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Psych Levels, Pivots, and Trendlines - Resurrected

  • #261
  • Sep 3, 2008 5:55am Sep 3, 2008 5:55am
Quoting y.caesar
Hello,
Your use of pivot points as entry and exit points is almost similar like mine. I do however trade economic news as the trigger of the trade. I wonder how you set your SL after your entry. I downloaded your video and I understand how you enter the trade and set your Target Profit. However, you didn't mention about how you set your stop loss. I'd appreciate if you can shed some light on that. Thanks.

Regards
Hello y.caesar,

Acumen usually spends most of his time on the EUR/USD thread. He will always respond to private messages. Suggest you click on his name in the thread and send your question to him personally.

Good trading,
Ed

P.S. Acumen's most devoted "disciple" is EyeVoltage. He lives in England and is usually online before now, although he has a serious time commitment caretakng also. I'm sure he'll see your post and try to respond in time.
Up or down, gimme a ticket
  • #262
  • Sep 3, 2008 6:22am Sep 3, 2008 6:22am
Let's see if EUR/USD price bounces off confluence of today's 38.2 and S1 (1.4435). Also, there is a nice downward channel on the H1 (not shown here) that has been working since about 8/29.
Attached Image
Up or down, gimme a ticket
  • #263
  • Edited 6:33am Sep 3, 2008 6:23am | Edited 6:33am
Quoting y.caesar
Hello,
Your use of pivot points as entry and exit points is almost similar like mine. I do however trade economic news as the trigger of the trade. I wonder how you set your SL after your entry. I downloaded your video and I understand how you enter the trade and set your Target Profit. However, you didn't mention about how you set your stop loss. I'd appreciate if you can shed some light on that. Thanks.

Regards
You raise an interesting point, mate, and I think you're right, and acumen doesn't mention SL's.

IMHO, I have always thought TP's and SL's should be down to the individual trader's discretion. Plus, it all depends on which method of trading you're using. What's good on one method, probably isn't on another, and vice versa.

However, taking acumen's method that we're using now, for instance. We're in the business of watching for reversal patterns or continuance patterns at critical points on the chart i.e. Pivot Points, Psych-lines, Fibonnaci lines and Trend Lines, with entries slightly above or slightly below the actual line, depending on price action. For me, it's logical, therefore, to use the nearest (within reason) critical line above or below your point of entry as your SL, with a couple of pips added on in an attempt to avoid the dreaded spikes. Another method would be to use the last highest high or lowest low.

Hardly rocket science, as I think you'll agree.

Alternatively, you could use a little attachment I've added down below. ATR PIPS gives you a reading of 70% of the average true range; the range being anything you want it to be. You can set it for whatever you want the ATR to be, and then it'll automatically give you an on-going reading of 70%. I've used this on many occasions, and I usually set it for 14 (don't ask me why...just seems to work ok!), and then when I make a trade, I use the ATR PIP reading plus the spread, and it more often than not makes for a sensible SL.

I hope this helps you, mate.
Cheers.
Attached File(s)
File Type: ex4 ATR Pips.ex4   3 KB | 346 downloads
File Type: mq4 ATR Pips.mq4   2 KB | 424 downloads
  • #264
  • Edited 6:37am Sep 3, 2008 6:35am | Edited 6:37am
Here is that downward channel I was referring to. Shows well on the H1 but back to 8/28/08 on the H4. Here is H1.

FYI, the yellow line you see above is 50ema.
Attached Image
Up or down, gimme a ticket
  • #265
  • Sep 3, 2008 6:40am Sep 3, 2008 6:40am
Quoting eyevoltage
You raise an interesting point, mate, and I think you're right, and acumen doesn't mention SL's.

IMHO, I have always thought TP's and SL's should be down to the individual trader's discretion. Plus, it all depends on which method of trading you're using. What's good on one method, probably isn't on another, and vice versa.

However, taking acumen's method that we're using now, for instance. We're in the business of watching for reversal patterns or continuance patterns at critical points on the chart i.e. Pivot Points, Psych-lines, Fibonnaci lines and Trend Lines, with entries slightly above or slightly below the actual line, depending on price action. For me, it's logical, therefore, to use the nearest (within reason) critical line above or below your point of entry as your SL, with a couple of pips added on in an attempt to avoid the dreaded spikes. Another method would be to use the last highest high or lowest low.

Hardly rocket science, as I think you'll agree.

Alternatively, you could use a little attachment I've added down below. ATR PIPS gives you a reading of 70% of the average true range; the range being anything you want it to be. You can set it for whatever you want the ATR to be, and then it'll automatically give you an on-going reading of 70%. I've used this on many occasions, and I usually set it for 14 (don't ask me why...just seems to work ok!), and then when I make a trade, I use the ATR PIP reading plus the spread, and it more often than not makes for a sensible SL.

I hope this helps you, mate.
Cheers.
Good morning EV. A very thorough answer. We would expect no less of you! As we golfers say, "You tha man!". By the way, how close are you to Chester?
Up or down, gimme a ticket
  • #266
  • Sep 3, 2008 6:45am Sep 3, 2008 6:45am
Quoting eyevoltage
You raise an interesting point, mate, and I think you're right, and acumen doesn't mention SL's.

IMHO, I have always thought TP's and SL's should be down to the individual trader's discretion. Plus, it all depends on which method of trading you're using. What's good on one method, probably isn't on another, and vice versa.

....


Cheers.
Thanks for your help guys. And thank you eyevoltage for your explanation. I think it's more easy to set an SL when the PA tells you it's going to be a reversal. But it seems that a lot of your trades falls under "continuation" and I am having problems setting a logical SL that satisfy risk and reward, plus PA formation.
Anyway, thanks for answering my inquiry into this system. It's a nice extra trading "weapon" to keep in my arsenals

Regards,
  • #267
  • Sep 3, 2008 6:58am Sep 3, 2008 6:58am
My pleasure, guys.
  • #268
  • Edited 7:22am Sep 3, 2008 7:01am | Edited 7:22am
Quoting SpecialEd
Let's see if EUR/USD price bounces off confluence of today's 38.2 and S1 (1.4435). Also, there is a nice downward channel on the H1 (not shown here) that has been working since about 8/29.
Bearish engulfing candle, Ed. Hope you're watching!

Edit: Nearly 20 minutes later.....price heading towards 1.4450. I was waiting for it to drop down under the next fib, Ed, for the extra confirmation. Let's see if it comes off the .50 psych-line!
  • #269
  • Sep 3, 2008 7:53am Sep 3, 2008 7:53am
Double-Top on the 15m eur/usd. If it drops below S1, I'll go short.
  • #270
  • Sep 3, 2008 8:01am Sep 3, 2008 8:01am
Quoting eyevoltage
Bearish engulfing candle, Ed. Hope you're watching!

Edit: Nearly 20 minutes later.....price heading towards 1.4450. I was waiting for it to drop down under the next fib, Ed, for the extra confirmation. Let's see if it comes off the .50 psych-line!
EV, I'm back. Had to catch up on morning e-mail. Take a look at the M15 chart (around 1200gmt) and give me a lesson. Do you see anything that could have foretold the spike through 4435 to 4461? Went past the 50, and is now uncertain if or when it wants to start falling again.

Ed
Up or down, gimme a ticket
  • #271
  • Sep 3, 2008 8:05am Sep 3, 2008 8:05am
Quoting eyevoltage
Bearish engulfing candle, Ed. Hope you're watching!

Edit: Nearly 20 minutes later.....price heading towards 1.4450. I was waiting for it to drop down under the next fib, Ed, for the extra confirmation. Let's see if it comes off the .50 psych-line!
Following up a bit late, but interested in your viewpoint. Here's the chart showing that bearish engulfing candle that I think you were referring to. Went totally opposite immediately thereafter.

Going to catch up on the double tops next.

Ed
Attached Image
Up or down, gimme a ticket
  • #272
  • Sep 3, 2008 8:19am Sep 3, 2008 8:19am
Quoting SpecialEd
EV, I'm back. Had to catch up on morning e-mail. Take a look at the M15 chart (around 1200gmt) and give me a lesson. Do you see anything that could have foretold the spike through 4435 to 4461? Went past the 50, and is now uncertain if or when it wants to start falling again.

Ed
On my chart, I guess the "spike" you mention is the candle that opened just above 1.4450, then dropped down to 1.4435, and then shot up to pierce the 1.4465 line before closing at 1.4459. I could be wrong, but these types of candles always seem to me to be "stop-loss seekers", but in this case, I don't see the point. If price had then continued northwards, then it would have made sense, but it didn't. So I guess I'm as puzzled as you are, Ed.

Anybody else got any ideas?
Attached Image
  • #273
  • Sep 3, 2008 8:21am Sep 3, 2008 8:21am
Quoting y.caesar
Hello,
Your use of pivot points as entry and exit points is almost similar like mine. I do however trade economic news as the trigger of the trade. I wonder how you set your SL after your entry. I downloaded your video and I understand how you enter the trade and set your Target Profit. However, you didn't mention about how you set your stop loss. I'd appreciate if you can shed some light on that. Thanks.

Regards
While waiting for my current trade to develop (I'm short from S1), and doing research on double tops, I found this article that also talks about stop losses. While most of us in Acumen's following don't like a lot of indicators, this is at least a very interesting article about the hazard of stop losses that are applied too tightly. Better to focus on trade position/risk instead of stop losses? I like it.
http://www.investopedia.com/articles.../05/032805.asp
Up or down, gimme a ticket
  • #274
  • Sep 3, 2008 8:24am Sep 3, 2008 8:24am
Quoting eyevoltage
On my chart, I guess the "spike" you mention is the candle that opened just above 1.4450, then dropped down to 1.4435, and then shot up to pierce the 1.4465 line before closing at 1.4459. I could be wrong, but these types of candles always seem to me to be "stop-loss seekers", but in this case, I don't see the point. If price had then continued northwards, then it would have made sense, but it didn't. So I guess I'm as puzzled as you are, Ed.

Anybody else got any ideas?
Which contributes to the credibility of the article I just posted, I think.

Ed
Up or down, gimme a ticket
  • #275
  • Sep 3, 2008 8:38am Sep 3, 2008 8:38am
I am presently -33 on my Sell-at-S1 trade. Because my position size was not so big, I can afford a larger stop loss, which I hope can help me hang a little longer while (like for maybe 20 more pips), while the trade plays out. Note two things:
1. I followed Acumen's rule - bias toward short while under pivot
2. Planned for bounce off a confluence (daily 38.2 and S1)

Looking at the attached H4 chart, I see that the price is still inside the relatively strong down channel. Think I'll wait... Thoughts?
Attached Image
Up or down, gimme a ticket
  • #276
  • Sep 3, 2008 8:41am Sep 3, 2008 8:41am
Ed, I think it's best to stay out for the time being, 'cos price can't make its mind up. The double-top was formed as part of a pull-back, and now it's headed north again, and at present is piercing my 0.0% fib line at 1.4465. Looks like a strong move as well, but seeing as this move is long, I'll stick with the "under the pivot - go short" rule. I know....I'll probably leave pips on the table, but hey, I'm a wuss! So what?
  • #277
  • Sep 3, 2008 8:46am Sep 3, 2008 8:46am
Quoting SpecialEd
I am presently -33 on my Sell-at-S1 trade. Because my position size was not so big, I can afford a larger stop loss, which I hope can help me hang a little longer while (like for maybe 20 more pips), while the trade plays out. Note two things:
1. I followed Acumen's rule - bias toward short while under pivot
2. Planned for bounce off a confluence (daily 38.2 and S1)

Looking at the attached H4 chart, I see that the price is still inside the relatively strong down channel. Think I'll wait... Thoughts?
Seems like a good idea, Ed. As you say, the H4 channel is looking very strong. I guess in the end, it's all down to how big a drawdown you can stand. Good luck, mate!
  • #278
  • Sep 3, 2008 8:51am Sep 3, 2008 8:51am
Quoting eyevoltage
Seems like a good idea, Ed. As you say, the H4 channel is looking very strong. I guess in the end, it's all down to how big a drawdown you can stand. Good luck, mate!
I'll get out if it does not bounce off 4500. So far, it is. I do agree with you though, EV, if I were not in this "logical" trade, I would not get in now.

Wanna hear a good one? Yesterday, I tracked a major short for about 14 hours. I had a TP target of about 4430. I followed all that sideways movement until 2345(EDT) last night. Got out with +20 pips. Within 15 minutes, that motha went SOUTH like I had originally planned. Bah Forex! Better to win a little than lose a lot.
Up or down, gimme a ticket
  • #279
  • Sep 3, 2008 8:54am Sep 3, 2008 8:54am
Because Daily Pivot is right above it at 4515. Problem with all that? Medium impact news coming in 7 minutes.

EV, how close are you to Chester?
Up or down, gimme a ticket
  • #280
  • Sep 3, 2008 9:08am Sep 3, 2008 9:08am
After the 1400gmt USD news, which was medium impact, but USD-favorable, price immediately streaked down from 4490 or so UNTIL it hit the 4450 psych. Bounced off that and is now headed back up.

Big opportunity to pick up 15 pips. I was too busy blogging.

Good testament to the power of psychs though.
Up or down, gimme a ticket
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