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  • #10,381
  • Mar 3, 2010 9:31am Mar 3, 2010 9:31am
Quoting patrick25
Yeah, the boss 20 is still in control. A strong close on HH, will look closely at worker.
That's the way, Patrick lad!
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,382
  • Mar 3, 2010 10:11am Mar 3, 2010 10:11am
Something else I do which I take for granted.

When I see these BIG candles (hammers or shooting stars) especially on the higher time frames, my first reaction is:

“Is this going to be a controlling candle and the beginning of a new range?”

I look for the most important PRICE of the NEXT candle to take out one of the extremes. If it doesn’t, I then expect PRICE to move within the range of the prior candle and trade accordingly.

I expect ranging action UNTIL the most important PRICE of a candle takes out one of the extremes and when it does, I trade in the direction of that break out.

If you go back in history, you can see that applying this to the Worker produces some very SAFE and very low risk trades.
Attached Image (click to enlarge)
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15 YEARS OF PASR ON FOREX FACTORY!
  • #10,383
  • Mar 3, 2010 10:26am Mar 3, 2010 10:26am
Can someone give me a reference(s) or advice on choosing which pairs to trade. Im trying to develop a set in which I can trade so as strat says "Dont put all your eggs in one basket". I've been burned by doing this before.

Thanks in advance.
Annoying Precision
  • #10,384
  • Mar 3, 2010 10:43am Mar 3, 2010 10:43am
Quoting erikte279
Can someone give me a reference(s) or advice on choosing which pairs to trade. Im trying to develop a set in which I can trade so as strat says "Dont put all your eggs in one basket". I've been burned by doing this before.

Thanks in advance.
If that is your goal then just trade the 6 major currencies:

EURUSD
GBPUSD
USDJPY
AUDUSD
USDCAD
USDCHF

The rest are just crosses (composites) of these 6 e.g. AUDCHF = composite of AUDUSD and USDCHF.

Make sure you understand the relationships between them and especially the 98% inverse relationship of USDCHF to EURUSD.
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,385
  • Mar 3, 2010 11:58am Mar 3, 2010 11:58am
[quote=strat;3517471]just wanted to alert everyone that a little while ago I cancelled my pending order to go short that was placed below the market on Feb 24. For Eur/Gbp

But why, Lou?
On Feb 19, PRICE closed STRONGLY above the 20. PRICE continued to close ABOVE the 20 ever since. Then on Feb 25, another STRONG close above the 50.

Draw your TL from the high of Jan 12 to the high of Feb 11 and you will see that on Feb 19 PRICE not only BROKE through it but closed STRONG above it. Then on Feb 22 & 23 came the RE-TEST of the TL as SUPPORT.

Lou, this is very worrying, more so if you have been trading for 10 years.
10 years? Not for another 5.

The chart shows what I saw. The S/R line had a lot of strength to it. Disregarded the 20. Didn't see it particularly good at holding price up.
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  • #10,386
  • Mar 3, 2010 12:27pm Mar 3, 2010 12:27pm
Thank you,

What do you mean by "If this is your goal"?


Quoting strat
If that is your goal then just trade the 6 major currencies:

EURUSD
GBPUSD
USDJPY
AUDUSD
USDCAD
USDCHF

The rest are just crosses (composites) of these 6 e.g. AUDCHF = composite of AUDUSD and USDCHF.

Make sure you understand the relationships between them and especially the 98% inverse relationship of USDCHF to EURUSD.
Annoying Precision
  • #10,387
  • Mar 3, 2010 12:36pm Mar 3, 2010 12:36pm
Quoting erikte279
Thank you,

What do you mean by "If this is your goal"?
Im trying to develop a set in which I can trade so as strat says "Dont put all your eggs in one basket"
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,388
  • Mar 3, 2010 12:50pm Mar 3, 2010 12:50pm
When you where referencing the yen pairs a while back you said dont put more then 1 trade for all of the pairs listed because of the correlation. Im trying to determine the best set of pairs to trade so when i get a signal on multiple pairs I'll know to only take 1 signal because all of them are corrlelated.

Quoting strat
Im trying to develop a set in which I can trade so as strat says "Dont put all your eggs in one basket"
Annoying Precision
  • #10,389
  • Mar 3, 2010 12:55pm Mar 3, 2010 12:55pm
Quoting strat
...EURUSD
GBPUSD
USDJPY
AUDUSD
USDCAD
USDCHF...
I'm taking this advice too. I'm watching too much pairs now and seeing nothing.
  • #10,390
  • Mar 3, 2010 12:59pm Mar 3, 2010 12:59pm
Quoting erikte279
When you where referencing the yen pairs a while back you said dont put more then 1 trade for all of the pairs listed because of the correlation. Im trying to determine the best set of pairs to trade so when i get a signal on multiple pairs I'll know to only take 1 signal because all of them are corrlelated.
This is the same as asking how long is a piece of string!

ALL the JPY pairs are correlated to JPY. How they behave is determined by the currency they are paired with. At any given time each paired currency can be strong or weak so which JPY pair to trade will change as their strength and weakness changes.

Aside from putting pairs labels on a dartboard and throwing a dart at them, one way might be to choose a major (EURJPY) and a commodity (AUDJPY).

Other than guessing Alexandra might tell you to trade the "mothership" as she so eloquently puts it, I don't know what else to tell you.
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,391
  • Mar 3, 2010 1:11pm Mar 3, 2010 1:11pm
[quote=Lou;3518467]
Quoting strat
just wanted to alert everyone that a little while ago I cancelled my pending order to go short that was placed below the market on Feb 24. For Eur/Gbp

But why, Lou?
On Feb 19, PRICE closed STRONGLY above the 20. PRICE continued to close ABOVE the 20 ever since. Then on Feb 25, another STRONG close above the 50.

Draw your TL from the high of Jan 12 to the high of Feb 11 and you will see that on Feb 19 PRICE not only BROKE through it but closed...
Disregarded the 20. Didn't see it particularly good at holding price up.

Have you read the thread?

If so, did you understand the roles the 20 and 50 play?

To make this comment tells me you have not spent the time to go back in history and study thousands of charts.

The 20 is the backbone of many profitable systems and methods and is a major component in one of my very profitable mechanical trading methods.

Since the Big Boys (Hedge Funds, Financial Institutions, Trading Banks) use it, I'm damn sure I will. Hell, even the Merchant Wanker I met in Mumbai used it!
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,392
  • Mar 3, 2010 1:33pm Mar 3, 2010 1:33pm
[quote=Lou;3518467]
Quoting strat
just wanted to alert everyone that a little while ago I cancelled my pending order to go short that was placed below the market on Feb 24. For Eur/Gbp

But why, Lou?
On Feb 19, PRICE closed STRONGLY above the 20. PRICE continued to close ABOVE the 20 ever since. Then on Feb 25, another STRONG close above the 50.

Draw your TL from the high of Jan 12 to the high of Feb 11 and you will see that on Feb 19 PRICE not only BROKE through it but closed...
The chart shows what I saw. The S/R line had a lot of strength to it.

Correct, no problem there. In fact that was a perfect example for students to illustrate PASR.

That SR line (PRICE LEVEL) acted as very strong support and then became very strong resistance.

Because that was a very strong SR level, when PRICE broke it to the upside on Feb 25, that was our PASR signal to go long.

The stronger the SR PRICE level, the more VALID (safe) trading in the direction of the break out is.

So, we had four "green flags" to go long:

PRICE closing above the 20 breaking out of the down TL

PRICE RE-TESTING the TL and 20 as support

PRICE breaking through strong SR PRICE level

PRICE closing above the 50

Had you entered after any of those you would now be in triple pip heaven.

You might want to look at what happened to the 20 and 50 on St. David's Day (March 1st). If you don't understand what that means, you know what to do............................................
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,393
  • Mar 3, 2010 2:11pm Mar 3, 2010 2:11pm
Quoting erikte279
Can someone give me a reference(s) or advice on choosing which pairs to trade. Im trying to develop a set in which I can trade so as strat says "Dont put all your eggs in one basket". I've been burned by doing this before.

Thanks in advance.
I can tell you what I do so I don't have too much correlated risk out there. I look at a lot of pairs and pick the best ones on any given week.
I make sure I don't have more than 3 trades on that are not in profit or do not have profit protected yet.

I usually exclude USDJPY and try and take a view on each currency, what that means practically is once you look at ALL the charts and you see what is doing what against each other you get a bigger picture.
So if there are a couple of setups to go long the dollar I will pick the weakest currency against it. If that means I then have a position short CAD say then I won't add another position short CAD until that one is in profit.
If I am bearish sterling and short GBPAUD then I won't short cable or buy EURGBP until that trade is in profit and protected.
Sometimes it sets up so there are opportunities in every yen cross or every EUR cross, when that happens I trade the strongest one long or the weakest one short depending on the setups available. If I don't have any other trades on I might take two but I am always aware of how much total risk I have on. Markets that are trending always win over ones that are not.
The way the markets are at the moment, if one fails then they will probably all fail so that is what I do to reduce that risk.
It is quite personal to your risk tolerance though, and I am sure if you asked 10 traders here you would get 10 different answers.

Nicola
  • #10,394
  • Mar 3, 2010 3:31pm Mar 3, 2010 3:31pm
Ok, so ignore correlation and just focus on the setups. Gotcha

Thanks


Quoting strat
This is the same as asking how long is a piece of string!

ALL the JPY pairs are correlated to JPY. How they behave is determined by the currency they are paired with. At any given time each paired currency can be strong or weak so which JPY pair to trade will change as their strength and weakness changes.

Aside from putting pairs labels on a dartboard and throwing a dart at them, one way might be to choose a major (EURJPY) and a commodity (AUDJPY).

Other than guessing Alexandra might tell you to trade the "mothership" as she so eloquently...
Annoying Precision
  • #10,395
  • Mar 3, 2010 3:34pm Mar 3, 2010 3:34pm
Thank you, this makes a lot of sense. I was looking at things through a weird lense (common sense not so common).

Check

Quoting elitejets
I can tell you what I do so I don't have too much correlated risk out there. I look at a lot of pairs and pick the best ones on any given week.
I make sure I don't have more than 3 trades on that are not in profit or do not have profit protected yet.

I usually exclude USDJPY and try and take a view on each currency, what that means practically is once you look at ALL the charts and you see what is doing what against each other you get a bigger picture.
So if there are a couple of setups to go long the dollar I will pick the weakest currency against...
Annoying Precision
  • #10,396
  • Mar 3, 2010 3:45pm Mar 3, 2010 3:45pm
See this is what I like about the forum (the last discussion is one where both people made good points!) In this way it's easier for a fairly new guy to the forex to learn.
  • #10,397
  • Mar 3, 2010 4:13pm Mar 3, 2010 4:13pm
Quoting erikte279
Thank you, this makes a lot of sense. I was looking at things through a weird lense (common sense not so common).

Check
Bear in mind that I am probably more risk averse and trade lower risk than most people here. When I do that I don't mind taking a crack at things. You will find what works for you.

I do really simple things. If I have a long setup on cable and EURUSD I look at EURGBP and that tells me which one is likely to do better long.
If I get the same setup on USDCAD and AUDUSD in reverse I look at AUDCAD and it tells me which one I want. Can't decide between AUD and NZD - take a look at AUDNZD. And so on.
If i can't decide from the correlated pairs, for example EURCHF likely won't help you choose between USDCHF and EURUSD then I hold a bit of a beauty contest. I compare distance to first resistance or 20ema and I divide that by the stop size. You can usually pick a winner that way.

Hope this helps and sorry its a bit disjointed.
  • #10,398
  • Mar 3, 2010 4:42pm Mar 3, 2010 4:42pm
Well thank you again for sharing! This seems simple yet key, finding strength and weakness and using it in conjunction with pasr. When I start picking winners more consistently Im going to start a "stress free founders" gratuity fund wheras I make a small initial deposit and continue to trade it and give it to all of you who have taken your time out to help and share your wisdom.


Quoting elitejets
Bear in mind that I am probably more risk averse and trade lower risk than most people here. When I do that I don't mind taking a crack at things. You will find what works for you.

I do really simple things. If I have a long setup on cable and EURUSD I look at EURGBP and that tells me which one is likely to do better long.
If I get the same setup on USDCAD and AUDUSD in reverse I look at AUDCAD and it tells me which one I want. Can't decide between AUD and NZD - take a look at AUDNZD. And so on.
If i can't decide from the correlated pairs, for...
Annoying Precision
  • #10,399
  • Mar 3, 2010 7:24pm Mar 3, 2010 7:24pm
Quoting strat
If that is your goal then just trade the 6 major currencies:

EURUSD
GBPUSD
USDJPY
AUDUSD
USDCAD
USDCHF

The rest are just crosses (composites) of these 6 e.g. AUDCHF = composite of AUDUSD and USDCHF.

Make sure you understand the relationships between them and especially the 98% inverse relationship of USDCHF to EURUSD.
Hi Strathttp://cdn.forexfactory.com/images/icons/icon7.gif

Would you consider NZDUSD also into this lot?
I have been trading only those you mention plus NZD.

Happy Tradinghttp://cdn.forexfactory.com/images/icons/icon14.gif
Jideck
  • #10,400
  • Mar 3, 2010 8:19pm Mar 3, 2010 8:19pm
Quoting PistolDave
Thanks for the clear explanation Craig.

Here is what I think I have the confusion about:

If I am understanding you correctly, you are saying that it would have been reasonable to trade a short setup here if it had occurred in the area of 88-90 regardless of the BUEB (bar 2) because of the major resistance there.

I'm not trying to find fault with your explanation, but it would go in direct opposition to the concept of the controlling bar idea, I think....
As i thought Strat said it much better than I.

We want to trade the Worker in the direction of the Boss and Big Boss. Ideally, we want to enter a trade when the Worker changes into the direction of the Boss at the same time as the Boss changes into the direction of the Big Boss. When you can time this, PRICE is sat on the launch pad!

This statement needs to be re-read by us all a few times, it's gold IMO.
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