Sounds great Ghous
- #262
- Jul 12, 2013 8:13am Jul 12, 2013 8:13am
- Joined Jan 2008 | Status: <<--(-$-)-->> | 5,571 Posts
The first thing I'd like to clarify for those still a bit confused is the most important horizontal line for me that is the decisive factor for each and every trade that I take.
HHR = Highest High of Resistance.
This is simply the highest visited price in a period of resistance. Its the last price that was traded before price turned around. It goes without saying that such price levels are critical when price returns to them as it straight away refreshes good and bad memories and lead to all kinds of actions.
LLS = Lowest Low of Support.
This is simply the lowest visited price in a period of support. Its the last price that was traded before price turned around.
An example of a chart with both HHR and LLS levels marked:
******---------------------------------*****
What I am looking for is for price to penetrate the HHR/LLS levels and end up closing back within these levels.
Here are a couple of examples:
How much should price penetrate the the HHR/LLS level to be valid? Enough to visually spot it without having to use the cross-hair and actually measure pips. Since I mostly trade the daily time frame this usually means at least 10 pips or so. Again depends on the pair and I normally don't like to specify the rules in terms of pips. As long as I see a "wick" beyond the HHR/LLS, the setup is good for me. Some people consider a fake out valid even if it violates the HHR by a single pip that they can make out by comparing say the HHR price with the actual high of the fake out bar. I never do that. While I scan more than 50 daily charts everyday I am not stopping for more than a few seconds on a single chart. This is not because I am in a hurry but more so because if anything is conspicuous it should catch my eye within that small window. Chances are if I am staring at a setup too long it will most likely be a pass. Such a method obviously calls for a lot of visual cues.
Also note that in most cases a wick is all that I am looking for. In some rare instances you get the same phenomena (of price going beyond the HHR/LLS only to get rejected and close back within the HHR/LLS) spread across more than one bars. In these cases you don't get a wick, but an actual close say above an HHR and then the next bar/s shooting right back down and closing back under the HHR without finding much support at the HHR. Such cases maybe considered only if the location (confluence factors lining up with the HHR and just the look of the bigger story and spatial concerns) is sound enough. An example would be the USD/NOK trade I took that I posted here at the thread (a few posts ago). It was a fake out comprising of 2 daily bars instead of a single bar's wick but the HHR itself was a HUGE one (very deep and major swing high) with confluence of a major RN.
More to follow...
HHR = Highest High of Resistance.
This is simply the highest visited price in a period of resistance. Its the last price that was traded before price turned around. It goes without saying that such price levels are critical when price returns to them as it straight away refreshes good and bad memories and lead to all kinds of actions.
LLS = Lowest Low of Support.
This is simply the lowest visited price in a period of support. Its the last price that was traded before price turned around.
An example of a chart with both HHR and LLS levels marked:
******---------------------------------*****
What I am looking for is for price to penetrate the HHR/LLS levels and end up closing back within these levels.
Here are a couple of examples:
How much should price penetrate the the HHR/LLS level to be valid? Enough to visually spot it without having to use the cross-hair and actually measure pips. Since I mostly trade the daily time frame this usually means at least 10 pips or so. Again depends on the pair and I normally don't like to specify the rules in terms of pips. As long as I see a "wick" beyond the HHR/LLS, the setup is good for me. Some people consider a fake out valid even if it violates the HHR by a single pip that they can make out by comparing say the HHR price with the actual high of the fake out bar. I never do that. While I scan more than 50 daily charts everyday I am not stopping for more than a few seconds on a single chart. This is not because I am in a hurry but more so because if anything is conspicuous it should catch my eye within that small window. Chances are if I am staring at a setup too long it will most likely be a pass. Such a method obviously calls for a lot of visual cues.
Also note that in most cases a wick is all that I am looking for. In some rare instances you get the same phenomena (of price going beyond the HHR/LLS only to get rejected and close back within the HHR/LLS) spread across more than one bars. In these cases you don't get a wick, but an actual close say above an HHR and then the next bar/s shooting right back down and closing back under the HHR without finding much support at the HHR. Such cases maybe considered only if the location (confluence factors lining up with the HHR and just the look of the bigger story and spatial concerns) is sound enough. An example would be the USD/NOK trade I took that I posted here at the thread (a few posts ago). It was a fake out comprising of 2 daily bars instead of a single bar's wick but the HHR itself was a HUGE one (very deep and major swing high) with confluence of a major RN.
More to follow...
I believe . . .
- #263
- Edited 11:37pm Jul 12, 2013 8:26am | Edited 11:37pm
- Joined Jan 2008 | Status: <<--(-$-)-->> | 5,571 Posts
The first thing I'd like to clarify for those still a bit confused is the most important horizontal line for me that is the decisive factor for each and every trade that I take. HHR = Highest High of Resistance. This is simply the highest visited price in a period of resistance. Its the last price that was traded before price turned around. It goes without saying that such price levels are critical when price returns to them as it straight away refreshes good and bad memories and lead to all kinds of actions. {image} LLS = Lowest Low of Support....
Where price closes just within the HHR/LLS I prefer to enter on the close and where price travels more then that (for instance price closing way under an HHR for a short setup) I place a pending order just under the HHR in a hope of a pull back to the HHR before price continues to drop (happens a lot). Either ways the idea is to always execute entries near and around your HHR/LLS levels and never too far from them. This makes sure you get an entry nearer to the "source" and enjoy a good R:R as well as leverage the maximum available space for the trade to breathe in.
Stop loss:
Stops normally go beyond the high/low of the fake out bar + spread + a few pips. For HHR/LLS levels that fall in confluence with other factors like RNs and EMAs etc I will sometimes go for a tighter stop in the hope that the HHR/LLS levels should straight away hold.
There are other non discretionary methods of placing stops too but I like it to be discretionary because it allows me a tighter stop. Almost the entire method is discretionary anyway so it doesn't pain me too much to use some discretion for placing stops.
Targets:
For those of you who drop by the James16 thread you would know how we normally go about managing our trades. We mark out areas of minor and major instances of support and resistance market out bar bar highs and lows (and closes) and simply watch as price goes into them. Additionally we like to keep an eye out for RNs and other stuff like EMAs (I use the 150 EMA) as potential sources of trouble for price.
Exactly what I do as price approaches these trouble areas is entirely a function of the strength of the setup, the space I have in general to manage the trade, the strength of the trouble area itself etc etc.
I may take a quick profit of the first trouble area, or hold for a potentially longer term trade. I may scale out of positions at trouble areas or reduce my stop slop to eliminate some risk. Again depends entirely on the situation.
*****--------------*****
Hope this answers some questions. For all others I am right here.
g.
I believe . . .
- #265
- Jul 12, 2013 10:58am Jul 12, 2013 10:58am
- Joined Jan 2008 | Status: <<--(-$-)-->> | 5,571 Posts
I believe . . .
Redid the front page. Took the indicators off. People don't need them and will only ask questions about how to use them. Variety is the spice of life. Every time I see a post of Lamertrader, I confuse the chart with my own. Drives me nuts.
I also like your "night" theme charts. I wonder if I would be able to copy them. Just kiddin. I will try to use other broker for uploading charts! It's all psychology...
Based on my rules a setup does not require 3 touches. I found this during backtesting. I have taken hundreds of rounded retest trades using forextester and the way I play them in regards to SL and TP 3 touches are not required. A valid level for me exists if it has acted as BOTH support and resistance in the past. You can see this very nicely on the UCAD trade. Saying this, you gotta find out how to play any trade setup on your own. You cannot just copy a "system" and expect it to work. Every personality is different and you will trade the exact...
I know i just cant copy systems and think that they will work. I have to backtest them, practice them on forex tester, and future test them. And then they can be part os my fabulous StephenOSx System
But thank you for your advice. I will write a PM to you during the weekend so check your mails time to time. Thank you!
Cheers,
Stephen
It's all psychology...
Ghous!
Today I spent my all afternoon (16-23h) to read through the whole thread again. It's worth it - so i can recommend it for the other guys to.
I feel like 95% of the things are crystal clear however I would have some questions:
- As I was reading through one of your amazing chart explanation I noticed that the bard DID close under the LLS. (If you look closely on your chart you see it too.) So i took my MT4 (which is alpari and uses the same closing time as FXpRo, and i look what i noticed. (Apart from the fact that the bars did close below the LLS) Any suggestions? (Look at the pic) I mean such "mistakes" can lead me to a different interpretation of the setup.... Im a bit pissed...
- I noticed that your method is very similar to Tom's. You use Daily TF though, and have a bit different SL system, but would that be all?
And last but not least: Thank you again!
Today I spent my all afternoon (16-23h) to read through the whole thread again. It's worth it - so i can recommend it for the other guys to.
I feel like 95% of the things are crystal clear however I would have some questions:
- As I was reading through one of your amazing chart explanation I noticed that the bard DID close under the LLS. (If you look closely on your chart you see it too.) So i took my MT4 (which is alpari and uses the same closing time as FXpRo, and i look what i noticed. (Apart from the fact that the bars did close below the LLS) Any suggestions? (Look at the pic) I mean such "mistakes" can lead me to a different interpretation of the setup.... Im a bit pissed...
- I noticed that your method is very similar to Tom's. You use Daily TF though, and have a bit different SL system, but would that be all?
And last but not least: Thank you again!
It's all psychology...
- #271
- Jul 12, 2013 6:28pm Jul 12, 2013 6:28pm
- Joined Jan 2008 | Status: <<--(-$-)-->> | 5,571 Posts
Hi there, you scan 50 forex pairs for swing failures each night? Or do you look at indices and commodities too? Thank you Paul
g.
I believe . . .
- #272
- Edited 7:11pm Jul 12, 2013 6:44pm | Edited 7:11pm
- Joined Jan 2008 | Status: <<--(-$-)-->> | 5,571 Posts
I believe . . .
- #273
- Jul 12, 2013 7:06pm Jul 12, 2013 7:06pm
- Joined Jan 2008 | Status: <<--(-$-)-->> | 5,571 Posts
I believe . . .
- #274
- Edited 10:28pm Jul 12, 2013 10:15pm | Edited 10:28pm
- Joined May 2010 | Status: HCR-LCS SFP | 6,026 Posts
Great Explanation of your fake out bars Ghous.
I am going to take some time, to contemplate all that you have so kindly shown us in great depth.
Many thanks for your wonderful contribution to the thread.
One question though, in the entry chart you posted, you wrote on the chart "Fake out bar closes way above the HHR".
Was that a typo and you really mean LLS?
I am going to take some time, to contemplate all that you have so kindly shown us in great depth.
Many thanks for your wonderful contribution to the thread
.One question though, in the entry chart you posted, you wrote on the chart "Fake out bar closes way above the HHR".
Was that a typo and you really mean LLS?
- #275
- Jul 12, 2013 11:34pm Jul 12, 2013 11:34pm
- Joined Jan 2008 | Status: <<--(-$-)-->> | 5,571 Posts
Great Explanation of your fake out bars Ghous. I am going to take some time, to contemplate all that you have so kindly shown us in great depth. Many thanks for your wonderful contribution to the thread
I'll correct it.
EDIT: corrected.
I believe . . .
- #276
- Jul 12, 2013 11:55pm Jul 12, 2013 11:55pm
- Joined May 2010 | Status: HCR-LCS SFP | 6,026 Posts
{quote} Oops. Yes. I'll correct it. EDIT: corrected.
Just thought I was not understanding something important there. LOL
Thought it was due to all the Beer, Chinese Liquor and Rum I drank last night.
While cats away, the mice will play. My wife is 500 miles away, in Shandon till Tuesday.
This could be an interesting area. The 1.700 is a bit too close though but that double top is nice.
Many thanks again Ghous
- #278
- Jul 13, 2013 5:23am Jul 13, 2013 5:23am
- Joined Jan 2008 | Status: <<--(-$-)-->> | 5,571 Posts
I believe . . .
- #280
- Jul 13, 2013 10:46am Jul 13, 2013 10:46am
- Joined Jan 2008 | Status: <<--(-$-)-->> | 5,571 Posts
I believe . . .