How to use Support and Resistance Effectively - page 9

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Malcik
158
Malcik  

el cid:

Thank you very much for explaining.

bubble:

Thanks for your continuing classes. I sure hope the login problems will disappear so that it won't prevent you from posting

Looking forward for upcoming lessons.

jackt
82
jackt  
bubble:
I am having some real problems with logging in to the forum lately dont know if any one else is.

Malcik

When you have identified an area of support look at how many minor swings there has been to this support ,enter on the second or third swing back to support , so the price would have to bounce of your area of support at least once and move higher then return to support place the stop loss under the low of the lowest swing.

For the exit assuming the trade goes ok find the last peak, when the price hits this peak move your stop to B/E +1 and close half your position ,let the other half ride because if your trade is with the trend the price will normally go to the next peak, if your taking a counter trend trade exit at the first peak.

Dont forget to note any points of resistance on the HTF when looking for the exit.

I hope this clears up some of the points you raised.

bubble

Hi bubble, 2 questions.

1. "enter on the second or third swing back to support" are you referring to 1 hr tf? What about other tf?

2. the exit line in the gbpusd example, would you reverse the position?

Thanks

jackt

PRADIP RUPARELIA
5975
PRADIP RUPARELIA  

Bubble

All theories are great.

How about posting trades....before they happen and seeing the results

We will see how profitable support and resistance is.

Regards

El Cid

Guyver
1152
Guyver  

Excellent Stuff Bubble

Bubble i admire your work and step you took to teach us newbies about one of the most important topics and i think you are going very good i am also learning alot from this thread ..

please take a look at my chart i am long EURGBP this trade has to do with different timeframes and support and resistance .

went long @ 0.6769 and stop @ 0.6750 as you can see the price is just at 0.6773 so not much has been done except i think from monday it is going to start going up hopefully for next 100 pips or more .. even if not ,well it doesn't matter atleast i planned this trade and i am still learning from you and others here on this forum.

"Lime" line shows which level i was waiting for the eurgbp to break.

many thanks and please continue to teach ..

a silent reader.

Guyver

Malcik
158
Malcik  

Hi bubble,

I was experimenting with some charts and your method today and I still seem to be having trouble finding fine entries and exits. The causes for this probably are:

1) no rules for exits as of yet - whether taking a loss or a profit

2) no idea as to how many trades are performed over a certain time period on average (maybe I'm overtrading one pair and should take fewer trades per pair but on multiple pairs)

3) problems with detecting trends on higher TFs

Do you think you could elaborate on these?

In case you are going to cover it later and this would be a disruption, please ignore it

Are you going to show some trades in real time - the way you would trade them?

Thanks for your great work!

nosam
103
nosam  

current EURUSD 1H & 4H

First, thank you to bubble and anybody that post in this thread, for their valueable and meaningful posts.

Now let me apply this to current chart, and please correct me if I did mistake in drawing s/r

EURUSD H1 shows gap, looks to me as blow-off, price now already break current resistance and in the gap

EURUSD H4 shows no gap, price is in current resistance

How should we interpret this, wait for other confirmation from other trading system ?

My guess would be H4 will dominate the decision, if price bounce back (down), price will hit current support, but if price breaks out (up), price will face 3 minor resistances, so it is waiting moment.

PS. should we draw minor s/r (as different color) ? and how abour spike (1-3 bars) that is false breakout ?

Files:
Guyver
1152
Guyver  
bubble:
Guyver,

Looking at the chart the support area is a bit lower if you look at my chart you can see it should be on the first peak lower down ,the price went up made a new high and then retraced back to the previous area of resistance which now becomes support , we enter the trade on the second retrace to support, if the price did not come back to retest then there would be other trades.

You can see on the 60 min chart how the roles of s/r are reversed as that trough on the left now becomes resistance and that is the exact same line from the 15 min chart.

On the 4 hourly we can see how the same line was tested 4 times before the price went lower, that same line again reverses and become resistance.

This trade may be a reversal , which ever timeframe i trade on thats where my target comes from so in this case i would of targeted around the 6793 mark as that is the next peak.

The eurgbp is not very volatile so its important to remember not to expect 100 pips from a trade on the 15 chart for this pair i would look for 4hrs upwards timeframes.

bubble

hi bubble thanks.

I understand your point , i am in a process to automate these lines which i show in the chart they are indeed taken from 4hrs time frame, but ofcourse your opinion matters most as i am learning from this thread . The reason to take this is line was that it was somekind of support manifested in past let me show the chart again from where it is comming pic shows 24th May 2007 support and also on 17th April. So as i calculate the support or resistance this green lines gives me the most near support not to say i am correct but just an observation of the lines when it calculates ..

i dont know about targets but thanks for mentioning how would you look for the targets i will continue to watch this thread with interest.

regards

Guyver.

beagle1977
83
beagle1977  

Do you use murrey math, fibs, elliott etc for finding your S and R cos i have tried using them and have found them to be very effective...

Malcik
158
Malcik  
bubble:
Malcik

1) no rules for exits as of yet - whether taking a loss or a profit

Dont worry about the exits yet , concentrate on finding the signals and s/r lines, i dont want to throw it all out at the same time ,then people will get more confused, one step at a time ,it took me a long time to learn this stuff dont pressure yourself.

When trading this style we are first looking for a turning point around a peak or trough then we draw in our s/r lines if you try it the other way round then it become more difficult , so to make it easy just look at a chart of past price action start from a low or a high and see how the troughs or peaks interact then place your lines in one at a time then look at the higher timeframe one at a time , the confusion here comes with the s/r role reversal on the higher timeframes , think in reverse ,read the whole section again do a google etc.

Place a moving average on the chart if it helps you to see the turns better ,dont ask me which one.

2) no idea as to how many trades are performed over a certain time period on average (maybe I'm overtrading one pair and should take fewer trades per pair but on multiple pairs)

There is not a preset amount of trades to take we take what looks right according to our analysis when they become availble, 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.

This style if applied correctly is very high reward with low risk because we buy at support and sell at resistance therefore we know where to place our stop if we are wrong then we will know very quickly and wait for another opportunity.

3) problems with detecting trends on higher TFs

Can you elaborate on this one a bit more.

bubble

OK, some of the things have become clearer already... there's nothing like studying the charts

What I meant by number of trades... I know that the market tells you how many trades you are supposed to trade by giving you the setups or not. I just wondered, from your personal experience, how many signals (a week for example) you get per pair and how many it totals for all pairs. Just experience so that I can see how much you trade.

As far as exits - OK, I'll hold on, please don't let me disrupt your layout

PRADIP RUPARELIA
5975
PRADIP RUPARELIA  

Bubble

How can u forsee a reversal using s and r before the reversal happens ?

or are u just saying support and resistance is there but i got no clue where the market is heading

Cid

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