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Drawing correct resistance and support-lines

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  • #1,841
  • May 27, 2008 8:13am May 27, 2008 8:13am
Well nice ride down...against the trend...exciting


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  • #1,842
  • May 27, 2008 8:58am May 27, 2008 8:58am
I am not sure. Going to wait for the next H4 candle to open.

What do you think??
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  • #1,843
  • May 27, 2008 11:54am May 27, 2008 11:54am
Hi Guys,

I have done alot of reading lately especially on Tom DeMark and his ideas. I just finished reading his "New Science of Technical Analysis" and am very bound to buy "New Market Timing Techniques: Innovative Studies in Market Rhythm & Price Exhaustion".

Let me say that I have started experimenting/drawing trendlines in a different way. Actually, I have been trying his techniques lately. His price movement/exhaustion techniques wants you to draw trendlines exactly the way one would find on an economics textbook. Considering a supply and a demand line being read/interpreted from right to left.

These trendlines would only be draw in a special manner:

Demand: From top right to bottom left.
Supply: From top left to bottom right.


These trendlines would be plotted on points as follows:

Demand:
True points of support are only those which low has two candles to the left of it and two candles to the right of it which lows do not exceed the low you are using.

Supply:
In order to create a supply line, it is necessary to locate the two points that create the supply line. Remember that a supply line is the same thing as a down trend line. A supply is created when supply exceeds demand; this is where the name supply line is derived from. When choosing the points to create a supply line we are focusing on points of resistance. True points of resistance are only those which high has two candles to the left of it and two candles to the right of it which highs do not exceed the high you are using as your point of resistance.

I have to emphasize that I always choose the 2 most recent points because DeMark argues that the most recent price levels are the ones that influence price movement the most.

Also, I argue that this kind of technique has worked for me in the 4H timeframe because it consolidates the most data thus making breaks much more credible.

I have to say that there is a price projection argument that I still am not totally sure about. I prefer to trust magnet points such as fibos, pivots, S/Rs etc.

Attached there is some material I have found regarding his philosophy and how it applies to trading.

If you are interested in discussing this further, I also have other material of his theories being applied in FX trading. (true examples)

Hope you enjoy the reading.

Best,

Jupiter.
Attached File(s)
File Type: pdf TD_Trendlines.pdf   658 KB | 549 downloads
  • #1,844
  • May 27, 2008 12:40pm May 27, 2008 12:40pm
Thanks jupiter_peak for bringing this into attention...looking at it now
  • #1,845
  • May 27, 2008 11:23pm May 27, 2008 11:23pm
The E/U is on the way up.
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  • #1,846
  • May 28, 2008 1:25am May 28, 2008 1:25am
I had bought the E/U at 1.57236, but decided to exit at 1.57442 about 20 minutes before the EUR report came out. I had a 21 PIP gain. I had thought it would go higher, but decided to exit before the news. I also did not feel confident enough to go back in, and now it is dropping. I am just observing at this time.
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  • #1,847
  • May 28, 2008 1:30am May 28, 2008 1:30am
Chances are more correction to come ? Today may set the mood for the rest of the week.
  • #1,848
  • May 28, 2008 1:37am May 28, 2008 1:37am
Quoting aiyahmarklah
Chances are more correction to come ? Today may set the mood for the rest of the week.
It was reported that oil price had come down some. The U.S. has durable goods reports this morning. I believe you may have some action at 12:30 GMT today.
  • #1,849
  • May 28, 2008 2:11am May 28, 2008 2:11am
Quoting aiyahmarklah
Chances are more correction to come ? Today may set the mood for the rest of the week.
Hi aiyahmarklah,
As I look at the E/U H4 chart, I believe the move up this moring may have been a correction. I am watching to see if it breaks below the lower TL I have drawn on my H4 chart and continue down. Time will tell.
Best wishes with your trading today.
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  • #1,850
  • May 28, 2008 2:33am May 28, 2008 2:33am
Quoting Dcb
Hi aiyahmarklah,
As I look at the E/U H4 chart, I believe the move up this moring may have been a correction. I am watching to see if it breaks below the lower TL I have drawn on my H4 chart and continue down. Time will tell.
Best wishes with your trading today.
Yep the break at 0100 GMT seems to be intended to kill the short orders first...will have a confirmation once it breaches yesterday low again...

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All da best to u too !!

Having problems with my charts...using free ones now
  • #1,851
  • May 28, 2008 4:08am May 28, 2008 4:08am
Quoting aiyahmarklah
Yep the break at 0100 GMT seems to be intended to kill the short orders first...will have a confirmation once it breaches yesterday low again...

Attachment


All da best to u too !!

Having problems with my charts...using free ones now
Get ready aiyahmarklay. E/U is approaching the LTL on my H4 chart.
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  • #1,852
  • May 28, 2008 4:16am May 28, 2008 4:16am
U bet i am...

Depending on your time frame...i am expecting no more than 70 pips should it drop within this 24 hrs.


  • #1,853
  • May 28, 2008 4:22am May 28, 2008 4:22am
Quoting aiyahmarklah
U bet i am...

Depending on your time frame...i am expecting no more than 70 pips should it drop within this 24 hrs.


Aiyahmarklay,
It is time for me to shut down my trading platform. Good luck today.
  • #1,854
  • May 28, 2008 5:04am May 28, 2008 5:04am
well it depends to durable goods orders maybe it drop

or maybe go up to 1.5820
  • #1,855
  • May 28, 2008 5:25am May 28, 2008 5:25am
E/U - Went past support @ 1.5671. Depending on the
news, could free fall to 1.5594.

U/C - Trying to break resistance @ 1.0389.

U/J - Broke UTL and Resistance (confluence) @104.37. Made good 40 pips from this move. Trying to breake res at 104.83.
  • #1,856
  • May 28, 2008 5:35am May 28, 2008 5:35am
Quoting jupiter_peak
E/U - Went past support @ 1.5671. Depending on the
news, could free fall to 1.5594.

U/C - Trying to break resistance @ 1.0389.

U/J - Broke UTL and Resistance (confluence) @104.37. Made good 40 pips from this move. Trying to breake res at 104.83.
Yeah i have a long order of EU at 1.5598
  • #1,857
  • May 28, 2008 5:41am May 28, 2008 5:41am
Here is what I see;

 

  1. We are reaching breakout-target from 4h pattern
  2. Currently area is lower TL on 30m drawn from this down-rally

So I'm looking for this area to hold for long position. If not, the opposite.

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Measure twice, cut once
  • #1,858
  • May 28, 2008 9:35am May 28, 2008 9:35am
double top in GU 15 minutes tf ,rsi and stoch and macd pointing down,can we say this is a short term bearish....someone can help?dont know how to detail the information from other time frame...
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  • #1,859
  • May 28, 2008 5:17pm May 28, 2008 5:17pm
I believe the E/U will go down, but I will wait until near the London session to make my decision.
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  • #1,860
  • May 28, 2008 6:41pm May 28, 2008 6:41pm
Hey guys,

I have a support line at 1.5627.

The trend is down with a formation of what I can tell is a downwards channel. Also, there was a double tops that initiated a downwards movement. If you notice we can see a first wave, a retracement, a second wave, and what I see is a retracement for the second wave.

I strongly believe we could have a third wave downwards before it goes back up.

Tell me your impressions...

Jupiter.
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