DislikedDan,
I could have easily been wrong and you could have used a 1.2140 stop and walked away with only a small amount of profit.
Everyone trades differently. Personally I don't pay any attention to targets. I will have points in mind where I think a trade should stall or turn around and if the PA shows me this - on the same timeframe as the one in which I entered the trade - then I will look to exit.
Otherwise, I will use breaks of these target points (particularly with PA) to ADD to my position. This is how you really make money in the market.
Euro/Usd was a recent example. I was looking at the Eur/Usd thread a lot when I was in this trade and it always struck me that whenever the majority of people in there were looking to close longs or go short, I was doubling up.
I made a lot of money on that trade.Ignored
Got the same trendline from late February and am wondering what happened to all those people constantly talking about the "fourth touch is the kiss of death".. I count around 5 touches now
- | Joined Mar 2007 | Status: Zoom out | 1,425 Posts
Razl,
Good spot on the USD/CAD IB you mentioned a few posts back.
This is winding up really tight and I am fairly sure that it's going to break sharply in one direction. Problem is, as ever, knowing which way it's going to go.
What are you planning to do with this Raz?
Wiz
Im having a hard time ignoring the fundamentals, but it really makes life easier to do just that, so Im really trying. Its much easier of course if you trade off daily or weekly charts, gets rid of most of the noise. Im still finding that stops have to be left at the bottom/top of the pin which means theres no way I will be able to take this many trades/week live. Dont think Im getting blase either after all this good luck, I am so pleased these are working
in fact I cant believe it sometimes..well, keep plugging everyone, its worth the work, take care and have a great weekend all, Raz
Never say never.
Dan,
This Eur/Usd has been the best trade that I have made in seven years of trading (two years of forex). This is not just because it has made me the most money but because I have planned it incredibly carefully and executed that plan with discipline and confidence.
It is going to be difficult for me to go into too much detail here but I will try and cover the main areas.
1. Entry signal was a pin bar that bounced off a ppz (pivot point zone) and the 150ema. It was also the 50 fib level of the last major swing low in January 2007.
Now the safe way to play this was to go long on a break of the pin and put your stop just beneath the low. However, I missed the entry (I cannot remember why) and saw that although it had briefly gone higher it had fallen back again and was heading lower. (see doji immediately after the pin)
So I prepared to enter if it had another attempt.
Now on the hourly chart I saw that although it fell it then rejected the lower levels and came right back and that there was an incredible resistance building at the top of that pin. At this point I had an instinctual feeling that once it broke it was going to rise sharply. So I decided to change tack slightly and take a huge position that was far, far higher than I could afford to hold but to place a very tight stop so essentially I would be in this only if it took off. The strength of the pin and its confluence and the resistance mounting at the point where I would have gone long anyway, gave me the conviction to do this.
2. Next stop was a break through the pivot point zone and a two bar high. Now there was potential support underneath and resistance not far ahead - a fellow trader on these boards called Rockrat referred to this as the "Chop Zone" - I'm not sure if this was his term but I love it and it summed this up perfectly. At this point, I moved my stop to breakeven to see what would happen. This was very hard to do because I was sitting on a huge profit but I have never been as certain of a trade in my life as I was that this was going higher.
As you can see price rejected the PPZ and closed below it forming a doji. This was the only time in the whole trade that I thought I might end up seeing all my profit disappear. However, next day, the price exploded sharply to the upside and I already had my second position planned. I wired in more money (that I really couldn't afford) and doubled up the position size on a break of the two bar high, putting my stop for both positions, just beneath the doji.
At this point I should say that at no time when I added to a position would I have LOST money. I always made sure that the stop on all combined positions would leave me with profit. So when I say I couldn't afford to trade this, I just meant that I didn't have the capital readily available to trade this. I had to borrow it from other areas in order to swing a massive line.
3. OK. Moving on. Price stalled again as expected at the next PPZ. This didn't worry me at all as I was fully aware that this was going to be choppy. What price action showed me was a doji, a pin bar and then another doji. The two doji's once again formed a two bar high. I realised that once this was broken price could easily go straight up to the next PPZ, so I put another order in there to add to my position and it was triggered the next day. This time I added another 50% of my total position size rather than doubling it. That is to say, each time I added, I did it by the same size as the position. (So first time you add you are doubling, second time you are adding 50%, third time you are adding 25% of you total position). I then put my stop for all 3 positions just beneath the pin.
4. Price then soared through 2 PPZ's. After the first up day my unrealised profit was so large that I was unable to look at it. I had to go into the platform, and go immediately to the orders page where I cannot see my open profit and place orders based on the charts without seeing what I was up allowing that profit to get me excited and make me close out. Yesterday, I went long with another 50% of the position and moved the stop on all of them to just beneath the penultimate PPZ at 1.3540. At this level, to give back over 100 points on a position of this size is very hard but I am determinded to stay in this. I always saw this targetting at least 137.00 before I was even in it.
The strange thing about this trade is all those PPZ's were drawn in before I took it and when I discussed it with Rockrat we could both visualise exactly what would happen. It's like we saw the trade plan out perfectly before it even happened. So much so that at point 3 I was happy and excited to see the price going against me because I WANTED that resistance to hold temporarily because I knew it would then be broken more powerfully.
I am not claiming to have a sixth sense - far from it - but this trade really did work out in a uncanny way for me.
And all the while I used the EUR/USD forum to see what others thought. You can see the posts where I was trying to tell people to go long and all you get is people telling you how the fundamentals point to it going lower and how they are adding to shorts. You get people taking positions and then exiting because their target resistance has been hit! I never understand this. If PA shows price is reversing then exit but why would they do this just because it hit?! At any rate, it always seemed to work out that just as people were closing or going short, I was adding.
I hope this helps, Dan. When you have conviction, make sure you are positioned to take advantage of it. Pin bars are two a penny but trades like this do not come along often.
Wiz
Thanks again for showing this ..... this is a great forum. Dan
Wiz I am glad you did so well on your trade, but I HAVE to chime in here and say that anyone who is starting to trade, just because you believe the trade is a homerun doesn't mean to throw your whole bankroll at it. Live to trade another day. Period. Stick to 1-2%(really 1% of your capital.)
I had to butt in here because it is super misleading for new people just wandering in here, to think if they see an A trade to start wire in money so they can swing a larger line then they can afford. That is really a disaster in the making. I understand after your first position(which you said you were swinging a much larger line then usual), that you made sure you were never not going to lose your profit(thankfully), but I just worry too much about new people and reading things the wrong way.
No matter how much you believe a trade is going to go your way, the fact is once you place the trade it is not up to you anymore. There are NO guarantees in this game, only high probability situations(from a chartist standpoint).
as James says rifle shots guys/gals
Have a good weekend all
Mike
LOL! just kidding Mike.
This is a very important point. I think it's very dangerous to change your established risk parameters when an apparent A trade comes up. Cuz sometimes these A trades turn out to be Fs. It's out of your control.
I was burned a couple of times back in the day when I pumped more money than the usual on trades that looked top notch. It's easy to dig yourself in a hole this way.
If anything, I sometimes drop my typical position size with trades that I don't feel are A trades (more like B+).
Take care everyone,
Tom
- | Joined Mar 2007 | Status: Zoom out | 1,425 Posts
This looks like a dangerous place to go long to me! Mike, wouldn't you say that's a pin in traffic? Or am I wrong...either way it worked - good stuff!
And yep, I see Eur/Jpy soared today...I have to admit even after I know how I "should" be thinking (trade with the trend) I still look at a steep uptrend and wonder where to start trying to short sell...probably why I am not quite there yet!
Never say never.
- | Commercial User | Joined Feb 2005 | 2,875 Posts
well put tom, its this breakdown in discipline that puts the whammy on so many new traders. we all end up doing it. i still fight it to this day. its an evil little voice we must ignore.
jim
jim
pffff..... Here comes Mike again with his "logic", to rain on the parade.
LOL! just kidding Mike.
This is a very important point. I think it's very dangerous to change your established risk parameters when an apparent A trade comes up. Cuz sometimes these A trades turn out to be Fs. It's out of your control.
I was burned a couple of times back in the day when I pumped more money than the usual on trades that looked top notch. It's easy to dig yourself in a hole this way.
If anything, I sometimes drop my typical position size with trades that I don't feel are A trades (more like B+).
Take care everyone,
Tom
