No Brainer Trades

Quoting Money-RX

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Tough call but I am waiting for 102.76 for a short. IMO price looks like it can go either way as the trading starts on a Sunday night.

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Quoting Money-RX

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Tough call but I am waiting for 102.76 for a short. night.

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Quoting Mary Pippins

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Excuse my ignorance but what makes a start on Sunday night different?

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Quoting Mary Pippins

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The CHFJPY looks like a pretty clean "No Brainer" to go short, though one would have to se what the gap is gonna be like.

If the gap is up, even better, then I'll short it with a 20 pip S/L and a first target at 100.37.

If the gap is down I have to see how big it is and assess it from there, whether I jump straight in or wait for a gap closure, but a gap anything within 10 pip an immediate short from my side.

Damn, I didn't manage to catch up on Friday, else I would have shorted it then.

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Quoting Money-RX

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Thin trading combined with holidays in UK & US = abnormal conditions.

I am not saying your trade is a bad trade - could very well have topped out around 101 and is heading back down. I just don't trust Sunday night action until things start moving later this evening.

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Quoting Iron-man

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These are two wonderful words to utter, as it comes at the end of a meal. Think about it, you get to peruse the menu, decide what you are in the mood for, perhaps take in the recommendations of your server, order, enjoy and only when you are completely satisfied do you feel the need to catch the attention of those who care and softly make your request known, “Check, please.”

Now what’s wrong with that? Well…. Nothing.

If only trading could be like that. Well…. Maybe it can.

Let’s see.

We already get to peruse the menu. Many currencies to trade, even gold and silver if you are so inclined.

We certainly get to decide what our mood fancies. Hmmm….. let’s see, do I want the tight spreads of the Euro or the volatility of the Cable?

We are free to take the recommendations of people who have earned our trust. Long live Billy Ray! Give me a B. ……………….Ok I’ll stop.

We are free to place our order when we are ready.

So all that is left is enjoy and check please. Now some of you are saying, “go ahead hotshot! Prove that!"

Sometimes the enjoyment of the meal is determined by the restaurant we choose in the first place. (the method we use to find trading opportunities.) Support and resistance and price action are fine dining at their best!

But one of the questions I am asked a lot (through PM and personal conversation) is how do I know when to exit? (Check Please!) There are many choices but I want to share one that fits very well with this thread and a couple others that are ok. (So here are your server’s recommendations, ready?)

One I have used in the past is to use a moving average. (when price closes inside the 13 or 21 or 55 or 62 or whatever …. then close the trade.) You determine which one by back testing and by time frame and by currency since there is not a one size fits all. It works ok, the only draw back is a false signal means you exited a good run early. Not the end of the world because you can’t go broke taking a profit but if we want to refine efforts then there are other things we can test and apply.

We have already talked in this thread about taking some or all the money off the table at 20-40 pips. Again I say profit is good! By all means, if you like it that way then great!

But here is one that I use that seems to work well.

It tends to decisively tell you when you are late for the door. But wait there’s more. If you order right now I will through in a set of Ginsu knives.

Just kidding.

BTW does anybody out there actually own a set of Ginsu knives? I was just wondering if they really do last forever?

But I digress.

The technique I use is (drum roll) …………support and resistance!

Don’t look at me like that!

First I go to a 5M (not 2, not 10, not 15, not 28 but 5 minute) chart once I enter the trade. If it’s a buy I mark the last swing high price made and look for price to find support on the previous high. If price breaks below then an aggressive exit would be there. If it breaks below and comes back and finds resistance then it is definitely time to get out.

If it’s a sell I mark the last swing low price made and look for price to find resistance on the previous low. If price breaks above then an aggressive exit would be there. If it breaks above and comes back and finds support then it is definitely time to get out.

In other words, “Check, please!”

I will attempt to illustrate in 7 charts or less. (Seven charts is the limit you can upload per message.)

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Quoting ohenry

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Current Res 205.11
Next Res North Level 205.50
Thereafter 206.28

Comments?

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Quoting BillyRayValentine

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Hahahaha....nice post....I just got back from a sun-filled weekend and trying to clear the brain of any holiday mush which might be slowing me down, but to clarify some taking profit points, here is my best attempt:

I keep on talking in general terms sometimes saying things like "it depends", or "you have to look at current market conditions", etc. etc. The reason I say this is because it does and you have to. There is no black and white answer.

We're not cooking a rotisserie chicken here; there's no such thing as "set and forget" in the fx market.

In fact, last time I cooked a rotisserie chicken I remember having to check it alot in order to make sure it was just right. The trades posted here are intended to mark major market turning points (100 plus pips) because they are major areas of support and resistance. Some of the reasons they may only last for 20 pips include:

1. The market just underwent a major correction of 80 or more pips (just an approximation) at a support/resistance level no more than 30 or 40 or 50 or so pips away from the current one. In other words, if the market already underwent a major correction at a level just slightly futher away from where price is now, you've got a much slighter chance of hitting a home run on it.

2. Low liquidity. Market makers are paying off the mortgage and buying the wife a new Range Rover on your money because nobody is there to stop them. Includes holidays, the very beginning and end of weeks, etc.

3. Market moving on hysteria, rumors, news, etc. Dollar getting eaten for dessert? Why try to serve it? If the dollar is getting smashed on any particular day, and you're in a fast-moving market, your chances of a trend reversal get pretty slim.

4. More significant target further away. Option expiration and everyone wants to knock out the knock out options. Put a frame around those double zeros 100 pips away, wrap it up and put it under the Christmas tree because over someone's dead body will they be allowed to make money at expiration.

This also applies to other levels of support and resistance and changing market patterns. Sometimes diagonal trendlines do hold, and in order to complete the sequence and get everyone else on board, price will creep to where it needs to to make it look like the perfect situation.

5. Impatience and weariness. Support and resistence gets used and abused over and over again, until enough is enough, and a breakout is due.

And on and on we go. My typical day starts by looking through my charts and looking for reversal points up, down and all around. Based on where price is currently, I say to myself:

- What are the long and short term trends?
- If price moves up, where is it going to reverse?
- If price moves down, where is it going to reverse?
- Will I be looking for a trend continuation or a trend reversal?
- If a level gets broken, where could it go next?
- What other trendline scenarios (diagonal) could come into play? How do these coincide with my horizonal s/r?
- News coming out? If I take the trade, what's its expected life before a threat of any counter spikes?
- Taking profit: Once I'm in the trade, what opposing levels of s/r are likely to reverse price again and go against me (when should I close out based on these factors)

etc. etc.......

I mark up my charts until they look nearly illegible, marking crucial areas with dark colors making them hard for me to miss.

And then I wait until the trades come, I take them, and manage them.

With 1 through 5 on the above there are plenty of ways to hop on in and take part in the onslaught, which I encourage.....entries are a little more ambiguous, but patience and hard-look analytics pay off. Taking a look at some other stuff right now, but thanks Ironman again for the reply. Much to be learned from you. And I'll take the Ginsu knives. How else am I going to cut this stupid chicken?

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Quoting BillyRayValentine

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Short EUR/JPY 164.70 - 164.90

This is a wider range, but typically in situations like this price tends to bounce off of the lower level. Dont ask me why, that's just the way it goes. Note that the higher one has shown more significance long term. Historically has acted pretty well.

Right now its hitting resistance at about 163.85. If it can close above it on an hourly I'm looking for a follow through to a short up there.

Also a retrace down to 163.85, if it does close above it, presents a short term buying opportunity. Being cautious because its Friday, though. There WILL be stops up there. Want to watch market momentum, anything overshooting and position size.

Not looking to hit any home runs here. Just make my daily cash and enjoy the weekend . T-H-I-N-K.

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Quoting BillyRayValentine

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Hey all, I just noticed something on EUR, you'll be able to see it on other major pairs as well. 1.5784 up to around 1.5813 is blocking upward movement pretty strongly. Just look at the drift, the duration of the drift, and its frequency to avoid higher areas like teflon. Not that it cant break anytime soon, as it can, but its more likely that price will drop to 1.5633 (where I want to go long), based on the current price action, either on this bounce or the next one. When you see areas like this getting hit hard and no one is pushing it any higher, its a good indication of what's next. Market order central up there. Just an observation.

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