Tuesday, 6:28 am GBPJPY still in consolidation after last bearish movement. Volatility low. Bollinger bands flat. Consolidation may continue, price floating/herky-jerky sideways between bollinger bands. Pent up energy building, marking time. There will be a big breakout at some point: Trending Momentum with compelling 100+ pips potential. Until then nothing to do. Traders, smart money just watching, waiting it out.
Sometimes just one good trade opportunity a week is enough. Sometimes it's good to stand aside (wait out consolidations, etc.) Chart (with mispelling) and trade summary.
I've been following your thread for a while now and I am amazed by your results. However, it seems much easier reading your posts than applying what you say to real trades. I just wish I can do it the way you do.
Good luck to you and thanks for the valuable information you are providing here.
Sometimes just one good trade opportunity a week is enough. Sometimes it's good to stand aside (wait out consolidations, etc.) Chart (with mispelling) and trade summary.
I have to say that this system works great for Greg. I have been with him for over a year. Although this system does not fit me, i agree that with enough time, a person possibly could make it work for them. I will also say that after a year, that pretty much no one in a group that has been as high as 50 or so people, have successfuly mastered this system. The entry is very subjective to your own eye i think. It does work for Greg, and i hope someone else will be able to get hold of it.
Hi Bob, As we know, only 5 percent of all forex traders are consistently successful. There is no strategy that works for everyone. Psychological factors/makeup of a trader also have to be considered. But there are others in the forex group (group of traders in this area I host weekly) who are trading the 100+ pips strategy successfully: Joe VanGoah (trading full time and uses the strategy), Rich Licata (uses the strategy and has clients), Cedrick (back with the group), Arelene George, MD (uses the strategy), Sandi, Jim, Karl, Carmen, Ray and others use the strategy to some or great extent. Overall the feedback I receive about the strategy from traders who understand or learn from it, or use it is very high. Cheers, Greg
Thanks for the post, I'm glad you find the charts helpful. Despite the simplicity of my strategy, or having an understanding of the indicators and what they are telling you, I know winning consistently at currency trading takes a lot of practice, practice, practice. Demo trading is great for that. What I learned through practice and experience were the things I hadn't understood or read in books and articles (or didn't choose to read about at the time because they didn't seem important).
One of the important things is the timing of the trade; the entry of course, but also the time of day or night I'm seeing a setup, even the time on the hour clock (this is why I have a clock on my desktop).
I try to make trading decisions simple and as easy as possible, i.e. as stress-free as I can. I wait for the obvious setup, the highest probability, risk/reward trade. Trending Momentum.
I place price alerts to my cell phone at areas on the chart where I think a trade setup may occur.
I try to trade off floors or ceilings (support and resistance) only, ideally between pivots, but other floors or ceilings will do if price has been there and they have been tested. I will sometimes take a trade between a floor and ceiling (entry and target), but only if price is already in a trend, and only if there's compelling momentum.
The value of this and other considerations has to be studied.
My advice: Look at the chart, what is it telling you? See if you can correctly analyze what has happened in the recent past, what is happening now, and what is a possible scenario for the future. If your analysis turns out to be wrong, do another analysis and see where you were in error. Take a picture of your charts like I do (e.g. Snagit.com), a pre-analysis chart, then another chart after the trade, diagramming them out, adding commentary like I do. This is journal-tending. You will learn a lot by this discipline. In the end this will be more valuable than any book, advice column or guru (although they can be very important in the learning years).
Thanks for doing this thread, it shows that trading just one pair is more than enough to make plenty of pips.
Iv sent you a private message about a short entry from yesterday that you took, dont know if you have seen it.
Hello, Patrino. You are quite right, one currency is enough. In years past I was trading all the majors and it was confusing. I lost money. Reason: each currency has a personality. One currency is heading up, another currency is going down, another currency is doing nothing or is in consolidation. Also factor the economic fundamentals for each currency. A lot of juggling and sorting.
Thus my dream became to move from complexity to simplicity. Part of that wish was to find a currency that gave me enough volatility that I didn't need to trade 4 or 5 currencies. Somehow I stumbled into GBPJPY. The more I watched it, studied it, the more it appeared to fit what I was looking for.
Fact is, if you can consistently capture just 15 pips a day (plus spread) on any currency, in three years you will have more money than you ever imagined (of course you'll be increasing the % amount of your stake that you trade). It doesn't take that long to build a decent stake, given that your skills are in place and you have a trading strategy.
I'll address your private message here: Yes, that was quite a good entry on the trade, amazing even. I always have to attribute part of it to luck, and then to long experience at looking at charts which give me a "hunch" that the entry I made was the right decision. Art vs. science. Of course you'll never know for sure until the move kicks in, there can be pullbacks, chop, etc. Entries are a bit dicey, be quick to exit if you're wrong.
I don't pay much attention to candlestick patterns, so I can't address the pattern you describe in your private message. You might be 100% on the money about it. I do pay attention to the candles, e.g. the last one (in a given scenario) was blue (bull candle), and now of a sudden we have a red candle (bear). Interesting. (Musing): "I notice that price is revisiting (1) Recent top area (2) Recent ceiling -- bollinger band top, channel line top (3) Yesterday's high (4) Yesterday's open, etc., etc., etc. Maybe that's why we're seeing a red candle on the..." (whatever time frame -- I give more weight to 1 hr chart for intra-day trend/trade considerations).
Question is: Do I want to jump into a trade to the downside just because I suddenly see a red candle? Answer: Maybe so, likely not. I need more confirmation that the current move up is reversing. I need to wait. I need to look at my other indicators, stochastics, MACD, etc., what are the telling me? Is the stochastics on the 1 hour chart overbought? Are the stochastics, MACD on the 1 hour and 4 hour charts contradicting each other? Maybe I should wait until they line up.
In our downside scenario, the red candle on the hourly gets bigger, price looks like it's heading down. When do you enter? That's the tough part, and I've never been able to convincingly teach someone else when to pull the trigger. It is somewhat subjective, although in my case I have guidelines: I like to trade Trending Momentum...
...In other words, if price (candlesticks) are moving in the trending direction the charts indicate it should move (e.g. moving averages are trend indicators), I wait for momentum to confirm that. Momentum = movement. Movement can be actual movement you see as you are watching a candle, or it can be series of candles already moving in the direction of your trade (e.g., the last 3 or 4 blue candles).
Bottom line to entry consideration: (1) I do my analysis and find a possible trade setup (2) I wait to pull the trigger until I am as convinced as I can be that the trade is heading in my direction via momentum, other indicators, what other time frames are telling me, etc.
All of this assumes that I have a trading strategy and have mastered it. The strategy I follow is Trending Momentum = 100+ pips opportunties between a floor and ceiling (and vice versa), or entry and target. Highest probability, risk/reward opportunities. One a day, one currency pair is enough.
P.S. If I don't have a target other technical traders are looking at (e.g. pivot points), I won't make a trade. Why? Answer: What's to provide momentum other than a target in common that traders are shooting for?
Thanks for the detailed answer. Am i correct in thinking you place your stops below the candle that got you involved? Or below the entire setup itself?
Iv found on many occasions that when i have a sl below my chosen candle, it gets hit then continues upwards.
Please see the chart below from a few days ago (eurgbp). The setup itself was screaming at me to buy. I would usually wait for a Break out pullback continuation of the "2" of the reversal 123, as entry.
But now trying to improve my entry i was looking at the area that forms the "3".
And using the 5min/15min candles for entry.
If you prefer to take entry off the 1hr candle wont you have a 1hour candle SL which will be fairly big? This big stop is what is shying me away from using a 1hr candle entry. How do you compensate for this?
As you can see in the chart i had both stops hit. And the only place that a stop would have been safe is below the entire setup.
In this kind of situation asumeing the setup is good, how would you manage the sl?
Many thanks for your help !
Refer to other posts on this thread regarding stop loss. I usually don't place a stop loss initially. This implies I have chosen a high probability, risk/reward setup. After the trade has moved in my direction 30 or so pips, sometimes less, I place a stop loss at breakeven entry. This tends to be my only stop loss for the duration of the trade, and I don't adjust the S/L up (or down) as my pip count increases until I've captured 100+ pips. Always exceptions to the rule of course: Occasionally I will place a stop loss at the same time I enter the trade. But what this is saying to me is that I'm not sure of the trade.
I realize my approach to stop losses smacks of high risk (if we have another 911 type attack, my account could be wiped out instantly), but this is the way I approach the game. Stop losses are subjective, countless articles have been written on the subject with different approaches.
If you always use a S/L, I think you have to be flexible, i.e. adjust as circumstances dictate, widening or narrowing the S/L. Where you place your stop losses and how far from price depends on your pain threshold, and how many positions you have on the trade. 20 pips, 50 pips, 75 pips? Do you place your stop loss under a recent low or high, at the bottom or top of the current candle? Off the 1 hr chart, 15 min, or 4 hr chart?
Sorry to be vague about this, but for me every consideration depends on the initial setup. Higher (100 + pips) and lower (ranges, scalps, etc.) probabilities will dictate different approaches to S/L, and also entry and exits, time in the trade, etc.
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Correct analysis is so important. When I'm about to enter a trade, I like to ask myself two questions which make me check my analysis one more time: (1) Why am I entering this trade? (2) Is there any reason why I should not enter this trade?
I'd better have the correct answer to both questions. If I do, I either have a high probability, risk/reward setup (where S/L parameters are less critical), or I need to pass on the trade.
[b][i][color=#0000ff]Thanks for the post, I'm glad you find the charts helpful. Despite the simplicity of my strategy, or having an understanding of the indicators and what they are telling you, I know winning consistently at currency trading takes a lot of practice, practice, practice. Demo trading is great for that. What I learned through practice and experience were the things I hadn't understood or read in books and articles (or didn't choose to read about at the time because they didn't seem important)....
