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Psych Levels, Pivots, and Trendlines - Resurrected

  • #7,581
  • Edited 4:24am Aug 4, 2011 4:21am | Edited 4:24am
Okay. Really kicking myself for having not taken this, but would appreciate some feedback on the interpretation of the H1 and M15 candles on the EU chart.

Firstly there was a strongly negative 8am candle. So, from 9am we are looking for a pullback on the M5.

Attached chart is the M5. The pullback took much of the next H1 candle. Price retraced to the 38.2% of the morning move, forms a shooting star, which is confirmed by the next negative candle. I would have looked to enter on the break of the candle marked with a black arrow.

However, by now the hour is posting a doji and the M15 is also forming a doji after a big positive candle.

Did anyone else take it? If so what was your rationale?

Thanks!

Oh, there was also hidden divergence on Medici's super-duper composite index. Pants. Really, really kicking myself now.
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  • #7,582
  • Aug 4, 2011 4:38am Aug 4, 2011 4:38am
Quoting Delite
Okay. Really kicking myself for having not taken this, but would appreciate some feedback on the interpretation of the H1 and M15 candles on the EU chart.

Firstly there was a strongly negative 8am candle. So, from 9am we are looking for a pullback on the M5.

Attached chart is the M5. The pullback took much of the next H1 candle. Price retraced to the 38.2% of the morning move, forms a shooting star, which is confirmed by the next negative candle. I would have looked to enter on the break of the candle marked with a black arrow.

However,...
I haven't been able to trade so far this morning due to other commitments, but looking at your chart, Delite, there's no problem IMO. You say you wanted to enter at the break of the candle (black arrow)? Why not wait a while and enter at the break of what I presume is the Monthly Pivot line? I think that's what I'd have done, Delite.
However, (and I hope you don't mind me saying this) but it seems that in this case, you were looking at too many reasons to stay out of the trade. You were convincing yourself NOT to trade.
MTF analysis can bring some great trades, it's true. However, MTF analysis can persuade one to MISS some great trades as well. IMO, this is a case in point.
Just my view on things, and others may disagree.
  • #7,583
  • Aug 4, 2011 5:30am Aug 4, 2011 5:30am
Quoting eyevoltage
I haven't been able to trade so far this morning due to other commitments, but looking at your chart, Delite, there's no problem IMO. You say you wanted to enter at the break of the candle (black arrow)? Why not wait a while and enter at the break of what I presume is the Monthly Pivot line? I think that's what I'd have done, Delite.
However, (and I hope you don't mind me saying this) but it seems that in this case, you were looking at too many reasons to stay out of the trade. You were convincing yourself NOT to trade.
MTF analysis can bring some...
My thinking was the same as Delite's I stayed out becuase 1hr showing hammer/pinbar and 15min showing doji on my charts. Like EV said, i think i was looking for reasons to stay out of the trade. One of my biggest problems is deciding whether to take the break of a pivot/pysch level of wait for the retrace after the break and then enter. When i see trades like today, i was waiting for a retrace to enter on, but the break would of been the better choice. other days its the oppoisite way round, which only adds confusion to my trading. How do you guys normally enter on trade, break or retrace, or both ? how do you decide ?

Thanks
Dan
  • #7,584
  • Aug 4, 2011 5:40am Aug 4, 2011 5:40am
Quoting Delite
Okay. Really kicking myself for having not taken this, but would appreciate some feedback on the interpretation of the H1 and M15 candles on the EU chart.

Firstly there was a strongly negative 8am candle. So, from 9am we are looking for a pullback on the M5.

Attached chart is the M5. The pullback took much of the next H1 candle. Price retraced to the 38.2% of the morning move, forms a shooting star, which is confirmed by the next negative candle. I would have looked to enter on the break of the candle marked with a black arrow.

However,...
Don't know what came over me but I was having a snooze (watching a Mel Gibson film, can't be that surely!). Move up to 4325 seems to be the LO head fake so moves down more likely? Anyway the neg 1hr breaks range lower, when price moves up to the D pivot at 4269/75 psych level and rejects with the SS. You can either enter where you said, there is a clear SR area there from late Asian session. Conservative traders (well like me) might well have waited for the 15 min doji to close and enter just above 4250.

The fact that the LO headfake up has happened suggesting down + the move to Asian low and reject might have been deciding factors if I was awake.

If candles are not quite right for you thats also fine, especially on double int rate day.
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  • #7,585
  • Aug 4, 2011 5:51am Aug 4, 2011 5:51am
Quoting dan89
My thinking was the same as Delite's I stayed out becuase 1hr showing hammer/pinbar and 15min showing doji on my charts. Like EV said, i think i was looking for reasons to stay out of the trade. One of my biggest problems is deciding whether to take the break of a pivot/pysch level of wait for the retrace after the break and then enter. When i see trades like today, i was waiting for a retrace to enter on, but the break would of been the better choice. other days its the oppoisite way round, which only adds confusion to my trading. How do you guys...
An interesting conundrum from Dan, and one that affects us all who practice this method.
When price meets a pivot/psych line, it does one of a variety of things.

1. It'll just breeze straight through.
2. It'll hit the line, retrace, and THEN breeze through.
3. It'll breeze through, and THEN retrace to test the line, before resuming its journey.
4. It'll hit the line and do a total reversal.
5. It'll start consolidating.

To my mind, candlestick patterns play a big part in this conundrum. Also the actual candlesticks themselves. As price approaches a S/R line, each individual candlestick should be observed and its characteristics noted. For instance, large or small body, large or small shadows etc.

One could literally write chapter and verse about this subject, but the best advice I can offer is to adopt a strategy and stick with it. For instance, wait for a breach of the line and wait for a retrace. If it retraces, tests for S/R successfully, enter the trade. If no retracement occurs, then forget it and wait for the next opportunity.

My best advice would be to do some homework with old charts. Go back through them and look for the type of instances I've mentioned. Study them, taking into account the types of things I've advised to look for.

At the end of the day, the choice is yours and yours alone. We're all different in our approach, so really it's up to YOU!!

Any other advice by others on this thread will be most welcome.
  • #7,586
  • Aug 4, 2011 5:55am Aug 4, 2011 5:55am
Quoting eyevoltage
An interesting conundrum from Dan, and one that affects us all who practice this method.
When price meets a pivot/psych line, it does one of a variety of things.

1. It'll just breeze straight through.
2. It'll hit the line, retrace, and THEN breeze through.
3. It'll breeze through, and THEN retrace to test the line, before resuming its journey.
4. It'll hit the line and do a total reversal.
5. It'll start consolidating.

To my mind, candlestick patterns play a big part in this conundrum. Also the actual candlesticks themselves. As price...
I think this time I can be brief! Trade the reaction to a level. Watch out for your SR areas.
  • #7,587
  • Aug 4, 2011 6:17am Aug 4, 2011 6:17am
Quoting eyevoltage
When price meets a pivot/psych line, it does one of a variety of things.

1. It'll just breeze straight through.
2. It'll hit the line, retrace, and THEN breeze through.
3. It'll breeze through, and THEN retrace to test the line, before resuming its journey.
4. It'll hit the line and do a total reversal.
5. It'll start consolidating.

As price approaches a S/R line, each individual candlestick should be observed and its characteristics noted. For instance, large or small body, large or small shadows etc.
This just about sums up exactly how the Market moves. Couldn't say it any better myself.

Everyone take note of what eyevoltage has posted here. It's extremely important to watch price and see how it behaves around levels in the market.

Those levels typically are found at

1. 00/25/50/75 price levels
2. Fibonacci Retracement Levels 50% being the best to watch out for
3. Previous Support/Resistance Levels
4. Daily Pivots Points ( I don't use them)

I mainly watch price action around the 00/50, S/R and Fibonacci levels. Any price action in between I typically ignore.

Hope this helps.
  • #7,588
  • Edited 7:19am Aug 4, 2011 7:05am | Edited 7:19am
Example of today price movements back to a previous intraday support level, combined with a 75 level and a 38% fib retracement of today range.

Price will typically retest previous levels in the market quite often. Back to the daily low or close to it typically will occur frequently.

Knowing when to get out.... that's the bit that takes practice, practice and practice...

+22 Pips this time of day is nothing to be sneezed at...
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  • #7,589
  • Edited 7:33am Aug 4, 2011 7:24am | Edited 7:33am
A retrace through the xx50 line followed by a shooting-star, and then strong momentum downwards. One 15m candle brought the prize, and I was quite happy to bail out, even with the strong possibility of further downward movement.

Edit: This example actually demonstrates a possibility I never mentioned before. This time, price breached the line, retraced and breached the line again and then resumed its original course and breached the line again. A backwards "N" shape, if you like!!
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  • #7,590
  • Aug 4, 2011 7:41am Aug 4, 2011 7:41am
News can really get prices moving.... see how price reacted strongly to the 50 level in the market.

Incidentally reaching that initial target level using price extension.

Doesn't always happen this way, however it will happen.
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  • #7,591
  • Aug 4, 2011 7:49am Aug 4, 2011 7:49am
Quoting eyevoltage
I haven't been able to trade so far this morning due to other commitments, but looking at your chart, Delite, there's no problem IMO. You say you wanted to enter at the break of the candle (black arrow)? Why not wait a while and enter at the break of what I presume is the Monthly Pivot line? I think that's what I'd have done, Delite.
However, (and I hope you don't mind me saying this) but it seems that in this case, you were looking at too many reasons to stay out of the trade. You were convincing yourself NOT to trade.
MTF analysis can bring...
Yep - nail on the head again! Do you fancy a part time job as my trading psychologist?!

The MTF bit is tricky - I need to keep working on this to decide how much weight to give it.
  • #7,592
  • Aug 4, 2011 7:51am Aug 4, 2011 7:51am
Quoting Vantage
Don't know what came over me but I was having a snooze (watching a Mel Gibson film, can't be that surely!). Move up to 4325 seems to be the LO head fake so moves down more likely? Anyway the neg 1hr breaks range lower, when price moves up to the D pivot at 4269/75 psych level and rejects with the SS. You can either enter where you said, there is a clear SR area there from late Asian session. Conservative traders (well like me) might well have waited for the 15 min doji to close and enter just above 4250.

The fact that the LO headfake up has happened...
Thanks! So, unless the M15 is showing an obvious reversal candle, you will (if all things are equal) take the trade?

Which Mel Gibson film were you sleeping at?!
  • #7,593
  • Aug 4, 2011 7:54am Aug 4, 2011 7:54am
Musashi and EV

Some great trading knowledge from you both this morning.

I think, EV - you are right. It is best to choose one method ie trade breakouts or wait for retrace etc and accept that you are not going to catch every move.
  • #7,594
  • Aug 4, 2011 9:07am Aug 4, 2011 9:07am
Quoting Delite
Yep - nail on the head again! Do you fancy a part time job as my trading psychologist?!
Well, I would, but I'm so busy keeping others on the straight and narrow...you know how it is!!

[quote] I think, EV - you are right. It is best to choose one method ie trade breakouts or wait for retrace etc and accept that you are not going to catch every move.[unquote]

That's exactly it, Delite! If one accepts the fact that it's almost impossible to catch all the moves, then it's easier to concentrate on whatever selection method you've chosen.

Good luck.
  • #7,595
  • Aug 4, 2011 9:14am Aug 4, 2011 9:14am
[quote=eyevoltage;4838628]Well, I would, but I'm so busy keeping others on the straight and narrow...you know how it is!!

Quote
I think, EV - you are right. It is best to choose one method ie trade breakouts or wait for retrace etc and accept that you are not going to catch every move.[unquote]

That's exactly it, Delite! If one accepts the fact that it's almost impossible to catch all the moves, then it's easier to concentrate on whatever selection method you've chosen.

Good luck.

Fair point! Can't deprive others of your words of wisdom!

How's Cumbria? Have you avoided this rain?
  • #7,596
  • Aug 4, 2011 9:27am Aug 4, 2011 9:27am
[quote=Delite;4838650]
Quoting eyevoltage
Well, I would, but I'm so busy keeping others on the straight and narrow...you know how it is!!


Fair point! Can't deprive others of your words of wisdom!

How's Cumbria? Have you avoided this rain?
How's Cumbria? Big, green and damp at the mo. Wet overnight in this neck of the woods, but drying out right now!
  • #7,597
  • Aug 4, 2011 9:29am Aug 4, 2011 9:29am
Missed this one due to other duties.......

Damn near a carbon copy of the last one. Another one of those reversed "N" positions. Self-explanatory really.
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  • #7,598
  • Aug 4, 2011 12:09pm Aug 4, 2011 12:09pm
chf - almost all of the move reversed in less that 2 days!
jpy - about 50% of the move reversed in less that a day!
  • #7,599
  • Aug 5, 2011 1:12am Aug 5, 2011 1:12am
Rise and shine!

Quick 20 pips on Euro, S1 is probably a done deal but daily open can be a strong reaction point and I want to finish early!

http://i288.photobucket.com/albums/l...f?t=1312524682
  • #7,600
  • Aug 6, 2011 8:53am Aug 6, 2011 8:53am
Have not posted here for a long time. However this is with No Brainers is the best thread there is and I owe a lot of thanks to Mysterio and Eyevoltage for trading ideas I use and build my trading upon.
Nothing however substitutes for long hours of watching the market.
I am too focused on my trading to post but always refer this thread to newbies
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