Alternative Technical Templates.

[tonymand]

[quote=John P.;57458]Thank you both for your valueable time. I feel a responsive reply perculating, but am going to give it a day to re-read and think it through.

Its somewhat striking that the topic of this thread is so rare on forums like this one. I am not exactly sure for the reason, given its relative importance. Perhaps supply/demand doesnt sound as sexy as a Rainbow this or Monte Carlo that?


Yes its partly that. Also because indicators give a false sense of knowing something and appear easier to use so the more of them the better! This is despite oceans of statistical data showing they are relatively useless. Yet what is so difficult about trading the price action. If it bounces in an area of supply then buy it and if it falters in an area of demand sell it. The higher the timeframe and the more times its been there the more important a level it is. Not exactly rocket science. Put together some simple strategies that allow you to execute at those levels and count the dollars (preferably AUD given the state of the greenback)

[John P.]

Originally Posted by tonymand

The higher the timeframe and the more times its been there the more important a level it is. Not exactly rocket science. Put together some simple strategies that allow you to execute at those levels and count the dollars (preferably AUD given the state of the greenback)

Hey look, a Tony sighting! You say its not rocket science. Clearly its not because even I can draw them. That is actually one of my problems, I can see and draw them everywhere. By the time I whittle down from 240 to 60 to 15M, I have too many. So, that is an area in need of improvement -- seperate the strong from the weak, the major from the minor. And was the root of the question to Tess above. A work in progress. Which you are cordially invited to weigh in on too mate

[John P.]

Originally Posted by Tess

I don’t really place a graded emphasis (differing strength’s) on what constitutes s&r to be honest. If price kicks away from an obvious (several bar) base or a 2-3 bar ledge, I’ll mark that area up for future reference.

Thanks again. I mean that.

First, my inclination would have been that tested S/R on the longer term chart would have the higher ranking. Interesting.

Second, sounds like you will mark up any potential/promising area for later confirmation? This is turning into a bit of a problem for me. I dont have any issue identifying "areas of potential interest," but I do with weeding through them. With trend lines added, I end up with the street map to Rochester. I have lines all over the place. Hopefully, my S/R acuity will approve with time.

Third, on your chart series, middle pair -- EJ 4H, lower of the upper two lines of resistence, where price touches in the middle, purple block. That would be the type of s/d area I was trying to describe in the original post. Price scoots up to an area of oversupply and goes quickly screaming away. In your example, of course, its twice more confirmed to make it all the stronger.

[tonymand]

[quote=John P.;57641]Hey look, a Tony sighting! You say its not rocket science. Clearly its not because even I can draw them.


Hi John
Wasnt trying to be smart just encourage you not to overthink this. My GU 4H attached. Remember each line is a broad area of interest not a specific point.

[daydreamer65]

I've uploaded some of Tess' earlier charts, you will find them
somewhere in the thread, reading from the 1st 4hr chart to the
final 15M chart.

Plus we have been playing around at these levels for the last
few days. (on the 15M chart) Spooky!!

[Jocelyn]

Originally Posted by daydreamer65

I've uploaded some of Tess' earlier charts, you will find them somewhere in the thread, reading from the 1st 4hr chart to the
final 15M chart.

Plus we have been playing around at these levels for the last
few days. (on the 15M chart) Spooky!!

Yeah, those levels from 3rd quarter last year have been instrumental on this pairs behaviour for the past couple months. You'll find these occurances are quite commonplace.

A high percentage of the levels on the charts posted since we've been active on here (on all the pairs which have been illustrated) have no doubt come back into play recently, or certainly will be next time the train pulls into the station.

It's why we operate the way we do. What better way is there to map the day on day behaviour of those most active in your favored market or instrument?

The most common sense method of tracking the footprint of price activity is to study, record & act on the momentum of supply-demand (support-resistance).

You don't need fancy indicators or holy grail salesmen to tell you what you can see with your own eyes if you strip it back to basics.

There's an old saying out which goes something like:-


Trading is simple, but it aint easy


Never a truer word spoken about this industry

[Jocelyn]

Originally Posted by John P.

1) sounds like you will mark up any potential/promising area for later confirmation? This is turning into a bit of a problem for me. I dont have any issue identifying "areas of potential interest," but I do with weeding through them.

2) on your chart series, middle pair -- EJ 4H, lower of the upper two lines of resistence, where price touches in the middle, purple block. Price scoots up to an area of oversupply and goes quickly screaming away. In your example, of course, its twice more confirmed to make it all the stronger.

1) If you're experiencing some initial frustration in getting to grips with the concept of identifying & acting on your interpretations of this type of trading activity then strip it back a little further & simplify it until you become more aclimatized with it.

I'll assume you're more intent on trading via a shorter timeframe framework? (generally more intraday or short visits to the market?). If so, then drill a little closer into the action than a daily template.

Try observing the price & levels on a 60 minute chart. On a half decent chart package, that should offer you between 2 & 4 weeks of activity.

You're looking to see if prices got rejected quickly or fiercely from a key level, or whether they form a small base or ledge from which price gets booted.

These are the area's where you need to plot your s&r zones. Similar to those posted recently by Tess.

You've already described adequately enough what's occuring when price moves quickly away from a level & revists it for the 1st time. The imbalance or equilibrium (whatever you care to call it) quite often attracts price back for a second look.

It does that for a couple reasons. Usually because stops or limit orders require to get shuffled thru the order book and/or buy & sell stop orders get fired off & attract speculative players as price moves aggressively away from a level. Buyers (sellers) remorse can often set in, or counter stop activity kicks in, forcing price back from whence it came.

If the move is genuine enough, you'll then witness the move unfold again (the original move away after the pullback), which is why these s&r zones Tess marked up nearly always work out positively.

But drilling in a little closer might help in eliminating some of your cluttery type lines on your chart. If the 30m or even the 15m highlights this type of activity, then by all means plot the action on those also. You don't always require a Daily or 240m perspective to profit from the intraday-intraweek momentum moves.

2) Absolutely, but remember - s&r (or supply-demand) isn't an exact line or precise level.

Try get into the habit of allowing a little tolerance above & below a key level or flip zone. By all means plot a line thru say 163.50 or 1.9975 if that specific line flips price from support to resistance or vice versa, but try identify a small group of 5 or 15m bars which mark up equilibrium & observe how prices react when they move away from that level....was it a lazy, lethargic move or an aggressive, sharp push up/down?

Watch price as/if it revisits & see how it reacts as it approaches & vibrates around this short-term s&r zone.

I think you'll benefit from drilling in a little closer & focusing on what is doing NOW rather than what it did 3 months ago.

Try it out & see how you get on....we'll try post up some examples as they print out as they set-up as & when we get time, to assist explaining what we're talking bout.

[Jocelyn]

Take a look at this pair from earlier in the week to see how an influential level can act as a trigger as & when it pops back & forth around it’s boundaries.

I’m not suggesting you’d have instigated trades both ways or even one way, but by understanding the behaviour patterns of price action in & around these clearly identified close quarter s&r zones, your research tools & decision process becomes easier & less stressful.

Price either sets-up according to your execution strategy or it doesn’t (dependant upon your own rules etc).

As long as you can establish a playable activity zone where price has proven to you that it attracted strong, recent participation then you’re good to go.

Obviously, any trade will need to sit alongside your personal risk-reward parameters etc, but that’s a whole separate issue.

Keep it nice & simple.
If it helps, then work from today & scroll back.
Try locate an area where price got rejected or bounced with a good lick of participation & draw your lines of engagement.
See if the level attracts a second bite of the cherry & plan how you’d choose to interact with it if it does.

Once you’ve drawn your area, scroll back via your 60 or 240m chart & see if your area attracted previous visits from recent activity………I think you’ll surprise yourselves with one or two of these levels/zones by adopting this type of price action research!!

[John P.]

Originally Posted by Jocelyn

1) If you're experiencing some initial frustration in getting to grips with the concept of identifying & acting on your interpretations of this type of trading activity then strip it back a little further & simplify it until you become more aclimatized with it.

I'll assume you're more intent on trading via a shorter timeframe framework? (generally more intraday or short visits to the market?). If so, then drill a little closer into the action than a daily template.

I appreciate your efforts. Yes, I am working with the 15 as base, and sometimes end up punching the button off the 5 (or maybe a tick chart). I used to have multiple TF charts, each with its own set of S/R zones marked. After reading all this along with a couple of other sources, I began incorporating the 240 and 60 into the 15. Maybe I should have been doing that all along, but I wasn't. I find having them on the same chart is easier than looking to the side or above to a different sized chart as reference. Looking back, while I was putting the time in to recognize the levels, its now clear that I was not taking full advantage of them. Seems like such a simple and obvious thing to do.

As to the too many lines issue, a somewhat similiar solution had began to form in my head for the last couple weeks. The way I was looking at it was something like this --> since I am trading the same two pairs over the same session and generally am all out when I quit for the day, why not focus only on those areas price might actually interesect, given the daily ranges. Repeat process the next day. Same ballpark as what you are suggesting?

In the name of contributing a chart, here is GBP 15M Thurs -- NY session showing a bounce off previous resistance combining with a James IB entry. The times are NY. The wait for that second leg down was over an hour. I took 1/2 at + 26, moved the SL for the other 1/2 to b/e, waiting to see if that smaller R would hold on retest. It did, but I had to leave for lunch so moved SL down to top of that green candle (20046) and TP to ~ the 00. The luncheon had an opportunity cost of another 50Ps or so but no complaints.

Anyways, thanks again Jocelyn for your attempts to come to the aid of your fellow trader.

[John P.]

Originally Posted by tonymand

Wasnt trying to be smart just encourage you not to overthink this. My GU 4H attached. Remember each line is a broad area of interest not a specific point

Hi Tony. No worries. Probably due to my poor english skills. Was intended to be a self-deprecating humorous line, nothing directed at you.

Thanks for the chart, and point well taken. I take comfort seeing our S/R lines reasonably similiar.

Chart for next week?