Gbp/Chf..."PRICE ACTION" straight from the textbook. 
I believe . . .
james16 Chart Thread
- #34,221
- Edited 12:52pm Jun 22, 2009 12:24pm | Edited 12:52pm
- Joined Jan 2008 | Status: <<--(-$-)-->> | 5,571 Posts
- #34,222
- Jun 22, 2009 12:29pm Jun 22, 2009 12:29pm
- Joined Feb 2009 | Status: kiki soso largyalo | 2,243 Posts
meine augen sind die sterne
- #34,223
- Jun 22, 2009 12:33pm Jun 22, 2009 12:33pm
- | Commercial User | Joined May 2007 | 7,685 Posts
Gbp/Chf...straight from the textbook.
I call shenanigans on this one. Why would you take this trade? The R/R is ridiculous. If you took that pin, you better be aiming for 1.94. Otherwise - you are wasting your time.
CW
Sorry, just that trades like this are dangerous, especially for newbies.
- #34,224
- Jun 22, 2009 12:34pm Jun 22, 2009 12:34pm
- Joined Feb 2009 | Status: Borderline yahoo & oh-no! | 6,607 Posts
TotalNewbie,
alternatively, u could have exited with some profits. Next time...
nice breakeven trade, anyway.
ghous,
u are working overtime, huh. Nice trades.
EDIT:
WOW. all star cast today: (online/posted)
jarroo, StoragePro, Matiasfx, Rainmaker, mbqb11, clockwork71, james16. I'm amazed
alternatively, u could have exited with some profits. Next time...
nice breakeven trade, anyway.
ghous,
u are working overtime, huh. Nice trades.
EDIT:
WOW. all star cast today: (online/posted)
jarroo, StoragePro, Matiasfx, Rainmaker, mbqb11, clockwork71, james16. I'm amazed
- #34,225
- Jun 22, 2009 12:35pm Jun 22, 2009 12:35pm
- Joined Jan 2008 | Status: <<--(-$-)-->> | 5,571 Posts
I believe . . .
- #34,228
- Jun 22, 2009 12:39pm Jun 22, 2009 12:39pm
- Joined Jan 2008 | Status: <<--(-$-)-->> | 5,571 Posts
I believe . . .
- #34,230
- Jun 22, 2009 12:51pm Jun 22, 2009 12:51pm
- Joined Jan 2008 | Status: <<--(-$-)-->> | 5,571 Posts
I believe . . .
- #34,234
- Jun 22, 2009 1:17pm Jun 22, 2009 1:17pm
Sure, Sir.
What about 'Zen indicators', are there any in that book?
btw...
nice trades, squeezy, ikki, Vorvoul, Jduester!
Excuse for intervening with this Zen thing but I do recall that in the book there is a famous Forex koan.... it goes like this: What is the sound of one pip pipping?
Unus pro omnibus, omnes pro uno
- #34,235
- Jun 22, 2009 1:21pm Jun 22, 2009 1:21pm
- Joined Feb 2008 | Status: sucker for punishment | 2,444 Posts
i took the gb/chf daily pin trade at 7815 and closed at 7867( where i indicated the first problem area on chart)for just short of a 1:1 trade.I also went long again last night at 7804 and closed at 7867 for about the same return. the set up reminded me of the GB/CAD pin bar a few days earlier,only this bar didnt take off the same way.
jon
EDIT:trade on chart is demo.
jon
EDIT:trade on chart is demo.
PATIENCE... DISCIPLINE
- #34,236
- Edited 2:29pm Jun 22, 2009 2:11pm | Edited 2:29pm
There are so many ways to play basic price action. Ghous is right to point out that price reversed exactly where expected, and if you took the daily GBPCHF trade you can't have been surprised that it did that.
Clock is also right that if you took that trade near a swing high looking for that small RR then it's an awful lot to risk for a small RR. But there are many ways to look at this.
You could be a "stop to break even quick" kind of trader. And so as the trade broke hard you moved your stop to BE looking for a longer move. You got stopped out at BE. Oh well.
You could be someone who looks for a hard break of pinbars so you had a 30-50 pip stop looking for a hard break. This one gave a hard break and if that was your style you would have made a nice return here by taking profit at the highs.
Or you could be a breakout trader. You've seen the 1.75 level is a huge area of interest on all timeframes and have been looking to get in. You know that price often pulls back to test the breakout level and you see it here testing 1.75. You know there will be trouble at the previous highs but you think 1.75 has been broken and retested and if the highs are broken, then you buy and hold this all the way up to 1.94
That's three styles already before we even think about 4H trendline pullbacks (of which this was an example). But whatever your style, you manage accordingly. And crucially, whatever your style, you can't be surprised that price reversed at the highs. That's what Ghous is getting at. This isn't a failed anything. It did exactly what we expected. Will it return to retest those highs and move on? That's your call.
I personally took this as a breakout/pullback trade. My stop is at the nose of the bar ,below 1.75, and I am looking for a big move off this key area. I am willing to risk that 1% to see if we get it because I believe 1.75 is going to act as resistance. If we get strong bearish price action on a high timeframe I'll re-consider. If I lose, I lose. I thought this was a strong breakout/pullback signal and the RR on these trades can be great so I'm willing to risk my 1%. Given that this is my plan, it would be madness for me to move my stop to break even at the highs. Madness for me, not necessarily for you. I need to give this room to breathe, especially given the strength of that uptrend. I was expecting a bounce and some drawdown. So trade management is all about your plan, what you're looking for, and then just watching the edge play out over a series of trades.
This is where the whole A+, B+ etc grading of trades doesn't work for me. This is definitely not an A+ pure price action trade. But 1.75 is an A+ SR level. It's certainly an A grade breakout/pullback trade, although a low a bit further below 1.75 would be nicer. So it's impossible to grade really. So much depends on management. If your stop is 30 pips into the bar and you're looking for a hard 60 pip break then your definition of an A+ is going to be very different from someone who's looking for a bigger move. Remember, Josh just banked his last position on the EURCAD trade, the same one that James16 took a loss on. Is Josh a better trader than James16? Did he manage this trade better than James 16? No. Their respective edges will play out over time. In this instance they both played their plans to perfection which means they were equally good here.
And one last word on the stop placement. My stop is at the end of this bar for a reason. It's because the nose of the bar is a key support level. Look how the GU and AU weekly pin trades have been saved by those pin noses. The style I trade, I'm not in a hurry to move my stops up. I try not to until I have a new SR level to hide my stop behind. This is a conscious decision because I don't want alerts waking me up in the middle of the night to baby my trades. So I get pickier.
My style is developing and I am a new trader. But this much I am realising. If I am not willing to take the full loss on the trade then I am probably risking too much. I don't trade 2% for this reason. This is a dangerous game to play with scared money.
And one more thing, while I am ranting. When price reverses and goes into drawdown on some trades a lot of people ask "why did this fail?". It didn't fail. It went into drawdown. Your trade is a calculated gamble that price will hit your TP before your SL. If you can;t cope with losers, or with drawdown then that's something you need to change if you want to be in this business. GU weekly isn't dead by these criteria, neither is AU weekly.
Over time you develop an idea for what parts of trading you can tolerate or enjoy, and what parts annoy you. Maybe you enjoy complicated analysis. Maybe you enjoy keeping it simple. Who knows. But when you know from practice, you build a trading style and method that fits your personality. And you rinse and repeat.
That's the beauty of what is taught here. Traders of all personality types can create a system from James' method. Aggressive, conservative, chart watchers, set and forget types. Price action works for you all.
Okay...rant over....
Clock is also right that if you took that trade near a swing high looking for that small RR then it's an awful lot to risk for a small RR. But there are many ways to look at this.
You could be a "stop to break even quick" kind of trader. And so as the trade broke hard you moved your stop to BE looking for a longer move. You got stopped out at BE. Oh well.
You could be someone who looks for a hard break of pinbars so you had a 30-50 pip stop looking for a hard break. This one gave a hard break and if that was your style you would have made a nice return here by taking profit at the highs.
Or you could be a breakout trader. You've seen the 1.75 level is a huge area of interest on all timeframes and have been looking to get in. You know that price often pulls back to test the breakout level and you see it here testing 1.75. You know there will be trouble at the previous highs but you think 1.75 has been broken and retested and if the highs are broken, then you buy and hold this all the way up to 1.94
That's three styles already before we even think about 4H trendline pullbacks (of which this was an example). But whatever your style, you manage accordingly. And crucially, whatever your style, you can't be surprised that price reversed at the highs. That's what Ghous is getting at. This isn't a failed anything. It did exactly what we expected. Will it return to retest those highs and move on? That's your call.
I personally took this as a breakout/pullback trade. My stop is at the nose of the bar ,below 1.75, and I am looking for a big move off this key area. I am willing to risk that 1% to see if we get it because I believe 1.75 is going to act as resistance. If we get strong bearish price action on a high timeframe I'll re-consider. If I lose, I lose. I thought this was a strong breakout/pullback signal and the RR on these trades can be great so I'm willing to risk my 1%. Given that this is my plan, it would be madness for me to move my stop to break even at the highs. Madness for me, not necessarily for you. I need to give this room to breathe, especially given the strength of that uptrend. I was expecting a bounce and some drawdown. So trade management is all about your plan, what you're looking for, and then just watching the edge play out over a series of trades.
This is where the whole A+, B+ etc grading of trades doesn't work for me. This is definitely not an A+ pure price action trade. But 1.75 is an A+ SR level. It's certainly an A grade breakout/pullback trade, although a low a bit further below 1.75 would be nicer. So it's impossible to grade really. So much depends on management. If your stop is 30 pips into the bar and you're looking for a hard 60 pip break then your definition of an A+ is going to be very different from someone who's looking for a bigger move. Remember, Josh just banked his last position on the EURCAD trade, the same one that James16 took a loss on. Is Josh a better trader than James16? Did he manage this trade better than James 16? No. Their respective edges will play out over time. In this instance they both played their plans to perfection which means they were equally good here.
And one last word on the stop placement. My stop is at the end of this bar for a reason. It's because the nose of the bar is a key support level. Look how the GU and AU weekly pin trades have been saved by those pin noses. The style I trade, I'm not in a hurry to move my stops up. I try not to until I have a new SR level to hide my stop behind. This is a conscious decision because I don't want alerts waking me up in the middle of the night to baby my trades. So I get pickier.
My style is developing and I am a new trader. But this much I am realising. If I am not willing to take the full loss on the trade then I am probably risking too much. I don't trade 2% for this reason. This is a dangerous game to play with scared money.
And one more thing, while I am ranting. When price reverses and goes into drawdown on some trades a lot of people ask "why did this fail?". It didn't fail. It went into drawdown. Your trade is a calculated gamble that price will hit your TP before your SL. If you can;t cope with losers, or with drawdown then that's something you need to change if you want to be in this business. GU weekly isn't dead by these criteria, neither is AU weekly.
Over time you develop an idea for what parts of trading you can tolerate or enjoy, and what parts annoy you. Maybe you enjoy complicated analysis. Maybe you enjoy keeping it simple. Who knows. But when you know from practice, you build a trading style and method that fits your personality. And you rinse and repeat.
That's the beauty of what is taught here. Traders of all personality types can create a system from James' method. Aggressive, conservative, chart watchers, set and forget types. Price action works for you all.
Okay...rant over....
- #34,237
- Jun 22, 2009 2:14pm Jun 22, 2009 2:14pm
- | Commercial User | Joined Aug 2006 | 12,004 Posts
Aaron you are a cool dude 
You are going to do just fine in the long run
Mike
You are going to do just fine in the long run
Mike
There are so many ways to play basic price action. Ghous is right to point out that price reversed exactly where expected, and if you took the daily GBPCHF trade you can't have been surprised that it did that.
Clock is also right that if you took that trade near a swing high looking for that small RR then it's an awful lot to risk for a small RR. But there are many ways to look at this.
You could be a "stop to break even quick" kind of trader. And so as the trader broke hard you moved your stop to BE looking for a longer move. You got stopped...