I started a journal on this method a couple of weeks ago when I went live with it, but figured this would be a better place to discuss it and get everyone's feedback. I have been trading and testing this method for about 6 months now in a demo account with good success.
I have been lurking all over this site for almost a year now, studying and reading many threads and finally decided to join a couple of weeks ago. There seems to be many good folks here who are more than willing to share and help, so thanks to all who have helped and influence me!
After testing many approaches I find that trading support and resistance levels really fits my personality and trading style best. I learned a great deal about this on the J16 thread, along with price action. The method I am sharing is based on support and resistance but is calculated by SMA crossovers. So here it goes:
The Method:
Determine support and resistance levels by going back to the most recent crossover of the 200 SMA and the 65 SMA, then placing a horizontal line.
Must be at a swing high or low.
The lines are not valid immediately after the crossover occurres, must wait for significant space to form for it to become valid.
Look for these crossovers on the Weekly, Daily, 4H, 1H and 30M charts.
The lines can only be used once.
Planning the Trade:
At the end of each week scan all pairs starting with Weekly down to 30M. Place support and resistance lines at all appropriate crossovers.
There are currently two forms of entries I will be making:
The first is simply a limit order set at the support or resistance line. I will do this when price is in a good solid trend on the smaller TFs (not ranging), and approaching the line at an angle. The second is based on price action much like what is described in the J16 thread. If consolidation/ranging has occurred reasonably close to the line I don’t want to be caught in a breakout, so I will wait for price action on the 1H or higher.
Placing and Managing the Trade:
As I was back testing this, it seemed to me that a couple of approaches can be taken, and honestly I haven't really settled on which on works best for me yet, although I am leaning towards the shorter term trades.
The first is a longer term position with a 50-100 pip stop loss and profit target, depending on time frame. Simple.
The second is bit more hands on. Immediately set a 50 pip SL. If 15-30 pips are gained immediately, take the profit. If draw down occurs, wait for some sort of consolidation and/or reversal to occur, then reset SL to just below the low. The thinking here is that if the rules above are adhered to and the price is approaching the line and a good angle, then at some point it is due for either a rest or a reversal.
My Mental Approach:
Every trade is unique and needs to be treated as such.
Gauge my trading success on a weekly basis, each trade made is working toward my weekly target.
This is a business, treat each trade as business transaction, not as a basis of self worth.
____________________________________
I will post some examples that should help clarify, and will continue to add to the above descriptions as needed.
Please let me know your thoughts, I am always open to suggestions and constructive criticism.
Thanks in advance!
I have been lurking all over this site for almost a year now, studying and reading many threads and finally decided to join a couple of weeks ago. There seems to be many good folks here who are more than willing to share and help, so thanks to all who have helped and influence me!
After testing many approaches I find that trading support and resistance levels really fits my personality and trading style best. I learned a great deal about this on the J16 thread, along with price action. The method I am sharing is based on support and resistance but is calculated by SMA crossovers. So here it goes:
The Method:
Determine support and resistance levels by going back to the most recent crossover of the 200 SMA and the 65 SMA, then placing a horizontal line.
Must be at a swing high or low.
The lines are not valid immediately after the crossover occurres, must wait for significant space to form for it to become valid.
Look for these crossovers on the Weekly, Daily, 4H, 1H and 30M charts.
The lines can only be used once.
Planning the Trade:
At the end of each week scan all pairs starting with Weekly down to 30M. Place support and resistance lines at all appropriate crossovers.
There are currently two forms of entries I will be making:
The first is simply a limit order set at the support or resistance line. I will do this when price is in a good solid trend on the smaller TFs (not ranging), and approaching the line at an angle. The second is based on price action much like what is described in the J16 thread. If consolidation/ranging has occurred reasonably close to the line I don’t want to be caught in a breakout, so I will wait for price action on the 1H or higher.
Placing and Managing the Trade:
As I was back testing this, it seemed to me that a couple of approaches can be taken, and honestly I haven't really settled on which on works best for me yet, although I am leaning towards the shorter term trades.
The first is a longer term position with a 50-100 pip stop loss and profit target, depending on time frame. Simple.
The second is bit more hands on. Immediately set a 50 pip SL. If 15-30 pips are gained immediately, take the profit. If draw down occurs, wait for some sort of consolidation and/or reversal to occur, then reset SL to just below the low. The thinking here is that if the rules above are adhered to and the price is approaching the line and a good angle, then at some point it is due for either a rest or a reversal.
My Mental Approach:
Every trade is unique and needs to be treated as such.
Gauge my trading success on a weekly basis, each trade made is working toward my weekly target.
This is a business, treat each trade as business transaction, not as a basis of self worth.
____________________________________
I will post some examples that should help clarify, and will continue to add to the above descriptions as needed.
Please let me know your thoughts, I am always open to suggestions and constructive criticism.
Thanks in advance!
