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Higher low, lower high system

  • #6,041
  • Feb 25, 2013 3:34pm Feb 25, 2013 3:34pm
Quoting money89
Now I started to understnd the system bit by bit.
If I assume it right, During the London open and new york session we look at the 3bar reversal signal ?

Cause there are many arrows all the day, which confuses us unless we focus on key levels and Time of the day.

and one more thing is that, which one do you give much weight to on 3bar reversal ? H1 or M15 during entry ?

Forgive me for my silly question's, As you know, I'm still learning..!! So, bit curious runnin behind my mentor..
I think most people accept that there are some key times of day when most trades will occur. Late Asian session, LO, US pre and post news as a general rule probably the most notable.

The 3 bar reversal by the way it was written has to have a CT trend candle in the set up, in the 3 bars. Yes there are many arrows in particular on the 15 min. I would suggest as per the nature of the thread you are looking at getting in on the first move possible in a set up, i.e. the first hl/lh. So you are focused on 2 main issues, time of day and trend V CT.

If you are in strong trend where all TF's in agreement you can be quicker off the mark with 15 min hl/lh. In general you want the 1hr to lead the way. If you are going CT then we want the CT trade rules to apply, a confluence of proven SR levels, W pivots, price proving for hours it does not want to proceed, higher TF divergence. So all the CT signals on 15 min that do not comply with above rules would be ignored and considered just possible CT rallies.
  • #6,042
  • Feb 25, 2013 3:57pm Feb 25, 2013 3:57pm
Quoting Vantage
25 Feb

EUR - D closed a doji, in itself not a strong signal. 4hr still clinging to the lower high lower low flow, divergence is showing and RSI has crossed above its signal line. Until flow properly moves higher bias down.
This was my view earlier this morning on EUR. The 4hr candle highlighted by the red line had not yet closed at the time I posted. Anyway it closes a higher low following divergence and you may have picked up by now thats a set up I like. It has changed the flow and does give the chance for CT buys even if against the D. Today it went up 100 pips, it won't always do that.

OK back to the 4hr, HL following divergence, bounce off the W M2 pivot, see the red line. It is also a 3 bar reversal as indicated by the green arrow which shows to the right. OK now to the 1hr, its also showing a HL after divergence and green arrows signaling 3 bar reversals. The red line shows last candle of the highlighted 4hr candle. The flow certainly seems to have changed up.

OK now onto the 15 min. The red line shows last 15 min candle of the highlighted 4hr candle. If your view was down on D but now SHORT TERM the 4hr/1hr HL flow suggests scalp buys are possible (I say scalp as we are CT to D). There are no 1hr candles suggesting a move back into D trend at all. So you would now be focused on 15 min buy signals. Remembering that its the candle to the left of the green up arrows that generated the signal. It does a quite remarkable job of capturing the moves up.
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  • #6,043
  • Feb 25, 2013 4:15pm Feb 25, 2013 4:15pm
Now looking at the move down. D bias was down but now this massive move up?? Its either a CT sell or a reversal to trend. Either way because of the size of move we NEED the flow to reverse. So what do our rules say for CT. Proven SR level OK we are at 1.33 the Dec highs, W M3 at 1.3312 (interesting the end of the run ended as an 85/15 trade). I don't see higher TF divergence. We have 2 upper wicks on 1 hour and the highlighted shooting star is a 3 bar reversal (see the arrow down to its right). Lots of reasons to be happy with trade. There is a genuine 15 min lh little/no lower wick. In this case there is no 3 bar reversal as the highlighted candle 16.45 closes at same price as the prev candle i.e. it did not close lower.

So money89, don't look at every 15 min signal. Its either in trend (so ignore CT signals) or you can get interested in CT alerts once CT rules are in place. If the 15 min is too busy for you prob best to leave on 1hr and once alerted there go look at 15 min. Like everything in trading its not going to get every move (see the 15 min freak occurrence above as an example) but it does a darn good job in most scenarios.
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  • #6,044
  • Feb 25, 2013 4:27pm Feb 25, 2013 4:27pm
One final post just to be clear. The red lines on 15 min show the candles that actually generated the 3 bar reversal signals (the arrows are put on the candle to the right of the signal candle). You can decide for yourself if they are good signals in trend.

Why ignore the red sell signals. The 4hr and 1hr flows now suggest we are going up even if D is in downtrend. We would be looking to sell once this CT move up has shaken itself out.
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  • #6,045
  • Feb 25, 2013 10:37pm Feb 25, 2013 10:37pm
Recap 25 Feb

EUR - View was: D closed a doji, in itself not a strong signal. 4hr still clinging to the lower high lower low flow, divergence is showing and RSI has crossed above its signal line. Until flow properly moves higher bias down.


The 4hr that was still open at the time of posting did close as a higher low to change flow, moving up from the Sep '12 high/W M2 support. Price moved up to the Dec high/W M3 resistance level and fell after 2 x 1hr hammers.

GU - View was: GBP was down graded late Friday night, it remains to be seen whether this bad news will follow through. Had a gap down which is likely to be closed, so a possible move up to 1.5160 area. Still no reason to believe its anything other than a rally in downtrend. Bias down.


Attempt to move lower failed and gave a 4hr higher low in US session.

EJ - View was: Rejected another attempt to go below 123.00. D closed an inside bar, still just on a lower high lower low. 4hr had a higher low positive close hammer. The gap up will need to be closed suggesting a move down to 123.20 area.

Looking for a move lower to close the gap there were 2 x 1 hr shooting stars at W R1. It closed the gap and then just carried on falling over 600 pips.
  • #6,046
  • Feb 25, 2013 10:49pm Feb 25, 2013 10:49pm
26 Feb

EUR - Engulfing D neg close. 4hr and 1hr flow down, both showing divergence. Whilst there can be a reaction up after the over sized negative close bias down until flow confirms otherwise.

GU - Positive D close still below 8lwma, no trend line breaks. Flow on 4hr higher low and 1hr is on higher high higher low. This can be a buy or sell day.

EJ - Bias down until positive flow proves otherwise.
  • #6,047
  • Feb 26, 2013 1:59am Feb 26, 2013 1:59am
Mrs V just advised she exited EJ sell for +57, Frankies hour sale. Will post charts later.
  • #6,048
  • Feb 26, 2013 7:29am Feb 26, 2013 7:29am
Mrs V wanted to but did not buy the EJ dble bottom.

She sold EJ 120.45 and we are struggling with the lows/breaking the RN. Will post chart later if it pushes lower.
  • #6,049
  • Feb 26, 2013 7:37am Feb 26, 2013 7:37am
Quoting Vantage
Mrs V wanted to but did not buy the EJ dble bottom.

She sold EJ 120.45 and we are struggling with the lows/breaking the RN. Will post chart later if it pushes lower.
bought double bottom.not good as expected
  • #6,050
  • Feb 26, 2013 7:39am Feb 26, 2013 7:39am
Quoting frank.david
bought double bottom.not good as expected
sell EJ 120.47 hope Gud.
  • #6,051
  • Feb 26, 2013 7:41am Feb 26, 2013 7:41am
Quoting frank.david
bought double bottom.not good as expected
I meant the dble bottom earlier at 119 that ran up 100 pips.

I have been advised out at +43. 2 trades today +90.
  • #6,052
  • Feb 26, 2013 7:48am Feb 26, 2013 7:48am
Quoting Vantage
I meant the dble bottom earlier at 119 that ran up 100 pips.

I have been advised out at +43. 2 trades today +90.


well I bought there.+80

but still I'm trapped by fake move.
  • #6,053
  • Feb 26, 2013 8:44am Feb 26, 2013 8:44am
Quoting frank.david
well I bought there.+80

but still I'm trapped by fake move.
A three-year report into currency dealing shows rapid growth in trading, with the majority of business happening in London.


Trade has jumped by 20% in the three years since the last survey was conducted by the Bank for International Settlements (BIS), which is sometimes called the "central bankers' bank".
But London outpaced the average, with turnover up by 25% over the period...See
  • #6,054
  • Feb 26, 2013 10:28am Feb 26, 2013 10:28am
Quoting Vantage
Mrs V just advised she exited EJ sell for +57, Frankies hour sale. Will post charts later.
An early trade this morning +57. D bias was down, 1hr closed as a 3 bar reversal, 15 min lower high little/no lower wick.
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  • #6,055
  • Feb 26, 2013 10:32am Feb 26, 2013 10:32am
Quoting Vantage
She sold EJ 120.45 and we are struggling with the lows/breaking the RN. Will post chart later if it pushes lower.
EJ did not want to go up after news released. An intra day resistance level around 120.70. Shooting star treble top, little/no lower wick. the move below days open 119.89 earlier in the day was rejected. Happy to exit +43 for 100 pip day when it held again.
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  • #6,056
  • Feb 26, 2013 10:36am Feb 26, 2013 10:36am
Quoting frank.david
well I bought there.+80

but still I'm trapped by fake move.
Can you post a chart?
  • #6,057
  • Feb 26, 2013 1:00pm Feb 26, 2013 1:00pm
Quoting Vantage
Can you post a chart?
Hello Van


1.This is the chart,I bought on circled engulf formation.not able to know where missing something important of this system?

2.could you please explain candle by candle today's EJ H1 chart(what you see when candle formed etc),it will very helpful for me.

Thanks
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  • #6,058
  • Feb 26, 2013 10:35pm Feb 26, 2013 10:35pm
Recap 26 Feb

EUR - View was: Engulfing D neg close. 4hr and 1hr flow down, both showing divergence. Whilst there can be a reaction up after the over sized negative close bias down until flow confirms otherwise. We had an early move down before London open. Price moved higher reacting to the W M1 pivot/1.3015 support level previously identified on D charts.

GU - View was: Positive D close still below 8lwma, no trend line breaks. Flow on 4hr higher low and 1hr is on higher high higher low. This can be a buy or sell day. Overall moved lower but difficult to trade off 1hr as the negative close candles were all large.

EJ - View was: Bias down until positive flow proves otherwise. Overall there were good selling opportunities but the low from the 25th/W M0 held.
  • #6,059
  • Feb 26, 2013 10:52pm Feb 26, 2013 10:52pm
EUR GU EJ 27 Feb

EUR - D closed a doji, contained by previously identified support/resistance levels. Whilst we can go either way today the bias remains down until price confirms otherwise. We have a base now at 1.3040, the move below that yesterday was strongly rejected.

GU - D negative close lower high 3 bar reversal. It seems a struggle to go lower in this 2 month down trend, bias remains down until proved otherwise.

EJ - D closed a doji. 4hr showing a clear base despite that there have been no strong moves higher. Bias remains down.
  • #6,060
  • Feb 26, 2013 11:09pm Feb 26, 2013 11:09pm
Quoting frank.david
Hello Van


1.This is the chart,I bought on circled engulf formation.not able to know where missing something important of this system?

2.could you please explain candle by candle today's EJ H1 chart(what you see when candle formed etc),it will very helpful for me.

Thanks
Your 15 min circled candle is a great engulfing close. In the bigger pic its counter trend and the 1hr had just closed negative for resumption of downtrend, the entry was 160 pips from low (against trend). Its also in that time slot before US open that can be tricky. Its no longer at extreme of range i.e. 160 pips from low.

EJ chart arrow down left clear candle for resumption of down trend. Arrow up left hammer from W M0 but its run almost 100 pips and to be honest based on the reaction on 25th i.e. 200 pips up if Mrs V had bought closer to 119 wouldn't have blamed here if it didn't work out. Middle arrow down reverting to trend. Mrs V waited for failure of US news to go higher and got good sell at extreme of range. Arrow up right, hammer then 1hr positive close higher low 3 bar reversal. Mrs V did buy here and out at BE when W M1 held and had a quick reaction lower. Arrow down right resumption of move down.
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