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Higher low, lower high system

  • #6,241
  • Apr 2, 2013 9:42pm Apr 2, 2013 9:42pm
EUR GU EJ 3 Apr

EUR - D negative close below 8 lwma and RSI 50 level but hardly a convincing move. 4hr below RSI 50, 1hr flow lower high lower low. We are on the low from Oct '12 bias still lower.

GU - D engulfing negative close, 4hr below RSI 50 level, 1hr flow lower high lower low. Bias down.

EJ - D closed a doji, 4hr flow still lower high lower low but lots of lower wicks, 1hr was on higher high higher low flow which seems to have stopped and looking to fail? Not really clear to me what it wants to do, looks like we are forming a triangle on 1hr, no bias. Wait for some clarity.
  • #6,242
  • Apr 3, 2013 7:52am Apr 3, 2013 7:52am
Hello Van,
I have gone through the two blog posts you referred. I got some idea about the conditions but yet can't understand how to start. I have installed the indicators (without the ma's as not understanding the periods). Now, in such chart how you'd start analyzing? What factors you'd look for first to find a possible trade? Was there any opportunity?


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  • #6,243
  • Apr 3, 2013 7:57am Apr 3, 2013 7:57am
Here is the Min-15 chart. I have a confusion. That is, we will first look into the H-1 chart, if we get any signal, then will take entry from Min-15 chart? Entry from Min-15 chart means opening order at Min-15 TF?
And what <7:50 indicating?
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  • #6,244
  • Apr 3, 2013 8:07am Apr 3, 2013 8:07am
Quoting Arav007
Hello Van, I have gone through the two blog posts you referred. I got some idea about the conditions but yet can't understand how to start. I have installed the indicators (without the ma's as not understanding the periods). Now, in such chart how you'd start analyzing? What factors you'd look for first to find a possible trade? Was there any opportunity? {image}
At the start of day you do your basic analysis for each pair you'll trade looking for bigger pic trend and current flow on 1hr. Then you look for support/resistance levels/W pivots that could change this view of trend.

If D trend is strong and 1hr flow is confirming then a 1hr or even 15 min candle will get you into move.

If going against the trend, then you need to see if 1hr flow is reversing at a SR level/W pivot. So not just 1 candle but a definite stopping and refusal to go further e.g. 1hr dble top/bottom, HL or LH or hammer/shooting star rejecting move beyond the identified SR level.

Today was not a good day to start, pa was largely horrible and we did not have a trade.

Yesterday on gu was great. If I recall view was potential to fall from a proven resistance level. Have a look at GU 4hr big shooting star rejecting move up. Once you have a direction i.e. gu sell yesterday after the 4hr close, look at 15 min smooth lower high waves for entry. Generally for sells it will be good engulfing/3 bar reversal closes with little/no lower wicks in direction of trade (so little/no lower wicks for sells). 15 min candles that open above 8lwma and close below good general rule of thumb.

Have a look at 15 min chart yesterday after that 4hr shooting star has closed, will give you a good idea.
  • #6,245
  • Apr 3, 2013 8:41am Apr 3, 2013 8:41am
Quoting Vantage
"pa was largely horrible and we did not have a trade."
What is 'pa' and for what formation of pa you didn't open a position would you please give that example?

Quoting Vantage
15 min candles that open above 8lwma and close below good general rule of thumb. Have a look at 15 min chart yesterday after that 4hr shooting star has closed, will give you a good idea.
'8lwma' is which Moving avg?
I could recognize that Shooting Star of H-44 chart but isn't understanding the min-15 things
Need help please.
  • #6,246
  • Apr 3, 2013 9:25am Apr 3, 2013 9:25am
Quoting Arav007
What is 'pa' and for what formation of pa you didn't open a position would you please give that example? '8lwma' is which Moving avg? I could recognize that Shooting Star of H-44 chart but isn't understanding the min-15 things Need help please.
Sorry pa - price action - wasn't that bad today only had chance to glance at charts earlier.

8lwma - linear weighted moving average, gold on my charts.

The red line shows where the the 4hr shooting star closed. You could get a 15 min lh right where that 4hr candle closes or it could follow. When selling look for a pullback above the 8lwma and close below. See the 2 arrows down.
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  • #6,247
  • Apr 3, 2013 9:29am Apr 3, 2013 9:29am
Quoting Arav007
Here is the Min-15 chart. I have a confusion. That is, we will first look into the H-1 chart, if we get any signal, then will take entry from Min-15 chart? Entry from Min-15 chart means opening order at Min-15 TF? And what <7:50 indicating? {image}
See trade 1 on 1st post, in addition you have 2 x 1hr hammers. This is a higher low at the extreme of price range. We normally would be wary of trading around the RN but otherwise a good example.
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  • #6,248
  • Apr 3, 2013 9:25pm Apr 3, 2013 9:25pm
Quoting Vantage
See trade 1 on 1st post, in addition you have 2 x 1hr hammers. This is a higher low at the extreme of price range. We normally would be wary of trading around the RN but otherwise a good example. {image}
Forgot to mention, as per the days analysis even though bias was down those 2 x 1hr hammers happened at the identified support level (from 1 Oct) so with 2 x 1hr hammers that 15 min hl at the extreme of the immediate range is a trade. The only problem is the RN, so we wouldn't have taken that one.
  • #6,249
  • Apr 3, 2013 9:26pm Apr 3, 2013 9:26pm
Recap 3 Apr

EUR - D negative close below 8 lwma and RSI 50 level but hardly a convincing move. 4hr below RSI 50, 1hr flow lower high lower low. We are on the low from Oct '12 bias still lower.
Result: 1 Oct low held moved up after 2 x 1hr hammers.

GU - D engulfing negative close, 4hr below RSI 50 level, 1hr flow lower high lower low. Bias down.
Result: Down bias did not play out, moved up.

EJ - D closed a doji, 4hr flow still lower high lower low but lots of lower wicks, 1hr was on higher high higher low flow which seems to have stopped and looking to fail? Not really clear to me what it wants to do, looks like we are forming a triangle on 1hr, no bias. Wait for some clarity.
Result: Some decent moves but range bound.
  • #6,250
  • Apr 3, 2013 9:51pm Apr 3, 2013 9:51pm
EUR GU EJ 4 Apr

Interest rate announcements today in UK and EUR, tomorrow NFP.

EUR - D closed positive but we could not break above the W pivot/resistance level. 4hr RSI crosses have worked as trades even if the moves have not been significant. Asian session could not take us back up to yesterdays high. No bias we could move lower from the rejection of the W pivot (see 4hr upper wick) or continue up, will need to see good 1hr candles.

GU - D closed a doji, 4hr and 1hr seem to be swinging back down. Below 50 RSI level on all time frames so appears to be swinging back lower.

EJ - No bias D closed a small doji and there is a clear base at 119. Interest rate decision came out and we just spiked 50 pips, we'll need to see the follow through as to whether this move up fails or not.
  • #6,251
  • Apr 4, 2013 9:02pm Apr 4, 2013 9:02pm
What about this?
NY daily close under the Resistance line 1.5251.
An Inverted Hammer or Hanging Man has created.
Next candle couldn't break the level and bearish.
So, what the next direction be? Does it make any sense?
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  • #6,252
  • Apr 4, 2013 9:06pm Apr 4, 2013 9:06pm
What about this?
NY daily close under the Resistance line 1.2954.
An Inverted Hammer has created.
Next candle couldn't break the level and bearish.
What can we expect next? How to approach now?
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  • #6,253
  • Apr 4, 2013 9:31pm Apr 4, 2013 9:31pm
The eur gu move up caused by the reaction to news stopped during Asian session. They don't seem to have the willingness to continue the move up and respected the previous session highs, happens all the time. It doesn't automatically mean we are falling from here. By the same token they could have moved the market lower on their volumes but choose not to. The Asian big boys undecided and waiting?

Only time will tell if the market has been shifted by news. If this is the case the big boys will have to manipulate EUR down so they can offload some of their short positions.

Or the downtrend resumes properly?

On any given time the market is either going up/down or sideways and today is no different. You have Fri morning which can be freaky, NFP day which added to a news reaction that must decide what to do.

We always say we will take care on a Fri morning and certainly don't mind sitting out the session before NFP, trading only if the moves look clean i.e. smooth hl/lh waves, good 1hr set ups and avoiding sideways junk.
  • #6,254
  • Apr 4, 2013 9:48pm Apr 4, 2013 9:48pm
I got your thought Van.
As far I can understood that there was no such clear Higher High or any such clear steep. That's why you are out of market temporarily?
  • #6,255
  • Apr 4, 2013 9:57pm Apr 4, 2013 9:57pm
Quoting Arav007
I got your thought Van. As far I can understood that there was no such clear Higher High or any such clear steep. That's why you are out of market temporarily?
Have a look at your D charts, or any tf for that matter. Over sized candles that don't follow through immediately, often followed by a candle or two retrace/dojis before following through. Also its the Fri thing, Fri mornings can often just be erratic. I know lots of people that just don't trade on fri's. We tend to remain cautious happy to sit out or trade if moves look clean (smooth waves no real wicks in the direction we are looking to trade, key levels clearly being respected). Then today NFP could cause problems, perhaps moves early and then drifts.

There's never any harm in sitting out a session if things don't add up.
  • #6,256
  • Apr 4, 2013 10:12pm Apr 4, 2013 10:12pm
EUR GU EJ 5 April

No point in doing a recap for yesterday as the moves up were all related to news, interest rates/central bank announcements.

NFP today. Add to that D over sized candles that often do not follow through immediately, lots of reasons to be careful this morning.

EUR - D engulfing close should follow through higher. If this is a change in the market the big boys will want to move the market lower to offload some of their short positions, so a D over sized candle could be followed by a one or two indecisive candles. Only time will tell if this is a true turn. Would not be surprised then to see a retrace lower. No bias.

GU - Same as EUR.

EJ - 550 pip D candle begging for a retrace. No bias.
  • #6,257
  • Apr 6, 2013 3:47am Apr 6, 2013 3:47am
Quoting Arav007
Hello Van, I have gone through the two blog posts you referred. I got some idea about the conditions but yet can't understand how to start. I have installed the indicators (without the ma's as not understanding the periods). Now, in such chart how you'd start analyzing? What factors you'd look for first to find a possible trade? Was there any opportunity? {image} {image}
Arav some specifics attached D chart with some support/resistance (SR) levels identified. Also 4hr chart with the 3 bar reversal alerts indicated. Have you seen on blog that every weekend I put on 4hr charts with W pivots and make the comment that generally there are 2-4 moves a week on 4hr chart? Thats a good place to start with looking for set ups that you can start back testing yourself to identify trades and get more confidence.

I will have a view based on D chart but a 4hr signal (3 bar reversal/engulfing close, reaction from an identified SR level) that goes against this will often allow counter trend (CT) moves. CT rules need to apply, search the blog in need.
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  • #6,258
  • Apr 6, 2013 3:53am Apr 6, 2013 3:53am
Cleaner chart with the 3 bar reversal candles highlighted by the red line.
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  • #6,259
  • Apr 6, 2013 4:08am Apr 6, 2013 4:08am
Hello, I am a bit confused with the '3 bar reversal' signal!
I am confused with the Arrows. As far I can remember, the arrow to a bar indicates that it is following the signal bar/ reversal bar. That means a reversal is going to happen. But I see often there are two opposite adjacent arrows! I failed to get a clear idea from this alert. How to actually read it?
And on what basis you drew those red lines?
  • #6,260
  • Apr 6, 2013 4:09am Apr 6, 2013 4:09am
Quoting Arav007
Hello, I am a bit confused with the '3 bar reversal' signal! I am confused with the Arrows. As far I can remember, the arrow to a bar indicates that it is following the signal bar/ reversal bar. That means a reversal is going to happen. But I see often there are two opposite adjacent arrows! I failed to get a clear idea from this alert. How to actually read it? And on what basis you drew those red lines?
The red lines are where the 3 bar reversals alerted and the RSI has crossed its signal line.
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