Unimportant fellow's equally unimportant journal v2.0

Just went short on EUR/GBP, and here's my reasoning. We seem to have one border of a possible triangle fully formed, as it has three touches. Now the bottom border does not offer that good R:R, so I'm not going to use it as a target. Another reason why I went short is that multiple(triple?) divergences on H4, with the latest one pointing to 0.87, which I'm going to use as my first target, and 0.86285 as my TP2, which is a divergence target before the first one. Not using the 0.8467 as any of my targets as it is so far away it seems unrealistic. Since I'm trading against the trend, the fact that I entered when the market is least active should help.
Entry at 0.8812, stop above the week's high at 0.88267.
No reverse planned yet. Need some time to consider.

Also, this somewhat looks like a diamond but I couldn't get a proper broadening triangle on the left hand side, so I'm trading this simply as a triangle.

Putting a reverse order at 0.8828, SL - 0.8808. TP - end of day or manual close if I'll be satisfied.

What a beautiful picture on intraday EUR/USD yesterday. It reminds me of the trendline on USD/JPY that was touched a third time yesterday.

Made a critical mistake with my EUR/GBP trade. My 0.881 reverse stop level was rendered useless (this is what I thought) as I saw the price going in favour of my trade, and I removed the reverse order just before going to bed. Lesson learned.

Interesting picture with yearly EUR/GBP. It just made a third touch on a descending resistive trendline, which is a top border of a possible wedge. I dislike the first point of the bottom border, I think it's not technically valid. I'm not sure if I can trust this broker's charting for such long term technical analysis. Of course, if this later on turns out to be true then I'm going to mentally slap myself really really hard. ADR is at 178% already, weekly range is at 105%, both are exhausted. And we have unfilled divergences below. Hmmm...

Looks like there's a possibility of EUR/USD turning into a diamond. It seems I cannot project the right hand side of the triangle with the current lows/highs. It's a long shot as of now but let's see if anything will form out of this.



Also an after the fact chart with some symmetry. The two lines are perfectly parallel.

Next possible trading opportunity - break of the TL.

GBP/USD seems to have formed a triangle like formation. It is not a true triangle but I'm trading it as one for the sake of simplicity. There is a divergence pointing to 1.58279; I'm using it as my buy TP. Stop at 1.56596. Reverse sell at 1.56472, stop - 1.568, which will not be outside the day's range but it is the other border of the formation so we'll see if that will be good enough. Not established a TP for the reverse yet.

My order was picked up as I was writing this.

My GBPUSD long started off well, but now the price seems to be turning around. I have three options right now:
1) Take the profit and run, something that would be an impulsive action
2) put the SL at BE and let it run
3) Leave the SL where it is and let it run

I'm opting for #3. I have a reverse ready with a 30 pip stop. Not ideal as the stop will be inside the days' range.

Interesting development with EUR/USD. The two descending borders of a possible diamond are almost completely parallel. Now the thing to guess is if it will make the same thing with the ascending lower border. Safest thing as of now is to wait until the bottom border is defined and then trade inside the diamond, until it gets broken, most likely upwards as the main diagonal is pointing down.

And the next possible level to sell EUR/USD after the possible diamond gets broken upwards would be the top border of the possible intradecade wedge. That's a bit of a problem with the current charting tools that I have.

"Our IT department has investigated the 'spike' and determined that it will not be removed since OANDA is a market maker and that was a valid price for brief period of time. Since OANDA honored the trades executed at that price that price will remain part of our tick rates data. "

Good thing that it does not affect my analysis in any way.

With the trading day soon coming to an end, I'm putting the stop loss at break even. I don't remember the last time I moved my stop after the initial entry.

Some non-traded intraday action on EURGBP.

If to sell on the third approach of the top border two nice options for a SL were present: 12 pip stop above the day's high or a 7 pip stop above the 2nd approach. A break of the bottom border offered a 20 pip stop above the top border's third approach. 48ADR is at ~80 pips, so this means stops of ~10%, ~16% and 25% of ADR.

Hey Mizuno,

I like to trail my stops, getting it break even is a win/win in my book!

Good luck,

JCP

Hey Jcpfx,
I'll try them out sometime for sure. But definitely not with every trade. And I'd rather trail my stops behind technical levels

Yup, I hear you. I guess the flip side to that is getting stopped out all the time at break even and watching your profits soar shortly after, very frustrating .

I thought I posted about 18.4 on cad/jpy but it appears I did not. It looked like it was one, though it did not go anywhere. A stop moved to BE shortly after entering would've saved the situation. Alternatively, the market would've changed the MM just for you and stop you out.

Hey Mizuno,
Just posting what we discussed earlier:

Niteshift:
I could be wrong but I think price will make a move downwards next, so maybe cash in now? I'm probably going to wait a bit longer to see what happens nearer the end of the NY session. I will try a short, but if I can't get right price I will look for a long following third touch of the lower border, that's if the lower border is valid and holds.



Mizuno:
The difficulty with the formation as I see it is the following: if I connect the first two highs with a magnetic TL, on the third approach the price turns around a few pips before the TL, and then breaks it a bit. Does this mean that the upper border was defined first, and then broken with a false break, thus giving and opportunity to sell? I don't know yet as I do not have enough experience to answer that. If I connect the first and third touches directly, then there's a slight distance where the middle touch should have happened, which means that the TL is not as high quality as I'd like it to see. So my final answer would be that the formation is not good enough to be traded at the moment as it is (for me). Plus we have an unfilled divergence on M15 which I'm using as my target. I have not yet had a trade which would reach an unfilled divergence as my TP. I think the bottom border is worth trying on it's own though, as you probably saw in one of my charts that it has three touches, though the first touch is not high quality.



Niteshift:
I understand the issue you have. On my feed the latest defined TL is good and the middle touch has no gap like on yours, so perhaps an issue with the broker feed you use, and something you'll maybe need to work around. Do you have the same issue when viewing the TLs at higher timeframes? I don't think this was a false break, especially when viewed on my feed. I would take it as reliable and tradeable. I also come across TLs that look fine on one person's feed, but I get the same issue you just had, some gaps of a few pips or so. This can be annoying, but I think you can allow for a couple, maybe 3 pips of inaccuracy in certain circumstances, I just check different feeds and timeframes to see how it looks. IMO price does appear to react this TL, even if it missed by a couple of pips on your feed, so there are market participants who do view this line/pattern as significant. The sequence itself also looks valid. I missed my entry, but my plan would be to long from the third touch, lower TL. Price should move up there and hit the upper TL, break it, and look for your 15min div and beyond. Depending on the time it gets to that TL, ultratight stops can be employed with reverse, so virtually no risk if trade is executed when the ADR is low or around 50%. Of course this is in an ideal world, there's always some news event or other annoying announcement to ruin our best laid plans LOL

Keep up the good work

Actually there's another thing I'm not satisfied about MT4, for the reasons that I explained here. MT4 records the price at BID line. In other words, the price that you see in your MT4 on the charts is always bid(sell) price. The effect gets more pronounced on pairs with wider spreads, like I illustrated the USD/NOK example in the linked post. My argument is that no matter what the Sell/Buy spread is, if you take Sell+Buy and divide it by two, you will always get the middle point, no matter what the broker will be. And each broker will have different spreads, thus all MT4 charts on different brokers will differ slightly. I did not even start trading until I found a platform for my charting that I was satisfied with, and MT4 was out of the question. I call it MeatTrader, because that's the only thing it's good for - trading meat. I do use it to monitor the average ranges.

Looks like your line is holding so far. I don't have enough experience to be able to consider such a line, so I only use the most sexy ones I can find at the moment.

Also, a funny chart after I moved my stop to BE. Was almost stopped out, and when I say almost I mean 1.9 pip.