By this statement do you mean the target is an historically higher peak?
Is that why you said "trading blind" earlier in reference to the newer highs by gbp/usd recently?
Trend Following Indicator
I am still working on the entries though...I want to enter as close to the sup/res line(s) as possible...I don't know if I should try to use some sort of indicator on the 5 or 15 min chart or if I should just look at the bars themselves...
You can use any trend following indicator to help determine a reversal along with the price action at your S&R areas.
Res Becomes Sup
My understanding is that the main RBS level is the previous HH (in my chart the one on the left). However, I have noted that there is often additional Hi bounces (in my chart the one on the right), which might be during the retrace from the HH and or in the range the might follow.
1. Do the lower intermediary Hi's also offers support when broken ? (See Chart 1 Below)
2. I have read the thread multiple times and am still unsure how you figure out how far the retrace (from a high) is allowed to travel back through the RBS (Old Hi) into the range of the previous swing, while keeping a entry long a valid possibility ? I have read your answer (Pasted in below) to steveshutts, though often the point 2 is a huge amount of pips away. Can you expand your thoughts on this issue, which seems to be the key to getting the entry safe. (See Chart 2 Below and your original comment to steveshutts. This chart is the one you posted in reply to steveshutts.)
Bubble's response to steveshutts:
Look at the chart i have posted, as you know from reading the thread that i am looking to enter from a retracement to support back into the trend which is what happened here the price was making higher highs and higher lows.
I have used the 15 chart to illustrate range as the 60 was not clear enough.
Looking at the last high at point 3 i would look for the first trough down from that high which is point 2 now that point is the low of the range that the price can come into before turning back up , now if the price came lower than that then the trend is now broken and there would be no entry.
I am sure that you will undestand the concept , for those that do not understand please read the pdf i posted from marting pring reeaks and troughs.
I was going through Martin Pings article and the range posts with Stevehutts.
I would like to check with you if I am understanding "Range" correctly.
I have labled 2 price levels in red. The upper is the last peak HH and the lower the last trough of the HL.
I understand this to be the Range.
Now the price has broken below the range of the last HH and HL.
If I have understood correctly now the trend is broken.
Am I understanding this correctly?
I know the question is for Bubble, and do not want to interfere, but if I just can add a sub question: doesn't must be a LH now, before we can say certainly that the trend is broken ?
michel is correct ,to confirm the trend is over the price would have to make another lower high and then break the previous low to confirm the trend is broken ,at this point it is tempting to take a short but i can tell you now that that it is best to wait because the price will come back to retest shortly after it breaks the previous low.
thanks for that. I have been wrestling with the Range subject over the weekend. Now something has clicked. Thanks to Michel too, well spotted.
No, I am not tempted to short it!
Not Sure About this One?
This is a short gbp/yen position and I am showing a 15 min because it's easier to follow my question.
Ok..we have higher highs and higher lows price tops out @ 241.74. Price starts to fall and we have lower highs and lower lows. If I understand what you define as the range then the grey shaded area is the current range, is that correct? Even though we are making lower highs and lower lows the up trend is still in place until the price action moves down into the current range and we get a peak and trough within or below the gray shaded area? Is that correct? I wasn't sure if I should draw the pink support and resistance lines because we hadn't broken the support line @ 240.20 but I went ahead and put them in and I saw that price had several touches to the SBR line @ 240.75. Now here is were I got a little confused. I entered a short position on the candle in the blue circle @ 240.51. price didn't move much and actually went up and stopped me out at 240.98 (red circle) for -47 pips. Was my initial stop placed correctly? Looking at this in retrospect since price never formed a lower low and lower high in the gray area the up trend was still in effect and I shouldn't have taken a short position to begin with, is that analysis correct? Ironically enough a few bars later price dropped like a rock but it still hasn't formed a lower low or lower high yet in the gray area.
I guess bubble will confirm your querie in due course, but I've been reading the mid term trend as still bearish, with the recent 7 trading days activity merely cutting out a range below 243.0
Until price breaks back beyond that fulcrum, the mid term trend is down.
Failure for price to hurdle back beyond 241.30 this morning rendered this thing suspect to continued downside. The lower high @ 241.0 (with that candle print) was good enough really.
But that's just my take on current events - yours may well be entirely different!
PS: Forgot to highlight the lower (paring) profit levels - 1st watch level: 239.70, 2nd level: the bottom of the range @ 239.0
Spot on as usual Anna!!!
I think the GBP/JPY was a hard one, as Anna says, it was really just cutting out a range on the hourly, not clear direction, whereas cable gave a clearer direction once price broke support at 2080 and there was the retest.