Pivot Points

[.Oxy.]

hi plcapital...

more losers than winners? hopefully your winners are bigger than the losing trades.. 

tell you what...what about you post one of those trades here and your reasons for taking that trade...so we can take a look at it. 

Oxy

[David]

Oxy had a great idea plcapital !
Show what you do, I'm a noob, but I think we learn a lot this way.

Also, from what I read, I can feel like you put maybe too much importance in indicators to lead your decisions.
I think it should be the other way around, feeling what is happening on different timeframes and then confirm (and the word "confirm" has its importance) that what you see is supported by the indicators.

If what you think is happening is not supported by the indicators, be careful in entering a trade.
Ideally, your idea of what is happening is backed up by the indicators and you are in the best situation to enter a trade.
But indicators shouldn't provide you this "feeling" about what is happening, or at least, not only.

This is my padawan feed back so it worths what it worths 

[plcapital]

Hi guys,

I will try my best to depict the case at hand. I apologize I do not know how to save the MT4 chart in .gif file.
So, I save it under pdf file instead. The case study will focus on the opening of EU on April the 10th 2012 Asian session.
Please focus on the blue box. First off, you must understand that indicators tend to repaint after the fact; they always
look so good and promising after the fact. But when you trade it in real time, it is a whole different story.

1. Please look at the pdf file titled EURUSD, M2 (offline).
    When you trading this chart in real time, the ADX would show you that it already fallen under 30 line and the stochastic
    already pointing down below 80. If you go to a lower TF, PA even confirms that it is going down. Based on BK principle
    (without knowing the pivot levels), you would conclude that PA has shift into ranging phase and shorting the EU is the course to
    take. Just to my horror, price suddenly shooting up to the roof for about 40 pips after I completed my layers of short orders. This
    happens so quickly leaving you feel so hypnotized and disbelieve you couldnt even get a chance to put in your stop loss.

2. Please look at the pdf file titled EURUSD, M30 for comparison
    The chart is not so clear but if you line up the pivot median level, the opening price on April the 10th 2012 Asian session is
    actually sitting on the previous day support level of an M3 median level. There is no way I would take a short position knowing
    this.

VERDICT: I was mislead by the indicators and successfully fallen into the trap of the smart money.

[David]

Do you wait the candle to close before entering the trade ? If you are dealing in 2 minutes (M2 I think is for 2 minutes TF right?), indicators change all the time as small currency changes induct stiff indicators changes. On the top of this your platform needs to calculate the changes, so I'm not surprised you feel indicators are changing all the time... Because it's true, in 2 minutes they do ! 
And on an M2 TF, candles formation are less relevant, my noob opinion it's that such low TF are for scalping and pros.

You normally don't go to a lower time frame to confirm your trade, it's the other way around I would say.

Regarding the stop loss, maybe you are dealing in a too fast time frame ? Also, picks happen mate, and no system can predict that.


Now to conclude on your verdict, I would suggest you to read a book: "Trading the zone" by Mark Douglas.

What I want to say here it's that the market displays in real time data, but ultimately, it's up to you to transform this in to valuable info. If you got cought, it's not the market fault, and you need to protect yourself with tighter lots to prevent such risks if loosing 40 pips is a big blow to your account (well it is for me lol). And Mark Douglas covers very well this psychological effect and he takes your exemple : "The market took my money...It's all the market fault".

[rico]

Where is your range? You say you had previous day's M3 below. You prefer to give the M3 more weight, because you already know that price went up. You ignore that you similarly had previous day's R1 just above.

Sell top of the range and buy bottom, if you believe price will stay in it. If you see range broken, get out.

M30 has fairly bullish candle to give you a hint. It followed by another bullish candle which formed a bullish hammer.

If you lost 40 pips you probably did not sell at the top of the range between prev day's R1 and M3.
Price went only 25 or so pips above the range. You had to be out much earlier.

Let me also ask, how did you expect to trade the range? It is only 15 or so pips. You are probably not looking at more than 10 pips even if you execute flawlessly. What was you stop then?

I guess you are not a BK's student. He would not tell you to determine range or trend on 2 min chart. It would have to be done on M30, if this is your higher time frame.

[plcapital]

Hi guys, thank you for participating.

Just for your information. I am trading using a renko heiken ashi box chart in 5 steps interval. Price will form new candle only after it travels 5 pips in any given direction. So, in a nutshell, it is like trading a 30 min chart. IMHO, we are trading price volatility not time volatility. So, time base chart is not relevant for trading in my opinion.

For RICO: I am basically just comparing trading with JUST relying on indicators and trading with the knowledge of knowing where is the pivot levels.
              It would seems that trading base on indicators alone is not sufficient. It is more important to know where the elephant left its mark. In
              addition, I must clarify that I didnt lost 40 pips on that trade. I lost about 15. But this is an unnecessary trading pain if I have knowledge
              about the supporting median level before hand. Finally, I may not formally BK's student, but I watch his videos series time and time again.
              As a matter a fact, his teaching is the only one I follow. Maybe I should join BK trading room or sign up for his pro service to 'legalize'
              myself into the cult..

For DAVID: I already read and watch the video of Mark Douglas. I am not blaming the market. The market is always right. I am just cursing myself to
               rely too much on indicators. IMHO, it is a recipe for doom. In a case of confirming on a lower TF, basically I am just following what BK 
               dictate: Determine you self whether you are a bull or a bear in a higher TF and use a lower TF to find your entry; 5 box renko is my
               higher TF.

[plcapital]

For RICO: Back to my original inquiry, I was merely asking whether if price bounce, say, on M1 on day 1
and the day cross over, is the resistance level of M3 from day 1 still valid or should I look on M3 from
day 2 for the price target?

[rico]

I would say that you can keep in mind possibility of such "paired" level being reached or providing resistance/support at the recalculated level. I have done some eyeballing  and saw it happening, but I would not rely upon this as a hard rule which it feels you try to make out of it. Even if reached the level may turn out just a bump on the road rather than a turning point which is what you appear to look for. No holy grail. I think most traders will look at confluence of pivots with general S&R levels, rather than looking at what pivots were yesterday or even earlier. Yes, pure indicator trading appears to be tough to master in a consistent way and to develop enough confidence.

[.Oxy.]

Hi plcapital,

Thanks for sharing your charts. 

Your HTF is the 30M and the LTF the 2M?...or are we looking at 2 seperate trades? 

Dont take this personal...but i wont attempt to analyse a 2M chart...too fast and too messy for me...
But...if trading the 2m works for you...its all good. 

About your 30m chart...I understand that you didnt take the trade?   
Looking at PA...the reversal to the upside was at M1 but found resistance at the daily PP.
After some consolidation the second upwave was after the rebound at the S1. Price completed the S1-R1 move...went further to find resistance at the M4.
After the retracing back to the M3...i dont see this as a reversal just yet...so no considering going short here.
So yeah...i agree with your conclusion on this (based on priceaction and pivots) of not going short.

Do you have an example where u applied our system? (not on the 2m chart  )
Because im interested to see how you applied our system and how using our system resulted in the losses. 


Oxy

Hi guys,

I will try my best to depict the case at hand. I apologize I do not know how to save the MT4 chart in .gif file.
So, I save it under pdf file instead. The case study will focus on the opening of EU on April the 10th 2012 Asian session.
Please focus on the blue box. First off, you must understand that indicators tend to repaint after the fact; they always
look so good and promising after the fact. But when you trade it in real time, it is a whole different story.

1. Please look at the pdf file titled EURUSD, M2 (offline).
    When you trading this chart in real time, the ADX would show you that it already fallen under 30 line and the stochastic
    already pointing down below 80. If you go to a lower TF, PA even confirms that it is going down. Based on BK principle
    (without knowing the pivot levels), you would conclude that PA has shift into ranging phase and shorting the EU is the course to
    take. Just to my horror, price suddenly shooting up to the roof for about 40 pips after I completed my layers of short orders. This
    happens so quickly leaving you feel so hypnotized and disbelieve you couldnt even get a chance to put in your stop loss.

2. Please look at the pdf file titled EURUSD, M30 for comparison
    The chart is not so clear but if you line up the pivot median level, the opening price on April the 10th 2012 Asian session is
    actually sitting on the previous day support level of an M3 median level. There is no way I would take a short position knowing
    this.

VERDICT: I was mislead by the indicators and successfully fallen into the trap of the smart money.

[Black Knight]

 
Hi PL...

With Pivots, you always read it "day of".  So the first bounce is from the day that bounce occurred, your (likely) target is where-ever the corresponding pivot is today.  (That's why our pivot indicator, unlike most, doesn't do horizontal lines, but rather "sliding" lines, so you can always back-track if you need to).  I say "likely" because a significant news event can always reverse things ahead of time, which is where your indicators come in - separating short-term retracements from longer-term reversals.

On indicators, it feels a bit to me like you're trying to lead with a lagging indicator ("since ADX is below 30, I wait until Stochs cross below 80").  Stochs don't give you an entry signal, they give you confirmation (or lack there of) when you have a signal (based on price action) to evaluate.  Indicators "lag" when used for signals, they lead when used properly (for example what I mentioned above - a move reflected in your indicator as well is likely to go longer,  one which is not is likely to be short-lived... in other words they help us see through the noise and avoid whipsaws).

I disagree with your verdict that you got burned by my system.  Your charts look very little like mine.  It seems to me you're trying to combine several different systems either to "get the best of both worlds" or perhaps to allow you to trade more often.  This approach seldom works, and ultimately leads to trading "on a whim" (even though you think you're following a system) or outright analysis paralysis (which also often leads to just taking a trade when it "feels" right).  First, timeframes... M2 and M30 are 15X times apart.  I teach 4X to 6X apart.  Too close and they always conflict, too far apart, and they have little bearing on one another.  If you insist on M2 (I agree with Oxy here - waaaay too noisy), then you should be using M6 as your higher (or better yet try 1H/4H!).  Next, where is your 21 EMA?  If you're looking to short, wait to make sure it bounces, don't anticipate - and Stochs become bearish when they cross below 80, not above (assuming a reversal immediately above 80 is again trading anticipation rather than what you see).  If you're looking to long, wait for a break + re-test of the 21.  ADX is above 30 on your M2, incidentally, and your MACD is rising.  Try changing the setting of that MACD to 12, 26, 9 to cut down on some of the noise.

But, really, try a higher timeframe - looking at your chart ONLY at candle open, as Oxy suggested (we actually  have a free software tool to help build that discipline: http://www.fx-knight.com/dl/TradeAlert.exe)

[plcapital]

Hello people. Thank you for all your support..

Guys, for the last time, I dont trade on the M2 time frame. Believe me, you could easily going banana trading with that low TF. I use a renko chart 5 box interval. If you notice it is titled M2 offline chart. Thats because I use a specific EA to convert the regular bar chart to a renko chart and the EA utilizes an offline M2 chart to create that renko chart.

BK, dont take me the wrong way, I dont blame your system. Dude, you're my idol ! i think your system is the only one that makes sense to me compare to the others.  I am just saying that trading with indicators alone is not sufficient. You will need something more that really represent supply and demand level such as the market profile in the futures market. Hopefully, the indicators and the daily pivot/median level will complement each other.

[David]

It's hard to give you a feedback as I guess here we all use the same system, otherwise, we wouldn't be here
So using a renko chart 5 box interval is I think diverging from thestrategy we learn here. Did you try BK strategy without this ? Maybe this is the source of your problems ?

The next point I wanted to make, yesterday on the pro room we were talking about strategy, BK...That was purely mindblowing seriously...., and thinking that supply and demand are making the market is a bit...Restrictive.

From what I saw so far, BK never said trading with indicators was sufficient, and finally, indicators come after you have a feeling for what is happening, not before

[.Oxy.]

Its all good PL...im not mad at you 

...you could consider some coaching / training... 
It might change the way you look at things...

Hello people. Thank you for all your support..

Guys, for the last time, I dont trade on the M2 time frame. Believe me, you could easily going banana trading with that low TF. I use a renko chart 5 box interval. If you notice it is titled M2 offline chart. Thats because I use a specific EA to convert the regular bar chart to a renko chart and the EA utilizes an offline M2 chart to create that renko chart.

BK, dont take me the wrong way, I dont blame your system. Dude, you're my idol ! i think your system is the only one that makes sense to me compare to the others.  I am just saying that trading with indicators alone is not sufficient. You will need something more that really represent supply and demand level such as the market profile in the futures market. Hopefully, the indicators and the daily pivot/median level will complement each other.

[Black Knight]

 
That "something" you're missing is experience, PL... even the best of system still rely on the trader to make the final decision.  You'll get there, mate.

Oxy's right, though... experience takes time.  Having a good coach/group to work with can shorten the road.