For what its worth, here is an indicator I wrote to display previous day’s high and low and previous week’s high and low. I used it on a 5-digit broker with server time set to Eastern European Time, hence no Sunday candles (offset of 5 for New York time). I don’t know how it will behave on different setups/boker times, but hey, it’s free and you do not have to use it if you don’t want to.
Indicator.zip (1.67 KB)
Hi all,
For last week I was analyzing GBPUSD, please see my results below ( hope I got some of it correct :57: ). I zoomed out to the higher time frames (Daily, H4) but could not see any Key Reaction Points (no convergence). Although, when I was analyzing the H1 time frame, I noticed two Key Reaction Points which are highlighted in yellow.
For the first trade, noted by the blueish arrow pointing downwards on the chart, would have been an area I would have taken as it became a Key Resistance area. Trade would have been taken on the second bearish candle hitting the +20 pip take profit.
For the second trade, noted by the greenish arrow pointing upwards on the chart, would have been an area I would have taken as it became a Key Support area. Trade would have been taken on the second bullish candle hitting the +20 pip take profit.
Please provide feedback where possible :22:
As far as the 4H levels goes do not worry about having every 4H level on your chart but other than that you are more or less on the right track. It is good to study and get a feel for price action around these levels but going forward do not attempt to trade all these levels but continue to study and take notes. What I want people to focus their attention on is the key levels and look to take setups around those levels. Look for levels that are easy to spot and wait for price to trade to that level where you are anticipating a reaction and then take your one shot.
We need to learn to walk before we can run, trade the big key levels first, be prepared to sit and wait, be patient. Once you have mastered this and it will take some time then you can worry about intraday levels. As you said you can see trade opportunities almost everyday but don’t get carried away with that just yet. For now you want the big game. You want to kill a buffalo so you can eat the whole week. Later on we will still take down the buffalo and add a springbok everynow and again.
It becomes more significant in the fact that stops would of been resting below PDL and Wednesday’s low and you could therefore reasonably expect price to seek liquidity below those lows.
I agree with you in that 25pips is probably too far to meet the criteria as an overlap. In my initial comment I should have been more clear. I thought of the trade from this perspective:
Price ran PDL and wednesday’s low, pulled back and then reversed. It then ran below the PWL (previous weeks low). So stops were triggered below PDL (Thursday) low, Wednesdays low and now PWL. Where does price need to go now to find liquidity? Back up. Also given the fact that it was Friday, there had been a decent sell off last week we could reasonably expect market participants to take profits. But the 25 pip difference is probably too much interms of confluence.
Ye the pound was a tricky one! I would not have been willing to sell at your first blue arrow because we came so close to 1.6050 highs and I would of expected price to run up above that high before willing to sell. When price falls a few pips short of a high like that you can almost always expect price to revist those levels later on.
Hi Shaunfx!
Much thanks for your response! It was very insightful and knowing that “When price falls a few pips short of a high like that you can almost always expect price to revist those levels later on.” is very helpful!
Regarding your charts, on your H4 time frame, you have indicated nicely that 1.5911 was once a key reaction point and this time around price had reversed at that area (Is it safe to say that I could be looking at last year’s chart and using area’s from that time for confluence?). I was just wondering, say price had dropped past this area, what would be the next area you would be “stalking” for a reversal and what would be the next of that?
As well, when you are analyzing your charts, how low of a time frame do you go to? I noticed you posted a 30 min chart which showed (and you highlighted) around the 1.5950 there was a nice resistance there before breaking through and becoming a solid support level with continuation. The reason I ask is because the lowest I went was to the 1hr time frame which did not (at least to me) clearly show that reaction point unless zooming in further which you did.
Your advice is greatly appreciated!!
Hello Shaun & mashichan
I had a similar question about S&R: How far back do you go in time when looking for support and resistance? And does it depend on what timeframe?
Thanks!
P.S. - Just so everyone’ s aware, the clocks went 1hr backwards in Europe this weekend just gone - I believe the clocks dont change in the US until next week
Hi Donald,
I am a Newbie myself but this is how I understood it so far: In the question how far to look back I heard ICT speak about 4 year extremes. In the COT-Video for example. Sure you wouldnt note all the turning points out of 4 years but the extreme short and long levels I would monitor if we are trading in these areas. The same is true for the last year extreme points.
I am not quite sure what to do with extreme points in between. For example the high of the last two years but when we are watching 4 year extremes and 1 year extremes why not 2 year extremes, right?
Cheers
Hi,
Just couldn´t wait to start into the new week, so I went with the tasks from last week. I will redo it if shaun adds some new tasks for this week :21:
[B][U]Week 2 Monday[/U][/B]
Results Monday:
Results Overall:
Monday - Week 2:
one question: For Today PWH = PDH; should I double tab the sell order?
Cheers and have a nice week folks!
[B]Week 2: Daily & 4HR swing highs and lows[/B]
Going forward this week I want folks to focus on higher timeframe support and resistance levels. I see there are questions about how exactly you should draw in these highertimeframe support and resistance levels so I will do a post on that in a couple of hours. For now to avoid confusion lets continue to keep it simple. Focus on the latest daily swingpoints and the latest 4HR swing points. Set 20 pip stops and 20 pip targets.:57:
EURUSD 4HR swing points (purple), Daily swing points (black horizontal lines)
Hi Shoe, sorry to mess you around there. I am a bit late to the party here. Good week to you too;)
No Problem, I wanted to keep on plotting the PDH, PDL, PWH and PWL for some time anyway.
Nice, I am looking forward to that post you are planing to make!
One question to your chart: There is a Swing High at the 5th or 6th october. Did you leave it out because it was broken later on?
In my chart I have noted two levels (9280 + 9250) which were also broken, so I am not quite sure now about them. Especially around the 9280 level we had a lot of action going on, so I think this level is interresting.
I noted the 9280 and the 9290 level, should I consider these two as one level?
So lets try this!
http://img189.imageshack.us/img189/4322/usdchf1d4hsrweek2monday.jpg
Shaun,
one more question concerning the task of last week: Is there a special cause why you chose New York Time for our start of the day other than getting all the participants syncronized? Or can I for my analysis just got with the settings of my mt4 (GMT) without making a fault and getting misleading results?
Cheers
[B]Drawing Support & Resistance Levels[/B]
[B]Learning material[/B]
First off let me refer you to the ICT Support & Resistance video and then the ICT Key Support & Resistance Post. These are two excellent resources that will give you a clear understanding and a good working knowledge of support and resistance levels.
[B]Higher timeframes vs lower timeframes[/B]
When drawing in your levels, higher timeframe charts will always have a greater impact than lower timeframe charts. So support and resistance levels on the weekly chart will have a greater impact than the levels on a 1 hour chart.
[B]How far back should you look for S&R levels?[/B]
A general rule of thumb is that the higher the timeframe, the farther out you can go. Typically you will not have a 4hour level that was formed in 2010 on your current display. If that were the case you would have lines everywhere. With that said I am not looking at 1980’s data or even 1990’s data when looking at the weekly chart. The weekly chart on my screen shows data upto 2005. Generally that is as far back as I go. I also add more weight to what price has just done. I might have a level at 1.5000 but recently price just ran to 1.5050, I would add more weight to that most recent high.
[B]Drawing S&R levels[/B]
When selecting levels I start off with the Monthly chart, here I am looking for obvious turning points, my work here is quick, I am marking off really key levels. Then I work my way down to the weekly, the same thing here, you are looking for obvious levels. The weekly, daily and 4 Hour charts are my charts of personal preference in determining key levels. I spend a lot of time looking for key levels on these higher timeframe charts. I note yearly highs and lows and other key turning points. If I find myself straining my eyes trying to “fit” a level, generally it is not a level or I might add in a “light level” should I see a general area of support/resistance. I then work my way down to the 4 hour chart. The 4 hour chart holds levels that are relevant to current price action. The 4 hour chart is good for monitoring weekly price action. Generally this is the chart that is always open on my screen. It is not too far out to be out of touch with current price action yet not too close where you run the risk of getting “sucked into the chart”. When price trades to a level of interest and I want to get a closer view then I move through the lower timeframes. Sometimes levels can be drawn across the bodies of the candles. Price might alternate above and below a level making that level a midpoint.
[B]Exercises[/B]
With practice it does become easier. A good exercise I use to practice was to draw in monthly/weekly/daily levels from 2011 and prior, then walk forward into 2012 and see how price reacted off of these levels. Another exercise I did was to keep a seperate MT4 profile for drawing support and resistance levels. In this profile I would draw levels on multiple pairs and at the close of every week I would review price action on those pairs and note any reactions to these levels. I would then draw a circle around the reaction, labelled what timeframe the level was taken from and I would then continue to monitor and take down notes of future price action from that level. I would ask questions such as how far did price bounce from that level? Did it result in a trend reversal? Then take screenshots and record the data in notepad. It is hard to explain this all in words, it may provoke more questions than answers but the best way to figure it out is through practicing and study. It is also important to say we all have our own way of doing things. What works for one might not work for another so you have to find what works for you through trial and error and eventually you will find the right approach that conforms to your own profile and lastly don’t overcomplicate it.
ICT uses NY Midnight as his official start of the new trading day. It is also the end of the Asian range. As far as the results go I am not sure. Here is a video that explains the use of the times that we use.
On my chart I have only drawn in the most recent swing points. These are “fresh” highs and lows and as a result stops will be accumulating above or below these swing points. Next week we will start using all levels, from the weekly all the way down to the 4 hour and they will not be limited to fresh highs or lows.
Here are some examples of the AUDJPY on how far back I will look. I do “fine tune” my levels. notice 82.00 was the midpoint on the weekly but on the daily I would move it down to 81.60. On the weekly 88.00 is a key level but when price gets up there I would be aware of 88.60. I also like to see a good test and rejection at a key level that would serve as good confirmation. When we get around these key levels I look to all the other tools to look for the actual trade. If we are at a higher timeframe level and we are then stalking a trade I will then consider lower timeframe highs and lows such as session highs and lows, pdh’s and pdl’s etc and you can take a closer look.
Shaun,
Just to be clear. We are no longer looking for daily/weekly H/L but looking for just Swing H/L?
In your example, there are 2 swing low’s that you did not mark. Are these not considered swing low’s? (1.2920 and 1.2955)
Cheers
P
EURUSD
Mon Oct 29, 2012 trading:
For Tue Oct 30, 2012
PWH: 1.3090
PWL: 1.2888
PDH: 1.2950
PDL: 1.2886
2012-10-29_1955 - Cskrishna’s library
Good Morning guys!
Ok, a new try to keep it simple. I tried to pick only the most recent swing highs and lows.
Would you add one or leave one out?
About the low around the 20 Oct I am not sure, probably I should have put a line on it too.
The two highs (13th and 24th) are not longer relevant because they are allready taken out by the new high of 26th oct. Am I right on here?
Have a nice day!
cheers
