Sorry its not the clearest of pictures, there are two intermediate term highs and one long term high noted in green, and four intermediate term lows and one long term low marked in green…
Rebecca, recognized Williams’s work in your first question. I have spent many months studying that book, have only ever taken one thing from it, much later than your question.
Market structure, as related in the first book and re-told in the 2011 edition is a very old concept, right back before computers, as Williams recounts when they used paper charts and pens to ring the swing highs/lows.
You hit the nail on the why part, that is the singularly most important thinking in any approach.
Looking back on my old notes I ringed the last paragraph on p22 - there is no why, but I thought about this.
Yesterday price made a new high, but maybe it was out on a limb, maybe it was the S&P and a few stocks pushed higher, today price could not reach up beyond that point, the bulls tried with some buying, but they just couldn’t do it, price, after pushing up as a result of the buying could not make it higher - why not - because there was not enough buyers (not because of selling). the buyers give up - then in come the sellers.
In that case, if sellers are in charge, I expected to see, at the very least, a break of yesterday’s low.
This is maybe why Williams highlights the word ‘and’ right at the bottom of p22.
Having got that sense then Market Structure becomes a little easier to understand.
Hello again, Rebecca
I had to enlarge your chart, in order to check your labels.
[U]I think you missed the following[/U]:
[B]STL’s[/B]
Monday, June 8
Monday, June 15
Wednesday, July 1 (or Thursday, July 2 — I can’t tell from your chart)
Tuesday, July 7
Friday, July 17 (possibly — I can’t distinguish between that day and the following Sunday)
Monday, July 27
Friday, August 7
Monday, August 24 (possibly — I can’t distinguish between that day and the preceding Sunday)
Monday, September 7
Wednesday, September 9
Friday, September 18
Friday, September 25
Monday, October 19
[B]STH’s[/B]
Monday, July 13
Tuesday, July 21
Monday, August 3
Friday, August 14 (possibly — I can’t distinguish between that day and the day before)
Monday, September 21
[U]I think the following STL’s and STH’s need to be upgraded[/U]:
STL on Thursday, October 1 — change to ITL
STH on Friday, July 10 — change to ITH
STH on Monday, July 27 — change to ITH
STH on Thursday, October 15 — change to ITH — may become an LTH
[U]Two comments[/U]:
You are using 6-day charts, which have a stubby Sunday candle followed by 4 full days and a shortened Friday. By contrast, you could use 5-day charts (such as those available from FXCM-UK) which have five 24-hour days, beginning at 5pm Sunday New York time and ending at 5pm Friday New York time. Six-day charts create more ST lows and highs than 5-day charts, and this adds clutter to the pattern analysis you are trying to do.
Also, as I mentioned in my previous post, using a 3-bar criterion for your lows and highs generates more signals than a 5-bar criterion. After you add the STL’s and STH’s that you missed, I think you will find that you have a very busy chart to try to read. As an exercise, you might use the same chart to plot lows and highs based on 5-bar fractals, and see whether you prefer the result.
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Thankyou guys for your input, I will look at the five day charts and redo the highs and lows and then repost if that’s ok, it’s all learning…
Yes. But, I can’t help you with names, other than the one I have already mentioned.
A frequently asked question on this forum is ‘which brokers open and close daily candles according to the New York close?’
You might find useful information if you enter “New York close brokers” into the Babypips [I][B]Search[/B][/I] engine.
If I continue using three candles to identify swing highs and lows can either the first or the third candle be classed as part of another high or low depending on the candles to their left and right? or do those three candles stand alone as a high or low? And if was to use five candles to identify a high or low am I going to ‘miss’ some action waiting for two additional candles to form? Thanks again…
Yes, it’s possible for two consecutive highs or lows to share one (or more) candles. Two charts are posted below. They both cover exactly the same EUR/USD Daily price action (from June 3 through October 30) as the chart you shared in post #6 of this thread.
The first chart (below) shows 3-bar ST, IT, and LT highs and lows. I have labeled the STH’s and STL’s simply as H and L. I have labeled the ITH’s and ITL’s by circling the letters H and L. And I have labeled the LTH’s and LTL’s with two circles around the letters H and L.
Take a look at the third low from the left on that chart (the low on June 17). Then look at the next 4 highs and lows immediately after the June 17 low. You will see that all five of those highs and lows share one or two candles with adjacent highs and lows.
There are other instances of shared candles in that chart.
The second chart (below) shows 5-bar highs and lows. The same labeling has been used in this chart for ST, IT, and LT highs and lows.
I don’t know what you are trying to accomplish with this analysis of highs and lows that you are doing, so I don’t know what you’re concerned about “missing”. But, you can see the difference between 3-bar and 5-bar highs and lows in the charts below. To my eye, the 3-bar highs and lows create unnecessary clutter. With the 5-bar highs and lows, I can see price swings more clearly.
Edit:
Also, be aware that my charts are based on [I]the 5pm New York daily close[/I] (that is, they are 5-day charts), as opposed to your charts which include a partial Sunday candle. As a result, my 3-bar chart has fewer highs and lows than your 3-bar chart.
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Thanks for all your help Clint, it’s really appreciated, slowly but surely pieces falling into place…
Clint - do you think it is “misleading” at all for me to use the shorter Sunday candles as part of identifying a swing high or low? Looking back at my daily chart bar two occasions in five months a Sunday candle has always been one of the three candles forming the highs and lows I have identified… Are they still “real” swing highs and lows?
Hello, Rebecca
I’ve been away from the forum for 3 days, so I’m playing catch-up.
I’ll answer your latest post by tomorrow evening, at the latest.
Thanks for being patient.
Hello, Rebecca
Sorry for the delay in replying to your question.
The short answer to your question is: Yes, I think it’s misleading to do analysis on a Daily chart in which your “days” are not all equal in length.
The long answer follows:
It’s hard for me to comment on whether you are being misled using 5½ daily candles each week (including a very short Sunday candle, and a somewhat shortened Friday candle) — because I don’t know what you are doing with the data you are collecting. In other words, I don’t know what you are trying to determine with your study of ST, IT, and LT highs and lows. And I don’t know why you have chosen to do your analysis using Daily charts, rather than Weekly charts, or 1-hour charts, for example.
For whatever reason, you have chosen to use Daily charts.
Generally, when we choose a time-frame, we require all the candles in that time-frame to be equal in size. If we choose a 4-hour time-frame for a particular analysis, we wouldn’t want some of the candles to be 3 hours, and some to be 6 hours, etc. We would expect, and require, that all the candles in a 4-hour chart be 4-hour candles. Your Daily charts do not conform to this pattern.
I can’t tell from your chart (post #6 in this thread) what time of day your Daily candles open and close, or what time zone the charts are based on. I’m guessing that your Daily candles open and close at midnight in your platform’s time zone, and I’m guessing that the time zone is GMT. But, I could be wrong on both counts.
If your Daily candles open and close at midnight GMT, then your Sunday candles are between 3 and 5 hours in duration, depending on whether they open with the Wellington (New Zealand) market, or with the Sydney market, on Monday morning. Your Monday, Tuesday, Wednesday and Thursday candles are all 24 hours in duration. And your Friday candles are 22 hours in duration, based on the 2200 GMT closing time of the New York market.
So, you have four normal (24-hour) candles, one slightly clipped Friday candle, and a very stubby Sunday candle — all of which are being given equal weight as “daily candles” in your analysis. This doesn’t make sense to me. But, as I said, I don’t know what you are doing with the information generated here.
Since I don’t know what you are doing, I can’t assess whether Weekly candles would work for you. But, if they would, they have the advantage of being essentially universal. That is, everyone in the forex world agrees on what constitutes “a week”. For traders in the U.S., a week is everything between 2pm Sunday afternoon and 5pm Friday evening. For traders in New Zealand, a week is everything between 8am Monday morning and 11am Saturday morning. But, the U.S. “week” and the New Zealand “week” comprise exactly the same price data. Just something to consider.
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Thanks clint, my candles open at 24.00, time zone is GMT, it is all my broker offers. I initially started with the hourly, 15 minute and 5 minute chart, then after reading some more and listening to some ICT videos I added in the daily chart which is what I seem to spend most of my time observing. Trends are to be identified on the longer term time frame hence I have plotted all the highs and lows on the daily chart, it is the only chart I have plotted them on. I am working alongside Larry Willliams book, who advocates trading intermediate term trends, hence my need to identify and plot them. A sell signal is the formation of an intermediate term high that is lower than the prior intermediate term high, a buy signal is the formation of an intermediate term low which is higher than the prior intermediate term low, so my entry points are very precise. So i need to ensure that my swing highs and lows fit correctly into the intermediate, so going back to where I started – is using the Sunday candle as part of identifying a high or low giving me an incorrect ‘signal’ as part of my overall approach? If my current daily chart is detrimental to my approach then I will have to use a chart elsewhere that only has five candles…
Hello again, Rebecca
From your most recent post —
From my previous reply —
I don’t know what more I can say to make my point.
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Rebecca,
If you need a source for 5-day charts, here is one that might help you — NetDania charts, available online, no download required —
Forex Charts | Free charts software - FinanceChart | NetDania
Note: You will need to have the latest version of Java installed on your computer. And you will need to be in a browser [I]other than[/I] Google Chrome (which doesn’t support Java). Firefox, Opera (and I think IE) are all good.
When you open the NetDania webpage, you will see something like this (minus the red mark-ups):
After you detach the chart, you will see this (minus all the notes in red, which I added):
NetDania charts are 5-day charts. The time zone (which simply determines the date/time stamp on each candle) is adjustable, so you can easily set it to GMT (if it doesn’t automatically open in GMT).
Unfortunately, unlike your platform, when you close the NetDania website, you lose everything, and have to start over next time. Also, NetDania gives you the ability to add text to any chart, but you can’t position a letter or numeral directly over a candle — which is kind of a bummer when you want to denote highs and lows, etc.
All of the text (which I added to the chart above) was added using the SnagIt image-capture app.
All the usual “studies” (basically, indicators) are available in NetDania charts.
•
Another option (and maybe a better one): download a DEMO account from FXCM-UK. All FXCM MarketScope charts are 5-day charts. The advantage of this option is that you can save your charts within the FXCM platform.
I hope this is helpful.
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You don’t lose everything with Netdania when you close the browser if you’re logged in to your Netdania account (which is free to create and keep forever). The chart station package is the one you want to use. When you log in any changes you make to charts are stored permanently on Netdania’s side. These changes are not local changes to your PC so I have the same charts both at home and at work which is handy. I don’t use anything else other than Netdania personally. It’s been 100% reliable for me over the years.
Thanks. I didn’t know that. I’ve never created a NetDania account. I’ll have to try that.
Typically, I use NetDania charts only on the weekend, when my broker’s platform and charts are unavailable. It’s great to have access to a robust charting package that’s available 24/7/365.
Please what’s the name of the book by Larry Williams where in which you got this question from, I do like to read it
What’s the book name pls
Hi,
It’s “Long-Term Secrets to Short-Term Trading”.