Reading Charts in Real Time

[fxThunder 10]

Missed this opportunity in the usd/jpy.

 

went by whilst I was fairly oblivious to what was happening right in front of my eyes...

[MidKnight 12]

Thanks for the picture eNQ. I saw all that as all within a range as my prior 240m post showed. Yes, it was coming off S, of which I noticed in my plan for today, but it was also coming up to R. As it turned out, it was a stupid idea of mine, you are right.

 

With kind regards,

MK

[fxThunder 10]

Thanks for the picture eNQ. I saw all that as all within a range as my prior 240m post showed. Yes, it was coming off S, of which I noticed in my plan for today, but it was also coming up to R. As it turned out, it was a stupid idea of mine, you are right.

 

With kind regards,

MK

 

That is what makes it very difficult sometimes. A case can be made for a trade either way and it means a choice have to be made on which side to trade. You are 100% correct that the 240min showed both S/R.

 

What swung the case for me is, daily in uptrend, 240min at support within that uptrend and then a subsequent break out of that consolidation to the upside. Any short would have been fighting the above reasons.

 

Longs, however, would be playing with the wind at their backs. Very little resistance above and major trends in their favor. (The consolidation by itself contains many layers of support and resistance that would have required fighting through)

 

Above is just my reasoning when I see conflicting long and short plays. Not saying that it is right or otherwise but kinda like building a scorecard for both plays and then picking the easier one has helped me a lot, especially in futures trades.

 

Keep well,

eNQ

 

EDIT add:

 

I also look at which side has more "fresh air" that can be sliced through - the usd/jpy did just that now.

[MidKnight 12]

The night is young and already a fast loser on short gbp/usd. Both gbp/usd and usd/cad signaled me short at about the same time. What do ya do then as they are really opposite type of trades. Anyhow, at the time I took them both because knowing my 'skill', I would have picked the one that didn't work.

 

-22 on short gbp/usd.

 

Still short USD/CAD and have taken ~1R (30 pips) for 1/2 the position. Stop moved to BE.

 

Stopped out of USD/CAD with a 0.5R. Hit target 1 but that was all. So far price has stopped right at where my BE stop was. Obvious though right, price is testing the prior consolidation after breaking from it. Non-rhetorical question, but I do wonder how different the results would be if only moved stops based on natural levels and didn't do the BE thing because price so often tests its point of breakout.

[fxThunder 10]

usd/jpy long -setup.

 

eurusd only made it to T1, gbpusd went to T1 & T2

[Gabe2004 10]

I haven't posted this type of thing on trading forums before, but I do something like this every day. Recent posting made the comments about it being useful and true accountability. So, I'll be doing this for the next little while, let me know if it is excess clutter and I will cease.

 

 

Pairs near S/R:

EUR/GBP

EUR/USD

GBP/USD

USD/CAD

 

Steelblue is for Support

Red is for Resistance

(I read that somewhere in this thread

 

EUR/GBP

Looking for longs down here, especially on a probe lower.

 

EUR/USD

I've missed the longs so now watching to see how R gets handled around the 1.4900 area

 

GBP/USD

Up at R, but also reacting off S. I'll take a shot on the short side here if 15m gives good pattern once Europe opens.

 

USD/CAD

Looking to sell this test of the prior swing low.

 

With kind regards,

MK

 

Hi MK

 

Could you put the time frame on the charts? (or mention them in the post)

 

Thanks

 

Gabe

[thalestrader 14]

Hi MK

 

Could you put the time frame on the charts? (or mention them in the post)

 

Thanks

 

Gabe

 

 

Hi Gabe,

 

Just count the bars/day. There are 6 bars, so 24 hours/6 bars = 4 hours/bar.

 

Best Wishes,

 

Thales

[Gabe2004 10]

Hi Gabe,

 

Just count the bars/day. There are 6 bars, so 24 hours/6 bars = 4 hours/bar.

 

Best Wishes,

 

Thales

 

I did.

It was just a sugestion for the sake of efficiency.

 

Gabe

[MidKnight 12]

Hi MK

 

Could you put the time frame on the charts? (or mention them in the post)

 

Thanks

 

Gabe

 

Sorry Gabe, I chopped the tops off because these charts are big in my workspace and was trying to make them smaller for easier viewing....

[Gabe2004 10]

Possible long on UJ.

 

Gabe

 

Or not.

Edited November 13, 2009 by Gabe2004

[thalestrader 14]

Hi folks,

 

The GBPUSD is exhibiting price action that often indicates at least a temporary end to the last move.

 

Best Wishes,

 

Thales

[thalestrader 14]

Stopped out of USD/CAD with a 0.5R. Hit target 1 but that was all. So far price has stopped right at where my BE stop was. Obvious though right, price is testing the prior consolidation after breaking from it. Non-rhetorical question, but I do wonder how different the results would be if only moved stops based on natural levels and didn't do the BE thing because price so often tests its point of breakout.

 

One of the hardest things for me, even now, is that once I am in a trade, I often times fail to see that price is showing me the move is over and ready to reverse. I get so intent on focuing upon my PT's and my BE stop, that I miss the real SL, or even a Stop&Reverse.

 

Here is another view of the USDCAD. I do not know, had I been watching, if I would have taken the long entry that I show, but I do believe that had I been short from your entry, I would have been out at that long entry. First PT on that long would have been right around your short entry, and price now looks as though it might be setting up another short. However, the USDCAD is right in the middle of a prior chop zone, so unless is breaks back above 1.0468, I am not too interested in anything it has to say to me.

 

On the GBPUSD, your short entry created a Low (undercutting the previous low stopping point and thus entering you into a short position). Price immediately reversed and rallied to a new High. This, by the way, should be the only time an initial stop loss is hit for a full -R loss, i.e. when price immediately reverses from entry and takes you out. This is a "worst case stop" and this is, indeed, the worst case. Once price took you out, especially as it made a new high in the process, you could have looked for a pulback into a HL, and then traded from the long side.

 

Of course, this all smacks of "Monday Morning Quarterbacking," but I thought that it was worth bringing up that if what gets you into a trade is a H-L-LH sequence, then price presenting you with its counter-part (L-H-HL) ought to get you out, if not get you reversed.

 

In other words, do not be married to a trade or your profit targets if price gives you indications that it has changed its mind. While it is wrong to cut your profits short at the slightest reaction, e.g. in the case of the USDCAD short the rally into the point I marked with an "H". But, having reacted so, and having started to move down again, it would be prudent to move your stop loss down to what would essentially be a long entry and thus signal a potential reversal.

 

Best Wishes,

 

Thales

[Gabe2004 10]

One of the hardest things for me, even now, is that once I am in a trade, I often times fail to see that price is showing me the move is over and ready to reverse. I get so intent on focuing upon my PT's and my BE stop, that I miss the real SL, or even a Stop&Reverse.

 

Here is another view of the USDCAD. I do not know, had I been watching, if I would have taken the long entry that I show, but I do believe that had I been short from your entry, I would have been out at that long entry. First PT on that long would have been right around your short entry, and price now looks as though it might be setting up another short. However, the USDCAD is right in the middle of a prior chop zone, so unless is breaks back above 1.0468, I am not too interested in anything it has to say to me.

 

On the GBPUSD, your short entry created a Low (undercutting the previous low stopping point and thus entering you into a short position). Price immediately reversed and rallied to a new High. This, by the way, should be the only time an initial stop loss is hit for a full -R loss, i.e. when price immediately reverses from entry and takes you out. This is a "worst case stop" and this is, indeed, the worst case. Once price took you out, especially as it made a new high in the process, you could have looked for a pulback into a HL, and then traded from the long side.

 

Of course, this all smacks of "Monday Morning Quarterbacking," but I thought that it was worth bringing up that if what gets you into a trade is a H-L-LH sequence, then price presenting you with its counter-part (L-H-HL) ought to get you out, if not get you reversed.

 

In other words, do not be married to a trade or your profit targets if price gives you indications that it has changed its mind. While it is wrong to cut your profits short at the slightest reaction, e.g. in the case of the USDCAD short the rally into the point I marked with an "H". But, having reacted so, and having started to move down again, it would be prudent to move your stop loss down to what would essentially be a long entry and thus signal a potential reversal.

 

Best Wishes,

 

Thales

 

 

Hello Thales

 

Would you consider the potential trade in the purpole square a valid setup?

 

Thanks

 

Gabe

[Gabe2004 10]

Hello Thales

 

Would you consider the potential trade in the purpole square a valid setup?

 

Thanks

 

Gabe

 

Maybe you wouldn't because of the S/R line this would be @.....

Gabe

[thalestrader 14]

Hello Thales

 

Would you consider the potential trade in the purpole square a valid setup?

 

Thanks

 

Gabe

 

Hi Gabe,

 

It looks fine to me. In fact, my good friend the currency trader emailed me a chart yesterday showing he took that exact entry.

 

I marked my chart to shows price "stepping" higher into your entry.

 

I also show a current short entry on the GBPUSD, though R/R is +32 to first PT and -34 to initial SL.

 

Best Wishes,

 

Thales

[Gabe2004 10]

Hi Gabe,

 

It looks fine to me. In fact, my good friend the currency trader emailed me a chart yesterday showing he took that exact entry.

 

I marked my chart to shows price "stepping" higher into your entry.

 

I also show a current short entry on the GBPUSD, though R/R is +32 to first PT and -34 to initial SL.

 

Best Wishes,

 

Thales

 

 

If my entry is fine than I am confused.

When is an SR line/zone of such importance that you would wait until price clears it in order to enter into a trade and when is it OK to enter into a trade based on the L-H-HL or H-L-LH even if the entry would be at n SR zone?

 

Thanks

 

Gabe

[forrestang 10]

Just posting some S/R levels I'll be looking at throughout the day. Anybody see anything similar?

[thalestrader 14]

If my entry is fine than I am confused.

When is an SR line/zone of such importance that you would wait until price clears it in order to enter into a trade and when is it OK to enter into a trade based on the L-H-HL or H-L-LH even if the entry would be at n SR zone?

 

Thanks

 

Gabe

 

I am hesitant to show this chart, because we already have a few budding geometers among us, but this is not a triangle. This is price wedging into its lows. Do not focus so much on the "trendlines," rather concentrate your attention to the overall presentation that price as it is skipping along the bottom compared to the swift, impulsive move down.

 

I know I have mentioned this before, but William O'Neil's book, How to Make Money in Stocks, especially his latest edition, is one of the best sources you will find on learning to read price action. Though he focuses solely on daily and higher time frames, price action repeats itself at all degrees of trend. I recommend his book, especially those sections on chart reading, without hesitation.

 

I have one other source that I will recommend, though I am very hesitant to do so. I will post it later today. I want to wait because I know that this book can do more harm than good, especially if one reads the entire book. The authors did, however, publish a free .pdf pamphlet containing hwat I consider to be the only important technical aspects of the whole book. I do not possess that .pdf myself, but I know a few of my friends do have it. I will email them, and once one of them sends me the .pdf file, I will upload it here. That will be this weeks' "Weekend Reading" installment.

 

Best Wishes,

 

Thales

[thalestrader 14]

I also show a current short entry on the GBPUSD, though R/R is +32 to first PT and -34 to initial SL.

 

Price bouncing after tagging PT1.

 

Best Wishes,

 

Thales

[forrestang 10]

Price bouncing after tagging PT1.

 

Best Wishes,

 

Thales

 

Thales,

 

The entry that would have put you in this trade, there was a lot of overlap in the bars. And I'm not focusing on the bars, but what I'm saying is that it was a swing that was a lot of chop to develop the LH. So price wasn't distinctly moving.

 

Does this factor in at all to your trades?

[thalestrader 14]

Thales,

 

The entry that would have put you in this trade, there was a lot of overlap in the bars. And I'm not focusing on the bars, but what I'm saying is that it was a swing that was a lot of chop to develop the LH. So price wasn't distinctly moving.

 

Does this factor in at all to your trades?

 

Hi Forrest,

 

Overlapping price action is certainly be a signal to be cautious. Periods of price overlap create chop zones. These areas are often consolidations prior to a trend continuation. They can also be areas of distribution or liquidation at the end of a rally or periods of accumulation after a decline. If you look at the chart in my post #1136, you will see that the character of that particular over lap led me to suspect that at least a temporary change from up to down, or at the very least from up to sideways, was imminent.

 

Hi folks,

 

The GBPUSD is exhibiting price action that often indicates at least a temporary end to the last move.

 

Best Wishes,

 

Thales

 

The GBPUSD was presenting a series of marginally HH's and HL's, with each new high immediately resolving back into the range. This is not bullish, as it is a form of "wedging" higher along the lows as price is finishing a rally (on the other hand, if you see price wedging higher, and then break higher, that is often very bullish and leads to an extremely strong, nearly parabolic move higher).

 

Best Wishes,

 

Thales

[thalestrader 14]

Price bouncing after tagging PT1.

 

Best Wishes,

 

Thales

 

Second 1/2 out at +7

 

Best Wishes,

 

Thales

[daedalus 10]

Two trades this morning - 1 par and 1 winner. Price was just coiling sideways for a while after entry but I had no reason to get out of either. Had to take a bit of heat but sticking to the rules took care of me rather than bailing out of fear, reigning in stops too tight, bailing at par when they started to work, etc.

 

JY was the par based off rotation in the VC.

 

BP was +21 out at 270% target like usual. As you can see there was no VC rotation prior to it so I just hold the trades for my targets. (The 200% is my par level if the VC has not already rotated as was the case on this trade).

 

Off for an early start to the weekend! See you guys monday!

[forrestang 10]

Just posting some S/R levels I'll be looking at throughout the day. Anybody see anything similar?

 

Nice reaction on the 3 that met the support area. But again I didn't see an entry.

[thalestrader 14]

One of the hardest things for me, even now, is that once I am in a trade, I often times fail to see that price is showing me the move is over and ready to reverse. I get so intent on focuing upon my PT's and my BE stop, that I miss the real SL, or even a Stop&Reverse ... I do not know, had I been watching, if I would have taken the long entry that I show, but I do believe that had I been short from your entry, I would have been out at that long entry.

 

This GBPUSD is identical to the scenario that played out in the USDCAD. I moved the stop from BE to +7 when price pulled back from the high following the bounce from PT1.

 

That was also a long entry. I did not take that entry. But it did reach what I would have set as PT1.

 

Why did I not take it? A combination of factors, including paying too much attention to this thread.

 

Best Wishes,

 

Thales