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Higher low, lower high system

  • #581
  • Mar 19, 2010 4:02am Mar 19, 2010 4:02am
Some nice trades today. We did miss this last move down as neighbours dropped off keys, reasoning for last sell posted on medici/islander thread.
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  • #582
  • Mar 19, 2010 4:03am Mar 19, 2010 4:03am
Some of the actual entries taken.
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  • #583
  • Mar 19, 2010 11:46pm Mar 19, 2010 11:46pm
Hi V. Just a quick "thank you" for keeping your thread going. It's a great learning experience for many of us.

I can't find your entry on the second chart above. Maybe you could make your entry arrows white - the red is very hard to read (but it could just be my old age !) Cheers.
  • #584
  • Edited 4:33am Mar 20, 2010 3:42am | Edited 4:33am
Quoting orientos
Hi V. Just a quick "thank you" for keeping your thread going. It's a great learning experience for many of us.

I can't find your entry on the second chart above. Maybe you could make your entry arrows white - the red is very hard to read (but it could just be my old age !) Cheers.
That fooled me at first, but on inspection I see it is a MT4 sell line at 1.5193 not an arrow as usual. Snapshot must have been grabbed live as it occurred. Set up is selling the second LH in the 1 min run, with entry as a break of the first red bar close after a green up bar in a down trend, which happens just below the RN.
  • #585
  • Mar 20, 2010 8:59am Mar 20, 2010 8:59am
Hi guys, if you see post 581 the entry you are querying is the right hand side arrow down after the shooting star.

I try and take as many live snapshots as I can.
  • #586
  • Mar 20, 2010 9:20am Mar 20, 2010 9:20am
Quoting Vantage
Some nice trades today. We did miss this last move down as neighbours dropped off keys, reasoning for last sell posted on medici/islander thread.
Just clarifying from 5190 level, the last move down.
  • #587
  • Mar 20, 2010 9:55am Mar 20, 2010 9:55am
Hi V,

Thanks for the clarification. Can you tell me a little about how you deal with the mechanics of trade entries? For longer term trading, I use Oanda, but because the charts are basic, I use MT4 for charting. For this faster style of trading, I am initially using the IBFX platform so that I only have 1 platform to deal with, rather than juggle 2 platforms. What spread do you get with FxPro? The IBFX spread on cable is 3 or 4 pips, mostly 4, with a widening to 5 or 6 at news time. And do you mostly place market orders? On Oanda I used primarily stop buy/sell orders, but find the time taken to punch the numbers on MT4 takes longer, leading to me using market orders more frequently. In addition, I prefer to have the stop loss level on the ticket before the order is placed. This happens automatically on Oanda but MT4 platforms, a number has to be typed in from the keyboard. Is there a way on MT4, that you know of, to get an automatic stop appear on the ticket without keyboard intervention?
  • #588
  • Mar 20, 2010 10:32am Mar 20, 2010 10:32am
John carters explains this well in his book trade the markets.

This works well as a swing trade on daily charts on indicies. Less screen watching and you can still pick up a good run of points.
Also placing your order out of hrs take te stress off as well.

has anyone tested in forex on daily with similar results?


Sorry if this has been already mentioned


Hilton
Thank you J16 & Trader Dante
  • #589
  • Edited 4:04am Mar 21, 2010 3:43am | Edited 4:04am
Quoting Royston
Hi V,

Thanks for the clarification. Can you tell me a little about how you deal with the mechanics of trade entries? For longer term trading, I use Oanda, but because the charts are basic, I use MT4 for charting. For this faster style of trading, I am initially using the IBFX platform so that I only have 1 platform to deal with, rather than juggle 2 platforms. What spread do you get with FxPro? The IBFX spread on cable is 3 or 4 pips, mostly 4, with a widening to 5 or 6 at news time. And do you mostly place market orders? On Oanda I used primarily...
Hi Royston
Pls PM me as I can give you a nice tip on Fxpro and others.

OK Fxpro spread.
GU market quiet 3 pips, market active 1-1.5.
EU market quiet 2, active 1 and below.
EJ market quiet 3, active 2.
Spreads do not go crazy at news time. GU max I've seen was 3.

I use mostly market orders. I realise if I wish to try and trade like Islander I'll need to use pending orders more. I use a max deviation on price of 2 (full) pips, ie 20 on fxpro.

I always have a stop in place before entering. As trades are identified and I have an entry area in mind the stop is already placed. I will play with it slightly if price moves a little before candle closes. Also as I have a 2 pip deviation in price thats the reason why some stops may be a little larger than others, ie I've set stop but actual entry can change a little.

I don't know of any way of placing an auto stop a fixed number of pips as standard on mt4. There may be certain ea's that will do this but I don't use them. A google search may help.
  • #590
  • Mar 21, 2010 3:46am Mar 21, 2010 3:46am
Quoting chartergas
John carters explains this well in his book trade the markets.

This works well as a swing trade on daily charts on indicies. Less screen watching and you can still pick up a good run of points.
Also placing your order out of hrs take te stress off as well.

has anyone tested in forex on daily with similar results?


Sorry if this has been already mentioned


Hilton
You could use this method on daily charts, I wouldn't as size of stops does not suit my style, maybe 1 day though ..............

I rarely post daily charts but every day starts with a look at daily + 4hr to have a better idea as to where the market will go, then looking at lower time frames for entries on the basis posted.
  • #591
  • Mar 21, 2010 3:50am Mar 21, 2010 3:50am
Oh Hilton forgot to mention that most days I trade from around 6-10 am gmt. After that my working day is done.

I'll have a look see in and around US open/London close overlap but thats dinner time here so I'll normally be lucky to catch a trade. If London session has gone according to plan then I'm happy in any event.

Basically just looking for decent results without killing myself in front of screen for whole day.
  • #592
  • Edited 5:03am Mar 21, 2010 4:34am | Edited 5:03am
I have updated 1st post with some comments about how I use 15 min chart. Basically though I don't want to go into a 5 min hl/lh with an obvious dis-agreement from 15 min chart.

From page 37 I've started posting some 15 min charts to try and comment on this.

I will look at 15 min chart and vol to give heads up on 5 min.

Some examples as attached.

This is not cherry picking and represents some trades actually taken.

OK firstly whilst I may not post the charts always look at D and 4 hr charts to see if that pic is stacking up in your favour.

Left line. 2 shooting stars in a row. The highlighted shooting star had a lower close with lower vol. So buyers were clearly not interested. In fact any shooting star that had a dble top or lower close below the high of 1st shooting star that DID NOT follow through higher would have prob given a 5 min sell signal.

2nd line from left. Prior to this was a good vol hammer, that may well have given a 5 min hl and a trade. However when it didn't follow through and gave a decent upper wick at 5225, then a lower close below 5200 that was clear that buyers weren't too interested.

2nd line from right. A good vol shooting star followed by a spinning top that could not break the top of prev candles wick. Again clearly no follow through from buyers. Setting up a sell.

Line on right, good vol shooting star.

OK so some of the 15 min candles I look for are obvious, decent hammers and shooting stars. Also I look for a move in a direction and then the following candle, if it cannot continue in the original direction and vol is lower thats a clear sign that market is struggling.

15 min attached.
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  • #593
  • Mar 21, 2010 8:35am Mar 21, 2010 8:35am
Quoting Vantage

OK Fxpro spread....
Hi V,
thanks for your comments. I see that IBFX spreads are not quite as tight as the FXpro. At 3 or 4 pips wide, plus 1 above and below for the triggers, that means that there is a 5 or 6 pips of "friction" to overcome.

I have added a chart of a trade I took on Friday with entry at 08:15 GMT. Looking for shorts, and price had made a LH on the 5 min chart. My entry was 1 pip below the 5 min low. The 15 min chart had just completed a positive close up candle but the last 5 min bar was a red (actually orange here, lol) candle. Price reversed immediately on entering, and the next 2 @ 1 min candles were both green. I closed for -12. On my entry the 15 min bar was red, but rapidly started developing into a green (blue) bar.

I did not take the subsequent short a few minutes later, my mind was still digesting the previous trade. That is another story, and something I am working on. But would you personally have waited for the prior 5 min/15 min high to have broken, i.e., kept a looser stop? Or even a tighter stop? How would you have played this?
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  • #594
  • Mar 21, 2010 9:44am Mar 21, 2010 9:44am
Hey V I'm going to post a situation here that I always struggle with. It's hard to explain after the fact so bear with me and hopefully you'll get what I'm asking. In the following chart (GU 5min) the trend is down and during the London session price moved down over 150 pips. So you're thinking maybe the trend is over now but you never know when it will end so shorts are still a possibility.

My first arrow is a bullish hammer and also the first higher low after the big down move during London session. However it's against the overall trend so I don't think this is a great opportunity.

The second arrow then forms a lower high with the overall trend. So I'd think this is a better entry but you did just have a lower high so the trend is now messed up.

The third arrow is after price made a new lower low and now price has created a double top at the second arrow's price and so this can technically be called a lower high. So you had a lower high then a lower low and price is now back at a lower high so you enter short as the next bar goes lower by a pip and then you get stopped out right away.

This was the first example I found and it's not really the best way to explain it since the problem I have is as it's happening real time. So my question is would you take any of those 3 arrows as trades and why or why not? The problem I have is I'd look at the first arrow and start thinking the down trend is over and then the next 2 arrows would get me thinking that the down trend is going to continue. I just have a hard time figuring out when the trend is changing, but I guess nobody know for certain when it will change.

Hopefully that makes some sense, if not let me know and I'll try to explain it better. Sorry for the long post.

trublu
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  • #595
  • Mar 21, 2010 10:03am Mar 21, 2010 10:03am
Quoting Royston
Hi V,
thanks for your comments. I see that IBFX spreads are not quite as tight as the FXpro. At 3 or 4 pips wide, plus 1 above and below for the triggers, that means that there is a 5 or 6 pips of "friction" to overcome.

I have added a chart of a trade I took on Friday with entry at 08:15 GMT. Looking for shorts, and price had made a LH on the 5 min chart. My entry was 1 pip below the 5 min low. The 15 min chart had just completed a positive close up candle but the last 5 min bar was a red (actually orange here, lol) candle. Price reversed...
Hi Royston
This one was indeed a toughie. Yes the 15 min candle had a positive close but also did have an upper wick. If I recall this trade is one where our neighbours came over to drop off keys as they went on hols and we were not at computer.

Ok hindsight is easy but pa never went above top of entry candle and usually my stop would be above that, of course spread could also have taken you out. I had a diff there of 11 + spread, so realistically a 13 stop may just of held as fxpro's spreads there wouldn't have been more than 2.

One thing I can say with conviction is that IF I was taken out (darn United just gone 2-1 up against L'pool!!) when the following 15 min candle failed to go higher I would have been looking for another chance to get in a sell. There is no doubt about that, none.

You may have picked up I often talk about reaction to levels and small bounces from key positions. 5175 had caused a bounce before. When you got stopped out that was such a small bounce that the 2nd attempt to go lower was high prob to succeed.

Islander also talks often of 20 min gap in trades, that could I suppose of entered my head.

All in all I think I'd prob have taken the same trade you did, if I did get taken out after next 15 min candle I'd have been looking to get in another sell and chalked that loss to 'nothing works 100%'.
  • #596
  • Mar 21, 2010 10:29am Mar 21, 2010 10:29am
Quoting trublu
Hey V I'm going to post a situation here that I always struggle with. It's hard to explain after the fact so bear with me and hopefully you'll get what I'm asking. In the following chart (GU 5min) the trend is down and during the London session price moved down over 150 pips. So you're thinking maybe the trend is over now but you never know when it will end so shorts are still a possibility.

My first arrow is a bullish hammer and also the first higher low after the big down move during London session. However it's against the overall trend so...
Hey guys
You're making me think way too much for a Sunday afternoon when my toughest choice is do I watch Liverpool try and come back or have a snooze!!

Main problem as you say is 150 pip run down, after that anything can happen. The market can do anything at any time. There were easy trades earlier in run which I took (and posted) which were following 1 hr down with good (I hope) analysis of 15 min and 5 min candles. In other words the odds were definitely in your favour. Once you start hitting 125+ pip run we tend to lose interest.

The other problem you rightly point out is in the middle the hl/lh sequence did get messed up.

We prefer to trade in direction of immediate trend. If you watch islander's thread he'll trade both ways, we don't often do that, sometimes yes but usually we are exiting a trend trade and miss the counter trend. NB Thats most likely before London open.

As a general rule we will only counter trend after 125+ pip moves and then we'll try and trade right at a key level (often but not limited to a weekly pivots), ie not waiting for a hl/lh. We'll try and stick with sells in this example until such a key level is hit.

This system depends on small stops so IF IN DOUBT I stay out.

The easy money was selling the downtrend, I had long since lost interest and switched computer off when these trades were happening, so answer in reality is I prob most of days wouldn't have gotten involved. How many posts have you seen from me involving counter trend moves after massive run downs, not many, honest.

IF I DID, I would carefully consider what 1 hr AND 15 min charts/vol were telling me. I would want clear info that both were telling me move up was coming. IF you were to trade like this you'd prob needs stops below the lowest lows and below a key pivot etc, prob way too big a stop for me to trade.

I hope this has helped.

PS This is just my preferred method, there are great counter trend traders around, direct trade at gj gu uj thread comes to mind.
  • #597
  • Mar 22, 2010 4:05am Mar 22, 2010 4:05am
Weekly COT report analysis + trade ideas http://www.forexfactory.com/showthread.php?t=216247
appears to be another very interesting thread. I've been looking for some COT analysis threads for some time, looks like a very good one here.
  • #598
  • Mar 22, 2010 4:07am Mar 22, 2010 4:07am
No trades this am. In hindsight perhaps some opportunities but nothing we liked where everything added up.

Its a public holiday here and might get lazy soon, we'll see.

Oh whilst not yet a lh I do like a sell in 5010 area, ie top of Asian trade, again TWT.
  • #599
  • Mar 22, 2010 4:16am Mar 22, 2010 4:16am
15 min chart. Last push up to 5010 was decent vol and so far not followed through. Still looking for todays range move.
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  • #600
  • Mar 23, 2010 5:01am Mar 23, 2010 5:01am
15 min set up. GU falling in line with neg closes on 1hr. Immediately prior to the shooting star (arrow down) was a lower vol positive close candle. Exactly the kind of set up we hope to see ie the rejection is a close below high of prev candle and vol lower.

OK then the shooting star on higher vol we took entry as posted on the medici/islander thread.
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