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  • #1,521
  • May 15, 2009 10:30pm May 15, 2009 10:30pm
Quoting SquareRoot
I decided to go ahead and take this AUDNZD trade before the weekend.

It looks good to me but I'm just getting started on the Silent Service method so it would be good to get some feedback from ClockWork.

Truthfully, I would like to see the price break below that "pinbar", but you have the right idea. Besides, it's just a bit more aggressive your way - and fortune favors the bold.

Fair enough analysis though. Welcome to the thread.
  • #1,522
  • May 15, 2009 10:35pm May 15, 2009 10:35pm
Quoting Dropped Onion
Hi CW,

I wanted to talk about in trade management if I may. So much focus goes into deciding when to get into a trade, but the other side of the same coin is when to exit and that factor depends on how you manage an open position.

Chart is the audusd. i went short at the break of the large bearish englufing bar on the daily chart and the rejection of the long term weekly pivot zone around 0.77.

After entry price retraced heavily. This could easily cause someone short to panic and worry. first and foremost people should at least be aware of...
I want all of you to read this post again. These are great words.
  • #1,523
  • May 16, 2009 7:33am May 16, 2009 7:33am
Quoting dolphin
Hi guys,
What do you think about this short trade?
I shorted this pair on Wednesday. It looked cleaner besides the cad is looking strong against a few other currencies at the moment. True Aud isn't fairing too badly either but looking at oil and gold and their recent respective moves pushed me to fancy the short.
  • #1,524
  • Edited May 17, 2009 12:23am May 16, 2009 7:50am | Edited May 17, 2009 12:23am
Quoting CanuckCT
Here is the H8 chart. You know...a person could trade H8 charts and really limit their chart time.
I would question the value of 8 hour charts Canuck mainly because I don't believe they are much used. Everything I've seen from amateur or pro suggests that 24hr and 1hr are the dominant timeframes with 4 hour coming along behind.

IMO, if not many are watching 8 then what is seen on 8 is less likely to generate a good followership. A second reason is that 8h would exacerbate the problem of aligning your bars. Its bad enough with different views of OBs, IBs, etc on 4 hour bars and would be even worse on 8 hours (you have 7 other possible views of each bar depending on peoples' midnights).

I note the disagreement below and would add the following points rather than creating another post and thus more noise:
- the disagreement is an interesting part of what makes a market: if everyone agreed then trends would jump from point a to b with no entries in between.
- as much as James is admired, repeated examples in a thread are poor examples of proof - they're just examples and one could accuse people of deliberately or accidentally cherry picking them (that's how the recognition engines in our brains work).
- for me this illustrates why I neither use candlesticks nor really like candlestick patterns.

Again, IMO:
Patterns work for two reasons:
- either because of recognition of them (all the london based traders can see a london based pinbars but if you have a chicago bro.ker it might not look like a pin bar ... so does that mean chicago people are wrong and london people are right????)
- or because the pattern shows something happening underneath (again if the london people see it and the chicago people don't who is right?)

So, I personally don't use the patterns unless there is likely to be a large following for them. But that shouldn't stop others.

What interests me is
1) s&r levels (and everyone can see the horizontal ones so they're automatically better than others)
2) lines and channels based on highs and lows (because again if you use closes it depends on whether your broker is in London, Sydney, NY or Chicago where the xxx your close is ... so why is close so important?? (except on hourly bars))
3) price movements that show either strong rejection or test and retest
a) I tend to be a test and retest trader because I'm a trend pullback trader with a taste for market perversity; but
b) price rejection is very very popular in the catch the end of this move world so pin bars and other candlestick descriptors or dinapoli descriptors like railway tracks are very popular.

I note that an 8 hour pinbar is a dinapoli railway track using 4 hour bars. But how does one cope with the fact that NY trader sees a pinbar while Chic trader and London trader don't? Which is why I've asked the question "where is the big professional money and how is it seeing these patterns" because I know I don't move markets and I suspect that most of you don't either.

Just stirring a little here given the difficulties MT4 seems to create for midnight adjustment but perhaps thinking about it might be of value to some.
  • #1,525
  • May 16, 2009 10:46am May 16, 2009 10:46am
Quoting Dropped Onion
Hi CW,

I wanted to talk about in trade management if I may. So much focus goes into deciding when to get into a trade, but the other side of the same coin is when to exit and that factor depends on how you manage an open position.

Chart is the audusd. i went short at the break of the large bearish englufing bar on the daily chart and the rejection of the long term weekly pivot zone around 0.77.

After entry price retraced heavily. This could easily cause someone short to panic and worry. first and foremost people should at least be aware of...
What a brilliant post. And that's not just because I took the trade and had exactly the sem thought process...

If you absolutely positively must be right every time you take a trade then trading isn't for you. If you can accept that every time you pull the trigger, it's just another trade that might go wrong, and allow your edge over time to play itself out..... well, then you're less likely to interfere and mes it up.

I know the feeling of wanting a daily bar to break hard and never look back but as you said they often don't do that. If we're sure of our area patience will help. And only trading can build the confidence. Which is why, in my opinion, demo is so important to the process.

I'm learning more about this every day. I don't want a single ounce of anxiety when I put a trade on. If I wanted that I'd go to the racetrack. I don't want to be watching the tick chart anxiously. If I am, then I am risking too much. No matter what the stop size it should be a fixed percentage of my account and preferably a percentage so low that it doesn't matter whether it wins or loses.

I've observed from my backtesting that BEOBs/BUOBs very often retrace to between the 50 and 61.8 fib before breaking down. If you play and see enough of these on demo then you're confident of your level you won't worry.

The thing I learn the most from clockwork71, who after james16 and mbqb11 is the guy who I think has this method best mastered, is that trading can be simple and easy and that it needn't take hours of agonizing analysis and hundreds of wiggly lines. Under an hour a month for 2-4%? That would make you a titan on Wall St. Madoff made a percent a month and everyone crawled to his door. Of course now they are saying, "of course it was a fraud, no-one can make a percent a month, it's not possible!". So this stuff is gold.

On the business of aggregated charts, I respectfully disagree. The combined timeframes are completely valid no matter who looks at them. The reason is that forex is a non centralized market and every single one of our daily bars look different depending on our broker. This stuff doesn't work because everyone sees the exact same pinbar. It's about price rejecting a level at a key area. Price is price. Our broker is the one who aggregates it a certain way. The bars are just our lens of looking at price. This is why, if we're at a key level, I have no problem looking at another broker to see if there's a pinbar where mine doesn't offer it. We're looking for patterns of rejection. After all, a head and shoulders pattern is also a 38 day pinbar....

Look at the James16 chart thread and there was some discussion on it. Clock uses two day pins a lot, ultra conservative Mike has no problem with it, James16 likes it although he doesn't use it so much, and Jarroo spends all his time slinging em together..... So I think it's a valid technique if (and it's a big if), it doesn't screw with your comfort zone to start seeing so many options. I personally only do it when we're at a huge price flip area. Like the recent combined bars on the daily off the 1.50 level on GBPUSD.

Terrific post Onion my man. And it was no ramble. This was a ramble...

I don't have charts here but my TP on that AUDUSD is I think 0.7350. Recent area of support. That's because I am travelling and want to keep things simple because I can't acess charts easily and on time, and also because I think the trend is up on this pair so I wouldn't want to hold this too long
  • #1,526
  • May 16, 2009 6:41pm May 16, 2009 6:41pm
Quoting Dropped Onion
Hi CW,

After entry price retraced heavily. This could easily cause someone short to panic and worry. first and foremost people should at least be aware of two things before they enter the trade. first they have to be comfortable and accept the risk that they take, and secondly they should have a stop placed around a logical price action area, not a arbitrary 40 or 50 pips stop.

so price broke the BEOB and then retraced into an area of confluence of support - the May 7 high and the 50/61% FIB retrace of the BEOB.

When I saw price...
A few responses packed into 1 post:

1. D. Onion,
That was some post. It summarized a lot of my feelings that I've been having lately, especially on that AUD/USD trade. I would fully agree with what I've bolded above. I would also add one aspect that I have until this past week fully overlooked:

Confidence in your method/strategy. You see, I have now demo traded successfully for three straight months and have done a lot of studying to learn price action. But this week I started trading with real money (not much, but it was real). I took a trade on the EUR/AUD pinbar and started to panic when it went against me. I then moved my stop up and got stopped out at B/E. Not a bad trade, and technically part of my plan... but I didn't like the feelings I was having while in that trade and felt even worse when it ran up to my profit targets after I got out.

I wasn't fearing the loss of the trade, and my stop was properly placed. But I realized that maybe (despite great results over the last three months) I wasn't fully confident in my strategy and in price action.

After a lot of thinking, I now feel that it takes time to develop confidence in a system, but it will come. At this point, there is nothing I have found that validates my 'worries'. Price action provides remarkable results if you are able to be picky and only take the best setups.

2. Great insight Tia Forex too -To paraphrase: "Only trading can build the confidence, which makes demo that much more necessary/important". I fully agree with this. When I have doubting feelings about the accuracy and validity of price action, I can go back and look at my demo account, backtesting, and exit strategy results. These three studies all turned out very well and have given me confidence again.

3. Finally, on the 8 hour bars. Fully agree with Tia Forex on this one. If you read through the James16 Chart Thread, you will see conclusive evidence that this stuff works REGARDLESS of timeframe.

Well, perhaps another rambling post for you all.

(My first TP on AUD/USD at 0.7380 (based on 0.5R), but generally thinking bullish as well)

Josh
  • #1,527
  • May 16, 2009 9:17pm May 16, 2009 9:17pm
I have to agree with Tia about the time frames. In my opinion, it's about price, and reaction to it. The stops at Price X don't care if it's done on a 5 minute pinbar, or a BEOB weekly......it's all the same.

Besides, time doesn't actually exist. But that's a whole other conversation that gets a little esoteric.

CW
  • #1,528
  • May 16, 2009 9:34pm May 16, 2009 9:34pm
Quoting clockwork71
I have to agree with Tia about the time frames. In my opinion, it's about price, and reaction to it. The stops at Price X don't care if it's done on a 5 minute pinbar, or a BEOB weekly......it's all the same.

Besides, time doesn't actually exist. But that's a whole other conversation that gets a little esoteric.

CW
Ok now I am very curious. Pandora's Box has been opened. So clockwork71, please at least begin to explain what you mean
(I highlighted the comment about time. Clockwork did not)
  • #1,529
  • May 16, 2009 10:19pm May 16, 2009 10:19pm
Hi Tia and Clockwork,
Clockwork, in your post above you mentioned that time does not exist. Tia, in your recent post in which you talked about price action, bars, and different brokers. AND especially that it is all about price action at certain levels. You said:

"It's about price rejecting a level at a key area. Price is price. Our broker is the one who aggregates it a certain way. The bars are just our lens of looking at price."

Having in my head what Clockwork said and Tia, your statements as well, you both gave me an a'ha moment. Tia, taking what you said a step further, then quite possibly we might be able to eliminate bars and candlesticks altogether and learn to trade on simply a price line of the Close. I don't know but I wonder???
Most or much of the time, don't brokers agree on a certain price at a specific point in time? Sure there might be a pip or two discrepancy, but not that much. Regardless of what time it is, regardless when a bar started and in what time frame the trader happens to be looking, 1.5000 is always 1.5000, isn't it? And if price hit a hypothetical 1.5000 on a chart, wouldn't that intersection align price and time? And wouldn't that 1.5000 coincide with all brokers? For some lets say it is 12 midnight, and for others 6 am. But so what !! And every broker may have a different looking candle when price hit 1.5000. But if price level relationships are the key then so what if everyone's candle looks different.

If indeed the way to trade is by looking at price action/reaction at certain levels in relation to other or the same price levels, then wouldn't it follow that pin bars and beob, buob etc. which depict TIME are not relevant or not as relevant as (closing) price? And if that is the case, then we should be able to be successful trading off of a line connecting closing prices.
I don't know. Yet. Clockwork, is this what you mean when saying 'time does not exist'?
  • #1,530
  • May 16, 2009 10:35pm May 16, 2009 10:35pm
Hi

I haven't posted here yet but I do find the current topic interesting and would like to chime in, if thats ok.

I came to the following conclusion some months ago:

In trading Forex there is only the markets going up, the markets going down and the markets going sideways.
After that there is only time and risk. We cannot control time but we can control risk. Therefore time is irrelevant and controlling risk is all we have.

I have also traded equity options and I can assure you that if you are trading options you will indeed see time in a completely different light.

Great thread so far Clockwork, Thank you.

Dan
  • #1,531
  • May 17, 2009 6:16am May 17, 2009 6:16am
Quoting clockwork71
Truthfully, I would like to see the price break below that "pinbar", but you have the right idea. Besides, it's just a bit more aggressive your way - and fortune favors the bold.

Fair enough analysis though. Welcome to the thread.
Please help me understand your reply. Can you identify the "pinbar" to which you refer?
Enter Signature
  • #1,532
  • May 17, 2009 8:20am May 17, 2009 8:20am
Quoting SquareRoot
Please help me understand your reply. Can you identify the "pinbar" to which you refer?

The last bar is a pinbar, not a A+ one, but one none the less. I would have entered about 10-20 pips below that is all I was saying.
  • #1,533
  • May 17, 2009 5:53pm May 17, 2009 5:53pm
Just to illustrate the timezone trap

This is the AUDNZD pinbar referred to by Squareroot. In some timezones it is quite good. In others poor. But in most you can clearly see a test of the recent round bottom by a spike down - test and retest.

And in all you can see that horizontal s&r doesn't change

.
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  • #1,534
  • May 18, 2009 12:26am May 18, 2009 12:26am
Just sold USDCAD based on rejection at 1.1800. Stop is not that big...off to get some sleep.

Cheers

CanuckCT
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  • #1,535
  • May 18, 2009 3:45am May 18, 2009 3:45am
Quoting CanuckCT
Just sold USDCAD based on rejection at 1.1800. Stop is not that big...off to get some sleep.

Cheers

CanuckCT
I've been watching that one... I don't really like the setup but I hope it goes in your favour.

Cheers,

VB,
  • #1,536
  • May 18, 2009 5:25am May 18, 2009 5:25am
Quoting Lou
Hi Tia and Clockwork,
Clockwork, in your post above you mentioned that time does not exist. Tia, in your recent post in which you talked about price action, bars, and different brokers. AND especially that it is all about price action at certain levels. You said:

"It's about price rejecting a level at a key area. Price is price. Our broker is the one who aggregates it a certain way. The bars are just our lens of looking at price."

Having in my head what Clockwork said and Tia, your statements as well, you both gave me an a'ha moment. Tia,...
Lou,
There is no escape from time.
How do you get a line chart of the close, unless you have already decided upon a timeframe? If you have not done that, then you can't know if the line is up down or sideways!
What I would suggest, is to be aware that a universal absolute time does not exist in Forex. Therefore if you trade 4Hr or 1D charts you have to train yourself to see them form all relevant alternate timezone perspectives, not just what your broker's chart shows. (But perhaps this is just me, I hate 4hr charts.)
Ian
  • #1,537
  • May 18, 2009 4:27pm May 18, 2009 4:27pm
Hi CW. looks like the bears are in control of this pair at the moment.

 

  1. large bearish engulfing bar today on usdcad daily chart
  2. rejection of 1.18 level, former support now resistance.
  3. good weekly support at 1.1450 though so any shorts would have to be closely monitored as price may bounce if it gets there.

I know you were looking for opportunities to (re) short the usdcad? is this it, or would you be more comfortable shorting this pair around the 1.20 area? Thanks.

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  • #1,538
  • May 18, 2009 6:01pm May 18, 2009 6:01pm
Quoting Dropped Onion
Hi CW. looks like the bears are in control of this pair at the moment.

 

  1. large bearish engulfing bar today on usdcad daily chart
  2. rejection of 1.18 level, former support now resistance.
  3. good weekly support at 1.1450 though so any shorts would have to be closely monitored as price may bounce if it gets there.

I know you were looking for opportunities to (re) short the usdcad? is this it, or would you be more comfortable shorting this pair around the 1.20 area? Thanks.


Hell....I say go up to 1.30, I will short it there! To be honest, I am looking to re-short, but I haven't gotten the signal yet.

The higher, the better in my opinion.

CW
  • #1,539
  • May 18, 2009 6:55pm May 18, 2009 6:55pm
Here is a possible setup getting ready on the GY weve got support that turned into resistance. Right now it is at the top of the resistanceand it may break through again but the current bull run looks to be weakening. So I am keeping an eye on it.
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  • #1,540
  • May 18, 2009 7:48pm May 18, 2009 7:48pm
Quoting kodflakes
Here is a possible setup getting ready on the GY weve got support that turned into resistance. Right now it is at the top of the resistanceand it may break through again but the current bull run looks to be weakening. So I am keeping an eye on it.
could this be a possible short?
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