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  • #3,701
  • Jun 13, 2009 7:32am Jun 13, 2009 7:32am
E/D picked a nice spot to reverse the modest downward action off of the weekly pattern. The current area looks well supported to my eye, and I will be looking from the long side next week. A break of the weekly low is a nice R/R point to confirm or deny this view.
  • #3,702
  • Jun 13, 2009 7:45am Jun 13, 2009 7:45am
Quoting Alexandra
I have no conflict re: my bullish view of dollar-yen versus a continued overall sense of dollar bearishness. I see it simply as a reversal of risk aversion flows. A look at the M/W/D and, yes, even the 4-hour USDJPY chart is revealing. EURJPY is similar. At some point, the ride should become easier and quick, rather than the annoying chop of the last few weeks.
Thanks Alexandra,
USDYEN is, as you have mentioned a key driver in many ways. The 2 biggest GDPs in the world with fiscal positions that I would imagine have never been so diverged? The US with huge debts - I read this week that 50% of every dollar spent comes from borrowing! (Bill Bonner) whilst Japan has been mending balance sheets for 15 years.

Ashraf Laidi in his book 'Currency Trading and Intermarket Analysis' gives the topic of usdyen/vix/S&P500 some considerable debate. Bottoming cycles in usdyen rate have often preceded tightening cycles from the US Fed. The lag between the bottoming and Fed rate hikes is usually between 2-6 months. (Excellent book by the way for advanced traders, quite deep)

You can also plot eur/yen on the same chart as the vix index - the vix spikes will often drive capital back to the yen. (ie euryen and usdyen both fall as money floods back to pay off the carry trade as risk aversion strikes). So, keep an eye on the vix as the spikes will often point to a rise in the yen - there is a lag of a few months though.

Thanks BabaG too - On skype under the same name!
Trade less and become more profitable!
  • #3,703
  • Edited Jun 14, 2009 5:27pm Jun 13, 2009 10:41pm | Edited Jun 14, 2009 5:27pm
Here’s my USDCAD trade

21 April … USDCAD made a lower high on a pullback in a downtrend and then put in a shooting star, a perfect entry!

1. I put an order to short from the shooting star but it did not trigger.
The next day (22nd) there was another shooting star as an inside bar. I went short from 1.2315 with a 60 pip stop, all was looking good.
Friday night and I am up 3.5 times my risk so decide to bank half and leave the rest to run.

2. Sunday gives an inside bar and I put in a order to add some more short, but when I get up Monday it has broken long and price is going up.
Tuesday closes as another shooting star but with an ugly short tail. Decide to put an order underneath it for another short and hope that I don’t get top and tailed.
Short triggers and we are in business, My second short from 1.2150
Friday close and decide to play it safe and bank the lot, leaving original half to run.
Sunday night (03 May) makes another small inside bar but I remember last weeks did not work so I leave it and see what happens Monday. Monday the price continues down to a big bearish outside candle so I wish I had played the Sunday bar!! Murphys Law …
Tuesday is a small retracement and Wednesday I short a break of Mondays BEOB.
Thursday price pulls back again past my entry but not my stop … still in but offside.
Friday and the price tanks … Thank you NFP! I close the whole short because it all looks very overdone, The other half of original short still running.

3. Don’t trade Sunday and then Monday is a big bullish outside bar. Retracement is on. Tuesday is sideways and Wednesday is up again L Oh well.

4. Monday 18 May and we get a big bearish outside bar and we have a lower high. This is looking good again. Tuesday I trade a break of the BEOB and for the next four days the price drops every day. Friday we are at 1.1200 a big number (and long term trendline) and decide to bank this trade, still have original half running.

5. Sunday 24 May and Monday are inside bars, consolidating sideways. I am worried we might make a base and think about closing some more of my original short. Tuesday and we get a big fat shooting star – This one is a biggie, it is the break of the ascending trendline from the lows of October 08. My short gets triggered but we go back up to 1.1250.
Thursday 28 May and down again, but not much up. Friday comes through for me though and price closes down at 1.0923. Close trade before 5 on Friday PM. We have come a long way without a retrace …

Monday 01 June and we get a hammer for a long … The retracement is on again. Have to steel myself not to get shaken out and hang on for the ride. Wednesday 03 June is a bullish outside bar so antenna is up. My friend James now likes it long and the Canadian news is saying we are going to parity (that’s a buy signal I think)
Thursday price retraces half of the BUOB and then continues up on Friday.

6. Monday 08 June and a shooting star to short again. Priced has retraced back to the big trend line and is rejecting off it, looks really good! Short from 1.1125 and Tuesday goes well. Wednesday is a long legged doji … not so good. Thursday is an inside bar so decide to put my stop and also the stop for the second half of my original short above it at 1.1090 in case it breaks long. It breaks long so now we have a higher low. I'm now all out and flat.

I’m hoping this is just a bear flag but the dollar seems to be having a bit of a rally. Lets see what next week does.

Nicola
Attached Image (click to enlarge)
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  • #3,704
  • Jun 14, 2009 7:08am Jun 14, 2009 7:08am
That was brilliant, Nicola. I love how you kept attacking as price continued to drop
  • #3,705
  • Jun 14, 2009 9:10am Jun 14, 2009 9:10am
Thanks for a detailed description in that trade - was very useful to step thru it and see how I would have traded it.

I have a question re: Inside bars. My understanding of inside bars is that price is becoming forced into a tighter space so as the price breaks out of this there is a significant move. However it seems a lot of times the breakout can be a false one???

Can you (or any of the team) give me your views on what inside bars represent and how to play them.

Many thanks !
  • #3,706
  • Jun 14, 2009 12:29pm Jun 14, 2009 12:29pm
Quoting paddyham
Thanks for a detailed description in that trade - was very useful to step thru it and see how I would have traded it.

I have a question re: Inside bars. My understanding of inside bars is that price is becoming forced into a tighter space so as the price breaks out of this there is a significant move. However it seems a lot of times the breakout can be a false one???

Can you (or any of the team) give me your views on what inside bars represent and how to play them.

Many thanks !
I have been working a lot on my inside bar trading this month, real money and back testing.
Inside bars, to me, are a pause or moment of indecision in the market and therefore are safest played in the direction of the trend. You can use them for trend reversals but you should be really sure of your levels and they should be off a level with your stop below it if you are trading them on the daily chart.

My personal experience has been that inside bars formed in a consolidation range above support or below resistance are best played in conjunction with a break of that resistance and not just the bar. So instead of putting an order 3 pips below the break of the bar put the order below or above the support/resistance and just use the inside bar for the stop. Or you could also trade a break of the holding bar that the bar is inside for a more conservative entry.

Two or three inside bars in a row, like we have seen on USDJPY, get me really excited, the more pressure that builds up and more momentum when they break.

The higher the timeframe the better inside bars seem to work but like all candle formations they don't work every time. They seem to work much better on currencies than the indices too.

I am sure Strat will have something to add
Nicola
  • #3,707
  • Jun 14, 2009 2:34pm Jun 14, 2009 2:34pm
Quoting Baba G
7 and a half weeks....yeah right...wateva.......
We are so finished. You need to find a new FF girlfriend ...
  • #3,708
  • Jun 14, 2009 4:05pm Jun 14, 2009 4:05pm
Quoting elitejets
We are so finished. You need to find a new FF girlfriend ...
Hey Nic, i like the look of your brains, r u single now??http://www.forexfactory.com/images/icons/icon10.gifhttp://www.forexfactory.com/images/icons/icon10.gif
  • #3,709
  • Jun 14, 2009 5:36pm Jun 14, 2009 5:36pm
Quoting pianosax12
Hey Nic, i like the look of your brains, r u single now??http://www.forexfactory.com/images/icons/icon10.gifhttp://www.forexfactory.com/images/icons/icon10.gif
Haha .. I'm going to stick with Mr Market for a bit I think.
  • #3,710
  • Jun 14, 2009 5:40pm Jun 14, 2009 5:40pm
Quoting elitejets
The next day (22nd) there was another shooting star as an inside bar. I went short from 1.2315 with a 60 pip stop, all was looking good.
Hi Nicola

Thanks heaps for posting your trade - well done! . It helps to know some of the thinking behind trade management decisions.

One question I do have though is how you managed a 60 pip SL? You probably have a different close time on your chart (mine is GMT) but they don't look too dissimilar.

My daily on 22nd is H=1.2471 and L=1.2326 (145 pips).

Did you place your stop on a lower time frame?

Thanks

Greg
  • #3,711
  • Jun 14, 2009 7:04pm Jun 14, 2009 7:04pm
Quoting GregB
Hi Nicola

Thanks heaps for posting your trade - well done! . It helps to know some of the thinking behind trade management decisions.

One question I do have though is how you managed a 60 pip SL? You probably have a different close time on your chart (mine is GMT) but they don't look too dissimilar.

My daily on 22nd is H=1.2471 and L=1.2326 (145 pips).

Did you place your stop on a lower time frame?

Thanks

Greg
Hi Greg
Guilty. Its not Strat Stress-Free but yes I did enter on a lower time frame.
If I am free to watch it then I like to take the daily setups and if I am available look for tighter entries.
  • #3,712
  • Jun 14, 2009 8:27pm Jun 14, 2009 8:27pm
Quoting el_duende
AUD/USD

I am now recording my trades in excel and recording screenshots of when I take the trade to review wether it is right or wrong trade

So here is my 1st one

Long : 0.8013, I have listed some reasons in my excel trade plan
Not just for el duende but for others who were considering this trade and the gbpusd trade.

While a long trade on both of these pairs worked out - they should not have been considered at this stage of your learning.

Why? Because you were trading against the BOSS. This is where more discipline comes in. No matter how good the Worker looks for a trade, if the BOSS is not in agreement don't even consider it.

But, I hear you say, it worked out. Yes it did, on this occasion but I can tell you from experience, and costly experience at that, that it will bite your ass off in the meanest way possible. There is a way to do it but it is many steps along The Path from where you are now.

Just in case you were wondering, the gbpusd shooting star is still in effect on my data - the high has not been taken out. This also reveals a lot of information to us.

So to summarise, we trade the Worker in the direction of The BIG BOSS and the BOSS. We do NOT trade against THE BOSS.
15 YEARS OF PASR ON FOREX FACTORY!
  • #3,713
  • Jun 14, 2009 8:38pm Jun 14, 2009 8:38pm
Quoting patrick25
Hi All,

I have a little price action trade on gbpchf on June 05. Price had a hard rejected @ 7700 level and came back down past 7260 support level but strong closed above it and 20. My entry was above the June 05 candle. The candles after entry candle had shown strong sign of testing 7710 high so I hold on to the trade. Today candle closed above 7710 but little weak so I have moved my stop below today candle. O.K Strat, let me have it, I am ready.
Thanks.
OK, boy, you asked for it! You did good! (in a very lucky way). You used S&R but you didn't have real PA to go off. The June 05 candle on my data was weak compared to the June 04 candle which was very bearish.

Now did you really trade this? Your SL would have been about 300 pips which is one helluva SL! Did you think about LOSING first? This could have filled you and and put you in serious loss. This is not the type of trade you should be taking at your level - hell, it's not the type of trade I would even consider.
15 YEARS OF PASR ON FOREX FACTORY!
  • #3,714
  • Edited 9:08pm Jun 14, 2009 8:43pm | Edited 9:08pm
Quoting Grimweasel
Excellent stuff Nic; truly excellent - you have managed to leap ahead as a trader and jump many on the path to consistency. I'm reading a book by Al Brooks currently and I can't recommend it enough to everyone - as I read the first chapter I really thought ' this must be Strat' - I had to check the cover again. It took Al 10 years to become profitable; he went thru the indicator and paid system mill only to come out at the other end realising there was only one way to trade - Price Action.

I love his quote:
"Usually in trading, those that know...
Good reading Danny boy.

As I posted earlier, learn basic and pure price action, understand the styles of trading on here and then develop YOUR style. Whatever the style, the foundation MUST be PASR.
15 YEARS OF PASR ON FOREX FACTORY!
  • #3,715
  • Jun 14, 2009 8:46pm Jun 14, 2009 8:46pm
Quoting Naws
Hi guys, haven't posted in a while

Anyone think the bearish trend of the USD is ending? At least it seems to be slowing down for sure since we failed to get a higher high or lower low this week depending on the pair.

I'm not eager to short it soon but there might be some possibilities to look out for depending on what happens next week

Heres what I'm seeing

A head and shoulders pattern forming on EURUSD, I would want the price to go below the 1.3800 neckline area and retest it before going short. The price could still very well go up but I...
Good observations with sound logic and reasoning young Mr Naws - BUT, wait for the Queen to show you the way. (Show Me The Way - Peter Frampton 1974)
15 YEARS OF PASR ON FOREX FACTORY!
  • #3,716
  • Jun 14, 2009 8:48pm Jun 14, 2009 8:48pm
Quoting Grimweasel
Thanks Alexandra,
USDYEN is, as you have mentioned a key driver in many ways. The 2 biggest GDPs in the world with fiscal positions that I would imagine have never been so diverged? The US with huge debts - I read this week that 50% of every dollar spent comes from borrowing! (Bill Bonner) whilst Japan has been mending balance sheets for 15 years.

Ashraf Laidi in his book 'Currency Trading and Intermarket Analysis' gives the topic of usdyen/vix/S&P500 some considerable debate. Bottoming cycles in usdyen rate have often preceded tightening cycles...
Way too much thinking for me - I just look at the charts!

Everything is already priced in on a price chart
15 YEARS OF PASR ON FOREX FACTORY!
  • #3,717
  • Jun 14, 2009 8:49pm Jun 14, 2009 8:49pm
Quoting elitejets
Here’s my USDCAD trade

21 April … USDCAD made a lower high on a pullback in a downtrend and then put in a shooting star, a perfect entry!

1. I put an order to short from the shooting star but it did not trigger.
The next day (22nd) there was another shooting star as an inside bar. I went short from 1.2315 with a 60 pip stop, all was looking good.
[font=Times New Roman][size=3]Friday...
Excellent, Nicola, well done - 8 out of 10!

A far cry from those dark days of trading M5 and M15 with a lagging indicator eh?
15 YEARS OF PASR ON FOREX FACTORY!
  • #3,718
  • Jun 14, 2009 9:04pm Jun 14, 2009 9:04pm
Quoting elitejets
I have been working a lot on my inside bar trading this month, real money and back testing.
Inside bars, to me, are a pause or moment of indecision in the market and therefore are safest played in the direction of the trend....
Be careful, IBs are not as easy as Nicola makes out. Yes they are PAUSE bars but we have to ask ourselves WHY are the buyers and sellers pausing. Are they pausing because they have run out of buyers (sellers) and the next bar will take you in the opposite direction? Or, are they pausing while waiting for more new buyers (sellers) to continue the trend?

Usually, (and not 100%), an IB at the end of a trend signifies the trend has run out of steam and it is likely to reverse. An IB in the middle of a trend is usually a continuation bar.

IBs should NEVER be traded in isolation. In other words, use it as a "set up" bar - make the next bar prove the direction you were thinking of. Always place your entry order a good few pips above the high or the low.

BEWARE that the big boys KNOW where orders are placed around IBs and FREQUENTLY go on a stop run around them. Wherever possible, entry orders should be placed above or below the next level of S&R.

For you guys, I recommend you just watch the action around IBs for the time being. As you get more comfortable with PASR, then go on to learn, study and practice IBs.
15 YEARS OF PASR ON FOREX FACTORY!
  • #3,719
  • Jun 14, 2009 9:06pm Jun 14, 2009 9:06pm
Quoting Baba G
7 and a half weeks....yeah right...wateva.......
You're just a jealous pizza man - you don't like an ex - RAF officer and Air Traffic Controller showing you how it's done!
15 YEARS OF PASR ON FOREX FACTORY!
  • #3,720
  • Jun 15, 2009 6:20am Jun 15, 2009 6:20am
Quoting strat
IBs should NEVER be traded in isolation. In other words, use it as a "set up" bar - make the next bar prove the direction you were thinking of. Always place your entry order a good few pips above the high or the low.
Thanks Nic / Strat re: IBs. Not going to trade them - just wondering your thoughts on how to interpret them.

Thanking You
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