My Basic Chart Analysis Method

[jgadefelth]

i think we all wait for the new pdf part 2 if only the days could go faster

[phil838]

Originally Posted by jgadefelth

i think we all wait for the new pdf part 2 if only the days could go faster

It'll probably be towards the end of next week. I've had a lot of other stuff going on...

[johnnykanoo]

hey phil it would be great if you do some more analysis over the weekend and share with us your results. I like your style of reading price.

me ill keep an eye on my eu outside bar but honestly it is a b trade at best and really a c.

like you for me timing is everything where did an ib form or where did a pin bar form?

anyway i look foward to a chart or two from you mister

[cjgranfl]

Phil, thanks for your insight. I'm excited to give this method of trading a try, and incorporate it into what I've already been doing with S&R and scalp lines. I have three questions:

When you evaluate and chart your trend lines, do you do so on the 4 HR chart or on the daily TF and then verify the points that the lines are touching on the 4HR? It seems like you'd have the opportunity to find smaller trends on the 4 hr, but when you zoom out to daily you tend to see them as corrections of a larger trend.

My second question regards S&R zones. I've got a good handle on scalp lines, but charting more historical S&R is a bit more of a challenge. Like your trend lines, do you do this on the 4hr chart or look for the bigger picture on longer time frames?

Finally, I've got a scenario question. If you have a really wide S&R zone, say 100 pips, and you find that your logical stop loss for a long trade lies 150 pips away behind the S&R resistance. Do you think twice about the trade if the nearer S&R support or a bottom of the trend line are less than 150 pips away? This would seem to give you the possibility of a larger risk than reward for a potential trade if you exit on a bounce and reversal from the closer line.

Cody

[yantz]

hi phil! i just finished reading your ebook. i must say its very well written and extremely easy to understand. and your mm is very similar to mine, very good for long term investments.

a while back, i was also playing around with price action. what i tried back then was to look for the number of pips moved from recent lowest low or highest high on the h1. eg if the price has gone up 60 pips from recent lowest low, enter long for another 40 pips. basically the idea that i have is that once the price had moved a certain number of pips, it should have already be in a trend and continue that way. i got good results from a few pairs that way but only during certain times of the day. those times are specifically at eastern 2am to 6 am daily. during those times, my sr is virtually nearly 100%. but outside of that time period, i think i scored nearly 0% . i'm poor fundamentally, but maybe if fundamentals are added in, i could've skipped a few of the bad trades.

in the meantime, i'm back-testing your method and it seems very profitable! i just need to check the charts every about 2 hours or so, so that i will not miss any action.

thx
yantz

[phil838]

Originally Posted by cjgranfl

Phil, thanks for your insight. I'm excited to give this method of trading a try, and incorporate it into what I've already been doing with S&R and scalp lines. I have three questions:

When you evaluate and chart your trend lines, do you do so on the 4 HR chart or on the daily TF and then verify the points that the lines are touching on the 4HR? It seems like you'd have the opportunity to find smaller trends on the 4 hr, but when you zoom out to daily you tend to see them as corrections of a larger trend.

My second question regards S&R zones. I've got a good handle on scalp lines, but charting more historical S&R is a bit more of a challenge. Like your trend lines, do you do this on the 4hr chart or look for the bigger picture on longer time frames?

Finally, I've got a scenario question. If you have a really wide S&R zone, say 100 pips, and you find that your logical stop loss for a long trade lies 150 pips away behind the S&R resistance. Do you think twice about the trade if the nearer S&R support or a bottom of the trend line are less than 150 pips away? This would seem to give you the possibility of a larger risk than reward for a potential trade if you exit on a bounce and reversal from the closer line.

Cody

Hi Cody!

I do 95% of my charting on a 4H chart. In my opinion there's really not much you can see on a D1 chart that you can't see on a medium zoom 4H chart. If someone is else is trading a D1 chart and I'm trying a 4H chart we should still pretty much be seeing the same thing. I just like the little bit more detail you get a 4H chart.

As for your scenario... I normally wouldn't take a trade if the potential R:R is less than 1:1. But (there's always a but... )

If you have a trade, for example, that needs a 150 pip SL, has a strong S+R zone 100 pips away, and then the next strong S+R zone or strong trendline is 500+ pips or so away I would take the trade. That's a really good R:R ratio, if the price gets through the first line. I would be watching it really close, and if price reversed around that first S+R area I would get out of the trade around the breakeven point. That way you still have a chance for a really good winning trade, but your risk isn't too bad because you picked a third option (breakeven) instead of just win or lose.

[phil838]

Originally Posted by yantz

hi phil! i just finished reading your ebook. i must say its very well written and extremely easy to understand. and your mm is very similar to mine, very good for long term investments.

a while back, i was also playing around with price action. what i tried back then was to look for the number of pips moved from recent lowest low or highest high on the h1. eg if the price has gone up 60 pips from recent lowest low, enter long for another 40 pips. basically the idea that i have is that once the price had moved a certain number of pips, it should have already be in a trend and continue that way. i got good results from a few pairs that way but only during certain times of the day. those times are specifically at eastern 2am to 6 am daily. during those times, my sr is virtually nearly 100%. but outside of that time period, i think i scored nearly 0% . i'm poor fundamentally, but maybe if fundamentals are added in, i could've skipped a few of the bad trades.

in the meantime, i'm back-testing your method and it seems very profitable! i just need to check the charts every about 2 hours or so, so that i will not miss any action.

thx
yantz

That's one of the reason I like 4H charts and above. Because we're going for larger ranges of pips you don't have to worry about the fundamentals too much. Only really big fundamentals will move the larger timeframe charts. Small fundamentals that move price 20-50 pips isn't too much of an issue when your SL and profit targets are in the 150+ pip range, but if you were trading 1H charts with 40-60 pip targets then it would be.

I think your 1H strategy would work just fine if you stayed out during low volume times and threw in some fundamental analysis. I personally hate dealing with fundamentals though, but that's just me!

Also, don't underestimate how helpful price alarms can be! They can help keep you from having to check your charts every couple of hours. If you're looking for action around recent high/low areas just set alerts to go off when the price gets around those areas.

[helipip]

Hey Phil, Thanks for sharing, it really helps us newbies out. I'm going to give your method a try. oohh! and don't worry I'm sure I'll be asking for help. LOL

[optimak]

Thanks for the pdf Phil

[cjgranfl]

Thanks for the explanation, Phil. I'm working with charting S&R zones on a few pairs this weekend and doing so against the 4hr TF. Would anyone be able to post their S&R lines for the gbpjpy, so that I know I'm picking the right areas?

Cody