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Making Money and the Most Basic of All Basic Strategies

  • #21
  • May 25, 2008 11:06pm May 25, 2008 11:06pm
I have a some questions about how these trades are placed.

1) Do you see the resistance ahead of time and place a limit order on the line with appropriate stops and such? This would mean you are basically assuming the market will bounce as it nears a s/r line.

Or

Do you watch the price hit the line and react, then place a market order at a precise moment? This would mean you may get in a little later, but are sure that a bounce is actually going to occur. This would also mean you have to be at the computer at the time of the bounce.



2) Also, is this trade more of a scalp trade? Meaning you are not trying to pick a necessary reversal, but a large enough bounce to snatch a few pips, and if you get a reversal, all the better?

Im just trying to understand this better, thanks for the help.
All I ask for is a chance to prove that money cannot make me happy.
  • #22
  • May 26, 2008 8:16pm May 26, 2008 8:16pm
I imagine Billy would pre-empt the move, otherwise theres a fair chance you would miss it. The idea is that you are taking a small risk (10 or 15 pips maybe) for a likely gain (20+ pips hopefully). I think the basic idea is to close half the order when you lose confidence in the bounce and let the other half run. The other thing you could look for is a confirmation signal on the trend line via PA on say a 15 minute chart.

MAx
Gravity goes both ways in forex...
  • #23
  • May 26, 2008 11:46pm May 26, 2008 11:46pm
Sounds alot like what i have talked about in my threads. Great work billy why won't people understand. suport and resistance and candle patterns on longer time frame is the way to go. I trade using the close of the four hour candle wherever possible. If not then the close of one hour candle. Look for strong areas where the market is most likely to reverse then do the opposite of what 95 % of traders are doing.

great work billy
  • #24
  • May 27, 2008 12:04am May 27, 2008 12:04am
Quoting pipmachine2
Sounds alot like what i have talked about in my threads. Great work billy why won't people understand. suport and resistance and candle patterns on longer time frame is the way to go. I trade using the close of the four hour candle wherever possible. If not then the close of one hour candle. Look for strong areas where the market is most likely to reverse then do the opposite of what 95 % of traders are doing.

great work billy
No disrespect pipmachine but i think you will find that these ideas of utilising S/R arent exactly new or revolutionary. Nearly all successful traders incorporate S/R in their trading (Billy being one of many successfully doing so).

And out of interest how exactly can you determine what 95% of traders are doing? There is no level 2 analysis available; forex is not a centralized market. The only data you can be relying on is the trades being taking by your individual bucket shops and you can never be certain this is representative of the cumulative sum of trades being made. And again retailers dont and cant move the market anyway so trading against them is futile.

Or do you simply mean that 95% of traders are chasing the trend and not looking for reversals? Because i think you will find a lot more people are doing this (looking for reversals) than you think. You should not take the volume of newbie noise on these forums as a sample of the tendencies of experienced traders.
Lemming Forex! The Way to Trade....
  • #25
  • May 27, 2008 6:55am May 27, 2008 6:55am
Quoting SBrickman
I hope it is ok for me to post charts showing support and resistance here.

http://i32.tinypic.com/fa4x9c.gif
No sweat! Please go right ahead thanks.
  • #26
  • May 27, 2008 7:04am May 27, 2008 7:04am
Quoting Marsh
I have a some questions about how these trades are placed.

1) Do you see the resistance ahead of time and place a limit order on the line with appropriate stops and such? This would mean you are basically assuming the market will bounce as it nears a s/r line.

Or

Do you watch the price hit the line and react, then place a market order at a precise moment? This would mean you may get in a little later, but are sure that a bounce is actually going to occur. This would also mean you have to be at the computer at the time of the bounce.



2) Also, is this trade more of a scalp trade? Meaning you are not trying to pick a necessary reversal, but a large enough bounce to snatch a few pips, and if you get a reversal, all the better?

Im just trying to understand this better, thanks for the help.
Hi Marsh, I'll try to answer in sequence:
1. Yes, I use limit orders because sometimes if not most times, the recation from the support/resistance line is extremely fast as I and a bunch of other people have orders waiting to be executed on it. I always make sure there is enough room for my spread; dont want to not be executed for a bad reason, so I might place it a couple pips ahead. This is for major areas, where I am looking for a big move.

Sometimes, in weaker s/r zones, I sit and wait for a reaction. Price might be looking to do something different at that point. Again, this is only is weaker areas, where I am not looking for a major trend reversal, and not betting the farm on it.

2. I just posted some stuff in the other thread, I'll try to keep the learning stuff for here and that thread for the trading itself. But in general, in major areas of s/r which, over time have shown to be very strong levels, I am looking for a big move.

For intraday levels, I am looking for them to be nothing more than an interruption of a current trend. Sometimes, price will go down or up to a level against the current day's trend, hit it and reverse again, in which case I am now going with the trend, where I can expect more pips.
  • #27
  • May 28, 2008 4:02am May 28, 2008 4:02am
Hey Billy,
What are your thoughts on lines of S/R that have already been previously broken. If it has been broken in the last few hours can we assume that it is no longer relevant whereas lines broken weeks ago still retain significance.

Thanks mate

max
Gravity goes both ways in forex...
  • #28
  • May 28, 2008 4:29pm May 28, 2008 4:29pm
Quoting BillyRayValentine
No sweat! Please go right ahead thanks.
Attached Image (click to enlarge)
Click to Enlarge Name: supres.gif Size: 28 KB


Thank you BRV.
  • #29
  • May 29, 2008 12:48am May 29, 2008 12:48am
Quoting BillyRayValentine
I have been getting a lot of pm
Thanks a lot for good explanation of your view of support and resistance It is completely in my trading style Best regards,
it's o'k to win ...
  • #30
  • May 29, 2008 1:27am May 29, 2008 1:27am
Who designed that S/R Dasboard? And where can one find it?
  • #31
  • May 29, 2008 2:40am May 29, 2008 2:40am
Quoting forexmoments
Who designed that S/R Dasboard? And where can one find it?
Try this site. The fact that Brickman has never revealed where he got them leads me to believe that he's involved with them is some way.

http://kreslik.com/forums/
  • #32
  • May 29, 2008 4:22am May 29, 2008 4:22am
Hi B.R.V.

Thanks very much for your efforts to shear

My difficulty is finding the right r/s. So I wait for pa for confirmation. I end up loosing a lot of trades for trying not to jump straight at it.

What's your (or any one else who want's to coment, about this GBP CHF)

In what line/rectangle would you put a sell/buy limit?

Thanks again, and this is just my way to learn from experience traders
Attached Image
Non sunt multiplicanda entia preater necessitaem
  • #33
  • May 29, 2008 2:19pm May 29, 2008 2:19pm
Quoting Zaka
Hi B.R.V.

Thanks very much for your efforts to shear

My difficulty is finding the right r/s. So I wait for pa for confirmation. I end up loosing a lot of trades for trying not to jump straight at it.

What's your (or any one else who want's to coment, about this GBP CHF)

In what line/rectangle would you put a sell/buy limit?

Thanks again, and this is just my way to learn from experience traders
Anyone please correct me if I'm wrong in my approach although this is how I would trade it (and note: I'm no pro)

Form my attached chart you can see that the candles that hit that level around .0440 which is a round number. To make it even more round, we could just say .0450. From there, we assume that if it breaks the S&R level it will be at .0450 so we could set a long there if we wanted. For a short, we could assume that hopefully it won't be a false break and if it pokes out over the level, it'll be under 15 pips or so depending on your money management (in which case it was 0.445 which is only 5 pips off the round number mark) . Then you'd sit back and let the price play around a bit until it reached plus 20 on your short (if it was going to be long it would have a lot of velocity in the break (no bear/bull candles dancing around). Finally when it does break you ee theres a lot of velocity (and if you move into the m30 timeframe it's even clearer).
Attached Image (click to enlarge)
Click to Enlarge Name: gbpchf.gif Size: 18 KB
  • #34
  • May 29, 2008 2:26pm May 29, 2008 2:26pm
Are there any metatrader indicators for 1h, 4h, Daily and weekly support and resistance levels?
  • #35
  • May 29, 2008 9:42pm May 29, 2008 9:42pm
Hi BRV,

I wanted to firstly say "thanks" for all your contributions and to ask if you could clarify something you said in reply to FX Pimp in post #10 (numbers added by me for clarity):

1. "Support and resistance levels that get used over and over again will eventually break. Market has to move somewhere. When a level that has shown strong historical significance hasn't been toched in quite some time, it is very probable that a reaction will occur when price gets there. In a case like that, its sometimes best to sit and watch."

2. "There are weak and strong support and resistance levels. If you are a beginner, filter out the strong ones that haven't been used recently and only take those trades. Your win rate will be very high. Taking other trades in the meantime that lose will nip away at your account and pennies add up."


I interpreted #1 as saying "if it hasn't been hit in a while, be careful because it may break". In #2, it sounds like you're saying, "beginners should use strong levels that haven't been touched recently as they are higher probability".

Am I missing something or does #2 contradict #1?

Thanks
  • #36
  • Jun 1, 2008 6:17pm Jun 1, 2008 6:17pm
Quoting rumbey
Are there any metatrader indicators for 1h, 4h, Daily and weekly support and resistance levels?
Yes, I use the "Level Trading 123" indicator:
Attached Image
Attached File(s)
File Type: mq4 level_trading_123.mq4   13 KB | 1,170 downloads
  • #37
  • Jun 1, 2008 6:37pm Jun 1, 2008 6:37pm
http://i43.photobucket.com/albums/e3...d09212007b.gif

Resistance becomes Support. Go LONG.
After a while, you can spot these patterns.
  • #38
  • Jan 10, 2009 1:52am Jan 10, 2009 1:52am
I will be waiting for the beast to do 2nd retest then I will go long....targeting 140......the 2nd retest is confluence with fibo 50% at 135.81.........



Attached Image (click to enlarge)
Click to Enlarge Name: gjtf1hsetup.gif Size: 8 KB
  • #39
  • Jan 10, 2009 3:28am Jan 10, 2009 3:28am
This is a great strategy. The only problem I've had in the past is I guess what others have too..which is knowing whether a level will hold or not.

One thing, do you see if price has touched a certain level more than once? Or does it not matter how many times it has bounced off of a level in the past?

Thanks.
  • #40
  • Jan 10, 2009 3:52am Jan 10, 2009 3:52am
Of course it does matter. I would like to see at least 2 bounce points both separated by a few hours or days on larger timeframe.
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