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Drawing correct resistance and support-lines

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  • #1,741
  • May 16, 2008 2:52am May 16, 2008 2:52am
Quoting aediaz1
Strong TL on daily UJ;
I see what you are saying on the U/J Daily chart. On the H1 chart there is some support at the 104.000 area. I do believe it will go down, and I will have to watch the price action to decide when to exit. It is Friday, and I am a day trader, which is going to influence my decision.
  • #1,742
  • May 16, 2008 2:53am May 16, 2008 2:53am
Quoting jupiter_peak
I have seen several fake break outs. Like Aediaz said, always have a look at higher TFs just like you are doing.

Allow me to say that I look into other TFs and all but actually trade from the 4H TF. I believe it has sufficient gathered (consolidated) DATA in it, and therefore in each candle, in order to satisfy my needs for a valid break.

My strategy is the following:

1) Draw most recent valid demand(support) and supply (resistance) lines. Bill Williams fractals is a goos indicator for the right candles where S/R should be drawn. So I pick the most recent ones.

2) Looking at the 4h TF make a price projection for the break either for demand (support) or supply (resistance).

3) A valid break is whenever a 4H candle opens outside the TDs (either support or resistance).

4) Set your TP at the projected price target counting from the opening of the "break" candle or some other resistance or support lines (pivots, fibos, etc.) that might be in between the break and the price target.


I prefer to have channels with both demand and supply lines. Like this, I can be ready for breaks either way and make price projections either way.

Attched follows one example of what I am saying.

I hope this makes sense to you guys.

Best,

Jupiter.
Good explanation !
Measure twice, cut once
  • #1,743
  • May 16, 2008 2:55am May 16, 2008 2:55am
The E/U looks up.
Attached Image (click to enlarge)
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  • #1,744
  • May 16, 2008 2:59am May 16, 2008 2:59am
Strong lines on e/u 4h chart. Shall we see a new HH soon ?
Attached Image (click to enlarge)
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Measure twice, cut once
  • #1,745
  • May 16, 2008 3:00am May 16, 2008 3:00am
Quoting Dcb
The E/U looks up.
Measure twice, cut once
  • #1,746
  • May 16, 2008 3:03am May 16, 2008 3:03am
Quoting Dcb
I see what you are saying on the U/J Daily chart. On the H1 chart there is some support at the 104.000 area. I do believe it will go down, and I will have to watch the price action to decide when to exit. It is Friday, and I am a day trader, which is going to influence my decision.
Got support around 103.50 area;
Attached Image (click to enlarge)
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Measure twice, cut once
  • #1,747
  • May 16, 2008 3:44am May 16, 2008 3:44am
I closed my short U/J position with a 17 PIP loss. It never could push lower, and when it start moving up I decided to take my loss.
  • #1,748
  • May 16, 2008 3:48am May 16, 2008 3:48am
Quoting Dcb
I closed my short U/J position with a 17 PIP loss. It never could push lower, and when it start moving up I decided to take my loss.
TL rejection. For now.
Measure twice, cut once
  • #1,749
  • May 16, 2008 4:12am May 16, 2008 4:12am
I am buying the E/U.
Attached Image (click to enlarge)
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  • #1,750
  • May 16, 2008 4:15am May 16, 2008 4:15am
The E/U does not seem to have a lot of momentum to push it higher. If this lack of momentum continues, I may exit with a small profit. I am in the black, and if there is indecision in the market, I will close and call it a day.
  • #1,751
  • May 16, 2008 4:24am May 16, 2008 4:24am
The E/U does not have the strength to get above 1.55125 so I am close my position and call it a day.
Attached Image (click to enlarge)
Click to Enlarge Name: E.U.png Size: 30 KB
  • #1,752
  • May 16, 2008 4:44am May 16, 2008 4:44am
Quoting Dcb
The E/U does not have the strength to get above 1.55125 so I am close my position and call it a day.
Things will look more interesting when price gets out of triangle. Still early so lets see.
Measure twice, cut once
  • #1,753
  • May 16, 2008 4:52am May 16, 2008 4:52am
I am looking at G/U and U/J to think what to expect next week. The G/U looks like it could move down, and the U/J may move up to the TL before moving down again.
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: U.J.png Size: 25 KB
  • #1,754
  • May 16, 2008 5:39am May 16, 2008 5:39am
Quoting aediaz1
TL rejection. For now.
Entered at 104.55 and exited at 104.28. Not bad.

I had placed the order in antecipation. Also, I always set a trailing stop. So whenever the trade goes my way I walk out with some profit or at least break even. Price projection lately has not worked in its full or it will take 2 or 3 other different trades to get to the projected target. Either this or you set up higher S/L which would be much riskier IMO. But this depends on your P/L ratio and on your "disposable" capital. So trailing stops will help you if you have limited capital and would settle for less in a first trade. There always can be a 2nd or 3rd trade in the same direction. USD/JPY could be seting for a 2nd time, the same direction for example... who knows.

I had spoted a possible break for AUD/USD before I went o sleep last night (Brazilian time) and placed an advanced order for above the break and TP at R1. It was a good break. Some 37 pips.

Check it out.

Best,
Jupiter.
Attached Image (click to enlarge)
Click to Enlarge Name: aud_usd_4h_16_05_2008.gif Size: 26 KB
  • #1,755
  • May 16, 2008 5:57am May 16, 2008 5:57am
Quoting jupiter_peak
Entered at 104.55 and exited at 104.28. Not bad.

I had placed the order in antecipation. Also, I always set a trailing stop. So whenever the trade goes my way I walk out with some profit or at least break even. Price projection lately has not worked in its full or it will take 2 or 3 other different trades to get to the projected target. Either this or you set up higher S/L which would be much riskier IMO. But this depends on your P/L ratio and on your "disposable" capital. So trailing stops will help you if you have limited capital and would settle for less in a first trade. There always can be a 2nd or 3rd trade in the same direction. USD/JPY could be seting for a 2nd time, the same direction for example... who knows.

I had spoted a possible break for AUD/USD before I went o sleep last night (Brazilian time) and placed an advanced order for above the break and TP at R1. It was a good break. Some 37 pips.

Check it out.

Best,
Jupiter.
Jupiter,
Congratulations in your trades.
  • #1,756
  • May 16, 2008 6:18am May 16, 2008 6:18am
Quoting Dcb
I am looking at G/U and U/J to think what to expect next week. The G/U looks like it could move down, and the U/J may move up to the TL before moving down again.
Cable had a mild brake (UTL) last night and some profit could of been made. Nothing too fancy. I believe it's too choppy to be traded right now. There is some consolidation around 1.9459. We have been under a very low range the last couple of days. Lets wait for next week.

As for USD/JPY, it's still under a valid break although I am not trading it right now. It seems it's finding some resistance at 104.81. Lets wait for the this (present) and the next 4H candles to close and see if we get a new LTL.

Later...
  • #1,757
  • May 16, 2008 8:10am May 16, 2008 8:10am
Check it out.
Attached Image (click to enlarge)
Click to Enlarge Name: aud_usd_4h_16_05_2008_2.gif Size: 29 KB
  • #1,758
  • May 16, 2008 8:30am May 16, 2008 8:30am
Quoting jupiter_peak
Cable had a mild brake (UTL) last night and some profit could of been made. Nothing too fancy. I believe it's too choppy to be traded right now. There is some consolidation around 1.9459. We have been under a very low range the last couple of days. Lets wait for next week.

As for USD/JPY, it's still under a valid break although I am not trading it right now. It seems it's finding some resistance at 104.81. Lets wait for the this (present) and the next 4H candles to close and see if we get a new LTL.

Later...
Having breaks is one thing that works in normal market conditions.

Not necessarily true during news!! I totally forgot to look at the news and was in for the break. Eventhough I made a small profit in U/J, I could of faced a reversal and an undecent loss.

Price went up due to the good news coming from the US... I was about to face a reversal.

So, my bad, I did not look at the Economic Calendar ahead of the break.

My advice once again: stay away from trading before the news. There is still another one coming again today.

This is one of the things that makes this market so uncertain.

One lack of detail and you could be out for good.
  • #1,759
  • May 16, 2008 10:10am May 16, 2008 10:10am
Wait for the next 4H candle to come out and we should be:

Long for EUR/USD
Short for USD/CHF


Well it's going to be by the end of the day... somaybe it's better wait for next week.

Jupiter.
  • #1,760
  • May 16, 2008 10:29am May 16, 2008 10:29am
Quoting Dcb
Juang, Did you sell the G/J? I got up late and missed the initial move of the U/J, but I am selling now. I believe it will go down to the 104.000 level.

Yes,But I got BEP after 26 pip
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