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Higher low, lower high system

  • #1,221
  • Jun 3, 2010 4:50pm Jun 3, 2010 4:50pm
Quoting Vantage

Anyway just got back from medicine run, Mrs V's pneumonia is coming back, and did lunch.
Feel better soon, Mrs V! Don't worry, I'll make sure Vantage doesn't throw a bunch of new indicators on his charts while you're away.
  • #1,222
  • Jun 4, 2010 2:06am Jun 4, 2010 2:06am
Quoting khairul81
Hi Vantage,quick question.Do we wait for the 1hr candle to finish then trade the 5 min or the moment we see a LH/HL candle then enter the trade?

Sorry for this noob question!

Kai
No problem, there are 2 basic set ups.

The hl/lh at an extreme (aka 1 2 3 tops/bottoms) where the 1 hr may not yet have turned around. But here I would want some other confirmation eg good 15 min candles supporting a turn (double top/bottom, doji, hammer/shooting star) at a key level (pivot, round number, etc etc).

Then during a run a nice 1hr set up candle and 15 min agreeing with 5 min hl/lh.

So no I wouldn't necessarily be waiting for 1hr to close if I'm looking at a hl/lh at an extreme point. If I have missed the hl/lh at the extreme then yes I would be waiting for 1hr to close.

Pls note that the trade sometimes is on the close of the 1hr candle that it, the 15 min and 5 min all line up, or it can be after the 1hr has closed.
  • #1,223
  • Jun 4, 2010 2:14am Jun 4, 2010 2:14am
Quoting khairul81
Do we enter on the break of the first LH/HL or the moment the candle opens at a lower or higher location? There seems to be a lot of posts on take profits but not entry..
Entry is once the requirements are met (including the set up on 5 min having little or no upper wick for buys and little or no lower wick for sells) and price moves past the extreme of the 5 min set up candle by a pip or so.

If you look at the numerous live trade pics shown here (the buy sell levels are per mt4 and not added by me) they are the actual entry levels. I use a 2 pip (20 on 5 digit broker) max deviation in case price moves on me.
  • #1,224
  • Jun 4, 2010 2:17am Jun 4, 2010 2:17am
Quoting Auron112
Feel better soon, Mrs V! Don't worry, I'll make sure Vantage doesn't throw a bunch of new indicators on his charts while you're away.
Jpy have elected their 5th pm in a short period and his cabinet pics could cause some volatility (not just today but in days to come as they decide whether they are happy with jpy strength, they're not shy to intervene in the markets) coupled with nfp day means we are very, very unlikely to trade. So I have a day of experimenting!!!
  • #1,225
  • Jun 4, 2010 3:53am Jun 4, 2010 3:53am
Hi Van,thank you for your answers to my questions.I like the fact that this method is indicator free except for the 34 & 5 emas.Gives me a better view of the whole chart.Been demoing this and doing ok but i tend to enter late or too early hence the questions.Will demo again later so hope i get it right.

Thank You
  • #1,226
  • Jun 4, 2010 4:14am Jun 4, 2010 4:14am
Quoting khairul81
Hi Van,thank you for your answers to my questions.I like the fact that this method is indicator free except for the 34 & 5 emas.Gives me a better view of the whole chart.Been demoing this and doing ok but i tend to enter late or too early hence the questions.Will demo again later so hope i get it right.

Thank You
Currently using an 8 lwma on each time frame. Put an 8 lwma on 1 hr with a good candle and see if this simple trend tool looks like it will help.

On 15 I've added a 32 lwma and on 5 min the MTF MA settings 60,8,0,3,0 to show = of 1hr 8lwma.
  • #1,227
  • Edited 4:41am Jun 4, 2010 4:23am | Edited 4:41am
I never traded these but they are a good example of how the various rules come together to keep you out of a losing trade.

5 min gu. The 1hr had a shooting star so after Y's candle suggested lower also you'd think sell. If you viewed the arrows down as lh's that comply with system fine, pa never went 1 pip below the 5 min set up candle so no sell triggered. Loss avoided.

1hr turns around with a nice hammer, 5 mins after that candle closed a perfect system buy. 1hr hammer, 15 min pos close, right on 1hr 8lwma, 5 min hl, price continues above the set up candle = system buy.
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  • #1,228
  • Jun 4, 2010 4:27am Jun 4, 2010 4:27am
Quoting Vantage
I never traded these but they are a good example of how the various rules come together to keep you out of a losing trade.

5 min gu. The 1hr had a shooting star so after Y's candle suggested lower also you'd think sell. If you viewed the arrows down as lh's that comply with system fine, pa never went 1 pip below the 5 min set up candle so no sell triggered. Loss avoided.

1hr turns around with a nice hammer, 5 mins after that candle closed a perfect system. 1hr hammer, 15 min pos close, right on 1hr 8lwma, 5 min hl, price continues above the...
A 40 pip move resulted, say you got 30. On .1 lot per $1000 or 1 lot per $10000 with a 15 pip stop (1.5%) thats a 3-4% ROI on a pretty safe set up.

Why safe? Good 1hr candle, pos close on 15 min, the 5 min hl shaken out final sellers above W R1 at 4625 which = the 25 psych level.
  • #1,229
  • Jun 4, 2010 4:47am Jun 4, 2010 4:47am
Quoting Vantage
A 40 pip move resulted, say you got 30. On .1 lot per $1000 or 1 lot per $10000 with a 15 pip stop (1.5%) thats a 3-4% ROI on a pretty safe set up.

Why safe? Good 1hr candle, pos close on 15 min, the 5 min hl shaken out final sellers above W R1 at 4625 which = the 25 psych level.

Oh and whilst I'm talking about this trade. If you like the Geppyg and Shahab8b thread (I do) put Geppyg's TRO forexgreenland on 1 hr chart. It seems to be the same turn levels as the pivot indi I use ie his turn areas are the 38% fib on Y's range ie 38% of high and 38% of low.

So an exit on that fib would have given 40 pips on this trade. Thanks Geppg for making me focus on that more in future. So if you are using the (very cool) pivot indi from this threads 1st post just click the showfibos option onto true.
  • #1,230
  • Jun 4, 2010 4:55am Jun 4, 2010 4:55am
Sweetspots indi requested on a pm, here we are. For round and half numbers + 25/75 levels.
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  • #1,231
  • Jun 4, 2010 8:02am Jun 4, 2010 8:02am
Quoting Vantage
Sweetspots indi requested on a pm, here we are. For round and half numbers + 25/75 levels.
Thanks, Vantage
  • #1,232
  • Edited 8:53am Jun 4, 2010 8:52am | Edited 8:53am
Quoting Vantage
No problem, there are 2 basic set ups.

The hl/lh at an extreme (aka 1 2 3 tops/bottoms) where the 1 hr may not yet have turned around. But here I would want some other confirmation eg good 15 min candles supporting a turn (double top/bottom, doji, hammer/shooting star) at a key level (pivot, round number, etc etc).

Then during a run a nice 1hr set up candle and 15 min agreeing with 5 min hl/lh.

So no I wouldn't necessarily be waiting for 1hr to close if I'm looking at a hl/lh at an extreme point. If I have missed the [color=Red]hl/lh...
Vantage,
Could u please enlighten me on this...thanks
  • #1,233
  • Jun 4, 2010 9:05am Jun 4, 2010 9:05am
Have a look at Aurons chart here http://www.forexfactory.com/showpost...postcount=1186 on the left of the chart there is a hl above 111.25. The hl was at the extreme of the pa for the morning up to that point.

Then if you look at the middle of the chart where he has 2 arrows up pa is now in the middle and you should be watching to follow the 1hr/15 min. Until you get to a lh that you feel is at the extreme (yes that last bit can be subjective).
  • #1,234
  • Jun 4, 2010 10:13am Jun 4, 2010 10:13am
Seems to be a lot of selling now..maybe bcos its friday..
  • #1,235
  • Jun 4, 2010 10:48am Jun 4, 2010 10:48am
Quoting khairul81
Seems to be a lot of selling now..maybe bcos its friday..
Problems with most of the countries in in Europe and added to that concerns over the standing of some banks. Just a guess COT going to show more US strength, Euro/GBP weakness.
  • #1,236
  • Jun 4, 2010 11:09am Jun 4, 2010 11:09am
Quoting Vantage
Have a look at Aurons chart here http://www.forexfactory.com/showpost...postcount=1186 on the left of the chart there is a hl above 111.25. The hl was at the extreme of the pa for the morning up to that point.

Then if you look at the middle of the chart where he has 2 arrows up pa is now in the middle and you should be watching to follow the 1hr/15 min. Until you get to a lh that you feel is at the extreme (yes that last bit can be subjective).
Hi Van,understood the 1st arrow but the 2nd arrow is LOWER than the bar before it.I thought you need a bar higher than the prior to count as a HigherLow?

Or are you implying as long as it bounces from a pivot or round number and the candle close as a bullish bar,we can take trade?

Or maybe I am seeing it wrongly?
  • #1,237
  • Jun 5, 2010 2:31am Jun 5, 2010 2:31am
Quoting khairul81
Hi Van,understood the 1st arrow but the 2nd arrow is LOWER than the bar before it.I thought you need a bar higher than the prior to count as a HigherLow?

Or are you implying as long as it bounces from a pivot or round number and the candle close as a bullish bar,we can take trade?

Or maybe I am seeing it wrongly?
The chart again we are referring to
http://www.forexfactory.com/showpost...postcount=1186

This is my take. I'm not concerned where the hl bar closes with regard to the previous candle. I'm looking for firstly the low. The left arrow, the candle to the immediate left of it is a hammer, its clearly a higher low to the previous low around 111.47. The left arrow up candle closes positively (around 111.80) confirming the hl. The 2nd thing to look for, that confirmation candle has little/no upper wick so thats great. It has a clear move below/above the lwma.

The right arrow up. The engulfing neg close candle + the hammer with arrow up have the higher low around 111.75 and the right arrow up candle has a positive close with little/no upper wick around 111.93. It has a clear move below/above the lwma. I'm not worried that it hasn't closed higher than the prior candle.

As far as I am concerned a hl does not have to close higher than the prev candle as long as it closes positively with little/no upper wick thats fine. Its the low of the candles followed by a positive close thats the issue.

If you are worried about it breaching a key level 112 was just above and stay out of the trade thats OK but its a different concern.

This is a great example so I'll go on about another fave of mine. I often talk of key levels and the size of the bounce from them. Price came down from 112 area that we can just see on the left to 111.14-ish. Goes back to 112 and only bounces down to 111.50, goes back to 112 and falls only to 111.75. CLEARLY it seems that sellers are having less enthusiasm, the falls from that key area are getting smaller and smaller giving good reason to get/stay in the hl's.

Hope this helps if anything not clear pls shout.
  • #1,238
  • Jun 5, 2010 2:32am Jun 5, 2010 2:32am
Quoting Vantage
Entry is once the requirements are met (including the set up on 5 min having little or no upper wick for buys and little or no lower wick for sells) and price moves past the extreme of the 5 min set up candle by a pip or so.

If you look at the numerous live trade pics shown here (the buy sell levels are per mt4 and not added by me) they are the actual entry levels. I use a 2 pip (20 on 5 digit broker) max deviation in case price moves on me.
Hi Vantage,
Do u factor in the spread?
Thanks!
  • #1,239
  • Jun 5, 2010 2:35am Jun 5, 2010 2:35am
Quoting lefteye
Hi Vantage,
Do u factor in the spread?
Thanks!
Nope, 1 pip or so beyond the extreme of set up candle.
  • #1,240
  • Jun 5, 2010 8:44am Jun 5, 2010 8:44am
Quoting Vantage
The chart again we are referring to
http://www.forexfactory.com/showpost...postcount=1186

This is my take. I'm not concerned where the hl bar closes with regard to the previous candle. I'm looking for firstly the low. The left arrow, the candle to the immediate left of it is a hammer, its clearly a higher low to the previous low around 111.47. The left arrow up candle closes positively (around 111.80) confirming the hl. The 2nd thing to look for, that confirmation candle has little/no upper wick so thats great. It has a...
Thank You Van.You cleared it all up.Do you take counter trends too? I have been looking at the charts on 5min and there are a lot of chances for counter trend.Though it is risky,have you ever tried it? If we follow your method using pivots and round numbers as possible retracement areas,it should work.Maybe throw in RSI to look for divergence?
Been reading a lot and Ryanmcd uses it very well for counter trend trades..

Kai
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