[guyfibonacci]

edit delete
edit delete

[guyfibonacci]

I'll get it right eventually.

[thalestrader]

Originally Posted by thalestrader »

Here is another example on the current 15 minute EURUSD: If EURUSD trades below the back line, price will have printed a High, a low, a lower high and a lower low. I would sell a break of that line. If price breaks and holds below that black line, I'd expect it to reach at least the first blue line. Will it? Maybe. Maybe not. I do not know. But, I would expect it to reach that line. If it breaks and holds below that blue line, I'd expect price to reach the next blue line, and so on.

Will the EURUSD break that low? I do not know. That black line was a minor support level, and therefore, it may have marked the end of a rather shallow pullback and the rally in the EURUSD may be set to resume to retest and possibly take out today's high.

If it does break below that line, will it at least reach the first profit target? Probably, but maybe not.

Originally Posted by szubaark »

What do you consider "break" and what "holds"? Do we have to Close below the black line for it to break? or just Poke through it? Price doesnt just Break S/R. It will usually do fakeouts back and forth LOL, especially low Volatility summer days

I trade on stops a tick above a pivot high resistance and a tick below a pivot low support. I am primarily a breakout trader. I am rarely the victim of the fakeouts you cite as being the "usual". I would suggest that you search some of DBphoenix's posts on identifying support and resistance. Not all pivots are significant enough to offer a tradeable opportunity.

Here's a hint: Think Highs and lows, higher highs and higher lows, lower highs and lower lows.

Here is the EURUSD chart I posted last night along with the EURUSD now. As you can see, price broke below the black ine, easily reached the first profit target, and reversed within ticks of the second target. Not a large profit, but a profit nonetheless. And the key to hitting the big ones is to be in as any of the moves as you can identify, because all big moves start out small. All big moves start with a chipping away of support and resistance.

If I'm not mistaken, you were the same one who said that price never signals the big moves before they happen, to which I responded that my experience has led me to believe the oppposite is true. You may have found a decent book to read, but there is a big difference between reading a book and reading price. I mean no disrespect to Brook's or his book, but his book is a book of "set-ups." I have not read his book, but I have read his recent article in Futures magazine. Such set-ups, in my opinion, strike me as an attempted short cut to trading success. Instead of learning his set-ups, you should first learn to read support and resistance in the market. Only then will you really be able to enjoy the success deploying Brook's set-ups might offer. Then again, if you learn to read support and resistance properly, you will likely find that you do not need an arsenal of such "set-ups."

Best Wishes,

Thales

[bakrob99]

THales - I can not find the chart you referenced. Could you re post please?

[DbPhoenix]

Given the hundreds of posts in this thread, it is likely that this one will be lost. However, given that so many of the people posting here are new, I'll point out once that ignoring overnight activity is a mistake since this is so often where the movement of price after the NY open is "telegraphed". There are no "gaps" in instruments that are traded around the clock. We can create them by choosing not to collect data for a certain time period, but the trades are nonetheless being made and the buying and selling behaviors which result in price movement are nonetheless being illustrated.

The boxing match does not begin with the bell. The race does not begin with the flag or the starter's pistol. There is a great deal of preparation that must take place before one even approaches the field or the track or the ring if he is to have any hope of success. If he does nothing until the signal is given, he will very likely have little or no idea where he is or what's happening around him, much less what to do about it.

This morning, for example, the ES has once again, by its own action, reiterated the importance of 890 and 892. Is the trader aware of that? Does he know what it means? Does he know what to do about it?

[Shamal]

Thales
You certainly have valid points regarding S/R and mechanical setups.
You mentioned that not all pivots, S/R are significant.
How do you you determine which ones are and ignore the others?
Secondly do you identify support/resistance levels on the timeframe chart you trade with eg. 5min or refer to say 15min or 60min to determine those levels.

Dbphoenix,
Could you expand on the importance of the levels you mention ie. 890-892, What does it mean and what to do about it?
Premarket ES found support around 890 and prices rose to 898 before retreating

[zdo]

Does Brooks use SR?
If Yes, then how?
If No, then we'd probably be better off not trying to integrate it in this thread (it's like if I started posting about Brooks, RSI, or whatever over in a PriceVolume thread. Most likely it would be removed...)

[DbPhoenix]

Originally Posted by Shamal »

Dbphoenix,
Could you expand on the importance of the levels you mention ie. 890-892, What does it mean and what to do about it?
Premarket ES found support around 890 and prices rose to 898 before retreating

If I "expand", I'll likely hijack the thread since "trading price action", to me, means trading the movement of price regardless of how the movement is illustrated. The Brooks approach -- like any approach which focuses on indicators or candles or bars or some other form of illustration -- is a contradiction in terms, i.e., if one is trading price action by trading bar by bar, then he's trading bars, not price action, substituting the bars and whatever setups are created with them for the indicators that he's worked so hard to put behind him.

Understanding support and resistance and how they're created by traders is essential to trading price action. Otherwise, one is limited to trading setups and what may be meaningless lines, and repeated failures can lead one to think that support and resistance are bunk and "don't work". But I've gone into all this elsewhere in exhaustive and probably boring detail, so I won't go into it again, particularly since I've probably already offended most of the people who post to this thread. Rather I'll just provide an example, and those who are interested can pursue the link just above.

Leading up to yesterday, note here that after a nice rally to 95/96, traders began poking the 93/92 area. You don't know why, and it's not necessarily important. What is important is being aware of this testing and the fact that traders keep bouncing off the same levels. When price eventually breaks through these levels, the best it can do on a rally is work its way back to 91.

These two levels become potential levels of importance because traders turned price there. When price shot northward at the open, it stalled at 91, then advanced to 92. The trader who had noted the R levels ahead of time would be ready to act.

Now given this particular "setup", the most logical place to enter would be below the bar that tested 92. But this would mean a five-point stop, and that's a lot of stop. It benefits the trader, therefore, particularly one who is following price action, to "open" the bar and see what's going on inside. After all, trading a bar, particular one that summarizes quite a lot of time, involves watching price slide up and down in the same place, like running up and down stairs. If one wants to see what price is actually doing, it becomes necessary to use a smaller interval.

Here one can see more of the activity that's creating the 5m bar, and he can enter a short at a higher level, one which provides a much tighter stop.

But, again, placing the entry is only the latest step in a series of steps that one takes when preparing for the trading day, in this case going back several days to find those levels of support and resistance which are most likely to exert an influence on the morning's trading action. Today, that same 92 level that was tested yesterday morning and yesterday afternoon (and from above, this morning, premkt) provided a clean short at 0955 this morning.

Even though this isn't Brooks, understanding it may help the Brooks followers to distinguish among those setups which are most likely to pay off and which are more likely to fizzle.

Now back to your regularly scheduled program.

And my apologies to zdo.