You still a spectator on the E/Y Tony?
In short George with some misgivings because of the higher low behaviour but that juicy double top and divergence at such a strong supply area was too good to pass up. First target is a return to 162 then 161.50 with intention to bail all on signs of a move back up. My stop is be and currently up about 2R
I took the short a bit lower down than you, moved my stop to b/e. Might bail out at 162.00, depends on what the price is doing around that level. I was wondering do the jpy pairs have good volatility going into and during the asian session on average ?
Nice entry George, almost a 78.6 retrace (5 pips), tweezer top and divergence. UY is far and away the most traded pair in the Asian session and not much on the crosses. Hence they can move big distances with significant volatility
Nice moves today, unfortuantely i didnt get in to any of them. I saw this develop but there was no divergence so i decided to let it pass. Painful when that happens but i think its best to stick with the template you feel most comfortable with.
I dont know if iâve asked this before but with regard to the Asian sessions highs and lows, many people take notice of these prices, how do you use that information going into the European session?
You could use the Tokyo range as you would any other range (eg: prev days rangeâŚprev weekly/monthly range etc) & buy an upside break/sell a downside break of the line.
Dependant upon your triggers, risk & the behaviour of price action contained within the range, youâd either buy or sell the line directly or maybe wait for a pullback to test the intent & provided you got a favorite bar set-up, then play the pullback away from the high/low breach of the range.
Hi Tess:
Thanks to you and everyone else for all the great posts. This is a Grade A thread for a public forum. I havent finished with it all yet but thought I would drop off one question that occurred to me along the way. I did my due diligence by performing a thread search for this topic, and it did not reveal itself as already covered.
Given your preference for horizontal S/Rs, I have not seen pivots plotted on any of your charts. Is this b/c you doubt their reliability, or are they a part of something proprietary?
I plot them on some time frames but not all, sometimes using them as targets or to help configure a stop. I have ESignal for data and an issue Ive had with them is their predetermined 24-hour period for pivot calculation purposes starts midnight New York (EST). I admit I dont really know the answer to this but it seems possible that a large chunk of traders who use pivots may be using the GMT clock and have different daily pivots entirely.
Anyway, just curious of your thoughts on their usefulness.
And, again, gracias to all for the terrific efforts to date.
I have published a method somewhere in the thread George. Buying the upside break or selling the downside and using the 60SMA as your stop and a 1R target has a positive expectancy since I started tracking it in October 2006. Specifically since Nov 1 2007 it has returned + 27
I have toyed with pivot points in the past, but did not have a
great deal of success with them, but like all indicators they may
have their merits.
On this thread the main idea is historical support & resistance,
points on the charts where action has been seen before. These
coupled with a âtriggerâ pattern & the patience to wait for the
low risk trade.
Take a look at the webpage below for more info on pivots which
you may not have seen.
Pivot Point Trading
Hello John P,
Thank you for your kind comments, glad to hear the info, from all contributors, has been helpful.
As daydreamer65 sayâs the main crux of the thread focuses on near term & historical (price) support-resistance zones.
Neither myself, Jocelyn or any of our colleagues utilize pivots in any form. Thatâs not to say theyâre not useful or relevant, just that we prefer other forms of price action observation.
Try them out if they spark an interest. You wonât really be in a position to judge if pivots float your boat until youâve observed how they interact with your trading templates.
Have a play around with intraday as well as weekly pivots & see if you can integrate one or both into your regular worksheet?
The most popular recognized timezone for plotting next day pivot numbers is the 17.00 NY (22.00 London) close.
Good luck with your research/analysis 
Hi folks:
Still schlepping my way forward in this terrific thread. It pains me to see it withering on the vine at the most recent page, knowing that by the time I do finally catch-up, it will or may be over (my life story in a nutshell).
With an eye towards hopefully preventing that, I will throw out another question for Tess, apologies in advance if already covered in the great interim unread. But at least topical (espero tan).
Consolidation/base vs. quick turnaround. The question is which forms better/stronger S/R? It is my (current;)) position that when price rises or falls to a certain level but then quickly retreats or reverses in the other direction without spending much time at that level, it represents the greater imbalance between between supply and demand. One side was completely and quickly overwhelmed by the other. Whereas a consolidation or base formation shows a condition nearer actual balance between buyers and sellers over a period of time. Thus, a S/R line drawn at a one- or two-candle peak/trough (like a spike ending in a doji, or a two-candle piercing pattern that reverses price direction) shows a stronger level of demand/supply than consolidation pattern does. At least for the first visit back to that level.
Here is a picture that will probably better articulate what I cannot, showing one of each.
Is this counterintuitive? My logic faulty?
There really aren�t too many options to worry about where price action is concerned.
It does 1 of 3 things. Moves up, moves down or moves sideways. How heavily it moves is wholly dependant upon the quality & quantity of the participation. The significance of a particular level often has an effect on the behaviour of price action, particularly if the level was previously well defended.
If you got a reasonable handle on those levels & can recognize the behaviour as it oscillates around the various support or resistance zones, then you can wrap a simple technical model around whatever else you use, to execute your strategy.
As you quite rightly point out John, prices bust out of tight activity pockets to the topside when buyers outweigh sellers at a particular juncture & breaks down when the reverse sets up. Prices often re-visit these breakout zones & repeat the process if the original reasons (supply overwhelming demand or vice versa) still hold good.
Until that occurs, it�ll kick around in a state of equilibrium. It really is nothing more complicated or mysterious than that.
A heads up from a higher timeframe than the one you�re executing from, to adjudge whether you�re operating under trend conditions or range boundaries + any significant area or two to the left of the chart as a gauge to the potential near term destination, is about all that�s required to build a workable strategy.
That generic practice unfolds across all timeframes most everyday of every week. The force with which it moves away (& pulls back to test the breakout) from equilibrium will be influenced by what�s driving it (technical reasoning-data release-world eco event etc), but these handover zones occur with consistent regularity. Certainly regularly enough to profit from!!
How you play them depends on your risk appetite, strategy implementation & aims/expectations.
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.
I work mainly via an hourly chart reference as my template frame, but it doesn�t really matter which timeframe a trader works off��.these occurrences unfold across all the different timeframe chart grids. As long as you�re primed into which type of trading conditions are being worked (trend or range), you can work your edge to suit the exact conditions.
Here are a couple recent examples from differing pairs to illustrate the above comments:-
[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)
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 â 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 :rolleyes:
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 âareas of potential interest,â 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 â 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.
Iâve uploaded some of Tessâ 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!!
[B]1)[/B] If youâre 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.
Iâll assume youâre 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.
Youâre 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 areaâs where you need to plot your s&r zones. Similar to those posted recently by Tess.
Youâve already described adequately enough whatâs 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, youâll 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 donât always require a Daily or 240m perspective to profit from the intraday-intraweek momentum moves.
[B]2) [/B]Absolutely, but remember - s&r (or supply-demand) isnât 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 levelâŚwas 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 youâll 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 onâŚweâll try post up some examples as they print out as they set-up as & when we get time, to assist explaining what weâre talking bout.
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!!
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 wasnât. 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 â 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 :rolleyes: but no complaints.
Anyways, thanks again Jocelyn for your attempts to come to the aid of your fellow trader.
