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Pharley Simple system - Get your levels right for trading S/R

  • #141
  • Jun 5, 2016 8:34pm Jun 5, 2016 8:34pm
Quoting saruhn
{quote} Haven't decided which pairs yet, however i just want to limit myself so i dont get lost in 20+ pairs. I sometimes enter a bunch of different pairs and when the P/L starts to fluctuate i get lost. I make mistakes that I wouldn't normally make due to over burdening myself. Last week i was making a profit however i was entering trades too late. The red arrows on the USDJPY shows where i should've entered. 230 pips usdjpy 2 trades; and 160 on gbpaud, however i dont really know if the gbpaud entry qualifies as this technique. But it was a really...
Hi Saruhn,

That's terrific mate - well done. I like that it was clear cut and no stress trade! Don't worry too much about entering a bit late - you're getting the hang of it and the more you do, the better you will be at it.

Cheers
Pharley
  • #142
  • Jun 5, 2016 8:39pm Jun 5, 2016 8:39pm
Quoting jgadefelth
Hi What is the edge here, the trend i think and we find it by a 50sma ? Best regards
Hi jgadefelth,

The edge is in taking simple, uncomplicated price action trades. Yes you can use the 50SMA if you wish - most of the time I don't. I use my eyes to tell me if it's an uptrend or downtrend. (higher highs, higher lows etc). A horizontal line is all that's needed. I know that sounds too simple, but it's true.

Remember, many people overcomplicate their charts - some so bad I can't even see the price, which is crazy. We're trading the price - we make profits from the price movement. If I can't see price for indicators stuck all over the place, I don't even look at the chart. Drives me crazy.

Cheers
Pharley
  • #143
  • Jun 5, 2016 8:56pm Jun 5, 2016 8:56pm
Hi all,

I've received quite a few good emails about success using this method. I'm not really surprised as when you look at the charts, you can see it working more times than not.

One point that's been raised a couple of times is being able to see these real time as they form and some peoples difficulty with that.

This is one of the most common problems - being able to see stuff real time, and I have a theory as to why that happens.

I suspect the main reason why people can't see these things develop in real time is because they're sat in front of the charts all the time looking for them. I know that sounds a bit crazy, but bear with me.

When you sit in front of charts looking for set ups all the time, you'll change between timeframes, change between pairs, get distracted by the dog, cat, going to make coffee/tea, going to the toilet, shops, whatever.

Here's what to do to get rid of that problem and start seeing set ups as they form -

Stop looking at the charts all the time. What I mean by that is do the following - If you're trading off the 1 hour charts, set your mobile/watch/online alarm to go off 5 minutes before the close of the hourly candle.

When it goes off, then open your charts and look for the close and potential set up when the new candle opens. Don't be distracted by what happens during the hour of the candle - you're ONLY interested where it closes. Go do something else during that time and don't look at charts.

Draw any lines/areas required, set any limit orders required, reset the alarm clock, then shut it down and walk away for 1 hour. (If you trade 4 hr charts, then set everything for the 4 hr candle close).

If you're not having success, do the above - plus only look at a maximum of 4 charts (actually, preferably 1 or 2 charts to start). This cuts down the confusion, cuts down the chance of missing a trade and helps you focus.

If you do this, you get in to the habit of 1) not sitting in front of charts all day; 2) will be able to see many more set ups; 3) become a more balanced trader - life/work balance.

The method I describe here should be VERY easy to see. E.g Once you gave that candle/bar in a down trend that doesn't produce a new low, draw that line in as minor support. Are they easy to spot with hindsight? Yes of course - but if they are so easy to spot, why not spot them real time? It's because of overlooking at charts. Just give it a go - set the alarm for 5 mins before closing and just look at the closing time. You will see set ups as they happen.

This will work on any set up - remember you've read a thousand times - wait for the close of the candle. Terrific - so why sit in front of charts waiting for that? If you do sit and wait, you'll get distracted and miss the close, you'll miss the trades.

Hope that helps

Cheers
Pharley
  • #144
  • Jun 5, 2016 9:05pm Jun 5, 2016 9:05pm
Here is a 5 min chart from nzdusd this morning. I don't trade 5 min charts, but someone probably does!

Also a 15 min audusd chart


Cheers
Pharley
Attached Image(s) (click to enlarge)
Click to Enlarge Name: nzdusd 5m.PNG Size: 52 KB
Click to Enlarge Name: audusd 15m.PNG Size: 37 KB
  • #145
  • Jun 5, 2016 9:52pm Jun 5, 2016 9:52pm
Another quick 15 min chart trade.
Attached Image (click to enlarge)
Click to Enlarge Name: euraud 15m long.PNG Size: 41 KB
  • #146
  • Jun 5, 2016 11:39pm Jun 5, 2016 11:39pm
Hello pharley, I have read thro' your posts a couple of times and I am impressed with your approach ! I have used your idea's to polish my own, which are a very close parallel. I have been searching for clues on setting SR's for some time now and have tried testing levels selected from MN, W, D, for the major levels, even use different colours for each TF. I had to conclude that levels on MN were a waste of time ( for me anyway ). I now use W for major levels drawn full length and white ( for W ) and short blue levels in D and H4 charts for the "local" or minor levels. I have yet to decide on using the H/L's for levels or the candle CLOSE. I tend to favor the CLOSE. Example pic attached. As a 78 yo I don't get into posting very much but I do read a great deal. I think that makes me a "lurker" ?

I have to congratulate you also for the magnificent thread dealing with the SR levels and for sharing your trading system so clearly, no confusing pics or dialog, so nice to read. Marvelous clarity and thank you so much.
Attached Image (click to enlarge)
Click to Enlarge Name: XAUUSD H4.jpg Size: 32 KB
Good Trading to All ---- fairwind
  • #147
  • Jun 6, 2016 1:54am Jun 6, 2016 1:54am
Quoting pharley
Another quick 15 min chart trade. {image}
Dear Pharley,

thank you very much for you effort, totally subscribied. Is it possible to show more trades and pics from 4H TF because there are people like me that haven´t much time during day to watch cahrts every hour.

I guess these S/R levels appears on this TF too.

Thank you very much.
  • #148
  • Jun 6, 2016 2:16am Jun 6, 2016 2:16am
Quoting pharley
{quote} Hi Rub, Yes it can be a tricky spotting anything in real time. Here's something I look for that may help. See pic below - it's a 1 hour, but if you look at that chart on the daily you will see gbpaud has come away from a resistance area and is falling. Now when to enter? Well I know from the daily and 4 hr charts that it's in a bear trend. Looking at the picture we have a nice retrace upwards, then price reverses. Look at the bear bar I marked and drew a minor support at the bottom of it. Not long after price makes a new low and closes below...

Is this about where you're talking about? A sell stop where I've marked with the yellow lines with a stop about 1.9935.
Attached Image (click to enlarge)
Click to Enlarge Name: chart.png Size: 24 KB
  • #149
  • Jun 6, 2016 3:00am Jun 6, 2016 3:00am
Quoting fairwind
Hello pharley, I have read thro' your posts a couple of times and I am impressed with your approach ! I have used your idea's to polish my own, which are a very close parallel. I have been searching for clues on setting SR's for some time now and have tried testing levels selected from MN, W, D, for the major levels, even use different colours for each TF. I had to conclude that levels on MN were a waste of time ( for me anyway ). I now use W for major levels drawn full length and white ( for W ) and short blue levels in D and H4 charts for the...
Hi Fairwind,

Many thanks for your kind words. I'm glad you're getting something out of it and yes, I've tried to be as simple as possible with it (the wife tells me I'm simple!).

Your approach seems sound - anything to do with identifying these important levels and trading off them tends to work well as long as sounds money mgt and risk mgt are employed.

A lurker?? Oh, I don't mind a few lurkers mate. Besides, you're in WA which so that's good!

Cheers
Pharley
  • #150
  • Jun 6, 2016 3:27am Jun 6, 2016 3:27am
Quoting Mhons
{quote} Dear Pharley, thank you very much for you effort, totally subscribied. Is it possible to show more trades and pics from 4H TF because there are people like me that havent much time during day to watch cahrts every hour. I guess these S/R levels appears on this TF too. Thank you very much.
Hi Mhons,

Actually I just took a trade off the 4hr timeframe, but it's not this method. Happy to show it anyway. First pic - audusd 4hr. I too the long on the break of the nice looking pin-ish looking bar. Trend is up. TP is just a placeholder - looking at the daily chart, I may revise that TP level upwards. I'll see how it goes.
Attached Image (click to enlarge)
Click to Enlarge Name: audusd 4hrPNG.PNG Size: 46 KB
  • #151
  • Edited 3:45am Jun 6, 2016 3:30am | Edited 3:45am
Some other 4hr charts -

2nd one down is interesting - the gbpjpy. The red arrow trade would probably have lost. The same could be said of the trade at the yellow arrow. However, as pound/yen moves so much, price actually went up at this point by 60+pips. If I'm up 60 pips I can tell you that for sure I move my stop to BE + a few pips!

(sorry - had to edit as I'd put the wrong chart in)

Cheers
Pharley
Attached Image(s) (click to enlarge)
Click to Enlarge Name: gbpaud 4hr.PNG Size: 35 KB
Click to Enlarge Name: gbpjpy 4hr.PNG Size: 42 KB
Click to Enlarge Name: gbpusd 4hr.PNG Size: 41 KB
Click to Enlarge Name: audjpy 4hr.PNG Size: 35 KB
  • #152
  • Jun 6, 2016 3:38am Jun 6, 2016 3:38am
Quoting Rub
{quote} Is this about where you're talking about? A sell stop where I've marked with the yellow lines with a stop about 1.9935. {image}
Oh my apologies mate - I forgot to attach a pic of what I was looking at - here it is below.
Attached Image (click to enlarge)
Click to Enlarge Name: gbpaud1.PNG Size: 30 KB
  • #153
  • Jun 6, 2016 7:10am Jun 6, 2016 7:10am
Trade taken earlier this month - USDJPY. I think Ramjet is interested to see this one. Breakthrough and retrace again. Nice and simple.

Cheers
Pharley
Attached Image (click to enlarge)
Click to Enlarge Name: USDJPY trade.PNG Size: 38 KB
  • #154
  • Jun 6, 2016 7:20am Jun 6, 2016 7:20am
Quoting pharley
Trade taken earlier this month - USDJPY. I think Ramjet is interested to see this one. Breakthrough and retrace again. Nice and simple. Cheers Pharley {image}

LOL, can you stop teasing us with these simple clean trades I'm starting to dream of too much money in my account
  • #155
  • Jun 6, 2016 7:31am Jun 6, 2016 7:31am
Hi ya Pharley..

With the stops for these trades how would you place them?
I'm thinking the normal idea you would do would be at the swing low but being a 4Hr TF could be a ways away or is it a case of your dropping to the 1Hr TF and finding a swing low for a tighter stop??
Attached Image (click to enlarge)
Click to Enlarge Name: Stops.png Size: 30 KB
  • #156
  • Jun 6, 2016 7:43am Jun 6, 2016 7:43am
Quoting pharley
{quote} Hi Mhons, Actually I just took a trade off the 4hr timeframe, but it's not this method. Happy to show it anyway. First pic - audusd 4hr. I too the long on the break of the nice looking pin-ish looking bar. Trend is up. TP is just a placeholder - looking at the daily chart, I may revise that TP level upwards. I'll see how it goes. {image}
I draw few lines at AUD/USD H1 TF, I guess for newbies is really good to use direction EMA 50 and enter after break, close and retest of broke minor S/R zones, also is good to consider S/R zones from bigger TF like D1 W1 and trend on these timeframes, right?

Attached Image (click to enlarge)
Click to Enlarge Name: AUDUSDH1.png Size: 49 KB
  • #157
  • Jun 6, 2016 7:43am Jun 6, 2016 7:43am
Quoting Ramjet
Hi ya Pharley.. With the stops for these trades how would you place them? I'm thinking the normal idea you would do would be at the swing low but being a 4Hr TF could be a ways away or is it a case of your dropping to the 1Hr TF and finding a swing low for a tighter stop?? {image}

Hi there,

Yes you're more or less right with those SL placements.

The first one is a no brainer - easy to spot. The others - yes I like the stop under the bar that actually crosses the S/R area. Go for at least 1:1 and preferably more (I do like 1:2 and 1:3 despite what's said earlier in the thread - trying to keep this simple, but it depends on the type of set up I'm using).

Sometimes PA lends itself to a good placement of a SL. Sometimes you have to guess, say 40 pips or 50 pips on a good moving pair and less with less volatility (use ATR? I never do but others might do). The key thing is the money and risk mgt. Get that right with each trade -risk mgt is the key to longevity in trading.

The charts and PA are always tempting mate - just got to know when to say no as well as yes, when to pile in, when to hold back. One good trade like that a month/week is all you need!

Cheers
Pharley
  • #158
  • Jun 6, 2016 7:49am Jun 6, 2016 7:49am
Quoting Mhons
{quote} I draw few lines at AUD/USD H1 TF, I guess for newbies is really good to use direction EMA 50 and enter after break, close and retest of broke minor S/R zones, also is good to consider S/R zones from bigger TF like D1 W1 and trend on these timeframes, right? {image}
Hi Mhons,

Yes your description is correct, but don't get hung up too much on the SMA50. It can be an ok indicator of direction, but also trust your eyes to see the higher highs, higher lows etc to get the trend. Drawing in the weekly/daily major S/R is a key element because you can see where price is and what it's doing in relation to that market structure.

Also, don't draw too many lines on there from the 1 hr - try keeping it as clean as possible and just concentrate on the minor SR areas that are within the immediate vicinity of current price. You want one minor S/R the price is creating and another as a target (or major S/R). So just a couple of lines should be fine to work with. Draw your major lines/areas with a different colour or different line type, but be consistent across all your charts with it.

Hope that helps

Cheers
Pharley
  • #159
  • Jun 6, 2016 7:52am Jun 6, 2016 7:52am
Quoting pharley
{quote} The charts and PA are always tempting mate - just got to know when to say no as well as yes, when to pile in, when to hold back. I good trade like that a month/week is all you need! Cheers Pharley
cheers thanks for that

yes, I know what you mean can get a bit to excited about a flow of good trades ego goes to your head and bam! there goes the account!..

Yes the potential of 1 or 2 good trades a week compounded over a month can be great!
  • #160
  • Jun 6, 2016 8:58am Jun 6, 2016 8:58am
Hey Pharley,

I read thru all 8 pages and got rid of most indicators and work only on lines and i would like to say, it is much better. Throw in some demo trades and got 3 out of 4 trades in the blue, the one that was red was a mistake. Oh yeah! This looks like how it should be traded, with confidence.

Thank you bro, for once i can see clearly and no indicators to lag the systems.

Cheers mate!
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