Buy @ support, selling @ resistance, selling @ minor resistance, buy @ minor support

This is a discussion on Buy @ support, selling @ resistance, selling @ minor resistance, buy @ minor support within the Forex forums, part of the Markets category; Hi thebull I can't see the major support that you refer to at 1.2900. What chart are you looking at? ...

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Old Jan 8, 2007, 9:00am   #31
Joined Dec 2002
Question Re: Buy @ support, selling @ resistance, selling @ minor resistance, buy @ minor support

JTrader started this thread Hi thebull

I can't see the major support that you refer to at 1.2900. What chart are you looking at? and when (dates) do you see this support?

Does this major support come in the form of previous resistance, as opposed to actual support?, or did this support at 1.2900 exist way back, and has long since been broken?

Cheers
JT.

Last edited by JTrader; Jan 8, 2007 at 9:48am.
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Old Jan 8, 2007, 9:09am   #32
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Wink Re: Buy @ support, selling @ resistance, selling @ minor resistance, buy @ minor support

JTrader started this thread I don't want to get sucked into trying to short 1.3000 today just for the sake of it, not unless my chart setups, give me good reason to.
It's a new week, but i would rather miss the move down (or some of it) than lose another 13 pips like i did on Friday. I want to see how price reacts around 1.3000 (a very round century level). It still looks like heavy support exists around the late 2990's. WHen this S has collapsed, price has only dropped to 2980 before recovering back above 1.3000.

In my mind, I'm just imagining the level 2 order book with huge S below 1.3000, and many more buy order than sell orders. I could be completely wrong though.
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Old Jan 8, 2007, 11:26am   #33
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Lightbulb Re: Buy @ support, selling @ resistance, selling @ minor resistance, buy @ minor support

JTrader started this thread Hi DBP


I have noticed the following, particularly with reference to the minor S/R levels within the major Highs/lows - R/S on a chart..........the swings inbetween the full range of price activity on a chart....

To confirm a downtrend, an LH needs to form to accompany the LL. The LL seems to usually form before the LH.
To confirm an uptrend a HL needs to form to accompany the HH. The HH seems to usually form before the HL.

Therefore for shorts, I am thinking it would be best to go short once you have the LH to accompany the LL, in what will hopefully continue to be a downtrend. And to wait for a HL to accompany the HH before going long in what will hopefully continue to be an uptrend.

On the charts i am looking at I am finding that if the LH comes before the LL, and you then need to wait for a LL to confirm the LH and thus a downtrend, price often reverses at this LL, and had you shorted this LL, you'd have been stopped out.

Similarly if the HL comes before the HH, and you need to wait for a HH to confirm the uptrend, price often seems to reverse at the HH, and if you'd gone long at the HH, the reversal would have stopped you out of the trade.

Therefore, in order to go long when an uptrend is confirmed it is better for the HH to come before the HL.
To short when a downtrend is confirmed, it is better for the LH to follow the LL.

Do these interpretations and theories of mine, make sense, and have any credibility in your opinion? or do I appear to be getting confused?

Thanks again.

PS. I feel it can definately enhance my understanding of price by interpreting the chart as a series of HH's, HL's, & LL's, LH's, if I can start to interpet this info correctly.
Previously, I didn't really pay any information to these waves of price movement (except when i connected the highs/lows of these waves for drawing trendlines. However, i've stopped drawing trendlines now, because -A - as you say DBP they do not show areas of S/R, -B- I found they took up unneccesary time and attention to draw and maintain, when I can visualise where the lines would go. I now draw only horizontal lines). Previously I only really payed attention to my indicators signals on the chart, considering the waves of price movement inbetween (except major S/R) as largely insignificant. Its good to be able to identify and understand as much of the full picture as possible........

Last edited by JTrader; Jan 8, 2007 at 1:57pm.
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Old Jan 8, 2007, 2:13pm   #34
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JTrader

in 1.29 there is a combination I believe of a round number and previous resistance. I dont know how you trade, but when I mean I believe price will go down it doesnt mean that there wont be a technical correction upwards so if you are worried about loosing 12 pips then in that case I dont know.

when I look at the daily graph it looks like there should be resistance at 1.29, but you know untill price has moved you can never know

I am actually waiting for a correction to around 1.3066-1.309 to short the position

Quote:
Originally Posted by JTrader
Hi thebull

I can't see the major support that you refer to at 1.2900. What chart are you looking at? and when (dates) do you see this support?

Does this major support come in the form of previous resistance, as opposed to actual support?, or did this support at 1.2900 exist way back, and has long since been broken?

Cheers
JT.
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Old Jan 8, 2007, 2:18pm   #35
 
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Quote:
Originally Posted by JTrader
Hi DBP


I have noticed the following, particularly with reference to the minor S/R levels within the major Highs/lows - R/S on a chart..........the swings inbetween the full range of price activity on a chart....

To confirm a downtrend, an LH needs to form to accompany the LL. The LL seems to usually form before the LH.
To confirm an uptrend a HL needs to form to accompany the HH. The HH seems to usually form before the HL.

Therefore for shorts, I am thinking it would be best to go short once you have the LH to accompany the LL, in what will hopefully continue to be a downtrend. And to wait for a HL to accompany the HH before going long in what will hopefully continue to be an uptrend.

On the charts i am looking at I am finding that if the LH comes before the LL, and you then need to wait for a LL to confirm the LH and thus a downtrend, price often reverses at this LL, and had you shorted this LL, you'd have been stopped out.

Similarly if the HL comes before the HH, and you need to wait for a HH to confirm the uptrend, price often seems to reverse at the HH, and if you'd gone long at the HH, the reversal would have stopped you out of the trade.

Therefore, in order to go long when an uptrend is confirmed it is better for the HH to come before the HL.
To short when a downtrend is confirmed, it is better for the LH to follow the LL.

Do these interpretations and theories of mine, make sense, and have any credibility in your opinion? or do I appear to be getting confused?

Thanks again.

PS. I feel it can definately enhance my understanding of price by interpreting the chart as a series of HH's, HL's, & LL's, LH's, if I can start to interpet this info correctly.
Previously, I didn't really pay any information to these waves of price moevement - only really paying attention to my indicators signals on the chart, and seeing the waves of price movement inbetween (except major S/R) as largely insignificant. Its good to be able to identify and understand as much of the full picture as possible........
These have been the commonly-used definitions of trend for many years, so, yes, they are credible. As to theory, you can define trend any way you want. It's your trading environment. However, defining a downtrend by the presence of both a LH and a LL helps to prevent you from shorting, in an upmove, what turns out to be a retracement or buying what turns out to be a reversal. As for waiting for the LL after a LH, if you don't get one, you don't have a downtrend. You either have a sideways movement of some sort, or a possible preparation for a continuation. If you focus on the LLs and ignore the LHs, you're going to be trying to catch bottoms rather than trade the market flow.

For example, using the chart you posted earlier, all the green dots are potential longs. Which make the most sense?
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Old Jan 8, 2007, 4:16pm   #36
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Lightbulb More observations/thoughts/ideas

JTrader started this thread Following on from my slightly confused sounding last post, my thoughts are a bit clearer.

With regards to trading around HH's or HL's, or LL's or LH's - I see two options -

Option A
Naturally a HH is a break above minor or major R, and it is possible to go long (looking for a breakout/continuation up) at that HH. While a LL is a break below either major or minor S, and it is possible to short (looking for a breakout/continuation down) at this LL.

Option B
If looking to go long, you would/could/should look to time your entry at the next potential HL.
If looking to go short, you would/could/should look to time your entry at the next potential LH.
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Old Jan 8, 2007, 4:19pm   #37
 
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That's a beginning.
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Old Jan 8, 2007, 4:25pm   #38
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Lightbulb Re: Buy @ support, selling @ resistance, selling @ minor resistance, buy @ minor support

JTrader started this thread
Quote:
Originally Posted by JTrader
Following on from my slightly confused sounding last post, my thoughts are a bit clearer.

With regards to trading around HH's or HL's, or LL's or LH's - I see two options -

Option A
Naturally a HH is a break above minor or major R, and it is possible to go long (looking for a breakout/continuation up) at that HH. While a LL is a break below either major or minor S, and it is possible to short (looking for a breakout/continuation down) at this LL.

Option B
If looking to go long, you would/could/should look to time your entry at the next potential HL.
If looking to go short, you would/could/should look to time your entry at the next potential LH.
...........And then there's Option C which is to go long at a new LL, or to go short at a new HH - looking for reversals.
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Old Jan 8, 2007, 4:37pm   #39
 
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Originally Posted by JTrader
...........And then there's Option C which is to go long at a new LL, or to go short at a new HH - looking for reversals.
Technically, yes, that is an option. If you keep Dirty Harry in mind.

Db
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Old Jan 8, 2007, 5:44pm   #40
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Lightbulb Re: Buy @ support, selling @ resistance, selling @ minor resistance, buy @ minor support

JTrader started this thread
Quote:
Originally Posted by dbphoenix
These have been the commonly-used definitions of trend for many years, so, yes, they are credible. As to theory, you can define trend any way you want. It's your trading environment. However, defining a downtrend by the presence of both a LH and a LL helps to prevent you from shorting, in an upmove, what turns out to be a retracement or buying what turns out to be a reversal. As for waiting for the LL after a LH, if you don't get one, you don't have a downtrend. You either have a sideways movement of some sort, or a possible preparation for a continuation. If you focus on the LLs and ignore the LHs, you're going to be trying to catch bottoms rather than trade the market flow.

For example, using the chart you posted earlier, all the green dots are potential longs. Which make the most sense?
Hi DBP

I may be wrong, but as I see it, the green dots form 5 pairs of dots - one upper and one lower dot in each pair for the first 4 pairs of dots. The fifth pair of green dots are the two dots to the far right.

Upon first sight, for going long, the chart didn't/doesn't look very appealing to me, due to each option being at or near a new LL.

However, upon close inspection -

Entering long at the close of the candle that the first lower green dot represents makes more sense than entering long at the close of the candle represented by the first upper green dot.
The preferred candle has closed by retracing back into a range, after breaking support/making a LL - showing signs of a retracement up/recovery/strength.
The upper first dots candle is one candle later, and has shown signs of weakness by closing below the previous candles close.
Therefore entering here not only gets you into the long trade later than the previous candle (missing out on some profits), but you're also buying into potential weakness.

For the second pair of green dots, entering at the close of the candle represented by the lower green dot again seems to make more sense.
The preferred candle again broke the previous support level and closed lower than its open. But after making that LL, price retraces sharply, evident through the long lower spike on the candle, closing within the range of the previous LL - showing signs of a retracement up/recovery/strength.
The candle represented by the 2nd upper green dot not only gets you into the long trade one candle later (when some of the potential profit has been missed), but this candle again shows signs of weakness by closing lower than its open, and lower than the close of the previous candle.

For the third pair of green dots, again going long at the close of the candle represented by the lower green dot seems to make more sense.
The preferred candle has made a new low, but it has closed within the range of the previous candle - showing signs of a retracement up/recovery/strength.
Whereas the candle that the 3rd upper green dot represents, one candle prior to this had made a new LL, showing significant weakness.

For the 4th pair of dots, buying at the close of the candle represented by the upper green dot makes more sense this time.
The candle prior to this one (represented by the 4th lower green dot) has again made a new LL. Although it has shown some signs of strength by closing 3 pips higher than it's low, it only closes at the same price as the previous LL.
The next (preferred) candle however, shows clearer signs of strength, continuing the retracement from the previous candles low, and closing within the range of the former LL.

With the fifth pair of green dots (two green dots furthest right), going long at the close of the candle represented by the furthermost right green dot seems to make the most sense.
This and the alternative candle (as i see it - represented by the green dot that is 2nd most right) both have seen price recover above 1.3000, following a very recent price fall below 1.3000.
However, the recovery of price above 1.3000 in the candle on the far right seems to take place easier, quicker and more convincingly (within one 10-tick candle as opposed to three 10-tick candles), thus showing greater strength and potential for a continued reversal up.

Buying into (signs of) strength seems to be the recurring theme, and buying into (signs of) strength does make more sense than buying into weakness, especially when looking for price to reverse.

Thanks again.
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