How to use Support and Resistance Effectively - page 13
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Question time
Its been a week since starting this thread ,this should have given those that are interested in learning to trade a chance to digest the info that has been posted so far.
Before i move on with the next set of topics here is your chance to ask me any questions regarding any of the topics covered so far.
I would also ask everyone to refrain from answering or asking questions of other participants regarding this subject as it only makes it more dificult for me to follow the thread.
bubbleSorry for little trouble from me.
1. How many S/R lines should we draw, including minor ones, does it have to be every points that bar touches couples of time ? I suspect this will be critical and discretionary to traders, I prefer to pick 3 couple of S/R (6 lines)
2. In attachment, EURUSD H1, H4 and D1 before March 1st, are all in uptrend, then how should we interpret price after that (eu4.gif) ?
3. Do you believe in diagonal S/R aka trendlines and zig zag that creates patterns ?
Thanks for giving us a chance to know better.
Bubble: What do you use for confirmation of a price turn?
Candle formations? Indicator(s)?
Thanks for these real-time comments bubble... they are extremely helpful.
How would you have handled the initial stops? Would you place them at the level of the previous S/R that has been created during the ongoing trend? Or do you have some other method?
Thanks again!
As we have seen today EURUSD very strong support @3436,second retest came early this morning , with price reaching the top of the previous peak @3470 so a nice trade with the trend for 30 pips, i would of liked to see it move further up .
Same with the GBPUSD strong support @9944 with a retest gap to 9955 for a jump back to the previous peak @2003 for 50+ pips
USDCHF -strong resistance@2308 has been tested 3 times now and is holding for a possible short.
bubbleHi Bubble,
Great thread. Ok, you mentioned that you used the hour to get into trades. Looking at the above cable trade you mentioned, yeah, it went 50 pips but where would you have taken your entry. Do you take them blind off 55, anticipating a move back up? If not, and you wait for confirming price action then there was none on the hourly. There was a hammer on the 15 min chart, with a higher low after so you could have taken a long from there but then you are zooming into the faster timeframes, is this something you do?
Just curious as to how you would have played this. Its easy enough to spot these levels, its knowing how to enter and exit that is the hard part for us. Waiting for price signals to confirm leads us into a higher probability trade but can also reduce the risk/reward.
Cheers,
Steve
mas0n,
we are looking for a turning point in the price then from the area where the turning point occurs we look to see if this is a s/r so why all the lines all over the charts?
Re trendlines and zigzag.
- they have no relevance to what i am trying to show in this thread.
I really dont have the time to go through all those charts if you see a turning point during the trading day post that chart with your s/r lines and i will look at that.
bubblebubble, if you just spend less than a minute to look at those charts again, it really helps me, as I want to backtest this method.
But I will understand, if you still prefer not to do it.
your "turning point", does it mean usual current S/R line (not changing between S and R) or current S that change to R after price make a trough (current R that change to S after price make a peak) ?
And about USDCHF, I put arrows where I think why you put your TP over there.
I've just found this thread and can i say, after a brief look, what a fantastic thing you have going here, Bubble. Price action combined with S/R levels is my thing - you can forget all the fancy indicators and systems - keep it simple is the way.
I will have a proper read tomorrow.
Regards Chris
mas0n,
one minute ,thats not how i operate, it would take me hours to got through all of those charts
bubblebubble, so how do you backtest, or you just forward test ?
if I can guess, you might come with this method by reading book or article etc, and put it into practice and add some knowledge, but at least you must test it, either back or forward test.
Those hours you spent in analyzing charts, does it include pair correlation and fundamental (long-term news but not spikes) ?
sorry for more questions, I just need to keep up with you.
Looking at the GBP/USD today I noticed that price continued its decline from resistance (6/26 4hr chart pinbar) until 8:00 GMT...then it advanced up from there.
The resistance has been in place all week(4hr chart) and price has been unable to sustain any move above it.
The decline reversed at a prior resistance top that is now support(6/20 4hr chart 16:00).
My 4hr trend indicator showed downtrend briefly but turned back up and now shows uptrend...I also show uptrend on daily and weekly charts.
My concern is that price could reverse at the resistance again so I am hesistant to play this long unless i get a pullback into prior support.
Please...comments welcome
Chrislee, thanks for your comments,
mas0n,
there is no secret to using s/r, you have to practise, even i get it wrong ,the usdchf trade has been stopped out but thats only a loss of 6 plus the spread so its not a disaster even though the trade was 32 pips in profit at one time, there are some people on this forum giving stops of 50,100 even advocating using no stops i know which i prefer.
I have given you enough info to learn to use s/r and have said i am willing to answer any questions ,that should be enough apart from what i have written here ,to learn this subject takes practise, a lot of it which you will have to do until you are confident enought to go live thats how i learnt.
Why are you asking me about correlation and fundamentals ive explained to you many times where and how to begin.
bubblewell, thanks again bubble, I guess the answers already laid in your previous posts, and I didn't do my due diligence to re-read again, I am sorry for that, and you ignore TL,ZZ,Fundamentals and correlations, that's what I get from you.
No more Qs from me, as I better keep quiet and be a good student.
Bubble,
A few questions if i may?
Do you operate mainly from the 240 chart for trend direction?
How many currencies do you observe?
How many trades do you average a month with this strategy?
So basically, you always wait for the second touch of an S/R area and then you take a position without waiting for price action to confirm. The second touch is your confirmation and if it carries on through then so be it, wait for the next setup.
The advantage of this method is that you get a nice entry with a tight stop compared with waiting for price confirmation. I suppose waiting for the second visit is confirmation, if it holds that is. So once you have seen price visit an old resistance area, now acting as support, and it moves away, will you then set a limit at this area to take an entry if it comes back down? Unless, of course, price action before the return to S/R shows potential for a bigger move against the trend?
Steve