No Brainer Trades

Quoting daytrade5

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sorry...would help if I remembered to upload the file.

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Quoting FXBeacon

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Looks like a nice level to fade if it gets up there. Previous lows, fibonacci significance. Level also had some significance when it passed in on the way up in 2000. Remember, GBPJPY is very volatile, use smaller size and a little larger stop loss, psychological resistance 155.00 is right there too. If it holds, should be a nice 100-200 pip bounce.

btw, nice breakout trade Willow.

P.S. I'd be really careful if the level hits after the equity markets close in an hour during low liquidity time. We all know what can happen then!

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Quoting birdt

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About as good an example of the the break and retest 'kiss of death' as I have seen, compounded with the the three tests and a break Gann principle that we spoke on earlier.

You may see a level getting rejected more than three times, it is not absolute - but not often. The orders at the level get eaten up, pressure builds, and the more energy that is bottled up the more stop orders are placed on either side of the range so when it does break out you get a fast impulsive move.

In this situation when it broke it came back and retested the resistance turned support level. Easy pips, wish they all came gift wrapped like that.

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Quoting smittens4212

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Hi hendrix,

On a trade like last night on the UJ, there was a very well-established trendline and range that it had been trading in, and was ready to blow. I used a market order and entered the trade approximately 15 pips outside the line, because I wanted to definitively confirm that we were moving strongly (basically I watched price action and got in when I felt confident the breakout was the real thing, this was also confirmed by the Nikkei making strong gains at the time UJ was breaking out). My stop was 40 pips, giving me good breathing room so that the trade could go back to re-test the trendline and I didn't have to worry about being stopped out. This trade never did retest the trendline.

I'm usually looking for fast, definitive action on a breakout, so I'm not looking for a retest too often. I think you'd miss too many worthy breakouts if you looked for retests, since that kind of goes against the principal behind a breakout. However, after the initial action is over, I definitely go back to basic S&R concepts, and if the S&R gets approached again, I'd be looking to fade it unless the fundamentals are really against it.

Probably doesn't help, I haven't thought out the strategy to my breakouts too much-- they're usually impulsive moves that are supported by a drastic fundamental move, e.g. news or a strong move in whatever market the pair you're looking at is heavily correlated to (oil, gold, equities, etc.). They work really well in volatile and news-heavy environments like the one we have now, mainly because they're occuring so often. When the markets are a bit more tame, they are much less abundent and successful.

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Quoting jlmac27

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Hello bird,
You seem to have a good handle on this biz,thank you for sharing your knowledge.Great example of support becoming resistance.My question is do you usually zoom down to the 5 min. chart to confirm these moves?...Thanks!good trading to you my friend

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Quoting birdt

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PS., jones, there were some great opportunities on S and R today. Keep in mind that they do not always have to be rejected to provide opportunities to profit. All the lines on this chart were drawn before any of the candles on the page were created yet we see all of them were respected to some extent and all could have been useful for entering trades or placing TPs.

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Quoting jones247

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thanks for the reply birdt... what was your basis for the given S&R lines that you drew on the chart prior to the actual price movements? I guess that if you're right about your assumption of the basic direction for the day, and enter once pull-backs occur, then I'm confident you'll be successful. However, if you're wrong about the trend for the given day or period of time, and treat the \"true\" trend/direction as a pull-back, then it could be a painful experience. The hardest part for me is determining the given trend/direction for the day or period of time.

Typically, I'm only comfortable with risking about 30 - 50 pips to make 30 - 50 pips (ideally, I'd like to risk about 30 pips to make about 40 pips). Have you tried to follow the price movement after certain price points have been broken and a given indicator (i.e. stochastics or RSI or boillinger band) provides an entry signal?

Thanks,

Walt

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Quoting birdt

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Wash your mouth out Walt! Stochasitcs, RSI, Bollinger - dirty words around here. Forget about those, price action is a much better indicator, they'll get you in late and still tell you to go long when you're about to hit the mother of all resistance.

Those lines were drawn based on past levels of significance where price consolidated or pivoted in the past, take a look on the 30m, should be able to see pretty clearly how these lines described price in the past. Read up on BRV's pdf if you haven't done so (see page 1) and practice.

How about you only trade in the direction of the market for the day. I generally consider the London (0800-0830) open range to be the starting point - if we are above that I have a long bias. If we are below that then I have a short bias. Look at the open ranges for Tokyo and New York too. I may still take a trade contrary to this bias but I am quicker to take profits. Watching support and resistance levels you are often tempted to take trades against the trend - they have to end somewhere but just don't expect to hit home runs every time you do so. They say the trend is your friend for a reason. Trading a simple open range breakout system would have made you an absolute killing in the last few weeks.

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Quoting Gerard212

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Smittens

Ta for your contributions.Can you describe please your calc of stops ?

Thanks Gerard

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Quoting ranger

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When looking for s/r to draw in how do you go about selecting the best ones, I starting practicing drawing them in tonight to prepare, and after I was done I looked at my chart and there were way to many lines on the charts. I think I am seeing them were they really shouldnt be or just making connect the dots

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