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H4 Power

  • #761
  • Jan 10, 2014 5:27pm Jan 10, 2014 5:27pm
Quoting patapouer
OK 60man, lets give it another shot. Randomly picked UJ. There is a strong up trend as defined on MN & W1. The last 2 weeks closed bearish, but could not break (ie close below) previous S/R by 104-ish. This suggests price may be retracing, taking a breath before resuming the up trend. If it does, then there should be an H4 engulfing trigger within the next few days by 104 or so. Entry would be based on M15 bullish engulfing within the next 4h. Since I don"t want to play with LTF so far I'll watch price reacting at these levels. {image}{image}{image}...
Hi Pat

ok, UJ correct, monthly is still long, weekly has failed to engulf short, but it has closed short again, so will at least try and push short again next week


ECAD, correct again.No reason to do anything that wait for long signals really...

As for the SR and james 16 old school ways... ask yourself this, if those historical SR's are so important, what happened the very last time we hit it?

Attached Image


bust straight through it eh? not even a pause?.... here's the important thing with SR that everyone fails to teach or understand...

You can only gauge the strength of SR by the reaction of price action now, anything that happened in the past is irrelevant. You mark the next 2 levels then you wait and watch for price action to confirm it. If it turns h4 it has daily power, if it turns daily it has weekly power...etc... etc.... any other label you give it is purely assumption and no better than a coin toss.

Mark the lines, wait for confirmation, trade...

Remember banks and the big boys move the market, our edge is being able to watch and wait, then follow their moves, that's what this is all about, we have no edge with entries, nobody does really, it's a 50/50 game, were just picking good locations and aiming for big wins.

When price changes direction (engulf) then it's 50/50 gonna be a new trend... if we keep taking them then we will catch a few, if we've got the balls to ride the real moves we win big and the other 50% losers no longer matter.
tradewith60
  • #762
  • Edited 8:27pm Jan 10, 2014 6:45pm | Edited 8:27pm
Ok guys, my turn to do some 60-style analysis.

60, please let me know if I'm reading this right. Like Pat, my lowest TF is H4.

EA (This one seems quite tricky)

W1: we see an engulf short. So prices should be heading for MN1 S/R.
Here I've marked the low of the engulfing week. <-- Question: Do you mark both low and close? I see sometimes you do both, some times you only take close.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 41 KB


MN1: I've marked the next 3 S/R by marking the O,H,L,C of the most recent bars. If you notice, they often line up with more than one S/R point. In fact, every one of the 3 target lines meets at least 2 O, H, L, or C.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot2.png Size: 39 KB


H4: The vertical red line marks the open of the week after the engulfing week. I've marked several H4 engulfs that with entry bars that clearly broke the extreme of the engulfing bar.
Notice there are 3 entries. 2 which would have been rather painful. How can we avoid this?
Well... the purple line marks the previous swing high (our technical stop loss point). Each gray dotted line is 50pips.
<below are just eyeball numbers... don't expect precision>
1st Entry: Would you take the first entry with a SL of 230pips and TP1 @ 100pips? Probably best to let it go.
2nd Entry: How about a SL of 180 pips and TP1 @ 170pips? Also by this time we have had a daily engulf up (green indicator line)
3rd Entry: SL @ 130pips and TP1 @ 250pips... makes more sense.

Note also that since we are above the weekly S/R... we'll probably stall @ the weekly S/R (dashed blue line) before getting to TP1.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot4.png Size: 47 KB
  • #763
  • Jan 11, 2014 1:41am Jan 11, 2014 1:41am
All, here is my trading plan for next week (w/c 13/01/2014), your comments would be welcome. THIS IS NOT TRADING ADVICE, SIMPLY MY ANALYSIS OF CURRENT PRICE ACTION.


EURUSD

Weekly bearish engulf 2 weeks ago has not been invalidated BUT price has bounced off monthly Support at 1.3580. We need to wait for weekly price to close below this for a continuation of the downtrend to next monthly S&R at 1.31742 or a weekly engulf which will push price to next monthly S&R at 1.4016. I WILL NOT BE TRADING THIS PAIR THIS WEEK


GBPUSD

Bullish engulf on weekly means price should push up to next monthly S&R at 1.6745, will be looking for bullish commando entries on 4H


AUDUSD

Bullish weekly engulf off monthly resistance still valid, will be placing bullish commando entries on 4H with a target of Next monthly S&R at 0.9450


USDJPY

Last 2 weeks have both been bearish but did not engulf and have bounced off weekly S&R area, no reason to believe that this is a retrace in the longer trend and price will not continue to next monthly resistance at 108.92, will place 4H bullish commando entries


USDCHF

Weekly closed bearish after rejecting hitting weekly S&R, however bullish engulf from previous week is still valid, will be taking commando entries with first target next monthly resistance at 0.9296


USDCAD
Weekly has engulfed but hit monthly S&R (although that is a monthly S&R from 2009 so will watch with interest to see if it holds). Will sit on the sidelines with this on this week and see what develops, if that resistance is broken then we are into prices that this pair has not seen for 5 years


EURAUD

Weekly engulf from 2 weeks ago still valid (also that was off monthly resistance) so will be looking for 4H bearish commando entries with first target next monthly support at 1.4367


EURCAD

Last week was a bullish engulfing which should see price push to next monthly resistance at 1.5000. Will be looking for 4H bullish commando entries with first target at 1.5000


NZDUSD

Last weekly engulf still valid, price should continue to monthly resistance at 0.8397. Will be looking for 4H commando entries with first target 0.8397


EURJPY

Last 2 weeks have been bearish but have not engulfed. However price has closed below monthly S&R (from 2005 so not that significant). I am going to sit on the sidelines with this one this week and see what develops


GBPJPY

Last 2 weeks have been bearish but have not engulfed so up trend is still valid, will be taking 4H commando entries with first target being monthly resistance at 179.00


AUDJPY

Bearish engulf from early December is still valid so price should push down to monthly support at 87.37. However price is struggling to break weekly S&R at 92.14. I will be looking for 4H bearish commando entries with first target weekly S&R at 92.14 (against the rules slightly I know but price is really struggling to break below that level)
  • #764
  • Jan 11, 2014 4:31am Jan 11, 2014 4:31am
Quoting luesak
Ok guys, my turn to do some 60-style analysis. 60, please let me know if I'm reading this right. Like Pat, my lowest TF is H4. EA (This one seems quite tricky) W1: we see an engulf short. So prices should be heading for MN1 S/R. Here I've marked the low of the engulfing week. <-- Question: Do you mark both low and close? I see sometimes you do both, some times you only take close. {image} MN1: I've marked the next 3 S/R by marking the O,H,L,C of the most recent bars. If you notice, they often line up with more than one S/R point. In fact, every...
Hi Luesak, you got some stuff right and some stuff wrong.

1. your trend and sr analysis is perfect, exactly how I see it

2. Never try and avoid losers, it's RR that will make you big profits not win rate. The first trade youre clearly going against the weekly move so you could be more aggressive with your risk management, the second trade is a loser, just accept them, and the 3rd trade result is undecided (im in that short).

Here's the really important bit youre not getting yet.

when you mark the next SR lines on your chart you are marking lines to observe price action and make decisions, there's no reason price cannot steam straight through and begin a 3 week trend, this is a key element of h4power....1.mark lines. 2. wait for price action confirmation 3. trade

Sometimes your trades will retrace you out thats a cost of trading.

You need to have the same thought process as counting cards on blackjack at a casino, the strategy loses a lot of hands, but when the cards turn in your favour you bet hard and milk the win streak for every dollar, if you just sampled 10 hands the strategy could look very weak, but over 1000 hands it's very profitable.

hope that helps
tradewith60
  • #765
  • Jan 11, 2014 3:33pm Jan 11, 2014 3:33pm
Quoting 60minuteman
{quote} Hi Pat ok, UJ correct, monthly is still long, weekly has failed to engulf short, but it has closed short again, so will at least try and push short again next week ECAD, correct again.No reason to do anything that wait for long signals really... As for the SR and james 16 old school ways... ask yourself this, if those historical SR's are so important, what happened the very last time we hit it? {image} bust straight through it eh? not even a pause?.... here's the important thing with SR that everyone fails to teach or understand... You can...
Hi 60,

Thanks a lot for your help!

Quote
ask yourself this, if those historical SR's are so important, what happened the very last time we hit it?

Can I be honest? I knew you would point the bar that pushed through the level

Please don't take it the wrong way. I don't want to start a debate about which method is better than the other etc.
I have a very deep respect for the members of the J16 thread, as I do for you, and this for a number of reasons I don't want to detail here.
And, as of me, I'm totally blue. I'm at the stage where I try to stop crawling and start walking. No way I could judge anybody

It has often be said in J16 thread that the most recent, untested levels, are the most important as price is more likely to react to them.
What is funny is when you check backwards and see that this same level was also important years ago. This is especially true for HTF S/R when aligned with BRN.
I don't know anything about order flow, and I guess it's part of what I lack to further discuss this with you...
What I've practiced so far is HTF support & resistance confluenced with (B)RN, and look for H1/H4 price action setups. Well, it works...

Then, your method here is very elegant in its simplicity. It states the obvious: to turn, price has to print an engulfing, and it refines the use of this statement by using HTF very recent (read: reactive) S/R levels.
I also like the "you draw your lines, then you wait for price action to confirm it". You don't force trades. You let them appear. At obvious S/R areas. Your method also helped me understanding Jarroo's price break through. Finally, it's all about whether price could close above/below the S/R, or printed an engulfing.
I really like that.

Thanks again, I'll try and do my homework now

take care
Slow & steady
  • #766
  • Jan 11, 2014 4:43pm Jan 11, 2014 4:43pm
Quoting patapouer
{quote} Hi 60, Thanks a lot for your help! {quote} Can I be honest? I knew you would point the bar that pushed through the level Please don't take it the wrong way. I don't want to start a debate about which method is better than the other etc. I have a very deep respect for the members of the J16 thread, as I do for you, and this for a number of reasons I don't want to detail here. And, as of me, I'm totally blue. I'm at the stage where I try to stop crawling and start walking. No way I could judge anybody It has often be said in J16 thread...
Hi Pat, nice post, I know very little about the james16 stuff but he seems highly respected.
tradewith60
  • #767
  • Jan 11, 2014 10:07pm Jan 11, 2014 10:07pm
Quoting 60minuteman
{quote} Hi Luesak, you got some stuff right and some stuff wrong. 1. your trend and sr analysis is perfect, exactly how I see it 2. Never try and avoid losers, it's RR that will make you big profits not win rate. The first trade youre clearly going against the weekly move so you could be more aggressive with your risk management, the second trade is a loser, just accept them, and the 3rd trade result is undecided (im in that short). Here's the really important bit youre not getting yet. when you mark the next SR lines on your chart you are marking...
60,

Thanks for pointing out flaws in my understanding. I take it that those S/Rs are not really TPs they are really points to watch for price action to see what to do next (exit or stay).

Thanks man!

Happy trading to everyone next week!

Kim
  • #768
  • Jan 12, 2014 3:10am Jan 12, 2014 3:10am
Quoting 60minuteman
{quote} 2. wait for price action confirmation
Hey 60
Can you give us some example of price action confirmation? When should we exit on a S/R and when should we let the trade run?

Thanks 60
  • #769
  • Jan 12, 2014 5:47am Jan 12, 2014 5:47am
Quoting lucariga
{quote} Hey 60 Can you give us some example of price action confirmation? When should we exit on a S/R and when should we let the trade run? Thanks 60
Luc, good question.

I think this can only be a recording of live trade... so 60 it's probably going to be tough to show this one... but it would be extremely valuable.

Kim
  • #770
  • Jan 12, 2014 5:50am Jan 12, 2014 5:50am
Quoting lucariga
{quote} Hey 60 Can you give us some example of price action confirmation? When should we exit on a S/R and when should we let the trade run? Thanks 60
ok Lucariga....

Confirmation is just about reading the last close and the last engulfs on the different timeframes, until we have a close off a line of SR we can not assign strength to it..........here's GJ

here's GJ weekly... next week down or up?.... we closed down but no engulf.....so.... down a bit but no trend change yet???
Attached Image (click to enlarge)
Click to Enlarge Name: Screen Shot 2014-01-12 at 11.45.04.png Size: 36 KB


lets see what daily says.... daily engulf short, that's also saying more down, this has an engulf so it's going to need that weekly SR also
Attached Image (click to enlarge)
Click to Enlarge Name: Screen Shot 2014-01-12 at 11.47.57.png Size: 37 KB
tradewith60
  • #771
  • Jan 12, 2014 6:07am Jan 12, 2014 6:07am
Quoting dpeters
All, here is my trading plan for next week (w/c 13/01/2014), your comments would be welcome. THIS IS NOT TRADING ADVICE, SIMPLY MY ANALYSIS OF CURRENT PRICE ACTION. EURUSD Weekly bearish engulf 2 weeks ago has not been invalidated BUT price has bounced off monthly Support at 1.3580. We need to wait for weekly price to close below this for a continuation of the downtrend to next monthly S&R at 1.31742 or a weekly engulf which will push price to next monthly S&R at 1.4016. I WILL NOT BE TRADING THIS PAIR THIS WEEK GBPUSD Bullish engulf on weekly means...

EURCAD in standing on divergence
it will probably cover half of its last friday's move .. i guess..

look at that
Attached Image (click to enlarge)
Click to Enlarge Name: EURCAD Divergence.png Size: 65 KB
  • #772
  • Jan 12, 2014 9:38am Jan 12, 2014 9:38am
Going to go through a pair all week with analysis and entries, so first up is the context and levels,

GBP/JPY
Inserted Video
tradewith60
  • #773
  • Jan 12, 2014 9:53am Jan 12, 2014 9:53am
PROBABILITIES AND EXPECTANCY

This chart was given to me by a good friend in my skype group, digesting and accepting these figures is essential for most traders, if you take these probabilities and work out how many trades you take a week on average you can have very accurate expectations.

I know I am pretty much guaranteed to have at least a 6 trade losing streak every month, but i'm expecting it and will not then go and make some rash decision and change my approach. I know I'm going to have a day or 2 where everything goes straight to stop loss.... For a long time those losers would have me doubting and questioning my system and I think it is one of the main reasons traders chase their own tail for a very long time, we hit a totally acceptable and realistic losing streak and flip our systems.

Attached Image (click to enlarge)
Click to Enlarge Name: Screen Shot 2014-01-12 at 15.46.29.png Size: 302 KB
tradewith60
  • #774
  • Jan 12, 2014 10:04am Jan 12, 2014 10:04am
......more great charts (this one taken from the nobrainers web site)

this one exploring RR and profits.... look where the big profits are


http://4.bp.blogspot.com/_nW2eMRU5Wx...600-h/data.jpg
tradewith60
  • #775
  • Jan 12, 2014 10:30am Jan 12, 2014 10:30am
Quoting 60minuteman
PROBABILITIES AND EXPECTANCY This chart was given to me by a good friend in my skype group, digesting and accepting these figures is essential for most traders, if you take these probabilities and work out how many trades you take a week on average you can have very accurate expectations. I know I am pretty much guaranteed to have at least a 6 trade losing streak every month, but i'm expecting it and will not then go and make some rash decision and change my approach. I know I'm going to have a day or 2 where everything goes straight to stop loss.......
Good stuff 60! I believe trading success lies in mastering money management, risk:reward, etc. etc.
  • #776
  • Jan 12, 2014 10:39am Jan 12, 2014 10:39am
Quoting Winston Reed
{quote} Good stuff 60! I believe trading success lies in mastering money management, risk:reward, etc. etc.

yes Winston, we need to take care with our entries, but the care should be to find good locations to increase the RR, not to avoid losing..
tradewith60
  • #777
  • Jan 12, 2014 12:26pm Jan 12, 2014 12:26pm
Quoting 60minuteman
{quote} ok Lucariga.... Confirmation is just about reading the last close and the last engulfs on the different timeframes, until we have a close off a line of SR we can not assign strength to it..........here's GJ here's GJ weekly... next week down or up?.... we closed down but no engulf.....so.... down a bit but no trend change yet??? {image} lets see what daily says.... daily engulf short, that's also saying more down, this has an engulf so it's going to need that weekly SR also {image}
So if i decide to trade Weekly/4H combo following should be my rules:

1) Wait for weekly to engulf
2) Draw 2 next monthly SR
3) Enter on EVERY 4H engulfing until price touch a SR or until a weekly candle close against us
4) If after the SR touch, the 4H candle close against us exit the trade
5) If after the SR touch, the 4H candle close with us let the trade run until next SR

rinse and repeat

Did I summarize it well 60?
  • #778
  • Jan 12, 2014 2:57pm Jan 12, 2014 2:57pm
Quoting 60minuteman
Going to go through a pair all week with analysis and entries, so first up is the context and levels, GBP/JPY http://www.youtube.com/watch?v=ynmtU...ature=youtu.be
hi，60minuteman，i just want to know do you only trade every engulf bar on gj with 4h candle next week for your pan if you trade it ？？
  • #779
  • Jan 12, 2014 3:02pm Jan 12, 2014 3:02pm
Quoting lucas101
{quote} hi，60minuteman，i just want to know do you only trade every engulf bar on gj with 4h candle next week for your pan if you trade it ？？
No, and this is the important part.

I have a context of what is happening on the higher timeframes, where price may change direction and what timeframes to find safe exits on... Then I use h4 to trade inside that context....

I use engulfs and closes on H4 with the context of the higher timeframes to take small risk trades, Ideally a h4 engulf in the direction of higher timeframe trend will give best results, but im not against a signal in the direction of a retrace either.
tradewith60
  • #780
  • Jan 12, 2014 3:12pm Jan 12, 2014 3:12pm
Quoting 60minuteman
{quote} No, and this is the important part. I have a context of what is happening on the higher timeframes, where price may change direction and what timeframes to find safe exits on... Then I use h4 to trade inside that context.... I use engulfs and closes on H4 with the context of the higher timeframes to take small risk trades, Ideally a h4 engulf in the direction of higher timeframe trend will give best results, but im not against a signal in the direction of a retrace either.
but i saw one of your trade on EJ last week was against the trend ，donot you think is a retrace in the weekliy trend。。。
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