james16 Chart Thread

Question on close/open vs high/low.

I am a beginner in the fx world and have been fortunate to join the J16 private group and keep an eye on this public forum.

Im working through some of Jaroo's stuff over on the private site but thought I could also ask a question here.

Jaroo's method focuses on identifying support vs resistance with reference to the close of a candle. I am just a little confused with this. Whilst working it through in my mind I cannot help but think that the close of a candle is somewhat irrelevant i.e. it will be different on every timeframe/broker. How can it therefore give us a definition of support/resistance?

if you choose your close time (as most do on this thread i think) to be NY close, then it encompases the major bulk of the days trading volumes, thus representing the major market sentiment. If you think about it, if price spikes high to form the upper wick then closes below, in a smaller TF this is similar to price trying to break resistance but not being able to find a foot hold at those elevated levels, i.e not considered the correct value, i.e resistance didnt turn to support. The closing price, by definition, represents the market value at that time. The wicks are the past. Also a lot of big money trades on the days open/close.
If price breaks through and closes above a PPZ isnt that showing that the PPZ is now acting as support and not resistance??
thats my general take on it, im sure jarroo will explain things much better when he sees your post.

hope it helps

jon

Hi Jon

Thank you for the reply.

I also did a little research and found a very interesting post (albeit long). In my search for 'But why does price action work' (which is where my time frame query came from) I found the following from a post on forex factory. Whilst long winded, I think it has merit. I think it also ultimately explains the importance of lower time frame signatures in the success of Jaroos method.

Quote from http://www.forexfactory.com/showthre...=327553&page=4:

Gee I never thought that Multiple Timeframe analysis was so complicated - thank goodness I'm a simpleton

I have found that recurring candlestick patterns work very well with multiple timeframes when used with various forms of S/R etc

My basic belief is based around fractals (repeating patterns), and that includes trading.

An example in nature would be a tree, it starts of as a shoot, that branches out to form a fractal, that branch then forms another shoot and forms another fractal and so on until we have our tree. From little things big things grow.

Its the same with trading - its the smaller timeframes that build the higher timeframes. On any timeframe we have repeating patterns that occur on every other timeframe

These patterns must show up on the smaller time frames before they appear on the larger timeframe

On the tree there are many branches, which may depict various forms of trading - the choice is yours

This is the logic I base my trading on

Application
Find your repeating pattern - whatever that may be. For me I use candlesticks patterns, with various forms of S/R in conjunction with price overbought/sold/extremes - appears complicated, but in reality it's quite simple.

Candlesticks primarily give reversal signals, where they occur is what increases the probability of a successful trade
eg A long bodied candle that appears at/near a S/R level does not have the same implications as a long bodied candle that punches through S/R
A small bodied candle or a series of small bodied candles appearing as a S/R level is approached gives a clue as to what to expect.
A small bodied candle in a congestion zone is insignificant
A small bodied candle appearing after a long bodied candle is very significant
Candlestick shadows also provide valuable information. etc etc etc
There are only about a dozen candlestick patterns that are worth learning and they are easy to pick recognize

The main thing is where they appear - look for candlestick signals setting up on your preferred trading timeframe
We know that before a new trend can start on our timeframe - it must appear on the lower timeframe first
So we go to the next lower timeframe and look for our reversal signal there - if its successful, its follow through will complete the initial candlestick setup signal on our preferred trading timeframe
Moving to the lower timeframe for our entry will also get us into the trade early, with a much smaller stop loss (risk), thus giving us a better risk reward potential

Sometimes its worth looking at two timeframes down
We should also look at the next higher timeframe up from our trading timeframe - to check out the potential of our trade - no nearby S/R or price being at an unsustainable extreme etc

Also when we enter a trade we want to make sure that we are entering on strength i.e. if we are long we want to see that buying is strong confirming our entry signal.
The one min. chart is most useful in showing if the buyers are still active - the price is moving immediately in our direction - up. After watching the one min chart for a few mins we should have a good idea if we are entering on continued strength i.e. we have follow through buyer commitment

So how do we find the 10 baggers - we want to see our trend keep moving up through the higher timeframes

That's it

I hope the above ramblings make sense - It's only my opinion which may be meaning to some and mean absolutely nothing to others.

Maybe my success is due to my consistency in following my trading plan - BUT I'm certain that multiple timeframe analysis gives you the structure of the market!

Please do not expect me to answer any questions, for me that's too time consuming. Do your own research, if its not meaningful to you - its not going to work!!!

Have a nice day

im flat across the markets for the first time in awhile lol

here is a chart to watch i just emailed the group and thought I would post here too

This has been on the watch list. finally a break and retest.

well i guess its bullish for the dollar...

jon

why does the yen fall when usd takes off...??
anyone??

jon

What the hell is going on with EURUSD?
We got some nice, pip-accurate DBHLC...

Mike!
http://i1243.photobucket.com/albums/...psd1ab1bd7.jpg

Hey G

This isn't really one I would play because the rising TL for me isn't very accurate. The top descending TL is a beauty and that is really my main focus on this pair. It may come into play later but until then I wouldn't be getting involved myself. I'm pretty picky though



Best
Mike

Well, we really need Jarroo to answer this question.
I see Jarroo often using the H4 close but, I also see him using the H1 close.

CHF/JPY sure had the Bham effect off of that Double Barrel level.

Buying orders...

I would not buy into a weekly PPZ and a Daily SFP.

MIke, Jarro,
page from which you started to post here?

Giovanni,

You can click on the users name to see all their posts. They will be in most recent order but you can scroll down and click the last page.

From there you can move forward.

Hope this helps.

i liked this article...
http://andreitaga.wordpress.com/2013...o-information/


jon

chart i'll be watching for PA. Nice bullish flag around the BRN of 105

EUR/AUD 4H trade.. banked 1/3 and moved stop higher..

my favorable trades to watch coming days

Hi mbqb11, Jaroo, pinbar,

wats your take on this double top on GBP/NZD. its near BRN. though major trend is up. could this be a sign of reversal?

Regards

Dennis