You should not be confused, I have always said not to draw support and resistance from line charts for that reason… I have never, ever said to mark levels using line charts. That goes against everything I use.
Where you may be getting confused is that some other members have in this thread said that they find it easier to mark their levels using the line charts because it “takes away the bumps and makes a smoother chart”, but every time in this thread I have seen someone saying that I have corrected them.
It is these bumps that we need for information. These bumps are the wicks on the candles and the line charts take them away and don’t show them and we lose a lot of information with line charts not having these. Some people find it easier, but easier is not better it just means they need more experience to learn to read about the price action and what it is trying to tell them.
Just keep in mind moving forward that you really gotta be careful when playing small pins on intraday charts against the recent trend/momentum. You will notice there were some really large candles moving up into this area before the pin and then the smallish pin.
What you have to keep a look out for is when we get really large candles with full bodies making a big strong move either higher or lower and then a small pin bar. These are not true reversal pin bars and this is why we say it is so important to only trade big and obvious pins and that stand out.
These moves with large full bodied candles have a lot of money being made and these traders have to take their profits and the only way to do that is to cash out their trades. Until they cash their trades they are sitting on paper profits. These small pins or small rejection candles can often be just the market shuffling orders or in other words the traders who have made profits in the large moves taking profits and creating the small pins.
Your pin bar did work out and did move lower into the near term support level. Just keep this in mind going forward and look out for small pins after huge moves.
nice post, just a lit confused what you are looking for with the 1,2,3. I can see what you mean exactly with the double top and agree with you and can see that it has made a top. I discussed this pair a little while ago and this same area that I was looking for short trades is price made it back here. You can read that post here: http://forums.babypips.com/free-forex-trading-systems/42378-forex-price-action-1404.html
thanks for review. It kind of worked out for me but only due to market gap and i closed the trade as soon as the market opened. But as soon as the market shut on friday i realised that this was a weak trade and regretted it. I am now going to find much stronger setups. hopefully.
Johnathon I was a little confused here because clearly that level the pin formed at is not a key level so Darth had no business shorting at that level (No offense Darth )
But it did form at a key resistance level. If you look at the graph above you see the red line. you also see it lines up with BRN of 0.8200 and you also see it reject the pin. all on the 4hr chart.
It just was a short term counter trade that i thought was a good oppotunity but did not take it consideration the sell of before the weekend and it could of been a bigger pin too.
Also just to alleviate confusion that I “may” have created…
Notice in the posts where I talked about using line charts for drawing S/R, the last instruction is ALWAYS to switch back to candlestick charts and ‘best fit’ the S/R [ the reason for which is what J talks about, i.e, wicks give important info about a level’s ‘break-ability’; price failing to close above/below a given level tells a story ]
When price gets to new levels, we typically use price reaction’s to (V)BRNs to draw the S/Rs.
Also, when the Daily candles hesitate at a level, that becomes a new S/R (in this case, it would have been support, and the previous stalling above price would have been resistance, where we would have looked to short had price pulled back).
Basically we flow with where the price halts/consolidates, and try to enter the dominant trend by looking for PA at pullbacks on TF’s such as H4/H6/H8/H12
Thank you for your continuous support and help my issue now is that I don’t know how to put S/R with candlesticks I mean with line chart it is pretty obvious but after I switch back to candlestick how do I tweak ?
Alpari, LiteForex, and InstaForex use both MT5 and NY close on their live accounts. I know because I also searched for this same criteria in my brokers.
This is weird! I use Alpari UK but I’m looking at AXITRADE and looks like yours. I’m out of my office but tomorrow I will check it again in Alpari.
This is as I see in Axitrade.
Thanks,
Alpari UK sometimes shows different chart than the New York standard chart we use at this thread. That also answers some of the previous posts from another member who insisted of using Alpari UK a lot. Not recommended to continue using Alpari UK for the sake of discussion here, but of course you are free to continue using Alpari UK in your own personal live trade. Since you have Axitrader -it has our standard New York close chart- already, you can continue posting the next chart for discussion using Axitrader, mselva.
)
