Best Thread learning to read price action with p/f charts

[Dentalfloss]

cable..gbpusd
broken out
4 hour data
37 pips by 2 reversal..hilo plot
seems to be definite dollar weakness=stocks up
need to see surusd break

 

[isatrader]

isatrader
dorsey wright is a very good sight
barclays chart...the hilo plot is not good for this instrument.there is an intraday spike,which is eliminated on the close plot
so imho confuses the price action
dorsey wright...3 box reversal is too clumsy for short term trading imho

Thanks for the reply dentist007. I am a big fan of Dorsey's site and it's become a big part of my daily trading as I use the P&F activity reports, portfolio and P&F matrix features regularly.

I have noticed that the default P&F settings are not so good for UK stocks as the prices are much larger, i.e stocks over 1000 is very common in UK stocks, so the the larger sized scales are used. I'm not sure if this is correct, but P&F default scales seems to be suited towards US stocks as they are generally below 100.

I will look into the close only charts, thanks.

 

[malaguti]

Hi malaguti
good stuff..the trendlines tell you the story
it is the placement of the trendlines that will make you decide whether to trade..then just look for the signal/pattern
you will need to see the reaction of barc in the 230 zone before looking at shorts.also there is a big supp zone at 215 area
as you say there is no real confirmation of break of trend.so no shorts uneless scalps imho
tuition in p/f....well.there is very little to learn.the main thing which you have got now is placement of trendlines and interpretation...but am happy to help
meet either a saturday or sunday/late afternoon in kingston upon thames.there is a pret a manger near marks and spencer.you can buy the coffee"s

I'm in Ealing, I'd happily buy the coffees, just to say thanks for the thread! And there's loads to learn I've found, that mostly stem from moving from a book to actually trading. When to take a trade/not to, assessing good risk reward, buying/selling the breakout or waiting for the close...I cant post the chart as I work abroad alot but I noticed todays support of 230 on Barclays broke, and was setting up a double bottom only for it to close above. Had you set a limit order you would have been filled just to see it go back into the support zone..learn from people who are successful doing something..we'll set up a saturday afternoon for sure

 

[Dentalfloss]

spx 2 hour data

 

[Dentalfloss]

outlook for non farm payrolls
eurusd 10min data
the downtrend that started on 3 rd april looks to be over
so either
continuation of downtrend or support comes in

 

[Dentalfloss]

barclays..updated chart showing the breakdown in price
following the main indices which fell due to euro troubles

 

[Dentalfloss]

we can ssethe 232-236 supp area got broken on tuesday
a minor recoil back into the s/r zone
shorts saw the weakness there and bang down it went
now we look at major supp zone which is looming

note how we got a good tarding signal on this chart aswell..consecutive double- bottoms
a good trade for everyone who went short.the main driver being europe..imho
not for me..i dont trade uk equities

 

[Dentalfloss]

a scalp short as we called lsat week..price has now edged near the big supp zone..trendline cluster
so..either we bounce in this major supp zone and then reassess the chart,or we get trend continuation downwards
malaguti...a good spot on this
keep em comin

 

[malaguti]

malaguti...a good spot on this
keep em comin[/QUOTE]

Thats easy, Updata allows me to search for all manner of P&F signals..shame you dont do equities, but you day trade and they move too slowly for sure.
I do trade UK equities, as soon as I get better at this, I'll move up a bit. Still short on barclays and looking good, against my own advice but the way the FTSE is going I figured any short could pay off.

You highlight another interesting point though..My first analysis was 2 box, 2 reversal suggesting support was near, as does the 1 box reversal high low you showed.
Whereas the 4 box 3 reversal high low suggests the bullish support line broken and a firm double bottom sell signal.

If I've understood duplessis, the 1 box should be used in conjunction with higher reversal , to give perhaps more information..but where do we draw the line?
2 box vs 4 box, 3 reversal vs 1? 2 box vs 2 all giving a slightly different slant. Now I'm short i could easily convince myself that we are in the bear territory and fit the chart to my liking. Do you follow my dilemma?

 

[Dentalfloss]

trading signals
as we said that should come really from 1 box reversal
here is the chart that i would have probably traded from
a break of support
look at the green arrow......
a break of support..then price shot backl into the zone on a recoil
now that is where it gets interesting
the shorts will have noted that bad bounce and steamed in for the kill
so we would have taken a position on the opposite side of the pattern with a tight stop
or you could have been shorted from the 260 res area
either way,you were looking at the break of support to get you in the trade
you can day trade this sort of st up approx 10-15 times a day per instrument
if you take positions on the opposite side of the pattern,then if it is a trap,then losses are small

 

[malaguti]

OK, so trade off a 1 box..admittedly I've skipped over 1 box explanations preferring the more longer term but I can refine that for my trading.
But to begin, I'm setting my bullish/bearish zones...where do I start? I've got 3 charts where two of them are showing bullish support and the high low method showing multiple sell signals and no support in sight. On the one hand I'm still cautious whereas on the other i'm justifying my sell to myself preferring the last chart.
I guess if I try to answer my own question, I should be using all of them...Nothing wrong with being bearish, especially with the multiple sell signals on the high low method, but at the same time I should be looking out for any potential support areas being highlighted on the close method.
We should be looking out to see what the price action does at these support levels as you stated earlier.

 

[Dentalfloss]

eurusd update
30 minute data showing the downtrend from 3rd april.this trend took all the stock markets down with it...a stronger dollar
now..we have the beginnings of a new uptrend..no real confirmation as yet
weaker dollar=stronger stocks
6 pips by 1 hilo plot

 

[Dentalfloss]

so what shall we look for in this possible new trend ??
we change the chart to the close plot and we see a cluster of trendlines showing resistance.this is at the 1.3120 area which got tested on nfp..price then fell back.so there we have our potential area major res to this new trend.supports will be minor as it is a brand new trend.they can be picked off using 45 degree or subjective trendlines
price actually did settle at 3088,which was a 50% low pole area .i will show that chart aswell

 

[malaguti]

Now its all falling into place...thanks Dentist

 

[Dentalfloss]

dollar watching
aussie dollar has much more defined trends
so,there is a potential reversal happening...but there is a stack of resistance overhead
res area is 1.03640-1.0450 area..trendline cluster
audusd ..daily data
35 pips by 1 reversal

 

[Dentalfloss]

care with s&p500 shorts
a supp area at 1370 is looming
4 hour data

 

[malaguti]

A chart of BT...trend change perhaps, should it break past the red line

 

[malaguti]

And an update on Barclays, the 1 box just for you Dentist...a little triangle forming a break on either side I think would determine a good stop loss placement or an exit signal, would you agree?

 

[Dentalfloss]

barclays...excellent stuff
triangles are to be traded when you see them .make sure they have 5 columns ish..4 min
a common problem with triangles which you can profit from
.the market interprets the news wrongly...so they break out and then recoil and blow youre brains out.so you have to be nimble.
if you get the direction wrong..then possibly double up on the other side

 

[Dentalfloss]

done a quick scan of the ftse 100
one that might be of interest..antofagasta
16p by 1 reversal..daily
now you have a really decent downtrend which looks like it is about to reverse...so you have a good chance of getting plenty of pips from this reversal...imho
out of sync also with the s&p500...which is in an uptrend..as i said 1370 is an important support..a great uptrend from tuesday on that one