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

  • #341
  • Jun 16, 2016 3:53pm Jun 16, 2016 3:53pm
Quoting kingofkongye
Great thread, Pharley! Thank you so much for your time and effort. One question I have, when you stack orders to trade from one to the next daily SR level, what will you do if a order gets stopped out? I.E. you are 3 orders deep, and all your orders get taken out with the stoploss of the last order, as you always put all your SLs in one place - will you try to get in again, or is the run dead for you? Also, do you need any price action confirmation on the D1 like Pinbars or sth like that? Or do you watch price approach SR on H1, and see if you get...
Hi King,

Yes I will try to get in again when I see price starting to move in the trend direction again - IF there is room available before price gets to major S/R areas.

Regarding certain bars on daily TF - yes I do look for those as well and will trade them. The method described here is only 1 facet of how I trade. Things like pin bars (or other PA candle set ups) at S/R areas are things I'm always looking for. If you think about it, when price is at a S/R area, there has to be a setup (for me anyway) that I can see before I enter. Many times at major S/R I will use a 50% retracement set up to get in the first trade, then add to it with other trades based on other set ups, one of them being the method described here. You have to develop a toolbox that contains different ways to trade, of set ups. Not many - only 2 to 4 will do - keep it simple.

Regarding the 1 hour chart - typically I like watching the 4hr chart when price gets t major S/R areas. It's a better measure of what may happen with price. If I'm entering (adding to already taken positions) after the first one, then I'll use this method. Most often my first position will be taken using a 4hr chart and many times it's a 50% retrace of PA minor swings.

Cheers
Pharley
  • #342
  • Jun 16, 2016 3:59pm Jun 16, 2016 3:59pm
Quoting kingofkongye
Sorry, and when you stack your orders - are the 3% in relation to the floating P&L or do you always relate to the balance before you entered your first order? Thank you so much.
I always try to keep risk around the 3% to 6% area, no matter how many trades I'm in. But that's only a guide - I'm much more comfortable thinking about $ risk rather than %. That's because of this - I have an amount of money in my trading pot, but that's not all the money I have. Lets make the maths easy for me - If I have $100,000 in the bank and $10,000 in my trading pot, I'm only trading with 10% of my funds. Now if I risk 20% of that pot - $2,000, that seems a lot, but it's only 2% of my total funds so I'm happy to risk that amount.

Hope that helps

Cheers
Pharley
  • #343
  • Jun 16, 2016 4:02pm Jun 16, 2016 4:02pm
Quoting pharley
{quote} I always try to keep risk around the 3% to 6% area, no matter how many trades I'm in. But that's only a guide - I'm much more comfortable thinking about $ risk rather than %. That's because of this - I have an amount of money in my trading pot, but that's not all the money I have. Lets make the maths easy for me - If I have $100,000 in the bank and $10,000 in my trading pot, I'm only trading with 10% of my funds. Now if I risk 20% of that pot - $2,000, that seems a lot, but it's only 2% of my total funds so I'm happy to risk that amount....
Thank you so much, mate! Helps a lot. I am intrigued by stacking orders in order to get shitloads of dope out of one move. Will try my best to see what I can do. Got some loss orders yday, my mistake.. see whether it goes better today. Have to get used to drawing those levels.
  • #344
  • Jun 16, 2016 4:08pm Jun 16, 2016 4:08pm
Quoting schrupper
Lcrude H1 short TP 4646 Hello Pharley , if something is wrong , please let me know . Thank you very much for your effort {image}
Hi Schrupper - for all your trades, try to make sure you're getting at least 1:1 risk rewards or better.

Also, remember to look at the higher daily timeframes and draw in major levels of S/R first. I can see the eurcad short was shorting into a support area. From the look of it, it may have worked out, but it's always better to have plenty of room between major S/R levels.

I'll post some more pics later today to explain a bit.

Cheers
Pharley
  • #345
  • Jun 16, 2016 4:19pm Jun 16, 2016 4:19pm
Quoting kingofkongye
{quote} Thank you so much, mate! Helps a lot. I am intrigued by stacking orders in order to get shitloads of dope out of one move. Will try my best to see what I can do. Got some loss orders yday, my mistake.. see whether it goes better today. Have to get used to drawing those levels.
Pyramiding is a valid way of really boosting your account, but you have to know what you're doing as it's all about risk management. Actually I was doing that on gold the last few days and it went very well. Gold price came down last night a bit and hit stops, but they were in front of where I'd bought - only the last trade lost, but the winners gave an overall profit of about 10% of the pot which I'm happy with.

I go in to this multiple entry area in great detail in my other thread - it shows how to mange the risk, ow to move stops up etc.

The trick is to look at weekly and daily charts - draw in the major S/R areas and trade from one to the the other, entering multiple times as you ride the price up or down. Take 90% of the move as a profit target. To do this tye of pyramiding, you need to have clear in your mind how you're going to enter (what set ups you're going to enter on). The method described here is one such method you can use.

Hope that helps - yes for sure, practice seeing those major and minor S/R levels!

Cheers
Pharley

P.S I prefer to think of it as heaps of $ rather than sh!t loads of dope!
  • #346
  • Jun 16, 2016 4:49pm Jun 16, 2016 4:49pm
Quoting pharley
{quote} Pyramiding is a valid way of really boosting your account, but you have to know what you're doing as it's all about risk management. Actually I was doing that on gold the last few days and it went very well. Gold price came down last night a bit and hit stops, but they were in front of where I'd bought - only the last trade lost, but the winners gave an overall profit of about 10% of the pot which I'm happy with. I go in to this multiple entry area in great detail in my other thread - it shows how to mange the risk, ow to move stops up etc....
Yes i am pouring over your other thread at the moment! Such interesting stuff, so powerful. Will post my pyramiding attempts here to make heaps of $ . Can you share your watchlist for today? You posted it one time and that really helped to see what you are looking for !
  • #347
  • Jun 16, 2016 4:55pm Jun 16, 2016 4:55pm
Quoting pharley
{quote} Hi Ramzam, Sorry to hear that mate. Can you post a chart of what you did and I can take a look, perhaps give some advice? Cheers Pharley
this is what i did and where i take wrong entry... because i take resistance area as breakout area.. so thought to buy and loss holding
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 45 KB
Success is a Journey Not a Destination....... kind regards ramzam
  • #348
  • Edited 8:56pm Jun 16, 2016 5:22pm | Edited 8:56pm
Hi Ramzam, I took a look at the copper charts and this is what I see for that price action.

Pic 1 is a daily chart with a couple of S/R areas marked on it. You can see you bought at or near the major turning level at resistance. After price bounces off that and southwards, we should only be looking to take shorts.

Pic 2 is a 4 hour chart of the same with resistance and support marked. What I do is measure the last movement between these major support and resistance and take 90% of that move as my target for all entries. That target is marked as a thin black line. I'm now only looking for short entries as I'm expecting price to move to the major support. There are no guarantees of course, but PA is powerful.

Pic 3 shows a 1 hour chart of same with potential entries using this method of break and retrace to minor S/R

In effect you're looking to do the following:

1) Weekly or daily chart - draw major S/R areas - the most recent;

2) Price reaches one of these. Look at where price would go to - where is the next target? Take this off the major S/R areas you've drawn. Measue 90% of that move and draw a line - that's your target for all entries. (As a side note - if price has already moved away from major S/R area, still do the analysis, and wait for the next break/retrace of minor S/R set up to enter. You may have missed some of the move but at least you'll get some);

3) Now look at how to enter your first trade. If I'm on the 4hr chart I'm looking for pins, railroads, 50% retracement etc. If I'm on the 1 hr I can use this method of break and retrace to minor S/R;

4) In this example I can see a break and retrace as the first entry. Don't go all in - take a small position. You'll make money later from multiple entries. Remember - no guarantees, so keep the lot size small in case price decides to go the other way;

5) As price moves in your favour, look for further entries - there are quite a few on this chart. Every trade has a target at the 90% line/target level;

6) As you enter another trade, move SL to the last swing high above the PA;

7) Keep entering - either same size lots or slowly increase it. Watch the risk level all the way. By the time you've entered trade 3, you're normally home free - what I mean by that is you can't lose. That's because if trade 3 loses, the gains from trade 1 and 2 outweigh the loss from trade 3. As you move in to trade 4 and trade 5, your profits really being to grow. Move ALL the stop losses you have for all trades down to the new stop loss for the new trade. I did this live in my other thread and gained about 60% of the pot in 3 days.

8) Remember to keep entering as long as the risk reward is good - at least 1:1 or more - anything less, don't enter.

So that's how you could play this one.

How many of these do you need to get in 1 month? Probably 1. But you could probably find at least 1 of these a week. You want to be looking for good trending action between major S/R areas. It's SO IMPORTANT to get the major S/R drawn and target those - well, 90% of the move (or 80% - whatever you're comfortable with).

The gains are huge and risks minimal. Have a read of my other thread if you want to see more of that type of thing.

Hope that helps,

Cheers
Pharley
Attached Image(s) (click to enlarge)
Click to Enlarge Name: copper daily.PNG Size: 78 KB
Click to Enlarge Name: copper 4h.PNG Size: 86 KB
Click to Enlarge Name: copper 1h.PNG Size: 89 KB
  • #349
  • Jun 16, 2016 8:53pm Jun 16, 2016 8:53pm
Quoting kingofkongye
{quote} Yes i am pouring over your other thread at the moment! Such interesting stuff, so powerful. Will post my pyramiding attempts here to make heaps of $ . Can you share your watchlist for today? You posted it one time and that really helped to see what you are looking for !
Hi mate - haven't had a chance to look this morning! I'll get to looking later today.

Cheers
  • #350
  • Jun 16, 2016 11:15pm Jun 16, 2016 11:15pm
oh god.... really you are opening my eyes to how see the chart....
really i will follow this way and now only i got understand... and do minimal risk trades with max reward
hearty thanks....

Quoting pharley
Hi Ramzam, I took a look at the copper charts and this is what I see for that price action. Pic 1 is a daily chart with a couple of S/R areas marked on it. You can see you bought at or near the major turning level at resistance. After price bounces off that and southwards, we should only be looking to take shorts. Pic 2 is a 4 hour chart of the same with resistance and support marked. What I do is measure the last movement between these major support and resistance and take 90% of that move as my target for all entries. That target is marked as...
Success is a Journey Not a Destination....... kind regards ramzam
  • #351
  • Jun 16, 2016 11:25pm Jun 16, 2016 11:25pm
based on this read i drawn .. is this right please tell
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 23 KB
Success is a Journey Not a Destination....... kind regards ramzam
  • #352
  • Jun 17, 2016 12:35am Jun 17, 2016 12:35am
Quoting pharley
{quote} Hi Jun, Yes I look at the higher timeframes, draw in the S/R areas, then look at where price is in relation to those. If it's hit a resistance at the top and is travelling downwards towards support, then it's a downtrend - typically it shows lower highs and lower lows with the swings. THe reverse for an upwards trend. If you zoom out on a high time frame it's easier to see the overall market structure and trend. Cheers Pharley
So to double check if i am correct. You use Weekly and Daily to draw major support and resistance lines. If recently price has been rejected on that level and is starting to produce higher high or lower lows which indicates changes in trend you start to look to entering the trade. From my understanding you use weekly and daily support as area to look into entering. And once it has started to form a change in direction on 1H chart you start to enter until the next resistance or support line?
  • #353
  • Jun 17, 2016 2:37am Jun 17, 2016 2:37am
Quoting pharley
Hi Ramzam, I took a look at the copper charts and this is what I see for that price action. Pic 1 is a daily chart with a couple of S/R areas marked on it. You can see you bought at or near the major turning level at resistance. After price bounces off that and southwards, we should only be looking to take shorts. Pic 2 is a 4 hour chart of the same with resistance and support marked. What I do is measure the last movement between these major support and resistance and take 90% of that move as my target for all entries. That target is marked as...
Dear pharley,
thank you for another clear explanation of this system. Do you think its okay to make entries on 4H TF because H1 is too fast and I cant be at screen whole day.

So approach to enter on 50% retraces of swing or after close 4H candle above yesterday high or enter after retracement to this yesteraday close?
  • #354
  • Jun 17, 2016 3:15am Jun 17, 2016 3:15am
Quoting Jun1031
{quote} So to double check if i am correct. You use Weekly and Daily to draw major support and resistance lines. If recently price has been rejected on that level and is starting to produce higher high or lower lows which indicates changes in trend you start to look to entering the trade. From my understanding you use weekly and daily support as area to look into entering. And once it has started to form a change in direction on 1H chart you start to enter until the next resistance or support line?
HI - yes that's right. But I do look at 4hr as well as 1 hr charts for entries. Particularly the 4hr for the first entry - I tends to give a clearer signal.

Cheers
Pharley
  • #355
  • Edited 3:39am Jun 17, 2016 3:18am | Edited 3:39am
Quoting Mhons
{quote} Dear pharley, thank you for another clear explanation of this system. Do you think its okay to make entries on 4H TF because H1 is too fast and I cant be at screen whole day. So approach to enter on 50% retraces of swing or after close 4H candle above yesterday high or enter after retracement to this yesteraday close?
HI Mhon - yes absolutely - I also use the 4hr. The 4hr is also terrific for 50% retracement entries - see below a couple of images.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: cadjpy 50% retrace.PNG Size: 45 KB
Click to Enlarge Name: cadjpy 50% retrace single bar.PNG Size: 37 KB
  • #356
  • Jun 17, 2016 3:29am Jun 17, 2016 3:29am
Like I mentioned earlier, you have to have a toolbox with a few different things -

1) a few different ways to enter, whether that be by continuation or reversal PA candles, retracements etc;
2) how you identify major and minor S/R areas;
3) how you will manage risk on a single trade;
4) how you will manage risk on multiple entries
5) how/where you will exit at target or exit due to PA going against you.
6) Your daily routine (checking calendar, checking S/R, checking market structure etc)
7) Trading plan - write all this stuff down when you have it sorted and refer to it;
8) Find the perfect set ups on charts and take a copy of the chart - put this in your best set ups library and refer to it often.

Just a bit of food for thought!

Cheers
Pharley
  • #357
  • Jun 17, 2016 3:33am Jun 17, 2016 3:33am
Quoting pharley
Like I mentioned earlier, you have to have a toolbox with a few different things - 1) a few different ways to enter, whether that be by continuation or reversal PA candles, retracements etc; 2) how you identify major and minor S/R areas; 3) how you will manage risk on a single trade; 4) how you will manage risk on multiple entries 5) how/where you will exit at target or exit due to PA going against you. 6) Your daily routine (checking calendar, checking S/R, checking market structure etc) 7) Trading plan - write all this stuff down when you have...
Great input pharley! I assume you check your SR once peer week MAX. as on the daily and weekly well it takes some time for new SR to develop..
  • #358
  • Jun 17, 2016 3:38am Jun 17, 2016 3:38am
Quoting kingofkongye
{quote} Great input pharley! I assume you check your SR once peer week MAX. as on the daily and weekly well it takes some time for new SR to develop..
Hi mate - yes, I normally check the major S/R areas on a Sunday and draw/redraw ready for the week. Doesn't take too long.

Cheers
  • #359
  • Jun 17, 2016 3:49am Jun 17, 2016 3:49am
Hi Pharley! Thanks for your previous reply. I just consumed your latest food of thought and got some questions again.

I wonder if there is a possibility for me to know your daily trading routine? how it looks like?

Also, do you use any special software (edgewonk, etc), blog or website to record your trading? something like a private journal?

Or you actually just store it in a folder consist of charts with marking?

Cheers
Lin
Simplicity is the key to brilliance
  • #360
  • Jun 17, 2016 4:58am Jun 17, 2016 4:58am
Quoting LinFX
Hi Pharley! Thanks for your previous reply. I just consumed your latest food of thought and got some questions again. I wonder if there is a possibility for me to know your daily trading routine? how it looks like? Also, do you use any special software (edgewonk, etc), blog or website to record your trading? something like a private journal? Or you actually just store it in a folder consist of charts with marking? Cheers Lin
Hi LinFX,

My daily trading routine - it gets interrupted quite often - a consequence of having 3 kids!

But it's nothing special - I've already done my analysis on a Sunday concerning major S/R areas and market structure. Before I do anything, I open up the fx calendar - I want to know what's coming up today, especially if it's red flag stuff. Generally I ted to avoid trading when those are happening. If I'm in a trade, I'll tighten up any SL for the news coming out.

The I'll open the charts and start looking what's happened - particularly interested in yesterday daily candle - pins, inside bars, railroads, piercing etc etc. Anything happening near major S/R, anything happening near a minor S/R? If I've got trades open, of course I'll check those to see if SL can be moved or i they're still running.

Then check every 4hrs if I'm on the 4hr charts, or every hours for the hourly charts - assuming I can. Sometimes it's difficult to check every hour.

That's it really - I don't spend time on fxdaily or any other fx news site. I've found they can be as wrong as often as I can. Besides, I want to analyse the charts and come to my own conclusions.

I generally use good old excel - good as anything else. I have used mxfxbook in the past as it does some good analysis on your trades.

Hope that helps

Cheers
Pharley
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