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Support and Resistance Method - Pharley

  • #81
  • Aug 4, 2015 4:52pm Aug 4, 2015 4:52pm
Hi Pharley,

Here is a trade I took GBPCAD based on the S&R. GBPCAD reached weekly resistance. On daily chart a pin. On the H4 I looked for the 50% retrace but it was already 100% which I think will happen a lot. Please look at my chart and maybe you like to give me your comments. Already thanks a lot.

I am not intend to bombard you with my trades. Once I know it I can do it!
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 2015-08-04_2344_GBPCAD__Daily.png Size: 61 KB
Click to Enlarge Name: 2015-08-04_2346_GBPCAD_H4.png Size: 43 KB
  • #82
  • Aug 4, 2015 5:14pm Aug 4, 2015 5:14pm
Quoting Dutchpips
Hi Pharley, I try to reproduce your system on the AUDUSD chart. Attached one example (two attachments), can you please look at them and is this what you mean?? Red vertical line would be the entry (50% fibo). Questions: 1. As you can see there are two pinbars. If I would have act on the first pinbar I would have been stopped out. A situation that is common in these resistance area's. In my example I choosed the second pinbar. Please explain where to wait for. 2. Drawdown in this example would have been 64 pips. Is this normal in your system? You...
Hi Dutchpips,

Thanks for your post. I'll try and answer.

If you look at the daily chart below first - I wouldn't have traded anything up to yesterday. What I look for is a daily candle that shows me the way, ie. it's a pin bar or engulfing bar or a real bullish bar away from support.

Now have a look at the 4hr one. If I was going to trade this, I place the fib at the high and low of the move, not open/close. Trade would have entered and price would have gone against you by around 40 pips but not hit SL. (Price has started to move away nicely now).

So, I wait for a good daily candle to show me the way. In the gbpjpy examples I gave at the start of the thread, you can see that I saw the pin bar occur at support, and then moved down to 4hr charts for entry.

Now something important - I don't take every one that I see. First I would draw in the weekly or monthly SR areas, then go to the daily chart to see a set up candle (pin, engulfing, strong move etc). At that point I look at the potential of the move - where is the move likely to go to back up to resistance Is it 100 pips, 200, 500 etc. Then I move to 4hr charts for an entry setup. It may come off a 50% retrace or a confirmed break high or rising trend line. Whatever it is, I look at what my risk reward will be. A ratio of 1:1 doesn't interest me too much - for me its got to be more than 1:2 and I'm very happy when I start seeing 1:5.

As for 90% target - it's just an arbitrary figure I use to take profits before a run finishes. You could use 95%, 85% - what ever you feel like.
The last pic I post below shows me using the fib to measure 90% of the potential run back to resistance area. It doesn't have to be exact - remember SR areas are not fixed lines, just areas or zones. The timeframe (4hr, day etc) doesn't matter - as long as I can see the last moves. In this example we're looking at, the SR areas are drawn from further away to the left of the chart off weekly SR areas.

The monthly are ust as important as the weekly - I just prefer the weekly timeframe as I can see more of the action, but still see what's happening on the monthly timeframe Monthly candles are very important for super long runs!

Currently the AUDUSD has finished up on yesterdays candle - what I'll do it look for where I can enter on a 4hr chart and get good R:R back to resistance area If I can't get that I won't trade it. It may be that I if I can't find something on a 4hr I MIGHT go look for an entry on the 1hr - I don't often do that and don't really like to. If I'm not 100% happy with an entry set up, I will just leave it and look elsewhere.

But I will watch this pair now and look for entries.

Cheers
Attached Image(s) (click to enlarge)
Click to Enlarge Name: audusd daily.PNG Size: 30 KB
Click to Enlarge Name: audusd 4hr.PNG Size: 34 KB
Click to Enlarge Name: audusd target 90%.PNG Size: 35 KB
  • #83
  • Aug 4, 2015 5:18pm Aug 4, 2015 5:18pm
Quoting terminator12
pharley , How many pips u put in stop order average Please
Hi T12 - oh that varies with every trade. Sometimes it could be 30 or 40, sometimes 130. I manage risk by varying lot size so my $ risk is the same whatever size stop loss I'm using.

I really don't mind having a 100+pip stop - it doesn't bother me at all. On larger charts with bigger runs you need bigger stops. You just buy less lots. But remember, the aim is to enter multiple times so the gains really increase a lot, rather than just taking 1 trade.

Cheers
  • #84
  • Aug 4, 2015 5:24pm Aug 4, 2015 5:24pm
Quoting Gt3rs
Hey Pharley, Great thread. Do you trade polarity flips? EG [weekly] support turning to resistance. If so, how do you set targets for these? Many thanks!
Hi - Do you mean when price for example breaks through support and then retraces to the same area (now resistance)?

Yes I'm always on the look out for those - classic set ups on any timeframe. SL would be at the last swing high prior to the break through and set a target off either the weekly Support area. If you just want to take a trade with 1:2 or 1:3 R:R, then just set targets to those - make sure to look you have the room for those targets before trading.

Another way to trade these is to just place a limit sell order just before the retrace point. With this you're trusting SR and PA action will work as you're entering without confirmation (I prefer confirmation). SL and targets as before.

CHeers
  • #85
  • Aug 4, 2015 5:25pm Aug 4, 2015 5:25pm
Quoting missH
{quote} Great and simple method! Please go on and give out more examples Thank you!
Hi MissH,

Thanks heaps! Will do next time I'm on line.

Cheers
  • #86
  • Aug 4, 2015 5:39pm Aug 4, 2015 5:39pm
Quoting Dutchpips
Hi Pharley, Here is a trade I took GBPCAD based on the S&R. GBPCAD reached weekly resistance. On daily chart a pin. On the H4 I looked for the 50% retrace but it was already 100% which I think will happen a lot. Please look at my chart and maybe you like to give me your comments. Already thanks a lot. I am not intend to bombard you with my trades. Once I know it I can do it! {image} {image}
Hi Dutchpips,

That pin bar off the daily chart is not a good one to take - it isn't a classic shape for one and in fact finishes up for the day. I want to see a strong move away from SR areas - see that article link I posted earlier about SR.

On the 4hr chart of the same action below, I've drawn the low of the pin bar from the day chart. You can see the next day didn't break below the low of the pin. I'd need to see a day close below the pin bar day with a strong move down. Or a really strong pin bar formed.

At the moment I've no idea what will happen with this pair (no one does), If it breaks through resistance I'll be looking for a retrace entry to that area.

Cheers
Attached Image(s) (click to enlarge)
Click to Enlarge Name: gbpcad day.PNG Size: 23 KB
Click to Enlarge Name: gbpcad 4hr.PNG Size: 27 KB
  • #87
  • Aug 4, 2015 6:01pm Aug 4, 2015 6:01pm
Something I just thought about. I didn't explain something else relating to that gbpcad daily chart.

I realised that when I looked at it I haven't explained fully what I was looking at. If you look at the chart, part of the reason why I didn't like the pin bar was the price action leading up to it.

If you see the few days before, price had just run sideways for some time with no hint that it was going to fall. Then it moved up above the high/resistance areas of that consolidation piece with a strong candle upwards.

It's the upwards momentum, plus the lack of price pushing down etc for the lead up to this point - that's why I don't like the look of a short yet.

It's hard to teach or explain this sort of stuff and really only comes about through time in front of the charts looking for setups, what price does before hitting SR areas.

Cheers
  • #88
  • Aug 4, 2015 8:51pm Aug 4, 2015 8:51pm
Hi Pharley,

Love the thread.

Really want to learn more about S&R, if you had to pick, what one book / DVD or learning material would you recommend ?
  • #89
  • Aug 4, 2015 8:53pm Aug 4, 2015 8:53pm
hi parley, would like to enquire.. for eg today's EUR/USD, the closing of the 4hr candle at 2000-0000 was lower than the lowest low of the previous day, following the rules, we can open up a trade at the start of the 4hr candle at 0000-0400.. is that correct?

also, assuming that we carry on for this particular trade, where the start of the 4hr candle at 0000 for today is somewhere in between the 50% and 100% retracements(zooming in after fibo placed on daily TF), how and where do I locate the 90% TP level?
  • #90
  • Aug 4, 2015 9:20pm Aug 4, 2015 9:20pm
Looking at the 4hr chart on eurusd........couldn't resist....looking at price penetrate (slice) right thru the previous daily low.....shorted at 1.0878....target is currently at 1.0830
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSDecnH4.png Size: 51 KB
  • #91
  • Aug 5, 2015 1:44am Aug 5, 2015 1:44am
Good and simple method.But I need some live examples to learn real time trading.
  • #92
  • Aug 5, 2015 3:04am Aug 5, 2015 3:04am
Quoting kaharris95
Hi Pharley, Love the thread. Really want to learn more about S&R, if you had to pick, what one book / DVD or learning material would you recommend ?
Hi kaharris95,

I have no idea about the books/cd's side of things. I've never bought one. All I've done is find good PA websites with good articles and read them. Plus read snippets of advice from pro/experienced traders.

Then I've tried to use what I learned - getting away from indicators, practising finding and drawing SR areas, learning about candles, channels, retracements etc.

Have a look at this one on SR though - it's very good:

http://beatfxmarket.com/forex-suppor...istance-lines/

Cheers
  • #93
  • Aug 5, 2015 3:11am Aug 5, 2015 3:11am
Quoting menpowerup
hi parley, would like to enquire.. for eg today's EUR/USD, the closing of the 4hr candle at 2000-0000 was lower than the lowest low of the previous day, following the rules, we can open up a trade at the start of the 4hr candle at 0000-0400.. is that correct? also, assuming that we carry on for this particular trade, where the start of the 4hr candle at 0000 for today is somewhere in between the 50% and 100% retracements(zooming in after fibo placed on daily TF), how and where do I locate the 90% TP level?
Hi menpowerup,

There aren't any rules as such - well, I don't consider them to be rules. These are just guidelines on how I trade.

Re the eurusd - I'm not sure I'd be trading short as price is very close to a support area (see chart below). I'll be waiting to see if it bounces up from support, or crashed through that and retraces for an entry.

Cheers
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd daily 20150805.PNG Size: 38 KB
  • #94
  • Aug 5, 2015 3:30am Aug 5, 2015 3:30am
Just out of interest, don't just limit yourself to one way of trading. There is no right, one way to trade. I really like trading rising or falling channels as well. I posted earlier on another thread about channels so I thought I'd share a pic on here of usdchf. It's been in a good channel for a while which can be seen on a 4hr chart below. For this channel I've been looking at taking entries off the 1hr chart. That's because the runs up are 150 to 200 pips, so the 1hr charts can give me some more opportunities.

Don't forget that trading off channel support is just the same as trading off a horizontal support - it's just on a slope. You'll still find pin bars, 50% retracements, minor SR areas - all the good stuff to check out for further entries. The 1hr chart is also shown below, but go check it out on your charts and look for potential entries and where stops would be and targets.

Cheers
Attached Image(s) (click to enlarge)
Click to Enlarge Name: usdchf 4hr.PNG Size: 42 KB
Click to Enlarge Name: usdchf 1hr.PNG Size: 42 KB
  • #95
  • Aug 5, 2015 4:19am Aug 5, 2015 4:19am
Interesting trades on the usdchf:
Attached Image (click to enlarge)
Click to Enlarge Name: usdchf 20150805.PNG Size: 93 KB
  • #96
  • Aug 5, 2015 4:31am Aug 5, 2015 4:31am
Those are from Support area coming back up, a 50% retrace, an inside bar and not really sure why I entered the last one! However, risk is minimal now and I've got my eye on a higher resistance level than the channel.
  • #97
  • Aug 5, 2015 5:02am Aug 5, 2015 5:02am
Quoting jgadefelth
How many trades do you get a regular mounth ? on every run you get in percent about 10 percent account increase ? How many pairs do you trade ? I find the answear to this question in your thread gbpjpy eurjpy usdjpy gbpusd eurusd audusd usdchf gbpchf euraud gbpaud eurnzd gbpnzd nzdusd Best regards
Sorry mate - I didn't see that post - you were right!

Number of trades varies - most of the time I'm not trading at all, just waiting for price to get to a decent SR area. If it looks like I'm waiting a while, I'll look for some other things like channels (plus flags etc). But don't often trade them unless they're really good and strong.

Yes I would look across all those pairs plus probably a couple more. Normally when I'm trading I only trade 1 pair though. I just don't like upping the risk at all.
  • #98
  • Aug 5, 2015 5:05am Aug 5, 2015 5:05am
Someone sent me an email about my platforms and why they look different.

In fact I have to do a bit of housekeeping on account and platforms - so a good reminder!

Yes I use both MT4 and cTrader and they look quite different from one another. My complications don't stop there though - I have Oanda accounts, both MT4 and their own platform, Pepperstone (both mt4 and ctrader) and IC markets (both mt4 and ctrader), plus another one I don't use much any more.

I've been trying out the ctrader for a bit, and also comparing brokers with ctrader and mt4. I think I've come to the conclusion I like ctrader now, but have kept mt4 open in a few places as well.

Before my memory starts going, I'll have to do a bit of culling and rationalise!!
  • #99
  • Aug 5, 2015 5:09am Aug 5, 2015 5:09am
Quoting pharley
{quote} Sorry mate - I didn't see that post - you were right! Number of trades varies - most of the time I'm not trading at all, just waiting for price to get to a decent SR area. If it looks like I'm waiting a while, I'll look for some other things like channels (plus flags etc). But don't often trade them unless they're really good and strong. Yes I would look across all those pairs plus probably a couple more. Normally when I'm trading I only trade 1 pair though. I just don't like upping the risk at all.

Hi Thanks for your answear. so at a normal week or mounth how many trades, runs do you get and am not sure about when you add trades on the same run how many percent gain on account can one get this way ?

Best regards
  • #100
  • Aug 5, 2015 5:18am Aug 5, 2015 5:18am
Quoting jgadefelth
{quote} Hi Thanks for your answear. so at a normal week or mounth how many trades, runs do you get and am not sure about when you add trades on the same run how many percent gain on account can one get this way ? Best regards
Hi again,

Probably about 1 trade run a week on average I would say. But that could be short trades - a day or so in length, or trades that go on for weeks, or somewhere in between.

Mmmm, without trying to complicate the thread, I do enter multiple times at the same time, i.e. place 2 or 3 trades at the same place or very close, either manually or automatically. But think of just entering once initially, then later entering again. I normally add to trades when PA tells me I can - I'm just looking for PA setups to enter again - nothing complicated. Then I try to get all my stops at 1 position as price goes in my favour. Hopefully I can get all my trades at BE or better - as price moves up then my stops move up thereby locking in profit as I go. That way, only the current trade is at risk - I try to always ensure my risk levels remains the same.

I don't generally go on a % of risk. I prefer to use a $ risk Having said that I try to keep it reasonable at around the 4% to 7% level. I don't think I've traded with 10% risk.

Cheers
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