I’m a newbie to forex and over the last 6 months I’ve been doing a lot of reading and learning. After exploring MANY systems and ways to trade, I’ve found two common denominators in almost all of them… they are Trends and S/R. I’m beginning to realize that these are necessary foundations for everything else. I know most of you may already know that but I’ve found it difficult to get a straight answer on how exactly to find the trend, S/R and how to apply them.
Now, just so you know I’ve read the BabyPips Second Grade section in the “School of Pipsology” but I feel that I still need more.
So I’m starting a thread on the topic in the hopes that we can put our heads together to learn how to spot the trend, draw trend lines and find the support and resistance levels.
I would like for us to post examples of trend lines, S/R etc… that we come up with and why we came up with them in the hopes of learning from each other. Any suggestions from you “experts” would be much appreciated.
So far the biggest questions for me that remain unanswered are:
[ol]
[li]How do I apply these to my trades so that I can spot buy/sell signals and exits?
[/li][li]Are trends, S/R alone sufficient for trading?
[/li][li]If not (to #2) then what other tools can help confirm buy/sell signals?
[/li][li]How do I use these congruently in different time frames?
[/li][/ol]
I hope that we can get a good discussion going on the topic so that we can learn from each other. I am attaching some information that I’ve compiled over the last few months in Microsoft Word format.
Thanks everyone and I’m looking forward to learning from you all.
Well, the forum isn’t allowing me to add attachments (don’t know why) but I will try to add them later.
[B]Hi…
Right now im trading through support & resistance level’s , trendline’s … & Candlestick pattren also …& i think market changes it’s behaviour time to time so we can not say any system best … AnyHow the best way of trading which i found best is TRADING THROUGH S/R LEVEL’S , TRENDLINES WITH THE COMBINATION OF CANDLESTICK PATTREN’S…
This is the best system i ever seen successfull to survive inthis business… Anyhow if you know how to draw valid trendlines & S/R Level’s than hope so you will found it best for you… below is the link of my trading journal…
On it’s page 11 & 10 i have posted some examples with screenshot’s of S/R LEVEL’S , TRENDLINES’ & How to draw both… Go though there maybe this may help’s u… also read my whole journal i have posted lot of screenshot’s of my lot of trades through trendlines & S/R Level’s… http://forums.babypips.com/forextown/11844-piphackers-trading-jounral-11.html
You can ask anything more if you feel any problem…
PipHacker… What a great journal!!! Thank you for taking the time to write it. I’m learning a lot reading through it. I have some specific questions for you if you don’t mind.
Do I understand correctly that you look at the W1 chart to see the trend, and follow the H4 chart to trade?
Also, I noticed that in some of your pictures you are using the Stochastic and the RSI? How do you incorporate those into your trading?
Thanks guy’s actually i was trying to send private message to both of you guy’s with an intresting link about drawing valid trendlines with S/R line’s and their valid placement detail with videos also but dont know why PM Is failed. i dont wana paste link here coz i dont wana do any kind of publicity of anyother site here inthis form at all.
Any ways here is the detail about my trading method’s…As you guys know very well that market changes its behaviour time to time so we can not say any system perfect. the system which i found very good for me is ofcourse trendlines and price breakouts , S/R Lines with the combination of candlestick pattrens… so i am trading through different menthods with different timeframes also…
PipHacker’s Method No# 1 [B](Power Of Reversal Candles)[/B]
I use four hour chart with just couple of indicators like Stoch & RSI… whenever i see a strong Uptrend with stoch & rsi in a overbough region than i keep an eye onthe formation of reversal candles like doji , reversal hammer or any candle with a long wick & if i see it formed with both indicators are in a right place than i go for short & always target for +30 Pip’s & vice-versa for long…Reversal candles work on anytime frame but i saw their high impact on daily & 4-hour chart’s… but i use my this method on both daily & 4-Hour chart’s…
My 2nd trading method is technical. i use 4-Hour & daily charts for this method & place different S/R lines with trendlines… & keep an eye on them time to time & after the break of any S/R Lines or trendlines in daily or four hour chart’s i immediately enters for short or long respectively…
PipHacker’s Method No#3 [B](Trend fallower from higher tf to lower tf)[/B]
With just couple of indicators like Stoch & Rsi if i see that both are for example in a overbought region but still no reversal candle than i go to lower time frames time to time like 30-minutes or hourly & draw trendlines by hand (I dont use any indicator for that) & if i see that lower line of my trendline is break in 30-minutes or hourly chart than i enter’s for short also coz in 4-hour chart both indicators are already in a overbought region mean’s i enter for short after the breakout from lower time frame & on higher time frame both indicators are in my favour & vice-versa for long…
That’s it…
I Am using two different mt4 demo platforms …one with lower tf chart’s like 30-miutes & hourly & other with higher tf charts like daily & 4-hour with s/r lines & trendlines…I strickly avoide to enter in a critical news timings As important fundamentals may changes the whole situation against you…
[B]PipHacker!!! [/B]
Use Linear Regression Channels (if your platform has them of course).
You’re not worried about the distance between them (well at least not if you’re just using them to indicate the current trend).
Support and Resistance:
Use Fractals (again if your platform has them).
When a fractal appears you’ve either found support or resistance. By joining multiple fractals together that are on or around the same level, with a horizontal line, support and resistance becomes REAL clear. As a matter of fact I’ve found that using fractals to draw fibo lines takes the ‘guess work’ out of the old problem of which high point and which low point to use i.e. use the last up and the last down fractal and you’re done.
Stochastics:
Waste of time in my opinon. Anyone that wants to know why I say this then do yourself a favour and pull up USD/CAD and AUD/NZD and take a look at how Stochastics would have misled you almost ALL of the time. As a matter of fact: SOMEWHERE on the site you’ll find a post by someone that even suggested BUYING when Stochastics are in overbought territory and SELLING when Stochastics are in oversold territory!!! (I forget who’s post it was but I clearly remember the content of the post because AT THE TIME I thought it was a strange ‘statement’ to make but it proves itself over and over and over again on a daily basis).
RSI:
Far better than Stochastics IF UNDERSTOOD AND USED CORRECTLY (but of course I’ll admit that I’m ‘biased’)!!!
I whole-heartedly disagree. You should look into divergence. I’ve never seen such an accurate predictor of large price swings, assuming you know how to spot the particularly “good” divergences. As such, stochastics are the only indicator on my charts that I don’t draw by hand. Babypips school has the best divergence tutorial I’ve seen yet, and I highly recommended you give it a quick read!
I’ve been playing with these more as a breakout for a retracement or trend reversal with some degree of luck but still feel it’s only luck because I havn’t quite learned/come across the key importance when drawing them.
When you say not to worry about the distance between them, do you mean the beginning & ending points, or the width between the upper and lower lines? I havn’t been able to find much info on how they are best plotted…some say from beginning to end of day, some from last high to low which can be either major trends or minor trends… Do you have more you can elaborate on that from experience or other heresay …or would they follow the rules like drawing any other trend line(s)?
What great info Piphacker… Thanks!!! It will take me a while to digest this information but this is exactly what I’m looking for. I can’t wait to learn more.
I would really like to see that link… I don’t know if this is permitted or not but I will try… my email is [email protected] I would be eternally grateful if you would send me that link to my email…
Thanks… I’m using MT4 platform. I have Linear Regression Channels but I can’t find the Fractals. If someone is using MT4 and knows and would be willing to share how to find Fractals on the MT4 platform I would appreciate it.
Also, do you know of a tutorial that would educate me on how to use these properly?
Yeah, I’d vote for this method too. Horizontal lines, I draw through significant reversals and areas of consolidation. If I see a noteworthy trend, I’ll just draw a simple trendline, really nothing fancy. Now that’s just the beginning, you still have to figure out strategies based on the market situation, but these are some big big steps in the right direction. And what I mean by strategies is whether you are looking for a breakout or a bounce for instance, and also where you want to set your targets and stops is a whole 'nother lesson! Excellent starting point though if you just don’t know where to begin, and just study how the price interacts with your drawn levels, and which levels prove to be more significant and you’ll start to learn where to draw your lines for next time! Happy drawing to all
Support held at the 203.44 area, price peaked at 206.55 and fell back below resistance at 205.11 and 204.98.
The “SQUIGGLY” lines are based on jjrvat’s price action trading method. Price is under the slow ma, only look for shorts. The fast ma is making a series of higher lows, higher highs, we do NOTHING. Actually, we wait for the next setup.
so i am trading through different menthods with different timeframes also…
