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Medici trades the London open

  • #321
  • Jan 5, 2010 4:39am Jan 5, 2010 4:39am
Cool avatar Medici, Giovanni Di Bicci (De Medici), 14th century banker... nice
  • #322
  • Jan 5, 2010 5:13am Jan 5, 2010 5:13am
Medici,great journal, will follow with interest
  • #323
  • Jan 5, 2010 5:22am Jan 5, 2010 5:22am
Hi,

I've read your journal with interest and hope you decide to carry on with it.

I like to trade at this time too, 6am - 8.30am when I can, but of late I have had difficulty in reading cable price action, (I usually trade cable and am not too familiar with the euro.) so have been having a few confidence issues due to getting directional bias wrong far too often. Today, for instance, there was a H&S pattern on hourly, and it turned at 50% fib, but I was too scared to jump aboard as yesterday after price had made it's high, i expected a revisit to the highs, only for price to fall all day basically. Yesterday it paid little heed to the range fib levels, which made me wary to trust them today - then I watched like a stunned mullet as the cracking sell evolved!

I will reread thread and try to learn from your examples. Thanks to you all for your insight and posts.
cheers.
  • #324
  • Edited 9:45am Jan 5, 2010 5:52am | Edited 9:45am
Quoting medici
Thanks, very interesting. You seem to rely on these EMAs on 1min charts. How did you arrive at those?
As I have always been interested in trading on shorter time frames, with the objective of taking regular profits during limited time periods, I did most of my trading research on the 5 min chart.

With the knowledge that price will always return to a moving average I back-tested numerous variations before settling on the 30 ema as a good indicator of the tradeable intra day trend - this of course translates into the 1 min 150 ema.

The safest and easiest way to use this is to wait for a pull back towards the 30 ema, especially when the EMA has a well defined slope - i.e.there is a good trend move in progress. This then provides a low risk trend continuation entry.

Likewise, when price moves away from the 5 min 30 ema we can use + and - levels to form outer bands which can act as useful overbought / sold indicators.

When using the 1 min chart, which I now do during FO / LO, it becomes obvious that a faster EMA will often "hold" price during an active move and that a band around this EMA - I'm currently using the 30ema with +/- 35 pip bands - can help to show when price may be expected to stall or pull back - especially if "a level" is also present.

Thus, for me, these EMAs clarify the move in progress and make comparisons between currencies easier.

Also, by monitoring price against an EMA it is easy to construct a set of trading rules and trailing stops to suit the individual traders personal requirements.
Trading Levels with WRBs
  • #325
  • Jan 5, 2010 8:01am Jan 5, 2010 8:01am
Quoting cesare76fx
Cool avatar Medici, Giovanni Di Bicci (De Medici), 14th century banker... nice
Thanks Cesare, not that I intended to be cool but rather honour the first fx dealer in history. The Medici's were the first to make a business out of making market in currencies.
  • #326
  • Jan 5, 2010 8:05am Jan 5, 2010 8:05am
Quoting FOURX
Medici,great journal, will follow with interest
Thank you.
  • #327
  • Edited 8:49am Jan 5, 2010 8:29am | Edited 8:49am
Hi Annie, and thanks for kind words. Glad to hear that these posts are providing value.

I can identify with what you are saying, as I have been (and still sometimes am) suffering from directional bias. My way out of that was not to invest belief in certain levels but let the market tell me what it was doing at those levels, i.e. to wait for confirmation by price action. Not that I did a good job of it today, but initially my 'bias' was bullish, and when price action around the strong 4480 level in Euro said so I turned around and shorted. I could have done similarly in cable if I had had my eyes and mind in the right place. And just like you I have watched after missed entries, but there were a couple of good entries on the way down in cable. Crosses of the daily pivot tend to be good (which I watch on a 1min chart) and at 8am there's usually a wave of orders being executed. Nothing wrong with entering after a reversal, on the contrary - it's a lot safer.

Thanks again for post and kind words. Will try to keep it up here.

Quoting annieb
Hi,

I've read your journal with interest and hope you decide to carry on with it.

I like to trade at this time too, 6am - 8.30am when I can,...
  • #328
  • Jan 5, 2010 8:46am Jan 5, 2010 8:46am
Thanks very much for taking the time for clear and detailed explanation. That amounts to the building blocks of something that could be tested statistically and implemented mechanically. Would be interesting.

But I don't know if MA trading suits me. I have explored it and found that 'levels' and price action at those is my preferred approach. Would like to keep an open mind still...

Quoting Islander
As I have always been interested in trading on shorter time frames, with the ojective of taking regular profits during limited time periods, I did most of my trading research on the 5 min chart.

With the knowledge that price will always return to a moving average I back-tested numerous variations before settling on the 30 ema as a good indicator of the tradeable intra day trend - this of course translates into the 1 min 150 ema.

The safest and easiest way to use this is to wait for a pull back towards the 30 ema, especially when the EMA...
  • #329
  • Jan 5, 2010 9:54am Jan 5, 2010 9:54am
Quoting medici
Thanks very much for taking the time for clear and detailed explanation. That amounts to the building blocks of something that could be tested statistically and implemented mechanically. Would be interesting.

But I don't know if MA trading suits me. I have explored it and found that 'levels' and price action at those is my preferred approach. Would like to keep an open mind still...
You're welcome - making a post like that helps me to revisit and later review things that I now take for granted.

I agree and have frequently commented in the Psych Levels, Pivots and Trendlines - Resurrected thread that Price Action, especially around "a level" takes precedent over any MA and as I progess I may well discard them or just tone them down.
Trading Levels with WRBs
  • #330
  • Jan 5, 2010 9:53pm Jan 5, 2010 9:53pm
GM everybody. Nice 'line in the sand' at 5975 at the MS1 level, also 61.8% of the end of Dec move up at 5986 and the early July 09 bottom at 5982. Should be interesting.
  • #331
  • Jan 5, 2010 9:54pm Jan 5, 2010 9:54pm
Hi medici, some long on euro is looking good, what do you think about cable? I shorted it at yesterday's low.
  • #332
  • Jan 5, 2010 10:03pm Jan 5, 2010 10:03pm
Long cable and euro
  • #333
  • Jan 5, 2010 10:07pm Jan 5, 2010 10:07pm
Quoting okrutny
Hi medici, some long on euro is looking good, what do you think about cable? I shorted it at yesterday's low.
I come to think of a quote from one of my favourite trading books that I forgot to mention to you when you asked: "Expect nothing, be prepared for everything." The book is Zen In The Markets by Edward Allen Toppel, a book that is unique as it is written by somebody with more than 20 years of successful professional day trading experience rather than the usual scammers.

So to answer your question, I don't know, but the only thing holding our babies up over night was buying from the Korean central bank, and that was diversification buy rather than anything else.

Short cable from 5975 btw. Time Will Tell.
  • #334
  • Jan 5, 2010 10:56pm Jan 5, 2010 10:56pm
GM - from another perspective, the overnight low was into the large support area that formed in the few days before Xmas with the high volume pivot at the 60000 area. After this there was a shakeout type of push down to the 5850 level during the Asian session of Dec 29 /30, followed by the breakout upwards after LO on Dec 30th.

This move also broke up from a downward sloping Andrews Pitchfork, whose upper line held from early December. Its held the overnight low and is currently ay 5940.

From this point of view, we've had a breakout which has now pulled back to retest its old support.
Trading Levels with WRBs
  • #335
  • Jan 5, 2010 11:01pm Jan 5, 2010 11:01pm
Darn it, I keep loosing my connection......now what the heck happened to € - a drop of 50+ pips in 3 minutes....http://cdn.forexfactory.com/images/icons/icon11.gif.....AND cable held at its 5950 level - I went long and took a quick ~15 pips....
Trading Levels with WRBs
  • #336
  • Jan 5, 2010 11:07pm Jan 5, 2010 11:07pm
so this was the cause...

[EUROPEAN FX OPEN] Eur/Usd kicks off the session under pressure after the ECB's Stark says that the EU will "not save Greece". A flurry of European PMIs are due out this morning in Europe, along with the UK CIPS survey. Europe also sees industrial orders and PPI at 10gmt.
Trading Levels with WRBs
  • #337
  • Jan 5, 2010 11:16pm Jan 5, 2010 11:16pm
I sold € when it retraced to its S1 and banked a few pips.

I've bought cable 3 times as it makes HLs on the 1 min and banking quick pips.....I still favour an upside break....
Trading Levels with WRBs
  • #338
  • Jan 5, 2010 11:54pm Jan 5, 2010 11:54pm
Quoting Islander
GM - from another perspective, the overnight low was into the large support area that formed in the few days before Xmas with the high volume pivot at the 60000 area....
Indeed, but in my experience such support areas get tested in the morning before a reversal and a break wasn't impossible. But when 5950 held post the ECB scare I got out and reversed. Took a few longs in both cable and Euro, so pay cheque in bank, but in all a bit too exciting.
  • #339
  • Jan 5, 2010 11:55pm Jan 5, 2010 11:55pm
Quoting Islander

I've bought cable 3 times as it makes HLs on the 1 min and banking quick pips.....I still favour an upside break....
Just like me!
  • #340
  • Jan 6, 2010 12:03am Jan 6, 2010 12:03am
LOL.....my main excitement is my bloody connection which keeps dropping off....GGGGRRRRR

About 25 mins ago I started a post after I closed a long as price got to my 1 min upper band then at 6016. I then stated that I'd be looking to buy again around the 6000 level - well I pulled a fib over that move and waited for the pull back which got down just into the Decision Zone (38 - 61%) .......then I lost my connection and so missed a great buy for another ~30 pips.......
Trading Levels with WRBs
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