How to use Support and Resistance Effectively - page 32
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Hi Steve,
I see a different senario. I think it may help if you use the H,L, HL, HH markers on your charts. I do it religiously now and it helps me.
P.S. I'm not trying to be a smart arse, just learning here. Have a great day.
Short trade setup on the Swissy. Lets see how this pans out!
steveshutts
USD/CHF
if I good understand ...?? there is strong SBR , trend 1 hour is UP ,trend 4 hour is down but direction is UP ... what is more important now ?? trend or direction on 4 hour?? I think your trade is counter trade am I all right ???
have a nice "pipping" day
Peter
Yes, we are looking from different timeframes, and it can be ambiguous as they will have different trends. I am looking at this trade from a 4 hr perspective, with this peak, the retest of the previous trough on the 4 hour, being the lower high. Price has hit this area twice on the hourly so i went short.
I have since adjusted my stop to 00 as it still gives a small risk compared with the potential reward.
steveshutts
USD/CHF
if I good understand ...?? there is strong SBR , trend 1 hour is UP ,trend 4 hour is down but direction is UP ... what is more important now ?? trend or direction on 4 hour?? I think your trade is counter trade am I all right ???
have a nice "pipping" day
PeterIt always depends which timeframe you are operating from. I would not consider this trade a counter trend trade as i am trading off the 4 hour chart. You will often see a trend in the opposite direction on the lower timeframe as price retraces. In this instance, the 1hr timeframe trend is up, but it has reached a major reistance level, which is the old support level on the 4 hour. That level was a very strong support level, which price has broke through.
Price hit it once, which can be seen on the hourly, it has since made a stop run on any early shorts with the second spike up. We now have an inverted hammer on the 1hr.
I am not saying that this will be a winning trade, but i am simply looking for opps that are high probability. IMO, given Bubbles technique, this looks like it has a high prob of rebounding off this level and continuing in the major direction of the 4hr and daily trend.
If it doesn't, then we lose and its on to the next one!!
I may be wrong and i am sure Bubble will correct me if i am!
Will be interesting to here Bubble's comments on this one. From my 30 min perspective I was keen on a long, though stayed out after checking up on the 4 hr where there is 'massive' area of SBR. If too much conflict stay out ! To enter a trade I always check to see there is a reasonable clean run ahead without a barrier/s. What is a reasonable clean run is open for discussion !?
Usually on a higher time frame the stop is likely be wider than on a shorter one, though in both cases depends on past price action.
Will be interesting to here Bubble's comments on this one. From my 30 min perspective I was keen on a long, though stayed out after checking up on the 4 hr where there is 'massive' area of SBR. If too much conflict stay out ! To enter a trade I always check to see there is a reasonable clean run ahead without a barrier/s. What is a reasonable clean run is open for discussion !? Usually on a higher time frame the stop is likely be wider than on a shorter one, though in both cases depends on past price action.
Yep, we must always confirm with the higher timeframes, that is the key! The 30 min timeframe is a nice one and is great to trade in and out of the price swings on the larger timeframes.
Hi Steve,
using the 4h tf I don't see how you worked out your entry, it appears you have entered at a potential LH.
Hi Steve, using the 4h tf I don't see how you worked out your entry, it appears you have entered at a potential LH.
Here, i have marked on the series of LL's and LH's on the chart. The short was taken with respect to this 4hr chart, which is clearly in a downtrend!
The short was taken from the second touch of that old support area, which is clearly visible on the 1 hour chart.
If you are long, then fine, everyone sees things different, if not, the market would be a boring place, and completely untradeable!
If it gets down there, i will be looking to scale out at the 1906 area, where price bounced on the hourly. Then move stop to BE and look for main target of 1813 area, which is the 4hr target. But 1906 will be about 60 pips, so not a bad area to pare some profits. Then again, it could find support at 50 and come bak up and stop me out, if it does, then so be it!
Hi Steve,
thanks for clarifying things. Have a good day.
It always depends which timeframe you are operating from. I would not consider this trade a counter trend trade as i am trading off the 4 hour chart. You will often see a trend in the opposite direction on the lower timeframe as price retraces. In this instance, the 1hr timeframe trend is up, but it has reached a major reistance level, which is the old support level on the 4 hour. That level was a very strong support level, which price has broke through.
Price hit it once, which can be seen on the hourly, it has since made a stop run on any early shorts with the second spike up. We now have an inverted hammer on the 1hr.
I am not saying that this will be a winning trade, but i am simply looking for opps that are high probability. IMO, given Bubbles technique, this looks like it has a high prob of rebounding off this level and continuing in the major direction of the 4hr and daily trend.
If it doesn't, then we lose and its on to the next one!!
I may be wrong and i am sure Bubble will correct me if i am!Steve
thanks it is nice and clear explanation ..i think you will be right