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  • #41
  • Feb 9, 2010 10:37am Feb 9, 2010 10:37am
Quoting mf036ml
Temps , good luck with your trade...just checked the Eur and seemed to have bounced nicely off of that resistance.....

am getting much better at recognizing these patterns but still have much confusion on trading them effectively....


any projections on your tp for this trade....?

Thanks again...
Tp took 40 pips there was 70+ but I have learned not to be too greedy 40 and i am happy on any trade.

Good luck......
  • #42
  • Feb 9, 2010 10:40am Feb 9, 2010 10:40am
seeing as I still have much , much to learn...I think my energy would be spent best in analysing strictly one pair , learning its movements and learing how to trade that one pair correctly...

so stritcly due out of its popularity I chose eur/usd....

so here is what I see in this chart from first glance....please tell me what i am missing...this is the 4hr. chart...

lines drawn on most recent significant support and resistance and a nice down trend line with a false breakout which more than likely would have burned me....

now price can do only one of three things....continue downward....reverse...or move sideways....

I'll stop there and hope to get some feed back before I over analize this as usual...
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  • #43
  • Feb 9, 2010 10:50am Feb 9, 2010 10:50am
Wait untill you get a clear break of the bear flag there was a drop of 300 pips or if you traded the resistance line you still could have got atleast 3 to 1 risk reward and won, I think your doing the right thing sticking to one pair.....
  • #44
  • Feb 9, 2010 11:03am Feb 9, 2010 11:03am
Quoting Temps
Wait untill you get a clear break of the bear flag there was a drop of 300 pips or if you traded the resistance line you still could have got atleast 3 to 1 risk reward and won, I think your doing the right thing sticking to one pair.....
Thanks Temps,

definetly a lot less overwhelming for me ....and besides no sense in trying to run when I can barely walk at the moment....

so lets see how this goes...

Now by the bear flag breaking...this could be in either direction...correct?

the support level seems to be a pretty significant one...scrolling back on the daily I see a while back also served as a pretty strong resistance...

should I be anticipating a reversal here?
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  • #45
  • Feb 9, 2010 11:33am Feb 9, 2010 11:33am
this is what am looking ....price seems to have reached the area of resistance of what I had deemed a false breakout.....is this a decision area? good place to short? and trade with the trend? or could breaking of this level confirm a possible reversal?
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  • #46
  • Feb 9, 2010 1:32pm Feb 9, 2010 1:32pm
Here is a friend of mine that has helped me greatly in trading. He does a good job of explaining the 'What's happening behind the scenes' of things. http://kewltech.blogspot.com/
  • #47
  • Feb 10, 2010 8:31am Feb 10, 2010 8:31am
Quoting Ronin2002
Here is a friend of mine that has helped me greatly in trading. He does a good job of explaining the 'What's happening behind the scenes' of things. http://kewltech.blogspot.com/

Thanks again Ronin2002,
  • #48
  • Feb 10, 2010 10:35am Feb 10, 2010 10:35am
Curious as to how some of the more experienced traders out there would interpret this and really hope to get your feed back...

Looking at the red lines- would you say this was a bearish flag which has broken support and continued its movement...OR

Looking at the yellow lines- would you say this was a bearish pennant ...which broke to the upside signaling a trend reversal...and is now forming a bullish flag...

Your input is greatly appreciated...

Thank you all in advanced.
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  • #49
  • Feb 10, 2010 12:17pm Feb 10, 2010 12:17pm
bearish pennant with support that has been penetrated? or bearish flag forming?

As always, thanks in advanced..
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  • #50
  • Feb 10, 2010 12:46pm Feb 10, 2010 12:46pm
Here's what I see on the EURCAD chart. Fisrt chart is 4 hour. To see the price action, I broke it down to 30min. The fisrt chart shows an Inverse Head & Shoulders with target. The second 30min chart shows the next area to be a Head & Shoulders, again with target. The last chart shows the 2 hour with a posible Double Bottom and possible target. My point is this. You need to look deeper than one single chart. The 4 hour is good to get the feel of the overall trend, but larger time frames are built on the smaller. When you see a patern on the larger, dig into it to see what caused it. Just my 2 pips worth. hope this helps.
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  • #51
  • Feb 10, 2010 12:50pm Feb 10, 2010 12:50pm
Quoting mf036ml
Curious as to how some of the more experienced traders out there would interpret this and really hope to get your feed back...

Looking at the red lines- would you say this was a bearish flag which has broken support and continued its movement...OR

Looking at the yellow lines- would you say this was a bearish pennant ...which broke to the upside signaling a trend reversal...and is now forming a bullish flag...

Your input is greatly appreciated...

Thank you all in advanced.
taking a look at what price has done since i posted this chart, I would think that this was a bearish flag which has broken support and continued down....

Now i do see the penant...since the original trend was down , I hoping this would have been enough for me to have avoided a long trade at that point and given sufficient time for the flag to form and break support..

Any different views on this or different take, is highly welcome..
  • #52
  • Feb 10, 2010 12:58pm Feb 10, 2010 12:58pm
Quoting Ronin2002
Here's what I see on the EURCAD chart. Fisrt chart is 4 hour. To see the price action, I broke it down to 30min. The fisrt chart shows an Inverse Head & Shoulders with target. The second 30min chart shows the next area to be a Head & Shoulders, again with target. The last chart shows the 2 hour with a posible Double Bottom and possible target. My point is this. You need to look deeper than one single chart. The 4 hour is good to get the feel of the overall trend, but larger time frames are built on the smaller. When you see a patern on the larger,...
Ronin2002

Really appreciate the time taken to give such a thourough breakdown...Note taken: Find patterns on higher time frames....go and investigate on shorter time frames .....am still reading through the two links you posted...thanks again for those..

As always, a pleasure to have your contribution...
  • #53
  • Feb 10, 2010 1:53pm Feb 10, 2010 1:53pm
Another thing to take away from this is that patterns form around S&R levels. So really you can use the patterns as a 'heads up' in addition to locating these levels.

P.S.
You're very welcome, glad to help out.
  • #54
  • Feb 10, 2010 2:58pm Feb 10, 2010 2:58pm
Quoting Ronin2002
Another thing to take away from this is that patterns form around S&R levels. So really you can use the patterns as a 'heads up' in addition to locating these levels.

P.S.
You're very welcome, glad to help out.
Ronin,

would it be safe to assume that the same would apply if I wanted to take more of a long term to mid term with my trades...and trade off of the 4hr charts....

Perhaps finding patterns on the weekly's and daily's and droping back to the 4hr. for my trades?

although am in front of my computer most of the day, I cant really dedicate the time needed to take trades on the lower time frames..so the intraday approach is not the best for me..

I would like to find my own style with more of a midterm approach..rather than longterm..
  • #55
  • Feb 10, 2010 3:00pm Feb 10, 2010 3:00pm
Yes it would, just takes longer to perform.
  • #56
  • Feb 10, 2010 3:21pm Feb 10, 2010 3:21pm
Quoting Ronin2002
Yes it would, just takes longer to perform.
Thanks Ronin,

Till now I really favor the 4hr time frame for my trades...and see what you mean by having to wait for patterns to form on the weekly's or even daily's..

but fortunatly or unfortunatly , I havent figured that out yet...the 4hr. really fits the time available I have to trade...

Perhaps I should try and find the most reliable patterns under the best market conditions to trade in this time frame...if am able to do that succesfully, I would be very happy...

Thanks again Ronin.
  • #57
  • Feb 10, 2010 3:46pm Feb 10, 2010 3:46pm
Here's another example. I understand you don't play the intraday, but it serves as a good example none the less. the first chart is USDJPY 15min. See the Head & Shoulders? Next look at the 5min. Double wedges. It is very typical that the right shoulder is a wedge formation. This goes the same for inverse head & shoulders.
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  • #58
  • Feb 10, 2010 7:26pm Feb 10, 2010 7:26pm
Quoting Ronin2002
Here's another example. I understand you don't play the intraday, but it serves as a good example none the less. the first chart is USDJPY 15min. See the Head & Shoulders? Next look at the 5min. Double wedges. It is very typical that the right shoulder is a wedge formation. This goes the same for inverse head & shoulders.
Ronin2002

I see what your saying and it makes perfect sense...I dont know if you guys realize just how much help these little bits of insights your sharing are starting to paint a clearer picture..and I truly and honesty thank you for that....

Check this out and tell me what you think and if am implenting this correctly.....

first chart is daily chart...I see double top...


2nd chart is the 4hr on which i took a short position qued by break of a bearish penant...

again, thanks so much for those taking the time to participate and shareing your knowledge..
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  • #59
  • Edited Feb 11, 2010 7:24am Feb 10, 2010 9:33pm | Edited Feb 11, 2010 7:24am
I would say that you're on the right path. But did you notice that the break of the pennant was the confirmation of the dbl top just above it on the 4 hr?

Some more food for thought, on the first chart below (Daily) where the blue vertical line is, the bottom of that red candle (close) is S&R line (because of the gap). Notice how the price action bounces between that, and the support line below? Do you see the Head & shoulders there? How about the wedge inside on the lest side of the head?

Following the gap, price fell to support, accelerated up to & through the aforementioned resistance and into another resistance level. It then rebounded off and fell back to the resistance lost (red candle with blue vertical line) where it formed the wedge. You can see what followed for yourself. The point is the resistance of the 2.2897 are has been shown as significant. When price reached that level, a safe entry could've been made after it had tested the area. Note the grey rectangle. Now look at the next chart. This the 4hr showing the PA of that area. What do you see? Yep a dbl top. Markets love to test and retest, happens all the time. A safe short would've been to enter upon failure of the retest (green vertical line) with 2.2425 as your target. Where a dbl bottom was formed. I think you can see where I am going with this. Remember, if price can't go one way, then it will go the other. It's just how the market moves, ANY market. Keep up the good work! Until next time, Happy Trades.
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  • #60
  • Feb 10, 2010 11:30pm Feb 10, 2010 11:30pm
Quoting Ronin2002
I would say that you're on the right path. But did you notice that the break of the pennant was the confirmation of the dbl top just above it on the 4 hr?

Some more food for thought, on the first chart below (Daily) where the blue vertical line is, the bottom of that red candle (close) is S&R line (because of the gap). Notice how the price action bounces between that, and the support line below? Do you see the Head & shoulders there? How about the wedge inside on the lest side of the head?

Following the gap, price fell to support, accelerated...

Ronin,

Your explanations keep getting better and better...I see what your saying and am starting to feel a little more comfortable spotting patterns which for the life of me i could not see earlier....

Still have much work on this area but definetly having a much easier time spotting...the double tops/bottoms....head and shoulders...flags ...and pennants....

and am sure I'll put up a ton more examples of both succesful and unsuccesful trades for the AWESOME breakdowns on whats going on like above....

so am on the right path with entries....but now, what about managing open positions/ gauging tp levels....any advise?

Thanks again Ronin/awesome job presenting that explanation..really cant thank you enough for taking the time to put that together...


Off to read a bit more on chart patterns and market stages...and then to bed..
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