How to use Support and Resistance Effectively - page 39

Starfish
8
Starfish  
Sundowner:
I'm asking the most basic of questions. How do I decide what is a peak and trough? What am I not getting?

Hi Sundowner,

This is how I do it.

First, I determine the trend on the higher time frame. So to label the 15 min chart, I look at the 60 min chart. So I bring up the 60 min time frame, and mark the swing highs and lows. Then change the setting for the chart you have just marked to the 15 min time frame. If you try to mark the highs and lows on the 15 min time frame directly, you will experience the problem that you are having. Which is that you will have highs and lows marked that are not visible to a 60 min time frame player.

Then, there is a difference between "swing points" and a "swing high" or a "swing low". A swing point is a bar that has a lower high immediately before it and after it, or a higher low immediately before it and after it. However, a swing high is the first swing point once the previous swing high has been passed. What complicates the issue is that a swing low (in this example in an uptrend) is only confirmed, once the next swing high has been passed upwards. Which means you can spend quite a long time thinking "was that a swing low made just then?". You've no way of being sure until the high has been breached.

To confirm an uptrend, Bubble would wait for a Low, a HH, then a HL (which is only confirmed once price has passed the HH upwards) on the higher time frame, before looking for the SBR line. At least, that's what I think.... if I followed him correctly.

I've put on a couple of 60 min EURJPY charts with some of these points on them.

PS I am not sure if that is how anybody else does this, but that's how I do it. In addition, I have to say the charts only started to make sense to me once I had seen some kind of market structure forming.

PPS. This is video very good as well if you haven't seen it. From the LBR site. Linda Raschke MarketVu presentation part 3.

Created by Camtasia Studio 3

PPS Basic questions are GOOD ...... the more basic the better, I find

Sundowner
76
Sundowner  

Wow, very much appreciated Starfish

Hi Starfish,

Fantastic! Thanks for the video and all the information/examples. I'll have a good long study of everything you've presented. At first glance it seems as though I'm confusing swing points with swing highs and lows and I need to start looking at price action on a htf first.

Thanks again.

Cheers

Starfish
8
Starfish  
Sundowner:
I need to start looking at price action on a htf first.

There is nothing to stop you defining a trend on the 15 min time frame using the swing highs and lows, but I understood Bubble's way of looking for trades, was to enter on a lower time frame, in the direction of the higher time frame, and to do that you have to define the trend in the higher time frame. This then tells you whether to look for longs or for shorts. No trend in the higher time frame means no trades. So on EURJPY, there is no trend confirmed on the 4 hour time frame, and the 60 min time frame confirmed an uptrend which didn't go very far, and then a down trend, which hasn't gone very far either.

Where I am slightly confused is that Bubble said, I think, don't look at the higher time frame first, but rather look at the lower time frame to find multiple points of support or resistance, and only then check on the higher time frames. It would be good if anybody else could throw any light on this, because I am not sure if I have this correct.

XKR1962
60
XKR1962  

Hi Starfish,

bubbles reply to Malcik ref how he trades.

"trade 60 min and upwards ,trade only with the trend on the HTF, why all the effort trading 5,15when a few good trades on the 60m will give you more than enough pips and less stress."

I also remember reading that a confirmation of trends in the upper 2 tf's would indicate a better propability of a good trade but only the next higher tf (i.e. 4hr) is mandatory.

I have always believed bubble just used the 15 min tf to confirm an entry point for the 1hr tf.

I hope that helps.

Daryl

XKR1962
60
XKR1962  

Hi Folks,

I took what I thought was a debatable long trade today but it paid off. The trade was in the 60min tf with the 4hr looking to me like the trend was down yet the daily tf looking to me like the trend was up.

Anyway with the target being about 90 pips and the stoploss being about 20pips the risk reward seemed ok. (I'm trading a demo account)

Have a look and rip me to bits if needs be.

P.S. drop into fxitfx's chat room.

Daryl

Starfish
8
Starfish  
XKR1962:

Have a look and rip me to bits if needs be.

What is it with this negative talk?

Snappy name you've got there though, XKR1962......

Here is what I see, others may see something else, and frequently do. In fact, if anyone has a different idea for what the trend is doing, say so, because I am just trying to learn here.

My swing point count says daily trend is down, 4 hour trend is up, but price hasn't passed the last swing high, and the 60 min trend is up. So, it looks like you traded in the direction of the next higher time frame. As you say, good risk reward - looks like job's a good'un to me. How did you enter? On a buy limit? Or manually? Or did you go to a lower time frame and look for some kind of price action entry? And where did you put your stop? Questions, questions..

XKR1962
60
XKR1962  

Starfish,

thanks for taking the time to create those charts. If they are correct, and I think they look good, then I got 1 trend out of 3 correct and like you say the trade was good, not just luck.

Thanks again.

P.S. there are a few of us trying to learn to trade Bubbles system in fxitfx's chat room, all are welcome to join us. The more the merrier.

Goto paltalk.com "bubble fx room"

Thanks again to Bubble. If I don't bugger things up today your system will have added about 700 pips to my demo account. In the past any pips I made were virtually all luck.

XKR1962
60
XKR1962  

Hi Folks,

plenty of profitable trading opportunities again Friday using Bubbles methods, my favourite being the last of the day, spotted by fxitfx just before he finished for the week and left the "bubble fx room".

I took 90 pips from that trade, thanks fx.

Keep posting folks. Have a great weekend everyone.

Come back bubble

Files:
downunderdave40
156
downunderdave40  

Trend vs Direction

XKR1962:
Starfish,

thanks for taking the time to create those charts. If they are correct, and I think they look good, then I got 1 trend out of 3 correct and like you say the trade was good, not just luck.

Thanks again.

P.S. there are a few of us trying to learn to trade Bubbles system in fxitfx's chat room, all are welcome to join us. The more the merrier.

Goto paltalk.com "bubble fx room"

Thanks again to Bubble. If I don't bugger things up today your system will have added about 700 pips to my demo account. In the past any pips I made were virtually all luck.

I just wanted to point out that even though you may have an overall up or down trend on a 4 hr chart you can trade from the hourly chart with the short term direction of the 4 hr chart. Meaning that if you have a down trend on the 1 hr chart and the short term direction is down on the 4 hr you can take that trade. The short term down direction in the 4 hr chart maybe a pullback until the overall up trend resumes. I think these trades are a bit more difficult to execute and most newbies would be better off waiting until price hits support and starts to go up so they are trading with the overall longer term trend again. As I have learned having the patients to wait for the resumption of the trend is easier said than done.

XKR1962
60
XKR1962  

Hi Dave,

yes I see what you mean. I guess the more you trade the easier it will become to identify the less obvious trades.

I am demo trading this system at the moment using a couple of accounts, one for low risk trades, and the other for less obvious trades, this way I find it is easier to keep track by saving charts and notes of what I have done, right or wrong.

Also I am demo trading as many bubble setups as humanly possible finding the more I trade it the clearer it becomes.

Continuing this thread and debating good or bad trade setups is helping me enormously. Thankyou.