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  • #4,381
  • Aug 3, 2009 6:01am Aug 3, 2009 6:01am
Quoting Grimweasel
Cable looks range bound still.

So, just sit and wait for PA to reveal all - nothing to get me long or short on that chart, but an indication to go short is in favour over long.
It was range bound during June-July, but daily close above 1.6550 on Friday and still staying above this level shows the strength of uptrend. As long as 1.6500-1.6550 support holds, next resistance is at 1.71.
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  • #4,382
  • Aug 3, 2009 6:21am Aug 3, 2009 6:21am
I'd like to share a very clean chart which shows 89 level is very important. Down TL has been broken but double top and 89 R level prevents futher move up, for now. I suggest watching PA around 89.
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  • #4,383
  • Aug 3, 2009 6:29am Aug 3, 2009 6:29am
Quoting Blackeagle
It was range bound during June-July, but daily close above 1.6550 on Friday and still staying above this level shows the strength of uptrend. As long as 1.6500-1.6550 support holds, next resistance is at 1.71.


Thanks BlackEagle for the perspective. I was halfway thru my book last night where Al Brooks quoted "By now you'll realise that the whole point of this book is to show you how to trade with the trend and not countertrend"

He also said that trends tend to go a lot further than people think. Each pullback should be an entry back into trend. He makes some good points on reversals - Don't try to pick tops and bottoms -wait for the other aggressive traders to lose their shirts first. Like he says, most reversals don't happen with a single candle pattern, they evolve over a few tests.

The best way to counter trend is to wait for the break of the last low in a bull run or the last high of a bear run and then get in on the retest of the BO -so really you are then trading a new trend, not counter-trend. He says that many novice traders fall into the trap of learning a few patterns and candlestick PA set-ups and then trying to take on the market, often thinking they are smarter than the market; let these fools provide you the fodder to accentuate any moves!

Overall I'm struck with the simplicity of it all - there could actually be merit in trading a line chart and only switching to candles/bars when you are looking for a very specific set-up at a key level? I reckon you could actually make money just trading a weekly line chart - I may demo it to find out!!

So, looking at the current cable chart you’d only want to be long until such time there is a major attack of those uptrend trend lines.

I read a report at the weekend that said GBP was best placed in the eurozone as the major fall from 2.10 USD allowed the UK to sort out any valuation issues. It said the Euro was more than likely going to be in trouble as economies are ‘pegged’ to it – nations like Spain are suffering a similar situation to the UK but because they are stuck in the Euro their individual economy is under great stress. I’ll dig the article out when I get home!
Trade less and become more profitable!
  • #4,384
  • Aug 3, 2009 6:33am Aug 3, 2009 6:33am
Quoting elitejets
I used to hate EURGBP but I have to like this setup. I am a seller of rallies here...
Although I agree with you re. playing from short side (due to LH-LLs since 2009), long term up TL is still valid, therefore, I prefer range trading between 0.8400-0.8650 and any close above / below those levels will determine long term bias, IMO.
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  • #4,385
  • Aug 3, 2009 6:46am Aug 3, 2009 6:46am
Quoting Grimweasel

Overall I'm struck with the simplicity of it all - there could actually be merit in trading a line chart ...
Yes, there is, especially if you are using a breakout strategy. As you have indicated, I always switch between candle and line charts not to miss an opportunity in case one provides whereas the other does not.
  • #4,386
  • Edited 6:32pm Aug 3, 2009 12:04pm | Edited 6:32pm
Quoting elitejets
I used to hate EURGBP but I have to like this setup. I am a seller of rallies here, or a retest of the trendline.
Daily and weekly charts attached.
When I look at the BOSS big picture and the 61.8% retrace, all I see is consolidation before another move up. Then I swing over to the worker and see much the same thing. Then I look at EURUSD and GBPUSD individually and wonder how on earth we can trade EURGBP. As Yul Bryner said in "The King and I", "It's a puzzlement!".
15 YEARS OF PASR ON FOREX FACTORY!
  • #4,387
  • Edited 12:18pm Aug 3, 2009 12:17pm | Edited 12:18pm
Quoting Razor_trader
Goodbye July and hello August. May you be a month of opportunity and prosperity. May you finally rid yourself of the shackles of the range and roam free to higher (or lower) grounds.

Where too from here. We have some interesting levels this month on the weekly and I have limited time to trade due to the (my) business ramping up. Ill be looking for good PA off these areas to get me into some long trades.

Im a big favourite of seeing AUD making a pullback around 8500 to somewhere 8250ish and then spring forth to higher ground (lower than 8250...
Hey Jolly Swagman!

Since you’ve been gone I can tell you have been polishing your crystal ball!

Based on fib levels and targets, your Oz dollar may see its resistance where we are at now. I agree with a small pullback before resumption of the uptrend but my crystal ball has never worked that well so can only go with fib levels.

Similarly with GBPUSD and EURUSD although I have no idea funny mental wise why they should be so lofty.
15 YEARS OF PASR ON FOREX FACTORY!
  • #4,388
  • Aug 3, 2009 12:23pm Aug 3, 2009 12:23pm
Quoting Blackeagle
It was range bound during June-July, but daily close above 1.6550 on Friday and still staying above this level shows the strength of uptrend. As long as 1.6500-1.6550 support holds, next resistance is at 1.71.
Welcome back from your hols, Blackeagle! maybe now the markets will start moving.
15 YEARS OF PASR ON FOREX FACTORY!
  • #4,389
  • Edited 6:35pm Aug 3, 2009 12:26pm | Edited 6:35pm
Quoting Blackeagle
I'd like to share a very clean chart which shows 89 level is very important. Down TL has been broken but double top and 89 R level prevents futher move up, for now. I suggest watching PA around 89.
True to form, Blackeagle hits the nail on the head!

Will it close above psycho 89.00?

Yes it did - and pretty strong too!
15 YEARS OF PASR ON FOREX FACTORY!
  • #4,390
  • Edited 1:46pm Aug 3, 2009 12:41pm | Edited 1:46pm
Quoting Grimweasel
Thanks BlackEagle for the perspective. I was halfway thru my book last night where Al Brooks quoted "By now you'll realise that the whole point of this book is to show you how to trade with the trend and not countertrend"

[font=Arial]He also said that trends tend to go a lot further than people think. Each pullback should be an entry back into trend. He makes some good points on reversals - Don't try to pick tops and bottoms -wait for the other aggressive traders to lose their shirts first. Like he says, most reversals don't...
"Overall I'm struck with the simplicity of it all"

Not just line charts, Danny, but trading in general - "Trading IS simple, it is us traders that complicate everything!"

Line charts are invaluable for highlighting S&R and from there using them on break out strategies such as 123. However, there is no substitute for PASR.

LESS IS MORE

KISS - KEEP IT SIMPLE SON!
15 YEARS OF PASR ON FOREX FACTORY!
  • #4,391
  • Aug 3, 2009 1:42pm Aug 3, 2009 1:42pm
If one takes the Cable fib from the IB that broke (on the boss chart) in Jul last year and then extend it to the low at 1.37 PA is now right on the 50% Fib, combined with a level 20ema. The big level of 1.71 is just above.

BBC News has web page highlighting the FTSE and GBPs highest levels in 10 months - now a good contrarian would like to look for some PASR to go against the crowd here as they rush in - I'll be looking for a buying climax as the 'fools rush in' perhaps?

This week could be quite pivotal...time will tell...
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Trade less and become more profitable!
  • #4,392
  • Aug 3, 2009 1:59pm Aug 3, 2009 1:59pm
From Al Brooks' Book -

"Virtually all reversals begin with either a trend line break or a trend channel line overshoot and reversal and all of those eventually break the trend line when there is a reversal. The trendline break is what traders' need to see before they feel confident to take countertrend positions. Until there is one, most will scalp out of any countertrend trade. In the absence of a TL break, there is still a strong trend in effect, and traders should ensure they take every with trend entry and don't worry about missing the occasional countertrend scalp. The best odds and the best money are with the trend trades. True V Bottoms and tops in the absence of a TL overshoot and reversal are so rare that they are not worth considering. Traders should focus on common patterns and if they miss the occasional rare event, there will always be a pullback where they can start trading with the new trend."

" When there is a strong break of a TL there will usually be a second leg after a pullback. This pullback often retraces and tests the the old TL, but there are almost always more reliable PA reasons for entering there in an attempt to catch the 2nd leg of the pullback (or new trend)"

Simples!!!
Trade less and become more profitable!
  • #4,393
  • Edited 2:53pm Aug 3, 2009 2:42pm | Edited 2:53pm
News Trades....

"You should never pay attention to the news because it creates a distance between you and what you have to do. It requires thought that you then have to reconcile with the chart, which can only reduce your profit. The chart tells you all that you need to know."

"The single most reliable countertrend trade is entering countertrend to the pullback, which is in it's self, a small trend. This trade is counter to the trend of the pullback, but in the direction of the major trend and will usually lead to at least a test of the major trend's extreme"

I now realise that by trying to trade 'pin-bars' at extremes on the daily chart I have been trying to out smart the market all these years - no wonder I was becoming unstuck. Hammer and Stars are reliable but for new traders it may be better to only take them with the trend (ie Fading the pullback). Trying to pick tops and bottoms on the basis of 1 candle bar is too risky!!

I'll keep you posted with any other gems that I come across.

PS - Check out the CAD and AUD on the COT charts - they are at the highest net long positions in a 12 months. Extremes on the COT chart can lead to climatic reversals as too many people are sided one way on the trade. If they fall then then there will be mass 'exodus' leading to a potentially big move.

http://www.dailymarkets.com/commitment-of-traders/
Trade less and become more profitable!
  • #4,394
  • Aug 3, 2009 2:50pm Aug 3, 2009 2:50pm
Hey Grim, thanks for the info, haven't read any of his stuff, but will check it out.
On the subject of books, if you haven't read Brian Marber "marber on markets" , i'd say it's definitely worth a look.
As an aside, wondering what strat thinks, i'm looking to expand my charts to include stocks, but my mt4 is useless, doesn't have enough history to plot any meaningful S/R lines. I know it's the summer season and it always goes quiet, but on the daily, there's not much PASR, at least according to my plan and rules. Only took 4 trades last month.( All good, thanks for asking)
Wondering if anyone else includes stocks in their analysis, and if so, what charting package do they use?
My stock charts would be used purely to identify and practise with more PASR signals, and be demo traded.

Golfer
  • #4,395
  • Aug 3, 2009 3:02pm Aug 3, 2009 3:02pm
PROBLEMS WITH HAVING A FIXED MIND SET

So I woke up at 4:25am PST (7:25am EST) this morning, looked over at the trouble and strife who is snoring like a trooper, and, remembering that EURUSD was at the top of its range, decided I would have another fling with M15.

I pull up my M15 charts and a quick eyeball immediately screws up my thinking. Since Friday’s bar was a down red bar at the top of the range, I was expecting continuation of the 11 week range with a dive down to at least the magic 1.4160 level. The London boys had pulled it down to 1.4207, creating a cycle bottom, and then proceeded to take it another 100 or so pips higher to 1.4316 where it took out Friday’s high.

“Right,” I thought, “let’s get ready for the ride down.” This was based on a nice ascending triangle formed about 7:30am EST. The 7:45 am EST candle screws up my logic as it closes above the top line of the triangle. “Just the London boys having a final fling before NY shuts them down,” I thought. Then, just as the Doctor ordered, NY comes in and starts selling at 8:00 am EST. “Something’s not right”, I think to myself, “either the NY sellers are still stuck in traffic or maybe its just too early”. I was expecting the 8:00 am bar to break the ascending triangle up line but it didn’t – it used it as support. Then I see that the sellers had hit psycho 1.4300 so we should expect a wobble around there so no problem.

I placed my sell order at 1.4287 below the support of 1.4291 (easily seen on a line chart, Danny boy), and prepare myself for the fall to the cycle bottom at 1.4207 and then on down to 1.4160.

Suddenly I start sweating and realise my stomach is trying to jump into my mouth again – a feeling I have not had for a very, very long time. “Cycle bottom, CYCLE BOTTOM, what the hell are you doing? We haven’t had a cycle top yet!” screams the little man between my ears. “Who the hell are you, and what are you doing here?” I answer him back. Then the sludge between my ears, which is a feeble excuse for my brain at this ungodly hour, starts slurping away and then it hits me that I’m doing this trade without a PLAN. I just got up, prepared for a sell off, jumped on the M15 chart and started to trade.

By now, which seems like an eternity, the 8:15 am EST bar has printed and it is directly opposite to the previous bar. The only thing is, the next bar is forming and its red and I’m sat at the one eyed monster in a state of panic. “You’re OK,” I tell myself, “everything is fine”. “You’re not OK, you’re in a mess”, the little man tells me and I know it. I finally get my act together and the first thing I do is cancel my sell order.

I then realise I’m busting for a pee, which I didn’t do when I first got up, so I take care of that and grab a glass of water on my way back to the one eyed monster. With an hour gone since I got up and the sludge replaced with something resembling my brain, I do what I should have done the very first thing – make a PLAN. So, with no pressure from any orders, I start again.

My PLAN would be to trade from cycle bottom to cycle top as I had done before, so, since I have missed the cycle bottom, I have to jump in somewhere. This then changes my thinking. Jump in – long? A few minutes back I was thinking short! I then look at the chart and start thinking logically (first time this morning!). Price is above the 20 which is up and crossed above the 50 which is also up so technically we are up.

But it looks like we are putting in the top I was expecting I think to myself. “But how can you go short without a cycle top?”, the little man asks me. He’s right. There is no warning yet of a cycle top so there must be more to go to the upside. Then I have this mental vision of Dr. Joe laughing his socks off at me. “It keeps on going up until it stops going up, you dumb shit”, he is telling me. I complete my PLAN with a buy stop above the last high and my exit at the first cycle top warning WHEREVER and WHENEVER it shows.

Still, in the back of my mind, I’m thinking my previous short order might not be such a bad idea after all but since we can no longer place hedging orders, put it to one side. Anyway, my PLAN is in place so stick with that, right or wrong.

I get filled at 1.4335 at 9:00 am EST which turns out to be the high of the bar. A horrible feeling of “Oh shit” comes to mind as I think maybe this is the start of the big boys’ games. “Walk away”, I tell myself, “stop watching and thinking”, just leave your PLAN to do its job. Trouble is, I don’t know where the hell I am in this trend since I didn’t get in near the beginning so I have to “nurse” this thing to the finish line.

After 9:15 am EST, we finally see some action and prices head North. Then the damn thing closes as a Bond shooting star, which although I should know better, gets me on edge. I debate whether to pull in my SL to below the Bond shooting star but remember to trade my PLAN. The next bar produces a Bond hammer which cancels out the Bond shooting star so back to status quo.

I’m still thinking short even though my PLAN is long and everything on my chart is long. I’m still half expecting the next bar to be a long RED down bar and am preparing myself to be “RIGHT” when it happens. After 9:45 am EST, price rockets up and I’m beginning to think my PLAN was right after all. The 9:45 am EST bar closes on a long bar which makes me nervous so thinking I deserve some reward for going through this nightmare, decide to move my SL to the high of the Bond shooting star.

Subsequent bars fill in and at 11:00 am EST, I get my cycle top warning. “But its not a triple pip trade”, the little man tells me, “You’re used to triple pip trades!” “My PLAN is my PLAN and you can go to hell,” I tell him as I get out of the trade.
What I thought was going to be a doddle of a morning trade turned out to be a nightmare, so lots of lessons for me to learn:

NEVER TRADE WITH PRECONCEIVED IDEAS OF DIRECTION

NEVER TRADE ON A WHIM – ALWAYS PREPARE FOR IT

NEVER TRADE WHEN YOU ARE STILL ASLEEP

NEVER TRADE WITHOUT A PLAN

NEVER DOUBT YOUR PLAN

NEVER QUESTION A PROFIT

So for me, I’m at the back of the class – AGAIN!
Attached Image (click to enlarge)
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15 YEARS OF PASR ON FOREX FACTORY!
  • #4,396
  • Aug 3, 2009 3:23pm Aug 3, 2009 3:23pm
Quoting Grimweasel
News Trades....

"You should never pay attention to the news because it creates a distance between you and what you have to do. It requires thought that you then have to reconcile with the chart, which can only reduce your profit. The chart tells you all that you need to know."

"The single most reliable countertrend trade is entering countertrend to the pullback, which is in it's self, a small trend....
Danny, somewhere back in the posts, it says to "trade with the trend". Therefore, beginners should only be trading shooting stars and hammers to get back in the trend and not to go against (counter) it. It is all too easy to get wrapped up in PASR and forget about the trend.

It's an accepted statistic that the majority of losing trades are those taken against the trend.

Eliminating trades against the trend, even those that seem to stretch the 20 elastic band to its limit, work wonders for profitability and your equity curve.
15 YEARS OF PASR ON FOREX FACTORY!
  • #4,397
  • Aug 3, 2009 3:39pm Aug 3, 2009 3:39pm
Quoting strat
PROBLEMS WITH HAVING A FIXED MIND SET...
Fair play Strat for coming here and showing us what not to do!! Did you use the 15m CCI and Heiken Ashe candles too (LOL - we were there once!!!)

If you'd faded that counter trend move (ie bought the pullback) you'd have been sitting pretty - hindsight is a wonderful thing!!

Hear Hear! on the above too - if only I'd realised that a few years ago!
Trade less and become more profitable!
  • #4,398
  • Aug 3, 2009 3:41pm Aug 3, 2009 3:41pm
Quoting golfer27
Hey Grim, thanks for the info, haven't read any of his stuff, but will check it out.
On the subject of books, if you haven't read Brian Marber "marber on markets" , i'd say it's definitely worth a look.
As an aside, wondering what strat thinks, i'm looking to expand my charts to include stocks, but my mt4 is useless, doesn't have enough history to plot any meaningful S/R lines. I know it's the summer season and it always goes quiet, but on the daily, there's not much PASR, at least according to my plan and rules. Only took 4 trades last month.(...
PASR works on any instrument that is freely traded since the S&R levels are as a result of human (traders) emotions.

I'm not sure moving to stocks is the solution to your problem due to their low level/lack of relative volatility.

If you need something else to practice on, and as long as it is ONLY practice, my suggestion is to look at Commodities. The roots, hooves, sludges, and sweets will give you plenty of gas for your PASR desires!
15 YEARS OF PASR ON FOREX FACTORY!
  • #4,399
  • Aug 3, 2009 6:47pm Aug 3, 2009 6:47pm
Quoting Grimweasel
If one takes the Cable fib from the IB that broke (on the boss chart) in Jul last year and then extend it to the low at 1.37 PA is now right on the 50% Fib, combined with a level 20ema. The big level of 1.71 is just above.

BBC News has web page highlighting the FTSE and GBPs highest levels in 10 months - now a good contrarian would like to look for some PASR to go against the crowd here as they rush in - I'll be looking for a buying climax as the 'fools rush in' perhaps?

This week could be quite pivotal...time will tell...
Danny, I’m struggling with this:

“”PA is now right on the 50% Fib, combined with a level 20ema””

When I look at your chart I see that price has closed strongly ABOVE the 20 AND 50% fib.

If we follow normal fib progression, then we should expect price to target the next fib level which is 61.8% around 1.7615 or psycho 1.7600

OR,

Are you guilty of making your charts suit the BBC News?
15 YEARS OF PASR ON FOREX FACTORY!
  • #4,400
  • Aug 3, 2009 7:34pm Aug 3, 2009 7:34pm
Nice start, price stalled at the levels I had aimed for and got me out (all but cable which missed my profit target by 2 pips, I exitted manually this morning for close to 130 pips, whos complaining)

I am now eyeing some levels for pullback and will take a trade if I get the signal I want (preferably a nice fat hammer, perhaps followed by an IB). Traded my plan, and took some profit for once.

Take care

BTW Strat, I know trading can be solitary, but you do yourself little justice posting things like

"Suddenly I start sweating and realise my stomach is trying to jump into my mouth again – a feeling I have not had for a very, very long time. “Cycle bottom, CYCLE BOTTOM, what the hell are you doing? We haven’t had a cycle top yet!” screams the little man between my ears. “Who the hell are you, and what are you doing here?” I answer him back. Then the sludge between my ears, which is a feeble excuse for my brain at this ungodly hour, starts slurping away and then it hits me that I’m doing this trade without a PLAN. I just got up, prepared for a sell off, jumped on the M15 chart and started to trade.".

People end up in stray jackets for my less ;P.

Just joking, i love it, it brings about a little humourous commentary on what we all got through.

Take care

Razor
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