Higher low, lower high system | Page 314 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

What are Higher High, Higher Low, Lower High and Lower Low? 11 replies

How to program Higher-High Higher-Low 19 replies

Higher High/Higher Low indicator conversion from 4 to 5 decimals. Help anyone? 2 replies

Can u point me to code 2 show each bar with a higher high & higher low? 2 replies

High to High and Low to low time cycles 1 reply

Attachments: Higher low, lower high system
Exit Attachments

Higher low, lower high system

  • #6,261
  • Apr 6, 2013 6:13am Apr 6, 2013 6:13am
If you missed the higher low at the extreme of range (see trade 1 on very 1st post) then following 4 hr close looking for buys on 15 min retraces. Again why this? Well you know there are 2 - 4 good 4hr moves a week. The 1st 4hr close is a solid engulfing close off a level that provided support the previous week. Trading retraces in trend is one of the simpler but solid strategies around. Here we are looking for entry of 15 min retraces.

The red line is where the 4hr chart closed. You have a good % chance that 4hr candle will follow through. We are working on the concept that the 2 most important rules of trading are trend and support/resistance (and prices reaction to SR).

OK so even if you had a down bias for the day you cannot ignore the support level and prices reaction to it - the 4hr engulfing close NB no upper wick.

Then look for 15 min retrace below the 8lwma (gold) ema and then close back above it.
Attached Image (click to enlarge)
Click to Enlarge Name: 2.png Size: 30 KB
  • #6,262
  • Apr 6, 2013 6:18am Apr 6, 2013 6:18am
From the above 4hr chart taking the 4hr signals from left to right. The red lines show where the 4hr closed and the 15 min retraces that follow. here there is little follow through and Asian session had the better move.
Attached Image (click to enlarge)
Click to Enlarge Name: 3.png Size: 31 KB
  • #6,263
  • Apr 6, 2013 6:21am Apr 6, 2013 6:21am
Getting the idea.
Attached Image (click to enlarge)
Click to Enlarge Name: 4.png Size: 32 KB
  • #6,264
  • Edited 7:07am Apr 6, 2013 6:40am | Edited 7:07am
GU 4hr and the 15 min retraces. You'll see the one that is right on a round number, I prefer price to go through the RN and then trade below for a sell/above for a buy.

The red line shows the close of the 4hr candle then the 15 min retraces hl/lh's that follow.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 5.png Size: 32 KB
Click to Enlarge Name: 6.png Size: 29 KB
Click to Enlarge Name: 7.png Size: 33 KB
Click to Enlarge Name: 8.png Size: 33 KB
Click to Enlarge Name: gbpusdh4.png Size: 46 KB
  • #6,265
  • Apr 6, 2013 6:43am Apr 6, 2013 6:43am
Again the basis of the above is that there are generally 2-4 good moves a week from 4hr RSI crosses/3 bar reversals. Once you have a direction waiting for a retrace on 15 min (ie hl/lh) gives tight entry with smallish stop.
  • #6,266
  • Apr 6, 2013 6:57am Apr 6, 2013 6:57am
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 smaller the time frame the more signals you'll get. If its an issue just leave on 4hr and 1hr. If you are getting a signal on 1hr you looking to ask the same basic questions, am I in line with my definition of trend (can be off D or 4hr chart), if counter trend do I have reason to believe there will be follow through (our CT trend rules need a key SR level/W pivot, good candles and flow).

Also because of the definition that was written into the 3 bar reversal it will often signal twice in same direction. Anyway if you look at the above signals on 4hr you'll see its a good short term indi for direction.

Hope it helps Mrs V just got back so I'm outta here.

Cheers.
  • #6,267
  • Apr 6, 2013 8:53am Apr 6, 2013 8:53am
Quoting Vantage
.... Also because of the definition that was written into the 3 bar reversal it will often signal twice in same direction. Anyway if you look at the above signals on 4hr you'll see its a good short term indi for direction. Hope it helps Mrs V just got back so I'm outta here. Cheers.
Hi V., thanks very much for all those charts with commentary this morning. You have helped considerably to clarify my thinking re turning points, trend vs CT etc..
Follow, don't anticipate.
  • #6,268
  • Apr 6, 2013 9:48am Apr 6, 2013 9:48am
Hello Van,
I have been trying to related the RSI and temporary or Swing S/R levels for a while. Please have a view on it:
1. RSI touches level-20.
2. Market makes a new Low.
3. RSI starts to cross the MA (Green one) and approaching towards level-50.
4. Market couldn't break that Low and MA forms a slope of about 1/2 'O clock towards level-50.
5. Entering for a Long and wait until RSI reaches level-70 supported by the market reaching toward previous high.
6. Exiting when the MA reached level-70 and the market reached the previous High.

7. Waiting the RSI to cross the MA again and reaching level-50.
8. Market couldn't break the previous high and MA starts to form a 4/5 'O clock slope.
9. Waiting for the RSI about to cross level-50 and then entering for Short.
10. Exiting when MA crosses level-50 and RSI is around level-20 and the market is around it's previous low.

Each time the chart needs to support the crossover.

This is probably a 'Silly' thinking. It just came across my mind and I thought for asking your opinion. Please pardon my ignorance as a Novice.
Thanks
Attached Image (click to enlarge)
Click to Enlarge Name: EU H1.JPG Size: 104 KB
  • #6,269
  • Apr 6, 2013 9:51am Apr 6, 2013 9:51am
Quoting Vantage
am I in line with my definition of trend (can be off D or 4hr chart),
How to determine that Daily Trend?
By looking whether the NY closed candle broke the S/R or not?
  • #6,270
  • Apr 7, 2013 2:18am Apr 7, 2013 2:18am
Quoting Arav007
Hello Van, I have been trying to related the RSI and temporary or Swing S/R levels for a while. Please have a view on it: 1. RSI touches level-20. 2. and MA forms a slope of about 1/2 'O clock towards level-50. 5. Entering for a Long and wait until RSI reaches level-70 supported by the market reaching toward previous high. 6. Exiting when the MA reached level-70 and the market reached the previous High. 7. Waiting the RSI to cross the MA again and reaching level-50. 8. Market couldn't break the previous high and MA starts to form a 4/5 'O clock...
Market makes a new Low. 3. RSI starts to cross the MA (Green one) and approaching towards level-50. 4. Market couldn't break that Low - In other words you mean the market makes a higher low?

Market couldn't break the previous high and MA starts to form a 4/5 - In other words a lower high.

I don't think its silly thinking at all, thats pretty much what we are doing here but you are looking at it from what makes sense to you perhaps without fulling clicking what we are doing here. You seem to be pretty much on the same track.

I know there are guys that trade (and one that I am thinking of quite spectacularly) on crosses of RSI and its signal line (or TDI in his case - same as RSI just a different setting) and he absolutely trusts his cross on higher TF's. I think he mainly looks at 1hr and 4hr. You say chart must support the cross. Again thats what we are doing here but the focus is more on what has the market done and the secondary is the RSI cross.

Not saying you are wrong as RSI coming out of over bought/sold areas is as old as the hills. The only down side perhaps is when the market is trending strongly it may not reset back from 70 to 30 or 30 to 70.

When you are looking at charts try focus more on what the market is doing i.e. the higher low/lower high - the flow - and then look at what RSI cross has done. Then go with what works for you best (after loads of back tests). Again when back testing be fully aware of whether market is trending/ranging (must back test both) and support/resistance levels.
  • #6,271
  • Apr 7, 2013 2:32am Apr 7, 2013 2:32am
Quoting Arav007
How to determine that Daily Trend? By looking whether the NY closed candle broke the S/R or not?
We try and assess each days likely moves in line with the following simple D analysis:
http://vantagefx.blogspot.com/2012/0...-expanded.html
http://vantagefx.blogspot.com/2012/1...ulti-time.html
http://vantagefx.blogspot.com/2012/11/question.html

If we appear to be going counter to this (say D suggesting down but 4hr signaled up) we are looking for:
http://vantagefx.blogspot.com/2013/0...-consider.html
http://vantagefx.blogspot.com/2013/0...to-follow.html

If all this seems just too much (for now) stick to something simpler is D above or below a certain ma, or has D RSI crossed, or is D RSI above/below 50 level. An analysis of what the market is doing on D chart should help significantly though, this example in particular http://vantagefx.blogspot.com/2012/0...search-results gives candle/chart patterns that will work the majority of the time.
  • #6,272
  • Apr 7, 2013 3:51am Apr 7, 2013 3:51am
Quoting Vantage
In other words you mean the market makes a higher low?
Yes, it is.
I have also been thinking about the Trending market. This is a shortcoming but I think if we can identify the D trend and the overall trend, then it will be easier to take decision.
Here a sample back test (BT) which I did on a short term move from 1.3160 to 1.2960 (round figure), a 200 pips run.
What we can see at the first Rectangle that market started falling when the GMA (Green MA) rejected the L-70 and the crossover happened. Then at the first Triangle the GMA was about to cross the L-50 and RSI tried to cross it but failed and the run continued after a spike. At the second Rec, crossover happened and both MA and RSI started to bounce back to L-50. Just before, RSI was about to touch L-20 but didn't and there stopping the Sell could be an option.
Again, at the second Triangle, the crossover happened and GMA rejected crossing L-50. Then the gap between RSI and GMA became wide and the slope of GMA was convenient. At the third Rec, both of the RSI and MAs bounced back heavily.

This is just a fraction of the history. It proves nothing solid.
Honestly, I failed to understand the whole procedures of yours. (It's totally my inability of understanding simple matters).
So far, I have understood about HH,HL,LH etc. Still confused with 3-bar reversal. Like the other day I found in Google something attached below but it wasn't convenient enough to me. I'm struggling to get the whole concept and implementing it into trading.
That's why I started to Brainstorming and that RSI thing clicked into my mind. To get a way, help from an expert like you is needed badly.
Attached Image (click to enlarge)
Click to Enlarge Name: EU-BT.JPG Size: 99 KB
Attached Image
  • #6,273
  • Apr 7, 2013 11:15pm Apr 7, 2013 11:15pm
Quoting Arav007
Yes, it is. I have also been thinking about the Trending market. This is a shortcoming but I think if we can identify the D trend and the overall trend, then it will be easier to take decision. Here a sample back test (BT) which I did on a short term move from 1.3160 to 1.2960 (round figure), a 200 pips run. What we can see at the first Rectangle that market started falling when the GMA (Green MA) rejected the L-70 and the crossover happened. Then at the first Triangle the GMA was about to cross the L-50 and RSI tried to cross it but failed and...
See the definition of 3 bar reversal, 1st post 2nd paragraph. That should clearly explain what it is alerting to, then you should see that its for reversals. Then its up to the trader to decide if they are a hl/lh or any other trade that fits their rules.

You seem to be focused more on the RSI than price action.
  • #6,274
  • Apr 7, 2013 11:43pm Apr 7, 2013 11:43pm
EUR EJ GU 8 Apr

No point in doing a recap as the big move was NFP related. All 3 pairs did have retraces to some extent before the big news moves up.

EUR - Back to the support/resistance level from Feb-Apr '12 and Jan '13. W candle closed positive close to the previous weeks high. D closed positive with an upper wick. 4hr flow higher high higher low, RSI has crossed lower. D suggest up, there is a resistance level that we can react lower to and the COT data shows the big boys are bearish on EUR. Can go either way today.

GU - W closed positive hammer and we seem to be through the Dec and May '12 low resistance levels. D positive close, 4hr flow higher. Bias up.

EJ - W engulfing close. D positive close, 4hr flow one way up. Bias up.
  • #6,275
  • Apr 8, 2013 2:41pm Apr 8, 2013 2:41pm
I wasn’t at the screen for this one. Although daily bias was up price struggled at Friday’s highs/W_M3 during early Asian session.

4 hr chart showed RSI turned down through the signal line and price closed below the 8lwma although with a lower wick.

Price hit the daily pivot bouncing weakly from it just before and during early NY session. A couple of small 1 hr dojis couldn’t break higher and after the second one there was a 15 min close below the 1.5300 level at the bottom of the range with little/no lower wick.

Entry would have been at 1.5294 which was also below the pivot and the lows of the dojis and price ran down 50 pips to the W pivot at 1.5243 which was also a resistance level last week until broken at NFP on Friday afternoon.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: gu_20130804-h4.gif Size: 21 KB
Click to Enlarge Name: gu_20130804-h1.gif Size: 26 KB
Click to Enlarge Name: gu_20130804-m15.gif Size: 22 KB
Follow, don't anticipate.
  • #6,276
  • Apr 8, 2013 11:20pm Apr 8, 2013 11:20pm
Recap 8 Apr

EUR - Back to the support/resistance level from Feb-Apr '12 and Jan '13. W candle closed positive close to the previous weeks high. D closed positive with an upper wick. 4hr flow higher high higher low, RSI has crossed lower. D suggest up, there is a resistance level that we can react lower to and the COT data shows the big boys are bearish on EUR. Can go either way today.
Result: Large engulfing hammer off the Asian lows started move up.

GU - W closed positive hammer and we seem to be through the Dec and May '12 low resistance levels. D positive close, 4hr flow higher. Bias up.
Result: Up bias did not play out with W M3 1.5348 holding for about 16 hours. Fell to the W Pivot 1.5242 and the highs from 25 Mar and 2 Apr.

EJ - W engulfing close. D positive close, 4hr flow one way up. Bias up.
Result: Up bias played out.
  • #6,277
  • Apr 8, 2013 11:51pm Apr 8, 2013 11:51pm
EUR GU EJ 9 Apr

EUR - D closed positive but within the 1.3038 highs of 5 Apr. Asian session broke higher through this level. 4hr flow higher high higher low but showing sell divergence. We'll see if the break above this resistance levels holds. Bias up, potential to fall with the 4hr divergence in particular if a move up on 1hr fails giving a double top /lower high to switch flow down.

GU - D closed negative inside bar, still above 8lwma. D is still on higher high higher low. On 5th we shot through the area of the 1.5268 resistance level on news. 4hr RSI did cross signal line lower yesterday to signal a scalp sell but we are still on higher high higher low. Bias up but we'll have to see the reaction higher from here, a failure to move up would give a lower high and reverse the flow.

EJ - D positive close. 4hr showing divergence and has gone virtually straight up from 119-129. Would be looking for any retrace lower as dip in uptrend. Bias up.
  • #6,278
  • Apr 9, 2013 11:27pm Apr 9, 2013 11:27pm
Recap 9 Apr

EUR - Bias up, potential to fall with the 4hr divergence in particular if a move up on 1hr fails giving a double top /lower high to switch flow down.
Result: 4hr hammer stopped the move down. The move up was difficult to trade with several 1hr upper wicks, a nice hammer with little/no upper wick after US news did allow a trade.

GU - Bias up but we'll have to see the reaction higher from here, a failure to move up would give a lower high and reverse the flow.
Result: Lots of lower wicks on 1hr before/after London open put stopped any move down and up bias played out.

EJ - D positive close. 4hr showing divergence and has gone virtually straight up from 119-129. Would be looking for any retrace lower as dip in uptrend. Bias up.
Result: 1hr hammer at London open set the stage for up bias to play out. We saw a shooting star immediately after the hammer on 1hr (one of our dreaded candle set ups) and then several hours of chop followed. Took several hours for a nice 1hr candle set up which had captured most of the move.
  • #6,279
  • Apr 9, 2013 11:55pm Apr 9, 2013 11:55pm
EUR GU EJ 10 Apr

EUR - D positive close at/approaching the levels where rallies in downtrend sold off in March. This move up is much more significant. 4hr divergence continues, paused at W R1. 1hr higher high higher low is in tact, negative sell divergence. Bias up but we have key levels in play, divergences so there is potential for fall should 1hr close negative.

GU - D closed positive but could not break the previous 2 day highs. 4hr higher high higher low, W M3 approaching. Bias up with potential to fall from the key levels.

EJ - D closed a doji. 4hr clearly showing the struggle to go higher at the W pivot, negative divergence. 4hr hammer then positive close stopped the divergence playing out yesterday. Bias up until price action confirms any potential sell.
  • #6,280
  • Apr 10, 2013 12:02am Apr 10, 2013 12:02am
A family issue has kept Mrs V from trading for some time now. She tried yesterday but 2 small losses clearly showed her head was not back in the game (1 trade broke 2 basic hates/rules - 1hr hammer/shooting star following immediately after each other and chop above/below RN). If you are having personal issues in your life it is likely you will not have the focus required to trade effectively.

I don't think she will trade today and we'll see where we go from there.
5 traders viewing now