Pattern/Price Action Trades | Forex Factory

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Pattern/Price Action Trades

  • #1
  • First Post: Dec 8, 2006 6:02pm Dec 8, 2006 6:02pm
My major trading strategy is here if you are interested http://www.forexfactory.com/forexfor...ad.php?t=10874. I am keeping a journal for my own sake. I hope to have some valuable critique to make my trading better. I'll post diagrams and explanations too to help me with review and for those who decide to read my thread.

First trade is unfortunately a loser. AUD/USD, I entered on a pullback from what I thought was the break of a 1-2-3 pattern and even though she was in for 15 pips profit at one time, she bit me in the end. I was playing the bounce off the major line of resistance of an upward sloping triangle. I traded smartly though because I reduced my position size after she broke the minor downtrendline, thus reducing my overall loss. Waiting to see if she breaks the upper resistance line on the weekly.
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  • #2
  • Dec 8, 2006 6:07pm Dec 8, 2006 6:07pm
Second Trade, A winner, EUR/JPY served up a nice pattern. A head and shoulders bounce off a fibo retracement, while on a 10 year uptrend. I don't trade the NFP, that to me is gambling and I've lost enough money on it to know I'd better stay out and look for a tamer thing to trade. I usually won't trade it, even if I see a pattern. Anyway here's the EUR/JPY trade.
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  • #3
  • Dec 8, 2006 6:17pm Dec 8, 2006 6:17pm
EUR/AUD looks poised to drop significantly. She seems to have formed a Bear Penant with a 5 wave elliot count inside of it. That says to me correction time in other words as far as the waves go. She's also hovering above a 1 month trendline, which if she breaks and pullsback, and closes below we will have a great entry. One thing I want to point out is, if she does break I already have a line of resistance just above the trendline and just to make things better I may enter on an hourly pullback of the break instead of a daily pullback...we'll see. I like to see little humps above the trendline just before it breaks, it give me a good idea of where to put my stoploss. Now there's some nice confluence at the top of the 5 wave of the elliot wave that suggests more movement down. We have good downward momentum, a head and shoulders pattern and fibo/trendline confluence at the reversal point. If this somehow goes according to plan, I'm looking for a move to 1.6100 - 1.6000. We'll see. For now here is the chart: I'm sitting back and waiting!!!!
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  • #4
  • Dec 8, 2006 6:29pm Dec 8, 2006 6:29pm
MY favorite thing to trade is a 1-2-3 and I missed this one on the GBP/JPY. I fear this pair honestly so I am reluctant to trade it, but she gave perfect action today, would have been some easy profits, by the way, the spike you see at the 2 point didn't really happen, its not as long as it shows.
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  • #5
  • Dec 9, 2006 7:53am Dec 9, 2006 7:53am
USD/CAD is looking like a great opportunity. She's broken a 4 year Trendline, a great event. She's formed a 1-2-3 in accordance with all my rules, and according to my trading strategy she should be headed to 1.1800. There is also the November 2004 low of 1.1715 which adds to the magnestism of this area. Will be monitoring this pair for further developments.
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  • #6
  • Dec 9, 2006 8:28am Dec 9, 2006 8:28am
Looks Like this could be a nice informative thread. Hope to be able to contribute to it and learn from it.
  • #7
  • Dec 9, 2006 8:57am Dec 9, 2006 8:57am
These are some very good looking technical observations. I have subscribed to your thread and look forward to sharing your ideas. It is also nice that you look at a some pairs that I do not. I can gain some insight on these new horizons. Good stuff.
Profit is where readiness meets Opportunity
  • #8
  • Dec 9, 2006 12:10pm Dec 9, 2006 12:10pm
Thread looks great, I am reading it now, and looking at the charts along with your posted charts. Please show some more examples and which currencies your actually watching. Thanks.

Monarch
  • #9
  • Dec 9, 2006 3:14pm Dec 9, 2006 3:14pm
Quoting Donadoney
Second Trade, A winner, EUR/JPY served up a nice pattern. A head and shoulders bounce off a fibo retracement, while on a 10 year uptrend. I don't trade the NFP, that to me is gambling and I've lost enough money on it to know I'd better stay out and look for a tamer thing to trade. I usually won't trade it, even if I see a pattern. Anyway here's the EUR/JPY trade.
I think this is a very well thought out strategy. I like the idea of entering at the first sign of a reaction to the left shoulder area. I like it because it is a low risk to reward ratio. Adding to the trade when the neckline breaks is another nice move.
Profit is where readiness meets Opportunity
  • #10
  • Dec 9, 2006 5:11pm Dec 9, 2006 5:11pm
Quoting FXopportunist
These are some very good looking technical observations. I have subscribed to your thread and look forward to sharing your ideas. It is also nice that you look at a some pairs that I do not. I can gain some insight on these new horizons. Good stuff.
I cannot take the credit for the strat, I learnt it from Phile Newton at www.trading-strategies.info. He's the mastermind. His trading style is simple, and absolute common sense...in some way. That being said, I hope to continue to make good trades using what I have learnt.
  • #11
  • Dec 9, 2006 5:11pm Dec 9, 2006 5:11pm
Quoting monarch
Thread looks great, I am reading it now, and looking at the charts along with your posted charts. Please show some more examples and which currencies your actually watching. Thanks.

Monarch
I have many examples, will post them tomorrow
  • #12
  • Dec 9, 2006 7:01pm Dec 9, 2006 7:01pm
Quoting Donadoney
USD/CAD is looking like a great opportunity. She's broken a 4 year Trendline, a great event. She's formed a 1-2-3 in accordance with all my rules, and according to my trading strategy she should be headed to 1.1800. There is also the November 2004 low of 1.1715 which adds to the magnestism of this area. Will be monitoring this pair for further developments.
Looking at the USD/CAD 1 Day Chart your point 3 Entry for Long is around the Sep 1st 2006 area.

I see the 61.80% Fibo was reached at your point 2 July 24th.

What would you be looking for when making the decision that point 3 area has been reached? (I see it from the hindsight view) - But during real time - what would indicated the bottom was near, or in fact was complete?

Now you went Long around the Sep 1st area, would you be watching the 61.80% Fibo again, or would you expect it to pass by this time, even though it resisted during November 17th area and dropped for a week or so.

When do you plan the exit strategy on this, or maybe you already exited this position?

Thanks,

Monarch
  • #13
  • Dec 10, 2006 4:51am Dec 10, 2006 4:51am
Quoting monarch
Looking at the USD/CAD 1 Day Chart your point 3 Entry for Long is around the Sep 1st 2006 area.

I see the 61.80% Fibo was reached at your point 2 July 24th.

What would you be looking for when making the decision that point 3 area has been reached? (I see it from the hindsight view) - But during real time - what would indicated the bottom was near, or in fact was complete?

Now you went Long around the Sep 1st area, would you be watching the 61.80% Fibo again, or would you expect it to pass by this time, even though it resisted during November 17th area and dropped for a week or so.

When do you plan the exit strategy on this, or maybe you already exited this position?

Thanks,

Monarch
I will explain how I played this this afternoon, I made some money on it but in parts. I did not play the move with one trade. Like I said after two years I am learning still and I do not have the strength to watch 70 pips drop off the face of the earth. So please bear with me.
  • #14
  • Dec 10, 2006 5:36am Dec 10, 2006 5:36am
Quoting Donadoney
USD/CAD is looking like a great opportunity. She's broken a 4 year Trendline, a great event. She's formed a 1-2-3 in accordance with all my rules, and according to my trading strategy she should be headed to 1.1800. There is also the November 2004 low of 1.1715 which adds to the magnestism of this area. Will be monitoring this pair for further developments.
\\

hi, i am starting to use 123's together with pitchforks. will post a chart later if interested

g
With a break always expect a pullback, otherwise, you're dead meat/
  • #15
  • Dec 10, 2006 4:01pm Dec 10, 2006 4:01pm
Quoting ghitz
\\

hi, i am starting to use 123's together with pitchforks. will post a chart later if interested

g
Always interested in finding new ways to trade this pattern. Your contribution is much appreciated
  • #16
  • Dec 10, 2006 4:42pm Dec 10, 2006 4:42pm
There are many examples of the 1-2-3 pattern some of which I posted in the strat thread. But if you want some more I will post some
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  • #17
  • Dec 10, 2006 5:09pm Dec 10, 2006 5:09pm
GBP/CHF again
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  • #18
  • Dec 10, 2006 5:39pm Dec 10, 2006 5:39pm
Quoting monarch
Looking at the USD/CAD 1 Day Chart your point 3 Entry for Long is around the Sep 1st 2006 area.

I see the 61.80% Fibo was reached at your point 2 July 24th.

What would you be looking for when making the decision that point 3 area has been reached? (I see it from the hindsight view) - But during real time - what would indicated the bottom was near, or in fact was complete?

Now you went Long around the Sep 1st area, would you be watching the 61.80% Fibo again, or would you expect it to pass by this time, even though it resisted during November 17th area and dropped for a week or so.

When do you plan the exit strategy on this, or maybe you already exited this position?

Thanks,

Monarch
I'd like to post something about my trading. I suffer from, I can't see 100pips and not take it LOL, most I've made in pips is 167, 3 times on the GBP/USD on separate days. My impatience has led to loses as well and also some lucky breaks as well as some lost extra profit. I played the CAD conservatively. Why? She's reversed and then reversed and then reversed again on my positions so many times. It leaves a sting. And so when she offers up 118pips on a trade I say thanks and exit. For the length of the run from the break of the trendline to the CAD's current position I made 234pips and lost 50pips.

I shall give one example because this takes a lot of time and I want to be ready for the week. But in the image I posted my first trade of the CAD upswing. Please believe me when I say some luck was involved LOL. The minor trendline you see in my diagram I had drawn because even though there was a breakout of it, there was some obvious measure of resistance at that trendline. The trade was confirmed for me when the 1-2-3 as a continuation pattern appeared. She broke the minor Trendline again, and proceeded to pullback to the trendline as well as touching exactly the 50% fib. She formed a small area of consolidation and then proceeded back up. I entered early at a pullback to resistance at 1.1190 to the target of a psychological round number of 1.1300. There are two more trades I made in this pair but I am pressed for time. Will talk about them if you want later.
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  • #19
  • Dec 10, 2006 6:25pm Dec 10, 2006 6:25pm
Thanks for taking the time to show you charts. I know it takes you away from trading. I am reading your thread once again, and trying to catch all of the Chart info, some information is small, but I am trying to associate myself with your strategy. Please do your trading, for that is the reason were all here, you can post more on the weekends if you have the time.

Thanks,

Monarch
  • #20
  • Dec 10, 2006 6:26pm Dec 10, 2006 6:26pm
I am currently rethinking my EUR/AUD strategy. If she breaks the current uptrendline I think I'll sit it out for now. My start says long and right now that is the only position I'm considering.
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