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  • #781
  • Dec 15, 2010 5:30pm Dec 15, 2010 5:30pm
Quoting DanUK
That E/U short should be up around 90 pips now... hopefully we will see that continue to grow!
If only mine was real money!!!

With regards to moving stop to breakeven, I intend to move to breakeven around the 1.32 area which is at the lows of the 4 bars previous to the pinbar. Would this be correct or would you wait for the 1.29/1.30 key s/r resistance area?

Thanks

Mark
  • #782
  • Dec 15, 2010 8:19pm Dec 15, 2010 8:19pm
Anybody been watching this potential EJ setup on the D1 to go short?

It's coming off the 50% and off a resistance line.
Yesterday's candle was some kind of bearish candle (almost engulfing/OB...but not quite)...bearish nonetheless.

Regards,
Neo
Attached Image (click to enlarge)
Click to Enlarge Name: ej-d1.gif Size: 42 KB
Sentiment: Short on cash. Long on hope.
  • #783
  • Edited 1:46am Dec 16, 2010 1:32am | Edited 1:46am
Hi Dan,
I am reading for the second time your thread and I started to build my charts based on your method. I started with the USD/CHF because it has a nice weekly downtrend. I will attach a few charts and ask you a few questions if you do not mind. Please see the attached chart and comment on the S/L. Would you choose the same areas of interest from the weekly chart?
I know that these should be zones of S/R with a +/- 50 pips range but I drew only the lines to keep the chart easier to read. Thank you!
Attached Image (click to enlarge)
Click to Enlarge Name: USD-CHF, W.jpg Size: 83 KB
  • #784
  • Dec 16, 2010 1:42am Dec 16, 2010 1:42am
Hi Dan,
I switched to the Daily Chart and I tried to add the trendlines. I found four possible trendlines:
- 3 downtrend (blue, yellow, purple)
- 1 uptrend (green).
Please comment on my trendlines selection. Which ones should I keep on my chart and why? Thank you!
Attached Image (click to enlarge)
Click to Enlarge Name: USD-CHF, D1.jpg Size: 70 KB
  • #785
  • Dec 16, 2010 1:55am Dec 16, 2010 1:55am
Anybody been watching this potential EJ setup on the D1 to go short?

Hi Neo.

As mentioned in my post (748) I have been keeping an eye on this pair. With the confirmation of a bearish reversal bar I am very tempted. I don't mind losing a few pips by waiting to see what other people and Dan thinks. Is there something hidden that I haven't spotted. As a newbie and using real money, I'm just a bit nervous. Would you put stop around 112.300?

Regards
Paul
  • #786
  • Dec 16, 2010 2:01am Dec 16, 2010 2:01am
Hi Dan,
The third step would be to add the Fibs. You say the the Fibs should be drawn using the most recent swing in the direction of the trend. Which one would you use: the red one or the blue one?
Thank you!
PS: Please let me know if I posted to many questions/charts at the same time.
Attached Image (click to enlarge)
Click to Enlarge Name: USD-CHF, D1-Fib.jpg Size: 87 KB
  • #787
  • Dec 16, 2010 3:00am Dec 16, 2010 3:00am
Quoting paulwales
Hi Neo.

As mentioned in my post (748) I have been keeping an eye on this pair. With the confirmation of a bearish reversal bar I am very tempted. I don't mind losing a few pips by waiting to see what other people and Dan thinks. Is there something hidden that I haven't spotted. As a newbie and using real money, I'm just a bit nervous. Would you put stop around 112.300?

Regards
Paul
I have a sell stop below yesterday's D1 candle to take it short. And yes...it's a big SL around the 112.300 area. Just trade smaller position to compensate. I'm only risking 0.5% on this trade.

Kind Regards
Sentiment: Short on cash. Long on hope.
  • #788
  • Dec 16, 2010 3:10am Dec 16, 2010 3:10am
Hi All,
I will give my 2pip opinion. Please be aware that I am a newbie and I trade a demo account.
My view is that this is a reasonable good setup:
1. It seems that the new uptrend failed to develop. After a higher high and a higher low, we had lower highs and lower lows.
2. The old downtrend may be valid as the yesterday bearish candle comes from a the old trendline. Additionaly we have a nice confluence: S/R at 112.00, and 50-62 Fib.
Personnaly, I will take it (demo !!!) at the break of the bearish candle.

Dan please confirm/infirm my analysis. Thank you!
Attached Image (click to enlarge)
Click to Enlarge Name: EUR-JPY, D1.jpg Size: 85 KB
  • #789
  • Dec 16, 2010 4:05am Dec 16, 2010 4:05am
Good observation about the old trendline Windpip. I agree with entering after the break of yesterdays low. I would feel more confident then.
Also as extra confirmation I have posted the Weekly chart below and it shows a few weeks ago that the downtrend line was breached but the following week price closed below. Price now seems to be cautious about breaking up through to close, it's had a spike but came back, so this could be extra resistance.

Regards
Attached Image (click to enlarge)
Click to Enlarge Name: EJ 161210.png Size: 20 KB
  • #790
  • Dec 16, 2010 4:16am Dec 16, 2010 4:16am
EUR/JPY

I'm in SHORT at 111.20

I now need a strategy to get out ha ha, but I have set my SL.


Regards
  • #791
  • Dec 16, 2010 4:20am Dec 16, 2010 4:20am
Good luck with the trade Paul & Neo. I'm interested to hear if Dan thinks that a candle that almost is a BEOB is good enough when at an area of confluence.
  • #792
  • Dec 16, 2010 4:35am Dec 16, 2010 4:35am
Hi Mark.

Dan favours S&R (Location) above anything else, especially at round numbers, so in hindsight I should have waited until a break through 111.00 (another 20 pips) His favoured Fib retracement is 50% as well.

So for this particular trade, putting together strong S&R, 50% Fib, bearish OB, (Although not the best) and heading towards the 111.00 as I write. I should feel confident. But as a relative newbie I still have my fingers crossed. Interested in Dans thoughts.

Regards
Paul
  • #793
  • Dec 16, 2010 1:27pm Dec 16, 2010 1:27pm
Quoting HxMark
Dan, would the setup bar in this case be the bar previous to the inside bar? You dont trade the break of the inside bar?

Cheers

Mark
Hi Mark,

Strictly speaking the inside bar setup is at least a two bar setup... it suggests indecision with the inability of the second bar to break the high or low of the setup bar. Taking the break of the second bar is a much riskier entry as price has not actually broken out of the area of indecision (i.e. the first engulfing bar).

The inside bar setup is probably the candlestick pattern that I favour the least (out of the triggers I use) and as such I am extra cautious about using it.

Regards,

Dan
  • #794
  • Dec 16, 2010 1:32pm Dec 16, 2010 1:32pm
Quoting HxMark
If only mine was real money!!!

With regards to moving stop to breakeven, I intend to move to breakeven around the 1.32 area which is at the lows of the 4 bars previous to the pinbar. Would this be correct or would you wait for the 1.29/1.30 key s/r resistance area?

Thanks

Mark
Hi Mark,

Don't forget to think of demo money as real money! It helps with the discipline.

Re: moving your stop - I wouldn't argue with what you are planning to do.

These days I tend to use a "soft" stop loss more often than a hard stop (although I do of course place a hard stop) and on most occasions I close trades manually, but that is just a personal preference of mine. I think what you are planning to do makes sense.

Regards,

Dan
  • #795
  • Dec 16, 2010 1:37pm Dec 16, 2010 1:37pm
Quoting NeoRio
Anybody been watching this potential EJ setup on the D1 to go short?

It's coming off the 50% and off a resistance line.
Yesterday's candle was some kind of bearish candle (almost engulfing/OB...but not quite)...bearish nonetheless.

Regards,
Neo
Hi Neo,

On my feed that candle was a bearish engulfing candle (the body engulfed the previous day's body) and a valid trigger to go short.

Could the next stop be 110? Time will tell!

Regards,

Dan
  • #796
  • Dec 16, 2010 1:44pm Dec 16, 2010 1:44pm
Quoting Windpip
Hi Dan,
I am reading for the second time your thread and I started to build my charts based on your method. I started with the USD/CHF because it has a nice weekly downtrend. I will attach a few charts and ask you a few questions if you do not mind. Please see the attached chart and comment on the S/L. Would you choose the same areas of interest from the weekly chart?
I know that these should be zones of S/R with a +/- 50 pips range but I drew only the lines to keep the chart easier to read. Thank you!
Hi Windpip,

No problem. My lines aren't identical to yours but they are very similar. So long as you remember that they represent an area more than a line (which you mentioned) you should do fine.

These levels now represent your "areas of interest" (or places to trade from).

Good start

Regards,

Dan
  • #797
  • Dec 16, 2010 1:57pm Dec 16, 2010 1:57pm
Hi Dan et-al. Just found this thread and thought I'd say hello. Have skimmed thru and found it really interesting. When I have time I will try and study it. I am very new to trading but will try and keep any questions to a minimum.
Thanx
  • #798
  • Dec 16, 2010 2:05pm Dec 16, 2010 2:05pm
Quoting Windpip
Hi Dan,
I switched to the Daily Chart and I tried to add the trendlines. I found four possible trendlines:
- 3 downtrend (blue, yellow, purple)
- 1 uptrend (green).
Please comment on my trendlines selection. Which ones should I keep on my chart and why? Thank you!
Hi Windpip,

Good question.

There are often times when there are more than one trendline to consider so I am glad you asked.

First of all your blue trendline I consider to be a "developing" trendline - it isn't technically valid until the current swing exceeds the recent low in the 0.9500 area. If that happens I would then consider that to be a technically valid trendline and something I would call your "outer" trendline.

Your yellow trendline again is a "developing" trendline and again it is worth keeping an eye on.

Your green trendline isn't quite how I would draw it... I have attached a chart of how mine would look. This is a counter-trend trendline and in my perspective (as you can see in my chart) price has broken below it, come back to re-test it and formed a reasonable looking shooting star off it (although the day is not closed yet).

Finally, you purple trendline is valid although it is quite steep and steeper trendlines tend to break sooner. I tend to consider this as an "inner" trendline.

Just like fibs there are times when you will have more than one trendline to watch and you have identified them well.

Use these lines in confluence with your support/resistance levels in order to find a high probability setup.

I actually think the break of the counter-trend trendline and possibility of today's shooting star is looking like a reasonable setup. It has confluence with resistance in the 97.00 area and has also formed off of the 38.2 (and almost 50%) fib level. The only trouble I have with this trade though is that potential trouble is not far away (highlighted by the small blue box on my chart). Certainly worth considering though!

Regards,

Dan
Attached Image (click to enlarge)
Click to Enlarge Name: usdchf.gif Size: 21 KB
  • #799
  • Dec 16, 2010 2:11pm Dec 16, 2010 2:11pm
Quoting paulwales
Anybody been watching this potential EJ setup on the D1 to go short?

Hi Neo.

As mentioned in my post (748) I have been keeping an eye on this pair. With the confirmation of a bearish reversal bar I am very tempted. I don't mind losing a few pips by waiting to see what other people and Dan thinks. Is there something hidden that I haven't spotted. As a newbie and using real money, I'm just a bit nervous. Would you put stop around 112.300?

Regards
Paul
Hi Paul,

I hope you are using low leverage if you are using real money while you learn! I actually think it is good to trade with real money whilst you are learning but only if you are using very low leverage and can afford to lose the whole lot lol!

With regards to the trade... personally I think the E/J trade is passable. I know it's hard to not pull the trigger (especially if there aren't many other trades presenting themselves) but patience is key here.

The trade may work out but my advice to anyone, especially if they are new to trading, is to be selective about your trades. Try and pick the ones that are easily identifiable. If you really have to look for a reason to trade it could just be that it's not worth the effort.

Regards,

Dan
  • #800
  • Dec 16, 2010 2:21pm Dec 16, 2010 2:21pm
Quoting Windpip
Hi Dan,
The third step would be to add the Fibs. You say the the Fibs should be drawn using the most recent swing in the direction of the trend. Which one would you use: the red one or the blue one?
Thank you!
PS: Please let me know if I posted to many questions/charts at the same time.
Hi Windpip,

That's ok - questions are quite welcome. There are times when I can't answer quickly but I will always endeavour to reply at some point!

The USD/CHF isn't the perfect example for fibbing but out of the two you plotted I would be more interested in the blue one... the reason being is that a retracement up into the levels of the red fib would be around 1000 pips from the low which is more likely to be a reversal than a retracement!

Now, although it isn't a big swing there is also a smaller fib that I would pay attention to... and that is the most recent swing south (as per my chart).

Again, it's one of those things where you may need to keep an eye on a couple of possible fibs.

This can get a bit too complicated if you try and analyse every possible scenario so my advice would be to keep it as simple as possible. If it is a clear and obvious swing than it is worth applying a fib too and seeing if it provides any additional confluence. If it is hard to spot then it probably can be avoided!

As clear as mud!? Time and practice will of course help with things so keep at it!

Regards,

Dan
Attached Image (click to enlarge)
Click to Enlarge Name: usdchf fib.gif Size: 21 KB
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