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  • #3,281
  • Feb 21, 2011 10:28am Feb 21, 2011 10:28am
Thanks LJ, I've never had much luck with GBP/CHF but have just added it to my watchlist. I won't make a habit of messing up your journal by posting my own charts, but with your hint of 1.54 as an entry I now see an obvious short at 10am (with hindsight of course!) and potential head/shoulders?

http://thumbsnap.com/s/5cegxrN8.jpg
  • #3,282
  • Feb 21, 2011 1:26pm Feb 21, 2011 1:26pm
Quoting rm55
Thanks LJ, I've never had much luck with GBP/CHF but have just added it to my watchlist. I won't make a habit of messing up your journal by posting my own charts, but with your hint of 1.54 as an entry I now see an obvious short at 10am (with hindsight of course!) and potential head/shoulders?

http://thumbsnap.com/s/5cegxrN8.jpg
I'm not into H&S formations myself...here is my chart and reasoning behind the touch trade...SL would have been @ 1.5415 + spread...needed a bit of patience but it went to clear initial target area eventually...though the weekly chart could give reason to try and hold this one longer.
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  • #3,283
  • Feb 21, 2011 6:39pm Feb 21, 2011 6:39pm
Hi LJ. Nice thread. How's your TAG doing since starting last year? I apologise if you have already posted this recently. Keep up the good work.
  • #3,284
  • Feb 22, 2011 4:49am Feb 22, 2011 4:49am
Quoting lovejoy80
I'm not into H&S formations myself...here is my chart and reasoning behind the touch trade...SL would have been @ 1.5415 + spread...needed a bit of patience but it went to clear initial target area eventually...though the weekly chart could give reason to try and hold this one longer.
Price is now approaching an initial weekly TF target, on the 4HR TF there is a possibility of a bounce here....not a bad %R on that touch trade (about 9.5R)
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  • #3,285
  • Feb 22, 2011 4:50am Feb 22, 2011 4:50am
No surprise that EU bounced where it did...
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  • #3,286
  • Feb 22, 2011 4:52am Feb 22, 2011 4:52am
Quoting Xfd
Hi LJ. Nice thread. How's your TAG doing since starting last year? I apologise if you have already posted this recently. Keep up the good work.
Thanks.

I run several different broker accounts now and don't keep a record of all my trades and account growth on FF anymore...things are going well though.
  • #3,287
  • Feb 22, 2011 4:58am Feb 22, 2011 4:58am
Quoting lovejoy80
No surprise that EU bounced where it did...
...and no surprise where the current impulsive move is stalling.
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  • #3,288
  • Feb 22, 2011 5:27am Feb 22, 2011 5:27am
Hi, LJ! here is 2 setups now in EURUSD (touch trade) and EURCHF (PPZ+PA) , but they are in opposite directions. How to choose right way??
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  • #3,289
  • Feb 22, 2011 6:17am Feb 22, 2011 6:17am
Quoting makron
Hi, LJ! here is 2 setups now in EURUSD (touch trade) and EURCHF (PPZ+PA) , but they are in opposite directions. How to choose right way??
Personally if I see conflicting setups I'd rather just sit it out. I never feel the need to be in the market so if I'm not sure about something I just sit it out and watch.

The EU was a valid touch trade setup, but not the best one in terms of the strength of that area and confluence and not one I took...the problem with EUR generally at the moment is it's very political and just like the impulsive move on Friday it is prone to move suddenly based on ECB member comments about inflationary pressures / rate hikes etc.

I was short from yesterday on EU and took profit @1.3540 but do try to stay clear of EUR based pairs unless it's a really high probability setup.

Also remember ECHF and EU are not 100% correlated so one might rise whilst the other stays still etc.

Personally I would expect if EUR was to rise that EU would rise faster than ECHF in any case, so if you want to go long ECHF then I would actually be looking to go long EU than ECHF as CHF is currently significantly stronger than USD (look at USD CHF chart + money flows into CHF much more than USD at present in times of risk aversion), but with no real setup on EU I'd be on the sidelines waiting for the next opportunity.

So for me I'm on the sidelines but I would rather go long EU than ECHF at the moment.
  • #3,290
  • Feb 22, 2011 6:34am Feb 22, 2011 6:34am
Quoting lovejoy80
Personally if I see conflicting setups I'd rather just sit it out. I never feel the need to be in the market so if I'm not sure about something I just sit it out and watch.

The EU was a valid touch trade setup, but not the best one in terms of the strength of that area and confluence and not one I took...the problem with EUR generally at the moment is it's very political and just like the impulsive move on Friday it is prone to move suddenly based on ECB member comments about inflationary pressures / rate hikes etc.

I was short from yesterday...
What a day...US session didnt even started and price is already moving on steroids. Libya , NZ earthquake , Lower debt rating for Japan , ECB hawkish note over inflation. Whats next?
  • #3,291
  • Feb 22, 2011 9:10am Feb 22, 2011 9:10am
Dems on the RUN! (Wisconsin)

Quoting Greenhaze
What a day...US session didnt even started and price is already moving on steroids. Libya , NZ earthquake , Lower debt rating for Japan , ECB hawkish note over inflation. Whats next?
DM if you have any questions
  • #3,292
  • Feb 22, 2011 9:15am Feb 22, 2011 9:15am
Thanks for your reply to my earlier post LJ. Sadly, my bad luck with GBP/CHF continues as I tried a long this morning from just above 1.52 but have taken another loss (only demo) - this was based on a fib plus my beloved h&s prediction! LOL.

I very much appreciate you spending your time to give advise on here and I shall continue to lurk quietly in the background from now on.

Just before I go, could you suggest maybe 2 or 3 currencies pairs that as a beginner I could focus on to start with? Preferably 2 that aren't correlated so if I mess up on one I won't necessarily mess up the other as well. Are there some pairs that you find these setups work for more than others? I'd like to be able to give just a couple of pairs my full attention, and get consistent with those to begin with.

Cheers,

Ross.
  • #3,293
  • Feb 22, 2011 11:35am Feb 22, 2011 11:35am
Quoting rm55
Thanks for your reply to my earlier post LJ. Sadly, my bad luck with GBP/CHF continues as I tried a long this morning from just above 1.52 but have taken another loss (only demo) - this was based on a fib plus my beloved h&s prediction! LOL.

I very much appreciate you spending your time to give advise on here and I shall continue to lurk quietly in the background from now on.

Just before I go, could you suggest maybe 2 or 3 currencies pairs that as a beginner I could focus on to start with?...
Shorting CHF when the troubles in the Middle East are pesent is something I'm personally staying away from. Being able to put some basic fundies together with technicals and knowing how price reacts to certain events will keep you away from trades like this.

In terms of pairs, my favourite pairs are probably the USD pairs, but, I would stay away from EU as it can have some pretty impulsive moves, UCAD is very choppy right now, so that leaves AU, NU and GU. I would pick one of them and maybe EURGBP.

However, I wouldn't recommend just trading one pair, I would recommend from a technical perspective of just picking say 12-15 pairs and mark up your daily, monthly, weekly s/r areas, look for additional confluence (divergence, trendlines, fibs, round numbers) and just wait for price to approach these areas on the 4HR chart.

This is pretty much what I do, my best touch trade setups are those that are based around a daily S/R with fib confluence...if it is first time back then all the better (and if other confluence is present then even better still), but these are the golden ones that I wait for. I don't take lots of trades per week, I prefer to wait for the best high probability ones...this week for example there has been some great moves, but I've taken a price action setup on EU, the GCHF touch trade setup, a price action setup on YM and went long oil , gold on Friday using mostly fundamental knowledge (with some technical confluence) as I know that it's pretty much a sure thing that gold and oil would rise if the troubles in the Middle East continued and you can see the likely risk / reward on these trades alone...price doesn't always take off like this of course, but if you continue to take the same setups with the same mindset time after time the account sure does grow. There were defintely some other trades I could have taken...long EU, short GU, short any of the yen pairs and short gold are examples but I prefer to just wait and take only the best ones and manage them well and concentrate on reading the current market conditions and sentiment.

The rest of my trading is based on price action setups, watching for price anomalies, using some basic intermarket correlations and combining all of these together. For example the GCHF touch trade setup was all the better because of the weekly BEOB and the fact money flows hard into CHF in times of risk aversion...so all in all this was a pretty high probability setup, combining technical methods together with basic knowledge of how price reacts to certain events.

Hope that helps.
  • #3,294
  • Feb 22, 2011 7:21pm Feb 22, 2011 7:21pm
Quoting lovejoy80
Personally I would expect if EUR was to rise that EU would rise faster than ECHF in any case, so if you want to go long ECHF then I would actually be looking to go long EU than ECHF as CHF is currently significantly stronger than USD (look at USD CHF chart + money flows into CHF much more than USD at present in times of risk aversion), but with no real setup on EU I'd be on the sidelines waiting for the next opportunity.
I hold the same opinion but the clarity above leaves myself even more convinced!!!

Quoting lovejoy80
Being able to put some basic fundies together with technicals and knowing how price reacts to certain events will keep you away from trades like this.
What started as a good insightful thread has matured into a complete all round authority on FX. I know you have stated before it has taken you many years to get to this point but it is an example to us all.

While I like to see the trades you take I almost believe the true value is in the trades which you pass up..... a skill far harder to learn!!

thanks for keeping up the posts!!!! I find some true market wizard esq wisdom in your words!!!
  • #3,295
  • Feb 23, 2011 7:43am Feb 23, 2011 7:43am
Quoting zentrader108
I hold the same opinion but the clarity above leaves myself even more convinced!!!



What started as a good insightful thread has matured into a complete all round authority on FX. I know you have stated before it has taken you many years to get to this point but it is an example to us all.

While I like to see the trades you take I almost believe the true value is in the trades which you pass up..... a skill far harder to learn!!

thanks for keeping up the posts!!!! I find some true market wizard esq wisdom in your words!!!
Yes, the key with touch trades and PA trading is knowing the ones not to trade...some of that comes from experience and picking little things up over time and some from just being well disciplined and knowing the method for picking the right setups inside out (which comes from lots and lots of chart watching which is essentailly backtesting and forward testing the method).
  • #3,296
  • Feb 24, 2011 1:49am Feb 24, 2011 1:49am
Here is one no brainer touch trade I am in from yesterday.

132.50 initial target just been hit but considering how the market is moving I'm leaving this one in play and just moving the SL down to lock in profit.
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  • #3,297
  • Feb 24, 2011 4:11am Feb 24, 2011 4:11am
I took a touch long on EUR/CHF today at the 61 fib area shown. First time back. There is obvious risk aversion about at the moment and therefore upside bias for CHF. However, there was clearly a decent bull move here inspite of the obvious downward pressure beforehand (big bearish H1 bar, and the risk aversion element giving strength to CHF).

I have included a chart of USD/CHF to show the slight bullish move at the time of the EUR/CHF long, but USD/CHF continued it's downward move pretty quickly.

Mark, is this showing that order flow at these confluenced 61 fib/ppz areas is strong enough to reverse fundamental viewpoints, such as risk aversion, even if the move could be temporary? Or is there another reason the EUR, specifically, was likely to strengthen against CHF at this point? i.e. there is talk of EUR base rate rises for a while now, which I also assume is giving EUR strengh over CAD, even though crude is going through the roof?

Thanks

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  • #3,298
  • Feb 24, 2011 8:04am Feb 24, 2011 8:04am
Technically IMO that is a good technical setup, one I would normally take.

But, the reason I did not take it is because like you stated CHF is very strong based on risk aversion flows right now and because of the uncertainty of the Middle East situation I would not be wanting to go short the CHF right now. I do prefer to have the broad market on my side from a fundamental perspective (like with my GJ short) or at the very least not the opposite of the technical setup.

I am pretty cautious in the touch trade setups I take however, some might just consider the technical setup and take it, but for me I like to look at the market as a whole too and the current politcially caused risk aversion and the uncertainty surrounding what will happen in the immediate future is enough to make me walk away from this trade setup.

I wouldn't necessarily be looking at UCHF too much when trading EURCHF. In terms of CHF's I look at ECHF,GCHF,UCHF (and CHFJPY but this is different than the others...the fight for risk aversion king!) and can use these to see what CHF is broadly doing...but in the the case of UCHF, USD is particularly weak right now (look how weak it is even when JPY and CHF are strong) so UCHF falling hard would not concern me with regards a setup or potential trade on ECHF.

Price did in fact react at this area as you would expect, no follow through yet but if the situation in the Middle East calms down I would definitely expect a rebound in the CHF pairs...it's just for me right now there is too many unpredicatable events that could cause CHF to suddenly strength so I would rather stay on the side of the current market flows for the time being....but I could see it rising if things stay calm...in fact I would definitely expect it to rise IF things stayed calm and equities rose this afternoon as money will flow out of the CHF as risk aversion settles down.

Personally I don't fully understand why the EUR is so strong relative to other countries, the potential for an interest rate rise in the near future over AUD and CAD is an obvious reason, but it has been pretty strong all year. There is a lot of politics involved in the EUR IMO and not much time goes by before 'someone' is talking up the Euro. I prefer to stay away from Euro based trades at the moment as something doesn't look or feel right to me the way it moves, so I concentrate on other pairs.

I would never look to see why a currency might change at a particular moment in time as you can't really know that...I look more at the market as a whole and current sentiment...it's pretty obvious and easy this week to gauge which direction the market is heading and what FX pairs will strengthen / weaken, hence why I've wanted to stay on the side of the obvious market direction this week.



Quoting pmn100
I took a touch long on EUR/CHF today at the 61 fib area shown. First time back. There is obvious risk aversion about at the moment and therefore upside bias for CHF. However, there was clearly a decent bull move here inspite of the obvious downward pressure beforehand (big bearish H1 bar, and the risk aversion element giving strength to CHF).

I have included a chart of USD/CHF to show the slight bullish move at the time of the EUR/CHF long, but USD/CHF continued it's downward move pretty quickly.

Mark, is this showing that order flow at these...
  • #3,299
  • Feb 24, 2011 8:14am Feb 24, 2011 8:14am
Quoting lovejoy80
Technically IMO that is a good technical setup, one I would normally take.

But, the reason I did not take it is because like you stated CHF is very strong based on risk aversion flows right now and because of the uncertainty of the Middle East situation I would not be wanting to go short the CHF right now. I do prefer to have the broad market on my side from a fundamental perspective (like with my GJ short) or at the very least not the opposite of the technical setup.

I am pretty cautious in the touch trade setups I take however, some might...
HI LJ

Spot on analysis. I skiped this trade becouse of the same reasons.
Good trading to You , Sir !
  • #3,300
  • Feb 24, 2011 9:54am Feb 24, 2011 9:54am
LoveJoy,

Thank you so much for your journal and still stopping by to post a few of your set-ups. I greatly appreciate it.

When I first read your journal a year ago, I just thought it was too advanced for me.

And at that time it was too advanced for me to digest. I stuck with James16.

Now I can see how the James16 principles come into play. This week I am kicking myself for missing the GPBCHF short at 1.54 and then the GBPJPY touch trade from yesterday (I was thinking there was too much confusion in the market, so stupid of me).

Your thread is the first I read when I come to FF. I have saved many of your attachments to a thumb drive and I study them at any free moment I have.

I think I am about to turn a huge corner in my trading, and I owe much of that to you.
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