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Precision, low-risk entries for discretionary systems.

  • #1
  • First Post: Aug 17, 2005 10:10am Aug 17, 2005 10:10am
I've created this thread for the purpose of discussing precision, low-risk entry techniques to be used with discretionary systems. This is a spinoff from the thread located here:

http://www.forexfactory.com/forexfor...ead.php?t=2609

Please read the thread referenced above to get into context, and then share your technique for identifying discretionary entries that are both precise and low risk. By this I mean that once the trade entry is made, little to no counter-trade movement takes place, thereby allowing very low-pip stops to be set.

I look forward to your contributions.

Dial
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  • #2
  • Aug 17, 2005 10:25am Aug 17, 2005 10:25am
diallist,

Thanks for starting this thread.

Per my post on the prior thread... I am here with my pencil poised, my eyes and my notebook open. Ready to fill in my knowledge gap. Will contribute as I am capable on this subject.

Lou
  • #3
  • Aug 17, 2005 11:13am Aug 17, 2005 11:13am
I think the less risky pair is AUD/USD and is suitable for small speculators because to open position you need as little as 7700 USD (this may change as rate will change). Also EUR/CHF is less volitile and moves into narrow range. I think one of the very risky pairs is GBP/USD
kiss the trend
  • #4
  • Aug 17, 2005 11:19am Aug 17, 2005 11:19am
Well, I have had a pretty good experience with Cable (GBP/USD) and trade it nearly all of the time. Aussie a little bit.

But what we are looking for here are tactics for entering on pullbacks.

Lou
  • #5
  • Aug 17, 2005 1:14pm Aug 17, 2005 1:14pm
Quoting Lou
Well, I have had a pretty good experience with Cable (GBP/USD) and trade it nearly all of the time. Aussie a little bit.

But what we are looking for here are tactics for entering on pullbacks.

Lou
Quite right Lou. Tactics for entering on pullbacks is in line with the context of the parent thread referenced in post 1 of this thread. However, I hope this does not dissuade anyone from offering alternative detailed tactics.

While it is true that fx-trader777 did not offer a specific tactic, I nevertheless think it is valid to look at which pairs would provide the best low-risk foundation to which detailed tactics may be applied.

Thanks for your post.

Dial
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  • #6
  • Aug 17, 2005 2:15pm Aug 17, 2005 2:15pm
Doesn't a pull back occur usually because it hit a level of resistence?
Fdisk Please I just want a few pips. Is that too much to ask?
  • #7
  • Aug 17, 2005 2:30pm Aug 17, 2005 2:30pm
Pull up any major US-pair and use a 21, 75, and 200 EMA. Just look carefully at how price relates to these averages. Befriend the trend.

-Liz
There's always money in the banana stand.
  • #8
  • Aug 17, 2005 2:33pm Aug 17, 2005 2:33pm
Quoting fdisk
Doesn't a pull back occur usually because it hit a level of resistence?
Yes, long positions that are moving up can pull back after hitting resistance, while short positions that are moving down can pull back after hitting support.

Additionally, pullbacks in either direction can occur when there is no apparent support/resistance because of profit taking which causes a pullback of an uptrend, and buying at a perceived low price which causes a pullback of a downtrend.

The pullbacks mentioned in the previous paragraph, whether caused by a spurt of buying or selling, "create" a point for support/resistance. Traders expect these points to be respected in the future, so they become a self-fulfilling prophecy.

COME ON FAN-FOUR! JUMP IN HERE!
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  • #9
  • Aug 17, 2005 3:11pm Aug 17, 2005 3:11pm
Quoting LizardGizzard
Pull up any major US-pair and use a 21, 75, and 200 EMA. Just look carefully at how price relates to these averages. Befriend the trend.

-Liz
Hi Liz, what has your experience been with using these averages? Could you also share with us the time frame you use?
Steven
  • #10
  • Aug 17, 2005 3:47pm Aug 17, 2005 3:47pm
Quoting diallist
Yes, long positions that are moving up can pull back after hitting resistance, while short positions that are moving down can pull back after hitting support.

Additionally, pullbacks in either direction can occur when there is no apparent support/resistance because of profit taking which causes a pullback of an uptrend, and buying at a perceived low price which causes a pullback of a downtrend.

The pullbacks mentioned in the previous paragraph, whether caused by a spurt of buying or selling, "create" a point for support/resistance. Traders expect these points to be respected in the future, so they become a self-fulfilling prophecy.

COME ON FAN-FOUR! JUMP IN HERE!
i am going to watch for a while. man diallist you have come a long way. maybe it should be the fab-five. you always hit the n key which totally cracks me up.
  • #11
  • Aug 17, 2005 4:23pm Aug 17, 2005 4:23pm
ScPeter,

They are very functional on ALL time frames including 1 minute, but I use my main point of reference for large trends on the 30M chart. The 5 is for fine tuning. When price stays below the 21 and 75, one must be short, unless it is a brief toe-dipping below the waters. Tis nice when price jumps through the averages, then retreats, then moves beyond the first test. You do NOT want to go against this signal.

I find the averages to be extremely useful trend indicators. They are especially useful when price bounces (spikes) through the averages and then rebounds. Very telling. The 200 is powerful S/R. Bounces off this level are important. Its a great way to ride long term trends, but could easily be used on 5M charts for intraday trending. MACD is a useful filter, whereas divergence is present and price rejection occurs at the averages. GREAT place to go counter-trend to catch a top or bottom with a tight stop.

-Liz
There's always money in the banana stand.
  • #12
  • Aug 17, 2005 4:29pm Aug 17, 2005 4:29pm
Quoting LizardGizzard
ScPeter,

They are very functional on ALL time frames including 1 minute, but I use my main point of reference for large trends on the 30M chart. The 5 is for fine tuning. When price stays below the 21 and 75, one must be short, unless it is a brief toe-dipping below the waters. Tis nice when price jumps through the averages, then retreats, then moves beyond the first test. You do NOT want to go against this signal.

I find the averages to be extremely useful trend indicators. They are especially useful when price bounces (spikes) through the averages and then rebounds. Very telling. The 200 is powerful S/R. Bounces off this level are important. Its a great way to ride long term trends, but could easily be used on 5M charts for intraday trending. MACD is a useful filter, whereas divergence is present and price rejection occurs at the averages. GREAT place to go counter-trend to catch a top or bottom with a tight stop.

-Liz
Thank you Liz, I will check these things out.
Steven
  • #13
  • Aug 17, 2005 4:31pm Aug 17, 2005 4:31pm
Quoting LizardGizzard
ScPeter,

They are very functional on ALL time frames including 1 minute, but I use my main point of reference for large trends on the 30M chart. The 5 is for fine tuning. When price stays below the 21 and 75, one must be short, unless it is a brief toe-dipping below the waters. Tis nice when price jumps through the averages, then retreats, then moves beyond the first test. You do NOT want to go against this signal.

I find the averages to be extremely useful trend indicators. They are especially useful when price bounces (spikes) through the averages and then rebounds. Very telling. The 200 is powerful S/R. Bounces off this level are important. Its a great way to ride long term trends, but could easily be used on 5M charts for intraday trending. MACD is a useful filter, whereas divergence is present and price rejection occurs at the averages. GREAT place to go counter-trend to catch a top or bottom with a tight stop.

-Liz
good stuff here.
  • #14
  • Aug 17, 2005 5:51pm Aug 17, 2005 5:51pm
Quoting LizardGizzard
ScPeter,

They are very functional on ALL time frames including 1 minute, but I use my main point of reference for large trends on the 30M chart. The 5 is for fine tuning. When price stays below the 21 and 75, one must be short, unless it is a brief toe-dipping below the waters. Tis nice when price jumps through the averages, then retreats, then moves beyond the first test. You do NOT want to go against this signal.

I find the averages to be extremely useful trend indicators. They are especially useful when price bounces (spikes) through the averages and then rebounds. Very telling. The 200 is powerful S/R. Bounces off this level are important. Its a great way to ride long term trends, but could easily be used on 5M charts for intraday trending. MACD is a useful filter, whereas divergence is present and price rejection occurs at the averages. GREAT place to go counter-trend to catch a top or bottom with a tight stop.

-Liz
Now yer talkin'!! Great stuff Liz! Thanks!
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  • #15
  • Edited Aug 19, 2005 9:02am Aug 17, 2005 5:55pm | Edited Aug 19, 2005 9:02am
Quoting james16
i am going to watch for a while. man diallist you have come a long way. maybe it should be the fab-five. you always hit the n key which totally cracks me up.
Why, thank you Jim. :o If I've made any progress, it would not have been without the help and inspiration I've gotten from you.

What's an "n key"?
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #16
  • Aug 17, 2005 6:26pm Aug 17, 2005 6:26pm
ok dialist, i have a precision, low-risk entry techniques to add. this one takes small profits, but you can usually get away with a very small stop.

between the hours of 5pm and 6am EST (not later because volatility is too high), if you see the euro yen or pound start moving strongly toward R1 (pivot point), enter about 25pips from R1, and exit about 2 or 3 pips before price reaches R1.

it works the same, in reverse, for S1.

the reason i believe this is a low risk entry technique is because the pivot points act like a magnet and doesnt allow pullbacks (unless the market is really changing direciton). a stop of 10 - 15 pips does the trick.

i used to trade this heavily a year ago. i ended up dumping it though because i was getting eaten up by the spread maybe somebody could fix that problem though
Relax and be happy.
  • #17
  • Aug 17, 2005 8:01pm Aug 17, 2005 8:01pm
btw, this just happened on the yen about 30 minutes ago...

long at 109.94, exit 110.15.
Relax and be happy.
  • #18
  • Aug 17, 2005 11:38pm Aug 17, 2005 11:38pm
Quoting merlin
ok dialist, i have a precision, low-risk entry techniques to add. this one takes small profits, but you can usually get away with a very small stop.

between the hours of 5pm and 6am EST (not later because volatility is too high), if you see the euro yen or pound start moving strongly toward R1 (pivot point), enter about 25pips from R1, and exit about 2 or 3 pips before price reaches R1.

it works the same, in reverse, for S1.

the reason i believe this is a low risk entry technique is because the pivot points act like a magnet and doesnt allow pullbacks (unless the market is really changing direciton). a stop of 10 - 15 pips does the trick.

i used to trade this heavily a year ago. i ended up dumping it though because i was getting eaten up by the spread maybe somebody could fix that problem though
Merlin, is it just these 2 pairs that you like for this system. The EUR/JPY and the ???? when you say pound do you mean GBP/JPY or GBP/USD? Thanks for the tip.
Steven
  • #19
  • Aug 18, 2005 12:02am Aug 18, 2005 12:02am
Quoting scpeter
Merlin, is it just these 2 pairs that you like for this system. The EUR/JPY and the ???? when you say pound do you mean GBP/JPY or GBP/USD? Thanks for the tip.
Merlin can correct me, but I took "euro yen and pound" to mean EURUSD, USDJPY and GBPUSD.

Hey Merlin, am I correct in assuming you're using daily pivots on a daily chart? Thanks for the entry technique! Very interesting!

Dial
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #20
  • Aug 18, 2005 7:49am Aug 18, 2005 7:49am
Quoting narafa
Well, what time frame are you talking about to apply those MAs?
Take a look at post # 11 in this thread. That post should answer your questions.
Steven
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