a bullish channel. We are starting to see bullish hints on gbp today so be prepared.
Attached Image (click to enlarge)
Click to Enlarge Name: gbp.gif Size: 27 KB
Measure twice, cut once
  • #133
  • Feb 21, 2008 2:33am Feb 21, 2008 2:33am
Quoting Rocroy
Noticed that you are using channels too... Fibo channels are nice, esp on longer tfs, and you can easily modify them as you like.



Attachment
Nice fibo channels, haven't used them before, but guess it could be worth a shot trying them. Good entry on gbp/usd you're still in ?
Measure twice, cut once
  • #134
  • Feb 21, 2008 2:36am Feb 21, 2008 2:36am
Quoting boomer1
Aediaz1 When it crosses the trend line i am targeting the 50%fib at 211.31.
I work on 4H but my entry is normally 1H or lower. and re-asses from there.

See the 1h post on cable, I just couldn't draw any perfect lines on 4h so I just jumped down to 1h. You could be right about the 50% level around 211.30 today. Let's see where the market takes us.
Measure twice, cut once
  • #135
  • Feb 21, 2008 2:51am Feb 21, 2008 2:51am
Don't trade gu that much, so that was just an example. Long on geppy, small though, watching for good next entry.

Quoting aediaz1
Nice fibo channels, haven't used them before, but guess it could be worth a shot trying them. Good entry on gbp/usd you're still in ?
  • #136
  • Feb 21, 2008 3:01am Feb 21, 2008 3:01am
Quoting Rocroy
Don't trade gu that much, so that was just an example. Long on geppy, small though, watching for good next entry.
Same Rocroy, went long from lnd pivot level, price is struggling with 1h, but according to PA we would have a break very soon.
Measure twice, cut once
  • #137
  • Feb 21, 2008 3:04am Feb 21, 2008 3:04am
Usd/jpy didn't turn out too bad, did you have any position on it Mark ?
Attached Image (click to enlarge)
Click to Enlarge Name: usdjpy.gif Size: 36 KB
Measure twice, cut once
  • #138
  • Feb 21, 2008 3:12am Feb 21, 2008 3:12am
Will start looking for buys on eur/usd if yesterdays high is taken out. Price just refuses to go down, so we are in a very strong uptrend IMO.

Also, to support the euro (and gbp), many big stocks are up 1% - 2% around Europe, COULD be a bullish day.
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd.gif Size: 24 KB
Measure twice, cut once
  • #139
  • Feb 21, 2008 3:53am Feb 21, 2008 3:53am
Possible second target. Still riding with us Rocroy ? This is where you can use stochs to see when price gets OB in different TF's. It's not even OB @ 15m chart so this have great potential.
Attached Image (click to enlarge)
Click to Enlarge Name: gupopy2.gif Size: 29 KB
Measure twice, cut once
  • #140
  • Feb 21, 2008 4:32am Feb 21, 2008 4:32am
Quoting aediaz1
Usd/jpy didn't turn out too bad, did you have any position on it Mark ?
Nope I was just curious, I did short the USD/CHF though the idea behind it was that it's a win-win situation: if I lose money that's the fee I have to pay for my superficial analysis and t remember not to do it again and if I can have some pips than it's simply awesome. And I had +15pips (down to 50% then I quit) so thanks for your help mate!

And your geppy analysis (possible upside B.O. based on PA) was truly professional. I really hope you jumped the bandwagon in time it's a lot of money now! 122pips since the breakout
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