Strat's PASR Long Term, Stress Free Trading

I sent Strat pages of my analysis last night ... and I got some good analysis back that I thought I would share here.

EURUSD Boss made an unconfirmed swing low and in an up cycle. Daily momentum is down. Momentum Cycle still in uptrend but flattening out – in transition.

EURJPY Boss made unconfirmed swing high at the top of its cycle. Daily momentum is bullish but decelerating

USDJPY Boss made unconfirmed swing high at the top of its cycle. Daily momentum is bullish but decelerating

GBPUSD Daily momentum is bullish and accelerating

GBPJPY Boss made unconfirmed swing high at the top of its cycle. Daily momentum is bullish and accelerating

GBPCHF Price at BOSS 20. Boss cycle up. Daily momentum and cycle up.

AUDUSD Boss momentum up near top of cycle. Daily momentum up and accelerating and at bottom of cycle.

NZDUSD Boss made unconfirmed swing high at the top of its cycle. Daily momentum is bullish and accelerating at bottom of its cycle.

NZDJPY Boss made unconfirmed swing high at the top of its cycle. Daily momentum is bullish and accelerating at bottom of its cycle.

USDCAD Boss made confirmed swing top on 4/3. Daily momentum cycle down

USDCHF Boss momentum down/sideways/transition but made new high at bottom of its cycle. Daily momentum in transition to bullish but at top of its cycle.

EURGBP Price at Boss 20. Halfway through Boss down cycle. Daily momentum down at top of its cycle. HELD BY STRONG SUPPORT.

Thanks for the feedback Strat. I had a great breakout trade on cable, and on AUD & NZD thanks to your advice!
Nicola

As you already know, I have a huge disdain and zero tolerance for "lurkers", "trolls" and "know it alls" and all those looking for "free lunches" on Forums.

However, I will, and do, spend as much time and effort as it takes, to help genuine, serious people on their way to becoming successful and profitable traders.

I have already withheld from this thread some of my methods and techniques in PASR simply because I only want the genuine and serious people to benefit from them. These are being discussed in private through FF PMs and already several traders have learned these methods and are using them successfully and profitably.

Similarly, I have asked Baba G, to withhold his methods and techniques for our genuine and serious traders.

Another of my dislikes is promoting links to commercial websites who offer "carrots" as bait to get you in and then switch you to their broker or software etc. That is not to say that we don't have any links to useful and beneficial information; we do, but these have to be approved by myself and are then made only available to those on The Path of Learning.

Also, where possible, attachments are being removed from the thread and only being made accessible to those on The Path of Learning. Similarly, new attachments will be, and already are, being made only accesssible to those on The Path of Learning.

Finally, if you think you already know it, and are TOO BIG to be on The Path of Learning - GET OVER IT! Lose your ego and the chip off your shoulder - no-one, I repeat no-one, knows it all and never stops learning, not even the Professionals, not even the Money Managers, not even Baba G, - don't believe me? Go ahead and ask them - PLEASE!

Correlation eh? I read and studied correlation for months and then tried it on another thread and it worked fantastic. Then, out of the blue, just when I thought I had the key to the Magic Kingdom, it turned on it's head and was about as much use as a crack in a glass eye! Remember, Nicola?

I watch what similar pairs are doing but I don't guess what they should do based on what another pair is doing. The only pairs that are highly correlated, as of today's date are:

USDCHF 84.7% inverse correlation with EURUSD
EURCHF 85% correlation with EURUSD
EURJPY 73.6% correlation with EURUSD

EURJPY 86.1% correlation with USDJPY

USDJPY has an 18.4% inverse correlation with USDCHF so nowhere near as good as a coin toss!

These are the only correlations higher than 70% - any less and you are better off with a coin toss.

Sorry I can't give the link to this website but it's another bait and switch scam.

Do you have a trading journal? Either in excel or word? If you don't, start one...when you have to write down WHY you're entering a trade or placing an order, it helps sort the wheat from the chaff (trade wise) and you'll probably find (as i did) that when you're writing out you're wonderful trade idea, you struggle to find the real reasons why it should work, and you'll begin to pick more justified trades which you're comfortable with.

When you trade the Daily - TRADE THE DAILY -you only need to do your analysis once - after 5pm EST. There is absolutely no point in looking at Daily charts prior to 5pm EST


The lack of trading is SAVING you money you would otherwise have LOST and gaining you experience, patience and discipline

Malcolm, there was something about this post that bothered me so I came back to it and it is this:

""when I see a setup to really hit it""

This is THE BEST WAY to blow your account! Don't do it. To stand any chance at beating the system on this you MUST trade the same % of your account on EACH trade until you are consistently profitable over a long, long time.

I can't tell you the number of times I thought this was the Mother of All Trades and put enough on it to make up for all my losers - well, The Queen has a nasty way of reminding us that we are only little serfs in her Kingdom and each time I did this she took everything without even as much as a "thank you".

When you are consistently making profits, your account grows AND therefore the $ amount which, although the same % of your account, is now higher. You MUST work, trade and think in terms of % rather than $ amounts.

When you are consistent, you can also fund and add and increase your account size which, on the same % basis, will increase your $/pip contract size.

Whatever you do though, do NOT try and pick and choose between a good trade and a slam dunk trade and load up on it - it is the FASTEST ROAD TO RUIN.

Do you understand this?

1. https://cdn-assets.forexfactory.net/...ar19097_10.gif Baba G
2. Joined Sep 2006 | Status: Hors non numero nisi servitas | 733 Posts

Strat is right a pin bar is only as good as its location....a bit like a house.....dont just go OHLC bars and call all sorts of "lookelike" bars....bars

Its like calling the Dutch.... German...or a Scott an Englishman....they dont like it and you will get a bloody nose........g

1. https://cdn-assets.forexfactory.net/...ar19097_10.gif Baba G
2. Joined Sep 2006 | Status: Hors non numero nisi servitas | 733 Posts

Anyone still on a 4 hr or less trading vibe please send me your accounts and i will not only take half the profit but by the time you have killed many demos,you will have a profit with me........
.OR
Give it to the bucket shops....
OR
Get on a path to learning.......
OR
Give up..........

Pairs? - I look at as many as I can get my eyes on, big ones, little ones, plastic ones (but never flat ones), sorry what were you talking about again, my mind wandered off?

Oh yes, right!

How many charts to follow? This is very personal and comes down to many things, time, circumstances, account balance, level of trading but not least, your personal vibrations and harmonics (don't laugh, it IS true).

The beauty about trading the Daily is that it gives you a life. You can do whatever you want during the day, a job, golf, tennis, boating, sleeping, dreaming, anything. All you need is a couple of minutes on each chart after 5pm EST when NY closes. How long you spend reviewing each chart is entirely up to you. Some can make a decision with just a quick glance while others like to make each review an "event"

There are some that say specialise on one pair and one pair only, but while I understand the reason for that, and it has merit, WE need to see as much PASR as we can get our hands on to stay "in tune".

Since I added pizza man's CADJPY chart, I now have 18 pairs that I follow - BUT I don't follow them all for trading purposes. Some I am using for further development of my Momentum and Cycle methods and others for further development of my Volume Analysis.

So, the bottom line is, follow however many charts you are "comfortable" with and only you know what YOUR comfort level is. Just make sure those pairs have HIGH VOLUME & LIQUIDITY and not some exotic pairs like USD/Krona etc., (Nicola, are you listening?).

""On a "average" month how many trades would you place (I know you are going to say...all depends on PA setup - but just want an idea of no. trades achieved on a Daily timeframe)""

This really is impossible to answer because it is 100% dependent on the markets and PASR. Each day is different from the previous day and so on.
Instead of worrying about the number of trades to take, you should be more concerned with the QUALITY of trades. I keep saying, and I will say it again, QUALITY before QUANTITY.

AJHill and Bloom are trading EXACTLY what the market is giving them - if she gives you nothing, you trade NOTHING. If she gives you something and you don't recognise it, you still trade NOTHING. I can tell you from experience, that when a trade isn't there, and you start looking for a trade because you have an "itchy" trigger finger, then you can make anything look like a trade - and when that happens - it is a LOSING trade.

Remember the # 1 Rule in Trading - CAPITAL PRESERVATION.

This week, so far, has been a dull, boring week for trading the Daily - Why? Because there were no decent, low risk PASR set ups. Where there any trades to take? Yes, but VERY RISKY and not for anyone learning on this thread.

Once you have taken a trade that gives you pips in 4 figures, you will NEVER, EVER, worry about the number of trades you are doing in any given period.

Waiting for the safe, low risk trades are what will take you from where you are now to the next level, and the level after that and so on. Trading with an "itchy" trading finger will take you to your lowest level - BUST!

We should never enter any trade without FIRST KNOWING:

WHERE TO TAKE PROFITS

This is just as bad as those who ignore RISK and forget about LOSING and never think about SL placement.

Always remember we need to REWARD ourselves for trading - we do this with PROFITS - it is the very best medicine for our psychology. There is no better feeling (well there is, but that's for another time!), than taking PROFIT from the market and putting it in your account - even if it goes another 150 pips after that - you STILL have PROFIT in your account.

Bloom, and I'm sure many others, are struggling with this also. Until you gain the experience to do different, Here is what I recommend, and I'll use Paul's trade as an example:

Trade 3 contracts (adjust $/pip if necessary to remain within your account %)

Take PROFIT on 1 contract at the 1st support -

Now, depending on your risk aversion, either place your SL at BE on the 2 remaining contracts or trail above the previous high.

Take PROFIT on 2nd contract at next support and bring 3rd contract SL above previous high.

On 3rd contract (with 2 contracts already with PROFIT taken), stay in UNTIL a PASR REVERSAL set up.

If this is not to your liking, you can still do 3 contracts but take PROFIT at each 50 pip level which will give you:

1st Contract 50 pips
2nd Contract 100 pips
3rd Contract 150 pips
TOTAL 300 pips

Whichever way you do it, ALWAYS take PROFIT from the market. Forget about thinking it may go another 150 pips - as soon as you do that, your emotions kick in BIG TIME and you are a TRAIN WRECK waiting to happen. Be satisfied with what YOU got from the market. As long as you are CONSISTENT in trading, your pip haul will increase but it will take time, lots of it.

Paul - did you read Blackeagle's post # 2009? Did you understand it? That should tell you something.

Always remember Dr. Joe - it keeps on going down until it stops going down!

You only need to know when it has STOPPED going down - you don't need to worry about when will it end or where will it end - it ENDS when it ENDS!

A very risky entry as 0.8990 was ABOVE WEEKLY and MAJOR SUPPORT at 0.8950 and NO PA for entry - As I have told others, EURGBP is in a bearish Momentum Cycle so sell all rallies so you have done OK - this time - but probably not next time IF you keep taking these HIGH RISK set ups

You are 164 pips in profit - are you going to lock any of this in or let The Queen take it back?

There are also two distinct and very different aspects of trading involved in this:

1) Technical analysis
2) Trading psychology

We need to blend these two together sensibly and logically if we are ever to have a chance in making money at trading. No matter how good we are in our technical skills, once we have our money "on the line" (and the more money - the greater the STRESS and pressure), our emotions, greed and fear, kick in and take over control of our trade.

Remembering the lurker who PM'd me saying something like "Assuming I have my emotions under control.......", Yeah, right! BUT it CAN be done but you then have to draw on two other aspects of trading psychology - patience and discipline.

This is why I keep repeating ad infinitum, success and making money in trading is 90% trading psychology.

Therefore, my answer to this will always be from the trading psychology aspect BECAUSE we have to keep our emotions, specifically greed and fear, under control as best we can.

The best way I know to do this is through a TRADING PLAN

You PLAN THE TRADE and then TRADE THE PLAN.

If you do this, you will ALWAYS keep your emotions in check and away from any decision making.

There are, however, provisos in this:

You must have your $/pip not only at your M % risk level but also at YOUR EMOTIONAL TOLERANCE LEVEL. It is no good having a huge trading account which allows you to trade $10/pip contracts if you are a huge EMOTIONAL BAG OF NERVES during the trade. Reduce your $/pip to a level that you feel comfortable with WHEN YOU LOSE.

You must always define your RISK (LOSING) before even thinking about profits. Forget about thinking (and dreaming) how much you will win. Instead, think and ACCEPT how much you will LOSE.
Forget about profits - when you are CONSISTENT over a long period of time (at the very least 1 year), your profits will take care of themselves.

So, let's go ever a typical scenario:

You see and recognise PASR, so you want to make a trade.

FIRST - where does my SL go? How much will I LOSE if this goes against me? Do I ACCEPT the RISK (LOSS)?

If Yes, next step. If NO - reduce the $/pip until you ACCEPT the RISK(LOSS) or DO NOT TAKE THE TRADE.

This is CRITICAL and VERY IMPORTANT - you have to be VERY HONEST with yourself here - you MUST be able to say to yourself

"THIS IS THE RISK I AM PREPARED TO TAKE ON THIS TRADE AND I WILL UNCONDITIONALLY ACCEPT THAT IT MAY BE A 100% LOSS"

If you cannot do this then YOU DO NOT TRADE!

SECOND (and only after accepting the RISK(LOSING)), where do I take PROFIT?

As discussed in an earlier post, put on 3 contracts and take PROFITS at either the first and second levels of S & R as appropriate or in increments of 50 pips - which ever polishes your knob! On the last contract, you trail this behind a suitable level which you are comfortable with UNTIL you are either stopped out or you see a PASR REVERSAL bar

So, this is now YOUR PLAN

THIRD - Do I believe in my PLAN? Do I have 100% absolute faith in my PLAN?

If the answer to this is NO - make a NEW PLAN
Do NOT trade until you UNCONDITIONALLY ACCEPT YOUR PLAN

FOURTH - Plan accepted so place trades. Enter SL and TP levels

FIFTH - Trade Management - You are trading the Daily time frame so no need to check your charts UNTIL after 5pm EST - NY close. -right, Dan?

IF you have been HONEST WITH YOURSELF and accepted YOUR PLAN then there is NOTHING TO DO!

You will either be stopped out for a LOSS - which you have already accepted and is no longer a concern for you

OR

You have to start taking PROFITS

There is NOTHING ELSE FOR YOU TO DO

"Ah, but what if something happens and I see the trade going against me, what then?" I hear our high school student say.

FIRST - YOU SHOULD NOT BE MONITORING PROGRESS DURING THE DAY ON A DAILY CHART.

If you are doing this then YOU STILL HAVE THE MENTALITY OF A SHORT TERM LOSING TRADER. You must GET SERIOUS and CHANGE YOUR TRADING STYLE.

SECOND - IF YOU ASKED THIS QUESTION THEN YOU DO NOT BELIEVE IN YOUR PLAN and VERY, VERY IMPORTANT - YOU HAVE CHEATED YOURSELF - YOU HAVE LIED TO YOURSELF!

YOU EITHER BELIEVE IN YOUR PLAN - OR YOU DON'T - it really is that simple.

So, my short answer is:

PLAN THE TRADE & TRADE THE PLAN

Young Mr. Grace. You have disappointed me - I would hope any of our group could ask ANY question without having to preface it with ""Forgive me if this is a stupid question.""

I have asked more questions in my life than Baba G has had pasta!. If you don't ask questions, how will you ever get answers?

Now, when I was in important executive meetings and I thought what I was going to ask might seem stupid, I would usually say, ""There are others in our group that might not know what you're talking about, so, for their benefit, would you mind explaining it in simpler terms?""

Right - Hanging Man and Inverted Hammer:

Here is my take:

Hanging Man:
Despite what the "experts" say, I don't treat a Hanging Man as a reversal bar. I have been caught out too many times doing that, thank you!. Instead, I use it as "EARLY WARNING" that a top may be coming in. I always need PASR after a Hanging Man before I will trade.

A Hanging Man tells me that the sellers sent out a scouting party and the buyers rejected it. However, the fact that they could drive prices down, tells me that sellers are positioning themselves and the buyers are looking to take profits.

There are other threads and forums that recommend selling a 50% retrace of the Hanging Man bar - NOT FOR ME - I need to see the bars BEFORE it and the bars AFTER it, before I do anything. Yes, I might lose 100 or so pips in profit but more likely, I haven't lost anything.

Inverted Hammer:
The Inverted Hammer at the end of a downtrend is what a Hanging Man is at the end of an uptrend. So, for me, it is EARLY WARNING that a bottom may be coming in.

Similarly, an Inverted Hammer tells me that the buyers sent out a scouting party and the sellers rejected it. However, the fact that they could drive prices up, tells me that buyers are positioning themselves and the sellers are looking to take profits.

Again, there are other threads and forums that recommend buying a 50% retrace of the Inverted Hammer bar - NOT FOR ME - I need to see the bars BEFORE it and the bars AFTER it, before I do anything. Yes, I might lose 100 or so pips in profit but more likely, I haven't lost anything.

The Path of Learning focuses on the two more important reversal bars:

The Shooting Star and Hammer

Learn these, practice these and demo these and become an EXPERT on these before playing any other candles. There are many successful and profitable traders for which these two candles are the BASIS of their method.

I'm so angry with myself I could burn Baba G's pizza!

AstonDan thanked me for his TITZ! I don't remember sending him any TITZ I thought to myself (I seem to forget a lot these days). Now where was I, Oh yes, TITZ.

I need to remind all those registered on The Path of Learning to get their TITZ - but give Lance chance to get HIS TITZ and then put in the special place where you can get your own TITZ.

I highly recommed you get your hands on TITZ - you will not regret it and the feeling you get after, will make you better (and for some, bigger!).

I told the trouble and strife I have to go out to get TITZ and since then she hasn't spoken to me (again) - so it's just me and my 59 Stratocaster for a while.

Why am I so angry? Because I didn't see TITZ being Trading In The Zone by Mark Douglas. Damn, I'm losing my edge!

Strat,
Thanks again for an excellent post wrt the trading psychology. I have come to realise exactly what you have mentioned over the past few weeks, that one is cheating one's self when delving into the intraday charts on a daily entry.
It takes great discipline to open a daily position and then not even take a peek at the market in the day when sitting infront of an internet connected 'clever-telly' most of the day!!
I have fouled up recently on a couple of trades by moving a stop intraday based on a 1/4hr chart, only to be closed out and then have the market turn within a few pips of that wretched stop move!! So now I have a new rule never to look at open positions in the day. This has also involved me in deleting my SB's platform from my mobile phone - which I seemed to be checking at lunch time etc.
Still got a long way to go.
The post on the HMen and Inverted Hammers is great too. I have been 'lucky' in the past with both candles but when you look for them in old charts they do often signal a reversal is coming - but more often not just yet - you need to wait for the PA to get you in at significant SR levels.
Hammers and Shootin' stars are all we need to make money I believe; combined with patience - which is so hard as the human mind percieves so many possibilities on any chart; real discipline is needed. - just remember that we (retail traders) hold the greatest trumpcard as we can choose when to trade, if at all. City traders are paid to make money and are under pressure to perform every day!! We have the luxury of only taking the very best trades - so use that luxury troops!!!
Grim

1. https://cdn-assets.forexfactory.net/...ar19097_10.gif Baba G
2. Joined Sep 2006 | Status: Hors non numero nisi servitas | 733 Posts

Quoting AminAS
Sure, if I was incredibly dim I would have entered on a 25% chance. That is obviously not what I meant! Are you now going to try and send me your account details for a wire transfer?

If I entered a perfectly good PASR setup, and the market being the market puts up the PA to start moving against me, why not close it out when those signals become clear!!!!
Gentlemen.......what are you going on about.........if you learn what Strat and i have been saying and showing.....live........you will see that a play will not just "lose" but the price action on your chosen managment system will show you if you need to cut your loss and declare it "invalid" as the whole of your analysis is wrong.

A perfectly good PASR set up wont just suddenly go against you if you are perfectly good at selecting AND manageing PASR setups........

So if on your management system selected for that trade you have a signal to exit and you happen to be down you go,if your up your up....and so and so.....

This is why we build a system profile....so we dont have these kind of hustons when we are floating at sea in violent waves............g

Profit taking is VERY SUBJECTIVE and PERSONAL. What is one man's meat is another man's poison.

You have to try ALL the options available to you and find the one that you are COMFORTABLE WITH. I cannot tell you what I do because it is different each time depending on where I am in the trade, whether I'm just going to the ATM or whether I'm in a trend trade.

The Hammer and the Shooting Star is what those on The Path of Learning should focus on - nothing else. Learn how to use these for entry and CLOSING OUT a running trade.

1. Beachsitter
2. | Joined Apr 2009 | Status: Member | 4 Posts

Thanks strat for helping me with my indicator addiction. Your story finally got me through my twelve step program. Once I stayed clean for awhile and employed your longer term strategy I managed to stay away from the dealers down on the corner with the 5 minute magic rushomatic psychedelic black light poster charts. Not saying some of it isn't good..... just not for me. I had my best month trading to date. Never looking at lower time frames anymore just the Price action and S/R and nothing else. I know I have a long way to go but just being stressfree and not being clued to the tube, managing my money and holding onto the trades has really been helpful. Staying with the trades/trend and not getting spooked out when they retrace some has really helped. In other words setting the stop and letting it run until the next S/R level before doing anything has made a world of difference. Paralysis through analysis was leading me nowwhere and really understanding when to buy and sell based on what I see and not what some indie told me has gotten me in and out with consistent postive Pips. Thanks again for sharing.

The best advice I can give anyone starting out on The Path of Learning is, after learning the basics and PASR, is to take the two MAIN reversal bars, the Shooting Star and the Hammer, and only trade those signals until you know them inside out and the tricks they play. Forget about any others - they are a distraction - focus, focus and focus. Look on Daily, Weekly and Monthly charts - these are where you find the strongest and most reliable signals.
I also recommend you start and keep a journal on each Shooting Star and Hammer trade focusing on those candles - where were they? how long was the nose, body, where did they close? what was the sequence of bars prior to the candle? what was the size of the candle relative to the prior bars? etc. Observe where the next bar is after the candle, where did it open? where did it go? what did it do? Observe the swing after the candle, how long did it last? how many bars? Of course, all this should be done within the context of trends. Within your journal, you should take a snapshot of the candle, the bar(s) after it and the swing after it.
I see too many new and wannabe traders taking a trade and not really knowing why they took the trade and worst of all, not analysing their trades.
The analysis of your trades reveal EVERYTHING about YOU and where YOU are in YOUR trading. Those that don't analyse their trades have NO CLUE where they are in their trading development. Even worse, are those that do not analyse their WINNING trades. The analysis of a winning trade is EQUALLY as important as the analysis of a losing trade. We need to know what we did right and why we did it.

1. https://cdn-assets.forexfactory.net/...ar19097_10.gif Baba G
2. Joined Sep 2006 | Status: Hors non numero nisi servitas | 733 Posts

But hows about the old..."wait for a bit of price action".....thing......

Is this the new reality after the new reality ended up not being a new reality at all?
or is it a return to a fib of importance on a higher time frame price bar?or a break of
the afore mentioned price bar....and a new reality..............all i know and this is now the million dollar question that price action is king............

Reality is the only God there is..........ever tried to catch a falling knife without price action gloves.....no?......ok go on then......youll only do it once if your clever or poor

if your stupid and rich.........ouch............

REMEMBER just give me your money NOT the bloody bucket shops........g

Quoting psneto
oops indicator removed


If you don't learn anything else on here, young psneto, LEARN these two VERY IMPORTANT POINTS:

1) Jack of all trades - Master of NONE
I sent this PM to another EXPERIENCED trader on FF only last week:

""It's none of my business and you can tell me to piss off but I see you posting on just about every thread there is on FF commenting on methods and putting up charts. You will NEVER, EVER be a successful trader jumping about from one method to another. I know, I've tried it and lost $thousands to prove it. To be successful, you have to FIND what is COMFORTABLE and WORKS for you, stick with it, and learn it and practice it until you can do it in your sleep.""

His reply was VERY POSITIVE and said something like ""where were you years ago when I needed someone to tell me this""

2) INDICATORS
You have shown your true colours - you are using indicators for your analysis. Again, you will NEVER, EVER, be successful in PASR if you have to lean on and use an indicator as a crutch. As long as you refer to an indicator in your analysis, you are TRAINING your mind to be DEPENDENT on it. You have NOT accepted that PASR is the ONLY true method of evaluating price. Until you train your mind to study and SEE raw and pure PASR, you will not progress in your trading.

Furthermore, you are CHEATING and LYING to yourself which are LOSING traits in a trader. Trading brings out our personalities and characteristics and if you cannot be honest with yourself, you will NOT make it in trading

Finally, if this upsets you and you never visit this thread again, then I don't care - I ONLY want serious, committed students on here!