Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

Recommended Posts

While there are many concepts and nuances to be learned to be a complete technical trader and/or investor, there are a few basic criteria that if followed can make making money easy or relatively easier. Of course, this requires having the patience and discipline to wait for these high probability setups to occur. Can you do it? I will show an example of what to look for. Then it's up to you.

 

GetChart.aspx?PlayID=67982

 

In the weekly chart of Google (GOOG), prices broke above price resistance with strong momentum. This was followed by the first pullback after that strength to Minor Support (mS). As a general rule, the first pullback to mS after a strong momentum break above resistance will always be buyable. This is based on the basic concept that resistance once broken will become support.

 

This area of mS is where we know buyers will be. Now we wait to see the price action of that actually happening in this time frame and the daily time frame. This concept can be used in a combination of lower time frames as well. It also applies to any tradable instrument; that being Forex, E-minis, Commodities.

 

The basics covered - Prices have made a strong move above price resistance and we wait for the first pullback to mS where buyers are. Then wait for confirming price action in that area.

 

GetChart.aspx?PlayID=67983

 

oving down to the daily time frame, GOOG was not looking bullish at all before the turn. However, realize that the lower time frame never looks bullish when the higher time frame is pulling back to mS. For example, if you saw the EUR/USD currency pair in a 60-min. uptrend that was pulling back to mS, the 5-min. time frame would be in a downtrend. The expectation is that the lower time frame is going to turn in the area of mS in the higher time frame. Now wait for confirming the price action in the lower time frame before taking a position.

 

As GOOG moved into the mS area shown on the weekly time frame, the confirming price action began (in this time frame) with a gap higher and then a strong close into resistance. Here is where it gets interesting and it will become obvious if the big money buyers are continuing to step up. We want to see that big green bar's low and ideally its mid-point defended by the buyers.

 

While the buy signal candle came five days later, it could have come after only two days. There is no set number and this is where our Bar by Bar analysis concept comes in to tell us when GOOG will move. Bar by Bar analysis combines each new bar's meaning within the context of our bigger picture analysis. One bar can be meaningless in of itself, but when combined with our bias and the other bars, it's a powerful concept.

 

The basics covered - While our lower time frame is moving down, the higher time frame area of mS is where prices should produce the price action that confirms that area and reversal of some type happens. Reversals can happening in many ways, so do not be set on it having to happen in "your way." Once the action occurs find an entry signal using Bar by Bar analysis.

 

GetChart.aspx?PlayID=67984

 

I have shown you the basics of what to look for in those easy money situations using two time frames; I used the weekly and daily. We can also take that bias into the intra-day time frames as I explained above with EUR/USD, but it could be anything. Now, let's look at some detail that occurred on the 60-Min. of GOOG that showed the "early turn" and a couple of Pristine concepts to understand the price action of the turn.

 

As GOOG was trending lower into the area of mS on the weekly time frame a 60-Min. bearish Wide Range Bar (-WRB) formed accompanied with a huge volume spike. That's a bearish event, but remember this was right into the weekly mS! That was followed by a stall and bullish Wide Range Bar (+WRB), that's a very bullish group of events that started the early turn.

 

Pristine Tip: That 3-bar reversal was the Bottoming Tail (BT) on the daily time frame. The Advanced Candlestick reader understands how different arrangements of candles can mean the same thing in the same time frame and/or different time frames. Names of candlesticks are meaningless and are more likely to confuse traders that use them or worse by causing avoidable losses and/or missed opportunities.

 

Once GOOG gapped up and ran higher a Pristine Price Void (PPV) was created. In other words, there was now no price support below for traders to bid at. Support would need to be "created" for traders to bid at. Creating support and resistance is a powerful concept used by Pristine Traded Traders (PTT) to see where the big money is entering prior to existing support or resistance. Pristine Tip: Strong upward price moves often do not pullback to support, they create it.

 

With the bias from the time frames shown above, intra-day traders could move to lower time frames of their choice to find confirming buy setups to enter. At this point, this is still the case.

 

Side note, while I have used a 20-MA on all time frames. It has no relevance to being actual support, resistance or the trend. It is simply a "visual aid" to speed the analysis once understood.

 

PRISTINE - A Trading Style, Often Imitated, But NEVER Matched!!!

 

Greg Capra

President & CEO

Pristine Capital Holdings, Inc.

pristine-logo-small.jpg

Share this post


Link to post
Share on other sites
Strong upward price moves often do not pullback to support, they create it.

 

Good point. Strong uptrends are more likely to stall at resistance briefly and continue upward. This can often be seen as a stock rides a moving average such as a 20 sma.

Share this post


Link to post
Share on other sites
A golden rule on the pull back is that it should never be on heavier volume than the pullback

 

I assume you mean "heavier volume than the continuation", and it's not quite a golden rule. Volume may be heavy on the pullback as buyers rush in to support the price. It may then be lighter as sellers allow price to rise without much resistance.

 

Db

Share this post


Link to post
Share on other sites
Good point. Strong uptrends are more likely to stall at resistance briefly and continue upward. This can often be seen as a stock rides a moving average such as a 20 sma.

 

A stock won't "ride" a moving average. The moving average tracks the progress of the stock.

 

Db

Share this post


Link to post
Share on other sites
The moving average tracks the progress of the stock.

Db

This is true. I should have wrote: APPEARS to be riding a moving average.

I understand price action and meant it from an observation point of view. Mostly It's all about levels imo.

Share this post


Link to post
Share on other sites

I think this article is full of half generalised information that does not add much.

You may as well just have said, have some patience and look for a second break on the close of a support level to the upside before entering a long trade.

 

There are multiple buying opportunities and equally so shorting opportunities with low risk in case it did turn around (market tops can look remarkably similar).

there is no additional levels of where stops might be, where to take profits.

 

In the weekly chart of Google (GOOG), prices broke above price resistance with strong momentum. This was followed by the first pullback after that strength to Minor Support (mS). As a general rule, the first pullback to mS after a strong momentum break above resistance will always be buyable. This is based on the basic concept that resistance once broken will become support.

 

so if resistance once broken becomes support, then support once broken becomes resistance......

there is no explanation for minor support which is clearly below resistance when the support is broken.....

in other words, it would imply you should be bearish unless you show how you are calculating minor support.

 

Basically the value is in understanding that these are zones......and that you should wait and look for confirmation.....but if you did not wait on the previous break you could have bought at 6.70 and watched it rally to 7.70.

Now by waiting until you get to buy at 6.70....what now?

 

. Now we wait to see the price action of that actually happening in this time frame and the daily time frame. ...............

The basics covered - Prices have made a strong move above price resistance and we wait for the first pullback to mS where buyers are. Then wait for confirming price action in that area.

 

 

As GOOG was trending lower into the area of mS on the weekly time frame a 60-Min. bearish Wide Range Bar (-WRB) formed accompanied with a huge volume spike. That's a bearish event, but remember this was right into the weekly mS! That was followed by a stall and bullish Wide Range Bar (+WRB), that's a very bullish group of events that started the early turn.

 

So this could be a buy signal in the support zone.

Plus if you are only buying off a close of the daily above the resistance line, then why look at the 60min bars unless you are looking for better low risk entries there.

 

Pristine Tip: That 3-bar reversal was the Bottoming Tail (BT) on the daily time frame.

 

 

hindsight unless you have specific ways of dealing with wide range bars and reversals when they occur in a zone of support.

 

Pristine Tip: Strong upward price moves often do not pullback to support, they create it.

 

a good tip......

 

 

...............

IMHO - too generalised and generic to be worth much except to reinforce patience sometimes works, and while Pristine might offer some sound advice sometimes (I dont know) this is not some of their best.

Share this post


Link to post
Share on other sites
I assume you mean "heavier volume than the continuation", and it's not quite a golden rule. Volume may be heavy on the pullback as buyers rush in to support the price. It may then be lighter as sellers allow price to rise without much resistance.

 

Db

would you mind posting a intraday chart showing what you just described?

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Similar Content

    • By AdrianaLowe
      The theme over this last trading week has been one of remarkable resilience. After breaking down from key resistance levels, it seemed that a period of consolidation would follow. But, globally, markets instead rallied with conviction to retest their highs.
      I have been sceptical about the sustainability of the rally this year. But one of the most fundamental axioms of surviving the markets is to trade what you see, not what you believe. And what I am seeing is markets that seem to want to push higher across the board, with individual stocks holding up well even when faced with bearish news.
      S&P 500

      (credit: chart from Sigma by Hydra X)
      The S&P closed the week strongly at 2,822.48, up 0.5% on high volume, and on the back of its biggest weekly gain since November 2018. US markets seem insistent on forging a path higher despite the overhang of earnings, macro economy news, North Korea, and ongoing China trade talks. I still wait for price to break and close clear of the congestion zone around 2,800 before entering longs, but this looks increasingly like a environment where the only rational positions to take are either to be flat or long.
      MICROSOFT

      (credit: chart from Sigma by Hydra X)
      Gains this week were led by tech, with the sector surging 4.9%, and also becoming the best performing sector of 2019. I find MSFT interesting, having completed a bullish inverse head and shoulders pattern, rallying in a tight rising channel, and strongly testing resistance (and also its all-time highs) on high volume. But a spinning top candlestick in the midst of overhead resistance, and a bearish stochastic crossover which in overbought territory could translate into a pullback, which could provide interesting entries for longs.
      TESLA

      (credit: chart from Sigma by Hydra X)
      A good litmus test for market sentiment is how stocks behave on news. Tesla has held on to $275 support despite its Model Y unveiling event underwhelming analysts; BAML, CFRA Research and Canaccord Genuity all issued cautionary notes. If it gets there, $260 looks to be strong support for a countertrend rally.

      BOEING

      (credit: chart from Sigma by Hydra X)
      Boeing continued to suffer the aftermath of the latest tragedy, ultimately having to suspend its entire fleet of 737 MAX planes when the FAA finally followed the lead of global aviation authorities in grounding the plane. Deliveries of the 737 MAX have also been paused. The beleaguered company faces an indeterminate outcome from investigations, bills from airlines affected by the grounding of the plane, as well as potential suits from the families of victims. On Thursday, the US Air Force joined the party. It launched a blistering attack on Boeing, saying that the company has a ‘severe situation’ after flawed inspections of their KC-46 air refuelling tanker aircraft, and questioning the company’s ‘culture of discipline for safety’. [https://www.cnn.com/2019/03/14/politics/air-force-boeing-refueling-plane/index.html] Despite all this, the stock has proven remarkably well supported at $370, repeatedly rallying from those levels on high volume.
      FACEBOOK

      (credit: chart from Sigma by Hydra X)
      No company has had a worse week than FB, even within the context of its bad year. The week started with a proposal by Senator Elizabeth Warren to break up FB, was followed by a network outage affecting its Facebook, WhatsApp and Instagram services, and then announcements of a widening federal criminal probe into its data sharing practices. Two key executives, Chris Cox and Chris Daniels also announced their departures from the company. A nadir was reached when its Facebook application was used to livestream the hate-driven massacre of 49 people in New Zealand.
      Technically, the stock has broken below the bottom of its ascending channel, and key overhead resistance in the $170-173 region looks daunting. There is also a huge gap from Feb 2019 waiting to be closed.
      Yet in spite of the weak technical picture and the deluge of negative news, FB closed just 2.13% down for the week, and ended the trading session on Friday well above the lows of the day, forming a bullish hammer. While I have been waiting for a clear break in one direction or the other for a while, as rising channel met overhead resistance, I choose to stay as interested spectators for now.

      EUR/USD

      (credit: chart from Sigma by Hydra X)

      Finally, last week I noted the technical breakdown of key support levels in the EURUSD, in conjunction with fundamentally bearish news in the form of Draghi’s dovish speech. However, I was keen to stay on the sidelines, given past experience of how crowded trades tend to turn out. EURUSD didn’t disappoint, as it promptly rose in a stop-hunting rally, which would have trapped any short entries in a very uncomfortable position.




    • By trading4life
      Hello, My name is trading4life.
      I just joined this forum.
  • Topics

  • Posts

    • Reply to this topic... Skim these - if you can https://www.oftwominds.com/blogmay20/globalization-dead5-20.html https://www.oftwominds.com/blogmay20/cycles5-20.html https://www.oftwominds.com/blogmay20/opt-out5-20.html https://www.oftwominds.com/blogmay20/tinas-orgy5-20.html https://www.oftwominds.com/blogmay20/stocks-fragility5-20.html and if you’re still strong and not  burnt out https://www.oftwominds.com/blogmay20/demand5-20.html https://www.oftwominds.com/blogmay20/social-media-plantation5-20.html
    • Open a new NinjaTrader Brokerage account by June 30th and SAVE on a Lifetime license with a discounted price of only $999! Along with access to the most powerful version of NinjaTrader, you will save even more with deep discount commissions at $.09 per Micro futures contract & only $50 margins. Your Lifetime license includes ALL of NinjaTrader’s premium features: Award-winning order entry including Chart Trader & OCO orders Order Flow + tool set featuring the Volume Profile Indicator – NinjaTrader’s most powerful indicator to date ATM Strategies, advanced Alerting system, auto-close positions for additional risk management & more PLUS all future NinjaTrader platform enhancements are included at no additional charge – for life! Simply fund your new account with the minimum of $400 by June 30th to lock in your savings. Questions? Contact us at 312.262.1289 or brokeragesales@ninjatrader.com. Platform License Discount Requirements: Account must be opened & funded in June 2020 with $400 minimum Discount is applicable to software purchase only 2nd accounts for current NinjaTrader Brokerage account owners are not eligible for platform discounts Futures and Forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. View Full Risk Disclosure.
    • Date : 01st June 2020. Events to Look Out for This Week.Geopolitics are back in the picture giving the markets pause and adding another layer of uncertainty to a shaky global outlook. However other than US-China tension, next week the global data dockets are heavy and results are likely to underscore the cratering in global economies this quarter. The calendar includes the US Jobs Report and Monetary policy meeting from RBA, BOC and ECB.Monday – 01 June 2020 Caixin Manufacturing PMI (CNY, GMT 01:45) – The Caixin manufacturing PMI is expected to slightly improve to 49.6 from 49.4 in May. ISM Manufacturing PMI (USD, GMT 14:00) – The ISM index is expected to slip to 40.0 in May from 41.5 in April, compared to a recession-low of 34.5 in December of 2008. Tuesday – 02 June 2020   Interest Rate Decision & Statement (RBA, GMT 04:30) – The RBA meet and are unlikely to move rates below historic lows at 0.25%, as RBA Gov. Lowe is his recent statement repeated that negative interest rates extraordinarily unlikely. RBA will maintain its expansionary monetary policies until progress is made towards full employment and we are confident on inflation . Wednesday – 03 June 2020   Gross Domestic Product (AUD, GMT 01:30) – GDP is the economy’s most important figure. Q1’s GDP is expected to slow down at 0.3% q/q and 1.9% y/y. Unemployment data (EUR, GMT 07:55-09:00) – The German unemployment rate in May is expected to have increased to 6.2% from 5.8%, while unemployment change is expected to have declined to 194K from April’s 373K. Meanwhile, Eurozone’s April unemployment rate should rise to 7.7% from 7.4% last month. ADP Employment Change (USD, GMT 12:15) – Lasts month, ADP report revealed a -20,236k April drop that undershot the -19,520k private payroll decline by -716k. For May a -9,000k drop is seen, since nearly all measures of activity rose in May from a trough. ISM Non-Manufacturing PMI (USD, GMT 14:00) – The ISM-NMI index is expected to rise to 46.0 from 41.8 in April. Most producer sentiment reports should show May rebounds after huge April declines due to mandatory closures, on top of the demand hit initially associated with the pandemic, and the oil price plunge with the OPEC price war, as re-openings are underway in most states. The April drop in the ISM survey was much smaller than the declines seen in other measures, however, and this is why we expect a further drop in May for that measure. Interest Rate Decision and Monetary Policy Statement (CAD, GMT 14:00) – On April 15, the Bank held rates steady at 0.25%, matching widespread expectations. In the next policy statement, the BoC is expected to leave rates unchanged, the Bank of Canada Governor Poloz said is his last interview that negative rates are needed only in extreme conditions. Thursday – 04 June 2020   Interest Rate Decision, Monetary Policy Statement and Press Conference (EUR, GMT 11:45 & 12:30) – Given that Lagarde buried any hope of a “mild” recession, the stage seems set for an extension of the PEPP program in size and duration at next week’s council meeting with an end date next year giving the economy more time to recover and EU aid programs to come into effect. Given that the ECB is no longer putting much hope in a quick recovery it is already clear that with the current time frame until the end of December that would risk a sharp widening of spreads in the second half of the year, when there is also the risk of a second wave of Covid-19 infections. Jobless Claims (USD, GMT 12:30)– US initial jobless claims contracted last week by -323k to 2,123k in the week ended May 23 after tumbling -241k to 2,446k previously. Claims have been declining since surging to 6,867k in the March 27 week. Friday – 05 June 2020   Event of the Week – Non-Farm Payrolls (USD, GMT 12:30) – A -2,200k May nonfarm payroll drop is anticipated, following a -20,527 April collapse, and a -701k drop in March. The jobless rate should rise to 17.5% from 14.7% from April, versus 4.4% in March. Nearly all measures of activity rose in May from a trough just after the April BLS survey week, but the initial and continuing claims data suggest a weaker labor market in mid-May than mid-April. Average hourly earnings are assumed to fall -1.0% with a partial unwind of the April distortion from layoffs being concentrated in low-wage categories. This would translate to a drop in the y/y gain to 6.6% from 7.9%. Labour Market Data (CAD, GMT 12:30) – Canada employment plunged -1993.8k in April, nearly doubling the -1010.7k tumble in March to leave a massive and rapid reversal in the labour market as firms cut jobs as most of the economy ceased to function amid the stay at home orders the began around the middle of March. For May employment should revealed a 4,000k drop in jobs, doubling again last months number. B]Always trade with strict risk management. Your capital is the single most important aspect of your trading business.[/B]Please note that times displayed based on local time zone and are from time of writing this report.Click HERE to access the full HotForex Economic calendar.Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!Click HERE to READ more Market news. Andria Pichidi Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Moar questions how many corps in the SP500, NQ100, etc indexes are "rolling in revenue"?  ie they have more revenue than they did 6 months ago ??  thx.  just askin'       Weekend reading https://consentfactory.org/2020/05/20/brave-new-normal-part-2/   https://www.oftwominds.com/blogmay20/demand5-20.html
    • When you learn all fundamentals about trading, then you can move towards successful trading, but still unsure about profit.
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.