Pivot Trading Journal
Please be aware that one screenshot is more than thousand words.
I'm posting live calls and trades but this isn't a signal service. You and only you are responsible for your trades.
Please don't ask software related questions here. I've got special thread for it: MT5 Indicators and EAs
Please no commercial content.
Please do your work and read this thread before asking questions. My focus is to trade and I don’t want wasting a time to answer same questions many times.
As thread starter I can ban anyone who continuously wants to be spoon fed or plain lazy.
Trolls will be removed without warning and hesitation.
I'm doing my own review of Davit's thread:
Part #1 started from Post 6
Part #2 started from Post 46
Part #3 started from Post 106
Part #4 started from Post 149
Part #5 started from Post 189
Part #6 started from Post 217
Part #7 started from Post 277
Part #8 started from Post 337
Books that are worth to read:
The Secrets To: Emotion Free Trading
“How To Consistently Act In Your Own Best Interest With Your Off-The-Floor Trading!”
Written By Larry Levin
Why visualization techniques works!
TRADING IN THE ZONE
MASTER THE MARKET WITH CONFIDENCE, DISCIPLINE AND A WINNING ATTITUDE
THE TRADER'S EDGE: THINKING IN PROBABILITIES
BIRD WATCHING IN LION COUNTRY
FOREX TRADING EXPLAINED
2010 EDITION (Revised, Updated & Expanded)
Dirk du Toit
unbearable lightness of trading
A New Way to Get More Living Out of Life
By Maxwell Maltz
The Secret of Using This Book to Change Your Life
PRACTICE EXERCISE NO. 1 - Get a New Mental Picture of Yourself
PRACTICE EXERCISE: Hold a picture of yourself long and steadily enough in your mind’s eye and you will be drawn toward it
How to Use Mental Pictures to Relax - PRACTICE EXERCISE: (To be practiced for at least 30 minutes daily)
Relax while you work - Practice Exercise
Practice Exercise: Form the habit of reacting aggressively and positively toward threats and problems
PRACTICE EXERCISE - Habitually, you put on either your right shoe first or your left shoe
Thoughts and feelings
So, why not give yourself a face lift?
UNLOCKING YOUR REAL PERSONALITY
Tranquilizers Which Bring Peace of Mind
Your First Aid Kit
The new psycho-cybernetics: the original science of self-improvement and success that
has changed the lives of 30 million people / by Maxwell Maltz: edited and updated by
Dan S. Kennedy and the Psycho-Cybernetics Foundation, Inc.
Pick someone to thoroughly study for a month
Imagination: The Ignition Key to Your Automatic Success Mechanism
ZERO RESISTANCE LIVING
Presented by THE PSYCHO-CYBERNETICS FOUNDATION, INC.
Stay out of trouble.
Vetheuil in the Fog (1879)
Oil on canvas - Musee Marmottan Monet, Paris
I'm using MT5. So, I've developed collection of required indicators for MT5:
Pivot, ADR, DailyOpenLine, MMPrice - Magnified Market Price and Pips.
You can download them freely from my software development thread: MT5 Indicators and EAs
I trade these pairs:
Majors: EURUSD, USDJPY, GBPUSD, USDCAD, AUDUSD, NZDUSD,
Euro Crosses: EURGBP, EURCAD, EURAUD
Yen Crosses: CADJPY, AUDJPY, NZDJPY
Other Crosses: AUDCAD, AUDNZD, NZDCAD
So, for clarification:
Majors: EURUSD, USDJPY, GBPUSD,
Some thoughts related to trading psychology:
What we call mistakes are actually valuable lessons for success. An important part of Psycho-Cybernetics is learning to use mistakes creatively and to remove the negative feelings that mistakes cause. From book Emotion free trading.
Worth posting this image. Image is from book "Psycho-Cybernetics, A New Way to Get More Living Out of Life" by Maxwell Maltz, M.D
Father of self help books but nobody comes close. Since trading is roughly 70-80% psychological it helps working on yourself.
Few thoughts I like to share.AS you probably already aware when things are going well this thread is bustling and when not gets quiet. Its natural $$ attracts however this system is not about 1 week's profits or even month's itís about quarters. This is how I measure my success
In short keep your head high and thrust forward few bumps should not derail your goals. Itís a marathon and not a sprint. There will be mistakes made and they are natural since we are dealing with lots of unknowns however when made don't beat yourself forgive yourself learn from it and move on.
The Secrets To: Emotion Free Trading ďHow To Consistently Act In Your Own Best Interest With Your Off-The-Floor Trading!Ē Written By Larry Levin
"One of the biggest reasons people get into losing streaks while trading is because they confuse their losing trades with themselves. In other words, we conclude that because we had a losing trade or a series of losing trades, we are a losing trader.
But the important thing to remember here is we are not our losing trades. Losing trades are part of trading. There isnít a single trader in the world who doesnít have losing trades. The only way to avoid them is not to trade in the first place. You cannot be a successful trader until you take mistakes and losing trades for what they really are. They are simply by-products in the trading game and need to be used to gain learning and understanding. But in no way do they define us as a person.
But that is where the big problem comes in. Many people let their losing trades and mistakes define them. If theyíre having trouble and have had a series of losing trades, they start to think of themselves as a loser. They continually think of themselves in that way. As we know from before, this kind of thinking will just bring on more of the same.
Forgiving yourself completely is the only way to avoid this trouble. You are not your mistakes and losing trades. You must put the past behind you and go forward. Holding a grudge against yourself only hurts yourself. Forgive yourself, itís the only way to be successful.
This applies to Nostro question and trading in general. First like to add that there is no loss system period! If anyone is telling you there is one just stay away and don't waste your time. Worth posting this.
Thinking in terms of probabilities also helps remove the emotional risk of trading. Mark Douglas talks about the 5 Fundamental Truths, they are as follows
1. Anything can happen
2. You donít need to know what is going to happen next in order to make money
3. There is a random distribution between wins and losses for any given set of variables that define an edge
4. An edge is nothing more than an indication of a higher probability of one thing happening over another
5. Every moment in the market is unique
Some thoughts related to Stop Loss:
One way I share on this thread to overcome spikes and DD is to trade smaller lots hence leaving room for adjustment should it be necessary. I think of trading like going to a battle. You always want reserve troops available should it be needed. This is why I can recover from DD in most cases.
When I am in profit I try to maximize by watching price action and get very alert on round numbers, daily open and pivots. This also true when getting in on trade
Currently watch NC so far failed to break RN 92 you must see these things clearly on daily bases
EG may bounce to 8380-90 again and could provide another swing down opportunity.
Guys I have posted over and over that I do take losses. No rational person who aspires to be a professional trader would not address one of the most important aspects in trading. Only difference I don't place hard stops and that has lot to do with 20-30 pip spikes that happen everyday and average trader often gets hit on these spikes. My SL is predetermined and firm. No fking way I will let 1% DD become 20%! that belongs in rookie section trading.
Clear? If you let your losses mushroom then that's your issue. I have never ever advocated trading without SL meaning NO guards in place should you clearly be wrong. Not placing hard SL does not mean one does not have SL!!
I answered this multiple times here and may save it for future reference. I don't use traditional hard stops. I trade totally different them most traders. I use real actual $$ for stops and not pips.
Example I like to short NU 7120
My budget for this is 2-3% of account risk say $500 for example. I then enter trades on mini lots and as long as my 500 is not consumed on DD and I am still confident of my trade I stay on it. I may choose to get out early but most times my SL is predetermined. This allows me to cast a wider net. So, my 10mini lots can cover 50pip distance hence capture better RR
There is advantage to trade this way. Should PA go against you and you no longer like the trade you can get out by fraction of lot invested hence your loss is minimal instead of traditional 1 trade 1lot per trade when if wrong loss is substantially higher.
This is typical issue not just this system but trading in general and most systems. How to overcome SL and DD. I find what I do provide best solution for me (account results speak for itself.) I don't use hard stops. Reason is 20-50pips SL are easily taken out. Market usually spikes before reversal. Try having wider stops smaller lots or monitor trades without hard SL.
Nice trading. I am holding for possible break to weekly pivot at 2940's. Just keep in mind that higher TF is still bear H4 so what may look bad on H1 30min may not look so bad on H4. This is hard part of trading. Take profit or let it run. Hold and PA may go up in a range and you lose profits and get out PA may break lower and you might be scratching your head why you got out early.
I don't have easy solution. Each swing has its unique PA must watch the market to determine the right move.
I think we are getting there gradually. av been seen some green pips but i want to catch more green pips by reducing my position sizing. How long do you leave your trade open.? D you have a mental projection or you close before the next available resistance. or you wait for Pa and Tdi to tell if the going has ended.
Watch PA and S/R's example your NU is heading towards previous daily open right now at 7065 but H4 H1 green so I would let it run towards weekly pivot 7111'sh
US final GDP Q coming up so market is unloading some USD now.
Some thoughts related to Stop Loss:
Just keep in mind that PA must agree with your entry. When it works you can add more positions kind of beef up the position hence 2x 5x profit ratio. To me itís not about how many pairs one trades but how well you maximized that 1 good trade.
Example I made over 2k pips on UC alone last month and almost the same on AC. Did not have to be all over the map. My focus is find good set up and hummer it hard.
Your exit is pretty bad. You need to allow trade to ride maximum distance at least to next pivot. Usually people getting out early have large lots and scared shit. This is part of training the mind. Reduce the size and allow greater distance.
How I deal with DD? Good question. I don't really count pips I count $$. I set for example $500 1 batch of trades. I enter mini lots. As long as my 500 is not reached then it did not reach my SL. In AN case I got stopped out. Sometimes does not work holding on. Should of gotten out when in good profit. That's trading. Hard knowing the future. I have many times got out early then price moved in my way another 300pips so itís delicate act which I am still trying to refine.
Once again my SL is based on actual $$ not pip. As long as my batch of trades have not reached max Dd in terms of $$ then I let it run. Let me give you concrete example. I was shorting UC from 129 and price went 31+ and I had over 200pip DD but in actual $$ it was only 20% of my intended lot to be traded on this pair. Then I Hummered rest from the swing top and made all DD back plus nice profit. I trade unorthodox style. I learned over the years that 20-30pip SL is sucker move. It will get hit and you can be taken out even if direction is correct. I refined my style of trading that pivots allows best entries without huge DD. People who see the value of this thread will profit.
My sL is part of my trading entries. Should PA overrun my budget for that trade I take the loss manually.
I often take earlier if I think fundamentals shifting. I work 70hrs a week and often can't be at my computer but twice a day morning and night I can hence plenty of opportunities to take the loss.
Reason I can do this because I don't over trade. I trade mini lots. Hope you are clearer. I don't talk about this often because I rather people use SL they are comfortable with.
Yes Nostro I average in. I only take the loss when I know I have no chance to recover. So far that rarely happened to me since trading pivots.
limit orders are just "in case scenario"
I operate on assumption that market can do anything anytime. As far as why not buy AU. Once I establish direction on a pair usually based on fundamentals (RBA may cut again) I only trade in that direction only. This only will make sense once you formulate longer term fundies. Fact is USD still dominate and US economy is picking up again. There is no way I would sell USD at these levels.
Don't buy NZD on any pair. Thing to do is wait for rally then sell the rallies. Once you establish weakness of the currency then don't chase it instead exploit it.
I generally hit 20+% a month without any stress and not even trying hard meaning without increasing position size. As you know there is advantage for smaller lot. Price is at 61R PA was bear and everything looked good and you went short large lot. Price spikes 30pips against you could be some pinhead saying something somewhere and you are immediately over 100 in the hole and panic and take the loss.
Now same scenario with smaller lot you could add more on top of spike and increase your position by exploiting the spike. You see its very different mindset. Instead of panic you increase likelihood of better price average overall.
As you probably already I hope you read that I often mention to trade small smaller lots. Furthermore you must have SL predefined as I often mention as well.
You must have an exit strategy. How much DD you can allow on any trade.
Beyond this this is an advance trading and warning is on my 1st page.
Good luck. I can't tell you what to do since you know your position vs account size.
Some thoughts related to News:
You did real well. Although you stayed during RBA minutes but I exited. Itís good that it went your way but could of spiked up in minutes wiping out your gains.
I learned to stay away from major news events. I may get lucky here or there but one is almost gambling. I did gamble for five years so trying to eliminate and I think I have that impulse totally from trading. My point is don't get hard wired in your brain that being live during major news events is good idea. In most cases market reaction can surprise you. I rather wait until market shows its hand.
Series of bad trades can wipe out months of hard work. Number 1 goal is preservation of capital. Number 2 preservation of capital, number 3 preservation of capital. Can't stress this enough. Difference of professional trader vs amateur retail trader relies on this. Pros think about risk and act upon it. Amateurs think about profits mostly. There is a huge distinction.
I have calendar on my template for a reason. Why would you buy before a major news release? You might get lucky but itís a sucker move.
I follow major news events. That's why I have the calendar on my screen because it is that important.
Example tomorrow's NFP I rather stay on sidelines until after the news. Worst thing when you take a position without being aware find yourself in deep hole. I always read about Aussie, New Zealand Economies since I like trading them. Whatever you trade the most make an effort to get familiar fundamentals that is. Whoever said everything is in the price is simply being ignorant. That's the kind of BS one reads over and over by people who basically are failed traders end up writing books about trading. Same goes for moving averages, overbought/ oversold oscillators crap. It makes sense right if you were selling and buying motorcycles for example wouldn't you want to know about the product thoroughly? Same example to anything that requires professional knowledge. Short answer follow the news. You should have routine. Mark every major news on the whole week beginning of the week then form overview what may happen. That should be also done daily. You simply can't afford not to be in the "know"
The daily news and everything that may effect price. This is what it takes to make it. Your edge over another trader is your preparedness. Itís basically automatic to me. I won't take positions unless I know what's going on in the market. It does not take lot of time plus I enjoy reading about fundies.
Gmo - My thoughts for next week.
I extend to Davit my gratitude for analyzing the Calendar for each forthcoming week.
I am more able to develop a "mood" for the Market each week and the events likely to govern that "mood". I have followed this practice of Davit's for over 2-years and more recently posted my thoughts.
The Comments are entirely mine and serve to remind me during the week. As I look back at my Analyses over the past months I remain appreciably surprised.
Formerly, I simply glanced at the Economic Calendar but after analyzing each week my poise is for market movement that in most situations I am in sync with.
Like Davit, I insist that you rigidly do this each week. It pays off very well - very, very well!
FF provides a good News Source with multiple contributors like the one in the link below. This site is not secure i.e. not https: !! Seems OK though?
https://www.investing.com/ - a favorite. Why? News, commentaries etc. but more especially Live Charts especially DXY and WTI - vital to watch these.
Yes, there are other sites with live charts but this one is OK for me.
Not secure link but very good look at the Economic scene. Davit will like the image - Chess!
Some thoughts related to Entries:
I am not sure exactly what you are asking but I only open 1 chart at the time and look at them one by one marking notes on potential set ups like yellow boxes to alert me. Not difficult spotting.
I basically look around 10-12pairs.That's it. Itís about focus on getting good entries on pairs you are familiar not be all over the board.
Here is how to trade pivots.
As price travels progressively away from weekly pivot it becomes more likely to go into correction."
Why not below pivot? I go with PA .For example AC has been climbing for weeks and WP is now at 9898 basically 99 which is seriously high for this pair hence selling below WP makes sense since there is tremendous room for correction like to 96 over 300pips south. This will make more sense if you zoom out and look at daily chart.
I never said anywhere I don't sell or buy below or over WP. I did say price reversal becomes greater when it stretches progressively away from WP. That's when counter-trending but one can actually buy going away from WP with the trend in fact using WP as a starting point. So nothing is cut and dry. Each pair is uniquely positioned. AC for example is so stretched that there is no way I will buy now so naturally I am selling it now.
UC is at WP 3090 and at this point either will break up or go down. I am interested to reload Shorts on this but oil still dropping so I will most likely wait to see how this goes.
Some thoughts related to Entries:
Important dates on Aussie Tues August 2nd Rate decision and market anticipates a cut and should that happen your Aussie shorts will bring ton of $$. I am going to hold my AC shorts until then.
NZD August 10th Weds rate decision again same scenario most likely will hold my NC shorts until then. I think itís almost guaranteed they will cut and looking maybe 90 for NC and that's 300pips south on 12 positions I have on it could boast my account significantly.
Might get in on NU shorts once price reaches 7190-72 which is 100R
If you are in drawdown some of your positions then don't panic relax. Drawdown is normal. This is why I always always recommend smaller lots to trade. Allows control of DD and recovery. Emmanual from TMS posted an interesting post on DD and his limit is 10% mine is lower but trying to convey that you must allow some room in your trading for price to fluctuate otherwise you will be taking a loss over and over after every 30pip spike and drain your account. Brokers love guys who place hard stops and that's why they love giving you 100k paper money to trade....nothing like holding a carrot to unsuspected.
Your problem is you were buying on major round number Resistance. I don't know if you read my posts on EG basically that's a pair I will only sell not buy at these elevated prices. PA is going into long corrective phase down. You also have buy and sell orders. Try not to do that. My pivots are there to guide you most probability trades.EG above 84 is hitting major R all over. If you are not sure demo until you know what you are doing. As I said on my 1st page this is advance trading. You must minimum understand what Price action means.
To simplify Watch price close to pivots for reaction and follow PA. What is PA? lots of videos on youtube about this. Most important price is like rubber band further it stretches away from WP higher probability for correction. This is very critical.
I do .05 .04 .03 in that order. Max should not exceed 3dollars a pip try keeping it 2 that means 100pip move=200 gain. This is comfortable stress free level. You can easily reach 500 by end of the month.
Notice I said 10% a month not week. Weekly gain of 10% is achievable and I have but you are under lot more pressure.10% a month consistently is staggering in 5years.Compound the gains. Once you see what can be achieved by study gains then you relax and only take best trades.
plug your number and see. Focus should be on consistency
You must make a decision direction on each pair. Example I would not buy AU but only sell. So I will only sell the rallies. Will not buy the bounce up. Reason is I like to be correct side in fundamentals. Price descends or ascents in waves. You have to decide how to respond.
patience is key in trading success in general.
"As price travels progressively away from weekly pivot it becomes more likely to go into correction."
Lowest TF I trade is 15min. 5min is scalping zone which is totally different mindset. Commodity pairs are taking a beating now but when there is carnage there is opportunity to make $$. Look for key support areas on AU NU UC. I like UC the best.
To me most important is looking at Price Action in zones.
General guidelines to me is this: If you have less then 5years of experience then don't trade hyper crosses like GN GA EN GJ.
Anything over 130 daily range is red herring to me. Itís not about profits itís about controlling risk profits take care themselves. Mistake lot of rookies make is getting carried over by greed and trade crosses and pay dearly when wrong. Slow study the way to build equity.
I mainly use swings tops and bottoms as exits and sometimes hang to see if there is more action in same direction. Example my EA trade I should of got out at 61S but held on thinking it may go lower but it didn't and closed at 50% profit. Itís a constant struggle to close? or not at least for me. So, swings can be anywhere 50pips to 100 depending on pair. Any gains more then 50pips is reasonable profit.
I think of weekly pivot as equilibrium. When price runs away from it resistance becomes greater as further it travels. You can observe this by viewing any pair.
Some thoughts related to Entries:
Hi Davit. May I ask as you trade swing. How do you set your SL. I posted about this. I don't set hard stops but do have % when in DD I get out.
Stick with pairs that are less then 120 pip ADR.
ON ME I took the idea from a book called "Bird Watching in Lion Country". Not many understand this book properly. I thought it was a gem.
To me waiting is critical part of trading like hunting.
I don't change my outlook. I hummer most probable trades and that's why I get 10-25% a month return. To me itís about following fundamentals and charts. I already stated lots of data coming out on Euro...hence rather stay out of it and catch the exhaustions. EC is no mans land. Trapped between S38 and pivot. I already stated many times that I prefer not trade pairs that are clearly untradeable specially in between pivots.
Keep it up. Jumping from system to system is normal in beginning stage but after few years itís important to choose a method that suits your needs and focus on it solely. This will improve your trading irregardless of method. Itís just hard wiring the brain to see repeated set ups.
If you are rookie trader I highly recommend not trading this. This method requires some experience of reading price action correctly.
From the attached EURUSD 30 chart. when am in profit and PA suddenly turns without getting to any S/R and begin to move against me and TDi crosses down. does that mean i have to close the trade and take whatever little profit i have on the table. or still hold on to see if the PA would turn back to the former direction. Please what would you do in that scenario.
Your question is excellent and I am surprised nobody asked that here before. Itís actually a simple solution-go higher time frame. 1hr 4hr specially. If previous 4h is bull stay in it. Move SL to break even then let price do its thing. Once you are more then 20pip in profit start moving SL closer and closer to protect the profits.
Price always goes towards least resistance. That's the simple truth.
Now my system is based upon simple observation that price hitting pivots away from weekly pivot will either break or retreat. That's my set of variables and given years of observation I came to conclude that price breaking 61R or 61S is less likely then going towards next level and rejection increases incrementally as price hits 78R/S and 100R/S. This is hard for people to get specially trend traders but simple fact is Elliot theory is real. Nothing goes in straight line. My system is based upon exploiting and profiting from swings. Itís as simple as that. To me trends don't exit only swings matter.
Just want to reiterate that space between 61r/s to 100r/s is most critical and volatile because most often price reverses on these levels hence spikes are common. So, If I take a short or long at 61R/S I will most often stay in it even if it goes through it because I know they are 2 more greater S/R coming up.
Hope this helps in planning your SL and trades.
I am not touching Euro or pound pairs until market consumes the news.
Some thoughts related to Entries:
Davit, i think i get you. Are you saying that you would sell at e.g. U/C in this case, say a small lot at R38 after spotting rejection wicks, and betting on it going south, then adding to ur position if it does, but also leaving u the option of getting out of trade if price heads north, and losing only a small lot/s? Is that the theory? Thanks G
That's part of it ...but I do lot more.. I build positions.
from my trading plan
1 Decide how much each swing is worth example $500
2. Divide $500 into mini lots for multiple entries example .50c a pip gives 1000 pip distance
3. This allows averaging in orders as seen fit irregardless if previous orders are in red
4. Orders are placed as long as reason for trade is still valid
5. If conditions change loss is taken since orders are not all placed all at once this allows smaller loss
Each Swing investment $500
Swing is taken as loss once -$500 is reached but often loss is taken early if PA obviously is going against you hence itís not necessary to wait until 500 is reached.
There are no exceptions. No running red beyond $500
Orders broken down into mini lots that satisfies each swing consist of 10-15 trades
I average about 15 swings a month consist of average 10 mini trades each swing
I came to realization that traditional hard SL of 20-50pip is total sucker move because players who move the market know exactly where your stops are. You will be taken out even if direction is correct. How to overcome this dilemma? Read my plan. Itís very logical. Monitor your trades without hard SL. Beat them in their own game.
Read about Elliot Wave theory. Itís the most brilliant concept in trading that all markets adhere to. Pivots are nothing but waves inside waves inside bigger waves.
Example I just exited my AC trades but should it hit 97 I most likely will sell again...You see you have to improvise and go with market flow.
Hi guys Sat Night and nowhere to go and happy being home. Please watch this video.
In the video he talks about major mistake position size (2 min mark) which I went over and over here and being systematic which my system does. Anyway I'll be interested to hear feedback and my system in general. My winning rate is unreal and I am saying this unapologetictly because I earned it through hard work. What I am trying to convey is "Yes it can be done!" you can make consistent money from Forex
The video outlines basic mistakes just about everyone made and still makes. This is one of the reasons I always push people to trade real money even if itís just cents. The reason is metal conditioning. Demo does not provide that and dealers, brokers know it and that's why they are eager to load 100k paper money to get you excited. Result is false sense of infallibility...which often ends up blowing a real account.
To sum up trade small and systematic way and get out when wrong at reasonable level. What I mean reasonable level is example you started shorting at 78R and PA was correct and all of suddent some bank unloads big order price shoots to 100R. Now in this situation I will not exit as long as 100R remains unbroken. Majority of times price will start going down. Most times swings end with spike. This has lot to do with market orders. Usually when Bank A want to sell they wont sell right away. They will push up 1st take stops which creates liquidity then drop their sell orders in chunks.
This happens every day hence you should be aware spike in general does not necessarily mean trend continuation when at critical levels of 61 78 100. Guys follow me? This is street smart trading. Got to see what your opponent is doing.
Check out NU chart. Look at the spikes. Notice reversal followed by a spike. Typical trader might be thinking TDI up PA up arrows up lets buy! Nope! On my 1st post I highlighted in orange. Everything depends on location.
This is type of thinking rarely touched upon at FF or in books. Itís hard putting your head around but location pivots create that key aspect in my trading because now I have a clear line on the sand to make appropriate decision. This thinking has Elliot wave theory as background guide. Pivots are nothing but waves. Price always travels in waves. Harmonics are based on EW and its real. As long as there is greed and fear markets will adhere to EW laws.
This is why trend trading fails most times because trends go into corrections. Unless you can live with 10-20% DD trend trading is difficult. Most retail accounts are not big enough to sustain trend's ups and downs. Anyway in my world trends don't exit only waves.
Some thoughts related to Entries:
Here is an example what not to do.
NU up going up like nuts. Don't sell just because you think its high. Sell when PA starts showing signs of decline and TDI starts pointing down. Look everything up. To me this could go. past 72
Another thing you want to focus is this. Decide which TF you like the best. I like 30min the best and 15 min 2nd. So when we say PA what context its relevancy. To me 30min price action TDI at pivots is sufficient entry. You decide what suits you. This is actually very important. Your decision process. You can't waver from 5min to H4 or whatever. Decide 1 TF and base all your descion on it. When you frame PA this way things become clear like Divergance etc.
Some thoughts related to Daily Open Line:
so what i understand we can deal with daily open line as R/S also or this is exception ? 3nx
Daily open is S/R it creates a bias. Itís on my template for a reason. I always like to know DO and ADR distance from that line. If pair travels average 20days 72pips like NU and manages to travels 130pips in 1day from DO then probability of correction is great or you should be cautious of getting in on LATE party after the move is exhausted. I usually get in on beginning of the move rarely on tail end.
AC PA is having real hard time breaking daily open 9662 once this goes I think it could drop lot quicker. Lot of traders think London open is true daily open. Not true. Day begins from NY close 5pm.
you can eye ball this on every pair and see real price reactions on daily open. Itís important because it creates a bias.
UC for example is already below DO not by much but enough that it creates a bear bias
Might be heading to weekly pivot and that would make sense closing the gap as well
Some thoughts related to Fundamentals:
Closed my UC shorts at 38S. I may get in should it bounce tomorrow. All commodity pairs are overbought NU AU UC so I am anticipating corrections coming.
EG hit 100S
Would love to see bounce up again to short this properly.
(you may wonder if I think PA may go up again then why not buy. Itís a great observation but I think Pound has been severely sold so market makers can drop this even further down from 100S hence I rather sell the bounce)
Usually I stick with my bias on each pair. You know the saying right? Bulls win Bears win pigs get slaughtered.
Managed to get in on NU again collect from 80 to 73.Nothing much. Waiting for EU to fall.
EU should it drop will open up the floodgates on GU and UJ as well. I think Sept is getting nearer and USD bulls will start reestablishing again unless FED become extra dovish which is unlikely considering their forward policy of rate hikes .
Letís see what Yellen has to say Friday. Market looks like is in waiting mode until then
Should NU hit 7290 again I may reload shorts
Aussie is artificially pomped because of high yielding factor however it also is flimsy and sentiment can change rather quickly. Aussie economy can't support high currency at this time.
I hope for once Chinese actually publish real numbers. They are so crooked everything is basically fabricated their growth, GDP Industrial production all fabrication.
Just as background reminder that corrective wave are usually 3 after complication of 5 wave EW
The reason I often mention EW because pivots are actually points where waves turn and waves are on Fibonacci numbers as well. This is one genius Nelson Elliot whom I have tremendous respect.
Itís worth reading more on EW. Itís extremely fascinating subject. The way I feel about drawing a nude person applies to trading as well. Sure you can draw a nude but an artist who knows anatomy, muscle structure can outdraw a layman. Think all these supplemental knowledge as skeleton, muscles the staff beyond the skin beyond the price. Why does price move the way it does. Its essentially a basic question but not so easy to understand.
When you zoom out to Daily you can see that this down move is only the first leg then bounce up maybe 46 and down to 4450.Looks like typical Elliot Wave so far.
Aussie is still playing hard ball. My take is lot of funds are going to AUD because of perceived "safe heaven and high yield"
Usually does not last long. Fundamentals are weak on Auusie to be this persistent.
AC is still at extreme overbought level (chance for you to get in...) Patiently waiting for this fat pig to lose weight
Some thoughts related to Fundamentals:
Glenn Stevens must feel frustrated that even with a cut AUD is still too high. Lets also take account that Yen got very strong as well more frustration for Abe
We live in environment right now that everyone fights to deflate their currencies.. very different then in typical healthy economies. Goes to show we are still in global recession even in US things are still shaky.
Japan is most aggressive with their stimulus (one of the reason I don't trade the yen ) They must feel the pain since Japan basically is export dependent economy. Yen pushes too high and your average Toyota will cost lot more hence lose market share to other brands.
RBA Gov Stevens Speaks tommorow
He wants Aussie lower desperately and most likely won't be too optimistic.
With global economies slowing down some still in recession and some heading that way its overall in this general business environment that cheaper currencies have a competitive edge.
The main reason Feds BOJ ECB were printing money to lower and stimulate investment and provide services that can compete.
Aussie ideally should be 68-70 and NZD 63-65 and this is the aim. Will it get there? I am sure it will but not sure of time frame.
Still holding AU shorts, in profit but I sense after today we are heading south deeper most likely not before Stevens gives his talk.
closed AU shorts
chipping it away. One brick at the time
might get in on bounce again
hang in there its going down.
I reloaded from 39
closed another batch on AU
Stevens wants Aussie lower and I am sure he will talk down. Question is would it have an effect? Don't know but I do know Aussie is hyper inflated. Will pick it up later
From my years of trading I know one thing every swing most cases ends with a spike. Could be this one...
Some thoughts related to Fundamentals:
Here is the thing about predictions. Logical person making forecasts usually has words like "may" "might" "probably" but idiots will post like Price will get to such number! You can immediately tell you are dealing with an idiot because nobody knows the future! Nobody can say with certainty what can happen specially volatile currency market. That's why all my posts have element of X that is unknown.
Trading is a probability game.
Nice drop on EC which I have shit load on my biggest position lot wise.
UC price hovering on WP depending on Crude Oil Inventories(in 20 min) it can go both ways but I am selling now...
H1 D red...
I am waiting for home run at this point although hate paying such high swap fees. The Aussie cut was priced in and I hope NZD acts differently.
Oil is still suspect with election year besides oversupply I think there are lot of political pressure to keep it under 40.Everyone loves cheap gas unless you are resident of S N Dakota, Texas, Alaska and bleeding Canadians dry by devaluation of currency.
I remember last summer when it was 1.46 buying vegetables was luxury in Canada...
I hope does not drop further. Drop in OIl brings down confidence in markets. Equities got crashed and wall street is scabbing now.
Crude Just got sold again with hair under 40. Not really a conspiracy guy but lot of big players love to see Democrats win and nothing like cheap gas to make average Joe happy.
The oversupply issues was same just few weeks ego when Oil was 50....everything changed after DNC
Serious dumping of oil. Hope 40 holds
On a positive note UC did not shoot up as usually the case.
I may just go through the rate cut event...
Aussie inflation is really low and they need the cut and should that happen RBNZ very likely to follow. There is great interest to keep AD and NZD in healthy distance. There are many more reasons for RBNZ to cut as well.
Brexit may drive scared investors back to "safe" currencies like AU NU and USD so be aware that massive spikes may occur on that day which is very close. In my view don't trade E or G pairs. Wild swings are expected. You will be taken out no matter which side you are on.
Yellen is due to testify 10am. I bet she will sound dovish and long term hawkish so don't know how market will react but USD may bounce.
Don't buy AC always sell AC
Fundamentally CAD is better shape then the Aussie. This is one pair that I only sell. That's just me.
Fundamentally market expects a rate cut on NZD and this might drag this pair another 265pips south to 92. Just be careful that sentiment has already shifted on NZD to very bearish
Some thoughts related to Fundamentals:
The main reason I don't like Yen because its highly manipulated. As soon as it gets strong then Abe starts with his "new stimuli" or BOJ starts dumping it in millions and billions. In basic form Japan wants cheap yen for her economic recovery. Would it come down to weekly? It could but US latest data are coming out green which prospect of that becomes smaller.
Make it simple Don't trade the yen! Let me also add that real professorial traders often trade 1 EU or maybe 3 pairs and that's it. Itís a myth that one needs to be all over to make money. Chances of you making a mistake on volatile pair you are not familiar is great. I do real well trading very small amount of pairs.
AN I always buy since difference of AUD and NZD is severely out of balance and I anticipate AUD to gain. Anyway, as a tip best way to trade range is to trade 1 direction only. Usually I trade towards fundemetal side.
Crude going up makes UC going down and all CAD pairs in simple terms more expensive crude becomes stronger Canadian dollar. Reverse also true.
Not all CP pairs effect by this equally. CAD effects the most then AUD and NZD
So you often notice that when crude goes up I sell UC AC and NC and now you know why
Thanks for your post Steve. I share from experiences. That's all. I did drop the ball on NC.I should of investigate why NZD dropped crossed the field matter of minutes.. Failed to see the potential of maxi maxi gain. Just lesson for everyone if something drops big and you have a good position don't be hasty taking profit. Looks like game was being played. 1st they jack up the NZD and once it almost gets to close to Aussie dollar then panic sets in.
NZ dollar slumps on signs of urgent RBNZ rate cut.
Funny day today. Great green numbers on US unemployment. Record stock market gains and overall optimism is coming back on USD and we got the pathetic Aussie dollar still holding to 76
I'll say letís give it 1 more week to see it drop to 74-73
Best thing to do and most times what I do daily is this. Type in google "Aussie dollar news" (sub any dollar name)and you'll find at least 5 quality links. Itís important to understand the difference of opinions of reporters vs official statements. Opinion does not mean policy change from a reporter but bank official making a statement is big. Overall you can gauge the sentiment by educating yourself state of affairs. Wanted to add when trading pairs specially USD based itís important to understand USD side to it as well.AU for example may depreciate simply because US economy is picking up again. This has an effect cross all majors.
Hi friend very nice post specially your last 2 sentences patience is part of trading
Just want to add did you often notice that once you take a loss PA magically turns around and you are left scratching and beating yourself why you got out?
Well Its hard explaining but Elliot wave once goes through 5 cycle of bull or bear just exhausts and turns around and that exhaustion level often coincide with your tolerance level which is why my emphases in trading is not about profits but controlling risk(profits naturally accumulate). Smaller positions allows one to overcome this extreme swing spikes as we witnessed on NC last night
Here an example of good set up.
NU 15min chart which I often use for entries but do use 30min as well.
We got important pivot 61R rejection. TDI turning south and a cross. Price is making lower swing high
Fundamentally we also have very negative export numbers came out earlier today very red.
Itís moving nicely so far should hit 7230 by friday
Hopefully its a typical 123 retrace Ellot Wave pattern
I often use zig zag indicator to see swings better. Nothing fancy just helps clear the clutter.
In am little surprised on resiliency of NZD which fueled after Wheeler's speech. Most misunderstood his speech. He was clear that he didn't want strong NZD and basically said he will cut rates to cap NZD gains. Market interpreted his comments actually opposite..(Wheeler said he didn't believe in aggressive cuts but did not rule out future cuts) but things will cool off soon on NZD
Some thoughts related to ADR:
Heads up guys
NC is at 100R and is running out of steam
145pips up from daily open on pair that travels 90 last 20days.Chance for reversal is great plus very strong pivot 100r
ADR is just a tool to let you know if pair is overstretched on daily range. When that happens likelihood of reversal is great and when confluences with pivots creates great opportunities. Emphasis is always on PA because often when pair overshoots itís likely that something major happened like rate cut or other fundemetal factors so you must check why it overshot in the first place.
ADR is good indicator of daily range. If example pair moved over 130pips and normally does 80 then anticipate correction or "exhaustion". It should treated same way as "heads up"
PA is most important and fundemetal factors. Case in point Brexit vote that was huge and drop was huge as well. Follow the news
Right now question is does EU have what it takes to go beyond 1.13? Itís pretty overstretched and worth putting it on "watch list"
itís at 100R so far FOMC passivity helped fuel its gain but week is getting to close and sometimes dumping happens on Fridays.
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