Just curious.... do you guys ever find lines showing up in different places on different chart services? For example I find lines drawn on daily charts will often "snap" into a slightly different position when I go down to an intraday chart. TOS has been problematic in this regard and I'm assuming the problem is that they only offer 20 days of data for timeframes under 1-hour, and so lines that originate beyond that 20 day window can only approximated. So I've tried out freestockcharts.com to see if it's any better and can't tell yet. edit - Maybe I've solved my own problem. Looks like you either need to pay up and get more complete data, or only look at the larger timeframes where the origin of the line is still visible. Any thoughts from the TA pros?
I've had some problems with TOS. One time I was trading early in the morning (about 3 am), when suddenly the chart dropped about 5 or 6 pts. At first I thought price had dropped. But, I keep a different platform to execute from. It was only the TOS platform that had distorted. Even though it has only happen a few times.. I NEVER trade TOS platform alone.. Hmmm.. I wonder why that happens??
Okay. Thanks for waiting for me The current 4hr eurusd chart (@7:55 pm, EST) is attached below, with appropriate markups. But I will also comment on fridays and todays price action, so you can get a better idea of what I'm thinking. Friday and todays action was very repetitive, which makes it easier for me to analyze Friday March 16th was the follow-through from a down trendline break. Usually, after a trendline break - regardless of timeframe - a pullback will occur (wave#2), whereupon a resumption of the new trend follows (wave#3). Price did exactly that, however with a couple twists. The first twist was a 1-2-3 reversal on the 4 hour chart marked by the dotted green-line (@~3068) However one defines a 1-2-3 reversal, that was a classic short set-up (which is perhaps why you said it could go either way, for a big move?) and would have caught me short, where it soon reversed into the bigger push you caught @3050. Interesting to note the 3050 reversal coincided nearly exactly to the pip of the backside from the old, broken, down trendline. This is what cornix likes to call a "backside touch" or "backside entry". Classic ta here. So while you guys were waiting for the long, I was following the 1 minute at that point, which was showing 1-2-3 reversals and pullbacks to the long side, which is how I caught the long at ~3055...on the micro-level (with a lot more stress). Another possible way to have caught that mega up-trend, was to draw another trendline down, in the direction of the failed 1-2-3 pullback, and go long after trendline break (as denoted by the dotted red trendline). So after the first big thrust up from 3050, the first new green up trendline is drawn on the 4 hourly from the bottom of the old trend, with point #3 at ~3050 (solid green trendline). Price retested the ~3187 high on March 18th, effectively making a double-top, then retraced down to 3150 during mondays session...and sprinted back in the original trend direction, with the new green trendline drawn to denote the faster trend, after a new high is made @3267. Interesting, on the 1 hour chart, price came right back down to 3150, tested, and shot back up. Easier to see on the 1 hr, afaict. Also, like the first pullback, the second pullback made a classic 3 wave pattern, trapping shorts in, before it tested the xx50 level for support and resumed in the original direction. Now, a little gold for all the trend followers, during pullbacks, the first higher high can be bought in an uptrend, and, during downtrend pullbacks, the first lower low can be shorted. Lots of ways to get in on pullbacks here, but using that method (hh, ll), the first hh could have been bot at ~3176 for a small loss. Then a second try made @3170 for a big win. So moving to the current chart. Price recently tested 3250 and found resistance. The test and rejection is easier to see on the 1 hr. Our new, faster trendline on the 4 hr coincides nicely with the 3200 level, where I would expect if price continued it's current retracement from 3250 down, would find support at or near that level (3200) for a long. A couple things could also happen. Price could break 3250, making a first higher high in this pullback, which is a nice place to go long and squeeze the shorts caught in this pullback. Two, we could draw another trendline that defines this current pullback downtrend, wait for a break and go long. Which it looks very close to doing. I would feel more comfy drawing a 1-2-3 downtrend line on the 1 hour, as on the four hour, the setup isn't classical. I like my 1, 2, and 3 points to be defined v bottoms and ^ tops. It's also possible we get a higher high, without making a new trend high, then break the bottom of the failed pullback (1-2-3 reversal). But as it stands, I'm short from 3247, waiting for a higher high at 3251, to go long. I'm gonna keep it to just the four hour here for analysis
This is normal and common to all charting platforms. The reason being the daily chart just shows where the daily high and low occurred, not when. Since candle spacing is even on all time frames, when you drop down to a 4 hour or 1 hour chart, the trendline projected from the higher timeframe is "off" and doesn't connect the actual lows (or highs), on that particular timeframe. The answer to all this is - it's not important. Just trade what everyone else is looking at. Everyone looks at the 1 hour for levels. And the 2 hour and 4 hour and daily. etc. They all give important levels because traders all look to those charts to provide levels (even though they're aware, like you, that when those charts are dropped down to the lower timeframe and lows and highs connected more accurately, the same levels won't be arrived it). If that makes any sense...
Thanks achilles, that makes perfect sense. Actually I had noticed what you mention, but didn't think that it could be the culprit. I'll let the thread get back to business as usual now...
Your detailed answer to my question helps me give an answer that might help move you forward. The 4hr chart at the point of my question was displaying a candle signal and I wanted to see if you were reading that or more inclined to read structures. First of all, to answer your question on how often I can make calls like this, most days would be the case. Most days can be mapped out in advance for the major swings, almost every day has a 60m gameplan swing chart that again is plotted in advance and these are to pick up the major moves like trade of the day. Every day has various Bosses that pop up within the 60m gameplan and give the current direction, usually in the 10 to 30m time frame. One of the guys in the room is learning to do this using stochastics on multiple time frames. Another way to do this is by using candle signals on quality set ups and seeing where the strongest set up is developing and using the time expectancy in that time frame to drive the direction. This is a starting point but obviously it needs a lot of refinement. I have a number of examples on the Dow thread on bigger timescales but the principle holds true on any timeframe. In the Eur lots of my trades would be taken below the 1m time frame but using this Map - Gameplan - Boss method it allows me to switch from scalping to holding for a much bigger return.
Yes, I call these backtests using the BSOT abbreviation (meaning backside of the trendline). Posted a few examples in this thread before. They are good confirmations of breakouts and also can be good entry/re-entry points. For example if one missed the first leg of the move, BSOT often gives nice entry into the second leg of the new born trend.
To add something to Xspurt's reasoning, my own reasoning was: 1) Euro definitely traded in the narrowing range aka triangle. 2) Shape of this triangle on 1H was more suggesting for an upside breakout, because the whole yesterday's session prior to the break looked like sort of a bull flag from the Friday's squeeze. So I jumped in long approximately at the same time as Xspurt called the same trade out.
I just stopped using intraday trendlines, which are too old to fit in my trading platform. Enough trades to catch anyway. As for those, which have different price on the daily/weekly than if drawn intraday, whenever possible I watch both variations and when not just use the big one, assuming that daily/weekly position traders don't care what the price is on 5-min chart anyway.