Trading off suport and resistance with Price Action, Is it really possible??? | Page 2 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Support/Resistance + Price action Trading 0 replies

s&p500 and gold Risk ON/OFF Price action trading 34 replies

Relative strength price action, is it possible? 1 reply

The Really Really Boring Forex System 97 replies

Is trading spikes really possible? 16 replies

Attachments: Trading off suport and resistance with Price Action, Is it really possible???
Exit Attachments

Trading off suport and resistance with Price Action, Is it really possible???

  • #21
  • Mar 22, 2007 12:48pm Mar 22, 2007 12:48pm
Quoting FXTerminator
I have already backtested a similar support/resistance idea. I buy when the price touches a specific resistance at least 3 times and then breaks that resistance.

Results after almost 1000 trades? - 810 pips (loss of 810 pips).

Then I did the reverse, I sell instead of buying, results?
+179 pips

As you see, this seemingly logical idea is a losing trading idea both ways, at least in this particular backtest (we can reasonnably assume that the +179 pips is due to chance alone).

Note that this idea of buying a breakout is a losing idea, doing the reverse (fading the breakout) seems to be working "better". As I said before, most brilliant and "logical" trading ideas end up losing big, while counter-intuitive ideas (like fading a breakout) seem to be doing much better, or at least break even.

In your case your system could work IF and only IF you are drawing the "right" trendline all the time, a herculean task to say the least.
I'd like to know what timeframe you were using, as well as the stop loss in your backtests as well as money management and exit strategy. Breakout trading does fail from time to time, but it should not perform that poorly.
  • #22
  • Mar 22, 2007 1:23pm Mar 22, 2007 1:23pm
Quoting Someone
It dropped down to my entry as i was uploading the pic, currently +2 pips will bring to b/e at 10 pips.
The trade made it past 10 pips so im at break even now, profit target support at 1.3344 or upper trend line which ever it gets to first.

If you look at the 1H and 4H charts you see these trend line breaks with pull backs all over the place, sometimes you can get the entry to the pip. I have only traded a total of 4 trades like this so far with 3 wins & 1 loss of 10 pips so im not saying they are the grail but so far so good.

If anyone is already trading like this please let me know.

S
Attached Image
  • #23
  • Mar 22, 2007 4:00pm Mar 22, 2007 4:00pm
Quoting SisterCurare
I'd like to know what timeframe you were using, as well as the stop loss in your backtests as well as money management and exit strategy. Breakout trading does fail from time to time, but it should not perform that poorly.
I used the 15min frame, stop at -33 pips and take profit at 155 pips (or whatever the market is giving me at the end of the day) and 40 pips trailing stop.

You wouldn't believe how many "brilliant" trading ideas fail the minute you start the backstest
  • #24
  • Mar 22, 2007 4:04pm Mar 22, 2007 4:04pm
Quoting Someone
The trade made it past 10 pips so im at break even now, profit target support at 1.3344 or upper trend line which ever it gets to first.

If you look at the 1H and 4H charts you see these trend line breaks with pull backs all over the place, sometimes you can get the entry to the pip. I have only traded a total of 4 trades like this so far with 3 wins & 1 loss of 10 pips so im not saying they are the grail but so far so good.

If anyone is already trading like this please let me know.

S
Great strategy you have here, just keep on practicing and getting used to it. Also, if you move the stop to breakeven after only 10 pips, it may keep you out of some profitable trades, sice yo may get stopped out due to some noise. It's just something to keep in mind. Good luck!
  • #25
  • Mar 22, 2007 4:07pm Mar 22, 2007 4:07pm
Quoting FXTerminator
I used the 15min frame, stop at -33 pips and take profit at 155 pips (or whatever the market is giving me at the end of the day) and 40 pips trailing stop.

You wouldn't believe how many "brilliant" trading ideas fail the minute you start the backstest
I think mechanical breakout systems (such as Mouteki) may be unprofitable simply because not all breakout patterns work out. Some have a much higher probability of success than others, and that's why trading breakouts with discretionary rules (current trend, supp/res levels, overbought/oversold conditions, etc, etc) is the way to go in my opinion.
  • #26
  • Mar 22, 2007 4:50pm Mar 22, 2007 4:50pm
I basically am trading this way using Absolute Fibonacci. I do use indicators, mostly bollingers and moving averages for confirmation and reference. I've had good success with it. I don't think there is any way to backtest it. A lot of it comes from just developing a feel for the market. You can't really create rules for that. I just know that I trade much better just off price action around the lines than looking for an indicator signal. Admittedly they are just lines drawn on the chart before price ever gets there, but something always happens to price when it touches one. Stronger lines result in support or resistance being created. Just watch and see which way it goes. The indicators then confirm the strength of the move.
  • #27
  • Mar 22, 2007 6:34pm Mar 22, 2007 6:34pm
Quoting accrete
Hi "Someone"... welcome to the factory.

I tweaked an indicator that originaly showed daily Hi/Low lines and data. What i did was add what is called "Harmonic Beat" lines. I've posted details elsewhere, but basicaly the HB Theory goes that a "Beat" is 60pips in the currency market (the guy that came up with this has traded utilizing this data for over 15 years).

I tweaked the original indicator to paint HB lines each 1/8th of a beat or 15 pips and resetting at the end of each Daily bar's close. During Wednesday's news announcements i took profits when the price reacted at near the HB lines. I was watching 1m, 15m, and 60m charts. I was watching the 1m chart for stalls near the lines and it was freaky how the price would tag a line to the pip and stall, retrace to a nearby HB, then go onward and tag another HB line. I've been trading now utilizing this theory for S/R areas since late 2005.

The .ex4 file of the indicator is available for all to use. I'm not releasing the non compiled version as i've got to much blood, sweat, and tears into this one. Here it is for any to test out:

http://www.accrete.com/fx-mirror/mt4...DSRBeatsPR.ex4

There is noting to do but put it on your chart and i will usually just have it show on the 60m and below charts. Today i was placing my Stops on the other side of whatever HB line was 30pips away from the stall areas and it worked great. There were no moving averages or anything on the charts. Just price and the S/R HB lines with the other daily O/H/L/C/Median lines the indicator shows.

Cheers,
Thom
When the price approaches these lines and you enter either long or short with the 1min. chart, are you consulting the 15min and the 1hr for the direction you intend to trade?
If so, what are your criteria for determing trend on these timeframes?

Thank you
  • #28
  • Mar 23, 2007 3:49am Mar 23, 2007 3:49am
Quoting accrete
Hi "Someone"... welcome to the factory.

I tweaked an indicator that originaly showed daily Hi/Low lines and data. What i did was add what is called "Harmonic Beat" lines. I've posted details elsewhere, but basicaly the HB Theory goes that a "Beat" is 60pips in the currency market (the guy that came up with this has traded utilizing this data for over 15 years).

I tweaked the original indicator to paint HB lines each 1/8th of a beat or 15 pips and resetting at the end of each Daily bar's close. During Wednesday's news announcements i took profits when the price reacted at near the HB lines. I was watching 1m, 15m, and 60m charts. I was watching the 1m chart for stalls near the lines and it was freaky how the price would tag a line to the pip and stall, retrace to a nearby HB, then go onward and tag another HB line. I've been trading now utilizing this theory for S/R areas since late 2005.

The .ex4 file of the indicator is available for all to use. I'm not releasing the non compiled version as i've got to much blood, sweat, and tears into this one. Here it is for any to test out:

http://www.accrete.com/fx-mirror/mt4...DSRBeatsPR.ex4

There is noting to do but put it on your chart and i will usually just have it show on the 60m and below charts. Today i was placing my Stops on the other side of whatever HB line was 30pips away from the stall areas and it worked great. There were no moving averages or anything on the charts. Just price and the S/R HB lines with the other daily O/H/L/C/Median lines the indicator shows.

Cheers,
Thom
I have loaded this in to MT4 and seems to work fine. Results are good so far and will continue to test your scalping theory. It also seems important to trade at specific times of the day, i.e. before and after news (at least 30 mins each side) and when there is volume. The only thing is the colours. With the dark background I use the +HB lines and text are barely visible. I have changed on the chart and saved as a template and profile but every time I load the profile I have to reload the template. Do you have any advice or a workaround?
Sorry to sound picky - considering your generosity in sharing this.

Cheers
  • #29
  • Mar 23, 2007 1:17pm Mar 23, 2007 1:17pm
Someone,
I also am trading suppport and resistance lines. Recently I have been trading on 5 min and 15 min charts in Asian session, mostly Euro/Jpy.
Yesterday evening was a perfect setup on Eur/Jpy, Price touched horizontal resistance many times around 157.56 area, and bounced back each time. I entered short just before the huge sell off, but took profit too early. Still learning
Attached Image
  • #30
  • Mar 26, 2007 2:01am Mar 26, 2007 2:01am
Somebody must be trading with only trend lines?

S
  • #31
  • Mar 26, 2007 8:30pm Mar 26, 2007 8:30pm
Quoting Someone
Somebody must be trading with only trend lines?

S
Do a google search on "forex trend lines" and you'll find countless articles about it. I just spent the last 30 mins drawing them on 1 hour charts and I could see how someone could make money playing the breaks and bounces.

And on this post:

http://www.forexfactory.com/showthread.php?t=15197

You'll find an indicator to alert you to trend line breaks.

Jason
  • #32
  • Mar 26, 2007 10:47pm Mar 26, 2007 10:47pm
Nice charts "Someone". I never have luck with the trendlines, but they seem to hold very very well on the USD/CAD longer term charts from what I have drawn. I've been playing around with support and resistance lines.

Trying to work on breakouts versus range trading on smaller timeframes. The less I have to watch each pip the better as my judgement during the action doesn't seem that great for which will happen. Trying to see how I can set trades to capture both. Maybe low volume hours will always bounce versus break. THAT is my mystery.
Or maybe I shouldn't be trying to catch both all the time.
  • #33
  • Mar 27, 2007 12:05am Mar 27, 2007 12:05am
Quoting techno79
Nice charts "Someone". I never have luck with the trendlines, but they seem to hold very very well on the USD/CAD longer term charts from what I have drawn. I've been playing around with support and resistance lines.

Trying to work on breakouts versus range trading on smaller timeframes. The less I have to watch each pip the better as my judgement during the action doesn't seem that great for which will happen. Trying to see how I can set trades to capture both. Maybe low volume hours will always bounce versus break. THAT is my mystery.
Or maybe I shouldn't be trying to catch both all the time.

I am also trying to do something similer. Range trading on smaller time frame in Asian session and looking for breakouts in London session
  • #34
  • Mar 28, 2007 4:02pm Mar 28, 2007 4:02pm
Hi, yes you can change the "baseline" to any number you wish and the lines will be drawn from that level. I usually will utilize the day's OPEN price that i wish to back test. For real time trading i utilize the indicator found on this explanitory page.

: ) Thom

Quoting Triton18
Very interesting, Accrete, thanks!

Indeed, it would be VERY valuable to have the option to get the lines for the past days too, to visually backtest easily.

Is it possible to change in that way your indicator?
  • #35
  • Last Post: Oct 16, 2015 4:59pm Oct 16, 2015 4:59pm
Hi

Interesting ,I have been having the same issue and trying to look for info to help me out. Why I stubbled apon this.

I have been using a tutorial from Beta trader he makes money using his system with curently a profit factor of 3-5 depending on his current sucess.

http://www.beta-trader.com/support-a...ance-concepts/

I use him as a base line as he actually makes moeny trading. What I find is lots of people have opinions which are good as you get variation but when your writting code to back test you want to spend your time on quality data. I dont mean to be hash but I really only trust people with an account I can see works.

I have been trying to automate it and having great difuicuty and wondering if it will work over time.

I can get I pair to test really well but when I apply this to other pairs it just blows up. I though that it should work with any pair, over an extended time. Maybe it doesnt and its just a myth? Therefore is the system just curved fitted?

When I move between pairs Im lucky to get over 50%. For support and resistance alone I have stopped using other price action until I can really refne support and resistance. 55-60 percent for at least 10 pairs at 1:1.

Ive tried only trading around round numbers actually significantly decreased gain.

Using points of congestion, using points of high movement. Change the length of of candles to take readings from, depth of hogh/low/high. Speed of change, space to the left. etc etc. But nothing yet.

I can get good results by optimising one pair, but In theory it should work with all pairs which I am starting to doubt.


If your interested I can upload some back tests.

Regards,
0 traders viewing now