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Market Structure, Support and Resistance

  • #21
  • May 8, 2016 5:20am May 8, 2016 5:20am
Quoting swTrue
{quote} Hey Focus, Check out my response to Juisen above as it relates to your question. Also, my win ratio is about 85%, so even if my R/R is 2/1, worst case, I'm still coming out ahead. But again, it's a dynamic stop, so average R/R is about 1/1 which is great at an 85% win rate. Risk/Rewards is hugely misunderstood and miss used...or maybe I should say over emphasized. And I'm talking about R/R, not money management, money management can't be over emphasized. I could snap my fingers and change my R/R to 1/3, but my win rate goes down to 50%....
You know what, you are right about r/r.. No r/r is right or wrong.. I guess, I don't personally like that idea of losing one time and then it take 3 trades to get back to break even. Plus i don't think I ever found a strategy that gave me 85-90% win rate..

What support & resistance are you using? Meaning, how are you drawing your lines? Is it from the monthly? Weekly? Daily? If so, explain to me how or why do you consider that support & resistance..
  • #22
  • May 8, 2016 6:43pm May 8, 2016 6:43pm
Hey Focus,

Like I said previously, WORST case you're at 2/1 if you leave your stop at the emergency placement, but most trades you're closer to 1/1.

I'd probably draw SUP/RES like a lot of traders, but probably look at it different or give certain levels different values. If shorts are triggered by structure change I'm looking to get in on a pullback where sellers came in before and vice versa for buys. Often these levels will coincide with where other traders would call SUP/RES, levels that flip back and forth.

Support and resistance is powerful. Market structure is powerful. Combine these simple and over looked aspects of trading and you can be deadly accurate.

Let me know if this helps.

Seth
  • #23
  • May 8, 2016 6:50pm May 8, 2016 6:50pm
After the market reacts from an expected level if the following candles don't close higher/lower than the created/potential swing hitting it again from a deeper pull back is valid. Here are a couple pending orders that what I'm talking about.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EURMXNDaily1.png Size: 50 KB
Click to Enlarge Name: GBPCADDaily1.png Size: 46 KB
Click to Enlarge Name: EURZARDaily1.png Size: 50 KB
  • #24
  • May 9, 2016 3:37am May 9, 2016 3:37am
just read your journal and with your thought process and your charts simply tells me that you are a seasoned trader. I really appreciate of what i am seeing on your charts and showing your mindset on your trades or set ups.

a question if you don't mind sir, do you only uses key support and resistance level to call a trade or do you also do candle interpretation? are you also using lower time frame? what other filters you usually use to confirm a bias and take a position?

lastly, when you mention market structure, do you mean chart pattern here? if not, would you be kind enough to enlighten me about market structure?

thanks.
  • #25
  • May 9, 2016 5:28am May 9, 2016 5:28am
Tell me these levels don't have value!

EUR/ZAR was front run, meaning buyers were jumping in before the level so not to miss the move. I always front run a little but, but missed this by a few pips.

GBP/ZAR, not sure what happened on this, my entry was perfect. market even dropped below my entry level. Spreads must have been drastically widened due to some minor news which didn't allow me to get filled.

Now that the market has reacted off of these levels these orders will be canceled. The trade is over. No more trades will be taken until the market structure changes to sells or it consolidates some, stochastic resets and longs are triggered again.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EURZARDaily2.png Size: 51 KB
Click to Enlarge Name: GBPZARDaily2.png Size: 49 KB
  • #26
  • Edited 10:39am May 9, 2016 8:48am | Edited 10:39am
Quoting tradeur
just read your journal and with your thought process and your charts simply tells me that you are a seasoned trader. I really appreciate of what i am seeing on your charts and showing your mindset on your trades or set ups. a question if you don't mind sir, do you only uses key support and resistance level to call a trade or do you also do candle interpretation? are you also using lower time frame? what other filters you usually use to confirm a bias and take a position? lastly, when you mention market structure, do you mean chart pattern here?...
Appreciate it Tradeur.

I studied price action pretty extensively, the candle formations you're talking about. And while they do offer great confirmation that price is respecting a level I find that waiting for the confirmation either gets you in too late or keeps you out of too many trades. That's how any sort of confirmation is, or should be, typically you'll sacrifice a better entry by waiting for confirmation, but it's a double edged sword, confirmation can keep you out of a losing trade as well.

As far as time frames everything is based on the daily. Nothing wrong with looking at multiple time frames but keeping it simple is key. Sometimes I will drop down to the 4HR to see if a level was respected recently. Say a level hasn't been revisited for a month and the last days bar closed right through it, well looking just at the daily it may look like there was no respect, but if you drop down you may see a 4HR reacted to the level and THEN pushed through it. This shows the level has been confirmed.Hope this helps.Seth
  • #27
  • May 9, 2016 2:44pm May 9, 2016 2:44pm
Trade Update: USD/TRY Target Hit. Aggressive entry at BE.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: USDTRYDaily.png Size: 57 KB
Click to Enlarge Name: USDTRYDaily1.png Size: 56 KB
  • #28
  • May 9, 2016 2:47pm May 9, 2016 2:47pm
Update on AUDCHF and AUDJPY Runners.

For runners stop remains at BE until a new low/high is created by a candle close. As marked on the charts the swing low on both trades was taken out so stop is moved about that swing high, market structure trailing stop.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: AUDCHFDaily1.png Size: 67 KB
Click to Enlarge Name: AUDJPYDaily.png Size: 59 KB
  • #29
  • May 9, 2016 2:50pm May 9, 2016 2:50pm
Quoting tradeur
just read your journal and with your thought process and your charts simply tells me that you are a seasoned trader. I really appreciate of what i am seeing on your charts and showing your mindset on your trades or set ups. a question if you don't mind sir, do you only uses key support and resistance level to call a trade or do you also do candle interpretation? are you also using lower time frame? what other filters you usually use to confirm a bias and take a position? lastly, when you mention market structure, do you mean chart pattern here?...
Tradeur

Sorry, I forgot to answer your question about market structure. I'm pretty sure you already know what it is, it's one of the first elements of trading you learn pretty much anywhere. It's also called the Dow Theory, higher highs higher lows = uptrend, low lows lower highs = down trend. This gives us the temporary direction of the market.
  • #30
  • May 9, 2016 3:04pm May 9, 2016 3:04pm
Quoting swTrue
After the market reacts from an expected level if the following candles don't close higher/lower than the created/potential swing hitting it again from a deeper pull back is valid. Here are a couple pending orders that what I'm talking about. {image} {image} {image}

EURMXN has closed above the previous swing high, so that order is now canceled.

As I showed this morning EURZAR and GBPZAR both reacted perfectly off those levels, I just missed one and the other the spread was too wide at the time.

As I stated this morning since candles hadn't closed above the previous highs taking another shot from a deeper pull back was valid. The deeper pull back has happened, entry was missed, although these candles didn't close above the previous swing high my orders are now canceled as the market already did what it should have from these levels.
  • #31
  • May 9, 2016 3:05pm May 9, 2016 3:05pm
GBPCAD order is still in play as that market just consolidated today. We'll see if we get a fill on this.
  • #32
  • May 9, 2016 3:17pm May 9, 2016 3:17pm
NZDUSD shorts are triggered with swing low being taken out. Stochastic on board below 50. Now we sell where sellers were before.

As I've said in previous posts sometimes I'll have a couple entry levels, I see an area where the market may sell off before it gets to my order BUT this pair has been pretty choppy the last couple months so I'm going to stick with just the conservative entry.
Attached Image (click to enlarge)
Click to Enlarge Name: NZDUSDDaily.png Size: 45 KB
  • #33
  • May 9, 2016 5:25pm May 9, 2016 5:25pm
Quoting swTrue
NZDUSD shorts are triggered with swing low being taken out. Stochastic on board below 50. Now we sell where sellers were before. As I've said in previous posts sometimes I'll have a couple entry levels, I see an area where the market may sell off before it gets to my order BUT this pair has been pretty choppy the last couple months so I'm going to stick with just the conservative entry. {image}
Kind Sir, would you please review my chart analysis for GBPJPY - my thought process is:

price has clearly taken recent key support area - that made me think a good level for price to re-test before continuing north.

will place stop loss about 10-20 pips below the previous candle's low.

profit target will be placed near or around the area of previous swing high.

please share me your thought of this... just looking for additional bias confirmation here...


Attached Image (click to enlarge)
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Attached Image (click to enlarge)
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cheers
  • #34
  • May 9, 2016 6:15pm May 9, 2016 6:15pm
Quoting tradeur
{quote} Kind Sir, would you please review my chart analysis for GBPJPY - my thought process is: price has clearly taken recent key support area - that made me think a good level for price to re-test before continuing north. will place stop loss about 10-20 pips below the previous candle's low. profit target will be placed near or around the area of previous swing high. please share me your thought of this... just looking for additional bias confirmation here... {image} {image} cheers
Tradeur - I can see what you're looking at, buyers came in there around the 23rd of February. But this would be a trade I would be looking to take as market structure is down so shorts would still be in play. Not saying it's not going to work out and technically that level should be respected but not a trade I'd be looking to take.
  • #35
  • May 9, 2016 6:20pm May 9, 2016 6:20pm
Quoting swTrue
{quote} Tradeur - I can see what you're looking at, buyers came in there around the 23rd of February. But this would be a trade I would be looking to take as market structure is down so shorts would still be in play. Not saying it's not going to work out and technically that level should be respected but not a trade I'd be looking to take.

i respect your view Sir and so agree with you too. I am very bearish with this pair... just challenging my stupid and crazy brain shouting a retrace... but again i could be wrong

thanks
  • #36
  • May 10, 2016 5:22am May 10, 2016 5:22am
Quoting swTrue
Trade Update: USD/TRY Target Hit. Aggressive entry at BE. {image} {image}
USDTRY runner taken out at BE.

Unfortunately MT4 won't allow partial target placement, so unless I'm at the computer I can't close out a partial position. On this trade I would have closed out 3/4s of the conservative position at my placed target as well as closed out my aggressive entry at a small win. My runner would have been moved to BE at the conservative entry which would have given the market some room to move.
  • #37
  • May 10, 2016 6:24pm May 10, 2016 6:24pm
Both EURGBP and EURCAD failed on a candle close higher, so taking another long at a deeper retrace is valid.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EURCADDaily1.png Size: 51 KB
Click to Enlarge Name: EURGBPDaily.png Size: 45 KB
  • #38
  • May 10, 2016 6:26pm May 10, 2016 6:26pm
Buy order on USDCNH
Attached Image (click to enlarge)
Click to Enlarge Name: USDCNHDaily.png Size: 44 KB
  • #39
  • May 10, 2016 6:27pm May 10, 2016 6:27pm
GBPCAD buy order at a deeper retrace level still valid, no new candle close high was made.
  • #40
  • May 11, 2016 5:14am May 11, 2016 5:14am
USDPLN is still hanging in there, expected a stop on this one but sellers came in hard...we'll see. Even with a loss on this one that's one loser, 18 winners and 3 break evens.
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