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Trade Anatomy - ramblings of an old-timer 147 replies

Need forex writers to write UNIQUE Daily forex technical analysis and forex news 2 replies

Ramblings of a Forex Junkie

Quoting mr.kho
[color=darkred]Poker and Trading are remarkably similar. Both pursuits are skill based speculation with a large short term luck factor. When you make bets in poker you are speculating that the large number averages are in your favor. There is very little luck in the game of poker over a long run if you are a proficient player. On any given hand, however luck plays a very big factor. In hold-em excellent hands are routinely beaten with rags as the board develops. Over thousands of hands however the player who plays the better hands and avoids...
Thank you and welcome.
Nice breakout and retest from the 3 hour range leading up to London Open.
Closed half at +40 pips, other half running with stop at BE.
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Quoting Olarion1975
Nice breakout and retest from the 3 hour range leading up to London Open.
Closed half at +40 pips, other half running with stop at BE.
Price has hit resistance at 3320. It doesn't mean it can't go up more but it does mean there is a decent chance it will come down. Sometimes the runners survive for days sometimes not. Maybe eight or ten times a year you will get a nice trade on Monday and price will run out all the way to Friday and you can see two or three runners earn hundreds of pips.
For the next two weeks I will not be posting any charts. I am testing a strategy that a friend showed me that has some great stats. He wants it to stay private so I cannot share. To make sure I don't accidently show any of the trades I will not be replicating my normal trades in the test account and showing screenshots. I will still answer questions and comment on the day's trading. If the strategy he showed me works for me it will allow for a more normal sleep pattern and maintain good profitability. I am lucky he has shown me this as he normally doesn't share his methods.
Quoting Seneca pilot
Price has hit resistance at 3320. It doesn't mean it can't go up more but it does mean there is a decent chance it will come down. Sometimes the runners survive for days sometimes not. Maybe eight or ten times a year you will get a nice trade on Monday and price will run out all the way to Friday and you can see two or three runners earn hundreds of pips.
Yes, you are right. Would you exit the trade then at the resistance or manage it as planned?
Quoting Olarion1975
Yes, you are right. Would you exit the trade then at the resistance or manage it as planned?
You exited properly. You got 1/1+ and moved your stop. That is all there is to do. If you feel that you should protect a portion of the profits on the remaining half of your trade I wouldn't condemn the decision as you had at least ninety pips and the resistance is quite strong as there are a number of weekly lows in that consolidation.
For those of us who use midnight eastern as our weekly open. Take note that the close from last week and the weekly open are the same price. This level will be a battle zone if price comes back. This level is also rather close to last weeks low so the bulls defense will likely be stiff as they will not want price to break that low. A four hour close below 1.2996 and that signals a break of the uptrend so bulls will fight hard in the territory we are currently in.
Quoting Seneca pilot
You exited properly. You got 1/1+ and moved your stop. That is all there is to do. If you feel that you should protect a portion of the profits on the remaining half of your trade I wouldn't condemn the decision as you had at least ninety pips and the resistance is quite strong as there are a number of weekly lows in that consolidation.
Ok, thanks for your thoughts. I decided to let the other half run and was stopped out at BE. Bad luck, but a win is a win (0.5R).

PS:
I am done for the day. Trading the levels made me 3.8R today. With the breakout trade on EU my account increased by 4.3R / 4.3%.
Quoting Olarion1975


Ok, thanks for your thoughts. I decided to let the other half run and was stopped out at BE. Bad luck, but a win is a win (0.5R).

PS:
I am done for the day. Trading the levels made me 3.8R today. With the breakout trade on EU my account increased by 4.3R / 4.3%.
EJ was especially kind today. Daily open went 3/1 and the weekend high rejected back down for 3/1 and running.
Quoting Seneca pilot
EJ was especially kind today. Daily open went 3/1 and the weekend high rejected back down for 3/1 and running.
Yes, EJ was one of my trades...exited way too early in hindsight.

One question: Would you consider the weekend high as the real weekly high or only as an additional level?
Quoting Olarion1975
Yes, EJ was one of my trades...exited way too early in hindsight.

One question: Would you consider the weekend high as the real weekly high or only as an additional level?
I consider the weekend as an extension of Friday. My week doesn't begin until Monday morning. Therefore the weekend data for me is the Friday high if it is higher like this one. Of course if the weekend activity is within the high and low of Friday I use those.
I did try using Friday Hi (1.3244) as a potential reversal on EU. Of course we all know how that worked out.

My question is, was this a valid set up or am I still missing something?

Price did make a fairly swift move to that area, and did react somewhat. When I noticed that the area was not really giving a strong reversal sign, that did water down my confidence in the position.

Any comments would be appreciated.

Thanks,
Darryl

"Whatever your past has been, you have a spotless future" ~ Melanie Gustafson
  • Post# 953
  • Quote
  • Feb 25, 2013 12:18pm | Edited at 3:26pm – To change LO to DO
Hi SP, I've a couple of questions on the EU today if that's OK.

There was no clean long this morning as only one 15m candle pulled away before retrace to DO. In addition price didn't quite get back to level, it was a full pip above. However on 5min chart below things are looking better so question 1 is:
What are your thoughts on a long entry here based on the fact there are a handful of 5m candles clear away before a return to level and two of those candles broke the current Tokyo session high? I guess I'm also asking do you trust a 5m chart.

Secondly, the other reason for posting the 5m chart is you can more clearly see the battle grounds today at 3230 and 3240ish. 3230 was Thursdays NY session high and 3240 was Fridays high, correct? Hope so, new to these daily levels. Now we had 3230 area as resistance for about an hour today then it became support with 3240 area becoming new resistance - as a side note when 3240 area was broken through it didn't become support but price steamed on up possibly because of no significant res level above? So question 2 is:
Having missed the 15m entry this morning but seeing price nicely bullish would you consider a long entry based on a 5m chart with price returning to 1.3230 (an exact level) after breaking away from it after spending an hour as resistance in that area? So it's a break and retrace to bounce on Thursdays NY session high but again not a clear entry on 15m. I guess here I'm asking when it seems clear on 15m what's going on but you don't have the 2x15m candle pull away is it worth going down to 5m? Or better to look elsewhere in the long run? What do you say? Cheers.
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Complete answers in a couple of hours. My son has an appointment with the pysical therapist in a few.
Quoting stevexyg
Hi SP, I've a couple of questions on the EU today if that's OK.

There was no clean long this morning as only one 15m candle pulled away before retrace to LO. In addition price didn't quite get back to level, it was a full pip above. However on 5min chart below things are looking better so question 1 is:
[i]What are your thoughts on a long entry here based on the fact there are a handful of 5m candles clear away before a return to level and two of those candles broke the current Tokyo session high? I guess I'm also asking do you trust a 5m...
Stevey, for your 1st question, all i can say is always remember to "adapt to the ever-changing jungle landscape-thats the market". As stated before, it's not perfect all the time, price can be against the way you think it should be but when one finds themselves in such a scenario, they must allow thier mind to see and accept that its not the market against them but them against what they see in the charts. As for today's LO, it worked out perfectly for me. If you look at the 1 Hr chart (BTW SP's method is described in a way to help you trade in bigger timeframes, 1 Hr and above, below that...it is always noise and you will get more confused) you will notice that price broke out of the LO price high level and the very first bar @7:00 GMT closed outside the range. The next green bar was bullish but it pulled down to the breakout level and later got more bullish. Then, there later came a BEP which pushed price higher. I got out when price was dancing around 1.3280 which was Daily High of last week on Thursday(I figured traders were waiting for news at 13:30 GMT). And guess what, i was true because price plunged after that and is still diving as i write. I need to take out a trade and call it a day.

Edit: Today i have reached my target of 100 pips with 4 trades 25 pips each, so am gonna stop here.
Quoting diamonddbw
I did try using Friday Hi (1.3244) as a potential reversal on EU. Of course we all know how that worked out.

My question is, was this a valid set up or am I still missing something?

Price did make a fairly swift move to that area, and did react somewhat. When I noticed that the area was not really giving a strong reversal sign, that did water down my confidence in the position.

Any comments would be appreciated.

Thanks,
Darryl

"Whatever your past has been, you have a spotless future" ~ Melanie Gustafson
Daily highs and lows are always valid set-ups. That is not to say they always work. That is why we use stops and try to make sure our winners are bigger than our losers. We only have to be right with our trade entries a little better than half of the time to make a good profit. Trading this way I have maintained a win rate around 58-60%. That is enough. We also aim to trade the pairs that are currently acting the best. In the last weeks that has been EJ not EU. EJ today worked perfectly while EU ran through all levels. This is something I have been touching on for the last two weeks as it is very important to be flexible and keep an eye on what is working in the current market conditions.
Daily demand on EU let the battle begin.
Quoting stevexyg
Hi SP, I've a couple of questions on the EU today if that's OK.

There was no clean long this morning as only one 15m candle pulled away before retrace to LO. In addition price didn't quite get back to level, it was a full pip above. However on 5min chart below things are looking better so question 1 is:
[i]What are your thoughts on a long entry here based on the fact there are a handful of 5m candles clear away before a return to level and two of those candles broke the current Tokyo session high? I guess I'm also asking do you trust a...
I have to begin by saying I was trading EJ today as I have been in the yen pairs for the past weeks. In looking at EU from today I am sure I would have taken a loss at the Friday high. I might also have taken a loss at the weekly close/open level when it came back down. Once that level was broken though I would have shorted the retest and made the losses back as price blew right through last week's low and went down 100+ pips. It is relatively common on a volatile day like today to take a couple of hits before you get the trade that survives. I am currently waiting for a retest of the weekly low to get short. I would hope to be able to hold that one for a nice gain. Could be one of those trades of the week.

As to the timeframe it really doesn't matter. Whether fifteen or five minute I still require thirty minutes of price not touching the daily open level before I will trade it. If you go back through the charts you will see that this is a necessary requirement. It caused us to miss a trade today and perhaps even caused a loss at the Friday high. If you decided to forego this requirement though the losses you would amass by being chopped up with false entries over the months and years would be staggering.

I know that you are trading around your work schedule. Square 1 gave some good advice in his reply. If you waited for the opening range breakout today on the one hour chart the winner was substantial and all you have to do is check the chart each hour beginning at 9AM London and set your pending orders when there is a breakout. I know you were a high frequency scalper type trader so trading off the hourly might be a stretch for you right now but it filters nicely and keeps you out of too many trades.
Olarion,

I am sure you don't want to stay up too many hours to trade. I want you to take a look at the opening range breakout you took today. Notice after you were stopped out of your runner you got a close and retest on the short side. I don't know if you took it or not but the short side trade was a valid one and I would bet that runner has a decent chance of surviving a little longer.
Quoting Seneca pilot
Olarion,

I am sure you don't want to stay up too many hours to trade. I want you to take a look at the opening range breakout you took today. Notice after you were stopped out of your runner you got a close and retest on the short side. I don't know if you took it or not but the short side trade was a valid one and I would bet that runner has a decent chance of surviving a little longer.
I did not the following short on the retest, unfortunately. But thanks for the hint.
The range breakout really is not time consuming at all. For the levels I trade, I would say in total I spend 2 hours looking at the charts.

So the 2 methods (levels and breakout) is really all I need to make consistent money. You showed me the way to go, mate.
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