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  • #4,761
  • Aug 22, 2009 9:01pm Aug 22, 2009 9:01pm
Quoting bjpumping
you know strat, when i came across you thread ,something caught my interest, the issue of SUPPORT AND RESISTANCE.

with all sincereity,i have had a lot of problems locating support and resistance, even after reading some part of this thread, i cant still get something, but of recent i stumbled on another thread on forexfactory where a guy mentioned something about using the pivot support and resistance ....and i tried it and since then,it has been working wonders for me....
Interesting that you should get a reply from CrudeCraig in the sense that BJ Pumps are a supplier of downhole crude oil pumps to the Oil Industry!

Anyway, Craig gave you the perfect answer and its better coming from him than me as in his early days, he struggled finding these S&R levels.

To help you better appreciate the value of S&R levels:

Pivot levels, pivot support and resistance levels, Murrey Math Lines, Gann Square of 9, Camarilla, Fib Pivots, and all other manner of fancy pivots are hyped up calculations of what WE SEE on our Price Charts. They are the lazy trader’s ignorance of what really happens when price reaches a certain level. Believe me, I have used and tried all these and many others and I always, ALWAYS come back to using S&R identified on a price chart by the Mark I eyeball.

Pivot calculations were used by the Floor Traders in the Pits many years prior to price charts being generated by computers. This was a “niche” or “edge” among these guys as from doing these calculations, they knew where to place their buys, sells and stops and it became a “self – fulfilling” prophecy. Eventually, word leaked out and the “big” private funds and traders started using them which then became more “self – fulfilling”.

Fast forward 30 or so years to where we are now and everything done by the “Big Boys”, Banks and Financial Institutions is triggered by computer algorithms and neural logic using the latest software and hardware technology available. Their trades are electronically triggered based on price levels, spreads, anomalies, aberrations etc., etc., as I stated in an earlier post.

This is EXACTLY why I don’t trade short time frames and why I feel sorry for the mugs that do. They have NO CHANCE trading against electronically generated trades. By the time your average Joe trader gets a signal from his Mark 9379, Version 999 “black box” and indicator, the Big Boys have already taken the OPPOSITE side of the trade!

Now, zoom out to the Daily and above time frames and you take away most of the electronic advantage the Big Boys have. “How and Why?” you say. If you have to ask that question then you truly don’t know enough about a business you are pouring money into and hoping to make money from.

You must understand that no matter how fancy the Big Boys’ software and hardware is, it is STILL using the same data as us little insignificant squirts are – PRICE. Yes, they also use TIME in their lightning fast software. Their basis for calculations is, and always will be PRICE and PRICE HISTORY.

On an end of day basis, we know as much about PRICE as the Big Boys and all their multi billion dollar trading equipment do!

“What has all this to do with my question about calculated pivots?”, you are grumbling. Everything, absolutely EVERYTHING.

From the very first trade ever made on any financial instrument, a FOOTPRINT of Price Action and Price History has been left behind. You can see this on the price chart of any instrument whether it is rice, crude oil, platinum or even bread in the Middle Ages.

Had you put in the effort and taken the trouble to understand Price Action at Support and Resistance instead of taking the lazy, ignorant trader’s way out using out dated calculations, you would understand all this.

Let me explain AGAIN.

It doesn’t matter what system/strategy/method you use, which black box, which indicator, which calculation, which scam artist’s software etc., etc., there HAVE BEEN and ALWAYS WILL BE, levels at which a particular financial instrument is bought and sold based on supply and demand for all and any economic condition and conditions.

Still don’t understand? Find the post earlier in this thread and you will see that in 2009 we were using price levels from 1994 from which to buy and sell. Look at my recent post on USDJPY where I am using Dynamic Support and Resistance levels from 1985 and 1994.

It doesn’t matter how these levels were arrived at; they could have been calculated using NASA’s space age computer systems or Mickey Mouse’s abacus, the fact is that these levels were left behind for us to SEE and use.

If you still think you need to calculate pivot levels then let me remind you that the most successful and profitable traders (including those here on this FF forum) all use very simple methods – PRICE at previously established and proven levels. Hell, some don’t even own a calculator! There is one trader on another thread here on FF who doesn’t even draw these levels on his charts – he just eyeballs them! He makes $millions each year without making one single calculation!
15 YEARS OF PASR ON FOREX FACTORY!
  • #4,762
  • Aug 22, 2009 9:17pm Aug 22, 2009 9:17pm
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Looking at your weekly charts, I saw something similar in the M5 charts that we use - how the trains leave the station. We use 10 pips stations on the M5. I made 200 pips stations on the W1. The principle is the same. If a red line train stops in a station, you look to ride the blue line train as it leaves the station. Hold your laughter, it works.

You can have a look at the method, HERE.
  • #4,763
  • Aug 22, 2009 9:20pm Aug 22, 2009 9:20pm
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I widened the chart to make it clearer.

The last red line train stopped in the 1.4000 station.

The blue line left the station at 1.4200 and ran over 100 pips before in pulled back into the station.

The next blue line left the station at 1.4200 and ran 175 pips.
  • #4,764
  • Aug 22, 2009 9:51pm Aug 22, 2009 9:51pm
[quote=gbppip;2980335]

Looking at your weekly charts, I saw something similar in the M5 charts that we use - how the trains leave the station. We use 10 pips stations on the M5. I made 200 pips stations on the W1. The principle is the same. If a red line train stops in a station, you look to ride the blue line train as it leaves the station. Hold your laughter, it works.

You can have a look at the method, NO THANK YOU

Had you read the thread, you would know that we have used the train and train station analogy from Day 1 BUT our stations are not at small increments - they are at the levels already determined for us by prior PA.
15 YEARS OF PASR ON FOREX FACTORY!
  • #4,765
  • Aug 22, 2009 10:15pm Aug 22, 2009 10:15pm
To refocus on the real profits out there, my version Strat....massive bear trap or continued rising sun?
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  • #4,766
  • Aug 22, 2009 10:24pm Aug 22, 2009 10:24pm
Quoting strat
Had you read the thread, you would know that we have used the train and train station analogy from Day 1 BUT our stations are not at small increments - they are at the levels already determined for us by prior PA.
Well Mate, you used the analogy but not since Day 1.
  • #4,767
  • Aug 22, 2009 11:08pm Aug 22, 2009 11:08pm
Well with Time On My Side (Rolling Stones 1964), I thought I would give my version of Money Management which so many have asked of me. The reason I have always avoided it is that I am the worst person to discuss Money Management as I don’t follow the rules and don’t give a toss what others say to do and not to do. I do what works for me not what works for someone else.

As you would expect, I do not conform with established procedures or even definitions of what Money Management (MM) is.

So before I get into it, for those who disagree with me and want to tell me how I “should” do it, save your energy and bite your tongue. (This is my new “polite” version of “me”).

Most people on these threads and forums think that MM is using Stops – I disagree. Stops have nothing to do with MM – they are for CAPITAL and PROFIT PRESERVATION.

MM to me is using your money to make you more money with low risk. MM is for increasing your stake as your ROI increases and reducing your stake as your risk increases.

Trading is all about LOSSES – lots of small losses and fewer big winners. The big winners are where we make our REAL money. We always want to be in the market to catch the big moves.

When we start out as new rookie traders, we always, without exception, have larger losses than winners – the exact opposite of what we “should” do. This is our inexperience and psyche controlling us.

We want to at least get to the point that our winners are bigger than our losers so that even with a 50% win/lose record, we make money.

Here are some rules I would suggest for those starting out on their Forex journey:

PLAN YOUR TRADE and TRADE YOUR PLAN

Enter each and every trade in your Trade Log/Journal

Always be IN CONTROL

Consider loss FIRST before profit.

ACCEPT your losses – you are not wrong – they are just part of doing business

ACCEPT and be prepared to make losses

Assume your worst loss has not yet happened.

Always PLAN for the worst possible case.

Limit your losses to:

2% of equity on any day
5% of equity in any week
10% of equity in any month.

STOP TRADING if you reach these levels – something is WRONG – analyse your trades and find out what you are doing wrong

NEVER, NEVER, NEVER, EVER add to a losing position.

Don’t get paranoid by watching PA during the day. Let the trade develop in accordance with your PLAN. Getting out too soon on the first “wobble” (minor retracement) before the big run will be more frustrating and psyche damaging than taking a small loss.

Do not trade unless you are 100% physically fit and mentally prepared.

If you make a mistake, get out. If in doubt – get out.

Follow your system/strategy/method – if you can’t do this – DO NOT TRADE!

Take only ACCEPTABLE risks within your risk tolerance and financial position.

Do not trade or even look at exotic or other thinly traded markets

Use multiple lots to get to “free trade” status

As your equity grows consistently over time, increase your stake within your risk tolerance. Add to winning positions within your risk tolerance.

Decrease your stake during losing “streaks”

Do NOT increase your risk by trading correlated pairs

Increase your lot size on a pair you understand rather than trading a pair you don’t understand to compound your money.

Specialise and focus on a small number of pairs maybe just the six majors.

Do not get over confident as your success grows – keep doing what you did to get you where you are at now – just do more of it. Never forget what happened to the last guy who thought he could walk on water.

Use the market’s money for your trading account. Once you have doubled your equity, take your original stake out and put it into a CD or Bank account. From this point forward you are trading with your profits and the markets money. Do not change anything at this point, just more of the same.

If you WIPE OUT (Surfaris 1964), do not add additional funds until you know what caused you to wipe out.

Understand risk and how lack of risk control can wipe you out.

Success or failure as a trader is how you react to your losses

Control your emotions – fear and greed are momentary, regret and disappointments last a lifetime.

Before you take a trade, look for reasons NOT to take the trade. We are all guilty of seeing a trade that isn’t there (much like people who see Mother Theresa in clouds or pizzas)

Eliminate negative thoughts – only think POSITIVE thoughts

Surround yourself with successful and winning people – avoid the losers

Amateurs manage money by taking RISK. Professionals manage RISK by taking MONEY.

Trading is a zero sum game – someone has to win and someone has to lose

Finally, once you get to a point in your trading where you are comfortable with your system/strategy/method and MM, then you know you have “arrived”.
15 YEARS OF PASR ON FOREX FACTORY!
  • #4,768
  • Aug 22, 2009 11:33pm Aug 22, 2009 11:33pm
Quoting strat

DYNAMIC SUPPORT & RESISTANCE INDICATOR

...
When STATIC S&R coincides (confluence) with DSRI which coincides (confluence) with PRICE ACTION which coincides (confluence) with DR. JOE, it is STRESS-FREE, PROFESSIONAL & PROFITABLE TRADING.
  • #4,769
  • Aug 23, 2009 12:16am Aug 23, 2009 12:16am
Quoting Alexandra
To refocus on the real profits out there, my version Strat....massive bear trap or continued rising sun?
Hey Alexandra,

Originally Posted by strat [IMG]file:///C:/Users/Robert/AppData/Local/Temp/msohtml1/01/clip_image001.gif[/IMG]
OK, since I've laid my cupboard bare, I may as well post this.

Now I have nothing left to tease Alexandra with, unless.........................

OK, here comes the “Unless………………….”

Forever on the lookout for a new “edge” or looking at the “old” for something “new”, I am studying “out of the box” ways of looking at the market under the guidance of a very experienced and knowledgeable trader who uses an original and unorthodox way of understanding why and how the markets move.

Combining my momentum and cycle work with his work “could” get us into Pandora’s Box but there is a LONG way to go yet.

No, Nicola, it has nothing to do with the Man in the Moon or The Planets or even Gustav Holst.

I have only scratched the surface on his work but with regard to USDJPY, he confirms my analysis, using his work, on the Big Boss and Boss.

So that being said, and, as things are now and if all else remains equal, we are expecting prices to at least equal and probably exceed 101.50 and maybe up to the 110.00 range. His work also embraces forecasting prices but as I say, I am but barely one step along HIS Path so am not into that yet.

This is also fully supported by my cycle work so putting all this together with PASR could prove to be very exciting!

Hopefully this makes you feel better about your “beloved” USDJPY!
15 YEARS OF PASR ON FOREX FACTORY!
  • #4,770
  • Aug 23, 2009 12:24am Aug 23, 2009 12:24am
Please read my posts #4522 and 4651 before moving on my next several posts. The reason of those two posts was to show you all how I was actually trading, though the DSRI lines on AUDNZD chart were drawn very roughly. But at that time, I was in hesitate to show the method (whether the timing is right or not), because Strat's thread was related mostly to static SR lines. Since he has decided to show you DSRI, and it is exactly how I am trading, I believe it is the right time to explain all I have.

Please understand that I have no intention to hijack Strat's thread. Since what I am doing for trading falls exactly into the context of this thread and all are related to Strat's teachings, my sole purpose, as a Strat Certified Trainer, is to contribute more.
  • #4,771
  • Aug 23, 2009 12:45am Aug 23, 2009 12:45am
Indeed....good to have company - not too much though! Seriously though - that is interesting, even at this hour!

You know my target, fundamentally, of 125......now to add your technicals....hmmmmm.....maybe I will review that floor plan for Neverland again.

It is, indeed, time for technicals...we are through the stage where every news event sent the Yen soaring in bubblish fashion on the intraday charts.....there are some huge static technical obstacles along the way, but they are quite visible. USDJPY will declare itself though and, hopefully, the prepared mind will be rewarded. I suspect 95 will be seen at some point this week...and a monthly close over 94 again should provide your Big Boss with a long term (yes > 15 min for some of you) trade with good R/R from my view. Looking the other way, one can certainly spin a case for 92. PA shall lead the way - money to be made on both sides of this one for a bit longer I suspect. Not for me though - I am an investor only on this one.
  • #4,772
  • Aug 23, 2009 12:51am Aug 23, 2009 12:51am
Please have a look attached GBPJPY daily chart with static SR lines (red) and DSRI (blue). And don't forget that the chart is clean enough to trade (not congested with many SR lines).

By looking at daily chart, I am aware where SR lines are standing and where the DSRI is so that I will not trade against them such as not taking short trade where the price is close to support or vice versa.

Next few charts will be on H4 time frame. I should admit that I am trading H4 for majors and then daily for other crosses.
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  • #4,773
  • Edited 1:28am Aug 23, 2009 1:18am | Edited 1:28am
Now I want you to check the price action between June 11th-15th. What you see is a zone around 162 where the price has difficulty to penetrate. Although 162 is not a major SR level, we can put a minor SR level as price reacted to this level in 2000 and haven't closed above it since end of 2008.

After this fact, August 7th (NFP day) close above 162 was a strong one and normally one can expect the test of 165 level. But price reversed next Monday all of a sudden and put a label to Friday's close which is "false breakout".

After making these comments by using daily chart, I am starting to check H4 chart to see where the fall will end to enter long (Actually we can enter short on H4 on Monday but since I am starting to show what I am doing after Monday, I am looking for long). Dr. Joe is the one who is helping me understand where it will stop going down.

“How do you know when it stops going down?”

“When it starts going up.”


And for this, I am using DSRI and Price Action together and one filters the other if I get a signal from only one of them.


What you should do is to draw a DSRI either on line chartor by using open/close on candlestick chart, I'll show you how.
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  • #4,774
  • Aug 23, 2009 1:25am Aug 23, 2009 1:25am
Now, until the bar where we have arrow, you'll mostly see H4 bars with lower high and lower low together with a few IBs that means we are going down. What we are looking for after drawing DSRI is the break of it with a bar which shows higher high and higher low.
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  • #4,775
  • Aug 23, 2009 1:37am Aug 23, 2009 1:37am
Quoting strat
Well with Time On My Side (Rolling Stones 1964), I thought I would give my version of Money Management which so many have asked of me. The reason I have always avoided it is that I am the worst person to discuss Money Management as I don’t follow the rules and don’t give a toss what others say to do and not to do. I do what works for me not what works for someone else....
neah you dont want to do it like that you wnna do it like this..........
Attached Image
  • #4,776
  • Aug 23, 2009 1:54am Aug 23, 2009 1:54am
The bar with arrow tells me:

1- The price stopped going down because of DSRI break.
2- The price stopped going down because buyers managed to show their
strength and marked higher high/higher low with a strong bar (this is where
I am trading differently as opposed to Strat's shooting star/hammer entries.
I am using those but I am also OK with strong bullish/bearish bars as long as
they show hh/hl or vice versa. For newbies, please continue with shooting
stars and hammers until you study thousands and thousands of charts).
3- We have no immediate major/minor static resistance around, the nearest
one is at 162.
4- And the stop is where we see a bearish bar with lower low/lower high which
tells us the up move was fake. That means I am waiting for the bar close to
exit. That could be risky for some but I am determining my trade size
accordingly (Please see Strat's recent post re. MM).
  • #4,777
  • Aug 23, 2009 2:02am Aug 23, 2009 2:02am
Now, after the entry, we should start reading each H4 bar and try to understand what market is telling us. Those three lines are not that important because they show indecision and they failed to take the low of the very strong bar after the entry. So I keep holding the long position.
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  • #4,778
  • Aug 23, 2009 2:11am Aug 23, 2009 2:11am
Then you can draw another DSRI either on line or candle chart. Here is how I do it. And as you can see, I am exiting the long trade at the close of the bar where we have arrow on chart and taking short trade this time due to the fact that:

1- The price stopped going up because of DSRI break.

2- The price stopped going up because sellers managed to show their
strength with a very bearish engulfing bar.

3- We have no immediate major/minor static support around, the nearest
one is at 150.

4- And the stop of this new short position will be where we see a bullish bar with hh/hl and/or DSRI break.
Attached Image(s) (click to enlarge)
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  • #4,779
  • Aug 23, 2009 2:18am Aug 23, 2009 2:18am
Quoting Baba G
Nah you don't want to do it like that you wanna do it like this..........
Damn, you figured me out! I wanted to keep it a secret!

It's Sunday morning with you - Are you wearing your pink frock again?
15 YEARS OF PASR ON FOREX FACTORY!
  • #4,780
  • Aug 23, 2009 2:30am Aug 23, 2009 2:30am
Now, you keep holding your short and wait DSRI break while it is forming and watch PA with LL/LHs. Isn't it stress-free?

You can either take profit after the close at first arrow bar or second bar and this time take long due to reasons I have stated for previous long position. This long position has a strong support from daily DSRI and you can even increase your trade size and watch bar closes to interpret PA.
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