I see the 2BR u mentioned, but I interpreted the PA story differently.
Maybe I can try to share with you what I think, and please share with me your thoughts too.
I drew the S/R lines as follows. Reason being I see the 2 bar BEEB that protrude the line as an attempt to break through and retest the resistance-turn-support, but failed to hold as support.
Youâre still inside a supply area, both in daily or 4hrs charts. To take a trade first you have to let the trend get out that supply area then you could take the trade accordingly.
Agree. Within this area, I can only consider smaller timeframe range trading, which Iâm not good at (not that Iâm good at anythingâŚ).
Iâm actually more inclined to wait for the price to break below my S/R line and then wait for a retest, before I go short, as shown below. Which is why I ask whether u will enter upon break out of your dotted line, or wait for the candle to close.
You can do it both ways, depending on your trading style. If youâre into scalping then you would probably take the trade immediately it passes under the mark and then use stops to protect your gain. If youâre day trader then you might want to wait for the day to complete and then take the trade.
Looks like NZD/USD just broke up through local resistance. One possibility is to buy here, as close to resistance as possible (for scalpers and risk takers). A second (and much wiser option) would be to buy above 0.7699.
My S/R line is different than yours. I have mine above most of that action on your chart.
I cannot post charts here(Iâm at work), but later tonight I will try to get a chart up with my line. Hopefully this can help me learn how to better draw S/R lines.
So here is how I drew my line on AUS/USD. There is a BRN at .79000. On the 4 hour charts it puts the bars beneath a support zone rather than above them. Please share your thoughts so I can continue to learn.
Also forgive me if my charts donât show up well, this is my first time posting charts.
Support/resistance are actually lines drawn inside zones of supply/demand. We just use lines for simplicity, thatâs all, instead of zones. The price though will always respect the supply/demand zones, not our lines.
If you want to know more of supply/demand there are some good resources on babypips and elsewhere.
About the chart: what you got there is a Supply area, where so far sellers are control. Itâs the white area. Inside it you can draw two S/R lines, and they are both correct.
Hi poopoopotato, I agree with Funnypips, I think we just have to be cautious since both of the lines we drew are valid areas of S/R where price respond to.
Think the support line I drew did not hold off as support, will probably be looking for it to hold as resistance again and look for short trades.
Yep, not much of lift off in that demand area where you drew the support line. A much bigger bullish engulfing bar would have been required.
Yet trading is possible:one suggestion would be to look for a buy above 1.9660. The opposite is to sell under 1.9359, although there are only about 120 pips worth of maneuvering space there.
Looks like a decent trend turn. But you need confirmation to act. First option is short under 1.3550. Second, and the best option is to wait and short once price passes 1.3470.
For the alternative scenario where the price first retraces a bit before going lower (this is a more aggressive trade) I would look into price first reaching 1.3640-1.3680 area, wait for a reversal here and short underneath (using a 4hr chart). But I wouldnât recommend it to everyone as good trading skills are required.
Just a personal thought here. Iâve been looking into posts and noticed people are interested mainly into reversals but not into continuation patterns. From price action point of view thatâs letting half of the trades go untouched.
The main purpose of this thread was to teach reversal price action methods. I think that is why you donât see much about continuations. Jonathon had spoken about inside bars as a continuation briefly but said they were not as reliable as the others. I have read through the beginning walkthrough as well as the first 200 pages or so. Mostly this tread is about finding reversal patterns on pullbacks which is really a continuation of the main trend anyways.
Actually I have also noticed that Funnypip is recommending a slightly different trading strategy as compared to what this thread is emphasizing.
Not to be offensive or any, and I do like Funnypipâs contribution, but I was just thinking whether Funnypip would be able to post trades that are more in line with Jonathanâs strategy, as I guess many who frequent here are also trying to learn his method.
Iâm not saying that your method doesnât work, and most methods work, as it all mainly depends on the traderâs psychology as well as his trade management. And Iâm also not saying that you should learn Jonathanâs method, as I also donât believe one size fits all. Hope I didnât offend u in anyway.
No offence taken tranceaty. I actually know this thread since the beginning but after a while I moved to other ways of trading. It happens that I really like supply-demand theory and the way it answers the practical issues of trading. Right now itâs fully embedded in my trading so thatâs why all my suggestions and answers start from or are connected to it.
Just trying to offer some help here, as I was helped myself in my early days by other experienced traders.
