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Strat's Long Term Stress Free Trading

  • #9,941
  • Feb 9, 2010 4:15am Feb 9, 2010 4:15am
I'm writing this post not to support my country cause they going to f... us with numerous taxes in the near future but to give another side of the coin as always there is one.
Greece is only the excuse as Portugal and Spain might follow the same path, BUT the real reason i believe is that Mercedes, BMW's, champaigne and roquefort are VERY expencive outside Eurozone so they have to find a black sheep to blame.
Ok back to The Path of Learning after a quick stop for a cigar.

PS. I don;t like funny mentals or guys with ties as i call them
  • #9,942
  • Feb 9, 2010 4:16am Feb 9, 2010 4:16am
Quoting strat
Myself and the trouble and strife will be gone for all the month of June touring the UK celebrating our Anniversary.

As such, we will be spending lots and lots of GBP and EUR. I therefore need a strong $USD and weak GBP and EUR.

I told the big boys about this and asked them to help me out.
Will we be seeing you in Skye??

Spinner
Spinner 'Tis in the Waiting.....
  • #9,943
  • Feb 9, 2010 5:25am Feb 9, 2010 5:25am
Quoting Spinner
Will we be seeing you in Skye??

Spinner
And then the Outer Hebrides? As part of the 'grand tour' of course...
When in doubt, sit on your hands...
  • #9,944
  • Edited 7:55am Feb 9, 2010 7:42am | Edited 7:55am
Quoting PistolDave
m,

This is something I have wondered about for some time.

When price breaks the support as here, do you simply watch for price to be rejected by the S/R level and move on, or are you looking for a certain kind of candle to show up to confirm that rejection?
VERY good questions. I'm not sure my answers will be correct per the Strat manual but these are gray areas that haven't been covered yet and maybe Strat will tell us if I'm right or wrong and show us the way if I'm wrong.

The Strat Stress free method is trading price reversal bars at SR. However, you don't always get a clear cut BEEB, BUEB, SS, etc. Sometimes it just goes straight down with no confirmation or the rejection of the SR level is 'just another candle'. Yes, the price reversal bar (or the bar after the reversal bar) creates the 'swing' but you don't have to have a technically correct price reversal bar to have a technically correct swing.

For example on my GBPUSD chart:
-Feb 5th price broke below support and closed there.
-Feb 7th, the next candle, was a very small doji indicating indecision as the players waited to see what the market would do with the break.
-Feb 8th the sellers pushed price below the low and then the buyers pushed it back up but didn't have enough buying power to take out all the sell orders around 1.5700. This candle now has the potential to become a swing low or a swing high depending on how today's candle closes even though it was just a doji.

Because Strat says we trade PA at (or close) to support, I interpret this to mean that if today's candle has a low that is lower than yesterday's low and a high that is lower than yesterday's high, then that swing counts as rejection of the SR level AND is a confirmed swing low.

2 ways to play it. You can play the initial break of the low or you can wait until the candle closes.

Quoting PistolDave
Since there is no nearby swing high, where would be the reasonable place to put a SL, say 20 pips above the S/R at 1.5700? How do you determine where to bail out on this one?
In this case there will be a confirmed swing based on my comments above. Since putting the SL just above the swing would still be below the major psych of 1.5700, and in the midst of all the other sell orders. I'd put it a good 30 pips above 1.5700. This will prevent early stop out due to players pushing the swing and will be well on the other side of the bulk sell orders if they get that far through 1.5700.

Quoting PistolDave
Would you consider it to be a failure if price broke through that much above that level, or would you try to enter short again if another breakthrough occurred immediately after?
Dave, these are the very questions I lay awake at night pondering...looks like us Tennessee boys don't fall too far from the same tree.

If it was a clear stop run above and closed below 1.5700, I'd watch for another confirmed swing high and play the break of the low. So, yes I'd look for another entry if it presented itself because they may just be clearing the books, because we've definitely broken out of the range.

However, if today's candle creates a swing low instead, I'll just continue to watch for price to either create another swing high below 1.5700 or present a clear price reversal bar below 1.5700

Understand, that this is just how I'm interpreting what we've learned here over that past X months.

Strat, can you provide your insight as to whether this is correct or not?

-m
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  • #9,945
  • Feb 9, 2010 10:22am Feb 9, 2010 10:22am
Quoting mstandifer
VERY good questions....

-Feb 8th the sellers pushed price below the low and then the buyers pushed it back up but didn't have enough buying power to take out all the sell orders around 1.5700. This candle now has the potential to become a swing low or a swing high depending on how today's candle closes even though it was just a doji.

I was thinking the same thing though your post explained it a lot better.

I understand how the Feb 8 candle can be come a swing low if today's candle breaks the high, but how can it become a swing high.

The last swing high was on Feb 3, which was confirmed on Feb 4.

I don't think we have another confirmed swing low after than, so the Feb 8 bar can't become a swing high.

Please correct me if I am wrong. Not trying to point out error, but rather confirm my understanding of swing highs and lows.
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  • #9,946
  • Feb 9, 2010 10:41am Feb 9, 2010 10:41am
I must admit im not stress free at this point
Annoying Precision
  • #9,947
  • Feb 9, 2010 12:23pm Feb 9, 2010 12:23pm
Quoting pipfx

I understand how the Feb 8 candle can be come a swing low if today's candle breaks the high, but how can it become a swing high.
Bear in mind at the time I posted that chart (intra-day) the high had not yet broken the high of yesterday.

My Sunday bar is tiny compared to yours and the 8th had a high that was higher than the 7th. So on my data feed, had today not broken yesterday's high but had instead broken the low and stayed there, then the 8th would have been a swing high...on my charts only.

A classic case of trade what's on your charts. You are correct in saying your chart does not show the possibility of a swing high for the 8th.

-m
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  • #9,948
  • Feb 9, 2010 12:35pm Feb 9, 2010 12:35pm
The voice of experience

Quoting Alexandra
...there is no harm in closing the trade as you have done; if correct and comfortable with early confirmation, you woud have been at the advantage, and you have company from me. But at what cost? It's risky for us both, but you have planned for and acted on that risk well. You have left me to bite my nails alone.
The voice of a novice

Quoting mstandifer
11:30am EST: Price is at 1069.21 which is just shy of the 1071.17 I require to hold the trade another day...
I consider it to be of benefit to me to be able to watch an experienced trade in action. Alexandra must not have bitten all of her fingernails on the down day because the hold out prevailed in the end.

-m
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  • #9,949
  • Feb 9, 2010 2:59pm Feb 9, 2010 2:59pm
[quote=elitejets;3443965]Expect the unexpected ...
I am not sure these stories are not good news for my Euro short:

Traders Make Record 8billion Bet Against Euro
and this:
Investors have made a near-5bn bet against the euro amid fears of a full-blown regional debt crisis.


Strat's been lining his pockets again......

Just in time for his June excursion.
  • #9,950
  • Feb 9, 2010 6:31pm Feb 9, 2010 6:31pm
Quoting Sid
from support to resistance?

mstandifer, pistoldave and pipfx this seems to fit nicely into your discussion...
Thanks for the heads-up on that one Sid. I'm seeing it a little differently though.

I'm watching it to see if there is any PA to go short if it puts in a swing high around the top of the channel that seems to be forming. Somewhere around 1.4975 would be nice. It's the nearest resistance that would offer me a safe RR for another swing down. I'm more concerned about how much I can lose than much I can make, so I'll wait to see what happens there.

It does look like it has some potential since it's making LH's and LL's even though the momentum appears to be slowing some over the last few weeks.

It's also interesting to note how price twice has broken upward through the previous downtrend lines, put in a LH, then proceeded down to make new lows, and testing the old downtrend line each time. Will that happen again? Maybe it will, maybe it won't. So what. Next.

I'm definitely seeing a regular pattern here, but that probably means a few million others are too. So that's a good time for the big boys to change it up enough to put the screws to all us little guys.

Attached Image (click to enlarge)
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  • #9,951
  • Feb 9, 2010 6:39pm Feb 9, 2010 6:39pm
Quoting mstandifer
VERY good questions....
m,

Thanks for the detailed explanation on the setup. That makes it clear what your logic was on that one.

I'm looking forward to Strat's comments on it too, to see if he would approach it the same way or has some pointers for us that we may not be aware of yet.
  • #9,952
  • Feb 9, 2010 9:16pm Feb 9, 2010 9:16pm
Quoting mstandifer
The voice of experience



The voice of a novice



I consider it to be of benefit to me to be able to watch an experienced trade in action. Alexandra must not have bitten all of her fingernails on the down day because the hold out prevailed in the end.

-m
I appreciate that ....but I do want to point out that stepping into E/J remains a high risk endeavor, because of both ths point swings and the chart formations

Again, the value of this thread is in finding a series of M/W/D charts that sing together, ideally based on chart pattern as well as S/R. For me, the S/R prompted the trade in the setting of overblown EUR concerns and a nice daily candle, but I wish to emphasize Strat's earlier post again - that one was bursting with pearls of advice about waiting for the meat of the move. I have only bitten off the shank at this point.

I would also like to emphasize that you had a plan for that trade. You executed the plan. You did not hope, cajole, or cry. To do this is to exit the 95 percent circle.
  • #9,953
  • Edited 1:00am Feb 10, 2010 12:40am | Edited 1:00am
  •  Sid
  • | Joined May 2009 | Status: Get wise or die laughing | 85 Posts
Quoting PistolDave
Thanks for the heads-up on that one Sid....
hey pistoldave,

your post is very intersting and has given me a different perspective. thank you! momentum has definately been slowing down.

to show you where my black line is coming from i have attached you my monthly chart. i think its a significant level going back to the year 2000 on my data.

the chart also suggests that no matter if price decides to go up or down in the end, there is quite a bit of space to either side...
Attached Image (click to enlarge)
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  • #9,954
  • Feb 10, 2010 4:02am Feb 10, 2010 4:02am
I'm following with interest the chat about swings, yet feel a bit confused. I thought that when we were talking swings we were talking longer term ones, so that these daily wobbles, were just that, wobbles or 4 hour chart swings.

I enclose the eur cad weekly chart with an example of what I thought were swings, also the descending line that seems to be holding it. As it is a clear example.

This is prolly an issue of terminology, hence me asking.

Spinner
Attached Image (click to enlarge)
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Spinner 'Tis in the Waiting.....
  • #9,955
  • Edited 8:57am Feb 10, 2010 4:41am | Edited 8:57am
I believe that we have an opportunity to SHORT EURGBP.

Big Boss:
The BigBoss broke through a monthly TL and looks very bearish. October high is a confirmed Swing High by the following candles:
- November candle made a LH and LL even if it was bullish which tells that the buyers were very weak
- December BEEB showed strong selling power
- January confirmed that the sellers are very strong breaking the monthly TL.
Conclusion is that the Big Boss is bearish oriented.

Boss:
Same story as Big Boss. While the hammer (#1) gave buyers some hope, the bearish candle (#2) confirmed that the sellers are very strong and still in control. The IB (#3) show very weak buy power and we are under the major resistance at 0.88. Boss is also bearish oriented.

Worker:
The SS shows rejection by the major resistance so here we could sell EURGBP. The next support is at 0.8645 and there is enough space to give a nice R:R.
This resistance looks powerful and we have also a cluster of fib 38.2 if its drawn from 30 Nov and fib 50 from 12 Jan.
Attached Image(s) (click to enlarge)
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  • #9,956
  • Edited 4:57am Feb 10, 2010 4:46am | Edited 4:57am
Looking how the price moved while i was writing the previous post, a sell order too tight to yesterdays hammer is not advisable since the price might stall around the major resistance at ~0.88. In this case i would prefer wide instead of tight
A wider SELL - initial SL could also give a good Risk:Reward ratio.
  • #9,957
  • Feb 10, 2010 7:54am Feb 10, 2010 7:54am
It looks like Dubai World is asking for a debt freeze of $22 billion this month. Last time this happened, the markets received quite a bit of a shock Nov 25-27 in 2009.

Well it looks like more fuel for continued risk aversion.

It doesn't seem like this has been factored into the markets yet, I haven't seen all the news sites running this story yet, just a couple.

I'm looking for a continuation of the down trends in AUD, NZD and CAD against USD and JPY.
-Razorjack
  • #9,958
  • Edited 9:01am Feb 10, 2010 8:39am | Edited 9:01am
Say that 10 times real fast!

Quoting Spinner
I'm following with interest the chat about swings, yet feel a bit confused. I thought that when we were talking swings we were talking longer term ones, so that these daily wobbles, were just that, wobbles or 4 hour chart swings.

I enclose the eur cad weekly chart with an example of what I thought were swings, also the descending line that seems to be holding it. As it is a clear example.

This is prolly an issue of terminology, hence me asking.

Spinner
Wobbles are swings by definition. We only trade swings at SR on this thread but swings don't have to occur at SR to be considered swings.

http://www.forexfactory.com/showpost...postcount=4483

That post (taken from the index) will clear it up for you.

-m
  • #9,959
  • Feb 10, 2010 9:31am Feb 10, 2010 9:31am
Quoting mstandifer
http://www.forexfactory.com/showpost...postcount=4483

That post (taken from the index) will clear it up for you.

-m
I read that post again too and beside making me look for the original Bond story, I've realized that the swing high from October (EURGBP) was confirmed by the November candle alone.

Quoting hcristea
The BigBoss broke through a monthly TL and looks very bearish. October high is a confirmed Swing High by the following candles:
- November candle made a LH and LL even if it was bullish which tells that the buyers were very weak
- December BEEB showed strong selling power
- January confirmed that the sellers are very strong breaking the monthly TL.
Conclusion is that the Big Boss is bearish oriented.
  • #9,960
  • Feb 10, 2010 9:44am Feb 10, 2010 9:44am
Quoting Spinner
Will we be seeing you in Skye??

Spinner
I'd love to but not sure we can get that far North - 4 countries in 4 weeks visiting friends and relatives is pushing it!
15 YEARS OF PASR ON FOREX FACTORY!
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