Trade what you see NOT what you expect

those 2 and eur/usd for me is all

I stick with cable at the mo

is anyone making a living with this system?

Not sure if anyone is currently living off this system - but I'm sure it is possible.

After learning so much from this thread, and from the help of others, I want to start giving back. I am taking more and more winning trades and want to try helping out others. After going back through this thread, I am agreeing that as far as charts go, there is very little to do with higher time frames. I took a trade tonight that gave me some very nice pips that I would like to share. For those who are just starting this system, or anyone having trouble, I am going to show you my whole process of what I started doing that has helped me alot and hopefully it will help you.

I am cropping my charts to help show you what I was seeing (sound familiar?) just before I took the trade. All charts are exactly as they looked at 7:59pm EST. I recommend having the chart open in another window while reading the post to follow along. Without further ado, I give you a multi-post special in what I feel is the absolute ideal trade combining PA with S&R.

Notice how I am starting with the daily chart - not something you see often here. I always start with the higher time frame charts and work down to the lower. The weekly is an occasional check, but the daily is something I check very frequently. I sat down tonight and here is what I saw on the daily for the GBP/USD (The Mrs.)

The line drawn is at 1.6400 and as you can see, this is a massive S&R zone. Look at the number of times she has reversed near this line. The D1 had hit that zone and was possibly already starting to turn back. Notice the shooting star candlestick pattern forming on the unclosed candle. Although this could be giving signs of a reversal, this candle was a long way from closing so it cannot be trusted completely.

Sometimes a line like this will be visible only on a lower time frame, but the higher the time frame the heavier the S&R.

I now know that I have a major resistance line so that part of the trade is complete. I now only have to concentrate on PA with candlestick patterns to take a trade. I then move down and take a look at my H4.

Here is what I saw when I moved down to my H4. The last candle shown was just about to close. I have marked a previous H4 (red) where we could have used this same analysis but I was not trading at that time. That candle closed very bearish which I keep in the back of my mind as I look at the most recent candle (blue).

This candle closed as a hanging man - and as an added bonus closed below the previous candle's high. Even though the candle was held by the 5sma, this is telling me that in this "uptrend" buyers had 4 hours to make a new high but failed - signaling a possible pull back. You can also see a type of "head and shoulders" (shampoo) pattern which I have marked.

So we know that we are up against heavy resistance, the H4 has a reversal candle as well as a type of head and shoulders pattern. Looking good to me. Let's have a look to see what we saw on the H1.

The H1 is not telling us much other than a previous reversal candle closed earlier in the day which also would have been a good opportunity (marked in red- the daily was up against the 1.6400 resistance and the only thing different is we would have been looking at the previous H4 candle which wasn't showing a reversal pattern. Being up against strong resistance, the red marked H1 candle would have been good enough to continue our analysis to the M15) I was not trading at this time so I only have what the H1 is showing me right now.

Unfortunately the H1 closed though the 10sma but you can see that it closed flat. (blue). There are many senior traders in here that use a flat closing candle as a sign of a reversal.

In our favor we now have strong D1 resistance, H4 reversal candle and head and shoulder formation, H1 has just closed flat. It is looking promising. Lets move to the final chart I look at. Here is where I take the trade using PA. I will be looking for any of the patterns discussed in the PDF's / PA in the form of candle stick patterns.

Here it is.. Our last chart. The M15. Lets have a look. The first thing I notice is over the last few hours, the price has been making lower highs, and lower lows. I have depicted 2 shooting stars where you could have taken trades as well - but remember, you will want confirmation from a higher time frame. Do not just take a shooting star on a m15. (In this case it was ok as we were up against the 1.6400 resistance and the H4 had closed as a shooting star - but that was a whole other trade)

So as depicted, my M15 closed with a flat top after making a lower low and bouncing off the 200sma.

Let's review:

D1: Strong resistance
H4: Hanging man, close below the high of the previous candle, head and shoulders pattern.
H1: Flat close
M15: Flat close, lower highs and lower lows.

This is more than enough for me to take this trade. I take the trade at the close of the M15 flat candle, with a SL above the high of the first shooting star I've marked. 25 pip SL.

See the next post for the finale.

Here we go. Took the trade and it was a possible 70+ pips. And look what happened - the possibility of an EO special - The 5oclock trade which I've marked.

You now see what I mean about this being an ideal setup - basically every time frame was screaming sell. All the time frames helping doesn't occur all the time, but when it does it is great.

I hope this helps for those who need to spend more time reading the higher time frames. I always start with the D1 then the H4 and so on. Yes EO has given us trades to take just off the m15, but you still must check your higher time frames as the m15 could be telling you to sell, but the h4 closed positive, or you are on a strong support line etc. If any seniors read this, please feel free to post some other ideas or corrections and I will add them to these posts.

Thanks and Happy Trading!

Good morning/evening Captain. I hope you are well today. Thank you for a very clear and concise explanation of your thought process, I hope that you will post more

i agree with gladis, awesome job buddy! very clear and clean!

Good morning Snow, I hope you are well today

Thanks guys. Just hoping it helps people put trades together. I'm off to bed, hopefully I'll be able to drag my ass out of bed in the morning.

Peace

and good morning to you!

Sleep well Captain
Namaste

take it easy, see ya manana!

Good morning fellow traders!

Captain that is great work but there is one very important part you left off and that would be where is the next stop where you would expect price to stall for taking profit and for a reversal trade. This should be pretty easily spotted on the 4hr chart for this particular trade. That way you can enter a trade take some profit off and set a TP and stop loss and go to bed. I'm sure you will like making pips while you sleep I know I do.

Yes, there are quite a few making a living with this system consistently.

Good morning/evening Lucklady and Pippi. I hope you are both well today