Hello Dazz,
I hope you don't mind if I add my take on things.
What I have learned recently is that a target is more than what people think it is. A target should ideally act as an magnet to price.
Very true, the PA moves to the next likely take profit point which is the next SR. The PA moves in a particular direction determined by market factors. That direction can be subtle or very obvious as the angle can be almost a vertical line. The more subtle the more likely profit taking will occur at all SR levels.
If trading SR, if market is going north, think "where is the last support level". Trade there. If market is going south, think "where is the last resistance level". Trade there.
If the trend is up I look for an entry point which will be a retrace to support. I then set a trap to catch direction using OCO orders. It matters not which direction the PA goes as both directions are covered. I then look to the next SR. Understand that SR's have varied strengths such as the M15, H1, H4 and the Daily. The higher the timeframe the stronger the SR.
If the level is not respected, that's warning the trend could be changing.
A strong SR level such as the H4 or Daily usually will get a bounce. It may be 1. a single hook back to the SR, 2. a second or more retest before the final direction is determined or 3. a complete trend change. I don't trade any one different from the other as the bounces will usually be at least 30 pips. If it isn't a retest of the SR then I'm in the correct direction.
The difficulty is in determining the hook. If the PA is bouncing only to retrace back to the SR and a H4 is within 40 to 70 pips expect a retrace there. If no strong SR is present then the risk is greater you will not catch the point of retrace. It may be a M15 SR that is the pivot point and if one exists 30 pips from the initial bounce I'm looking to take it.
Contrary to popular beliefs, historical S/R levels are not all that good, or as good as what people think.
That depends if there are recent SR levels. If none exist then old SR's are very good as can be seen with the recent dive of the EURUSD.
Trend lines breaks are OK, best if trading with the trend. Otherwise you need to be careful. A trend line re-test is a much, much, much better trade.
I don't trade trendlines by themselves as there are too many false breaks. With that said, trendlines on the Daily are deadly.
My current challenge is letting trades ride, but I have spent years scalping a 1min chart, where 20 pips was "letting it ride"! So I am a bit quick to exit, but getting better.
Plan the trade and trade the plan. We all get itchy fingers.
This is a SUPERB thread. Shame it was moved where people will not see it.
Well, Wmn has gone commercial but who can blame him. We don't trade for fun either as it's all about the money.
Trade Well and Prosper,
Johnny
I hope you don't mind if I add my take on things.
What I have learned recently is that a target is more than what people think it is. A target should ideally act as an magnet to price.
Very true, the PA moves to the next likely take profit point which is the next SR. The PA moves in a particular direction determined by market factors. That direction can be subtle or very obvious as the angle can be almost a vertical line. The more subtle the more likely profit taking will occur at all SR levels.
If trading SR, if market is going north, think "where is the last support level". Trade there. If market is going south, think "where is the last resistance level". Trade there.
If the trend is up I look for an entry point which will be a retrace to support. I then set a trap to catch direction using OCO orders. It matters not which direction the PA goes as both directions are covered. I then look to the next SR. Understand that SR's have varied strengths such as the M15, H1, H4 and the Daily. The higher the timeframe the stronger the SR.
If the level is not respected, that's warning the trend could be changing.
A strong SR level such as the H4 or Daily usually will get a bounce. It may be 1. a single hook back to the SR, 2. a second or more retest before the final direction is determined or 3. a complete trend change. I don't trade any one different from the other as the bounces will usually be at least 30 pips. If it isn't a retest of the SR then I'm in the correct direction.
The difficulty is in determining the hook. If the PA is bouncing only to retrace back to the SR and a H4 is within 40 to 70 pips expect a retrace there. If no strong SR is present then the risk is greater you will not catch the point of retrace. It may be a M15 SR that is the pivot point and if one exists 30 pips from the initial bounce I'm looking to take it.
Contrary to popular beliefs, historical S/R levels are not all that good, or as good as what people think.
That depends if there are recent SR levels. If none exist then old SR's are very good as can be seen with the recent dive of the EURUSD.
Trend lines breaks are OK, best if trading with the trend. Otherwise you need to be careful. A trend line re-test is a much, much, much better trade.
I don't trade trendlines by themselves as there are too many false breaks. With that said, trendlines on the Daily are deadly.
My current challenge is letting trades ride, but I have spent years scalping a 1min chart, where 20 pips was "letting it ride"! So I am a bit quick to exit, but getting better.
Plan the trade and trade the plan. We all get itchy fingers.
This is a SUPERB thread. Shame it was moved where people will not see it.
Well, Wmn has gone commercial but who can blame him. We don't trade for fun either as it's all about the money.
Trade Well and Prosper,
Johnny