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Higher low, lower high system

  • #3,281
  • Oct 22, 2010 3:33am Oct 22, 2010 3:33am
Quoting Vantage
Mrs V did her back yesterday and I have to go get some medicine and goodies (biltong and droe wors - don't ask, been here 30 years and still can't take that stuff! Imagine eating dried uncooked rat, our US friends will know biltong as beef jerky, droe wors = dry sausage also not cooked just left to shrivel up).
Mmm, shrivelled dried sausage! That sounds SO tasty!

Do any of you chaps use fibs or do you tend to use the upper t/f S&R levels? Fibs always seem so subjective, but I know some use them really effectively. Any thoughts?
  • #3,282
  • Oct 22, 2010 3:40am Oct 22, 2010 3:40am
Quoting Delite
Mmm, shrivelled dried sausage! That sounds SO tasty!

Do any of you chaps use fibs or do you tend to use the upper t/f S&R levels? Fibs always seem so subjective, but I know some use them really effectively. Any thoughts?
They have their uses, but S/R zones plus Round Numbers are much more effective.
  • #3,283
  • Oct 22, 2010 3:57am Oct 22, 2010 3:57am
Quoting Musashi
They have their uses, but S/R zones plus Round Numbers are much more effective.
What he said but I like pure SR with trend analysis on every timeframe, I keep one eye on news for dealers games, stop hunting.
  • #3,284
  • Oct 22, 2010 4:01am Oct 22, 2010 4:01am
Hi D
I use the fibs based on Y's trading range, its an option in the pivots indi from 1st post. It can be effective, eg eur has 50% of y's range at 3960 but also a W P there, ej's 50% of y's range 113.36, gu 38%/pivot 5738. All in areas where they turned today.

However all those areas can be viewed as SR areas from Y and Wed. So do you really need them, perhaps not, could they have helped highlight SR areas, sure.

All the above can be clearly seen from their 1 hr charts, fxpro charts so fib start times pretty good for London session. EU 1 hr attached, you decide what works for you.
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  • #3,285
  • Oct 22, 2010 4:08am Oct 22, 2010 4:08am
Quoting Vantage
Hi D
I use the fibs based on Y's trading range, its an option in the pivots indi from 1st post. It can be effective, eg eur has 50% of y's range at 3960 but also a W P there, ej's 50% of y's range 113.36, gu 38%/pivot 5738. All in areas where they turned today.

However all those areas can be viewed as SR areas from Y and Wed. So do you really need them, perhaps not, could they have helped highlight SR areas, sure.

All the above can be clearly seen from their 1 hr charts, fxpro charts so fib start times pretty good for London session. EU 1 hr...
Oh that pivot indi does have an adjustable start time, play around with the local time either + or - if your charts have a different start and you like the look of fxpros charts. That way IF you wanted pivots for London session and US just have 2 1hr charts with the pivot start time for each session.
  • #3,286
  • Edited 4:47am Oct 22, 2010 4:18am | Edited 4:47am
Quoting Vantage
Hi D
I use the fibs based on Y's trading range, its an option in the pivots indi from 1st post. It can be effective, eg eur has 50% of y's range at 3960 but also a W P there, ej's 50% of y's range 113.36, gu 38%/pivot 5738. All in areas where they turned today.

However all those areas can be viewed as SR areas from Y and Wed. So do you really need them, perhaps not, could they have helped highlight SR areas, sure.

All the above can be clearly seen from their 1 hr charts, fxpro charts so fib start times pretty good for London session. EU...
On the subject of the 1hr charts which I don't post often. We talk about taking trades at key levels, at times when moves can be expected with good candles.

The eur chart above, late Asian session moves eur up to 50% fib/W P combo and not surprisingly runs out of steam and gives perfect doji ie good candle at key level. Frankie half hour reversal has the dble top start of move down on 5 min, then later a 5 min lh shooting star. All good chances to get in. I missed the lot and got a 1 min entry later.

As examples go on what we're trying to look at on this thread thats as good as any I suppose.
  • #3,287
  • Oct 22, 2010 11:51am Oct 22, 2010 11:51am
Those of you that have range bars...how did you get them for mt4...that is my trading platform....

dojirock
  • #3,288
  • Oct 22, 2010 12:48pm Oct 22, 2010 12:48pm
i got this divergence thing down! Range bars...improvement...Where can i get them...please pm me ...

dojirock
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  • #3,289
  • Oct 22, 2010 5:29pm Oct 22, 2010 5:29pm
Hello Vantage et al.,

I was wondering if the following example is how one could implement this HL/LH method as discussed in this thread? I cherry picked the example using swissy and M1 (it looked so textbook imho), but I do realize other currencies and the M5 time frame could be used just as well.

I'm still busy reading this thread from scratch, and I've covered the first 30 pages or so. Just wondering if I managed to get the gist of this method.

Thanks for your time.

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It's not about how much you make, it's about how much you don't lose.
  • #3,290
  • Oct 22, 2010 6:18pm Oct 22, 2010 6:18pm
Hi Dojirock. Vantage's thread is really about trading HL/LH's, not Divergence. There's a huge amount of great information here, and starting to read at Post #1 would be the way to go. Cheers.
  • #3,291
  • Oct 22, 2010 7:04pm Oct 22, 2010 7:04pm
Hi Dhb,

can you please advise do you enter buy after the closed of the candle you mention in green box ?

Thanks,
MS

Quoting Dhb
Hello Vantage et al.,

I was wondering if the following example is how one could implement this HL/LH method as discussed in this thread? I cherry picked the example using swissy and M1 (it looked so textbook imho), but I do realize other currencies and the M5 time frame could be used just as well.

I'm still busy reading this thread from scratch, and I've covered the first 30 pages or so. Just wondering if I managed to get the gist of this method.

Thanks for your time.

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  • #3,292
  • Oct 23, 2010 1:35am Oct 23, 2010 1:35am
Thank you orientos,

I thought Mushashi had a tread on range bars...in hear about the middle of the thread...maybe he started a new one.

thnks

dojirock
  • #3,293
  • Oct 23, 2010 5:05am Oct 23, 2010 5:05am
Quoting pipfirst
Hi Dhb,

can you please advise do you enter buy after the closed of the candle you mention in green box ?

Thanks,
MS
Hi Pipfirst,

First of all, I did not trade these setups, I just posted them to verify if I understand the gist of the method being discussed here. But if I understand what I've read so far correctly, to trade these setups, you should enter as soon as the candles in the green boxes have closed and their highs have been exceeded (by 1 pip or so). By waiting for the close, as well as the continuation up, you have the best chance of winning the trade, or at least be given the opportunity to get your stop to breakeven. Won't work all the time of course, but an edge is all you need.
It's not about how much you make, it's about how much you don't lose.
  • #3,294
  • Edited 10:11am Oct 24, 2010 4:35am | Edited 10:11am
Quoting dojirock
i got this divergence thing down! Range bars...improvement...Where can i get them...please pm me ...

dojirock
Whilst I like divergence, Mrs V doesn't. As soon as I put an indi on for that she's arguing just as quick for its removal. Her reasoning is divergence can take some time to kick in and also gives false entries.

So the system doesn't rely on divergence but it may assist you with some double top/2b entries. Also divergence on a higher time frame, eg 1hr, may well alert you to a good 5 min entry. Mrs V argues (and its hard to disagree there) that you need the 1 hr candle to close to confirm the divergence and of course inevitably that should be a good reversal candle ie a signal in any event to look for 5 min entries.

Range bars are difficult you'll have to search, the one that was posted here was a 'pay for' product and we took off.
  • #3,295
  • Edited 5:00am Oct 24, 2010 4:47am | Edited 5:00am
Quoting Dhb
Hello Vantage et al.,

I was wondering if the following example is how one could implement this HL/LH method as discussed in this thread? I cherry picked the example using swissy and M1 (it looked so textbook imho), but I do realize other currencies and the M5 time frame could be used just as well.

I'm still busy reading this thread from scratch, and I've covered the first 30 pages or so. Just wondering if I managed to get the gist of this method.

Thanks for your time.

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Hi Dhb
Welcome to you and the other recent visitors.

In essence your posting is on the ball. Looking for a 1hr candle to set direction and look for the hl's (in this case). In a strong trend the 1 min entries work like a charm. Of course when its not a strong trend is when you can have some problems trading off 1 min.

We tend to use 1 min in trend when its a reaction to a specific level. Say price pushes through a psych level, trades above that level and you'd look to buy the hl close from there. At extremes we also look at good 15 min reversal candles then the next 1 min entry.

As a general compromise we've found that many good 1 min entries are the same as some 5 min candles eg doji's, small inside bars etc that are moving back with the trend.

On your chart the ? hl is still OK, prior to that pa had made a hh and the ? is definitely still a hl. So the trend is still on.

To the right of your ? candle price forms a lh, then a hl which you haven't highlighted (the hammer touch of the red ema). That would be very tricky to buy as price failed with that lh and good spot if you saw that. Then the trend resumes again with the hl's.

The entry candles you highlight all have little/no upper wick so thats fine. A couple of them do look quite large and off a 1 min chart we look to avoid trading those as stops are pretty small.
  • #3,296
  • Oct 24, 2010 4:54am Oct 24, 2010 4:54am
Quoting Dhb
But if I understand what I've read so far correctly, to trade these setups, you should enter as soon as the candles in the green boxes have closed and their highs have been exceeded (by 1 pip or so). By waiting for the close, as well as the continuation up, you have the best chance of winning the trade, or at least be given the opportunity to get your stop to breakeven. Won't work all the time of course, but an edge is all you need.
Yep thats the idea. If price doesn't exceed by a pip or so its no trade. To get an edge all you need is a system that gives you more winners than losers and more pips in a win that a loss. Some chart time to verify this will give the confidence needed to trade the method.

Of course normal trading rules apply, whens news coming out, SR levels, RN's etc etc etc.
  • #3,297
  • Oct 24, 2010 6:48am Oct 24, 2010 6:48am
Quoting Vantage
Hi Dhb
Welcome to you and the other recent visitors.

In essence your posting is on the ball. Looking for a 1hr candle to set direction and look for the hl's (in this case). In a strong trend the 1 min entries work like a charm. Of course when its not a strong trend is when you can have some problems trading off 1 min.

We tend to use 1 min in trend when its a reaction to a specific level. Say price pushes through a psych level, trades above that level and you'd look to buy the hl close from there. At extremes we also look at good 15 min reversal...
Hi V,

Thanks for your replies. Good to know I've got the gist of it down.

The red MA is the 50 SMA, the blue one is the 21 EMA. The reason I put a question mark below the one setup touching the 50 and did not highlight the hammer a bit later, is that I like to see price bounce off the 21 EMA, which to me indicates that the trend still has sufficient momentum. If it starts to bounce off the 50, or even goes below it (in an uptrend, above in a downtrend), I would want to wait to see what happens next. As long as price keeps bouncing off the 21, there's enough speed in the trend to enter if a proper setup presents itself. That's also why I wouldn't necessarily be too worried about entering after those bigger candles, because they are usually followed by a few similar momentum candles, which should give you the opportunity to protect your capital.

B.
It's not about how much you make, it's about how much you don't lose.
  • #3,298
  • Oct 24, 2010 10:18am Oct 24, 2010 10:18am
Quoting Dhb
Hi V,

Thanks for your replies. Good to know I've got the gist of it down.

The red MA is the 50 SMA, the blue one is the 21 EMA. The reason I put a question mark below the one setup touching the 50 and did not highlight the hammer a bit later, is that I like to see price bounce off the 21 EMA, which to me indicates that the trend still has sufficient momentum. If it starts to bounce off the 50, or even goes below it (in an uptrend, above in a downtrend), I would want to wait to see what happens next. As long as price keeps bouncing off the 21,...
Thats fine on the ema's, I've often said that basically any reason for a trade set up is fine, as long as entry is from a hl/lh. Thats what I want the thread to revolve around and stay true to.

Cheers.
  • #3,299
  • Oct 25, 2010 3:09am Oct 25, 2010 3:09am
Hi Vantage,

GU at LO, 5M gave us a positive close then a fast negative move of the same size plus more. However, on the move up price didn't 'penetrate the previous high' (quoting post 1). But it does appear to be a fake move, and there's clear recent resistance above.

So my question is, does this meet the 2B criteria?

Today's is a similar situation to Friday in that the move up didn't breakout previous highs.

Also I noticed on Friday the bars are not as solid as I've seen in some examples but have upper wicks - my thinking is that this supports the idea that the sellers might be stronger.

I've attached charts from both days.

Just wish to check if I've got the 2B right or just got lucky.

(Today I was preparing to enter long after the HL but was waiting for more evidence, then it turned)

Thanks
Saylu

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  • #3,300
  • Oct 25, 2010 5:33am Oct 25, 2010 5:33am
Quoting saylu
Hi Vantage,

GU at LO, 5M gave us a positive close then a fast negative move of the same size plus more. However, on the move up price didn't 'penetrate the previous high' (quoting post 1). But it does appear to be a fake move, and there's clear recent resistance above.

So my question is, does this meet the 2B criteria?

Today's is a similar situation to Friday in that the move up didn't breakout previous highs.

Also I noticed on Friday the bars are not as solid as I've seen in some examples but have upper wicks - my thinking is that this...
To be honest I didn't see it as a 2b, rather a treble top, we missed that and had to settle for a few pips after the shooting star around 5730. Didn't see much on gu when it went into range. Nice trade if you got it.

Looks like US session will have to help us out today.
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