Thexder's journey to(ward?) freedom

Cable Hourly Scalp
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Feb Week 1: +223
Feb Week 2: +20 + 59 = +79

The day started without anywhere to place a 40+ range and there was a bunch of upward spiking so I waited until something cleared up. An upward move came and eventually I could straddle from 1.9490 to 1.9555 (there was more than 40 pips range and although all highs were higher highs, there was a big retracement so a top could be chosen) so I took a short from 1.9490.

After falling straight down around 1.9445 there was half an hour of consolidation which was a series of ascending lows and a hammering on a horizontal resistance, so I figured it was going stale and likely to either resume its down path or take out the upper resistance and fail, so I set the stop there and ended up stopped. It proceeded to form a new consolidation above this and then break even higher above that new range so it was a good exit.

After the short the hourly chart seemed to be moving in a controlled swinging way, taking its time to retrace back up over several candles without ranging around. A new candle closed with a lower high so a new fib was drawn from 1.9444 to 1.9537. Although this was the range I pulled and was large, another supporting factor was that by looking at smaller time frames, there was a retracement down from the range high of 1.9537 down to 1.9492 and then the long break occurred - so the trade range can be thought of as only 45 pips, not almost 100.

Looking at the M1 activity there also wasn't any wild behaviour, there was an upward spiraling consolidation heading toward break out long. Normally with a wide range like this I would worry about taking a break, especially the second of the day because sometimes the momentum begins way down behind the break out point within the wide range so it's exhausted by the time it breaks out. But with this controlled M1 consolidation below the break out point it was worth it because the price action was more stable plus there's lots of places to put a tight stop behind many levels of support leading to the break.

The break out shot straight up for 5 minutes and then started forming support levels in a clean stair step pattern until a top was chosen and the trade was exited at 1.9603. There were three attempts at exactly the same horizontal support of 1.9593 on my chart in half an hour and a lower high had formed in the middle of this, so the trade is going stale.

Hourly Assisted Daily Method
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EUR/JPY: Buy at 156.10

Jared: Does this chart look vaguely familiar? Consider my thesis almost complete.

I've been dabbling in long term trades on E/J while I fine tune the method of the PDF on that subject, and I've been getting stopped out a lot, but that's at break even because I've been moving my stops as soon as I'm in significant profit.

I've been up near +150 at times last week and still taken break even from it because I'm trying to catch a big move and let it ride. The reason for stop outs is clear from the charts, there's been a consolidation going on so a lot of whipsaws.

For this reason I'm highly satisfied with my results - preserving myself in the rocky times on time frames up to daily. And today I took a long trade when I saw a break from consolidation.

My normal PDF rule says to wait for a daily bar close before considering the trend to be set, then look for lower time frame setups, but I've been following the charts so much over the last week that I knew it was breaking out.

I bought at 156.10 based on the fact that all three time frames were at least temporarily trending up, and doing so decisively. It looked like the consolidation on the daily chart could potentially be broken (a week of bars near the same high) and now it has been broken finally.

The hourly chart is going almost straight up for the past 7 or 8 hours, same with the 4 hour chart.

I've also been monitoring the 5 minute chart as a guide to price action and trend strength. It's been rising at 45 degrees and not really retracing at all. All signals were Go for a long.

Since price is going so far without taking breaks, I don't want to sit through a correction on this so I have a trailing stop that I chose based on the activity on the 5 minute chart, seeing how much swing there is on the increments upward. I'm already sitting at a locked in +40 which is fine with me.

Another reason I took the trade is this carry trade pair likes to trend up, and I might have caught it at the start of a new trend, at least a short term one. Whether I get stopped out or not, the momentum should be there now to allow re-entries based on the normal rules of confirming the trend across the charts and trading swing breaks with the trend.

Cable Hourly Scalp
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Feb Week 1: +223
Feb Week 2: +20 + 59 = +79

No change in the hourly scalp count from day 3 of the week. Broke even with a failed short followed by a mediocre long.

Hourly Assisted Daily Method
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Took profit on the E/J trade yesterday at the red line when things ran out of steam, then started buying on the following green lines today when the daily long bias kicked in again. It looks like it's about to run out of steam for the day again, the momentum is rounding off at the current "top" but there's profit locked in.

Hourly Assisted Daily Method
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Feb 12: +40 E/J
Feb 13: +114 E/J
Weekly: +154 E/J

Exited all long positions taken today when the hourly turned downward. Total of 3 mini lots were in play at various scale in points along the up trend but given the way the price action topped and turned down, the gains of the second lot were cancelled out by the losses on the 3rd lot where the stop occurred, so it was like only the first lot were in play all along, giving +114 still for half a day's work just casually checking the screen every so often, even went out and did some grocery shopping between trades as well as shoveled snow.

Total from the last 24 hours or so: +40 +114 = +154

Not bad for trading while sleeping.

I had to wake up to go to the bathroom.

Cable Hourly Scalp
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Feb Week 1: +223
Feb Week 2: +20 + 59 +22 = +101

Went long at 1.9663 since that was the high from the biggest 40+ range that started out. Didn't like the fact that the break had shot up steep from about 20 below the break out area, so I thought it might be rough because by the time I got in and it went a little higher, it would have been time to consolidate and that's what happened. Then it started doing the wild & crazy thing to a point where I didn't know what to expect. It was making new highs here & there but it kept coming back down to the same low horizontal support so I was never able to move my stop beyond +22 and it dragged out for over an hour and a half before I was kicked out.

Cable Hourly Scalp
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Feb Week 1: +223
Feb Week 2: +20 + 59 +22 +40 = +141

Approximately on par with weekly expected performance. Maybe there'll be another trade left this morning but I don't feel like risking it. Overall the last two weeks combined have averaged the most yet due to the big gains last week.

Hourly Assisted Daily Method
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Feb 12: +40 E/J
Feb 13: +114 E/J
Weekly: +154 E/J

Looks like I'm ending the week with my latest E/J position still open and sitting near break even. There is some ranging going on and I doubt it will go anywhere in the next 45 minutes of the end of the week. Maybe I'll close it and re-open it when I confirm there's no gaps in a few days.

So not bad, I didn't trade the whole week and I still got +154 this week which is a coincidence because that's my usual cable scalp return rate. But given that E/J is ranging I would expect in other weeks to have a lot more and hopefully be filtered against major loss when things go sideways (kind of like now).

If I get time on the weekend I might look at another pair with this method and see if I can double up on the activity, maybe I can start pulling in some good returns and also diversify so I'm not always worried about a trade going against me.

I want to pay attention to when typical trade opportunities occur if there is a general pattern - if I can find another pair that tends to have trade opportunities around the same time as E/J, it makes it easier to trade. On the other hand if I find a pair that has most of its entries in times where E/J is idle, it gives me flexibility to trade any point in the day that is convenient for me day to day.

Cable Hourly Scalp
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Feb Week 1: +223
Feb Week 2: +141
Feb Week 3: +45

The evening ramped up in a clean sequence of higher high/higher low candles right up to the time I'd normally start placing a trade and then a lower high candle closed, giving a place to pull a fib. A short break came at 1.9566 and fell cleanly down, then got stuck in a sideways range on M1 for a long time, almost getting stopped several times as it formed a horizontal resistance just under the stop price. Eventually it broke the lower support and continued down a little but then retraced back up and started forming some minor M1 resistances and kept breaking them on the way up, so it was time to choose a bottom. A lot of time had passed, the move lost steam, etc. I chose one of the short term upper resistances that formed on M1 as a tighter stop point and got out with +45.

Got stopped for break even on a cable long (too hairy tonight) but I'm doing ok with E/J on the longer term.

I held 1 lot over the weekend which is still going long and I added another yesterday and one just now...Anything can happen but right now I'm up +110 on E/J. If it works out I'll post some charts of how it's been lately.

The hourly assisted daily on E/J has been whipsawing lately even by following my own discretions of trading only when I feel there is a valid peak to trade, and taking the extremities of it to be sure etc...

Here's the past few weeks on the hourly chart, all marked up with things I'll explain here, and a reference daily chart.

From the daily chart it seems there is resistance right now from recent stall points so it makes sense and could have been anticipated, and using the info I marked on the hourly chart, these symptoms could have been evaluated as price neared the daily chart's potential resistance. All previous resistance points could end up posing no problem and price could sail through, but we'd also see this by analyzing the hourly chart for cleanliness and take the trades as such. It turns out that the hourly chart gets very hairy and lots of cautions spring up that could minimize whipsaws.

On the left of the chart there is an up trend in place that was moving far and clean (no major spiking, all swing movements were smooth etc). Then price ran into the resistance zone apparent on the Daily or 4 hour charts. The bottom of this zone is marked by a horizontal red dashed line. As soon as price moved into this zone, we'd want to pay attention to the price action to see if it continues to cleanly trend or shows signs of trouble.

The first pull back within the resistance zone, marked by the first yellow down channel, suddenly becomes very noisy...unlike the price action during clean trends, there are lots of long spikes spanning the width of the channel. A sign of a struggle/battle and worth using caution.

If a long trade is taken after this channel pull back, it would be soon exited either by stop for a loss or discretional exit for small profit or break even. This occurs in the red triangle. The up move after the channel reaches a new high but then collapses, falling below the previous low, engulfing the most recent swing move. At this point the up trend is especially in danger of entering a ranging period since there is no new higher low to match the higher high.

The low to high range of this triangle is bounded on the chart by the two red horizontal dashed lines. It may be wise to wait for a break out from this boundary before confirming a trend either way. The price action after the red triangle's counter trend engulfing is another noisy channel with lots of minor swings and lots of spikes showing more resistance. The overally longer term trend is still mostly up so we look for longs, but as price idles noisily toward the upper red boundary line, it becomes apparent that it would be wise to wait for two things:
1) A break from the upper range line followed by a pull back that does not re-enter the range, and a new long entry triggered outside the range
2) The noise on the price action should clean up before trades can be considered stable

There are a few penetrations of the upper resistance but the swing moves close with their lows back inside the range boundary. Then a valid break occurs, circled in yellow. A new swing high and pull back form above the range, then a long break occurs. The trade again reverses and would fail but at least a lot of whipsaw was avoided up to this point. Every system has failed trades.

When this trade fails, the down move again engulfs the prior activity and a new ranging period should be considered, marked by the green triangle and bounded by the green/yellow horizontal dashed lines.

By the time price has fallen to the low of the green triangle, the 4 hour trend has temporarily reversed to a short bias so no trades at all can be taken until price rises somewhere above the top red dashed line from the previous range boundary. At this price, the 4 hour chart's trend would have returend to long and hourly long trades are permitted.

By the time any hourly long trades could be considered, price action begins to get noisy again and the price is near the upper range boundary line so it's best to wait for a clean break out of the range with a pull back and resumption all above the green range.

Up to present, there are several false breaks and still lots of noise, so it's time to wait and see.

Here's the price action leading up to that stall point from the longer term resistance. Notice how clean the peaks are as well as the bars compared to how noisy it gets when it encounters trouble. This is how to sense trouble right when it starts like that first pull back noisy channel we saw.

what's going on Cable Hourly Scalp?
I care it so much

I didn't do much with cable this week, computer problems so instead of sitting watching the chart I was sitting installing Vista (again) and then wondering why, as an administrator and the only user account, I wasn't allowed to save files on the hard drive, secure web sites gave certificate errors suddenly (but not on the laptop with vista), and I wasn't even allowed to install my motherboard's driver CD due to access restrictions. It's been an unproductive week.

Cable Hourly Scalp
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Feb Week 1: +223
Feb Week 2: +141
Feb Week 3: computer problems
Feb Week 4: +15

+15 to start the Sunday evening with a short from 1.9648 down to a consolidation and retracement that triggered a stop almost 45 minutes into the stalled trade. The fib was pulled across the last 40+ pip range from Friday that encompassed all following candles leading right up to London tonight where the break out finally came from that range. Most of the evening candles were small in size but they were all trending down with lower highs and lows, then there was one pull back hourly candle with a higher low just near the fib range lower limit, so from there, a short break out was a confident trade and it did shoot immediately down around +20 profit at the fib target 61.8% extension. That's where it sat and then started drifting back up so it was time to get out.

I'm not counting Feb week 3 because I had computer problems and didn't trade for days while re-installing and getting setup again.

Cable Hourly Scalp
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Feb Week 1: +223
Feb Week 2: +141
Feb Week 3: computer problems
Feb Week 4: +15

Had a failed short trade followed by a successful long trade, balancing out to nothing changed from yesterday.

The first swing had a retracement beyond 61.8% after it failed so a new trade in either direction could be taken. The retracement also gave a 40 pip new fib range to immediately pull and watch for the first break.

Cable Hourly Scalp
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Feb Week 1: +223
Feb Week 2: +141
Feb Week 3: computer problems
Feb Week 4: +15 +38 = +53

Even though yesterday was a big up move, I followed the break out rules in tact without bias because you never know when something like today might happen. Another long break came without much retracement of yesterday and it went well considering it would have been expected to be running out of steam.

Hi Thexder
I found a lot of great info from you in this thread and the other Fibonacci thread. I have started looking at the scalp method, which I think looks very promising so far. I plan to do some testing of this method myself as soon as I'm sure I know some more about when to put on trades.
It was a nice long trade earlier today which you posted, and I wonder if you think the next setup is valid with a short entry below 1.9865? The hourly candle shows a lower high, and I have drawn the fib from the high of the previous up move at 1.9970 to the low of the next candle (which made the lower high) at 1.9865. Where would you put your stop loss on this trade? When looking at the M1 chart I would think approx 1.9915, however that is 50 pips above the entry.
Do you have a maximum stop loss on this method you trade?

I didn't take any more trades but here's the next setup and analysis I would have used.

After the long trade was presumed finished I would look to M1 to see where the run upward really began. In this case I could look at the chart 2 different times and see the run beginning at 2 different points so I've marked both possibilities. One is right at the hourly bottom where the first breakout swing low was and another would be somewhere above that since there was M1 retracement along the ride up from the very bottom to the higher low blue line, and from there it ran more clean. On the wider fib the stop would have to be around 40 pips by the time an entry comes which I find too big. I get nervous when it's much more than 20 for a stop. I marked the stops in red lines and circles. I marked a stall point that could provide a stop more like 20, so I might be inclined to use that if trading the break of the wider possible fib. If price rolls back to there anyway things may be in jeopardy so why take a hit of 40 when I can do it for 20.

The tighter fib has a short break that has an initial stop around 20 and that is more reasonable. If that trade were taken the stop could be trailed down so the failed short only costs maybe -10, and I think overall that does look like the better initial fib setup the more I look at the chart to find the beginning of the long break. I think that's the one I'd have chosen and not taken much damage.

Back to the longer fib range break outs, I show two orange breaks but the first one is only by 2 pips on this chart. My pending order would not have picked that up with the padding so the second true break would have been taken, and then rolled back for a failure without creating any new stop points so the loss would be between 20 to 30 with spread by using the stall point of the break out down thrust as a stop instead of the 40 pip peak.

I still might not have taken any trades because the day has already had a movement greater than 100 pips during the long break (my decided average daily move for cable - when it's moved this far I consider the day done), I would probably stay out the rest of the day (which is what I did). If this were the fisrt setup of the day I would probably take the trade with the higher blue line as the low break and take a small loss for the day up to that point.