How to use Support and Resistance Effectively - page 9

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Hi bubble,

I was experimenting with some charts and your method today and I still seem to be having trouble finding fine entries and exits. The causes for this probably are:

1) no rules for exits as of yet - whether taking a loss or a profit

2) no idea as to how many trades are performed over a certain time period on average (maybe I'm overtrading one pair and should take fewer trades per pair but on multiple pairs)

3) problems with detecting trends on higher TFs

Do you think you could elaborate on these?

In case you are going to cover it later and this would be a disruption, please ignore it

Are you going to show some trades in real time - the way you would trade them?

Thanks for your great work!

 

current EURUSD 1H & 4H

First, thank you to bubble and anybody that post in this thread, for their valueable and meaningful posts.

Now let me apply this to current chart, and please correct me if I did mistake in drawing s/r

EURUSD H1 shows gap, looks to me as blow-off, price now already break current resistance and in the gap

EURUSD H4 shows no gap, price is in current resistance

How should we interpret this, wait for other confirmation from other trading system ?

My guess would be H4 will dominate the decision, if price bounce back (down), price will hit current support, but if price breaks out (up), price will face 3 minor resistances, so it is waiting moment.

PS. should we draw minor s/r (as different color) ? and how abour spike (1-3 bars) that is false breakout ?

Files:
eurusd_h1.gif  8 kb
eurusd_h4.gif  8 kb
eurusd_h4_2.gif  8 kb
 
bubble:
Guyver,

Looking at the chart the support area is a bit lower if you look at my chart you can see it should be on the first peak lower down ,the price went up made a new high and then retraced back to the previous area of resistance which now becomes support , we enter the trade on the second retrace to support, if the price did not come back to retest then there would be other trades.

You can see on the 60 min chart how the roles of s/r are reversed as that trough on the left now becomes resistance and that is the exact same line from the 15 min chart.

On the 4 hourly we can see how the same line was tested 4 times before the price went lower, that same line again reverses and become resistance.

This trade may be a reversal , which ever timeframe i trade on thats where my target comes from so in this case i would of targeted around the 6793 mark as that is the next peak.

The eurgbp is not very volatile so its important to remember not to expect 100 pips from a trade on the 15 chart for this pair i would look for 4hrs upwards timeframes.

bubble

hi bubble thanks.

I understand your point , i am in a process to automate these lines which i show in the chart they are indeed taken from 4hrs time frame, but ofcourse your opinion matters most as i am learning from this thread . The reason to take this is line was that it was somekind of support manifested in past let me show the chart again from where it is comming pic shows 24th May 2007 support and also on 17th April. So as i calculate the support or resistance this green lines gives me the most near support not to say i am correct but just an observation of the lines when it calculates ..

i dont know about targets but thanks for mentioning how would you look for the targets i will continue to watch this thread with interest.

regards

Guyver.

 

Do you use murrey math, fibs, elliott etc for finding your S and R cos i have tried using them and have found them to be very effective...

 
bubble:
Malcik

1) no rules for exits as of yet - whether taking a loss or a profit

Dont worry about the exits yet , concentrate on finding the signals and s/r lines, i dont want to throw it all out at the same time ,then people will get more confused, one step at a time ,it took me a long time to learn this stuff dont pressure yourself.

When trading this style we are first looking for a turning point around a peak or trough then we draw in our s/r lines if you try it the other way round then it become more difficult , so to make it easy just look at a chart of past price action start from a low or a high and see how the troughs or peaks interact then place your lines in one at a time then look at the higher timeframe one at a time , the confusion here comes with the s/r role reversal on the higher timeframes , think in reverse ,read the whole section again do a google etc.

Place a moving average on the chart if it helps you to see the turns better ,dont ask me which one.

2) no idea as to how many trades are performed over a certain time period on average (maybe I'm overtrading one pair and should take fewer trades per pair but on multiple pairs)

There is not a preset amount of trades to take we take what looks right according to our analysis when they become availble, trade 60 min and upwards ,trade only with the trend on the HTF, why all the effort trading 5,15when a few good trades on the 60m will give you more than enough pips and less stress.

This style if applied correctly is very high reward with low risk because we buy at support and sell at resistance therefore we know where to place our stop if we are wrong then we will know very quickly and wait for another opportunity.

3) problems with detecting trends on higher TFs

Can you elaborate on this one a bit more.

bubble

OK, some of the things have become clearer already... there's nothing like studying the charts

What I meant by number of trades... I know that the market tells you how many trades you are supposed to trade by giving you the setups or not. I just wondered, from your personal experience, how many signals (a week for example) you get per pair and how many it totals for all pairs. Just experience so that I can see how much you trade.

As far as exits - OK, I'll hold on, please don't let me disrupt your layout

 

Bubble

How can u forsee a reversal using s and r before the reversal happens ?

or are u just saying support and resistance is there but i got no clue where the market is heading

Cid

 

for gbpsud .. mostly i have gotten this move from 1.9786 and still inside with half position

last eurgbp i had to close my positions when it broke 0.6761 ( now i understand what you said about eurgbp movement ) so in short it is going good the gbpusd support i took from 11th april. Bubble do you mind me posting charts here? ..

 
bubble:
Malcik

I really couldnt tell you because i trade an array of instruments this way ,currencies,cfd,index,futures , gold ,silver ,stocks , each week depends on the time and effort i put in , the more hours i work then more trades i take so it really varies from week to week, trading s/r is not about being in out in out all the time hoping to snatch a few pips here and there ,we will leave that to the amateurs.

bubble

Thank you bubble, now it's clear. Looking forward for more classes

 

bubble, you don't have to put blank indicators. You can change the vertical scale easily in the chart propierties.. or just pressing in the price area numbers (right) and drag vertically.

also there is a nice way of seeing resistance and support levels here:

https://www.mql5.com/en/articles/1439

tell me if it helps

 

Malcik, when looking at potential sup/res, is it better if there are a collection of bars(for example 4hr bars) or is it better if it is one or two bars and the price moved quickly away from the levels of these bars?

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