Psych Levels, Pivots, and Trendlines - Resurrected | Page 281 | Forex Factory

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Psych Levels, Pivots, and Trendlines - Resurrected

  • #5,601
  • Jan 3, 2011 5:23am Jan 3, 2011 5:23am
First trade of the year, nothing too exciting, a quick scalp for 12 pips. Saw the candles across s1, & to be honest, if price had dropped below 13280 I would have gone short. But price rose to form train lines across s1 so went long at high of the green candle 13303. Lots of res ahead so just set a tp of 12, sl of 12 & went off to make some breakfast.

zee
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  • #5,602
  • Jan 3, 2011 5:40am Jan 3, 2011 5:40am
Quoting zhdeef
First trade of the year, nothing too exciting, a quick scalp for 12 pips. Saw the candles across s1, & to be honest, if price had dropped below 13280 I would have gone short. But price rose to form train lines across s1 so went long at high of the green candle 13303. Lots of res ahead so just set a tp of 12, sl of 12 & went off to make some breakfast.

zee
Good stuff, zee!! Hope you don't mind me being a little pedantic, but those train-lines are actually a bullish engulfing pattern.
Tell me to mind my own business, by all means, but sometimes, I just can't help myself!
Great use of a pivot line/candlestick combination set-up, mate!
  • #5,603
  • Jan 3, 2011 5:44am Jan 3, 2011 5:44am
This is a good video to watch regarding using candlesticks along with pivot points. A Steve Nison special.

http://www.candlecharts.com/blog/?p=156


Enjoy!
  • #5,604
  • Jan 3, 2011 5:45am Jan 3, 2011 5:45am
Quoting eyevoltage
Good stuff, zee!! Hope you don't mind me being a little pedantic, but those train-lines are actually a bullish engulfing pattern.
Tell me to mind my own business, by all means, but sometimes, I just can't help myself!
Great use of a pivot line/candlestick combination set-up, mate!
Please be pedantic, it will help me learn the names ! I'm not bad at spotting patterns that seem to work, but have yet to learn what to call them.

zee
  • #5,605
  • Jan 3, 2011 5:52am Jan 3, 2011 5:52am
Quoting zhdeef
Please be pedantic, it will help me learn the names ! I'm not bad at spotting patterns that seem to work, but have yet to learn what to call them.

zee
Thanks for that, mate. I didn't want you to think I was being some kind of smart-arse or something!! Don't hesitate to ask if you're not sure, mate. Always willing to help.
  • #5,606
  • Jan 3, 2011 8:50am Jan 3, 2011 8:50am
This is a trade I'm involved in, short on the trend line break. I don't expect much from it as we have news out at 3pm but I moved my stop to B/E and we'll see if we can get further movement down to S1 or S2. Just need to break through the 200 EMA which is a good dynamic S&R.

No divergence here but an ominous pin bar on H4 that was to fill a gap.

http://i288.photobucket.com/albums/l...f?t=1294066076
  • #5,607
  • Jan 3, 2011 9:55am Jan 3, 2011 9:55am
For a change, I've incorporated fibs in this one. Fairly self-explanatory although the green long upper shadow candle after the entry candle gave me a couple of uncomfortable moments!
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  • #5,608
  • Jan 4, 2011 6:23am Jan 4, 2011 6:23am
Afternoon, folks, and a happy new year to you all.

This is a quick-ish sort of trade after a pull-back from the R2 line and a break of the resulting short TL. (The doji on the mid-point level gave a very nice indication of a high-probability break.) Exit just short of the said R2 line.
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  • #5,609
  • Jan 4, 2011 8:51am Jan 4, 2011 8:51am
A tricky one on E/U but ultimately fruitful, I took it down to the support, it has now broken through.

Notice the clues the market gives you. There's a Head and Shoulders pattern twinned with divergence. The US dollar basket had also broken above a TL. The difficulty is the ambiguity of the pattern, is it a channel or a wedge? I gambled that it was a wedge and came away with 20 pips.

http://i288.photobucket.com/albums/l...f?t=1294152682
  • #5,610
  • Jan 4, 2011 10:35am Jan 4, 2011 10:35am
Quoting mysterio
A tricky one on E/U but ultimately fruitful, I took it down to the support, it has now broken through.

Notice the clues the market gives you. There's a Head and Shoulders pattern twinned with divergence. The US dollar basket had also broken above a TL. The difficulty is the ambiguity of the pattern, is it a channel or a wedge? I gambled that it was a wedge and came away with 20 pips.
That's a good trade & I like the method. Can I ask, do you trade bounce of trendline as well as cross?

zee
  • #5,611
  • Jan 4, 2011 2:22pm Jan 4, 2011 2:22pm
I wish I held it as it dropped over 100 + pips.

Personally, zhdeef, I only trade trend line breaks. I have read a lot about the psychology of trading and the importance of consistency, I find it much easier to implement a single method consistently. Maybe later on in my trading career I will incorporate other methods. For now there are more than enough trend lines in the market to make a healthy profits.

I am keeping a close eye on the candlestick patterns the experienced members are posting, these are interesting to me but I'm nowhere near a position to start placing trades based on them.
  • #5,612
  • Jan 5, 2011 3:27am Jan 5, 2011 3:27am
Just took this bounce off mr1 on low of bearish engulfing candle (is that right pattern name?). Tp at 2 pips away from dp for 23 pips. I usually set my actual tp a couple of pips shy of target to allow for spread/broker/chart discrepencies etc. Good call in this case I think. Gu might now make a bounce up. We'll see.

zee
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  • #5,613
  • Jan 5, 2011 5:45am Jan 5, 2011 5:45am
Eu trade this time. Price returned to s1& then dropped again. Entered at low of candle straddling s1 at 13251. Target ms2, & tp at 13236. Price kept dropping beyond but at least this covered a previous stupid trade I made that got me stopped out for 12pips!

zee
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  • #5,614
  • Jan 5, 2011 5:52am Jan 5, 2011 5:52am
Bullish wedge breakout and a triangle in development in the cable, I'll be watching for the break of that. Notice how it teases it's way out of the bottom TL of the triangle to try and tempt you into a trade before rocketing up. It is sneaky that way. It is not a good idea to trade straight into the daily pivot either.

http://i288.photobucket.com/albums/l...f?t=1294228247
  • #5,615
  • Jan 5, 2011 6:20am Jan 5, 2011 6:20am
Quoting mysterio
Bullish wedge breakout and a triangle in development in the cable, I'll be watching for the break of that. Notice how it teases it's way out of the bottom TL of the triangle to try and tempt you into a trade before rocketing up. It is sneaky that way. It is not a good idea to trade straight into the daily pivot either.

http://i288.photobucket.com/albums/l...f?t=1294228247
Hi there mate,

I only have one major problem with using a Trend Line for a trading signal and that is this...

1. Where do you put the trend line? (very subjective)
2. Do you move your trend lines?
3. What's the trigger for a beak of a trend line? (one candle closing above/below the trend line/pull back to the break point of the trend line)
4. How do you find a stop loss position and how do you find a target profit zone once the breakout of the trend line has happened.
  • #5,616
  • Jan 5, 2011 6:25am Jan 5, 2011 6:25am
Quoting mysterio
Bullish wedge breakout and a triangle in development in the cable, I'll be watching for the break of that. Notice how it teases it's way out of the bottom TL of the triangle to try and tempt you into a trade before rocketing up. It is sneaky that way. It is not a good idea to trade straight into the daily pivot either.
I can see that on my m15 too. Off for some lunch now but I'll keep an eye on it when I return.

Incidentally, I see a good tl break on gu at about 0730 this morning. I would have taken it as a pivot cross but too early for me!

zee
  • #5,617
  • Jan 5, 2011 6:28am Jan 5, 2011 6:28am
Wait for the candle to close here or wait for a pull back?

You see my point?
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  • #5,618
  • Jan 5, 2011 6:36am Jan 5, 2011 6:36am
Sell under these candles on the 5min chart?
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  • #5,619
  • Jan 5, 2011 6:47am Jan 5, 2011 6:47am
Quote
Hi there mate,

I only have one major problem with using a Trend Line for a trading signal and that is this...

1. Where do you put the trend line? (very subjective)
2. Do you move your trend lines?
3. What's the trigger for a beak of a trend line? (one candle closing above/below the trend line/pull back to the break point of the trend line)
4. How do you find a stop loss position and how do you find a target profit zone once the breakout of the trend line has happened.

Hello mate

1) Yes it is subjective. Everyone will have their own rules for drawing a trend line, I like the "textbook" (John J. Murphy) definition. Firstly you use the whole trading range of the timeframe under analysis. In other words you include the wick. The market will rarely give you a perfect trend line, so you have to make it a trend line of 'best fit'. So use the bottom/tops of wicks were possible, but don't worry too much if the trend line 'supports' the body of a candle. Also if a trend line has been touched twice it is "tentative". Anywhere between the 3rd and 5th touch can be used for a bounce. For a break, anything after the 3rd touch IMHO.

You could argue trend lines aren't as subjective as is usually argued. As a trader I am looking for a self-fulfilling prophecy in the market. In other words, something that traders see as a collective to trigger a flurry of buying or selling. So I want to be using obvious patterns in price that most traders can see, that is to say, obvious support and resistance and trend lines. The more esoteric your combination of indicators, the less likely the signal will be seen by other traders to trigger movement in price.

2) I do personally, to try and make it fit as best as possible. Going back to my last point, I want the trend line to look as close as possible to the trend line on other traders' screens.

3) Yup: "one candle closing above/below the trend line/pull back to the break point of the trend line"

4) Everyone will have their own method, I go in with an average of 12 pip stop loss, this is very tight so you need to be careful with your entries. The textbook way of trading breakouts is to place the stop on the other side of the pattern, or above the previous high/low. This works too but you have to reduce your position size accordingly. Profit target takes practice but the clue is in the thread title "Psych levels, pivots & trendlines". For me, it is major Fibonacci pivot points which are plotted automatically with an MT4 indicator.

Here is a textbook breakout that just occured on cable. It "should" continue down for a bit but as it's trading anything could happen. You just need to be right more times than you're wrong. As this is a triangle some traders will measure the base of it (80 pips or so) and project that as their TP.

http://i288.photobucket.com/albums/l...f?t=1294231540
  • #5,620
  • Jan 5, 2011 6:51am Jan 5, 2011 6:51am
Well it looks bearish to me that's for sure...

Bit of support at this level intraday however... if it does break here it should run pretty well..

A couple of upper wicks on the 5min chart followed by some indecisive 5min candles...

All it takes for price to drop is there to be a lack of buyers...
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