Higher low, lower high system

Good stuff...




I don't suppose you know what your average win, average loss (per trade in pips) have been in the last few months?


:nerd:

I don't actually. To be honest thats one thing I'd don't fuss about or even look at.

Stops are a little larger 20 ish EUR and GU and 30 or even more on EJ depending on where we get entry. Winners in number of pips certainly much higher from around Oct last year.

Unfortunately due to health issues Mrs V has not been a frequent trader this month, certainly in first couple of weeks. So the 200 pip trade above distorts avr win figure this month. Not that I look for this. I look at nett in acc, each losing trade was it system or not, can I learn and so tweak or not, are we happy with method.

Actual entry/exit chart from last ej trade.

Hey V,

Great to see your keeping the thread alive and kicking. Hope all is well and all the best to Mrs V also. Big thumbs up for the big non scalping win she pulled out on EJ .

Great stuff my friend.

Nice trade! In my opinion exits are more important than entries and more energy should go into them than anything. A good exit is everything. In racing, and life!

Cheers mate, passed on your kind thoughts to Mrs V.

Her neck C4-C8 spinal fusion does make things interesting shall we say and enforcing subtle changes to style. One thing I feel sure of the concept of higher TF analysis and lower TF entry is the one we will follow.

The problems that arise is she is getting closer to needing a lower back fusion, when that happens surgeons said she will be most likely fairly restricted in movement. Something she does not want to go through. I (and anyone else thats had a fleeting back pain problem) can only begin to relate to what she goes through every day with a smile. That lady is 1 in a 1000.

Mmmh interesting, I've always been of the view that you make your profit when you buy. In that (even in trend) a poor entry will inevitably end in tears.

I saw this trade posted on the Another Simple System 15 min thread so will use this as an example. Entry after the close of the candle marked x, so will be around 1.3670 or some 70 pips from the LO low. That has to be is a very high risk entry based on a 15 min chart and likely small-ish stop.

So I'll stick with your profit is made on entry, but obviously MM and an exit that is appropriate to your winning % and size of stop is vital.

Can you tell us the reason/reasons for why you enter short in this point?!

The last chart posted was where someone else bought, not sold. I was just pointing out the need, even when trading with the trend, to get in closer to the turn. An entry from a 15 min chart using a likely small-ish stop when LO has had a quick 70 pip run might not be a good place to enter.

Counter trend - building a set of trade rules.

I view trend and support and resistance levels as the two most important concepts in trading. Trend is time frame dependent so what doesn't work on 4hr counter trend might give a scalp trade on 1 min.

For the idea of developing a set of counter trend rules I'm going to discuss the 4hr chart. Trying to get a set of rules that assumes the D chart has not yet signaled a turn but will give trades in terms of 1hr set up and 15 min entry. Trades that should give some follow through on 4hr.

The best advice I can give is stick with the trend, use support and resistance levels and especially for GU and EUR the W pivots. Stick with the trend until you have very good reasons not to i.e. support/resistance level or W pivot, higher time frame divergences, price action sticking for hours proving it wants to reverse, engulfing closes that break the immediate range.

If in doubt leave the trade. Then don't worry if it goes in the direction that you thought it would. There is a good chance the trend will resume.

As an exercise put up EUR or GU 4hr chart, put on RSI (I use 8 rsi 8 sma) with a 21 ema and a tight price following ma, I use 8 lwma.

Have a look at how long the moves are when RSI is either above or below the 50 RSI level. Then have a good look at the moves against this that work or fail? So have a look at counter trend sells above RSI 50 level and buys below RSI 50.

Possible counter trend factors:

- A support/resistance level or W pivot
- Angle of 21 ema
- Time of day (London open, pre/early US open, London Close)
- Change in candle colour
- Close on the other side of 8 lwma
- RSI crosses
- Divergence
- Lower high/higher low engulfing close, morning/evening star pattern i.e. a multi candles pattern, change in flow
- RSI move through 50 level

You might notice that candles that change colour are poor signals even if at a support/resistance area or W pivot. You might see a cross of RSI at a support/resistance area, with a lower high/higher low engulfing close that follows divergence has a high chance of success.

I don't know what will jump out that you will see. What I do know is you should be able to put together a check list that will help avoid many failed counter trend trades. Always realising that until D has signaled a turn you are counter trend and need to change profit targets and always be looking for trend to resume.

My list is at http://vantagefx.blogspot.com/2012/1...-consider.html and I also look at specific times to avoid counter trend http://vantagefx.blogspot.com/2012/0...eearly-us.html.

Hello Everyone.
I'm new to this thread. After searching hell lot of thread and websites for trading based on Market structure and price action. I found this one and did like it a lot cause it is so similar to the way i trade. Infact, this is the way i trade.

I use D,H1 and M15 TFs to gauge price action and to enter the trades.

Key support and resistance level
Fibs
123 patterns
Round numbers
Time of the day( London open, ny york open, London close)
and also engulfing and rail road pattern,HH-LH patterns in M15 for entries.

What i did not include is Pivot points.
I never did use them but i see that they are acting very nice at those points

I Just want to know if the pivot point do carry same weight as the key support and resistance levels ??

Welcome. looking forward to seeing some of your set ups.

Hey you know what they say, great minds think alike and fools seldom differ!!

For EUR and GU I think W pivots are just as important, for some reason EJ not as much at the moment perhaps because its on such a tear.

For 15 min hl/lh's, dble tops/bottoms, engulfing closes to get back into trend the D pivots work well.

See post 1, I use the pivot point multitime frame for W pivots. The pivots indi for D pivots but the good thing is they have an adjustable start time so you can get your platform in line with LO if it is a few hours out. It also has some fibs based on prev days pa and days open prev days high/low which are useful.

Recap 1 Feb

EUR bias was up, initial moves followed that. Post US news was very erratic.

GU - Bias was up, GU stalled for 16 hours in total at the W pivot and previous weeks high. The 4hr higher low did not close higher. 4hr and 1hr divergence. The lower high following divergence gave a good trade opportunity.

EJ - Bias was up and we went up.

4 Feb

EUR - D is above our lwma and RSI 50 level, large upper wick. 4hr signaled sell with an evening star but now in the middle of a triangle. Triangles normally break in direction of trend which is up. D is inconclusive, no bias.

GU - Oversize engulfing close, it remains to be seen if this is a blow out last push down from sellers. Asia had no real move up. Bias down but can bounce from last weeks lows/W M2 1.5670-5680.

EJ - D positive close. 4hr double top with divergence but higher low flow in tact. 1hr divergence. There is potential for counter trend move lower. Bias remains up.

Very useful post V. I have been thinking about tightening my CT trading up so it came at a good time. food for thought.

Hello all

is there no setup today or I could not notice?

frank

Hello Van

http://http://screencast.com/t/cCgypY2pBZS

Ma cross with no strong candle on H1 can be setup or avoid this type of setup?

frank

Pls post a chart, I don't want to assume I know exactly what you mean.

Mrs V did not trade this morning.

EJ CT trade. 4hr divergence at the Fri highs, this weeks W M3 at 126.75. 1hr lower high engulfing negative close. 15 min lh engulfing close little/no lower wick. CT so happy to exit at 50 psych level/M2 combo for just shy of +30.

Looks like its going lower now but bo problem happy with that as a CT trade.

I have just been swopping emails with someone asking about trend v CT. I don't mean a cross of the ma's as a set up. I'm talking about the candle itself opening one side and closing the other side of 8lwma as a set up (provided patterns mentioned below are there).

Arrow down left neg close LH reverts to trend. Arrow up left, CT but a genuine HL, decent positive close engulfs the previous 2 candle closes. At a S level and there is 4hr divergence.

Arrow down right, an engulfing neg close evening star type pattern, about 20 hrs of trade that did not want to go higher then the engulfing close.

Arrow right up price forms a base around 1.3040 for 16 hours then has an engulfing pos close.

The 'strong' close candles, that engulf prev 2 candle closes, close the other side of 8lwma, little/no wick in direction of move are the kinds of candles we are looking for. of course add in the HL/LH, dble top/bottom etc as posted previously.

I'll send another chart now with weak candles.

OK see the x's. "Weak' candles some cause RSI cross but cannot get close below 8lwma. Where there is a close below 8lwma there are lower wicks/dojis.

See the divergence at the high, massive evening star type pattern, the engulfing lower close that follows divergence, thats the trade that follows through.

Have a look at prev chart the kinds of candles that cause a move and those that don't.

This is what I mean when I say back test and look for the kinds of candles/set ups that give some CT follow through and then those that don't. It should help give CT trade rules.This exercise is about getting your eyes used to the circumstances where CT has a chance of decent follow through.

Will this work every time, of course not, but if going CT should help increase the odds.