Ah, ok now I see. Yes, this is why it’s important to post charts with comments and explanations.
But yes even then you can clearly see in your chart that the 154 low you’re referring to isn’t confirmed as a 4H trend low by your 20 EMA (lowest low before EMA turns up). Your 20 EMA is confirming the same low I referenced in my chart for the bearish CHoCH.
SMA = Simple Moving Average
The purpose is the same as your 20 EMA - to smooth out the noise of the candles and show the trend including highs and lows
No, your low is a lower time frame swing low not a 4H low. Just look at your 20 EMA, it shows you the trend. When there is a high (peak) in the 20 EMA, just find the nearest and highest candle high before it, that’s the relevant 4H high. Then find a low (trough) in the 20 EMA and find the nearest lowest candle low before it, that’s the relevant 4H low. My low is lower and closer to the latest 20 EMA trough than your low.
Look at and study the latest chart I posted and specifically the texts and arrows where I write:
“Previous 4H cycle high is highest high between 2 peaks in red SMA”
and
“Previous 4H cycle low is lowest low between 2 troughs in red SMA”
Then look between the latest 2 peaks (latest peak = Nov 21st, 2nd latest peak = Nov 15th) in your 20 EMA and find the highest candle high, this is the last confirmed 4H trend high. Then look between the latest troughs in your 20 EMA (latest trough = Nov 19th, 2nd latest trough = Nov 8th) and find the lowest candle low, this is the latest 4H trend low.
Yes, study real technical analysis books like Technical Analysis of Stock Trends by Robert Edwards and John Magee.
The really good ones that you can actually learn something from are dense, technical and very detailed. It will be like going to the university again. This one is around 750 pages but it’s comprehensive and will give you an excellent foundation to start with.
Now in this 2nd chart below, I eliminated the noise by turning off the candles and only showing your 20 EMA. It clearly shows the underlying 4H trend and where the actual 4H low for the bearish CHoCH is.
The “aha” light bulb moment. Congrats, you’re now using the moving average for what it was designed!
Nice to see it finally click
Yes, works on all TF. You may want to experiment with the type of moving average (EMA, SMA, WMA, VWMA, Hull etc) as well as the length and smoothing parameters so it gives you the look that you want.
I prefer the very “laggy” smoothened SMA because I don’t need it to be fast but I do need to be smooth and accurate.
Bravo, mate! Hope it leads to more accurate analysis in the future!
hi @Dollar_McGavin, yes i do understand how EMA 20 can be useful for TA when identify market structure (marking lows and highs) and i will test further SMA, WMA ect… however, im still very confident and fixated that my CHoCH level is correct, i cant seem to see how yours is the correct one. ( im not trying to be arrogant or ignorant here please dont take it that way )
I’m late to the party but I’m going to give my 2 cents. This is where I see the Change of Character level based purely on where the market range has been broken for a reversal. I don’t use MAs so I have to stay in my lane on those.
I manually drew a zig zag where I see valid structure and highlighted those valid swing points.
To me your CHoCH level is internal noise of a complex retracement before a shift of market structure. A false CHoCH (trap) as I call it. The real CHoCH happens when the market structure range is broken.
If tracking HH, HL, LH, and LL, I’m doing it based on market structure relative to the market structure range.
Market structure is King. Unfortunately this topic is usually only discussed at a superficial level.
If you’re going to marry your trades and choose being correct as your hill to die on, the market will efficiently separate you from your funds. It’s better to be profitable than to be correct.
hi @MartialChartsFX, i like the different approach and perspective. however, how is that market ranging? is ranging not when equal lows and equal highs are created?
we can see downtrend by using trendlines/channel.
also how can you identify where your external point is so you can ignore the noise?
Last question sorry, i wanted to ask about trading times. I am an australian so trading during my timeperiod usually delivers quite low liquidity and sometimes it might take me all day till 12-1am AEST when US market opens.
Do you think its optimal for me to trade around this time instead of casual singapore and syd opening?
Maybe but I don’t use trendlines or channel as a substitute for structure. I only use trendlines as a visual aid to plot the rate of rise or rate of decline in price over time.
By relying on market structure. It’s too much to explain in a reply.
If you can only trade during the Sydney or Tokyo sessions, trade pairs that have at least one of the locales currency such as AUDJPY, AUDUSD, USDJPY, GBPAUD, GBPJPY, EURAUD, etc.
Hi, @MartialChartsFX
okay, is there any way to summarize what you exactly, mean here? When you say market structure that could mean alot of things. I can see what you mean when you talk external vs internal however, i do question it since we are studying and looking at a 4hr chart already. Also If you were to trade where your CHOC is lying it would nearly take a month for that CHOC to form is that not way too long for intraday?
update i actually, can see what you mean when you list your CHOC level and how you are ignoring internal noise. i can see how you are marking first HL and HH almost the top and bottom of that range and whatever lies between those levels is considered internal, and if a break is to occur to the upside that is BOS ofc and downside that would be CHoCH
It sounds like you had a good idea with the support level and CHOC confirming an uptrend, but I’ve been in a similar situation where I didn’t wait for enough confirmation either. Looking back, I think waiting for further confirmation could’ve helped avoid jumping in too early. Also, trading against the overall downtrend can be tricky—sometimes it’s better to wait for the trend to shift rather than trying to catch a reversal.
No, I don’t take this as you being arrogant, so no worries about that. Having said that, I’ll make one last post regarding the CHoCH.
Just so we’re clear, this is not my CHoCH, this is the chart telling you where the actual 4H CHoCH is.
Personally, I have no feelings about being right or wrong, I only go by what the chart and the market is telling me.
Market structure theory works and is profitable, but only for those who can properly read and understand what the chart and the market is telling them.
In the chart below, I highlighted how a 1:1 trade would’ve played out trading your CHoCH vs the 4H chart’s CHoCH
)
