A little help with PA and S&R, please | Forex Factory

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A little help with PA and S&R, please

  • #1
  • First Post: Mar 25, 2014 3:32pm Mar 25, 2014 3:32pm
Hey everyone,
I would like to ask you for little information and experience with trading price action and particular with Support and resistance levels.
I trying to trade S&R on 5min. time frame as my trade plan is for intraday, but I have problems with entry points with S&R. What I mean is, that when one level for example support was broken, immediately this level becomes resistance, and when I waiy price to retest this level, to know is this broken level are real, or just false, most of the time price didn't turn back to test this level or just correct very little, but still far away from the level, and I miss the whole trade.
Any opinion, and advice?

This is two examples what Im talking about, where price didn't turn back to the level to take the trade:
Attached Image (click to enlarge)
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  • #2
  • Mar 25, 2014 4:53pm Mar 25, 2014 4:53pm
Quoting Dimkata
Hey everyone, I would like to ask you for little information and experience with trading price action and particular with Support and resistance levels. I trying to trade S&R on 5min. time frame as my trade plan is for intraday, but I have problems with entry points with S&R. What I mean is, that when one level for example support was broken, immediately this level becomes resistance, and when I waiy price to retest this level, to know is this broken level are real, or just false, most of the time price didn't turn back to test this level or just...
It happens.
Thatīs trading.

Some people trade breakouts.
Some people trade retests.
Some people trade both.
  • #3
  • Mar 25, 2014 5:01pm Mar 25, 2014 5:01pm
Quoting bodypip
{quote} It happens. Thatīs trading.
I have to disagree !

Nothing just happens, there is always reason or MOTIVE!
I need to finish something i started
  • #4
  • Mar 25, 2014 5:17pm Mar 25, 2014 5:17pm
Dimkata,

I know what you are saying, i struggled with this for sometime also.

Look at both your charts, the 1st is just is not a good s&r zone. The 2nd, now that is a different matter. price tries on two occasions to break through, when it does we have a large pole straight through. Price on return reacts to this.

Go over your charts and see all the places this happens. Look for some history that the given price was a hurdle to overcome.

Unfortunately this is only part of a much larger story, that i hope you will learn as you go along.

The most important thought to bear in mind is "is that line or area historic"

Warren
I need to finish something i started
  • #5
  • Mar 25, 2014 5:55pm Mar 25, 2014 5:55pm
Quoting bigwal
{quote} I have to disagree ! Nothing just happens, there is always reason or MOTIVE!
It happens = some times price retest those lines of S/R and sometimes dont.

Of course there are always a reason or MOTIVE!
Otherwise the price doesnt move.

Speculation.
Stophunting.
Big players.
News.
Etc...

I agree with you.


@Dimkata
Trade zones, instead of S/R lines and use higher time frames, 5m itīs very hard.

But who am I to give advices ...
  • #6
  • Mar 25, 2014 6:22pm Mar 25, 2014 6:22pm
It is a common misconception that price "always" does something. This is why many traders say "it happens" because it does...nothing you learn will ever be "always". The idea is to take an idea and develop probabilities from that idea and then use those probabilities to your advantage...

I have reposted your first picture with what I think are significant points. If one side of a range fails, it is often that the other side will hold...and if one side holds it is often that the other side will fail. This theory can be backtested and checked for probabilities...

My way of looking at this was that you have a sell clue because the support on the initial range "failed" it was penetrated significantly. The final piece to that puzzle was that the resistance side held and produced a valid price action signal, an engulfing bar that would've given you your sell...then you can hold it through the bottom of the range....if it fails continue to hold.

Likewise your buy signal clue was that support area held...after being significantly penetrated...and your entry signal was both a price action (hammer) and a close above the support area.

Now it is easy for me to look in retrospect and say, "you should have gone long here and short there." My point is that in your study of support and resistance you would do well to focus on what clues allow you to believe which side is going to hold and which side isn't. Then test those clues for probability of that idea...if your probability is greater than 50% you might have the makings for a trading method.

You must then go about the business of making trading rules for that method...when to enter...when to exit...how big is your position...when to add in...when to scale out...ad nauseum.

Focusing on just one part of the method is fine but avoid the "always" mentality and instead focus on probability.
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  • #7
  • Mar 26, 2014 3:38am Mar 26, 2014 3:38am
Thank you so much bodypip, bigway, gspajon
I understand you what you mean, bodypip I know that smaller time frame is harder than larger TF, but Im feel comfortable with this TF and the Idea to catch not big moves but with smaller stop loss. You are right, sometimes price retest, sometime not... maybe I must be more flexible with my entry points.
Bigway, I saw what you mean with the second pic. strong S&R, I will try to find more such a opportunities, thanks.

Gspajon, thank you for your post and example of my chart I appreciate it.
Your entry points are little earlier than mine view of the pictures, but that is the different and subjective right? Your method reminds me to 2B formation entry.

This is one my trade from this morning, without waiting a pullback enter imediatly after break and close the bar below arrow, maybe I really shoud be a more agressive in my entry as this one:
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May I ask you one more question guys,
I have a doubt when I mark my S&R zones, principle I looking a M15 and M5 and mark them on both chart, but when I see a good point to mark them on M5, often this is just part of price of M15, and on M15 this zone just no exist, because is too small point for M15. But on M15 I can mark another S&R... so if you can advise me and to share your opinion which S&R to follow for entry point? Here we have 2 options, first to go with the S&R from M5 and catch the trade or that catch to turn to loss for us and price ignore this S&R, and second to wait for S&R from M15 and miss the trade or catch them late. I don't know if you understand what I ask you, that I will post 2 pics of EUR/NZD with example. First pic. is M15 with mark the S&R from M15 with red line, second pic. is from the same chart just M5 and mark the S&R from this TF with blue line.
So wich would you will follow to enter and why?
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  • #8
  • Mar 27, 2014 12:23am Mar 27, 2014 12:23am
You will need to enlarge the charts so as you can see the candles for one. S&R plays out between candles. Buyers vs sellers basically. I can't teach you...basically the process is like learning to ride a bike. Once you understand how the markets move, it becomes intuitive. What I can advise is maximum chart time. Don't trade at all, demo or live, just observe. And be prepared for a long hike, at least 4 years of long days observing. Good luck.
The road to pipland is arduous and fraught with challenge.
  • #9
  • Mar 27, 2014 3:35am Mar 27, 2014 3:35am
Quoting traider
You will need to enlarge the charts so as you can see the candles for one. S&R plays out between candles. Buyers vs sellers basically. I can't teach you...basically the process is like learning to ride a bike. Once you understand how the markets move, it becomes intuitive. What I can advise is maximum chart time. Don't trade at all, demo or live, just observe. And be prepared for a long hike, at least 4 years of long days observing. Good luck.
Thanks Traider, I totally agree with that 4 years experience, Im now on my 1 and half year of trading, I still have a long way to go with knowledge and experience. The good think is that I understand where the market beat me, maybe I don't understand why (the market always is right, right? )

Ok, what is your opinion for above 2 charts?
  • #10
  • Mar 27, 2014 7:21am Mar 27, 2014 7:21am
Quoting Dimkata
Thank you so much bodypip, bigway, gspajon I understand you what you mean, bodypip I know that smaller time frame is harder than larger TF, but Im feel comfortable with this TF and the Idea to catch not big moves but with smaller stop loss. You are right, sometimes price retest, sometime not... maybe I must be more flexible with my entry points. Bigway, I saw what you mean with the second pic. strong S&R, I will try to find more such a opportunities, thanks. Gspajon, thank you for your post and example of my chart I appreciate it. Your entry points...
Generally don't look for S&R on charts less than M5. You can look for S&R on M15 and above. If you find S&R on M15 you can mark it on M5. S&Rs on higher timeframes are more powerful. S&R on daily and weekly charts can be very powerful.
  • #11
  • Mar 29, 2014 12:27am Mar 29, 2014 12:27am
Quoting Dimkata
{quote} Thanks Traider, I totally agree with that 4 years experience, Im now on my 1 and half year of trading, I still have a long way to go with knowledge and experience. The good think is that I understand where the market beat me, maybe I don't understand why (the market always is right, right? ) Ok, what is your opinion for above 2 charts?
Dangerous.

S&R is basically at the candles that contains the stacked orders (there are grades of stack). You can with time and exposure work out what these look like. Steve Nison drops a few hints in his DVD's so get a set and listen carefully. They are nothing more than hints. You will have to make the rest of the journey.

Good luck.
The road to pipland is arduous and fraught with challenge.
  • #12
  • Edited 2:01pm Apr 1, 2014 1:45pm | Edited 2:01pm
Hi,

In an effort to help another SR/PA trader, I would suggest that you make your support and resistance lines on the H4, Daily charts (depending on the pair maybe even the H1) and wait for price to come to you. Don't chase price. Make your entries on the H1 time frame. This lessens the number of opportunities, but those opportunities will have higher probability.

Also, I would definitely suggest the following two threads.

You should check out Trader-Dante's (the wizard) "Fail Better" thread:

http://www.forexfactory.com/showthre...67#post7369767

Here is a synopsis of the thread:

http://www.forexfactory.com/attachme...hmentid=952965

wmd's thread "Trading with deadly accuracy" is another:

http://www.forexfactory.com/showthread.php?t=206723

Synopsis:

http://www.forexfactory.com/attachme...hmentid=376943

To read up on a very in depth write up about picking price targets from trendline breakouts, I would highly suggest Steve W's articles at No Brainer Trades (even if you think fibonacci is a waste of time, the price action is worth a look):

Measured movements, trendline breaks and taking profits

http://www.nobrainertrades.com/2013/...edesigned.html

All about diagonal trendlines

http://www.nobrainertrades.com/2010/...rendlines.html

Hope this helps. The wizard's thread turned my account from consistently losing money to make serious strides with confidence in just a few days.
  • #13
  • Apr 2, 2014 1:35am Apr 2, 2014 1:35am
Quoting revival_fx
Hi, In an effort to help another SR/PA trader, I would suggest that you make your support and resistance lines on the H4, Daily charts (depending on the pair maybe even the H1) and wait for price to come to you. Don't chase price. Make your entries on the H1 time frame. This lessens the number of opportunities, but those opportunities will have higher probability. Also, I would definitely suggest the following two threads. You should check out Trader-Dante's (the wizard) "Fail Better" thread: http://www.forexfactory.com/showthre...67#post7369767...
Revival, thank you very much for this valuable information, I appreciate that!
  • #14
  • Last Post: Apr 2, 2014 6:07am Apr 2, 2014 6:07am
Quoting Dimkata
{quote} Revival, thank you very much for this valuable information, I appreciate that!
Your welcome. Much success to you. Happy Trading.
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