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Trading setups around SR Zones

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  • First Post: Mar 3, 2009 1:49am Mar 3, 2009 1:49am
FYI I have started this thread to continue a discussion from another thread so as not to hijack or clutter the other thread.

Below is a chart representing Support and Resistance zones on the EURUSD for the last three trading sessions.

I trade in the blue session times and sometimes a bit further out if I feel it is worth it.

The time on the brokers platform is GMT+2

I have marked out the patterns I am attempting to trade on the chart.

jtdt777, you mentioned an interest in Billy Ray Valentines approach and I also see great potential with his methods and have studied his thread.

At the moment, I feel I have all the tools I possibly need to be a successful trader; I have proven to myself over and over that I can predict turning points using support and resistance analysis regularly, I can consistently identify high probability patterns. However, I have not achieved consistent profitability as yet. Most of this stems from impulsive trading and inconsistently trading my setups. I have difficulty following rules

Anyway good trading to you (and anyone else who happens upon this thread!)
and if anyone wants to discuss this style of trading feel free to post.

Cam
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Quoting ProbaBill
FYI I have started this thread to continue a discussion from another thread so as not to hijack or clutter the other thread.

Below is a chart representing Support and Resistance zones on the EURUSD for the last three trading sessions.

I trade in the blue session times and sometimes a bit further out if I feel it is worth it.

The time on the brokers platform is GMT+2

I have marked out the patterns I am attempting to trade on the chart.

jtdt777, you mentioned an interest in Billy Ray Valentines approach and I also see great potential with his...
Thanks for starting this thread PB,

I think a few discussions had taken over Pete's journal a bit, as there was no where else to put them.

I also have followed BRV's thread for a while and am in agreement that price action (helped by shakes's thread) skills are also a great tool in assessing whether a level with break or hold.

Looking at your 'failed' level with the H&S this looks like a level which BillyRay would have phrased "has been sloshed around a bit" - meaning price has been there a number of times in a short space of time (giving little time for short orders to build up there).

As you say, careful ticker action at these points, can enable you (as long as you are not emotinally attached to a 'short') to stop and reverse for profit in a situation like this... mathematician made a great post a couple of days ago, explaining that you don't have to be right at a key level, but you must react as soon as (if) you are wrong.

I hope this thread grows as I am purely looking to trade short term S/R. I will post some charts later.

WG
Quoting Willowgal
Thanks for starting this thread PB,


I hope this thread grows as I am purely looking to trade short term S/R. I will post some charts later.

WG
Agreed!

We had a nice bounce at the near SR I posted earlier. The 5M or the 1M provided confirmation entries with Price action patterns.

BTW the second chart is 5M

Cam
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Here is the 1M entry I mentioned earlier
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Quoting Willowgal
Thanks for starting this thread PB,

I hope this thread grows as I am purely looking to trade short term S/R.
Ditto from me!
Hi,

I will show you how I have been using PA and S/R to get into quick scalp.

On one screen I look at the 15min with some pivots and mark S/R and then on the other screen I have an indicator (called Renko box and covering most of the screen) which I just found somewhere but displays short term PA very well sourced from the tick chart.... not seen anyonre using this but I find it great to watch price.

You can see on the 15min we are at a 50% retracement level ('FIBIONACCI PIVOT' on screen) of previous move down, and at the same time the PA screen showed a double top .. I got in short and it was good for about 40 pips in less than 5 minutes.

See on the right hand chart how price virtually always stalls for a while at previous levels where it takes a while to decide where to go next
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Just took for half my order 15 pips on a reversal ... see the 2 screens for set-up M15 showing approach to trend line and failure to go any lower in the yellow PA screen (if it can't make a lower low ... what can it do ? it must go up !).

3rd pic ... 15 pips up in 2 mins

Other half at b/e - let it run
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Just want to say, very nice thread!

I myself also like SR very much, but I just don't know how to trade them effectively, I am glad to see various ideas trading them. Sometimes using limit order for big levels is just fine, but having some confirmation is always good. It also enables us to trade "smaller" levels.

By the way, I also have the idea to combine SR with tick action, willowgal, seems that you're doing good. I am actually directed by you from BRV's thread to shakesfx thread on tick action , unfortunately that nice thread is recently closed... anyway, I am still trying to learn that tick watching skill myself, getting some screen time.

Thanks for sharing.
I'm glad you started this thread. I think there are a few of us who are interested in similar techniques. This will give us a place to bounce some ideas off each other, without interfering with others' journals/threads.

In particular I am interested in:

  1. EUR/USD
  2. Short term (1-min, maybe lower, maybe 5-min)
  3. In general: Support & Resistance
  4. Chart patterns:

    1. ranges
    2. pivotal points (Livermore)
    3. head & shoulders
    4. double/tripple tops/bottoms
    5. 1-2-3
    6. S/R switchover

  5. Scaling out of trades

If being flexible is beneficial, then it might be a good idea to have a few setups so you can be more flexible, yet still disciplined.

Quoting dreamtrader
Just want to say, very nice thread!

I myself also like SR very much, but I just don't know how to trade them effectively, I am glad to see various ideas trading them. Sometimes using limit order for big levels is just fine, but having some confirmation is always good. It also enables us to trade "smaller" levels.

By the way, I also have the idea to combine SR with tick action, willowgal, seems that you're doing good. I am actually directed by you from BRV's thread to shakesfx thread on tick action , unfortunately that nice...
Hi dreamtrader,

Are you stalking me ?

If you want to try the yellow chart I have attached the files for it (I am not technical so don't know if you need both files, but I have them in experts/indicators and it works fine).

To use it I open the 1 min. chart and then attach Ticker_Renko_boxes and set the 2 input settings (Box size and Bar Width both to 3)

I then move it cover most of the screen and zoom out max.
I then it running for about an hour before I considering taking a trade. In this time the 'levels' will build up around which you look to trade later on in the day. It is also good in that you can draw trend lines and fibs etc. on the chart it builds.

It is a great way to spot reversals, which you cannot often 'see building' in even the 1 minute charts. e.g. if there is a current move down with lower lows (and usually highs, but not essential), as soon as it fails to make a lower low I watch for some strength in price to get in for a scalp long. This is 'fine tuned' by waiting for 'levels' that I highlight on the 5 min or 15 candles chart.

It seems to work for me .... having read thousands of posts in the last few months on here and looked at loads of methods, this is something I have found that really seems to suit me AND more importantly I am now winning most days !!

Good luck all,

WG
Attached File(s)
File Type: ex4 Ticker Renko Box.ex4   8 KB | 818 downloads
File Type: mq4 Ticker Renko Box.mq4   6 KB | 888 downloads
Quoting mathematician
I'm glad you started this thread. I think there are a few of us who are interested in similar techniques. This will give us a place to bounce some ideas off each other, without interfering with others' journals/threads.

In particular I am interested in:

  1. EUR/USD
  2. Short term (1-min, maybe lower, maybe 5-min)
  3. In general: Support & Resistance
  4. Chart patterns:

    1. ranges
    2. pivotal points (Livermore)
    3. head & shoulders
    4. double/tripple tops/bottoms
    5. 1-2-3
    6. S/R switchover

  5. Scaling out of trades

If being flexible...

Hi math,

Could you please explain 1-2-3 setups.... not sure I know what they are?

Thanks
Quoting Willowgal
Hi math,

Could you please explain 1-2-3 setups.... not sure I know what they are?

Thanks
Hey Willow, long time no speak, glad to see your trading has progressed and you have a strategy to call your own.

1-2-3 set-ups are found at reversals. 1-2-3's (or double top or double bottoms) are found at every swing point in the market, but not every 1-2-3 (double top and double bottom) is a pivot. It is when price bounces (point 1) and hooks back against the prevailing trend (and at which point is indistinguishable from a retracement), then the prevailing trend kicks back in (point 2), but there is not enough pressure from the trend followers to excede the contrarians, price fails to surpass the extreme (point 3) and then completes the reversal pattern by breeching point 2. This gives a great deal of information about sentiment and for me it is the only reversal pattern.

Take a read on Joe Ross' Law of Charts for more info.
Quoting Willowgal
Hi,

. I got in short and it was good for about 40 pips in less than 5 minutes.

See on the right hand chart how price virtually always stalls for a while at previous levels where it takes a while to decide where to go next
Nice catch Willowgal and thanks for outlining your setup.
Quoting Willowgal
Hi math,

Could you please explain 1-2-3 setups.... not sure I know what they are?

Thanks
A 1-2-3 pattern is basically a sloppy double top or double bottom. Like those, it's a reversal pattern.

In a reversal from up to down, it would be a top, followed by a lower top. So it would look like a double top, but not perfectly level, it would be slanting down (indicating that price will probably reverse and start going down.) [The first top is "1", the pullback bottom is "2", the second (lower) top is "3"]

In a reversal from down to up, it would be a bottom, followed by a higher bottom. So it would look like a double bottom, but not perfectly level, it would be slanting up (indicating that price will probably reverse and start going up.) [The first bottom is "1", the pullback top is "2", the second (higher) bottom is "3"]

Classically, the pattern is not confirmed until price breaks beyond the "2" aspect. Also a projection can be made: Measure the distance from "3" to "2" and add that to "2".

Here's an article. http://mediaserver.fxstreet.com/Repo...b92bc2ecee.pdf
Quoting birdt
Hey Willow, long time no speak, glad to see your trading has progressed and you have a strategy to call your own.

1-2-3 set-ups are found at reversals. 1-2-3's (or double top or double bottoms) are found at every swing point in the market, but not every 1-2-3 (double top and double bottom) is a pivot. It is when price bounces (point 1) and hooks back against the prevailing trend (and at which point is indistinguishable from a retracement), then the prevailing trend kicks back in (point 2), but there is not enough pressure from the trend followers...
Good description of the market forces behind the pattern. It's like the trend followers had their chance on the test of the original high/low, but they failed.

And yes, they occur at every reversal (except a 'V' reversal, but you'd probably see a 1-2-3 on every 'V' reversal if you zoomed into a shorter time frame). Of course ever H&S includes a 1-2-3 pattern in its right half.
Quoting birdt
Hey Willow, long time no speak, glad to see your trading has progressed and you have a strategy to call your own....
Hi birdt,

How's it going ?

Thanks for the explanation .... hope you are still pipping nicely !

WG

mathematician: thanks also !!
Quoting Willowgal
Hi dreamtrader,

Are you stalking me ?

If you want to try the yellow chart I have attached the files for it (I am not technical so don't know if you need both files, but I have them in experts/indicators and it works fine).

To use it I open the 1 min. chart and then attach Ticker_Renko_boxes and set the 2 input settings (Box size and Bar Width both to 3)

I then move it cover most of the screen and zoom out max.
I then it running for about an hour before I considering taking a trade. In this time the 'levels' will build up around which...


Here is a link to the article mentioned by birdt:
http://www.scribd.com/doc/10582353/Law-of-Charts

Hope this helps.
And thanks for the indicator, will check it out.
123, I do love its simplicity.

There was someone on FF that said they were successful trading this setup for several years. I think I have it on file, I will see if I can dig it up for you all.

The chart shows the strategy applied to a ranging market. It actually held up pretty well. However, if you go down to the 1M it becomes difficult to decide on valid pivot points to mark as point 2 and 3. Perhaps your Renko charts could manage this Willowgal.



Cam
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I thought I would repost this chart from the other thread. It belongs here.

http://www.jesse-livermore.com/price-patterns.html
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GBPUSD - I will be carefully watching PA around 1.3990 for a bounce here
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