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  • #6,401
  • Dec 21, 2009 2:22pm Dec 21, 2009 2:22pm
I totally agree Chris. I am watching the 1000 level as well. As you can see from Clocks chart (showing 1000 as a solid demand zone), there is probably a lot going on at that level. Here's what supply (resistance) and demand (support) theory says about that level. Price moved away aggressively from the 1000 level. Why did it leave that level so violently? Because there was an imbalance between supply and demand (more buyers than sellers, i.e demand was greater than supply). Because the move was so violent, most traders were looking for a pullback to go long. It never happened, price tried to pullback and then took off before reaching that initial breakout level. Now what we have is a stake of buy orders that were left at that point. Remember, there are more buyers than sellers at this level. So when price returns to the level, all those buyers are going to get in pushing price back up again (because demand is greater than supply at that level). Now that price has given us a target at 1200, most of these orders would target 1200. What's happening at 1200? Supply is greater than demand at that level (more sellers than buyers to prices don't stay there for long).

Basically my game plan when gold gets back to the 1000 level is to buy and hold for 1200. Will this happen this exact way? Probably not, but this is a high probability play. Recall what Dr. Alexander Elder said in his esteemed book, TRADING FOR A LIVING, "Innumeracy - not knowing the basic notions of probability, chance, and randomness- is a fatal intellectual weakness in traders." You just have to flip the odds in your favor.

Just be patient and wait for the high probability/low risk entry. And for this gold chart, like Chris has mentioned several times, the 1000 level is that area.

Again, supply and demand (support and resistance) trumps all in trading.

Kulu
Quoting clockwork71
Here's a chart of gold, showing a few places you could have gotten hurt trying to blindly buy on dips.....The next chart shows what I am watching out for.....major support. The $1000 mark is obvious, and the $1030-50 area would included the massive break out we had. Only time will tell, but this chart shows a great example of waiting and being patient......waiting for the right spot to "fire your torpedoes."

Chris
  • #6,402
  • Dec 21, 2009 7:14pm Dec 21, 2009 7:14pm
Quoting kulu
I totally agree Chris. I am watching the 1000 level as well. As you can see from Clocks chart (showing 1000 as a solid demand zone), there is probably a lot going on at that level. Here's what supply (resistance) and demand (support) theory says about that level. Price moved away aggressively from the 1000 level. Why did it leave that level so violently? Because there was an imbalance between supply and demand (more buyers than sellers, i.e demand was greater than supply). Because the move was so violent, most traders were looking for a pullback...
Great post. You guys should all save what he posted.....it's really well written.
  • #6,403
  • Dec 22, 2009 4:20am Dec 22, 2009 4:20am
As i totally agree with Chris on the issue of posting live trades........i post below update on the two trades i have been since market open on Sunday.....EURJPY S/L moved to breakeven...so free trade......T/P just below the 131.80 Resistance Area........so i will let this one continue to run or maybe close depending on the PA off Minor S / R.

GBPAUD is the interesting one........and i am kinder confident about this trade as much as it is currently in the RED. I have spotted a similar pattern to what is currently happening and i believe the down move is just about to take offe....a trade i am willing to keep holding to mid January.....as the swap is also in my favour, trend is down and a repeat pattern formation. Obviously the market can do what it wants to do..........happy trading all and MERRY MERRY CHRISTMAS AND HAPPY NEW YEAR to all especially Chris.......thanks for this wondeful thread.

Cheers

Quoting Danku
Thought i post these two charts.

EURJPY
Remember the BOX i posted sometime back, it stillseems to hold and now we are at the bottom of it. So will be watching the close and open keenly. We also at a good Support.


GBPAUD
2-Day Pin forming here and if they close good, we are in the direction of the trend and off good Resistance.....

Cheers all and nice weekend.....a BE week for me.....
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  • #6,404
  • Dec 22, 2009 5:11am Dec 22, 2009 5:11am
guys heads up, 4 hrr pin on NZD/USD forming off pivot, it it breaks then the monthly pins will trigger, could be a runner !

- just noticed its also a break of a weekly inside bar, lots of confulence
  • #6,405
  • Dec 22, 2009 6:48am Dec 22, 2009 6:48am
hi
i am in
regards

Quoting advfntrader
guys heads up, 4 hrr pin on NZD/USD forming off pivot, it it breaks then the monthly pins will trigger, could be a runner !

- just noticed its also a break of a weekly inside bar, lots of confulence
  • #6,406
  • Dec 22, 2009 11:47am Dec 22, 2009 11:47am
I just took profit at the current price level on this because I am concerned about that supply (resistance) zone where price is trading. We might see a breakout through that zone, but in this low volume environment, I am not taking chances.

When I planned this trade, my targets were the outside trendline and then ultimately the 95.50-96.00 zone. Let's see what happens at the current levels, I might jump back on this horse if we break the current zone.

Chris: What did you do with your trade?

Happy holidays to everyone.
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  • #6,407
  • Dec 22, 2009 1:42pm Dec 22, 2009 1:42pm
Quoting kulu
I just took profit at the current price level on this because I am concerned about that supply (resistance) zone where price is trading. We might see a breakout through that zone, but in this low volume environment, I am not taking chances.

When I planned this trade, my targets were the outside trendline and then ultimately the 95.50-96.00 zone. Let's see what happens at the current levels, I might jump back on this horse if we break the current zone.

Chris: What did you do with your trade?

Happy holidays to everyone.
I am b/e......but it's of no concern - I am planning on a long-term run, and have already accepted that it could stop me out. If so - that's life. It's a small position anyway.

I am still watching the NZD/USD.....it is flirting with .70 again. We will see.....but I think that is one of the stories of the first half of 2010.

Chris
  • #6,408
  • Dec 22, 2009 2:45pm Dec 22, 2009 2:45pm
Quoting clockwork71
One thing that helps is chart time. This much is true, and I wish I could offer it to you.

I think it really comes down to how "big" the move looks to you. In the case of the NZD I posted earlier, that is a very, very, very rare signal. To me that's worth really having a go. Also, there is another way....

Just short it every time you get a signal on the smaller time frames. Think of the monthly chart as a "guide" to direction. It is possible to get 15-20 good trades out of this that way.

Or hell, have a core position that you hang onto. Trade...
Great response Chris. This is one thing I used to really struggle with. It all comes down to defining your style, or "game". You don't have to have just one game either. So to define a game you have to be clear on what it is your trying to accomplish. You just described my "core" style. I look for a higher time frame setup. Then when it triggers I trade it on lower time frames. I stay "biased" in that direction until the higher time frame set up is no longer valid.
May the fish in your stream of life always bite.
  • #6,409
  • Dec 22, 2009 3:58pm Dec 22, 2009 3:58pm
Quoting Low
Chris,

I am a little more protective of my equity, since damaging my account, but something I have a hard time getting right, is that so often moving my stop to BE takes me out of a good trade early, and leaving it open keeps me in a good trade, that turns into a bad trade, and eventually turns into a loss. So somehow my ability to discern which ones will run, and which one's should be protected is almost 100% wrong.

How can I sharpen my instincts in this department?
Low, exits are the biggest thing I have struggled with. It is my humble opinion that .....we never KNOW which ones will run and which ones won't. I mean if we had a crystal ball it would be nice! After talking with Chris about exits earlier this month I have been on a hardcore research project. Even though we don't ever know, I do think we can define the odds. I hope you don't mind my sharing the process I went threw. I just see myself in your post and thought it might help. Everyone that post here or anywhere has a motive. Mine is that I get lonely trading and have no one to talk to about it.

So to define an exit.......how do we know when to get off if we don't know where were going? We don't so we need to set up some objectives in our trade plan. For me I realized I want to trade three core systems. One that takes a small piece with defined targets. One that looks to capture 50% of a swing. One that looks to capture a trend. Finally a separate plan for special situations. Not having a clear plan on any trade had me all over the place.
So take the pin bar. That could be a valid entry into all three of those plans. So the next step is what environment am I in? Is this market even worth the risk? Ie does it have attributes that my setups work in? Once we have an idea of the environment then we can we can determine what plan to use for our exit.
Quoting Low
so often moving my stop to BE takes me out of a good trade early, and leaving it open keeps me in a good trade, that turns into a bad trade, and eventually turns into a loss.
There is conflict in your statement about a good trade turning into a bad trade. A good trade is a good trade. For me I had to define what a good trade was. On that note I think any trade I do where I follow my rules is a good trade. Period. The outcome of one trade is meaningless. The outcome of the next 500 or so more where its at So to re word, I had to define where a trade was a win, was it 1R, 3R etc? Then after defining that what steps can I take to make sure I never that win turn to a loss? Also what has to happen to get me out of a trade? PA in the opposite direction? S/R? A break of Highest High for last x bars? Chandler exit? No movement in the trades direction after x many bars has passed? Once I answered these questions it became clear that certain exits lend themselves to certain styles. Hopefully this process might help you define "when to get out" .

Chris I hope is ok that I rambled on so long.

Happy holidays all !
Jason
May the fish in your stream of life always bite.
  • #6,410
  • Dec 22, 2009 4:31pm Dec 22, 2009 4:31pm
Well said Jason. If I could add my 2 cents. I have also had an extensive convo with Chris about exits. When I started trading, I thought I was just going to be able to hold my trades for as long as possible. However, I was just getting knocked out at B/E most of the time (basically B/E trader). Well, then I decided that maybe I was trailing to close, so I twicked my exits and left my stop at the initial spot for longer. And then guess what happened, I gave back some of those paper pips (at some point I would be up 200-300 points, just to be knocked out for a loss).

Starting about mid-2009 I started taking profits at the nearest resistance or support. Of course there are some trades where the next spot is far, and of course I let those run. Why am I doing this this way now? Because this is what works for me and I am comfortable with it. There are many ways of doing this, but you have to ultimately find what works best for you. I know some profitable traders that take partial profits. Also, one other thing that I have found, is that most traders (especially relatively new ones) don't follow up on their trades when they are knocked out at B/E. What do I mean by this? Well, supposed you've just moved your stops to BE and price comes back and knocks you out. Well, why not keep an eye on that trade and see if you can get back on. The only way I don't follow up on these is if price retraces all the way back to my original stop (in which case if you entered on a PB, the PB is invalidated). If price moves all the way down to my initial SL, then I will agree that my initial research/beliefs about the pair were wrong and move on.

This is just my opionion and what has worked for me. You just have to try a few things to get something that works. I will tell you what made me decide to take these profits was one of my OPTIONS trades in BIDU sometime this year. I had bought 10 contracts at $200/contract and I was up a whopping 346% on this damn thing. Well, I moved my stop to B/E and said I was going to let it run. Guess what, the following day, something happened and I got knocked out at B/E. To be honest, I was f-pissed, but hey, I didn't lose any money. It just hurt leaving that much on the table.

One more thing, consistency. Taking profit randomly is not a good idea. Like aSandman said, pick some strategy of taking profits (he uses 50%, and I use 68% fib tool to take my profits on intraday trades). Just find a way to take profits consistently for sometime and don't be hung up on counting pips and see how it goes for a month or so.

Cheers, sorry for the long note

Kulu

Quoting aSandman
Low, exits are the biggest thing I have struggled with. It is my humble opinion that .....we never KNOW which ones will run and which ones won't. I mean if we had a crystal ball it would be nice! After talking with Chris about exits earlier this month I have been on a hardcore research project. Even though we don't ever know, I do think we can define the odds. I hope you don't mind my sharing the process I went threw. I just see myself in your post and thought it might help. Everyone that post here or anywhere has a motive. Mine is that I get lonely...
  • #6,411
  • Dec 22, 2009 4:43pm Dec 22, 2009 4:43pm
I just entered my short NZD/USD position at 1.6980. I did this basedx upon the chart below, and the fact that the NZD economy grew less than expected. (just announced) So now I have a "fundie" reason as well. Hooray. I am thinking with the duel pins on the monthly....this could be the start of a big move. I certainly am playing it as such.
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  • #6,412
  • Dec 22, 2009 4:47pm Dec 22, 2009 4:47pm
Thanks for the writing of the exits aSandman and Kulu.....this is a huge area of struggle for many traders. I have found one thing that seems to be true for all.....if you are NOT comfortable with a particular style - it is useless for you. Comfort really IS the key.

Chris
  • #6,413
  • Dec 22, 2009 5:36pm Dec 22, 2009 5:36pm
Thanks Kulu and Chris. Sticking with it, you bet kulu if I get stopped for a small loss I get back in, over and over again till the reason for the trade is no longer valid. ie higher time frame set up is not valid. The thing I am proudest of this month is not that its another +, its that I hit a string of losses (9 out of 10) had only small draw draw down 1.8% and still came back in the money. That tells me that model is robust

Chris being comfortable with it, so simple and so powerful. If you cant execute your strategy what good is it? Its not. The most radical thing anyone can do to change their trading is work on their mind. Its almost a catch 22, like you have to get in there mess up a little bit to know your self. You know? Like everyone says I can handle a 34% draw down etc, but...how do you really know you can, unless you have been there before? For that matter how do you get the confidence to KNOW you can trade your way out of a draw down unless you have done it before? I mean what would I tell a new trader? Use a 1/10th size of the account you plan to trade, and learn on that? Just big enough to feel the sting of losses?

Another question Ive been pondering for years is, do our patterns really have statistical significance? Or...... is the truth that we are really just trading support and resistance and the patterns are just a physiological crutch? In an effort to answere this question I have been building a database of patterns and take samples of each pattern from different markets and different time frames. Thus ensuring a valid random sample of the population Then testing that entry vs a random entry. I'm rambling, Chris agree with you a 1000%, if a person trades something that doesn't fit them, no way they can stick with it, no matter how valid the methodology is.

Having spent time in construction I know what it is like to work high up in 30 to 40 mph winds and wonder if I am going to make it home. When I was worried about falling down, the physiological pressure made me move slower and I was less efficient. So Chris like you say about if you cant walk away from your trade.....your trading to big, ie your working to high up! Cut your size till your comfortable with it, and no one can define on your comfort level but you.

Jason
May the fish in your stream of life always bite.
  • #6,414
  • Dec 22, 2009 6:54pm Dec 22, 2009 6:54pm
Quoting aSandman
Having spent time in construction I know what it is like to work high up in 30 to 40 mph winds and wonder if I am going to make it home. When I was worried about falling down, the physiological pressure made me move slower and I was less efficient. So Chris like you say about if you cant walk away from your trade.....your trading to big, ie your working to high up! Cut your size till your comfortable with it, and no one can define on your comfort level but you.

Jason

That's a great analogy. As someone who is occasionally 40 feet in the air, I know exactly what you mean. It's psychology. Take this example:

I was once working in a atrium, about 106 feet in the air. There was scaffolding build for us, and it was a 3 to 4 days job. I remember being shaky when I was on top. Why? The top level tends to sway the most. I remember working really, really, really slow. Then I went one level down.

All of the sudden, I was perfectly comfortable. It seems that as soon as I had a roof over my head, it was almost like being in a miniature building, and not some scaffolding. The difference between falling 106 feet, or 96 feet is minimal at best, I assure you. I am sure dead is dead.

But I felt better, and that I suddenly felt much more comfortable. I suddenly could work easily.

Trading is similar.....for the same reasons. Scared? You are going to screw it up. Comfortable? You are going to be just fine.
  • #6,415
  • Edited 7:47pm Dec 22, 2009 7:16pm | Edited 7:47pm
Added a Twitter widget on my blog.....or you can follow if you do this....it's a trial, we will see how it pans out.

user name is forexfantasies at twitter.com

PS - figured out how to do it on webpage as well.......will try to make it somewhat interesting.
  • #6,416
  • Dec 22, 2009 7:42pm Dec 22, 2009 7:42pm
Closed my EURJPY long for some good +172 Pips.....i did not like the movement around the 131 Area and decided to step out aside..............

GBPAUD short still open......though and i am happy 1.8300 Resistance is proving to be Major Resistance on the Daily.

Just looking for to 25th with family, i got two goats to slaughter and some 6 chickens........lovely beautiful fruit cake...and not to mention the BOOZE.....................YOU ALL ARE WELCOME..................

Quoting Danku
As i totally agree with Chris on the issue of posting live trades........i post below update on the two trades i have been since market open on Sunday.....EURJPY S/L moved to breakeven...so free trade......T/P just below the 131.80 Resistance Area........so i will let this one continue to run or maybe close depending on the PA off Minor S / R.

GBPAUD is the interesting one........and i am kinder confident about this trade as much as it is currently in the RED[color=black]....
  • #6,417
  • Dec 22, 2009 7:47pm Dec 22, 2009 7:47pm
Quoting Danku
Closed my EURJPY long for some good +172 Pips.....i did not like the movement around the 131 Area and decided to step out aside..............

GBPAUD short still open......though and i am happy 1.8300 Resistance is proving to be Major Resistance on the Daily.

Just looking for to 25th with family, i got two goats to slaughter and some 6 chickens........lovely beautiful fruit cake...and not to mention the BOOZE.....................YOU ALL ARE WELCOME..................

Good trade Danku. Did you get your book yet?
  • #6,418
  • Dec 22, 2009 7:53pm Dec 22, 2009 7:53pm
Still waiting Chris.......i will continue to be patient as the guys here can take forever to deliver and should someone accidentally see the book and be interested...they can steal it. But i am not worried about it being stolen as trading is kinder a new thing here and very few people take much interest in it..........what many people try to follow is a DOCTORED STOCK MARKET....that i ran away from many years back..........i just keep seeing my friends burn their fingers on our stock market.....will let you know when i get it.....



Quoting clockwork71
Good trade Danku. Did you get your book yet?
  • #6,419
  • Dec 22, 2009 8:34pm Dec 22, 2009 8:34pm
Quote
GBPAUD short still open......though and i am happy 1.8300 Resistance is proving to be Major Resistance on the Daily.

I'm not really sure where you have your SL on this trade and how long you intend holding it but all I just want to point out is that you should be careful.. Take a look at this just in case you were thinking of having 1.83 level as your SL

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&&

Quote
i got two goats to slaughter and some 6 chickens

... This made me laugh a lot. Nice
  • #6,420
  • Dec 22, 2009 8:54pm Dec 22, 2009 8:54pm
Yo Chris,

LOL... Just when I thought I was done for the year I decided to get in on this one, would not want to miss it as NZD is looking weak. As usual I went down to lower time frame to see if i could get an entry at any of the fib levels... Not sure about it's strength so I'm in. Well looks like 1.7 is holding it so the plan is I'm in with 1% if it goes up again to any of those levels I'll add another 1 or 2% depending on what I see.

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