Busy Day Tomorrow

[gid]

	Quote:	cowpip
	And all it takes to more or less master that is time. It would certainly help to have access to some of the tools that Milliard, Anna, Art, Buk and the others have access to for better analyzing the rigidity of the various zones, but we can more or less determine that ourselves through a close examination of the candles that print at those levels, and more particularly how price reacts when it reaches those levels. Here's a good example of a drill-down for an early entry at that zone that Anna-Maria noted back in this thread. It's a near-real-time example of how I've played it today. The trend for the day was up following a big bounce during the European session. When the U.S. came on-line, poor news combined with a dropping dollar and increasing oil prices applied pressure to equities which played out in the euro/yen as a failed attempt of the highs. When price reached the 164.80ish zone, I zoomed in, watched and waited for a signal. Price attempted multiple times to break the high, but ultimately failed. After I saw my signal (the third attempt higher, candle prints gave the go-ahead), I went short at 164.86 with a tight stop above 165. I scaled out at the zone indicated on the 5-min chart (+50 pips) and have now fully paid for this entry in case it retraces back toward the next hot-zone near 161.50. The trend remains up on the hourly, so caution is advised for shorts. A long entry near the scale-out zone certainly doesn't hurt either (and may end up being the wiser action), in case this move is part of a larger break-out play higher. Otherwise, the initial short is in a good position to profit from a move lower. Obviously, the way you'd play this on the longer time-frames might differ from the way I initiated this trade on the shorter frames, but it shows how I utilized the shorter time frames to select focused entries.

Thanks for the detailed explanation of your thought process during the trade! I'm sure this is very helpful to and much appreciated by many.

One thing i was not sure of is why you entered after the third rejection? The first 2 attempts also provided an entry after an exhaustion type bar (although yours proved to be far better), do you wait for an RSI divergence for confirmation? Also any reason for having the stop above 165 (round number/option barrier?) instead of above the 3 bar highs around 164.95?

I join Sledge in asking for more of these examples if your time permits.

[Sledge]

	Quote:	gid
	Thanks for the detailed explanation of your thought process during the trade! I'm sure this is very helpful to and much appreciated by many. One thing i was not sure of is why you entered after the third rejection? The first 2 attempts also provided an entry after an exhaustion type bar (although yours proved to be far better), do you wait for an RSI divergence for confirmation? Also any reason for having the stop above 165 (round number/option barrier?) instead of above the 3 bar highs around 164.95? I join Sledge in asking for more of these examples if your time permits.

Gid-
Thanks for a chime in to support these as well and welcome to the forum, judging by your post, you appear to have a nice foundation of trading skill already. Hope you can dig some nuggets out of the forum as well!
Sledge

[cowpip]

	Quote:	gid
	One thing i was not sure of is why you entered after the third rejection? The first 2 attempts also provided an entry after an exhaustion type bar (although yours proved to be far better), do you wait for an RSI divergence for confirmation? Also any reason for having the stop above 165 (round number/option barrier?) instead of above the 3 bar highs around 164.95? I join Sledge in asking for more of these examples if your time permits.

Maybe as time permits, I'll throw up a few more.

I wouldn't have taken the first opp, as I like to watch price action to see how it reacts at these important levels. It is not likely to reverse quickly on the first attempt. Most reversals have some structure to them, and it takes time to build that structure. PATIENCE is key, even at these small time-frames. If you jump the gun, you'll likely regret it as you sit and watch the structure form into something that would have given you a better opportunity sometime later.

A lot of people place their stops tighter - like a few pips above the highs or below the lows, when they really need to be placing them above (or toward) the upper ends of resistance zones or the lower ends of support zones. Those who don't often get taken out on stop-hunts. The euro/yen pair often sees stop-hunts that run about 10 pips higher than the last high. I thrive on those, as they almost always end up as beautiful reversal bars when they close. The longer time frames (hourly to 4 hourly) provide the best signals, of course. Again, it pays to be patient.

Why above 165? As Anna-Maria pointed out earlier, that level was the next logical S/R zone (actually anywhere up to about 165.10 or so, I believe?). It's clear if you look at the daily charts back through late 2007. I don't pay any attention to option barriers. Sure, they have a role to play and can assist volatility, but again price action always holds the trump card.

Here's a follow-on to the trades I initiated earlier this week. I was looking to build a series of positions that I hoped would end up near 161.50 near the end of the week. That target wasn't met, but it did still provide some nice opps to get short on this train. Note that I am again utilizing the short time frames on an intra-day basis. These are 15-min charts to help show more of the underlying structure. My entries again were based largely on price-action and not much more. Fibs and price action played a role in my third entry.

Have a great weekend everyone. Next week looks to be like quite a busy one. Be careful out there! Sentiment can swing on a dime during weeks like this one coming up.

[Sledge]

Not sure if Art is around but I wanted to refer back to the charts again that were posted on page #1 of this thread referring to the GBP/USD.

Right now the currency pair bounced off the 1.9680 Support and is heading back towards the 1.9960 Resistance level.

This is a VERY elementary question as I am very new to utilizing these hard S&R levels, but hopefully after a large laugh you may be able to answer:
Is it reasonable to assume that since the market will not shoot straight from 1.9680 to 1.9960 without hesitation that markets GENERALLY will move towards that next level after it has bounced?
Hopefully articulated a bit better. I took a Long after it tested and retreated from the 1.9680 level. I closed out after 70 pips. There was a huge 4 hour up bar that knocked the market sideways silly in the morning (NY/London overlap) on Friday. Last night (Monday Morning 4/28) in London the boys kept pushing north towards the 1.9960. Long of the short of someone sitting in your shoes is when in doubt, with room to grow towards that 1.9960 target would anyone hesitate to continue to be long on that pair until it got close to the 1.9960 mark?

From what I have gathered from all of you folks, it appears that you would have gone long at the bottom test, held, waited for the stall and possibly added in. Your watchful eyes would be focused on the 1.9960 level like a hawk and then would make a decision of what your next move would be as it gets into this "Hot Zone" But as I do not want to assume how your minds work, I was hoping if I was getting this down the correct way or if I am way off base?

Much Thanks!
Sledge

[milliard]

	Quote:	Sledge
	Right now the currency pair bounced off the 1.9680 Support and is heading back towards the 1.9960 Resistance level. I took a Long after it tested and retreated from the 1.9680 level. I closed out after 70 pips. From what I have gathered from all of you folks, it appears that you would have gone long at the bottom test, held, waited for the stall and possibly added in.

Hi Aaron,

He’s not around until Wednesday of this week. Anna’s back tomorrow.

Neither of them are positioned on the Cable at present. They’re long Sterling via EURGBP & GBPCHF.

Cable is mired in the range on the hourlies & they rarely play that game, especially on that instrument.

There are far more lucrative (risk) opportunities elsewhere if you’re intent on shuffling Sterling around, hence the positions on those aforementioned crosses.

The scenario you describe is logical however. Long off the base range @ 680 is certainly playable on the 2nd attempt (25th), but I don’t see a pare-off @ 9750? Obviously, you’re working your own personal (risk) ticket & if it calls for a peel off or full encashment @ 9750, then so be it.

Thing is, if price continues to develop as it currently is, you're flat with no core position. Attempting to leg back in again on a fresh ticket wouldn't be on our radar in this type of market structure. The best risk opp was back at that double bottom pitch of supports.

As far as compounding or adding into a (range) leg; we’d simply abide by the normal price guage (higher highs & lows in an upleg – lower highs & lows in a downleg).

Straightforward, uncomplicated observation. Let price tell you when & if it's ready to ramp up the size/risk. No need to make life unnecessarily difficult.

[Sledge]

	Quote:	milliard
	The scenario you describe is logical however. Long off the base range @ 680 is certainly playable on the 2nd attempt (25th), but I don’t see a pare-off @ 9750? Obviously, you’re working your own personal (risk) ticket & if it calls for a peel off or full encashment @ 9750, then so be it. .

I think I understand- please correct me. In this situation you would not have closed out as you saw the sideways action as a normal pause and not a reason to exit your long?

	Quote:	milliard
	Thing is, if price continues to develop as it currently is, you're flat with no core position. Attempting to leg back in again on a fresh ticket wouldn't be on our radar in this type of market structure. The best risk opp was back at that double bottom pitch of supports.

Yes this would be correct, at present I am not in on a position, and it is quite possible that the ship has sailed and I missed the boat. I'm cool with missing the boat as long as I can utilize this missed passage to learn from it and be sure to get on the boat next time it is in port

	Quote:	milliard
	As far as compounding or adding into a (range) leg; we’d simply abide by the normal price guage (higher highs & lows in an upleg – lower highs & lows in a downleg).

Ok I need clarification a bit on this if you can.
If you are in an uptrending market and you have a "pause" or a "hesitation" you would add in and BUY when seeing higher highs and higher lows?
Conversely, you would on a downtrending market on the same "hesitation" you would add in only if their were lower highs and lower lows?

Also to clarify, there may be two different types of set-ups that I would like to discuss:
1. Their are "pauses" or "breathers" in the market.
2. Their are Retraces.

I am assuming that this strategy you outlines above is for "hesitations" and NOT for a retrace Yes? On a retrace you would have a different strategy to look for testing and buy the bottoms if possible correct?

	Quote:	milliard
	Straightforward, uncomplicated observation. Let price tell you when & if it's ready to ramp up the size/risk. No need to make life unnecessarily difficult.

I agree with you completely, Trying hard to make this as "uncomplicated" a process as possible. Sooner than later I'll be able to see through all of it with extreme clarity, because of you and your crew over there, you are assisting the clarity process to come to fruition more and more on a daily basis. Thank you for your replies!
Sledge

[milliard]

	Quote:	Sledge
	1) I think I understand- please correct me. In this situation you would not have closed out as you saw the sideways action as a normal pause and not a reason to exit your long? 2) If you are in an uptrending market and you have a "pause" or a "hesitation" you would add in and BUY when seeing higher highs and higher lows? Conversely, you would on a downtrending market on the same "hesitation" you would add in only if their were lower highs and lower lows? 3) Also to clarify, there may be two different types of set-ups that I would like to discuss: 1. Their are "pauses" or "breathers" in the market. 2. Their are Retraces. I am assuming that this strategy you outlines above is for "hesitations" and NOT for a retrace Yes? On a retrace you would have a different strategy to look for testing and buy the bottoms if possible correct?

1) Correct. There was no reversal activity @ circa 9850, neither is there any apparent at current level: 9900.

2) As to what would inspire me/us to compound a leg? Well sure, higher high/low ladder steps via maybe a sub hourly (if we’re working a range) would be one consideration. Chatter or order flow confirmation would be another if we were aware of who & why was also working the range and/or the stops. Specific fundamental flavor of the day/week would most definitely be a third.

We rarely commit money (especially range money) exclusively on the back of a technical print or chart reading. But that’s just us.

3) I’m not sure what you’re angling at regards point 3? Price is either in demand, whereby players are accumulating as it gathers momentum off support, or they’re unloading either due to a rogue economic print, negative chatter…or stops are dictating the supply, overwhelming the flows.


We’ll now begin to encounter that specific traffic up here at c9920 (thru the round number). Stops will be layered all the way to 9960 & 2.0030.

They’ll be 2 way, & Pound Bulls will want to test the strength of these 1st line stops @ 920 thru 960. You’ll soon see if genuine supply lurks atop here.

I doubt there’ll be much serious clout until 2.0030 is threatened.

[Sledge]

	Quote:	milliard
	1) Correct. There was no reversal activity @ circa 9850, neither is there any apparent at current level: 9900. 2) As to what would inspire me/us to compound a leg? Well sure, higher high/low ladder steps via maybe a sub hourly (if we’re working a range) would be one consideration. Chatter or order flow confirmation would be another if we were aware of who & why was also working the range and/or the stops. Specific fundamental flavor of the day/week would most definitely be a third. We rarely commit money (especially range money) exclusively on the back of a technical print or chart reading. But that’s just us.

Fair enough- any chance that retail traders are able to do this without having access to the tools you have at your disposal? I.E. most information I decipher from chart reading is that if we see a rounding bottom formation it is generally accepted that it is a sign of accumulation and higher prices to come, conversely- if we see a rounding top, we are seeing distribution and an inevidable decline.

	Quote:	milliard
	3) I’m not sure what you’re