How to use Support and Resistance Effectively - page 27

[downunderdave40]

Confused!

bubble:
Trade from today GBPUSD

HTF confims the uptrend with rising peaks and troughs.

bubble

Bubble,

I am a bit confused about the confirmation with HTF charts. I see you've posted several 15 minute charts, is that just to show us examples of the price action or are you using 60 min chart for confirmation of the turning point on the 15 min chart?

My understanding of what you are teaching (very simplified version) is as follows, please correct me if I am wrong here:

1. Identify possible turning point (S/R) on 60 min chart by price action.

2. Go to 240 min chart (HTF) and confirm if the same support/resistace area is on the 240 min chart.

3. Once confirmed on the 240 min chart drop back to 60 min chart wait for 2nd or 3rd bounce off the S/R line and then enter when you have confirmation of the reversal with a trend following indicator.

Thanks for your feedback on this.

Dave

[downunderdave40]

Thanks Bubble

bubble:
Dave ,

you are absolutely right in your post above,however s/r can be traded from any timeframe using the same principles ,however the smaller the timeframe the more difficult it gets .

The trades i have posted are from the 15min with confirmation from the 60.

Although 15/60 is not my preferred combination due to the higher stress levels involved from more frequent monitoring, there where some great trades which carried a high risk reward ratio and visually were worth posting for you to learn from as the principles of s/r are the same no matter which combo is used.

bubble

Buble,

Thanks for the explanation. That makes it much clearer for me to understand. I had another good day on Tuesday using the S/R methodology +46 pips.

Again...thank you Bubble...keep up the great work in this thread.

Dave

[emas]

Nice thread i like this lesson

i finish read this thread 2 time

now it time to practice

but i see a confuse which one is a valid setup....

or it's a sideway trend

bubble can you comment my chart

[steveshutts]

Hi Bubble,

Just going to post a few examples i have spotted to help me clarify my understanding of this topic.

I have attached some screenshots of one of your recent cable trades. Sorry if i have asked you this sort of thing before, but i was just wondering exactly what gives you the heads up to take the plunge.

We have identified our trend change on the 1hr and we wait for price to come down to our recognised support zone. We have one touch, okay, heads up, one more and we are long.

Now, i remember you saying that you do not like candle patterns, as the market makers know these. But there must be some sort of indication around the second touch to make you feel that price will bounce? In this instance, we could see from the bars that price was finding support again and so that was out entry. Especially when we got the bullish engulfing candle, where we could have entered long on the close of that. I just wondered if you just went long when price hit that level again, regardless of the candles.

My next post will give another recent example i found to ensure i understand.

PS If the last 2 charts are too big could you let me know, and sorry about the clocks!!

[steveshutts]

Ok, here is an example of a Eur/Chf trade from yesterday. The 4 hr trend was broken to the downside and price came up to old support that we have identified, that would hopefully hold as resistance.

From the next timeframe down, the 1 hr, it really is not clear that price hit that area, fell, and then hit it a second time. However, if we scroll down to the 15 min chart, we can see that price clearly hit a second time and that was our signal to sell, with a clear target of the 6426 area.

Hope i am on the right track now Bubble??

[steveshutts]

Ok, last example for today and this is cable today.

Trend on 240 is debatable i suppose and it is at a vital turning point. Price comes up to old s+r area and falls back down to the identified support zone. It touches once, then again as we can see on both the 1hr and 15 min chart.

To get the sort of small stops that Bubble achieves, we really need to zoom into at least the 15 min. Again, the question arises, where do we get in?

I see an up bar at the second touch, and surely this is enough, given all the other criteria, to go long.

The target area is the high at 0363, but given that we would get in around 0220 with the stop around 95, we could probably afford to scale at that high on the 15 at 96, pretty good. Set stop on remainder at BE and trail? Probably closing at that 50 level, good enough i reckon, 130 pippies!

Any comments Bubble, please correct me if things are wrong.

[fx2007]

Bubble

1. How much do you consider price have to bounce between touches, so that you can consider the 2nd touch valid ?

2. Lets consider a long trade, so we are looking for a long on the 2nd or more bounce off a desired entry level: If price makes a LH ( or LH's) inbetween each subsequent bounce, does this cancel the entry, or are we not worrying about this noise, as often seen on the LTF ?

3. In your opinion, how much does price have to move though a level to make the level invalid. If price hits support twice at say 1.3671, if on the 3rd time it spikes 5/6 pips below, though closes at or above, does this still count ? What are you personal rules on this ?

4. (Sort of related to #3) How far, do you consider, price can travel through a support becomes resistance line before it invalidates ? Is it not best for us to consider zones of price rather than spot on pip values ?

FX2007

[fx2007]

Bubble

Thank you for the quick response.

============================

FX2007:How much do you consider price have to bounce between touches, so that you can consider the 2nd touch valid ?

Bubble:The only rule i have here is that for a long signal with a retest of support we dont want the bounce to make a new or equal high and the reverse for short signal.

============================

FX2007: Why is that ? Sorry to probe......Can you offer more insight. I cannot work out why a equal or new high would matter ? If it makes a new high, is that not even my confirmation of the trend ? I understand that an equal high might be considered a Double Top. Though why would a new or equal high be more negative than a bounce that made a lower high ? (With respect to the support level or range we are trying to enter a long from).

[XKR1962]

Thinking out loud & thanks Bubble

Hi Bubble and the gang,

Bubble this thread has been fantastic in helping me focus on one method of identifying trades. I am confident it will help me trade profitably I think continued practice trades on demo accounts is the key here.

Thanks again.

No doubt all the participents in this thread will develop their own different methods of making their trades profitable, multiple lots, lower profit targets etc.

Watching multiple currency pairs, share prices and indexes is a full time job and is very time consuming and adds uneccessary stress, which in turn can lead to bad judgement / trades.

I'm just wondering if at a later stage when hopefully a few of us become more proficient at identifying trades it may be beneficial to perhaps share the workload. Maybe we could each monitor different currency pairs etc, once potential trades are identified, share the info for debate and then make trades accordingly.

I realise this would be for higher time frames / longer term trades, but all the same it could be helpful.

I know their are 101 reasons for and against this but as I said I am just thinking out loud here.

As this is a little off topic unless Bubble says otherwise perhaps anyone interested should PM me.

Thanks again bubble, thanks to you and everyone posting here I am getting better at identifying trades and adding pips to my demo account. I feel I just have to keep practicing until it becomes second nature. I am anticipating months of practice yet, but am enjoying every minute of it.

Great work everyone, have a great day.

[emdafx]

bubble.. is great all your charts and explanations

Thank you

but why do you have those blanks indicators below? Why don't you just change the vertical scale of the charts? you can set it to a fixed scale.. or drag the mouse vertically in the area of prices at the right