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Static's Place

  • #141
  • Jun 11, 2008 4:57am Jun 11, 2008 4:57am
Quoting zoopy
You're kinda getting the right idea with your explanation of how I place stops. In theory and in practice, when a move down turns into a move up, it HAS to create a wave first and break that wave up. Having said that, once it has done this, it creates waves going up in steps. Technically speaking, I could enter long anywhere as long as my stops are at the base of the wave that broke up. Think about Jacko's method. Quite often he will enter at round numbers yet price may be at the peak of a move up. If he's knocked out, not to worry, he'll have the AH (keep in mind the waves going up and how this works).

When you say there are only so many ways to enter using a line chart, that's correct and I'm doing this deliberately so that I have no doubt nor do I hesitate to pull the trigger (this is actually where I think line charts have a huge psychological advantage over candlesticks/bars). When a wave breaks up or down, I know which direction I have to trade in. If it starts moving in that direction immediately I just pull the trigger although I prefer to get a pullback first but doesn't always happen.

Another thing to clarify... the large stops are only temporary ones. When a move down turns into a move up, it has to create a wave first and then break that. Those "inbetween waves" aren't as big as most think. More often than not they're around 50-100 pips.
Here's my reasoning behind using 100 TP other than what I had mentioned. Let's say trader A decides to let his trade "run" and trader B decides to take 100 pips profit. Here's the scenario...

Trader A
1. Enters market
2. Market goes 300 pips in his favour (at this point he's smiling because of looking at all those pips)
3. He's now thinking this is a great trade, it could go way up, lets hold it for longer. He has no idea how far the market could go, yes the market is going in his favour but he has no idea when things could turn around so he holds the trade hoping to get more.
4. Market starts to drop, and he's now at 250 pips. This is when he starts to think... hmmm we going down now? Probably not, I'm in a great trade lets hold it longer, this might be a retracement.
5. Few hours later... 230 pips.
6. Trader A closes the trade for 230 pips because he doesn't want to risk more.

Trader B.
1. Enters market
2. Trader B isn't greedy, he goes for 100 pips. 100 pips is hit, he's now banked it.
3. Retracement occurs, trader B enters again, another 100 pips banked.
4. Another retracement, enters market again, another 100 pips.
5. At this point trader B has collected 300 pips.
6. Market starts to drop and trader is out waiting for next trade.

Result:
Trader A makes 230 pips
Trader B makes 300 pips (without compounding)

If I was trading the weekly or daily waves as is, depending on whether it was long term or medium term, I may let it run but chances are I would probably target maybe 300-500 pips. Hopefully that answers some of your questions.

btw, I don't see your comments as negative, it's constructive criticism and I'm use to that
You quote is profound indeed!!

  • #142
  • Jun 11, 2008 12:18pm Jun 11, 2008 12:18pm
The market is now back at 1.5550. It is hovering around that area, has been stalled for the last couple hours. Technically we have seen a close above 1.5550, but not by much, and I don't trust that the area has been broken.

However, the fact that we have turned back up, and not taken out the last 4HR low suggests to me that there may be another run up later in the week.

I am now waiting for another 4HR close above 1.5550 before considering placing an order. The fact that the market has not been strongly rejected from this area also suggests that that the (rather violent) correction, may be over.

We will see.
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  • #143
  • Jun 11, 2008 6:18pm Jun 11, 2008 6:18pm
Current Tally:

Trades Taken: 17
Winners: 6
Losers: 11
P/L: +25

Thoughts: Up and down up and down. But I feel like I am beginning to understand why...
  • #144
  • Jun 11, 2008 6:22pm Jun 11, 2008 6:22pm
1.5550 seems to be holding up well, but I will be waiting until the European open to decide if I am willing to take a position. Ideally I would like to have my stop underneath the current swing low, and using a 100 pip TSL this would require a dip to 1.5530. This is definitely not out of the question, so I will wait.
  • #145
  • Jun 11, 2008 6:39pm Jun 11, 2008 6:39pm
Quoting static
1.5550 seems to be holding up well, but I will be waiting until the European open to decide if I am willing to take a position. Ideally I would like to have my stop underneath the current swing low, and using a 100 pip TSL this would require a dip to 1.5530. This is definitely not out of the question, so I will wait.
Good analysis Static. Plus... Mr B is speaking tomorrow so you can probably pick a good entry when we hit euro/london session. They seem to drive the euro up quite often before Bernanke speaks. Good idea with the stop being below the current swing low as well.
  • #146
  • Jun 13, 2008 1:05pm Jun 13, 2008 1:05pm
Certainly glad I decided to wait before assuming the market would go back up.
I am now looking for a long trade depending on what happens at this level. If 1.5285 area holds then I am still bullish. If that area breaks, I will consider a trend change and possibly take short trades based on price action.

We will see, with the Fed's focus changing to inflation, it seems like we are gearing up for a trend change. Plus all the jawboning by US officials makes me think we may be heading down.
  • #147
  • Jun 17, 2008 8:18am Jun 17, 2008 8:18am
I am still waiting for the market to come above 1.5550 convincingly before I start buying. Price needs to hit 1.5600, which takes out the old 4HR low, and close above 1.5550 which tells me the uptrend is resuming.

It that happens it shouldn't be long till be at least hit 1.5800 again.

Thats the plan.

Ideally I will be able to get in on a touch of the 1.5550 area once the market breaches that area.
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  • #148
  • Jun 18, 2008 6:16pm Jun 18, 2008 6:16pm
Pressure seems to be building for an upside break.

Should be some opportunities in the next couple days either lower near major support, or from the 1.5550 area from a retrace after a breakout.
  • #149
  • Jun 18, 2008 6:54pm Jun 18, 2008 6:54pm
I have been feeling guilty because I have taken a trade that I did not post here.

I took a short trade in USD/CAD due to the daily pin seen in the chart. My order was triggered at 1.0190. I am still short, and my stop has been reduced 1.0300 where it was once above the high of the pin. I am targeting 1.0000 but will consider closing due to price action.

I have been patiently waiting, letting the trade play out.

See Chart.
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  • #150
  • Jun 19, 2008 12:58pm Jun 19, 2008 12:58pm
The CAD trade is still playing out.

Stop is adjusted to 1.0250. I am still expecting to see par.

For trailing my PA trades I will be trailing the stop just above/below two daily bars before current daily bar. So for now, counting two bars back that puts my stop at 1.0250.

I picked up this technique from Mike in the J16 thread. So credit goes to him. I like it because it is not discretionary. This trailing technique lowers your win percentage but makes your winners huge. It's a good way to let the winners ride, and have a trailing stop which depends on both price action AND time.

For this trade I will only close on a daily reversal pattern, or if my tailing stop is hit.

We'll see how it goes. There is a small pinbar on the 4hr but I am not too concerned about it at this point.
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  • #151
  • Jun 20, 2008 12:34pm Jun 20, 2008 12:34pm
Euro has finally made some meaningful movement and has now convincingly broke 1.5550.

I will now be looking to get in at 1.5550 as per my plan. Market should make it down there next week.

Now, just waiting.
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  • #152
  • Jun 20, 2008 12:48pm Jun 20, 2008 12:48pm
Waiting in boredom for the Eur/USD to pick up the pace, I have taken another price action trade in Eur/Chf.

The reasons:

1. There seems to be a reverse head and shoulders pattern forming on the daily. We are now at the second shoulder, hopefully ready to rally.

2. The long term trend is up.

3. There was a BUOB (bullish outside bar) on the daily (see chart).

4. The market has been rolling over on the daily for the last 20 days. And I consider this a buy as it is picking up momentum. I can see the momentum building, and the 4 Hr is now making higher highs and higher lows.

I entered at 1.6150 with a stop at 1.6065.

The trade is looking promising, as a nice 4HR pin has now formed. One good technique with outside bars is to wait for a retrace to the 50% fib level (50% of the outside bar) before entering. Although it will keep you out of some trades, it does reduce your stops substantially.

It was a set and forget trade, and I will now be trailing just below the daily bar low two days previous.

We'll see how it plays out.

On another note, the CAD trade is looking like it will stop me out soon. My stop is not adjusted to 1.0215 as per the trailing rule. It looks like we will get a Buob on the daily, which will cause me to look to exit with a small profit rather than take a small loss.
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  • #153
  • Jun 23, 2008 12:26am Jun 23, 2008 12:26am
OK, still in both my PA trades patiently waiting for them to do something... haha.

The CAD trade is looking iffy. My stop on that trade is now adjusted to 1.0205. There is an outside bar on the daily which makes me think a retest of 1.0300 may be in order if the market penetrates 1.0200. So putting my stop right above that area seems like a good strategy. My risk is now only 15 pips.

The EUR/CHF trade is still sitting like it was. Stop still below the latest swing low. Waiting for direction. Looks like we may get a pop down before going on to make higher highs. Feeling good about this trade.
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  • #154
  • Jun 23, 2008 11:23pm Jun 23, 2008 11:23pm
OK, trades all doing alright. Not too sure about the CAD trade yet, but it is no stress, only 15 pips at risk, I will soon set the stop to break even depending on what happens tomorrow.

EUR/CHF is about 75 pips in profit. Good start. I am expecting resistance at 1.6300 and have set a target for that area. I will be leaving town tomorrow for six days, and will have no access, so all trades will either be set to BE with a profit target, or setup with a trailing stop.

USD/CAD is consolidating right now, but I am hoping we see more downside.
  • #155
  • Jun 23, 2008 11:29pm Jun 23, 2008 11:29pm
Euro is looking very indecisive. But I am sticking with my plan, as it was made before I was in the trade.

Stop is now set to 1.5424, with 80 pips at risk.

Edit: I just realized I didn't post this trade. Must be slipping in my old age. I went long Eur/Usd at 1.5500 with a 100 pip TSL. I was waiting for a drop to see where it would bottom out without breaking the old low at 1.5480 area. This was an optimal buy according to the plan. We'll see how it goes.





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  • #156
  • Jul 6, 2008 9:23pm Jul 6, 2008 9:23pm
Ok, and update. I have not been keeping up my journal, as I have been in the mountains for the past week, and before that on tour with my band. Quite a hectic summer.

My Euro trade at 1.5494 went very well and netted me 240 pips.

I was definitely happy with that.

Unfortunately I had an AH trade picked up at 1.5900 for an 80 pip loss. So that knock my winnings for the week down to 160 pips. A good week.
I stuck with the policy of always letting my AH trades play out, although I wanted to pull the trade. In hind sight the trade that set the AH up was pretty much a violation of the rules, I did not let the market come to me, I was chasing it, and I got kicked twice for it.

On another note my two price action trades went alright. The Eur/CHF trade was stopped out at break-even. And the USD/CAD was stopped out for +40 pips. All in all, pretty safe trades I think. It was hard to give so much back, because both were in substantial profit at one point. Although, the trailing method I am using produces lots of little winners and losers with a few whoppers, so I can live with that.

  • #157
  • Jul 6, 2008 9:27pm Jul 6, 2008 9:27pm
Trades Taken: 17
Winners: 7
Losers: 12
P/L: +185
  • #158
  • Jul 6, 2008 9:47pm Jul 6, 2008 9:47pm
Ok, so after the break in market I am looking to get long again.

There is a big BEOB on the daily which makes me a little cautious. It looks like the market is heading down again. If the BEOB had happened without breaking the top of the range, I would be leaving the market alone until at least 1.5400. However, it is now making higher highs on the daily.

To me this suggests that we may not see the very bottom of the range 1.5350 again soon. The 50% fib retrace of the current move, and decent support at 1.5550 have tempted me into an order in that area.

Therefore, I have a limit order at 1.5600 with a 100 pip TSL.

That area has a fib level from the last swing low to high on the weekly and the last swing low to high on the daily. If it makes it past this area, then I assume we are headed towards the daily trendline around 1.5400 and my AH will pick me up later
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  • #159
  • Jul 7, 2008 11:51am Jul 7, 2008 11:51am
Entry at 1.5600 was missed by 10 pips!

Oh well, will wait for another opportunity I guess.

I believe we have seen the short term bottom given the 4HR pinbar and 4 HR BUOB currently forming.

I haven't quite decided how I'm going to handle this yet. I don't want to chase this market. Perhaps I will wait for a breach of 1.5720 area and then a pullback.
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  • #160
  • Jul 9, 2008 11:29am Jul 9, 2008 11:29am
Damn, thought I remembered to post my last trade here.

Oh well, not in danger of anyone calling me out, since no one reads this anyways. But, after missing my 1.5600 entry and seeing the dramatic rise to 1.5750 it looked like the market wasn't going down without a fight.

I didn't think I would get filled but I stuck a buy order at around 1.5650 hoping for a spike down for a higher probability trade, and I got it. So, I am long from 1.5650 with a 100 pip TSL.

My stoploss has already been adjusted to 1.5650 as market is banging up against resistance at 1.5750. We'll see what happens, seems like a good place to take profits.
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