Higher Lows Lower Highs

[Snow Dog 10]

When good candles/patterns fail that's an immediate warning sign. A solid D close should follow through. Failure to do so should be an alert to look for 1hr flow to switch.

[Snow Dog 10]

We look to follow the daily candles as much as possible. Trying to keep things as simple as possible we:

 

1) try and identify support and resistance levels

2) look for positive/negative closes to follow through the next day (as we believe this will hold true approx 70% of the time)

3) watch for divergence

4) Look for D chart higher lows/lower highs, double tops/bottoms, engulfing candles, hammers/shooting stars, morning/evening star patterns

5) rsi crossing its moving average or crossing the 50 line

 

If we are confident that a confluence of the above exists then the next day we will look to trade in 1 direction only. This keeps us out of some head fake moves typically around London open and the US open (weak counter trend 1hr candles in and around US open just as big a fake move as LO).

[Snow Dog 10]

If you are inconsistent take a critical look at your winning and losing trades. What do the losing trades have in common?

 

I was having many losing trades from 5 min on 3rd/4th move in London morning session. Guess what I cut that trade out. Now I couldn't care what that trade does as I know statistically its a high risk venture.

 

I cut out 5 min higher low/lower high trades that were counter the London morning direction that were set up from weak 1hr candles pre/early US session. Again now I don't care what those trades do, for me they are a high risk bet (a solid engulfing post US news candle a different story). If we are not in already from London open we are waiting out pre/early US session CT moves and looking for London's direction to resume.

[Snow Dog 10]

If we are considering counter trend we want over whelming additional information to consider, such as:

 

- Proven support/resistance levels.

- W pivots.

- Divergence on higher time frames.

- Price action proving it does not want to progress for hours, double tops/bottoms , higher lows/lower highs, evening/morning star patterns, engulfing closes.

- Psych levels eg round numbers

 

In addition to the right kind of price action on 15 min, double tops/bottoms , higher lows/lower highs, evening/morning star patterns, engulfing closes.

[Snow Dog 10]

The recap 8 Feb has already been posted.

 

11 Feb

 

EUR - D did close marginally lower than 7 Feb at the support area 1.3375. 4hr lower high lower low in tact, just. A 1hr move lower that fails and then moves up would switch flow up. Bias down but looking for move up should W M2/1.3350 hold.

 

GU - Same picture in reverse. Bias up but we have at W M3 at 1.5822 and resistance level at 1.5843 could flip 1hr to sells.

 

EJ - D neg close at the 123.30 support level. We have stalled here for 20 hours and there was buying during London and US sessions. Failure to go lower will set up buying opportunities.

[Snow Dog 10]

EJ - D neg close at the 123.30 support level. We have stalled here for 20 hours and there was buying during London and US sessions. Failure to go lower will set up buying opportunities.

 

As mentioned EJ did not want to go lower with a solid base 123.57 the W M2. Out 60% at +67 and the balance at +84.

 

A good day, Mrs V was right it seems and the nice 4hr close may take us higher.

[Snow Dog 10]

GU - Same picture in reverse. Bias up but we have at W M3 at 1.5822 and resistance level at 1.5843 could flip 1hr to sells.

 

 

This was a little early but if you were looking for 1hr to flip this shooting star is a great one to get. Not taken, nice set up though. Closes at the end of immediate range and follows through.

[Snow Dog 10]

This was a little early but if you were looking for 1hr to flip this shooting star is a great one to get. Not taken, nice set up though. Closes at the end of immediate range and follows through.

Oooops chart added. Great set up.

[Snow Dog 10]

Recap 11 Feb

 

EUR - View was a 1hr move lower that fails and then moves up would switch flow up. Bias down but looking for move up should W M2/1.3350 hold. 1.3350 did hold and we went up.

 

GU - View was bias up but we have W M3 at 1.5822 and resistance level at 1.5843 could flip 1hr to sells. An early shooting star rejected the move up and 1hr did flip for sells.

 

EJ - View was D neg close at the 123.30 support level. We have stalled here for 20 hours and there was buying during the previous days London and US sessions. Failure to go lower will set up buying opportunities. We did get move up.

[Snow Dog 10]

12 Feb

 

EUR - D closed positive inside bar. 4hr flow undecided. All in all a weak D candle did not cross our 8lwma, RSI below 50. Bias down but we can bounce from 1.3360 support level.

 

GU - D engulfing negative close. The flow is down but we have had 2 large D negative closes in this general area that could not follow through lower. Bias down but with potential to bounce up fro, the support levels.

 

EJ - D positive close, bias up.

[Snow Dog 10]

If you are inconsistent take a critical look at your winning and losing trades. What do the losing trades have in common?

 

I was having many losing trades from 5 min on 3rd/4th move in London morning session. Guess what I cut that trade out. Now I couldn't care what that trade does as I know statistically its a high risk venture.

 

I cut out 5 min higher low/lower high trades that were counter the London morning direction that were set up from weak 1hr candles pre/early US session. Again now I don't care what those trades do, for me they are a high risk bet (a solid engulfing post US news candle a different story). If we are not in already from London open we are waiting out pre/early US session CT moves and looking for London's direction to resume.

 

Posted this yesterday. It is a repeat from a previous post but worth reminding. As luck would have it GU today quick move down 60-70 pips after LO. This is a 15 min chart, we wouldn't touch the 15 min lower high trade, see the x. This is exactly the scenario mentioned.

 

We also would not be looking to buy weak pre/early US candles but wait for US to resume London direction (or give stronger reversal signal).

[Snow Dog 10]

Recap 12 Feb

 

 

I'm most likely going to be tied up tomorrow early so I'll do the recap now.

 

EUR - View was bias down but we can bounce from 1.3360 support level. We did bounce up from 1.3360.

 

GU - View was bias down but with potential to bounce up from the support levels. It went down at London open as per bias. We then had a 6 hour higher low form and move up signaled with 1hr engulfing positive close. The low was the 1.5575 identified support level, see previous D charts.

 

EJ - Bias was up. We went up after London open and had a big drop in US session.

[Snow Dog 10]

Asian session so much to early for us. Just another example (been swopping pm's with someone on the close at end of range). After Y's wide range PA 126.92 to 125 the move up to 126 could have gone either way. This arrow down confirms where flow is a LH, negative engulfing close (below last 2 candle closes) right at the edge of immediate range.

[Snow Dog 10]

Do we have an indicator or just see these things?

 

I was asked the question do we have an indicator or just see these things.

 

We do have a price action indicator based on 3 bar reversals. This gives an alert but on these trades the short answer is we see them.

 

With set ups like this we will take these trades every day. We "see" them because we're looking. If we have done our assessment in the morning and it looks like flow will reverse we're expecting it. Or shall I say when it happens it certainly isn't a surprise.

 

Arrow down left. The possibility of 1hr flipping over on 11th to reverse higher high higher low flow and give a lower high sell was discussed as a possible set up. So when we see that kind of shooting star, rejecting move up, after divergence at an identified resistance level and closing at the bottom of range we'll take it. Little/no lower wick on 1hr. It's easier to see when your daily analysis has already identified the possibility it will happen.

 

Arrow down right. Attempt to go up stalls with a doji. Then 1hr closes negative, little/no lower wick at low of range. In trend this is a picture perfect set up. Literally cannot ask for more.

 

The 3 bar reversal signals when the candle close is higher/lower than the previous 2 candle closes. For sells 1 of previous 2 candles must be green positive close. For buys 1 of the previous 2 candles must be negative close. So its doing a good job of capturing change in flow and resumption of trend. Its based on price action only not rsi/tdi etc etc.

[Snow Dog 10]

13 Feb

 

EUR - D positive close off the support level 1.3375/W M2. We stopped at the 1.3465 resistance level (highs from Feb '12)/W pivot. The 4hr lower high lower low flow broken. The 1hr showed divergence on move up to yesterdays high, it is at a tipping point and could go either way. A lower high after divergence at the resistance/W pivot a valid sell. Bias up with potential to sell.

 

GU - D closed a big doji off the 1.5575 support level, divergence showing. We have RSI below 50 still but crossed up, still below 8lwma. With 1hr flow higher high higher low, bias up.

 

EJ - The positive close on D 11th could not follow through higher. We are still below D RSI 50 level and below 8lwma. 4hr and 1hr now on lower high flow. Bias down.

[Snow Dog 10]

Mrs V and I had to renew our drivers licenses today. The queues are horrendous and after 3-4 days of pitching up to find they are closed due to strike action we were there at 6am local time. They open at 8. Filled in forms, eye test, finger prints, pay and out in 12 mins. Exited to see 100+ people in the now long line. You are going to queue for 2 hrs we just decided to get in and out early.

 

Anyway normal service blog recap/days view will resume tomorrow.

[Snow Dog 10]

First trade for today.

[Snow Dog 10]

2nd trade of the day.

[Snow Dog 10]

3rd trade of the day. A little short on time so no major explanations. 1st trade was a dble top on 1hr to set up, 2 and 3 were just running with the days trend.

[Snow Dog 10]

Recap 14 Feb

 

EUR - A D lower high shooting star set up a move lower. Asian session moved down strongly and this continued into London morning session.

 

GU - An engulfing negative close had very little follow through with the 1.55 support level/W M3 providing support.

 

EJ - A D doji hinted at failure again to go higher after the positive close on 11th. A 1hr shooting star then a 3 bar reversal set up the move of the day.

[Snow Dog 10]

15 Feb

 

EUR - D closed with a lower wick, we are below 50 on RSI but there is divergence. 4hr is on a lower high lower low at the moment, RSI below 50. Bias down.

 

GU - Very little follow through down after the 13th close, below 50 RSI but showing divergence. 4hr flow lower high lower low and also showing RSI divergence. RSI crossed up giving chance for scalp buys. Having said that bias down until D signals otherwise i.e. the 4hr viewed at the moment as a counter trend scalp opportunity.

 

EJ - These charts looking the cleanest of the 3. There are the Apr '11 highs that can act as support however bias down.

[Snow Dog 10]

This is the 15 min chart. Just above 50 psych level is M4, then W S2 and Y's high all within a few pips of each other.

 

We had view of scalp buys, bias down until D proves otherwise. 15 min double top at that cluster of resistance levels. See the arrow down in the box. Thats the pa 3 bar reversal i.e. it means the candle immediately before the arrow closed lower that the 2 previous candle closes. Exactly as its meant to, a good early signal back into the down bias.

 

Did not get this just showing what we are looking for.

[Snow Dog 10]

The 4hr charts to once again highlight how price is attracted to the W pivots. The red lines are some of the historical SR levels. EUR.

[Snow Dog 10]

The 4hr charts to once again highlight how price is attracted to the W pivots. The red lines are some of the historical SR levels. GU.

[Snow Dog 10]

The 4hr charts to once again highlight how price is attracted to the W pivots. The red lines are some of the historical SR levels. EJ.