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

  • #381
  • Jun 20, 2016 3:36am Jun 20, 2016 3:36am
+60 pips on GU :-)
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  • #382
  • Jun 20, 2016 11:37am Jun 20, 2016 11:37am
Quoting pharley
Hi all, Careful this week trading guys. In case you're bored and want to read some good articles, here are some links. http://www.tradingsetupsreview.com/1...soned-traders/ http://www.tradingsetupsreview.com/n...ng-indicators/ Have a look at this site generally - good info here (no, I'm not affiliated in any way with this one)- http://www.tradingsetupsreview.com/
Great links pharley!

Cheers,
  • #383
  • Jun 20, 2016 7:58pm Jun 20, 2016 7:58pm
Quoting Albertdkpllh
Pending buy set. {image}
Hi Albert - It looked as though that one worked out well - how did it go?

Cheers
  • #384
  • Jun 20, 2016 7:58pm Jun 20, 2016 7:58pm
Quoting FireFries
+60 pips on GU :-) {image}
Well done with that one!
  • #385
  • Jun 21, 2016 3:40am Jun 21, 2016 3:40am
Quoting pharley
{quote} Hi Albert - It looked as though that one worked out well - how did it go? Cheers
Took me out at -10 Pips. SL may have been too close, but am happy. Solid system, solid levels and with a little discipline I may become a Pro .
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My help is in the name of the Lord who made heaven and earth.
  • #386
  • Jun 21, 2016 1:04pm Jun 21, 2016 1:04pm
level broken and trade activated with a spread of 6 . SL 36 pips
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My help is in the name of the Lord who made heaven and earth.
  • #387
  • Jun 21, 2016 1:52pm Jun 21, 2016 1:52pm
Quoting Albertdkpllh
level broken and trade activated with a spread of 6 . SL 36 pips {image}
SL hit
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My help is in the name of the Lord who made heaven and earth.
  • #388
  • Jun 21, 2016 3:10pm Jun 21, 2016 3:10pm
Quoting Albertdkpllh
level broken and trade activated with a spread of 6 . SL 36 pips {image}
I don't think it was a correct entry as per the rules posted by Pharley. Neither the SL seems to be logical. It was very exposed to be hit. You need to set your SL few pips below/above the previous swing low/high. And i suggest you should set your TP as per the bar close price on previous swing high/low.

My USDCAD shorts taken last week. Two trades of lot 0.02 size were initiated. Trade#1 TP was set at target 1 slightly few pips more than the SL and Trade# 2 TP was set at previous swing low above the consolidation at the level. SL for both of the trades were above previous minor high and consolidation at the level.
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Forex; the game of movements not the game of candles.
  • #389
  • Jun 21, 2016 3:24pm Jun 21, 2016 3:24pm
Quoting Albertdkpllh
{quote} SL hit {image}
You exactly took the opposite trade at the level. This level already broken, so its no more a support. It will now act as resistance. And by looking it your chart, the level has proven its worth as resistance. Therefore are enough evidences that the level is now resistance not a support. So you took the wrong trade my brother and SL hit was obvious.
Always remember that once a level broken then it will change its role. And new consolidation below/above that level is confirmation that the role is changed.
Forex; the game of movements not the game of candles.
  • #390
  • Jun 21, 2016 4:08pm Jun 21, 2016 4:08pm
My two cents
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Forex; the game of movements not the game of candles.
  • #391
  • Jun 22, 2016 4:16am Jun 22, 2016 4:16am
Quoting pharley
{quote} Hi - yes of course there are minor trends within larger trends. It all comes down to what you want to trade. E.G if you want to trade the 15m chart, you probably want to take the trend from the 4hr charts. If 1m, then probably a 1 hour chart trend. I take daily and weekly as I generally trade daily, 4hr charts and sometimes 1 hour. Even with 1 hour charts I want to be on the side of the larger trend and market structure. That's because most of my trades are targeting major SR areas. Cheers Pharley
Dear pharley,

I made few analysis on charts, with your method, could you check if I am right, in pics below on W1 we are on ressistance, D1 short-term uptrend, notable wicks on blue rectangle, at H4 we are in uptrend channel, now we will wait what price will do bounce down from resistance, after that signal would be close of 4h candle below yesterday low or maybe after that wait for retrace to this level.

Or broke above rezistance and then wait for retrace to start opening longs.

Of course there is problem with Brexit but I think AUD/CAD pair is not so vulnereable.

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  • #392
  • Jun 22, 2016 7:36pm Jun 22, 2016 7:36pm
Quoting Mhons
{quote} Dear pharley, I made few analysis on charts, with your method, could you check if I am right, in pics below on W1 we are on ressistance, D1 short-term uptrend, notable wicks on blue rectangle, at H4 we are in uptrend channel, now we will wait what price will do bounce down from resistance, after that signal would be close of 4h candle below yesterday low or maybe after that wait for retrace to this level. Or broke above rezistance and then wait for retrace to start opening longs. Of course there is problem with Brexit but I think AUD/CAD...
Hi Mhons - yes that seems reasonable.

I've been having a little break away from fx for the last coupe of days. This week will probably give some nice opportunities but I'm sort of staying out of it. Mainly the GBP pairs could be very volatile with others not as much. But it's nice to have a break every now and again! Some of the price action is tempting, but I can wait.

Cheers
Ph
  • #393
  • Jun 22, 2016 8:16pm Jun 22, 2016 8:16pm
Hi,

Someone has asked me how do I know a S/R level is significant or not. I thought I'd post something on it here.

Generally, the longer the timeframe charts you're looking at, the better. If I take a weekly chart of gbpjpy (see below) and draw the significant SR area on, they're pretty easy to spot.

Now how do I know these are significant? Well it's because price has turned at these points in the past, or has flipped around them. It's important to get these weekly levels in, then when price approaches them you're aware that these are significant levels.

I would encourage you to pick any chart, go to the weekly setting, draw in significant SR levels from the past, then go to daily or 4hr charts in a more recent time and see what price does when it reaches them. You'll see that price does something significant - it will bounce off them, or it will go through and retrace back to the line. Many times this happens - if the line is just blasted through and price doesn't retrace to it, take it as a sign that the level isn't valid as a significant level anymore.

The chart attached shows major SR areas from the past in blocks with a line through them to carry it forward. The circles are where price comes back to that line. Go have a look yourself at price action at that point - you'll see pin bars, engulfing bars, flip trade set ups etc etc. Price always does SOMETHING at these levels, which is an opportunity to be taken advantage of. I attach a second pic of just 1 recent area on the 4hr chart - these happen all the time at these levels.

These are what I consider to be significant SR levels. The ones inbetween are minor SR levels only - useful for getting in or adding to positions.

Take a look across just a few pairs at weekly levels, then go to daily or 4hr and look at the trade opportunities that exist. There are heaps of them. That's why I tend not to trade short timeframes - there are so many opportunities at higher TF levels with huge pip potential.

Cheers
Pharley
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: 20160623 gbpjpy 4hr.PNG Size: 48 KB
  • #394
  • Jun 22, 2016 8:33pm Jun 22, 2016 8:33pm
On the 4hr chart above, here is one entry you could take after a pin bar appears bouncing down from the resistance. Target is at the next SR major level which is 1,418 pips away. Now have a look how many short trades you could have taken on that run using pin bars, break, break and retrace, inside bars etc. Heaps - you only need 1 of these runs every month, 3 months, 6 months or year to make a huge difference to your account. This is what I try to do - get on a big run using weekly SR areas as targets, then enter multiple times on that trend. It makes a massive difference.

Cheers
Pharley
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  • #395
  • Jun 22, 2016 9:15pm Jun 22, 2016 9:15pm
HI again - ok I'll share something that I do sometimes. Especially if I just want to do a bit of set and forget on multiple trades.

Attached is a 4hr pic of the gbpjpy action as per previous post. On it I've put my modified fib - I use this purely as a measuring tool and not as a fib per se.

After the first entry and target has been established, I can set limit orders all the way down at the levels shown. With this one, I can measure and say I want 10 trade entries before hitting target (T1, T2, T3 etc).

I put a stop at the level above where I enter. So if I enter T3, I put a stop at T2. When price gets to T4, I move the stop for T3 to breakeven plus a couple of pips, i.e. T3 entry + 3 pips. I'll do that for every trade I enter.

You can see price retraced halfway down and took out the SL of T7. T6 was also hit but SL for that one is already at BE. Same for T5.

Then I wait - if price resumes it's downward trend (which it does in this case), I enter at those points again - now T8 and T9. Same thing happens again around T12.

Eventually all get cashed out at the target. So how many pips do I get? (I'll count a BE trade as 0 pips in this case):

T1 = 1,412
T2 = 1,274
T3 = 1,126
T4 = 985
T5 = 0
T6 = 0
T7 = -140
T8 = 709
T9 = 558
T10 = 427
T11 = 280
T12 = -140
T13 = 140

That makes a grand total of 6,631 pips on a pip run (Resistance down to support) of about 1,500 pips.

Work out $ per pip and see what the potential is.

Some will say - it's impossible, blah blah - I've just shown how it can be done.

The other way is to use price action - retracements, pins, breaks etc.

Another thing I do is move stops down for each trade thereby locking in profits. That's great and I do that a lot. However, you wouldn't have got as much from this run. Remember the old saying - let your profits run? Well if you can stand just moving your stop to BE and letting them all run with a defined target at a major support level, that's the sort of pips you can get.

Interesting stuff?!

Cheers
Pharley
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Click to Enlarge Name: 20160623 gbpjpy 4hr equal entries.PNG Size: 48 KB
  • #396
  • Jun 23, 2016 2:54am Jun 23, 2016 2:54am
Hi Pharley.

I have been reading your thread for a few weeks now. Thanks for all the helpful tips.
I would like to ask a couple of questions if thats ok.

1 Is it easier to see the levels using a line chart, or does this give a false reading. I have tried both and ended up a bit confused.

2 Does the heiken ashi candles give a more balanced, smoother view of the trend.

hope you don't mind these questions as I seem to be going round in circles with the different advice.

Kind regards
Kevin
  • #397
  • Jun 23, 2016 3:03am Jun 23, 2016 3:03am
Quoting kevin1959
1 Is it easier to see the levels using a line chart, or does this give a false reading.
With line chart you are missing part of the move ... as it shows you only the close price for each candle ... without the wicks movement which is also important to define more precise levels/zones.
MT4/MT5 EAs/Indicators/Alerts coder
  • #398
  • Jun 23, 2016 3:10am Jun 23, 2016 3:10am
Quoting kevin1959
Hi Pharley. I have been reading your thread for a few weeks now. Thanks for all the helpful tips. I would like to ask a couple of questions if thats ok. 1 Is it easier to see the levels using a line chart, or does this give a false reading. I have tried both and ended up a bit confused. 2 Does the heiken ashi candles give a more balanced, smoother view of the trend. hope you don't mind these questions as I seem to be going round in circles with the different advice. Kind regards Kevin
Hi Kevin and thanks for your questions.

I suppose everybody uses different things for their own method - what works for them and what's comfortable and useful.

I tend to swap between candles and OHLC bars - I find when I use the OHLC bars I can see levels better. If I want to see more clearly the price action in a single candle, I will use candles - I can spot Pins, inside bars etc more easily using candles.

As for Line charts - I don't really use them at all. That's because I want to see the full range of a candle or OHLC bar and the lines don't show that. But I'm sure there are trading methods out there that utilise the lines.

HA bars - yes these do smooth out some PA as they're calculated differently. I've had these on my charts some times ago, but I find I still want to see OHLC or candles. It's because I want to see a particular SR area or line. Again, they can be useful for certain trading methods.

What I hear from your question is this (and please forgive me if I'm wrong!) - I think you're trying different methods, reading advice about which is the best way, trying different things. That's fine and it's something we all do. However it can lead in to trying one method then swapping to another as soon as it loses, and on and on.

My advice to you would be to do this - don't listen to others and minimise reading lots of different methods. It's so confusing!

Find and choose a method that looks promising and initially use the basic candles. See what you can see. Try the OHLC bars on it if you want. It's the same information on candles as on OHLC bars after all. But pick a good method and stick to it. Do some analysis on charts using that one method. Usually the best methods (IMHO) are the price action strategies. Nice and simple charts, easy to see major and minor SR levels and things like rising or falling channels.

One of the biggest things is to keep things as simple as you can. Don't fall for complicated charts with all the whistles and bells on them. Honestly they're not required. Take off everything from a chart, use candles, put it on a weekly or daily or 4hr timeframes, zoom out and draw horizontal lines where price turns. Do that for several months ago, then look at price when it gets back to it more recently. Then look at the price action when it does - is there a pin? 50% retracement? break and retrace? inside bars? Railroads? - many ways to trade this price action, and no indicators in sight!

Hope that helps
Cheers
Pharley
  • #399
  • Jun 23, 2016 3:12am Jun 23, 2016 3:12am
Hi FerruFx.
Thanks for your reply. I will stick to normal candelsticks.
Thanks again
Regards
kevin
  • #400
  • Jun 23, 2016 3:16am Jun 23, 2016 3:16am
Quoting FerruFx
{quote} With line chart you are missing part of the move ... as it shows you only the close price for each candle ... without the wicks movement which is also important to define more precise levels/zones.
Thanks mate! spot on
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