Drawing correct resistance and support-lines
aediaz1,
Regarding the charts in post #317, thats when I use closed prices.
What do you think ? Workable ? I took the later trade, only managed to grab a few pips coz it fell back too fast.
Regards
mARK
aediaz1,
Regarding the charts in post #317, thats when I use closed prices.
What do you think ? Workable ? I took the later trade, only managed to grab a few pips coz it fell back too fast.
Regards
mARK
For the matter of practice; another pennants on 5m chart gbpjpy. As stated before, a pennant is a pattern for continuation of currently trend. So, we are looking for a break to the upside.
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?
2)Another question i have is what gd source are there in the net which explain the theory behind SR lines and trendlines? just like Adeiaz1 said that an uptrend tells tt demand is higher than supply and the SR lines(demand lines) etc. most of the sites teaches hot to spot and draw but did not have gd explanation behind. i think that understanding the reason is as important as learning how to draw correctly.
thanks in advance and gd trading to all
Yuna
aiyahmarklah; look how Asia low play as a magnet for price. Could be that london pivot is nearby
Not sure what you mean. Only help I could provide here is ; try and see how price reacts when it breaks one of those two lines
LOL of coz I do,
Personally I have been switching between candle charts and closed price line chart while trading. I do have certain guidelines though, firstly it depends on from which angle you view the price action ? Eg., if you consider the standard candle stick patterns as part of your analysis then the shadows are are important when drawing any lines.
Second, if your breakout is from a pattern drawn with shadows included, then I would not wait for the candle to close, I would take the trade once it breaches the line.
However if the breakout is from a pattern drawn from closed patterns, I would wait for that candle to close above/below the line before initiating any trade. ( feedback required as its my own perception ) (THANKS)
As to why trendlines work, its about geometry also. There are certain mathematical laws behind price action as well as charting.
The above works for me, its about practice really. When you spot a pattern, you must have the "AH HA !! this is the one" feeling. Confidence in the lines you have drawn is important for obvious reason, besides bad signals it will slow down the decision making process, such effects will cost u pips.
As you practice, you will notice how patterns repeat themselves over and over again. TRENDLINES WORKS !! Keep it simple.
Regards
mARK
YUNA, why dont you consider trading micro lots, some brokers offer them. It is much better than trading dummy money, the psychological aspect of training is better, you will be surprise what you can achieve if played correctly .
, LoL!oh i mean is mine considered a pennant? because the angle was so steep and doesnt really look like a pennant. anyway here's the update
Attachment
Yuna
My feedback is tt i do agree wit u tt if ur tl is drawn frm line chart, better to wait for it to close as u noe tt tl tt drawn frm line chart is (nearer) as it does not include shadows. however if drawn on including shadow i personally wait for it to close and retest. maybe ur style is more aggresive or maybe u're enter for a fast scalp?
Wahaha geometry and mathematics laws, chim sia. i like ur example of the "Ah Ha" moment. anyway thanks for your advice, i'm considering micros also. which broker u use? dun tell me u use DBS
Yuna
oh i mean is mine considered a pennant? because the angle was so steep and doesnt really look like a pennant. anyway here's the update
Attachment
Yuna
Pennant marks the midway point in a move. Since gbp/chf on that time-frame just moves up and down, I wouldn't call it a perfect one. Best examples is when you have a strong bear/bull move and then it occurs. As we had on the gbpjpy example earlier today.
anyway the news has caused some effect on USD.
