Predicting Short-Term Direction and S/R Using Indicators

USDJPY

Corrected. Thanks. Gets a little busy with different charts on one monitor and annotating screenshots on another.

Added to USD/JPY position at 146.682, bringing the breakeven to 146.898

I might look to enter at 146.51 if pa looks good

Every trade needs to "breathe", but if your trade goes against you, based on your demeanor, there are a few ways to handle it: (all of these assume you are still confident in the overall direction of the initial trade)

1) If your account is big enough, you can just do nothing. I don't recommend that, because a drawdown limits your ability to trade other pairs when you have the original trade open.

2) If you have the funds, you can add to your position like I did above. This lowers your breakeven to a more manageable level. I will only do this at 40 pips or more change from the original price.

3) Get out of the trade, let it do what it wants the opposite way, and then get back into it at the price you got out. This prevents any drawdown on your account, and still give you a good position when you get back in. This is the method I normally use IF I'm going to be able to be at the computer.

Many people get stopped out because they set stops too close to the original price. If you go to the lower time frames, you will see how each trade needs to breathe. If you trade off the 1hr chart, look at the 5min chart to see the range. Doesn't mean it isn't going to do what you expect, it just has to fully grow into your profit. And keep in mind it may take 2-3 candles to get there on 4hr and below, and if you trade off the Daily candle, you have a 24hr period the trade can breathe in before you get your profit. So make sure you don't panic before you need to...I traded with a guy that if it went 8 pips against him, he was out no matter what. That strategy just doesn't work, because often it would go 10-12 pips against him and then right back into profit, but he would miss it because he was then scared to get back into it.

Bottom line: find a system that works and you are comfortable with, learn how the different timeframe charts interrelate to each other and get control of the a trader's killer emotions (fear and greed).

My 2 pips worth...

nice work, missed my entry

Breakeven at 146.898
Out at 147.082

A little over 18 pips profit.

Another USD/JPY trade off the Daily chart.

I used the lower time frames to see when their RSI was turning up to get in at a good price, as the Daily candle itself doesn't lend itself to that detail of information.

Out of the USD/JPY trade, for now anyways.

In at 146.769
Out at 147.036

A little over 26 pips.

Back into the USD/YEN off the Daily chart, using the 5min chart for entry.

In at 146.974

Added to USD/YEN position off the 15min chart.

Added to position at 146.729
Breakeven is now 146.852

USD/JPY Daily chart looks good for a decent trade. I will probably let run a little more than my normal 10+ pip goal, keeping an eye on the lower time frames for resistance levels other than the Daily chart levels.

Out of USD/JPY trade off the Daily chart.

Out at 147.419
Breakeven at 146.852

A little over 56 pips. I'm done for the night, I gotta get up to see the SpaceX come down in the wee hours of the morning.

One more thing for a visual reference: See how the 1hr chart/30min chart/15min chart all indicate the price is ready to come back down, at least some amount? You add that info to the major resistance of the 4hr chart mid-BB, and it gives a pretty good visual representation that it is time to get out, and if you do so at the beginning of the candles, you are able to squeeze out a few more pips before it starts going down a little.

All timeframes can give you information on your trade, you just have to look at them and understand what they are telling you. As you can tell, I use them a lot and for the way I trade, they make a world of difference.

NZDUSD M15, going to have a go here if I get a chance after spreads settle on open.

Out of curiosity, what are you basing the trade on?

divergence at the time

no entry

Be careful about only using RSI for a divergence signal. I've been bitten by that in the past, that's why the only RSI divergence I use is what I described earlier in the thread. I found out in the beginning that I always needed more than one indicator to determine a signal, and price and RSI are locked in together for my RSI Divergence signal. Took me a few losses to figure that out exactly, but I finally did and it typically works great the way I read it now. Doesn't happen too often on the higher time frames, but it is good when it does.

I'll be watching the GBP/USD Daily chart for the next couple of days to see if it forms an RSI Divergence pattern. If it does, it will be a good trade.