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Psych Levels, Pivots, and Trendlines - Resurrected

  • #141
  • Aug 19, 2008 11:56am Aug 19, 2008 11:56am
Hello EV. Well, after we last spoke, the EURO took off and left me behind. I'm ok with that because I stuck to my plan and was out with no open trades. That's improvement for me.

Hey, please take a look at this chart and tell me what kind of candle that next to last bear candle is, and do you place any significance on it. It's ok if you're not online now. I just want to know for the education.

Thanks,
Ed in Virginia
Attached Image
Up or down, gimme a ticket
  • #142
  • Aug 19, 2008 12:18pm Aug 19, 2008 12:18pm
Quoting SpecialEd
Hello EV. Well, after we last spoke, the EURO took off and left me behind. I'm ok with that because I stuck to my plan and was out with no open trades. That's improvement for me.

Hey, please take a look at this chart and tell me what kind of candle that next to last bear candle is, and do you place any significance on it. It's ok if you're not online now. I just want to know for the education.

Thanks,
Ed in Virginia
Good to know that you're sticking with a plan. "Plan your trade, then trade your plan." Isn't that how it goes? Do that, and you'll find yourself with more high-probability trades than low ones? Well, it seems logical to me!

From what I can see on your chart, Ed, the candlestick you're wondering about is a "hanging-man". Strictly speaking, it should have no upper shadow, but usually a very small one is considered ok. Also, the lower shadow should be at least two-thirds bigger than the body, and it looks as if it qualifies to me. There's a smaller hanging-man about half-way up the run, but because it's not at the top of the move, it's usually ignored. A hanging-man is a bearish candle, Ed, because you should only see one at the top a move, with the possibility of a reverse downwards.

Hope that helps, mate.
Cheers
  • #143
  • Aug 19, 2008 12:34pm Aug 19, 2008 12:34pm
Quoting eyevoltage
Good to know that you're sticking with a plan. "Plan your trade, then trade your plan." Isn't that how it goes? Do that, and you'll find yourself with more high-probability trades than low ones? Well, it seems logical to me!

From what I can see on your chart, Ed, the candlestick you're wondering about is a "hanging-man". Strictly speaking, it should have no upper shadow, but usually a very small one is considered ok. Also, the lower shadow should be at least two-thirds bigger than the body, and it looks as if it qualifies to me. There's a smaller hanging-man about half-way up the run, but because it's not at the top of the move, it's usually ignored. A hanging-man is a bearish candle, Ed, because you should only see one at the top a move, with the possibility of a reverse downwards.

Hope that helps, mate.
Cheers
Thanks for such prompt reply, EV. I thought that is what you would say. It looked familiar, in the context of reversals, when I first saw it. I stayed off the trade, however. Don't want to jinx myself by departing from the plan! (-:

Have a good evening EV.
Up or down, gimme a ticket
  • #144
  • Aug 20, 2008 4:39am Aug 20, 2008 4:39am
This is one where the price had to clear three obstacles before I opened a trade. First obstacle was the sloping TL, followed by the Pivot Point. Then it had to drop below the previous low, and then it was all systems go. A bit of an anxious 15 minutes with the doji/spinning-top, but then a nice drop down to the mid-point. I got in a little late and exited a little early, but still managed a nice 19 pip profit.
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  • #145
  • Aug 20, 2008 6:12am Aug 20, 2008 6:12am
I took this trade on the basis of the classic morning star reversal pattern, but I hadn't realized that price was just under the 50.0 fib (not shown), drawn from yesterday's high and low. This, combined with the fact that I was in a LONG trade BELOW the Pivot Point, made me a little nervous, so I finally pulled the plug with 1 pip profit. As I type this, price is still looking unsure as to what it wants to do, so maybe I did the right thing. Whatever, it's better to be out and on the side, rather than giving yourself a heart attack!
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  • #146
  • Aug 21, 2008 6:47am Aug 21, 2008 6:47am
Quoting eyevoltage
I took this trade on the basis of the classic morning star reversal pattern, but I hadn't realized that price was just under the 50.0 fib (not shown), drawn from yesterday's high and low. This, combined with the fact that I was in a LONG trade BELOW the Pivot Point, made me a little nervous, so I finally pulled the plug with 1 pip profit. As I type this, price is still looking unsure as to what it wants to do, so maybe I did the right thing. Whatever, it's better to be out and on the side, rather than giving yourself a heart attack!
I was off to the beach yesterday. I took time to do one really stupid thing. After reviewing the market for about 15 minutes (dumb!), I decided to process a dollar short, expecting (begging) the market to get down to 4650. After posting a 44 pip stoploss, I left the trade unattended, as I had a lot of work to do yesterday. The market rewarded my haste and stupidity with a smooth 44 pip loss. I post this to remind everyone, particularly newcomers, that it is very easy to get burned in trading if you do not study the market, make your plan, and stick to it. Don't expect it to be "get rich quick". On the other hand, you can generate a lot of pips (pips don't spend, money does) if you follow the advice of a lot of the folks on this site.

I'm only on for a while again today, EV. Got more work to do at the beach house. Should be back online tomorrow. Have a great trading day.

Ed in Virginia

P.S. How about those American women in beach volleyball. 2 Golds in two Olympics! Not to forget the Brits, your Adlington lass did swell in the swimming distance events!
Up or down, gimme a ticket
  • #147
  • Aug 21, 2008 7:13am Aug 21, 2008 7:13am
Quoting SpecialEd
I was off to the beach yesterday. I took time to do one really stupid thing. After reviewing the market for about 15 minutes (dumb!), I decided to process a dollar short, expecting (begging) the market to get down to 4650. After posting a 44 pip stoploss, I left the trade unattended, as I had a lot of work to do yesterday. The market rewarded my haste and stupidity with a smooth 44 pip loss. I post this to remind everyone, particularly newcomers, that it is very easy to get burned in trading if you do not study the market, make your plan, and stick to it. Don't expect it to be "get rich quick". On the other hand, you can generate a lot of pips (pips don't spend, money does) if you follow the advice of a lot of the folks on this site.

I'm only on for a while again today, EV. Got more work to do at the beach house. Should be back online tomorrow. Have a great trading day.

Ed in Virginia

P.S. How about those American women in beach volleyball. 2 Golds in two Olympics! Not to forget the Brits, your Adlington lass did swell in the swimming distance events!
They say you learn from your mistakes, and you sure seem to have seen the error of your ways!! You just can't rush things in this game, Ed, as you've found out to your cost. You're not alone, however, because I'd say that we've all been guilty of it at some time or another.

Ok on the Olympics. We're all getting a bit giddy over here at the medal haul. Best since 1908!!

See you tomorrow, mate.
Cheers
  • #148
  • Aug 21, 2008 7:32pm Aug 21, 2008 7:32pm
I've been testing the naked psych levels of 20 and 80 for breaks to the round numbers. After testing 100+ Euro/Usd trades from six months back, I have found that if price has been between the 40-60 during the Asian session, you can place a sell stop at 20 and a buy stop at 80 no earlier than one hour before the Frankfurt open with TP at 00 and you will win about 75% of the time. You can also reset the buy/sell stops for the NY open if the price pulls back into the 40/60 area in the London afternoon, and the NY open will usually test 00. Place your stop loss at 20 pips away for a 1:1 risk/reward. Normally you want it higher, but this is a high probability scalping type setup. Some filters: Do not trade any later than two hours after the NY open or there is not enough volatility to maintain an expectancy above 50%. Don't start placing the entry orders until after 1 am EST, one hour before Frankfurt open. This system seeks to take advantage of stop gunning. It has not lost more than three times in a row in backtesting, so theoretically you could risk up to 8% per trade if you could stomach a potential 21% drawdown and make some serious money. Have any of you guys notice this type of action with the 80/20 and 00?
  • #149
  • Aug 22, 2008 7:54am Aug 22, 2008 7:54am
I drew these fib lines through curiosity , and although I wasn't involved with this chance, it's a nice example of how short term fib lines can sometimes interact with the Pivot lines. If you look at the original low to high fib line, the high is at the tip of the shadow of a candle that was stopped in its tracks by a mid-point line. There follows a nice harami reversal signal, and price drops to right on the 38.2 fib line. A bullish engulfing pattern follows and price then swoops up to the R1 line, which would have given a profit in the region of 50 pips, assuming one had taken the trade from the 38.2 line.

hx.......very interesting, post, mate. I don't usually have 20 and 80 psych lines on my charts, but I know for a fact that acumen does. It would be interesting to hear his views on your post.

Cheers.
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  • #150
  • Aug 22, 2008 8:05am Aug 22, 2008 8:05am
Quoting hxcjf
I've been testing the naked psych levels of 20 and 80 for breaks to the round numbers. After testing 100+ Euro/Usd trades from six months back, I have found that if price has been between the 40-60 during the Asian session, you can place a sell stop at 20 and a buy stop at 80 no earlier than one hour before the Frankfurt open with TP at 00 and you will win about 75% of the time. You can also reset the buy/sell stops for the NY open if the price pulls back into the 40/60 area in the London afternoon, and the NY open will usually test 00. Place your stop loss at 20 pips away for a 1:1 risk/reward. Normally you want it higher, but this is a high probability scalping type setup. Some filters: Do not trade any later than two hours after the NY open or there is not enough volatility to maintain an expectancy above 50%. Don't start placing the entry orders until after 1 am EST, one hour before Frankfurt open. This system seeks to take advantage of stop gunning. It has not lost more than three times in a row in backtesting, so theoretically you could risk up to 8% per trade if you could stomach a potential 21% drawdown and make some serious money. Have any of you guys notice this type of action with the 80/20 and 00?
Have not noticed this, hxcjf, but will try it soon on my demo account. Thanks for the tip.

Ed in Virginia
Up or down, gimme a ticket
  • #151
  • Aug 22, 2008 8:14am Aug 22, 2008 8:14am
Quoting eyevoltage
I drew these fib lines through curiosity , and although I wasn't involved with this chance, it's a nice example of how short term fib lines can sometimes interact with the Pivot lines. If you look at the original low to high fib line, the high is at the tip of the shadow of a candle that was stopped in its tracks by a mid-point line. There follows a nice harami reversal signal, and price drops to right on the 38.2 fib line. A bullish engulfing pattern follows and price then swoops up to the R1 line, which would have given a profit in the region of 50 pips, assuming one had taken the trade from the 38.2 line.
Good morning EV, or afternoon on your side of the pond. Why do we always see the best trades in retrospect? That's a good one though. I executed 3 trades in the past 24 hours. Each of them got closed out by trailing stops. My combined profit goal was about 100 PIPs. Instead, I got a sum total of 9! I hear a lot of talk about setting trailing stops, but I get burned by them quite often. I've about decided that the best policy is to monitor the trade and manually adjust stops while "letting the profits run".

How's the weather in UK today? Have a nice weekend,
Ed in Virginia
Up or down, gimme a ticket
  • #152
  • Aug 22, 2008 8:37am Aug 22, 2008 8:37am
EV or others,

Please take a look at this picture at the 4791 support. I can't remember the name of the candlestick but it's fairly significant in your library isn't it? Reversal? If so, not for much this time.

Thanks,
Ed
Attached Image
Up or down, gimme a ticket
  • #153
  • Aug 22, 2008 3:58pm Aug 22, 2008 3:58pm
Hey, mate, 9 pips is better than none. Do that 4 times a day and there's a nice healthy 36 pips profit. Sounds easy, doesn't it? Of course, it isn't, otherwise we'd all be members of the IRC (Idle Rich Club)! Yep, much better with this method to monitor what's going on, Ed, and set your SL accordingly. Speaking for myself, I haven't the patience for longer than 15m candles, and judging by the SL's needed, the wherewithal either!!

As for your candle.........it's a spinning-top, Ed, and therefore not a real reversal signal. If that upper shadow hadn't been there, or, at least a very small one, then it would have been a very healthy hammer, with a reversal a distinct possibility. Yes, I can see that price did reverse, but it all looks a bit scrappy to me, and I, for one, wouldn't have touched it.

Regarding the fib example on my chart. I'm definitely going to keep a closer eye out for these opportunities. I've been doing a bit of backtesting, and it seems as if they're happening all the time, and from what I can see, some very surprising profits can be had.

Well, it's now the weekend, and here in the UK, there's a Bank Holiday on Monday. Still, I'll be monitoring what's going on, hopefully, and looking forward to Tuesday.

Have a great weekend, mate.
Cheers
  • #154
  • Aug 26, 2008 3:57am Aug 26, 2008 3:57am
First trade after my vacation hits a homerun...

After news in the M1 from SP 4650 down to 4598.

KISS
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Donīt live for working, but work for living.
  • #155
  • Aug 26, 2008 4:47am Aug 26, 2008 4:47am
Quoting matsf
First trade after my vacation hits a homerun...

After news in the M1 from SP 4650 down to 4598.

KISS
That's a nice way to come back to work. Way to go, MATSF. I've seen your posts over on EUR/USD. Would you please explain what made you take that trade. I know it appears to be a very straightforward one. I think the bull candle signified a reversal to you, and you rode it to the next psych level. Is that correct?

Trying to learn. Thanks a bunch,
Ed in Virginia
Up or down, gimme a ticket
  • #156
  • Aug 26, 2008 5:30am Aug 26, 2008 5:30am
I too am just back from a couple off months working at sea and slowly getting back into trading.

Cable has given me two profitable trades this morning - the first in Frankies Hour as it spiked back up to the 8450 level - also the 34 ema - I exited on a limit order at the S1 level.

I took my second trade after the bad German Buisness Climate data - here I was a little slow as I wasnt watching and only looked when my alarm went off just under the 34 ema. I exited in the push down to the MS2 level at 8638.

So far this move has made it to the 161.8 fib extension, but with the dollar breaking up to new highs I'm thinking that cable will make new lows. A retrace towards the 8400 level could provide a nice sell......
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Trading Levels with WRBs
  • #157
  • Aug 26, 2008 6:03am Aug 26, 2008 6:03am
Quoting SpecialEd
I think the bull candle signified a reversal to you, and you rode it to the next psych level. Is that correct?
Absolutely correct.
I traded with the trend after a pullback to the SP.
As price came back to the SP, i waited for a second, if price goes up further, but it didnīt, then i immediately entered.
I was a bit afraid of S2, but it broke through very nice.
Donīt live for working, but work for living.
  • #158
  • Aug 26, 2008 6:22am Aug 26, 2008 6:22am
Quoting matsf
Absolutely correct.
I traded with the trend after a pullback to the SP.
As price came back to the SP, i waited for a second, if price goes up further, but it didnīt, then i immediately entered.
I was a bit afraid of S2, but it broke through very nice.
Up or down, gimme a ticket
  • #159
  • Aug 27, 2008 5:18am Aug 27, 2008 5:18am
Unfortunately, I overslept this morning, so I'm feeling a bit frustrated at missing this golden opportunity on cable.

See how the spinning-top/morning-star candle formed right between the psych point and the Pivot Point. A good entry would have been just above the PP, with a target of either the next psych point at 1.8450, or the mid-point line at 1.8455. Doesn't matter really, as price bulldozed through both of them, with a potential 40-odd pips the result.
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  • #160
  • Aug 27, 2008 5:33am Aug 27, 2008 5:33am
Quoting eyevoltage
Unfortunately, I overslept this morning, so I'm feeling a bit frustrated at missing this golden opportunity on cable.

See how the spinning-top/morning-star candle formed right between the psych point and the Pivot Point. A good entry would have been just above the PP, with a target of either the next psych point at 1.8450, or the mid-point line at 1.8455. Doesn't matter really, as price bulldozed through both of them, with a potential 40-odd pips the result.
Hello EV,
Good to have you back. Since you say you overslept, I'm wondering if you were in hybernation. Don't think I talked to you in about 3 days.

I don't trade GBP/USD but thanks for the illustration. Oil is up today (to about $116). Gold is up (to $838), and EUR/USD has been rising throughout the night.

I will not trade much, if any, for the next few days. Will be spending time with my granddaughter (1 year old, coming to visit). Have a good week,

Ed
Up or down, gimme a ticket
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