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HCR-LCS + SFP Research thread

  • #341
  • Jul 18, 2013 9:34pm Jul 18, 2013 9:34pm
Quoting Pinbar
Donkey, I think we are on a similar page here. I know, you know what I am talking about, the diagram is for people who do not know. {image}
Yep we're on a similar page no doubt. One thing that I see trading around these areas is that I have the most success when I reduce risk (not necessarily to BE) quickly. You can catch runners, but price can easily reject quickly at these levels too.

Here is another exapmple of a weekly level that could have worked for a quick bounce. This is another one that had little or no confluence to speak of and one that I did not trade. First chart is weekly, and shows the HCR created week of 6/9ish and the second chhart shows the quick bounce the following week on the 4H.

Plenty of time to manage the position to take profits or BE.
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PS nice trade on the dragon!!!
  • #342
  • Jul 18, 2013 10:30pm Jul 18, 2013 10:30pm
Quoting ghous
{quote} There is a reason to not enter on Day 1. You are right. Its because the length of the wick is just simply not long enough and while we do have a rejection the fake out bar still has closed relatively strongly with a small wick. Not enough information to create a strong enough bias to pull the trigger. I would have entered on bar 3/4. This is when we had strong rejection off the HHR (decisive rejection) on bar 2 and the next two bars pulled back to the HHR. The stop would have been above the fake out bar high. As mentioned previously The...
Got it. Thanks Ghous.
  • #343
  • Edited 1:44am Jul 19, 2013 12:51am | Edited 1:44am
Quoting Donkey
{quote} Yep we're on a similar page no doubt. One thing that I see trading around these areas is that I have the most success when I reduce risk (not necessarily to BE) quickly. You can catch runners, but price can easily reject quickly at these levels too. Here is another exapmple of a weekly level that could have worked for a quick bounce. This is another one that had little or no confluence to speak of and one that I did not trade. First chart is weekly, and shows the HCR created week of 6/9ish and the second chhart shows the quick bounce the...
Many thanks Donkey

Your post tells me that, I am on the right track with the way I am looking at both the HCR-LCS & the HHR-LLS.

Funny how we all seem to arrive at the same kind of thinking about these entries.
Personally, it was really hard for me to use PA as an entry. For example if we have 150 pip Bearish PB, it was psychologically difficult for me to believe in the bar alone and put the SL above the bar wile entering at the break.

This way of looking at levels with the above two mentioned methodologies gives me a much better mentality about it.


Here is one I am watching for next week.
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  • #344
  • Jul 19, 2013 3:40am Jul 19, 2013 3:40am
Also note that different brokers with different timezones will have different closing time, thus the HCR/LCS levels wont be the same for everyone, WHILE the HHS and LLS WILL BE (maybe on their feed the bar shapes will be different, but the highs and lows should be at the exact same place. (on every time-frame) -> (1) That was my first positive thing with HHS and LLS levels.

And just as you well said guys - the close levels (HCR, LCS) are hand in hand with the HHS and LLS levels. F.e. at a jarroo trade a HHS/LLS could be a (and usually WILL BE) a trouble area, while at SFP trades the HCR/LCS levels can be trouble areas.

Please correcting if im still missing some important points, and still not seeing the big picture

Cheers,
Stephen
It's all psychology...
  • #345
  • Jul 19, 2013 4:50am Jul 19, 2013 4:50am
I think you've got it. You have to be aware of highs and lows in the market, especially on daily TF and above as there is usually alot of order flow around those areas.

It is very important for me for the PBT&CA/B bar to close above the high or low of the respective HCR/LCS bar. I missed a lot of setups early on because I would try to play the retrace back to the HCR/LCS and the train would leave without me. When I looked into these I often saw that the close of the PBT&CA bar was above the previous high (when I was looking for longs). SFP failure also helps identify these setups too. For that reason another way I will play the bar is to enter on the close and place my stop on the opposite side of the the HCR/LCS that I am expecting to act as the support flip area.

Hope this makes sense.....off to work in a few minutes, I'll try to post some charts later on.
  • #346
  • Jul 19, 2013 4:57am Jul 19, 2013 4:57am
Quoting Donkey
I think you've got it. You have to be aware of highs and lows in the market, especially on daily TF and above as there is usually alot of order flow around those areas. It is very important for me for the PBT&CA/B bar to close above the high or low of the respective HCR/LCS bar. I missed a lot of setups early on because I would try to play the retrace back to the HCR/LCS and the train would leave without me. When I looked into these I often saw that the close of the PBT&CA bar was above the previous high (when I was looking for longs). SFP failure...
Thanks for the heads up Donkey!

I noticed the same thing - when price breaks through the hight and the former close in one bar that really indicates something. However if it does, where would you enter? Retrace to the former HHR? ("I would try to play the retrace back to the HCR/LCS and the train would leave without me.")

About weekly levels - i just realized the same thing. (Unfortunately only after 3-4 months of learning ) - Its useless to play Daily bars on daily ppzs and levels. Marking the weekly levels and then entering on daily Timeframe, (and then managing on daily at the beginning - (BE, take some profit etc) - Well it's just amazing

I think the same goes for lower TF trading -> We scan daily ppzs and enter 4H or 1H etc etc...

Looking at your charts I see the trading style I want to learn so I think I'm going to PM you during the weekend, so keep your mailbox opened

Thanks,
Stephen
It's all psychology...
  • #347
  • Jul 19, 2013 7:52am Jul 19, 2013 7:52am
Quoting Donkey
I think you've got it. You have to be aware of highs and lows in the market, especially on daily TF and above as there is usually alot of order flow around those areas. It is very important for me for the PBT&CA/B bar to close above the high or low of the respective HCR/LCS bar. I missed a lot of setups early on because I would try to play the retrace back to the HCR/LCS and the train would leave without me. When I looked into these I often saw that the close of the PBT&CA bar was above the previous high (when I was looking for longs). SFP failure...
Haaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa

Just perfect D.

How come we are all led here to the this place of HCR-LCS & HHR-LLS after years of PA & PPZ?
Probably because, without the investment in years of time and energy, of PA & PPZ, we would never have understood what it really means, just like life.

Great post D. It really fits with the larger order of things.
And another great Hug to those that led the blind to this place, meaning, me.

That does not mean, I am out of the woods yet!
  • #348
  • Jul 19, 2013 8:15am Jul 19, 2013 8:15am
Where is Jarroo??????

I miss him.
  • #349
  • Jul 19, 2013 9:02am Jul 19, 2013 9:02am
Quoting LamerTrader
{quote} ) - Its useless to play Daily bars on daily ppzs and levels. Thanks, Stephen
I think you are missing something here.
Do you really think playing a daily PA bar at a daily level is useless?

J16 does it all the time, so does Mike.
You don't see Mike or J16 switching TFs all the time.

They work, for sure, that is not the point, the point is something else IMHO.
  • #350
  • Jul 19, 2013 10:01am Jul 19, 2013 10:01am
I have been away most of the week but on market open on Sunday I plugged in my orders. 2 were triggered during the week.

USD/JPY is as beautiful as it gets. Print this chart and hang it over your bed. Thus is like the perfect setup.

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NZDUSD also a very nice setup. Not as textbook at the one above but still a valid trade.

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Price is what you pay. Value is what you get.
  • #351
  • Jul 19, 2013 7:21pm Jul 19, 2013 7:21pm
This one has all the characteristics of a possible setup.
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  • #352
  • Jul 20, 2013 12:12am Jul 20, 2013 12:12am
Quoting Pinbar
{quote} I think you are missing something here. Do you really think playing a daily PA bar at a daily level is useless? J16 does it all the time, so does Mike. You don't see Mike or J16 switching TFs all the time. They work, for sure, that is not the point, the point is something else IMHO.
Okay let me rephrase
My point was that the great winners - the A++ winners on daily are much more like to happen at weekly PPZs than daily PPZs... I mean I'm still going to look for daily setups at daily PPZs however I'm thinking of a fast profit taking (1/1 R:R) while at a pinbar which occurred at a weekly PPZ i might let it run for longer.
Mike uses the daily TF however many of his trades are on 4H (or maybe 1H) - which are the same methodology as Weekly/Daily Timeframe switching.
"total useless was maybe a bit harsh"

Have a nice weekend
Stephen
It's all psychology...
  • #353
  • Jul 20, 2013 9:30am Jul 20, 2013 9:30am
Quoting Donkey
{quote} Thanks pin. Yes I use HCR/LCS levels in confluence as a sign of a higher probability set up - in this case a continuation. When the bar closes above the highs associated with the HCRs or below the lows of the LCSs, I see that as a sign of strength. Here is an example of a PBTCA a daily HCR with no other confluence...I would not trade this live but I do like watching what happens in real time. Daily chart - close above the level, but not the high (HHR in ghous's method I think) {image} 4hr - identifying entry, stops, and targets {image}
good thing you took that quick profit on dragon pinbar. 15 pip drawdown below the HCR and BAMMMMMM as our good buddy jarroo would say!!

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  • #354
  • Jul 20, 2013 12:29pm Jul 20, 2013 12:29pm
Hi, I am new here. I have been reading this thread for a few weeks now. I was wondering if someone can review my chart to see if i am setting my HCR + HCS lines correctly.

thank you.
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  • #355
  • Jul 20, 2013 7:53pm Jul 20, 2013 7:53pm
Quoting Donkey
{quote} good thing you took that quick profit on dragon pinbar. 15 pip drawdown below the HCR and BAMMMMMM as our good buddy jarroo would say!! {image}
Could not agree more.

That solid block of consolidation was about as far as it was going.
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  • #356
  • Jul 20, 2013 8:48pm Jul 20, 2013 8:48pm
Quoting Helius
I have been away most of the week but on market open on Sunday I plugged in my orders. 2 were triggered during the week. USD/JPY is as beautiful as it gets. Print this chart and hang it over your bed. Thus is like the perfect setup. {image} NZDUSD also a very nice setup. Not as textbook at the one above but still a valid trade. {image}

Great stuff Helius

The old story of price flips and market memory.
  • #357
  • Jul 21, 2013 12:36am Jul 21, 2013 12:36am
Quoting Pinbar
{quote} Great stuff Helius The old story of price flips and market memory.
I recently read what is behind those Support turns resistance trades. I therefore labeled the chart with 1, 2 and 3.

1) The general public trades long here because we have such a strong support level according to all the technical analysis textbooks. After the break they will be all long facing drawdowns.

2) The people trading with the uptrend looking for targets.

3) The people from (1) will be breakeven when we reach the level again the therefore exit bigtime. And as covering a long means entering a short position, we see short pressure from this group. Plus traders from (2) will also be looking to exit there because it makes sense! Again exiting a long position means entering short. More selling pressure.

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Price is what you pay. Value is what you get.
  • #358
  • Jul 21, 2013 12:42am Jul 21, 2013 12:42am
Quoting Helius
{quote} I recently read what is behind those Support turns resistance trades. I therefore labeled the chart with 1, 2 and 3. 1) The general public trades long here because we have such a strong support level according to all the technical analysis textbooks. After the break they will be all long facing drawdowns. 2) The people trading with the uptrend looking for targets. 3) The people from (1) will be breakeven when we reach the level again the therefore exit bigtime. And as covering a long means entering a short position, we see short pressure...

Yeah, the order flow and tempting the masses onto the wrong side of the fence.
This is what got me interested in the SFP originally.
Although, as I am sure you know, Price Action such as a PB or BUEOB is the same manifestation of the bigger scheme, trapping people into a trade, hitting their SL and as you say, reversing their positions for the bigger scheme ahead. Just could never really put 100% faith in PA somehow. Probably because I really did not understand what the real deal behind the PA was.
The SFP is really putting the pieces of the puzzle together.
That said, I think the big guys also play the same game with the SFP levels, sometimes.

Scary when you think that, when we started trading we probably all believed the breakout textbook stuff.

Good stuff Helius
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  • #359
  • Jul 21, 2013 12:50am Jul 21, 2013 12:50am
yes. But I am not sure you can cal it scary.

"The big buys" have to be positioned in the market. And they have huge money they need to somehow trade. But if they would just sell price would drop like a stone what would in the end cause them to enter for a bad price, giving away profits.
So the need to make people believe price will go up. They will buy a little themselves, pushing prices slightly higher because retail is buying (from the big guys) as well (but here they will already start accumulating short positions). Prices wont go far though because when retail buy, they are buying from the big guys which pushes prices down again. This will get repeated time and time and the big guys will try to push prices as high as they can to be able to sell as expensive as possible. That's how SFP are created. Because this will happen at places where everyone will get interested in buying.

At some point the big guys will have entered their full position and price will drop like a stone. All the retail traders who are long, will look to cover their longs (going short) which adds momentum.
Price is what you pay. Value is what you get.
  • #360
  • Jul 21, 2013 1:40am Jul 21, 2013 1:40am
Quoting Helius
yes. But I am not sure you can cal it scary. "The big buys" have to be positioned in the market. And they have huge money they need to somehow trade. But if they would just sell price would drop like a stone what would in the end cause them to enter for a bad price, giving away profits. So the need to make people believe price will go up. They will buy a little themselves, pushing prices slightly higher because retail is buying (from the big guys) as well (but here they will already start accumulating short positions). Prices wont go far though...

Yeah, I know how and why it works.
It is scary because without a proper understanding of the order flow, we will be on the wrong side of the fence.
Of course, once we understand it, we will be on the right side of the fence, most of the time.
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