How to use Support and Resistance Effectively - page 28

steveshutts
49
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
10
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
10
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
60
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
17
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

steveshutts
49
steveshutts  

Guys,

Does this look like a potential short on Nzd/Usd to you? We have a downtrend on the 240, with the second touch of the s+r zone on the hourly, giving us a short around 73 with a target zone of around 7550?

Any comments?

Files:
nzdusd.gif 54 kb
nzdusd_2.gif 52 kb
substanz1973
7
substanz1973  

Hey ! Another good trade on USD/CAD ! +27 pips !

Fixed the take profit at 1.05577, but the trade was good for +41 pips !

Files:
cad.bmp 709 kb
substanz1973
7
substanz1973  

Yes i know Bubble !

But i have a big problem with what. I never know when to close the trade. Generally i take the last resistance or support to close.

Will try to apply this basic rule of money management on the next trade.

Many thanks.

midnightrider
15
midnightrider  
bubble:
Second trade was on the GBPJPY making 120 pips ,very much the same scenario as the EURJPY trade ,i will leave the chart for you to work out.

Yes, those pairs along with $jpy all displayed decent strikes thru their respective levels today.

Files:
geppytra.jpg 43 kb
Sosan
32
Sosan  

Bubbling

Hi Bubble,

wanted you feedback on this trade I did today on the eurjpy.

I have downtrends for the 1hr and Trend up but direction down on the 4hr. Took my short entry on the 15min @ 162.90 SL @ 163.05 and TP @ 161.88.

Well, what do you know I got stopped out.

Did I miss something?

mairangi

ps this has taken me most of the day to post, had problems with the internet connection......

Files:
eurjpy_1.gif 9 kb