Plutonite's Trading Manual

Don't worry, I don't mind, I did it on purpose because if it doesn't hurt then people won't learn anything. Knowledge is painful

Price Action at entry points circled in white.

Accompanying trade on GJ, single entry point circled, very clean price action and coinciding bands.

Like the good little traders we are, we take a glance at the Dow every now and then to spot positions where the US stock market - tightly bound to the USD - is going to recover from a dip. Notice the entry points and compare the times to those in the above charts.

And if you look at the S&P 500 it's practically the same darn thing. 100% correlation almost.

GBPJPY is a derivative pair, most speculation happens on majors like GBPUSD and USDJPY, so we look for factors affecting these 2 when we trade.

As you can see, we do not enter arbitrarily when the price reaches the outside of a band. Rather, we try to gauge the price movements and only enter on solid H4 price action. Since we are predicting bottoms here, we close our trades if the price goes below the formed bottom (that phrase always tickles me, almost like saying the sexy bottom) in a sustained manner (over several hours).

In the USD example, the price rebounded off the band (26th Jun 12:00) as per the maths, but the market sentiment drove the yen crosses down again. We can cash in some profits to see what happens, and looking at all charts at the same time we see that GBPJPY still has room down to go, so on violation of the USDJPY low we enter short for a nice 50 pips or so UJ (120 on GJ) and quit right before the expected rebound at the vegas fib.

When GBPJPY reaches the very strong variance threshold and rebounds nicely, we enter long again on both pairs (see the white circle on chart 1b) and keep the long until fibs reached on the other side of either pair. Again, SL at the predicted low, which is not violated this time. GJ faces the resistance first (after another 200 pips of profit) and we cash in and watch the market. Nasty price action here, and UJ price action leads to a risky short with SL at the high.

The UJ short gives another 100 pips or so with slight hesitation at the bollinger band, but we hold on until the conundrum of bands and fibs at the second white cirlce of the UJ chart (1a). We enter long on convincing price action at July 3rd, 20:00 CET, and we aim for the sensible target at 123.40, which is reached before friday close for another 100 pips or so.

What kind of tea are y'all drinking? Whatever it is, make some more, and start asking stuff. If you say anything silly i will kill you. Only I am allowed to do that.

While not playing very well by the rules right now, GBPUSD was in a short-term downtrend channel not very long ago. Here are some hotsy trades from that period. Again, so far mostly successful trades shown here, no complicated scenarios yet.

Some Euro trades from the same period. GBPUSD and EURUSD are 2 of the trendiest, friendliest pairs of currencies you'll ever find. When the market factors increase due to increased participation in the majors, the resulting randomness benefits us for reasons discussed in the articles.

I'm out of tea. Look through the charts yourself to see if you can understand all this nonsense with the aid of calendar entries. It's a lot of pips, but a lot of effort.

Back later with more challenging situations.

Best Regards,
-P

Hi

From which lines will you be expecting the rebounds in order to watch the price action at that level? Vegas fibs, BBs, Scrats (I even do not know what this one is)?

It seems as if there is some line at any level.

Thanks in advance for clarification

Thanks for the charts plutonite. Looks tasty.

ok. Questions


on post 83 we take the pullback (bottom fishing at a confluence of fibs/'scrat' lines) however, in the very sexy uptrend at the left of the chart, price action seems to imply reversal on a number of occasions while interacting with both fibs and the inner 'scrat' line.

What led you to decide against entering losing trades on these occasions?

On post 86, we take a lot of entries, seemingly using a variety of confluences.

However in the centre of the chart there seem to be a number of possible price action set-ups around confluences that we didn't take. What is different with these areas?


Apologies if these seem like foolish questions.

trades taken after news announcements cause reversals at confluence,or prove unable to take a currency beyond them?

also many of the trades shown appear to be entered upon either

a) an initial spike

B) a retest of (recently) previously encountered resistance

Both. If unable to take it beyond, it is a sign of correctness on behalf of our indicators. Otherwise they help the price action in our direction. Strong, volatile movements are NOT "nice" because they are usually scalped in the opposite direction very quickly too. We look for steady action, helped by the news if possible.

ok.

Certainly most trades seem to have been taken after a strong prior move towards resistance.

on trade 1 on post 86, though, it appears you did not wait upon confirming price action (unless on a smaller time frame) and either

A) entered on the initial spike

B) set a sell stop once price had met resistance, presupposing a retrace would happen.

Good questions, but you are getting ahead here..I said I will talk about difficult trades next, dammit!

To answer you though, one word: Trends. The trend on all Yen crosses is upwards in the long term, and currently in the short term as well. I am VERY hesistant to short against a Yen cross, but I actually did enter short on a couple of these and lost maybe 20-30 pips only to make it back many times-fold when the top was obliterated. Same stop/reverse mechanism as described before.

The difference between the confluence we take and the one we don't take is our own discretionary understanding of the price action given all the pairs, charts, news, ..etc. They did not all look convincing to me, but there are a couple more I omitted inorder not to complicate the chart.

Best,
-P

How soon I enter will depend on how strong the movement against me was, and how steady the price action in my favor is. This is again a matter of experience and traders get accustomed to it when dealing with the push-pull game of the market for a long time. More illustrations of various situations will come.

Hi Pl,
Thank you very much for your efforts.
It’s not clear for me what is the purpose of all the indicators. Also, if you share with us the exactly rules for entering, exiting and stop-losses, we will definitely look at the charts with grater interest. Any way, you help me tremendously! Best regards! Scardi.

Hi scardi!

Please go back and read the articles written on the first few pages, they are vital to understand what is going on and on what the trades are based. We enter and exit based on price action and projections, as you will see.

Regards,
-P

Ok so far I think I follow everything. (still uncertain about the methodology for some entries, but if it is taken on the basis of specific price action then that is to be expected - you had to be there)

humbly await more belligerent charts.

More difficult, but still doable. Have a look.