No Brainer Trades

Quoting aSandman

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Hi Magnus,

I would venture to say... these are the type markets to let your winners run a long time. I'm up so much for the month I'm afraid to pull the trigger for fear of losing it all back. It comes down to trusting yourself to do the right thing under any market condition. Guess I will be reading mark Douglas again tonight for the 10,000 time. lol

Let one wave go against you...........A picture says a 1000 words

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Quoting hendrix

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Could you please elaborate a bit more about this topic? I've never heard about it. Has this something to do with Elliot Waves (I don't want to start a lenghty conversation about EW's, I'm just asking)?

EDIT: I'm asking this, because I had a lot of \"1 pip profit\" trades lately... Price went 15 or 20 pips in my favor and I've moved my SL to +1 pip of profit and it got hit three times this week. Maybe I'm just not letting enough room for the trades to play themselves out...

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Quoting Willowgal

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You hit on a point that I have been meaning to mention for ages here.

Even though a pair may be heading up/down like a rocket there surely will always be trading opportunities to trade the pullbacks/bounces etc. on the shorter timeframes using S/R levels (and our beloved buckets) so if we are looking to trade say, the 5 or 15 min. chart, how important are the fundamentals for a day trader ?

Shoot me down if I am talking rubbish but ??

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Quoting hendrix

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Could you please elaborate a bit more about this topic? I've never heard about it. Has this something to do with Elliot Waves (I don't want to start a lenghty conversation about EW's, I'm just asking)?

EDIT: I'm asking this, because I had a lot of \"1 pip profit\" trades lately... Price went 15 or 20 pips in my favor and I've moved my SL to +1 pip of profit and it got hit three times this week. Maybe I'm just not letting enough room for the trades to play themselves out...

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Quoting hendrix

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Could you please elaborate a bit more about this topic? I've never heard about it. Has this something to do with Elliot Waves (I don't want to start a lenghty conversation about EW's, I'm just asking)?

EDIT: I'm asking this, because I had a lot of \"1 pip profit\" trades lately... Price went 15 or 20 pips in my favor and I've moved my SL to +1 pip of profit and it got hit three times this week. Maybe I'm just not letting enough room for the trades to play themselves out...

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Quoting smittens4212

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Hey hendrix,

A few weeks ago I was having trouble with this issue. Let me preface this by saying that I don't strictly fade S&R, I often trade breakouts (especially during days like this when there's a lot of volatility-- for example the past weeks in the EURUSD traded in a very identifiable range, perfect for nice fades and short term mid-range breakouts towards the range boundaries), so obviously we may not trade the same style.

I came to realize that given my trading style, one of two things happened: (1) on breakouts I got in late (i.e. if I am shorting support, I didn't get in right at support, but perhaps a few pips after), and moved my stops to B/E after finding 20 or so pips in profit, only for it to get taken out on mid or opening hour retraces before finally moving back in the green with me being left behind in the dust.

(2) When fading S&R levels, there would sometimes be immediate drawdown, i.e. my entry was off by a little bit, but would go green after a little bit of time. What I -THINK- is going on here and in your case, is that often times if you don't execute a perfect trade to the pip, they may move in your favor eventually as you move your stops to break even, then retrace back to where they reversed positions, before finally moving back to the green and getting on with the move.

Let me give you an example: let's say we identify a strong resistance level on the EURUSD at 1.3550 (just for example), and price approaches it. We have a limit order set at 1.3550, and it's filled, while price moves to say 1.3560. We experience a 10 pip drawdown before price moves to 1.3530, and we move our stop to break even. Here is the key-- price has a tendancy to retest towards a high or low (not always of course), in which case it will blow by our stop-loss, only to find that resistance again and eventually move in our favor.

What I now do is watch price action-- using the same example as above, perhaps instead of setting my stop to breakeven, I may move my stop to just outside of 1.3560. If THAT gets hit, to me that says it's better that I got out of the trade at a 10 pip loss that was probably a bad trade and may end up breaking upwards while still allowing for the trade to move back in my favor if it only gets back to breakeven, instead of getting out at breakeven and missing out on a potential trade.

Another issue is consolidation, but it should be pretty obvious what's going on there. In the case where I enter a trade that I thought would be a good level and it begins to consolidate-- bouncing back and forth between profitable and losing, I'll usually set my stop loss to outside of the range it's trading in, which is usually defined by some sort of pattern, whether it's just a sideways channel, a pennant, etc. I had a trade like this last night and when I identified a pretty solid pennant it was trading in, I set my stop outside the north side of it as I was in a short. The trade eventually broke the lower TL and then I adjusted my stop appropriately. I also think this is a good method for staying in trades that stall when they're 40+ pips in the green. Basically you want to identify if what's happening is just some short term consolidation where the trade will bounce back and forth in a range (I use the 5 and 15m chart), or if it's an actual solid reversal where you should exit your trade.

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Quoting Forex007

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It's back to 1.2550... That's what the \\"fundamentals\\" say: But so deep is the sense of economic pessimism at present that Thursday's Bank statement is likely to only further accentuate the Canadian dollar's downtrend, unless the central bank makes a stunning departure from the generally dovish impression created by Tuesday's rate statement.

As for \\"short this pair over and over again...\\" - why would you want to go short when the main trend is up?..

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Quoting smittens4212

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Also, I've been following this thread for the past 70 pages or so, and just registered and thought I would give my props to BRV. I've only been trading for about 8 months (including demo), and while I've been trading live for the past 4 months on a mini account, I've recently gone from being a strictly break-even trader (bouncing back and forth between profitable and losing), to a pretty consistently profitable trader thanks to this thread and your blog.

The section on fundamentals was quite literally a game-changer for me and I would say has singlehandedly improved my win % from in the low 30s to well over 80 now. Having a fundamental basis for a trade means I'm able to identify the technical levels for what they truly are-- a counter-trend fade, a continuation breakout, etc.

Unfortunately I'm only able to trade the Asian session (live on the East coast but work full-time) so I miss most of the good action in this thread, but I've been following it diligently and intend to continue, hopefully being able to contribute more.

Thanks again BRV. It's my full intention to trade full-time by next September, and only in the past few months has this become a realistic proposition. If this ever comes to fruition I will have to buy you a bottle in one of those high priced NYC clubs

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Quoting jlmac27

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That sounds like a pretty small stop...(depending on the trade of course).But price has to have room to breathe.

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Quoting Forex007

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BillyRay, was that a good/valid bucket trade? THANKS!

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Quoting BillyRayValentine

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Yes sir! That would do it.

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Quoting smittens4212

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Hi Alex,

My take on this trade is that you must look at the two main issues here, technicals & fundamentals.

Technically speaking, it's been my (relatively little) experience that buckets are best for playing the counter-trend bounce, meaning that you scalp whatever pips you get (and this could be anywhere from 20 to 200), before the bucket level is going to be retested and broken back on following the initial trend.

Fundamentally speaking, and this definitely ties in to the technicals, the USDJPY has been on a pretty steady downtrend on strong Yen buying as investors get rid of their carry trades amidst the global stock market slumps. Because this particular bucket had already been used for a counter-trend move, I think the better move (obviously hindsight is 20/20) would've been to hang around the sidelines, wait for price action around the level, and because it broke it, play the short term fade as price retests it from the downside.

Obviously as I said hindsight is 20/20, but I think in this particular case you were trying to do too much with a trade that had little fundamental support and playing a technical level that had little statistical support given the circumstances (i.e. it had already been used, therefore it's a low % trade).

Hope this helped.

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Also, I've been following this thread for the past 70 pages or so, and just registered and thought I would give my props to BRV. I've only been trading for about 8 months (including demo), and while I've been trading live for the past 4 months on a mini account, I've recently gone from being a strictly break-even trader (bouncing back and forth between profitable and losing), to a pretty consistently profitable trader thanks to this thread and your blog.

The section on fundamentals was quite literally a game-changer for me and I would say has singlehandedly improved my win % from in the low 30s to well over 80 now. Having a fundamental basis for a trade means I'm able to identify the technical levels for what they truly are-- a counter-trend fade, a continuation breakout, etc.

Unfortunately I'm only able to trade the Asian session (live on the East coast but work full-time) so I miss most of the good action in this thread, but I've been following it diligently and intend to continue, hopefully being able to contribute more.

Thanks again BRV. It's my full intention to trade full-time by next September, and only in the past few months has this become a realistic proposition. If this ever comes to fruition I will have to buy you a bottle in one of those high priced NYC clubs

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Quoting hendrix

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Could you please elaborate a bit more about this topic? I've never heard about it. Has this something to do with Elliot Waves (I don't want to start a lenghty conversation about EW's, I'm just asking)?

EDIT: I'm asking this, because I had a lot of \"1 pip profit\" trades lately... Price went 15 or 20 pips in my favor and I've moved my SL to +1 pip of profit and it got hit three times this week. Maybe I'm just not letting enough room for the trades to play themselves out...

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Quoting belekas

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Good morning Sir. How you doing today? Id like to ask you about that resistance on Loonie weekly timeframe price is approaching right now @ 1.26850 Do you think this level will hold some sellers and so we could join the crowd? Not like im willing to short, but im just curious if taking a short on this level what size stops must be placed according to you?

Thank you in advance

Cheers

P.

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Quoting BillyRayValentine

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Hendrix I think this is just something that comes with experience more than anything.....when you take as many trades as I or other experienced here have you get (alot) less paranoid of little moves going on, or letting a 20 pip trade go against you because you're looking for 100. I have had many trades that move 40 pips in my favor and then come back, put me in the red for a few seconds and then really kick in and pay out. Comfort is a blessing I think that comes with time.

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