Well I broke the rule about chasing a trade. I put in a sell order below where it was trading on the 26th and got filled right near the low of that candle.
please be nice. Spongy is a valued member of this thread with a history of helping others and was doing the same for you. No need to get all cranky.
What spongy was saying whether you agree with it or not is “we” as in everyone in here using this method treat each chart independent of each other. I have spoken roughly 4,000,000 times in this thread as to why it is we do this.
Basically it is because we are swing trades looking to get on the correct side of the next swing. We are looking to get with the recent momentum of that particular time framed chart.
It makes no sense to look at a weekly chart to see what way a trend is going if for example we are going to enter a 4hr trade. Now we would look for price support and resistance areas but for trend no. Why? Because there could be 5 different short term trends occur on the 4hr chart that we could trade with that on a weekly chart will make 1 single candle.
It is the same as when we are on the 4hr we have smaller pip stops and also smaller pip targets compared to what we normally would on the weekly chart.
For every 1 week candle you have 150 4hr candles form. For a trend to be in place we need at a min say about 10 candles (short term trend) by the time you are seeing a short term trend on the weekly there has been 1,500 4hr candles made. Hope this is making sense.
Basically it all comes down to this. Each chart can have it’s own trends and we need to be getting in the correct side for the next swing to make money. Looking at higher time frames to gather a trend for a lower time frame is something a lot of people get confused and that is because they try to match everything up.
That’s where I always have doubts, I still kinda don’t understand, how far back we have to look (14 days; 30 days; 60 days or even more…?), when we do the analysis of support/resistance levels and draw them. I hope Johnathon answers this question.
I think that you go as far back as you need to to find the next level of relevant S/R, this may be a week or a month or longer depending on what has happened recently. For example if there has been a big, uninterrupted move up then you may have to zoom out to find the next level, whereas if it has been ranging then you wont have to look very far at all.
I hope this makes sense (and is indeed correct) : )
Whew very interesting charts from the previous pages makes me wanna look at them all day long. Just wanted to comment on this, if this is how you (intended for zaku not liangko) draw your lines then I would agree it is ranging. Only entries for me would be at the top or bottom lines. Signals like this (BUEB) in the middle will whipsaw you. I ca’t stress enough how I got whipsawed most of the time entering in the middle of ranging markets (even if the signals appeared at support/resistance levels inside the range.) Movement is just erratic inside a range. That’s why I agree with your point #2.
Also just basing on the drawing above, the move generally would have to be down seeing it has just touched resistance and is more likely poised to move back down to support. Just my opinion.
I’m not sure if anyone is on this trade as I saw no replies. Anyway, I got in and now I’m in profit moving the right direction. It is not significant yet but I decided (just for practicing purposes) to add to my position. I moved my stops accordingly and now I’m at break oven on this one. Will see what happens…
Hi OMF…
i will surely take your advice man i.e. no trading in ranging market and trade only in major areas.
One question though: How do you trade on VBRN?
Thank you
No offense taken. What you’ve explained is just exactly what I had in mind. Thank you for confirming it with your answer. Now I have a question with your article here:
How did you determine 1.2685 as the next resistance? Thanks.
