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gspajon Oct 12, 2014 10:02pm | Post# 1

Simple Uncomplicated (obvious) trading
 
2 Attachment(s)
Hello all...I've been wanting to start a thread like this for some time but have been busy. I want this to be a thread were we share simple and uncomplicated trade ideas and plans. I feel that the trades we post here should be so simple they are obvious to everyone.

My point is that this type of trading (the low hanging fruit - if you will) should be plenty to suffice for anyone who is looking for that consistent way to keep pushing the rock up the hill. One trade at a time. I have a particular method that I have used for many years and have been distracted by "newer" or "sexier" ways to trade...but I keep coming back to this and have decided (after a decade of bullsh--t) to keep this and leave everything else alone.

My plan is simple...sell rallies in a down trend...buy dips in an up trend...watch for ranging markets and then buy the bottom of the range...and/or sell the top of the range....that's it...no complicated oscillators...moving averages...or gee whiz indicators. I invite your participation.

For my part I plan to use weekly and daily charts as my time is very limited. Thus my trade posts will be once or twice a week. I invite you to follow along or post your own trades (keeping in mind the above). If you're going to tell me about elliot wave abc correction, or negative divergence on xyz oscillator...save it for another thread...this is just simple price chart with candle sticks and a few trend lines.

I offer this first trade to get things started. XAU/USD weekly chart. One chart is just a blow up of the other...
So here it is down dirty and simple: Price has been in a narrowing range for a little over a year, (as seen on the weekly chart). At the bottom of this range, last week's price candle created an obvious outside bar. Each of the previous two attempts in this area resulted in a significant rally. I have placed two pending orders for long and will see which ones trigger. I have two targets one 500 pips and the other 1,000 pips. (remember these are weekly candles). If these trades fail then the resumption of the bearish trend will be obvious and I will then sell the next rally at an obvious resistance level.

I will make no "Predictions" about where I think price will go or what I believe will happen in the futures...because I just don't know...the bottom line is this...in this kind of environment, this signal (engulfing bar) has an 80% accuracy rate to at least the first target...it may go more which is why I have a second target...

(as a side note I am using this thread to gather data on the hit rate for the 2nd target...but that will take some time). For now I have solid data from live forward trading on the hit rate for the signals and characteristics of the signals I will be trading here.

No big secrets or "sexy" predictions...just simple - uncomplicated - OBVIOUS trading
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kprsa Oct 13, 2014 2:21pm | Post# 2

Hi gspajon, I have in the past learned a lot from your threads, which I have carefully studied.
Subscribed to whatever you want to share.
Sometimes simplest is the best, and often more complicated methods turn out to be trading pullbacks of a strong trend.
Cheers,
kprsa

gspajon Oct 13, 2014 4:40pm | Post# 3

Hi gspajon, I have in the past learned a lot from your threads, which I have carefully studied. Subscribed to whatever you want to share. Sometimes simplest is the best, and often more complicated methods turn out to be trading pullbacks of a strong trend. Cheers, kprsa
Very kind words...I thank you very much!!

For now the trade has triggered one of the pending entries...and now we do what is the hardest in this business...WAIT...and sit on your hands...

gspajon Oct 16, 2014 8:29pm | Post# 4

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New Trade Opportunity:
USD/JPY - Day Chart

Price has moved higher after breaking an ever narrowing channel in August. The quick move up was followed by an even quicker move down to bounce off a logical support area that was previously resistance for the last move higher. This support area is also confluent with the 50% retracement level.

An exhaustion candle was noted (two candles prior to the open candle) and today's price action formed an inside bar.

I have placed a pending order 10 pips above the inside bar's high and will hold for 2x the range of the inside bar. Approximately 190 pips.

The probability on these trades (according to my data) is approximately 76% to the level noted here. Also note that the limit comes in right at where the previous support at the high was before it broke down.
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EnoFX Oct 16, 2014 9:14pm | Post# 5

Excellent trading ideas. As presented 7/10 of these types of inside bars will go your way.

gspajon Oct 16, 2014 9:33pm | Post# 6

Excellent trading ideas. As presented 7/10 of these types of inside bars will go your way.
Where there is contraction there will also be expansion

ajentha Oct 17, 2014 7:11am | Post# 7

Dear GSPAJAN,

I am very much interested your method of trading.

Thank you so much for starting this method of trading.

Regards,
ajentha

gspajon Oct 17, 2014 8:43am | Post# 8

Dear GSPAJAN, I am very much interested your method of trading. Thank you so much for starting this method of trading. Regards, ajentha
Ajentha,

I thank you for your kind words...and as much as I'd like to say what a genius I am...I'm afraid it is not true. This method of trading is as old as it gets...but the simple fact is...it works...IF and only IF you stick with the discipline. All I've started here is the thread to discuss it.

For years...pretty much a decade now...I have been chasing my tail over this and that and have had mentors ask me why on earth I am changing my strategy yet again...the answer...lack of discipline.

You see this method of trading is very boring and UN-sexy. It takes time and patience to wait for the trade set ups...and even more patience to WAIT for the trigger...and and EXTREME amount of patience to WAIT for the limit to trigger...

It takes discipline to not touch the trade parameters even though the temptation to move your stop in tighter to "protect" your position is huge. The discipline is simple but hard to follow as I am human and tend to over analyze almost everything...even what's in my food.

So the discipline is this...(1) Find the set up; (2) set the trade and wait for it to trigger; (3) DON'T touch it; (4) When profit gets to 70% of goal, move stop to Break Even; (5) Don't touch anything else until either stopped out or limited out. (6) Rinse/Repeat.

Pretty simple...yes? Try actually doing it...on a weekly or daily chart...have your psychologists phone number handy...it will test your mental strength, I promise.

ajentha Oct 17, 2014 9:32am | Post# 9

1 Attachment(s)
Dear GSPAJAN,

I have placed Buy & Buy Stop pending order as per your trading method with engulfing bar Signal.
Please provide your valuable comment. I can improve as well as learn PA.

Trade 1:
Buy@171.00
SL@168.45
TP@172.90

Trade 2:
Buy Stop@171.80
SL@167.95
TP@173.70

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bye
ajentha

gspajon Oct 17, 2014 10:15am | Post# 10

Ajentha,

I'm afraid this trade is not what I was talking about. Remember my first post...buy dips in an UPtrend. The chart you have pictured here does not show an up trend. Nor is the signal you indicated an engulfing bar...

I'm sorry to be the bearer of bad news. An engulfing bar is just that...the range of the the bar in question ENGULFS the previous bar. This bar did not engulf the previous bar. Although the body of the candle did engulf the real body of the previous candle this bar does not meet the criteria and, while it may prove successful I have no statistics on the hit rate for this kind of bar.

Now on to trending. On your chart I see a move up then a fairly quick move down which pushed through the last swing low, creating a lower low before your signal bar. For my definition of trending...(higher highs, higher lows = up trned; lower highs, lower lows = down trend) this may be the start of a down trend.

As you have already entered one position you must hold that and hope it will work out...however, according to my discipline, I would cancel the pending order and watch the price move up to a "logical" resistance area and then look for a signal, that indicates a continuation of bearish trend.

However, if your trade proves good and price rises to the top of this chart you may have a range forming...in any case I would not be trading this signal and would be looking (at this point) for a bearish signal that may indicate a continuation of a down trend.

ajentha Oct 17, 2014 12:38pm | Post# 11

Ajentha, I'm afraid this trade is not what I was talking about. Remember my first post...buy dips in an UPtrend. The chart you have pictured here does not show an up trend. Nor is the signal you indicated an engulfing bar... I'm sorry to be the bearer of bad news. An engulfing bar is just that...the range of the the bar in question ENGULFS the previous bar. This bar did not engulf the previous bar. Although the body of the candle did engulf the real body of the previous candle this bar does not meet the criteria and, while it may prove successful...
Dear GSPAJAN,

Thank you so much for your clear & understandable explanation.

I want to increase my trading knowledge and treated eyes

I continuously follow your method

I like your trading method

Best regards,
ajentha

ajentha Oct 17, 2014 1:08pm | Post# 12

1 Attachment(s)
{quote} Ajentha, I thank you for your kind words...and as much as I'd like to say what a genius I am...I'm afraid it is not true. This method of trading is as old as it gets...but the simple fact is...it works...IF and only IF you stick with the discipline. All I've started here is the thread to discuss it. For years...pretty much a decade now...I have been chasing my tail over this and that and have had mentors ask me why on earth I am changing my strategy yet again...the answer...lack of discipline. You see this method of trading is very boring...
Dear GSPAJAN,

I agree that waiting for trigger the take profit is really uncontrollable. So I want to get psychologically as well as mentally strength.

Trade setup also I want to improve lot, because your explanation about your trade setting and details has correct. So that your trade prediction correct. So visually this trading method is simple, but why you have take a trade explanation is you have very deep understanding for each and every candle. So I am ready to follow your each trade and read more time as well as increase my knowledge.

Why I have taken GBPJPY trade, because you have placed USDJPY trade without engulfing bar, so I think turning point or Lower high is trade-able.
OK, I want learn from you lot...

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bye
ajentha

gspajon Oct 17, 2014 4:05pm | Post# 13

{quote} ...Why I have taken GBPJPY trade, because you have placed USDJPY trade without engulfing bar...
The USD/JPY trade signal you refer to here is an inner bar... not an engulfing bar. They are complete opposites of each other. While they both tend to signal the same thing they do it in a completely different manner...again I am not here to give a lesson on what candle patterns mean or why they do what they do...I have just kept close and careful statistics of MY trades and worked out the probabilities of each signal. This is an exercise I recommend you do as well as anyone who wants to become consistent.

I use only four reversal patterns. Why 4? Because my records show me that these four are the most consistently productive and easily recognizable. (1) Engulfing bar; (2) Inner Bar or Harami; (3)Pin bar (verified with my personal qualficiations), also known as a hammer and/or a shooting star; (4) Dark Cloud/Piercing Line (again with my own personal criteria.

One last thing I've learned - unfortunately the hard way - DON'T apply the conditions of one pair to another similar pair. Like USD/JPY and GBP/JPY. Each instrument must stand on its own. It will only lead to loss and a great deal of confusion, if you analyze one chart then apply that analysis to another completely different instrument.

Hope this helps.

gspajon Oct 17, 2014 4:18pm | Post# 14

2 Attachment(s)
UPDATE for this week's positions:

XAU/USD: First of two positions triggered and is currently 42 pips positive. Price seems to have stalled over the last two days at the 38.2% fibo level. Next week may see a small pull back that could trigger the second position. Plan for now is hold. No action required.

USD/JPY: Position also triggered and is currently 36 pips positive. This trade is progressing well for its first day. Plan is to hold. No action required.

I hope you all have a good week end...more on these trades at the end of next week.
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gspajon Oct 17, 2014 4:32pm | Post# 15

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Hello All again...

Just running through the weekly charts at the end of this week and found that my original position on the USD/JPY also qualifies for a weekly trade (assuming it triggers).

Posted below is a weekly chart with a very clear pin bar showing a "clean" retrace and rejection of the last support level (previous resistance).

I have place an additional order to trigger at the top of this week's bar with a take profit set for 110. Probability on this formation is also about 76% to this first take profit level...and as it comes in at this year's high we may just make this, assuming the trend holds.
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atheer1 Oct 17, 2014 8:48pm | Post# 16

I like your way of trading as I am an indicator hater and a simplicity liker................

keep on this

atheer1

ajentha Oct 18, 2014 12:20am | Post# 17

{quote} The USD/JPY trade signal you refer to here is an inner bar... not an engulfing bar. They are complete opposites of each other. While they both tend to signal the same thing they do it in a completely different manner...again I am not here to give a lesson on what candle patterns mean or why they do what they do...I have just kept close and careful statistics of MY trades and worked out the probabilities of each signal. This is an exercise I recommend you do as well as anyone who wants to become consistent. I use only four reversal patterns....
Thank you GSPAJON,

I got the point,

I learn and focus on more about the 4 type of reversal handle patterns and
Fibonacci %.

(1) Engulfing bar;
(2) Inner Bar;
(3) Pin bar and shooting star;
(4) Dark Cloud/Piercing Line.

USDJPY Weekly Trade:
Now you have placed buy stop of 1 lot size which means this pattern setting is "the best".
Because Support level 105.25 to 105.50 has rejected with reversal of the price and formed trend reversal pin Bar. Thank you for the clear and nice reason to place a weekly trade.

Take Profit:
I get the point 110 is at this year's high; but what is mean by 76% 1st target? Please

bye
ajentha

gspajon Oct 18, 2014 8:58am | Post# 18

{quote} but what is mean by 76% 1st target? Please bye ajentha
This number is what i have found the probability to be for this signal - The hammer. It is made even more powerful because it is a weekly candle. Again it is a high probability but it is NOT 100%. It only means there is a higher chance price may move up than the chance it will move down. This business has always been about using the probability in you favor and controlling the risk in case you are wrong. Understand?Always remember - it doesn't matter if you are right or wrong. It only matters how much you make when you are right and how much you lose when you are wrong.

ajentha Oct 19, 2014 1:53pm | Post# 19

{quote} This number is what i have found the probability to be for this signal - The hammer. It is made even more powerful because it is a weekly candle. Again it is a high probability but it is NOT 100%. It only means there is a higher chance price may move up than the chance it will move down. This business has always been about using the probability in you favor and controlling the risk in case you are wrong. Understand?Always remember - it doesn't matter if you are right or wrong. It only matters how much you make when you are right and how...
Dear GSPAJON,

OK, I got the method and using probability with controlling the risk and maximize the profit. Any have, I think need more confident and experience about the PA movement. let see coming days ...

bye
ajentha

bryan1618 Oct 19, 2014 4:38pm | Post# 20

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I really like your non complicated method. I was looking at the USD/JPY pair and a few others and began to notice that many of the USD pairs at are very important monthly and weekly levels. I will be looking to see what develops in the following weeks to see if I can catch a long term trend in some of these pairs. Here is an example of a long term channel from the USD/JPY pair.
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