DislikedI know that area has been broken... i was looking at the area just above (1.2630 - 1.2690)
EDIT: I've admitted defeat... sort of... with a +1 pip gain LOL
Will be looking at the better supply zones from now on... what a waste of time that was.Ignored
B.S. Trading with Kenneth Lee
- #3,182
- Edited 9:25pm Mar 21, 2012 6:06pm | Edited 9:25pm
A 1 pip gain is still a gain, and I wouldnt call it a waste of time, not every area is going to produce a winner, just learn from it and look for the next one.
Guess what... yesterdays Daily candle created a Pin Bar, plus it hits the 50% fib retracement from the 9 Dec High to the 7 Feb low, and almost hits the 100 Daily SMA, Daily Stochastics are above 80... confluence all round!
I'm in again, but at a better price (1.2640), with less risk (50 pips)... now targeting 1.2465
EDIT: Now targeting 1.25 (round number)
- #3,186
- Mar 22, 2012 2:42am Mar 22, 2012 2:42am
- Joined Oct 2010 | Status: full time beer drinker | 1,345 Posts
EUR/AUD supply zone was consumed, a nice breakout
- #3,187
- Mar 22, 2012 9:21am Mar 22, 2012 9:21am
- Joined Feb 2011 | Status: Probabilities, Not Absolutes | 1,246 Posts
I found this little gem from Sam so I thought I would share. This has really helped me find the correct levels to trade from. Hope it can do the same for someone else.
Support and Resistance, a Deeper Understanding
Often, I talk about supply (resistance) and demand (support) in articles. I use simple examples and pictures to help explain how markets work and prices move. Today, let's take our level of understanding to a deeper level by actually simplifying the picture of quality support and resistance. I was recently reviewing the pages in the stock class, and came across a page that showed what I considered something very close to the perfect picture of support (demand) and resistance (supply). The message that page conveyed to me was something I want to share with you here in hopes of improving your level of knowledge and understanding.
Price and Time
rice spends the least amount of time at price levels where supply and demand are out of balance. Price spends the most amount of time at price levels where supply and demand are NOT that out of balance.
In other words, price levels on a chart where price spends the LEAST amount of time are where the most quality trading opportunities are found. What this picture looks like on a chart is a pivot high and a pivot low, NOT a cluster of trading activity. Let's have a look...
Notice the turning points on this stock chart. If you focus on the pivot high point in the upper left portion of the chart, that provides for solid resistance when price returns to it on the 29th. That is a quality supply level. Notice the demand (support) level on the bottom of the chart, the pivot low on the 29th. Price shoots up from that level because supply and demand are so out of balance. Price spends so little time there because demand greatly exceeds supply. When price revisits that area two days later, that is the time to buy as price is revisiting a quality demand level. Next, notice the circled cluster of trading from the 28th. Price declines from that area and when it returns to that level, it moves right through it like a hot knife through butter. This is because supply and demand are not that out of balance, the cluster of trading tells us so. The fact that price spent more time in that base than it did at those pivot high and low points tells us that the great supply and demand imbalance is at the pivots, not the cluster of trading. While I may show these clusters in letters, they are for understanding. For application of support and resistance, pivot highs and lows are where the greatest imbalances are found.
Let's go over the turning points in this forex chart. Notice pivot high area "A". We call that a "pivot high" because price could only stay there for a few minutes. Why? Because supply (resistance) was so much greater than demand at that level. "B" was the first time price revisited "A" which was the low risk/high reward time to sell short. Area "C" on the chart is a pivot low. "C" happens because of a major supply and demand imbalance. There are so many more buyers than sellers that price can only stay there for a few minutes, creating the pivot low. The first time price revisited that level was the time to buy "D" as the risk was low and the reward was high. Next, notice "E", the cluster of trading that is followed by a decline in price. When price comes back to that level for the first time at "F", it goes right through it without turning lower. This is because of the time issue. Price spent more time at "E" than it did at "A" which is why "A" is a higher probability shorting opportunity (turning point) than "E". The same issue is true at "G". The cluster of trading provided no support when price revisited that level at "H". Again, time is the key issue here which is why the pivot highs and lows are the low risk/high reward support and resistance levels, not the clusters of candles.
Support and Resistance, a Deeper Understanding
Often, I talk about supply (resistance) and demand (support) in articles. I use simple examples and pictures to help explain how markets work and prices move. Today, let's take our level of understanding to a deeper level by actually simplifying the picture of quality support and resistance. I was recently reviewing the pages in the stock class, and came across a page that showed what I considered something very close to the perfect picture of support (demand) and resistance (supply). The message that page conveyed to me was something I want to share with you here in hopes of improving your level of knowledge and understanding.
Price and Time
rice spends the least amount of time at price levels where supply and demand are out of balance. Price spends the most amount of time at price levels where supply and demand are NOT that out of balance. In other words, price levels on a chart where price spends the LEAST amount of time are where the most quality trading opportunities are found. What this picture looks like on a chart is a pivot high and a pivot low, NOT a cluster of trading activity. Let's have a look...
Notice the turning points on this stock chart. If you focus on the pivot high point in the upper left portion of the chart, that provides for solid resistance when price returns to it on the 29th. That is a quality supply level. Notice the demand (support) level on the bottom of the chart, the pivot low on the 29th. Price shoots up from that level because supply and demand are so out of balance. Price spends so little time there because demand greatly exceeds supply. When price revisits that area two days later, that is the time to buy as price is revisiting a quality demand level. Next, notice the circled cluster of trading from the 28th. Price declines from that area and when it returns to that level, it moves right through it like a hot knife through butter. This is because supply and demand are not that out of balance, the cluster of trading tells us so. The fact that price spent more time in that base than it did at those pivot high and low points tells us that the great supply and demand imbalance is at the pivots, not the cluster of trading. While I may show these clusters in letters, they are for understanding. For application of support and resistance, pivot highs and lows are where the greatest imbalances are found.
Let's go over the turning points in this forex chart. Notice pivot high area "A". We call that a "pivot high" because price could only stay there for a few minutes. Why? Because supply (resistance) was so much greater than demand at that level. "B" was the first time price revisited "A" which was the low risk/high reward time to sell short. Area "C" on the chart is a pivot low. "C" happens because of a major supply and demand imbalance. There are so many more buyers than sellers that price can only stay there for a few minutes, creating the pivot low. The first time price revisited that level was the time to buy "D" as the risk was low and the reward was high. Next, notice "E", the cluster of trading that is followed by a decline in price. When price comes back to that level for the first time at "F", it goes right through it without turning lower. This is because of the time issue. Price spent more time at "E" than it did at "A" which is why "A" is a higher probability shorting opportunity (turning point) than "E". The same issue is true at "G". The cluster of trading provided no support when price revisited that level at "H". Again, time is the key issue here which is why the pivot highs and lows are the low risk/high reward support and resistance levels, not the clusters of candles.
- #3,189
- Edited 10:12am Mar 22, 2012 10:00am | Edited 10:12am
- Joined Nov 2008 | Status: Trade Inspiration Not Despiration . | 4,827 Posts
Good Trading To All ; Ken Lee
- #3,190
- Mar 22, 2012 10:03am Mar 22, 2012 10:03am
- | Joined May 2007 | Status: Trader | 4,716 Posts
great article Thanks ..
This also should answer some doubts asked earlier about a single candle not being a base, It isn't so much the base as it is how price leaves a area, I look for big candles exiting a spot to look for entry.
Then if it is a swap line. I know that the demand or supply had to be exhausted for price to move threw that level and they thought is there is still some of those orders left that broke it.
But a tight leash should be used on those as it may or may not be true, But the way price broke and the speed and distance...
Just stopping by, glad to see your thread is thriving so well.
I remember when it was just a baby.
HOLLA
- #3,191
- Mar 22, 2012 10:08am Mar 22, 2012 10:08am
- Joined Nov 2008 | Status: Trade Inspiration Not Despiration . | 4,827 Posts
Good Trading To All ; Ken Lee
- #3,192
- Mar 22, 2012 10:11am Mar 22, 2012 10:11am
- Joined Nov 2008 | Status: Trade Inspiration Not Despiration . | 4,827 Posts
Hey Ken
Just stopping by, glad to see your thread is thriving so well.
I remember when it was just a baby.
HOLLA
Computer maintenance is a must for trading.
Cheers Ken
Good Trading To All ; Ken Lee
- #3,193
- Mar 22, 2012 10:15am Mar 22, 2012 10:15am
- | Joined May 2007 | Status: Trader | 4,716 Posts
yes great group of guys helping each other understand.. Glad to see you still about hope all is well and trading and school progressing. Please fell free to drop by anytime . or PM me . love to chat, Though right now I am in cyber hell computer packed it up waiting on new one. Using wife's which always seems to have issues. LOL
Computer maintenance is a must for trading.
Cheers Ken
1.3180 - 1.3215 has alot of resistance on my 4hr chart, also add the 100 day MA at 1.3188.
Talk to ya soon.
HOLLA
- #3,197
- Mar 22, 2012 12:36pm Mar 22, 2012 12:36pm
- Joined Nov 2008 | Status: Trade Inspiration Not Despiration . | 4,827 Posts
Dell?
still hanging on to it for now may work on it and make a media center for my bedroom out of it.. Here is the new one which is now in Jacksonville getting closer.
http://www.tigerdirect.com/applicati...3ORDER-_-Deals
Good Trading To All ; Ken Lee
- #3,198
- Mar 22, 2012 12:42pm Mar 22, 2012 12:42pm
- Joined Nov 2008 | Status: Trade Inspiration Not Despiration . | 4,827 Posts
Good Trading To All ; Ken Lee
- #3,199
- Mar 22, 2012 1:59pm Mar 22, 2012 1:59pm
- Joined Feb 2011 | Status: Probabilities, Not Absolutes | 1,246 Posts
Great article traderinSD, thx for posting it !!
