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Higher low, lower high system

  • #2,101
  • Aug 9, 2010 7:36am Aug 9, 2010 7:36am
Quoting Vantage
The original idea behind this thread, a good trader said to me that the first retracement is the best trade. The first higher low/lower high. These retracements provide good opportunites to enter into a move with a relatively small stop loss. A hl/lh confirms a test and failure to follow through at a certain level.
You should seriously consider switching to Range Bar Charts for using this strategy my friend.

Nice work all the same.

I presume this is the sort of thing you are talking about.
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  • #2,102
  • Aug 9, 2010 7:59am Aug 9, 2010 7:59am
Looks set for a reversal or should i say bottom reversal pattern

Thoughts?
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  • #2,103
  • Aug 9, 2010 8:03am Aug 9, 2010 8:03am
and away it goes

almost 1:1 on first position
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  • #2,104
  • Aug 9, 2010 8:11am Aug 9, 2010 8:11am
Hit previous intra day support and found resistance... as always where to exit is the problem eh
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  • #2,105
  • Aug 9, 2010 8:34am Aug 9, 2010 8:34am
Higher Swing Low = Bullish

that's the theory anyway
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  • #2,106
  • Aug 9, 2010 8:44am Aug 9, 2010 8:44am
starting to look bearish again...
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  • #2,107
  • Aug 9, 2010 11:51am Aug 9, 2010 11:51am
Quoting medici
It might be an interesting morning tomorrow. The trend line support meets the 1.60 level at around 9.30 UK time - classical reversal time and tomorrow trade balance data release.

One possible scenario in attached chart.
Very interesting never really thought much about trying to pin a tl move to a time.
  • #2,108
  • Aug 9, 2010 11:55am Aug 9, 2010 11:55am
Quoting chuks
hello,
hope house, i hope traders did take this trades this morning
Hi chuks eurgbp is not a currency I watch, if you get set ups worth sharing though feel free.

As you have seen got some from the gu 2b trade and a subsequent re-entry got taking out at BE after just missing my exit price.

Had some good friends visit (public holiday here) and see that things were largely sideways.
  • #2,109
  • Aug 9, 2010 12:05pm Aug 9, 2010 12:05pm
Quoting Musashi
You should seriously consider switching to Range Bar Charts for using this strategy my friend.

Nice work all the same.

I presume this is the sort of thing you are talking about.
Welcome.

I've looked at range bars only in passing so cannot really comment. Mrs V and I have built up a MTF system that works well for us with consistently high win %'s and we have built up a reasonable standard of candle analysis. Mrs V is the final arbiter for all system changes (basically tweaks really) and I have to PROVE any substantial change will work. That basically comes down to a lot of chart research time on my side.

I'll be honest and say range bars may get rid of the some of the skills we have built up so whilst never say never I'll say unlikely. If you wish to post hl/lh trades from range bar charts what the heck I'll take a look.
  • #2,110
  • Aug 9, 2010 12:11pm Aug 9, 2010 12:11pm
Quoting Musashi
Hit previous intra day support and found resistance... as always where to exit is the problem eh

Especially where vols are low. I think in Aug whilst there will be some good days I'll generally be happy banking whatever comes our way.

I have for a long time worked on the idea that the size of a bounce from a key area will determine whether it will hold or fail. So if you keep having shallower bounces towards a key level likely then it won't hold.
  • #2,111
  • Aug 9, 2010 12:14pm Aug 9, 2010 12:14pm
Quoting Vantage
Very interesting never really thought much about trying to pin a tl move to a time.
After the pm drop it seems like a H&S reversal with a shoulder at 1.5960 would be more likely. Maybe sooner but 9.30 still likely. The appreciating pound is bound to have had an impact on the trade balance, so the forecast will not unlikely be too optimistic.
  • #2,112
  • Aug 9, 2010 12:18pm Aug 9, 2010 12:18pm
Quoting Musashi
starting to look bearish again...
OK I'm already finding these range bars interesting and may run concurrent with present system. Care to post the range bar indi, what size range bars do you use?

And thats the beauty of trading these methods you don't get married to a direction/trade and a certain view can be turned around in 15 mins.
  • #2,113
  • Aug 9, 2010 12:27pm Aug 9, 2010 12:27pm
Quoting medici
After the pm drop it seems like a H&S reversal with a shoulder at 1.5960 would be more likely. Maybe sooner but 9.30 still likely. The appreciating pound is bound to have had an impact on the trade balance, so the forecast will not unlikely be too optimistic.
Will have a look tomorrow, cheers.
  • #2,114
  • Aug 9, 2010 7:14pm Aug 9, 2010 7:14pm
Musashi - I have often wondered how HL/LH's would look on range bar charts, so now that V. has given permission, I for one would love to see a couple of charts. Will probably depend a bit on what size bar is used I guess. Thanks.
  • #2,115
  • Aug 9, 2010 7:53pm Aug 9, 2010 7:53pm
Quoting orientos
Musashi - I have often wondered how HL/LH's would look on range bar charts, so now that V. has given permission, I for one would love to see a couple of charts. Will probably depend a bit on what size bar is used I guess. Thanks.
Up to you what size bars you want.

The patterns remain the same no matter what bar sizes. However too small a bar size will produce too much noise. I would say at a minimum 7R is about the smallest I would go. 15R is a good size.

As you can see in this chart of EJ we can clearly see the lower high formed and the bar pattern shows us that downside is likley.

Stop above the lower high.
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  • #2,116
  • Aug 9, 2010 7:58pm Aug 9, 2010 7:58pm
zooming the chart out we can clearly identify support zones... i'm big on round numbers as target areas once one round number support zone breaks.
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  • #2,117
  • Aug 9, 2010 8:03pm Aug 9, 2010 8:03pm
Found a good enough reason to exit.

41 pips from an initial sl of 14 pips

which equates to almost 3:1 r:r

not bad
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  • #2,118
  • Aug 9, 2010 8:25pm Aug 9, 2010 8:25pm
Now see if a bottom reversal pattern will present itself.
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  • #2,119
  • Aug 9, 2010 8:49pm Aug 9, 2010 8:49pm
Possible bottom reversal pattern, price failed to make a new low, broke above bear candle, potential reversal, at least some of the way.

SL 13 Pips, TP 13 Pips

1:1 R:R

This not the type of trade I would normally like to take, I would rather wait for a lower high then take the break in the direction of the initial move down, however this is a valid set up as far as I'm concerned.

However I would not be surprised at all to see this continue to the downside.

We'll see there it is.
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  • #2,120
  • Aug 9, 2010 9:11pm Aug 9, 2010 9:11pm
That was a nice trade earlier this morning on EJ. Your entry was about the same as a standard LH (which I missed), but I might just dig out my old notes on range bars and take a look. Cheers.
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