When do you label HH HL LH LL's

F

freedomshark

I have never done this but think it could be beneficial for shorter term trading. If price does not take out HH you have a LH. Would you wait for the prior low to be taken out before labelling this LH or do you use a candlestick break? The former makes sense to me but would lag quite a bit while the latter would get cluttered in sideways action.

Thoughts? Thanks guy.

Free
 
If price does not take out a HH, it can then either form a DT, a DB, a LL or a HL. However, it will not make a LH. To make a LH, price 1st has to make LL. Once price makes a LH, you would based on your 10,000 hours of screen time, decide if this is a valid LH, and then short.

HH= Higher Higher
DT = Double Top
DB = Double bottom
LH = Lower High
HL= Higher Low
LL = Lower low
 
The easiest way to not get yourself into trouble is to have your charting application automatically label your candles for you if you are trading intraday since this will save time while you focus on understanding what the candles are telling you.

For example using an indicator in Ninja Trader, I let the application do the work for me.
 
oraclewizard77 said:
If price does not take out a HH, it can then either form a DT, a DB, a LL or a HL. However, it will not make a LH. To make a LH, price 1st has to make LL. Once price makes a LH, you would based on your 10,000 hours of screen time, decide if this is a valid LH, and then short.

HH= Higher Higher
DT = Double Top
DB = Double bottom
LH = Lower High
HL= Higher Low
LL = Lower low
More...
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Good points;
+ bull market //bull trend or a bear market//bear trend will make a big difference.

That may not be obvious @ the end of the day;
but enough hours, enough days/months it is big difference some.:cool:

Wisdom is profitable to direct.
 
I just re-read this and it makes a lot of sense. Very good information. Thanks. It re-enforces my thoughts on only using trading timeframe swing points as risk levels (any price turns within are just noise, etc). IOW once price makes a higher high the trend is up until the original low point is taken out.

I am still working on the most practical approach to define each swing point. At the most basic level it comes down to the minimum distance price reverses from current direction. IMO it needs to be an output of the current volatility or range you are playing. Since close price plays an important role in my trading, I suspect these swing points will have to be a combination of both, distance and close. Would like to keep the discussion going.

Thanks, again all.

FS


oraclewizard77 said:
If price does not take out a HH, it can then either form a DT, a DB, a LL or a HL. However, it will not make a LH. To make a LH, price 1st has to make LL. Once price makes a LH, you would based on your 10,000 hours of screen time, decide if this is a valid LH, and then short.

HH= Higher Higher
DT = Double Top
DB = Double bottom
LH = Lower High
HL= Higher Low
LL = Lower low
More...
 
freedomshark said:
I just re-read this and it makes a lot of sense. Very good information. Thanks. It re-enforces my thoughts.....

I am still working on the most practical approach to define each swing point...... Since close price plays an important role in my trading, I suspect these swing points will have to be a combination of both, distance and close. Would like to keep the discussion going.

Thanks, again all.

FS
More...
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If one had to pick one, freedoms-hark;
pick the close price=all have voted by then...............................................................

Having said that[closing price priority];
record them all, especially close price,+ HI in a bull market,,,,,,+ low in a bear market,..... And speaking of repeating patterns, pay attention to close price, i like to record close prices,, record close price by hand...........................................................................................................
 
Greetings All,

I have compiled the six things price can do (assume DB/DT's favor direction of 4th swing point) and swing point 2 never breaks the original direction (from '0' to 1)

From here should I find the probabilities what sequence 1 will most likely do as sequence 2, for example, an 'up trend' will be followed by another 'up trend' or 'up consolidation' or 'up expansion?' Other questions, can you find tells in the first sequence as to what it may become for the 2nd? And finally, do I begin tracking the 2nd sequence after the 4th point of sequence 1 OR does it begin between points 2-3 (iow points 2 and 3 of sequence 1 are points 1 and 2 of sequence 2.

Any contributions/PM's greatly appreciated as I feel these guidelines could help some people too.

Free
 
This is much what you'd see if you observed a 1-tick chart. If you watch price move, you will -- eventually -- see how price moves in waves. Sometimes these waves are just marking time. Sometimes they have a directional intent.

You may be interested in the auction market theory section of this pdf. It's not long. If you understand what traders are trying to accomplish, you'll better understand how to navigate the waves.
 
freedomshark said:
Greetings All,

I have compiled the six things price can do (assume DB/DT's favor direction of 4th swing point) and swing point 2 never breaks the original direction (from '0' to 1)

From here should I find the probabilities what sequence 1 will most likely do as sequence 2, for example, an 'up trend' will be followed by another 'up trend' or 'up consolidation' or 'up expansion?' Other questions, can you find tells in the first sequence as to what it may become for the 2nd? And finally, do I begin tracking the 2nd sequence after the 4th point of sequence 1 OR does it begin between points 2-3 (iow points 2 and 3 of sequence 1 are points 1 and 2 of sequence 2.

Any contributions/PM's greatly appreciated as I feel these guidelines could help some people too.

Free
More...

All these patterns continuously repeat and what you will find is there is very little information to tell apart developing patterns, they will give many false signals.

1) false signals a perfectly okay if you have a good Risk to Reward, then swing away

2) This is the main point - These patterns become high probability trades when you place them in the context of larger/longer term price action.

3) learning longer term price action is also very involved and difficult. Like driving it is a skill you will develop after many many years, allowing yourself to take a snapshot of various information and then being able to project in time and anticipate the action of various vehicles.
 
lots of information on this chart, once you can read it you can take any long signal trigger on the smaller time frames.

"lots of information on this chart, once you can read it" - It looks simple and easy, I assure you it is not. It takes may years to put this information into context.
 
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