Higher low, lower high system

You seem to be so busy..No post's at all..?

Yep unfortunately thats what it is at the moment.

EURAUD obviously in a strong uptrend. Hit an identified lower support level (prob easiest to find on W chart). 5 lower wicks in a row on 1hr. Mrs V's first trade in a few days and she readily admits she got out much too early on the first one. 2 trades first 70 pips and 2nd after the bounce off the RN 80 pips. Not having a TP at W R1 was a slip.

With the EUR trend up (pick your definition above RSI 50 level, above ma's, D hl/hh's) this 1hr engulfing close/3 bar reversal above W M3 was also a nice set up back into trend. Our focus was on the above EA trade.

EJ D below ma's, RSI 50 level. There are D SR levels near but the 1hr lh 3 bar reversal in yesterdays US morning session (around the time Mrs V was exiting her EA trade or perhaps the RN had her worried) had enough space between entry and W M2/prev days low 127.00 to enter.

Not taken just another example of current focus.

Good to see you back boet.

Good health to Mrs V.

Cheers my friend.

Was hoping for a bit more from this one but its knock off time for the week.

1hr was on lower high flow this am. Had a hl/dble bottom bounce off W M3 to return to D trend. Like I said hoping for more but in view of the time of day we settled for +25.

17 June '13
General comments:
- We don't trade UK open on a Monday usually waiting an hour or two for things to settle down. Often waiting for US session particularly if trends are not strong i.e. if time frames conflicting.
- If we have dips/rallies counter to the D trend and the 1hr flow has gone against the D trend we'd be waiting for 1hr flow to resume flow in line with D. This would imply good 4hr candle, 1hr higher high higher low flow resuming. A good example would be EURAUD this morning, we have a base at 1.3840 but I am not yet convinced the flow is back up so being a Monday morning we are not buyers yet. If this is wrong we are happy to live with the missed opportunity.

EUR - D closed with what appears to be a bearish hanging man, RSI has crossed signal line but above 50 level. Above the 8lwma however with a hanging man candle you'd expect that.. 4hr is in a triangle so we have a higher low then a lower high. D has not yet given the 3-7 day reversal pattern I'd like to see. View is that this is a pause in the 4 week uptrend.

GU - D also closed a bearish hanging man. Again we'll see what the reaction is to the area 1.5720-70 the highs from June/July '12. Looking back don't just look at the D wick highs look at the body open/closes. We seem to have divergence showing but price action has not yet confirmed. We had a strong reaction lower on Friday to 1.5720 and after that 4hr is on a higher low (candle still open). Viewing as pause in uptrend and we'll see the reaction at the highs.

EJ - A strong D close at the 125.25 lows where there has been buying. A good candle close should follow through lower. 4hr has had a higher low and a morning star after the divergence (my RSI is set on close). Viewing as counter trend rally.

EURAUD - Friday's positive close candle was weak compared to the strong down move on Thursday. We are above the 20/50 ema's and the RSI 50 level. Also still on higher high higher low flow. 4hr positive divergence at the lows. Viewing as dip in uptrend.

AUD - More conflict between D and 4hr. Viewing for now as rally in downtrend.

CAD - D below the ema's and RSI 50 level, 4hr also. This suggests downside. We have buyers at 1.0134 and above.

Recap 17 June 2013


As mentioned we generally don't trade Monday mornings unless trends appear strong. Did have doubts about some and mentioned EURAUD which had a move up around London open, drifted and then had an inter day higher low on 1hr moving up at US open. AUD was similar with a 1hr move down back to D trend at London open, drifted and then fell after the inter day lower high.

The 1hr flow for both pairs now back in line with their D trends.

Was a public holiday here and we sold AUD just below 0.9600, exited too early with other things planned. Still pips on what for us was a day off.

18 June 2013
EUR - D up trend continues to struggle to break through the highs. 4hr shows the multiple tops and the higher lows. If you are buying on the chance of pop higher would need enough space between entry and the highs to get stop to break even if it fails.

GU - Similar story to EUR.

EJ - D down trend struggling to break the lows around 125.25, see 15/16 April. Retaining down bias until D confirms otherwise.

EURAUD - D hammer closed above the previous days range so no surprise the 4hr and 1hr flow now also positive. Bias up.

AUD - D shooting star closed below the previous days so no surprise the 4hr and 1hr flow now down. Bias down.

CAD - Has had 2 D doji closes, yesterday counts as a 3 bar reversal as the close is positive above the previous 2 candle closes (one of the prior 2 having been negative). 4hr RSI has crossed up and just above 50 level. Would think there are better pairs to trade that this at the moment.

Recap 18 June
The 2 pairs that we had a specified bias in line with the D trend both moved nicely, EURAUD up and AUD down. Moves starting around London open, EURAUD had a nice higher low 1hr close, AUD lots of lower wicks.

Of the counter trend moves GU and EJ both had 4hr 3 bar reversals, we were focused on the in trend pairs above.

19 June
EUR - D closed positive and whilst the flow is up the 1hr chart would not have been easy to trade. D and 4hr RSI showing divergence.

GU - D closed negative with a large lower wick after 3 days failing to follow through higher, RSI crossed lower. 4hr had a 3 bar reversal close going into London open and is now on a lower high lower low. Time will tell if the current support at the 14 June lows will hold. A negative close at or near the Asian lows 1.5620 around London open would suggest more downside.

EJ - D still on a lower high but closed strongly higher. 4hr double top might be reject of the resistance level around 1.2760.

EURAUD - D positive close, 4hr RSI crossed lower. Bias up would expect challenge of last weeks highs 1.4250 area.

AUD - D negative close, 4hr 3 bar reversal double bottom at W M2 also showing positive divergence. Bias still down but perhaps the cracks are starting to show.

20 June '13
General comment.

We had a couple of small losing trades, very little for trend traders yesterday prior to the FOMC statement.

Bernanke's statement strengthened the US$. Now we have to see if the over sized D candle closes have follow through. Often these large D candles are followed by a pause before continuing.

EUR - Engulfing D close bias down.

GU - Yesterdays D RSI cross did follow through lower with the news move. Bias down.

EJ - D RSI cross did follow through higher. Bias up.

EURAUD - Bias up.

AUD - Bias down.

21 June 2013
General comment.

As mentioned yesterday often after big D candles there is a pause before moves continue. Yesterday the pairs generally moved during Asia or pre London open. Very little movement after London open into US open. Only 1 trade for us yesterday, AUD sell in US session around 0.9200. Got to +30 and the London lows, out at BE when it never followed through lower.

It does not seem that there were strong Asian buyers for EUR and GU this morning. Makes me think there is chance of move down continuing. We'll see what candles give us.

EUR - D closed negative with a decent lower wick, RSI has crossed below 50 level. 4hr RSI crossed up but could easily flip over. We are moving up to a support/resistance level around W M2 1.3260 and if we are headed lower that would be a level to watch out for. No bias can go either way.

GU - D closed a hammer, 4hr has signaled up with RSI cross. No bias can go either way.

EJ - D closed a shooting star, RSI crossed up and on 50 level. Its high around 129.90 is lower than the previous swing high on 11th 131.28. 4hr on the other hand is on a higher low RSI crossed lower for sell. Conflicting signals, bias up unless there is a stall and 4hr flips over.

EURAUD - D positive, 4hr has stalled RSI has crossed lower. A 1hr negative close here would give a lower high sell signal. Counter trend as there is nothing yet for me to believe that this is anything other than a dip in uptrend.

AUD - Similar picture to EURAUD except this viewed as a rally in downtrend.

Will admit we missed out on some trades earlier, Mrs V left the good EUR US pre/session 1hr neg close 3 bar reversal move lower as the 1hr closed just above 1.32.

Anyway these things happen. EJ 4hr did stall and flip over as mentioned this morning. We could easily go lower but in view of the time of day exited just shy of 50 pips.

You can click on the link Question on absolute basics of method for the examples and charts.
I was discussing general trading ideas with someone that is just starting his journey. It often helps to tie up concepts with a concise summary.

It comes down to: 1hr flow in line with D view. Essentially thats it.

If it appears that D view is not working then counter trend rules come into play: proven support and resistance levels and W pivots, when price has proven over a period of several hours that it does not want to continue in trend (specifically not 1 x 1hr candle).

We really want to see good 1hr flow.

Very nice summary of your evolved/evolving strategy V, I'm sure it won't only be those starting out who will find it useful.

Whilst some trades are taken from 15 min charts focus mainly now on 1hr. Still as per the threads 1st post the focus remains higher lows, lower highs as the first trade set up in a turn (first trade is the best trade) and then from there its trade the HH/HL, LH/LL flow. With of course the D trend v CT view.

So happy to keep this in a higher low, lower high thread even if the TF's are moving a little.

Cheers

24 June 2013
EUR - Had a small gap down which was closed during Asian session. D down, 4hr down bias down.

GU - The gap down was a little larger and would expect attempt to close. D down, 4hr flow down bias down.

EJ - Another upper wick on D that stays above 8lwma and RSI above its signal line, seems to have formed a large triangle with some strong upper lower trend lines. Can only wait and see who wins out and trust that good candles lead the way or provide clearer opportunities elsewhere. At the moment the 1hr flow is higher high higher low.

EURAUD - D closed negative after the RSI divergence. RSI has crossed lower but I don't see a D reversal pattern so continuing the view that this is a pause in the very long uptrend. Bias up.

AUD - D stalled at the lows with an inside candle shooting star. 4hr has gone sideways now for 12 candles. Bias down.

25 June 2013
General comment on yesterday, like Friday mornings we treat Monday mornings with similar respect and rarely trade.

EUR - D closed a doji, below 8lwma and RSI below 50 level. The D being below the tight 8lwma is no surprise given the strong move down over 3 days. Yesterdays low was at the 62% retrace (from 29 May low to high). 4hr signaled a counter trend buy with a candle that had a large upper wick and so far no follow through. 1hr appears to be back to lower high. Bias remains down.

GU - D closed positive, 4hr signaled buy and has moved up. Like EUR Asian session move up did not reach the highs so we appear to be on a lower high. Would like the 4hr to flip over to confirm what appears to be a rally in down trend, bias down.

EJ - No convincing D candles yet, 4hr flow on lower high lower low. Not convinced of direction, but in view of 4hr bias down.

EURAUD - D closed a doji making no real progress lower from Fri. 4hr flow on lower high lower low. 1hr looking like it wants to turn up again.

AUD - D closed a doji making no progress lower. After a rally up 1hr also looks like it wants to go lower.

If you get the impression that we're not quite happy with most set ups you'd be right. Of course by London open things can get a lot clearer. Might not be a trading day with Mrs V down with some flu.