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Psych Levels, Pivots, and Trendlines - Resurrected

  • #5,541
  • Dec 18, 2010 10:15am Dec 18, 2010 10:15am
Quoting pipfirst
Hi eyevoltage,

I see your entry point mostly after the price break previous candle. it is true ?
can you please advise how many pips away after the break ?


Thanks n Regards,
You're quite right, mate. I mostly try and enter just after a confirmation candle in a pattern. or, as you said, a price break candle, has closed and the potential entry candle has advanced by two or three pips. Hope that helps.
  • #5,542
  • Dec 20, 2010 5:12am Dec 20, 2010 5:12am
Afternoon, folks.....

A nice simple trade from the EJ. I liked the doji that formed after a pull-back, right on the 34ema (in the blue square), because of its longish upper shadow. Entry was under the low of the next confirming candle and exit as shown, down at S1.
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  • #5,543
  • Dec 20, 2010 7:47am Dec 20, 2010 7:47am
Took this one after the break from the TL, Move already SL to BE+2 because of the vicinity of the S1 and the round number it could be a strong confluence.

Good trading for you guys.
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  • #5,544
  • Edited 8:10am Dec 20, 2010 8:09am | Edited 8:10am
Quoting Rednose
Took this one after the break from the TL, Move already SL to BE+2 because of the vicinity of the S1 and the round number it could be a strong confluence.

Good trading for you guys.
Great username for the time of year, mate!!

I very nearly took this one, red, but was called away before my entry signal was reached. Would have been worth around 30-odd pips or so. Oh well, them's the breaks. Let us know how you did, mate.

Edit: By the way, that long consolidation was right along a mid-point level.
  • #5,545
  • Dec 20, 2010 8:21am Dec 20, 2010 8:21am
Quoting eyevoltage
Great username for the time of year, mate!!

I very nearly took this one, red, but was called away before my entry signal was reached. Would have been worth around 30-odd pips or so. Oh well, them's the breaks. Let us know how you did, mate.

Edit: By the way, that long consolidation was right along a mid-point level.
LOL!You´re right. Maybe I should change the avatar to a reindeer this time of the year.

Jokes aside...I closed half of my position so I can have a free trade now and watch the outcome.

About the mid. pivot: I used to have them(and the quarters too...thanks AK4x) on my screen but you see too many lines took a little confidence from my trading so I decided to take them away.
  • #5,546
  • Dec 20, 2010 8:36am Dec 20, 2010 8:36am
Quoting Rednose
LOL!You´re right. Maybe I should change the avatar to a reindeer this time of the year.

Jokes aside...I closed half of my position so I can have a free trade now and watch the outcome.

About the mid. pivot: I used to have them(and the quarters too...thanks AK4x) on my screen but you see too many lines took a little confidence from my trading so I decided to take them away.
I know what you mean about too many lines. Pivots, mid-levels and psych-lines virtually leave you no room to manoeuver a lot of the time. I've found that the best way is to select which ones you feel happiest with and sort of "be aware" of the location of the others, if you see what I mean.
Thanks for your post, mate......look forward to seeing others from you.

By the way......nice avatar!!

Cheers
  • #5,547
  • Dec 20, 2010 8:56am Dec 20, 2010 8:56am
That´s a good idea, maybe I can set an "overview chart" with all lines and keep my trading chart only with the ones I like. Great.

  • #5,548
  • Dec 20, 2010 9:37am Dec 20, 2010 9:37am
Quoting Rednose
That´s a good idea, maybe I can set an "overview chart" with all lines and keep my trading chart only with the ones I like. Great.

I mainly watch GU, EU and EJ. What I've done in the past (and I might do again) is split the screen into six. Have the three across the top showing psych-lines and the three along the bottom showing pivot lines. It only takes a second to check a potential set-up to see if it's got room to move or otherwise. It saved me a few times from entering trades that would have skidded to a stop very soon after I'd entered. The whole point is that if you haven't got a point of reference to, say, pivots or, alternatively, psych-lines, then it's very easy to forget them and then sit there twiddling your thumbs wondering why the bloody price isn't moving!
I know this is all pretty basic stuff, but usually, it's the basic stuff that comes back to bite you in the arse!!
  • #5,549
  • Dec 20, 2010 9:46am Dec 20, 2010 9:46am
Quoting eyevoltage
I mainly watch GU, EU and EJ....
I trade the EUR/USD mainly so it won´t be so complicated to follow two charts, I keep an eye on EJ too but as reference only.
Thanks for the tipp.
By the way, I´m still holding that short.
  • #5,550
  • Dec 21, 2010 3:20am Dec 21, 2010 3:20am
Quote
I like your charts, mate, in particular because of your fondness for TL breaks. Something I practice, but am never confident with, to be honest. So with that in mind, it would be extremely beneficial for me (and others, probably) if you'd be kind enough to post more examples of your trades which utilize TL breaks.

And a Happy Christmas to you too, my friend. (None of this "Happy Holidays" or "Holiday Greetings" bollocks. IT'S CHRISTMAS!!)

With pleasure mate,

First a comment on how I approach trend lines, I look for a trend line that is visible on the 15 minute chart and use the 5 minute for triggering. If there is a trend line that is visible on the 5 minute chart, but not obvious the 15 minute chart, then it is too weak for me. Also, a trend line that only connects two points and breaks on the third I would class as a 'tentative' trend line, and too weak for me to trade.

The trend line must have been touched three times at least, and I usually look for some other indication that the trend is about to end, often you can just look at the waves and see that the trend is running out of steam, or maybe there is some divergence, or candlestick patterns.

First example here, the trend line would be clearly visible in the 15 minute chart, three distinct waves, the trend line is touched three times and breaks after the fourth touch. Look carefully at where it breaks,.. price makes a couple of attempts to test the trend line after the break but FAILS to close above! Triggers can be that precise which is why I only go in with a 12 pip stop on the E/U and 10 on the A/U (sometimes a little less). If it hits your stop, then the chances are the whole set up has failed. The 'open' price is strong S&R and price almost always reacts to it so it's a good place to set your stop to break even. Then the target is screamingly obvious.

http://i288.photobucket.com/albums/l...f?t=1292929730
  • #5,551
  • Dec 21, 2010 3:27am Dec 21, 2010 3:27am
Here's another... look where it breaks again, no wide stop needed, just go in as soon as the 5 minute candle closes after the break. There is no divergence here but the sign that the trend is going to end is the classic 'head and shoulders' pattern. These get a bad reputation for intraday trading but they work fine in my experience! The only problem is the confluence of 200EMA and the open price close to the trigger, but I still took this one. Target is S1!

http://i288.photobucket.com/albums/l...f?t=1292930553
  • #5,552
  • Dec 21, 2010 3:36am Dec 21, 2010 3:36am
A couple of easy ones on the Aussie..

Divergence and again price barely makes it a couple of pips above the trend line after the break.

http://i288.photobucket.com/albums/l...f?t=1292931142

Then look where price reverses, the daily open. Not long before we get another opportunity. Again tight stop and stop moved to break even when price hits the pivot for both examples.

http://i288.photobucket.com/albums/l...f?t=1292931259
  • #5,553
  • Edited 3:51am Dec 21, 2010 3:39am | Edited 3:51am
Last one for now.... look at what happens after the break. That channel was drawn before the break and it is respected to within a fraction of a pip! Magic! Show me an indicator based system that lets you go in with that tight a stop with reasoning behind it!

http://i288.photobucket.com/albums/l...f?t=1292931438
  • #5,554
  • Dec 21, 2010 3:57am Dec 21, 2010 3:57am
Here's a real time one I'm looking at, a bearish pennant, might be good for a handful of pips.

http://i288.photobucket.com/albums/l...f?t=1292932544

"If" it breaks down then daily pivot might be a good target.
  • #5,555
  • Edited 4:18am Dec 21, 2010 4:16am | Edited 4:18am
This is a nice example of a symmetrical triangle that led to a handy profit. The fact that it formed right on a mid-point level made it well worth watching. Pretty self-explanatory really, but I'm starting to think I got out a little early.
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  • #5,556
  • Dec 21, 2010 4:21am Dec 21, 2010 4:21am
Many, many thanks for the examples that you've posted this morning, mate. I'll need a bit of time a little later when I'm not so busy in order to fully study them.
Thanks again, mysterio. Much appreciated.
  • #5,557
  • Dec 21, 2010 7:10am Dec 21, 2010 7:10am
Quoting mysterio
Last one for now.... look at what happens after the break. That channel was drawn before the break and it is respected to within a fraction of a pip! Magic! Show me an indicator based system that lets you go in with that tight a stop with reasoning behind it!
Terrific stuff Mysterio. I really like T/Ls. Where do you enter the trade once it moves through T/L? From my experience I see if it returns to T/L then enter once second candle has confirmed penetration. However, it appears from your charts as if you may enter earlier if it continues to bounce off the new resistance line. In this case did you wait for R2 to be penetrated?
  • #5,558
  • Dec 21, 2010 7:19am Dec 21, 2010 7:19am
My short from yesterday got stopped out, just entered this one:break of TL and round number after finding resistance on the 50 ema. SL already moved to BE+5.
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  • #5,559
  • Edited 7:43am Dec 21, 2010 7:28am | Edited 7:43am
This one could have been tailor-made for mysterio. A TL that's been touched about 5 times, then breached and tested for resistance a couple of time before dropping away. Awesome!

Something else for me to keep a weather eye out for!! Cheers, mysterio!


Edit: Ooops! Just realized that this would have been the end result of the bearish pennant mysterio mentioned earlier. Sorry, mate!
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  • #5,560
  • Dec 21, 2010 7:58am Dec 21, 2010 7:58am
That's a fabulous one! Price action is pretty eratic though and will probably continue to be for the year. With the benefit of hindsight, that pennant I posted was really just lunchtime sideways movement and NOT a good example of a breakout I would trade.

Barry, I usually just enter after the 5 minute candle penetrates the TL if there is no resistance in the way. The exception is if the piercing candle pulls away too far from the TL after the break, by 'too far' I mean not very far at all, say 5 + pips. Look at this one again.

http://i288.photobucket.com/albums/l...f?t=1292931142

The piercing candle is something like 6 pips away from the trend line, which would only give me 4-6 pips 'breathing space' on the opposite end of the trend line. You could just extend your stop and adjust your position size accordingly. But I prefer to wait for the price to pull back to the trend line. Even if you don't get in at the perfect price the market usually allows you a few minutes to get a better price.

That R2 example you mentioned, yes it is probably wise to wait until the R2 is broken, however, once you see the 5 minute candles testing the TL and failing, several times, you could just enter bang on the TL with a tight stop. The danger is if you wait, that it breaks R2, then pulls back to the TL and stops you out.

Here's another one I dug up, not great R:R (just shy of 1:2 so not terrible). Notice that failure of the 5 min candle to close below the TL. Once that happens you're usually onto a winner. On this occasion I entered as soon as the candle which broke the TL closed, as it hadn't pulled away too much. From memory this went on to continue upwards but on balance given the information at the time it was best to close it.

http://i288.photobucket.com/albums/l...f?t=1292946726
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