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  • #3,421
  • Mar 17, 2011 4:16pm Mar 17, 2011 4:16pm
Quoting unlv_tj
I went long on the daily BUOB on the GBPUSD on Monday, then short the EURUSD on the IPB (inverted Pin Bar) on Tuesday. So two winning trades and added to my account.

I didn't see any true touch trades, maybe I over looked them.

I stayed the heck away from the JPY, that thing has been a monster.

And I 2nd the notion for raw garlic. It might burn, eat it with something else, but that stuff is pretty tough.
These are the touches I've seen this week.

EUR/GBP: 50/61 retrace of D1 BUOB, touch long on retrace to monthly PPZ at 0.8662 on the 16th.

EUR/USD: 50/61 retrace to 1.3860 on the 15th. Didn't like this though as coming off a double top, and with risk aversion kicking in, wasn't expecting a bullish Euro.

GBP/USD: 50/61 retrace to 1.6200 on the 14th. Didn't have a PPZ at this level, but its vaguely there in hindsight, just above at 1.6205ish.

Oil: 50/61 retrace of a D1 BEOB at 99.20 on the 16th. More of a H4 PPZ than D1, and took a bit of drawdown, but price didn't penetrate the 61 fib.

Was also short NZD/USD as I was tagged in on Friday evening. Trade open over weekend at +12 pips. Entry 50/61 retrace of bearish swing to 0.7450. Gapped down on Monday open, and I closed for a 2R gain at about 0.7390. Then look what happened. Two of my best touch entries have been entered late on Friday and open over the weekend, but not sure I want to be doing this in future.
  • #3,422
  • Mar 17, 2011 5:19pm Mar 17, 2011 5:19pm
Quoting Majestic12
Hey LJ. Thought i would let you know that i ahve started my own journal of trades. A lot of them will be based on what i have learned from this thread so it would be great if you could take a look now and then. I will still be posting plenty of charts and questions in this thread as they arise though.

My initial target is to make 4R a month trading (hopefully) high probability setups and taking quick profits as i'm not very good at holding on for the big winners (i hope i will improve when i start taking setups with better potential).

I Wasn't...
Raw Garlic, are you kidding me, sounds nasty! lol

I think having a journal of all your trades is useful so you can regularly review your trades and yourself.

It's good that you recognise your weaknesses and what you need to improve etc, thats always one of the hardest parts for some people. The next hard step is taking steps to overcome these issues, again this is not always easy and involves a lot of hard work and dedication in my experience.

A couple of pointers and questions if you dont mind...

1. I would urge you not to set targets, it's only ever destructive to your trading doing things like this IMO as it can only ever lead to either not taking good setups because you've reached your goal or taking that 'iffy' setup because you are short of your target i.e. it leads you to think in terms of profit, money, %R etc which is the last thing you should be thinking about when looking for trades and taking trades...you should be thinking about whether a setup is one that fits your rules and how you will manage it in accordance with what your charts are telling you...anything that gets in the way of you being able to focus on doing this should be avoided at all costs as it can only be a bad influence on your mindset and have a negative impact on your trading.

I cringe when people set themselves targets as its just meaningless numbers...let the market give you what it's prepared too, one week/month/year will be different so just trade and manage the setups in accordance with your rules and the results will take care of themselves.

A true measure of your trading performance is how consistently you are following your trade setup and and trade management plan not the results you achieve IMO.

I'm going from my own past experiences here and from what I've seen with other people too and it would be my strongest recommendation.

2. Make sure you have it crystal clear in your head what constitutes a high probability set up for you, set it in writing if you need to...but have it so clear in your mind that nothing can cloud your judgement.

If you have 'correct' rules then ensuring you trade by these rules 100% of the time (whether this results in a winning trade or a losing trade) should be your number one goal. The results will take care of themselves as long as you can execute your trade plan over and over again.

3. Ask yourself what causes you to cut trades 'early' or not let winners run...if you can figure out what causes this then you can implement a plan to improve this. The statement 'let winners run and cut losers short' is particularly important with touch trades as they have the potential to produce big %R winners consistently...losses do happen and will always happen but if you can slowly increase the average %R you make from the winners this will easily overcome the losses. If you really struggle with not letting trades run their true course then try taking partial profits e.g. take half profit at FTA and move to BE on other half...this overcomes the desire to book profit and ensures you are compensated for executing your trade setup plan whilst ensuring you catch a runner from time to time. At first just set a realistic TP at an obvious daily PPZ or something and just leave it. These are just examples but build a plan that will work for you in that it will improve and overcome you inability to let trades run slowly over time (I had the exact same problem by the way).

"its mastering the self that sets the tone for successful trading."

This is a brilliant statement and is completely true for everyone who wants to be succesfull at trading IMO, it's only yourself and your mind that can stop you from becoming a consistently profitable trader, the more processes you can do or build into your trading plan / routine that keep 'you' out of the equation the better.

These are merely just my thoughts, ideas and comments from having been through the same process myself. I wish you all the best with your journal and will pop in from time to time.
  • #3,423
  • Mar 17, 2011 5:34pm Mar 17, 2011 5:34pm
Quoting Majestic12
Hey LJ. Thought i would let you know that i ahve started my own journal of trades. A lot of them will be based on what i have learned from this thread so it would be great if you could take a look now and then. I will still be posting plenty of charts and questions in this thread as they arise though.

My initial target is to make 4R a month trading (hopefully) high probability setups and taking quick profits as i'm not very good at holding on for the big winners (i hope i will improve when i start taking setups with better potential).

I Wasn't...
For me this is a minor swing coupled with a minor ppz so a no trade by the way I look at things.

This is the most recent touch trade setup on UCAD I would have taken...price did hang around for a long time before shooting off...so at worst at BE trade.
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  • #3,424
  • Mar 17, 2011 5:41pm Mar 17, 2011 5:41pm
Quoting unlv_tj
I went long on the daily BUOB on the GBPUSD on Monday, then short the EURUSD on the IPB (inverted Pin Bar) on Tuesday. So two winning trades and added to my account.

I didn't see any true touch trades, maybe I over looked them.

I stayed the heck away from the JPY, that thing has been a monster.

And I 2nd the notion for raw garlic. It might burn, eat it with something else, but that stuff is pretty tough.
What price feed showed a daily BUOB on GU?

I dont play them myself (presume this is the J16 termed name for 'hanging man' which is the more general candlestick pattern term) but it was a nice one.

I found a few touch trades I liked this week on the USD majors.
  • #3,425
  • Mar 17, 2011 5:45pm Mar 17, 2011 5:45pm
Quoting pmn100
These are the touches I've seen this week.

EUR/GBP: 50/61 retrace of D1 BUOB, touch long on retrace to monthly PPZ at 0.8662 on the 16th.

EUR/USD: 50/61 retrace to 1.3860 on the 15th. Didn't like this though as coming off a double top, and with risk aversion kicking in, wasn't expecting a bullish Euro.

GBP/USD: 50/61 retrace to 1.6200 on the 14th. Didn't have a PPZ at this level, but its vaguely there in hindsight, just above at 1.6205ish.

Oil: 50/61 retrace of a D1 BEOB at 99.20 on the 16th. More of a H4 PPZ than D1, and took a bit of drawdown,...

Not been watching Oil, EG, or NU this week but the EU and GU ones were right up my street...especially EU as it had other supporting technical confluence with correlated securities that made it a top class setup for me.
  • #3,426
  • Mar 17, 2011 5:59pm Mar 17, 2011 5:59pm
Quoting lovejoy80
What price feed showed a daily BUOB on GU?

I dont play them myself (presume this is the J16 termed name for 'hanging man' which is the more general candlestick pattern term) but it was a nice one.

I found a few touch trades I liked this week on the USD majors.
Sorry, wasn't a BUOB, it was a pin bar, got ahead of myself there.

Daily Pinbar actually formed on Friday of last week, and then I waited for the markets to open to make the play GPBUSD long on Monday.
  • #3,427
  • Mar 18, 2011 6:44am Mar 18, 2011 6:44am
Quoting lovejoy80
Not been watching Oil, EG, or NU this week but the EU and GU ones were right up my street...especially EU as it had other supporting technical confluence with correlated securities that made it a top class setup for me.
Hi Mark

So in the current risk averse market, you wouldn't have minded shorting the Dollar? I know in the past you've stated that while markets are showing risk aversion, you'd look to long Yen/Swiss/USD.

Looking at the Dow again, I now see it was in the 50/61 retrace area and at support. Was this confluencing factor enough for you then to overide the risk aversion factor?

I've read recently that the US Dollar appreciates more when there are signs of deflation (which I assume includes commodity weakness), and isn't really a risk averse currency as such, at least not on the scale of Yen/Swiss. Would you agree with this?
  • #3,428
  • Mar 18, 2011 9:35am Mar 18, 2011 9:35am
Quoting pmn100
Hi Mark

So in the current risk averse market, you wouldn't have minded shorting the Dollar?...

Generally the safe haven currencies in times of risk aversion are the USD/JPY/CHF but this year every 'major' risk aversion event has been met with money flowing predominantly into JPY and CHF as can be seen from a chart of UCHF and UJ (ignoring the recent shenanigans!).

When the EU setup formed I thought it was a decent setup, but then look at where price was on YM, USDX and GU (the former were at viable confluenced touch trade setups in their own right and GU was at strong daily support and bottom of the current range).

From a technical perspective this turned the EU setup into a no brainer trade.

Aslo looking at how money was flowing during the Japense disaster you can see, as I said, that the jpy and chf pairs were suffering the most i.e. weakening the hardest and the usd pairs weakening the least...thus if YM was going to jump it would be safe to assume that usd pairs should rise hardest compared to the jpy and chf pairs.

Moving onto the usd pairs themselves you can see that the currency pairs like ucad and au were falling much harder than eu and gu as they are higher yielding commodity currencies so out of the usd pairs eu and gu were falling the least so if usd was going to weaken across the board eu and gu would be obvious beneficiaries.

Therefore it was easy to conclude that with YM at confluenced support and USDX at strong resistance that GU and EU would defintely rise if these areas held, GU was at a range bottom and EU had the touch trade technical setup so all in all it was an easy no brainer setup from the way I look at things.
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  • #3,429
  • Mar 18, 2011 11:04am Mar 18, 2011 11:04am
Mark thank you so much!

You give me hope that even though I turn 33 soon, eventually, someday, my life will actually be worth living.

Growing up lower middle class in the USA has been pure hell. 11 years out of college, in one of the best fields (computer programming) working on the weekend doing side jobs, still doesn't amount to a damn thing. It is such a rat race.

I may never get to enjoy life at all, but maybe I can at least exit this damned rat race.
  • #3,430
  • Mar 18, 2011 11:06am Mar 18, 2011 11:06am
Quoting lovejoy80
Generally the safe haven currencies in times of risk aversion are the USD/JPY/CHF but this year every 'major' risk aversion event has been met with money flowing predominantly into JPY and CHF as can be seen from a chart of UCHF and UJ (ignoring the recent shenanigans!).

When the EU setup formed I thought it was a decent setup, but then look at where price was on YM, USDX and GU (the former were at viable confluenced touch trade setups in their own right and GU was at strong daily support and bottom of the current range).

From a technical perspective...
Thanks for the explaination LJ. So we're talking three things here; 1.) The techincal setup, 2.) The overall fundamental perspective concerning risk appetite, 3.) The intermarket relationships, to find both correlation for the trade, and weakest/strongest currency. Its a lot to get the head around but think it should come quicker with practice (and two or three monitors!).
  • #3,431
  • Mar 18, 2011 5:38pm Mar 18, 2011 5:38pm
Quoting pmn100
Thanks for the explaination LJ. So we're talking three things here; 1.) The techincal setup, 2.) The overall fundamental perspective concerning risk appetite, 3.) The intermarket relationships, to find both correlation for the trade, and weakest/strongest currency. Its a lot to get the head around but think it should come quicker with practice (and two or three monitors!).
Yeah the technical setup on EU combined with confluence with technical setups on USDX, YM and GU - all correlated 'assets' and confluence with watching how money was flowing during the risk aversion which makes the EU setup a super A+ technical setup.

I would always recommend that anyone wanting to learn touch trading to stick to the basic mechanical setup to start and concentrate on becoming consistently profitable trading the method.

The correlation 'stuff' and discretionary aspect I use take time, practice and a lot of chart watching to be able to get confident with how to use it affectively, plus its not for everyone's mind set either.
  • #3,432
  • Mar 18, 2011 5:55pm Mar 18, 2011 5:55pm
Quoting unlv_tj
Mark thank you so much!

You give me hope that even though I turn 33 soon, eventually, someday, my life will actually be worth living.

Growing up lower middle class in the USA has been pure hell. 11 years out of college, in one of the best fields (computer programming) working on the weekend doing side jobs, still doesn't amount to a damn thing. It is such a rat race.

I may never get to enjoy life at all, but maybe I can at least exit this damned rat race.
Hey, glad you find some of my posts useful, let me know if anything I can help with.

Trading is tough, it's so different to any other 'traditional' job in so many ways and that's why it takes so long to get to a stage you are happy with. I know through my own personal experience how emotionally demanding and draining it can be trying to become consistently profitable.

You see most of our life we learn in the same narrow way...through schooling, college, university and into a job etc it's a very rigid process we follow in our every days lives which actually has a rigid set of rules we must follow. Trading is entirely different as there are no rules it is up to us as individuals to make the rules that allows us to become consistently profitable traders and estbalishing what those rules are and following them robotically like we do in our everyday lives is extremely difficult. We also have the emotions associated with winning and losing money, money that is off value and can change your life ... the type of emotions we are not used to experiencing at all in in our everyday environment and when these emotions come to the fore they are extremely difficult to understand and control as we are not used to having to deal with them.

Trading is a long, hard, emotional journey...to become a succesful trader requires a lot of dedication, hard work, time, patience, discipline and the ability to understand and conquer yourself...if you have the dedication and understand/realise what it takes (it took me 2 years to even understand what it took to become succesfull) then you're on the right path.
  • #3,433
  • Mar 19, 2011 9:09am Mar 19, 2011 9:09am
  •  kk21
  • | Joined Sep 2009 | Status: ...the innocent bystander | 45 Posts
Quoting lovejoy80
.............that the jpy and chf pairs were ......weakening the hardest and the usd pairs weakening the least...thus if YM was going to jump it would be safe to assume that usd pairs should rise hardest compared to the jpy and chf pairs.

Moving onto the usd pairs themselves you can see that the currency pairs...

hi LJ,
can u please throw more light on what u were trying2 say above(those highlighted especially)? i find it somewhat difficult to understand.

i thought the higher yielding commodity currencies are affected more whether it is in a risk-averse environment or when there is risk appetite- just only in opposite directions and not the magnitude(just like a stock with a higher beta coefficient is more volatile than one rated lower).

the point i am trying to make is, since the higher yielding currency pairs were affected more now that the market is suddenly risk averse, will they not still be, when market sentiment changes. ie.

risk aversion = strongly bearish
" appetite = strongly bullish

what i understand u saying was:

risk aversion = strongly bearish
" appetite = mildly bullish

i know i must be missing something
and thanks in advance
  • #3,434
  • Mar 19, 2011 12:26pm Mar 19, 2011 12:26pm
Quoting lovejoy80
Raw Garlic, are you kidding me, sounds nasty! lol

I think having a journal of all your trades is useful so you can regularly review your trades and yourself
Thanks for the advise LJ. I've read it 5 or 6 times now so it sinks in. Didn't get a chance to do all the trading i wanted to last week and missed out on some great setups i think i would taken looking back at the charts.
Quote
I would urge you not to set targets
Targets have been removed from my immediate trading plan and i can see exactly what you mean and the reasons why they can be destructive. My initial reason for having targets of say 1R per week was to make myself realise that this was all i really need to build an account. Over trading has been a problem for me and i considered conservative targets as a way to help myself not take every setup i thought might make money.

I will turn my attention to exactly what constitutes a good setup according to my rules and how i will manage these setups then derive my satisfaction of whether it had been a good/bad week according to how successful i was at sticking to these guidelines.
Quote
Ask yourself what causes you to cut trades 'early' or not let winners run
I guess the most sensible answer would be that this seems to be what has worked best for me in terms of not allowing 'myself' to get to involved in the management of a trade and mess it up. I also like to win money on every trade which i am right about and can't stand to take half profit and see the rest of the trade stopped out at BE. I used to trade solely retraces of pa bars with the trend and although i never lost money i never really won that much either (due to over trading i'm sure).

I think its a good idea to set an ultimate TP at the first daily level rather than for example the FTA or STA as i have been doing a lot. Perhaps a new rule is in order where i specify that i will always run a certain percentage, no matter how small, to a daily level so i can build my confidence up in exit strategies.

I'm also going to start demoing quite aggressively the peaks and troughs strat mentioned earlier in this thread as i this may help me with being in a trade continuously as well as seeing just whats available if you can catch a whole trend.

Finally thanks for the well wishes. Your thoughts and comments are always extremely helpful and mean a lot to the people that read this thread.
  • #3,435
  • Mar 19, 2011 2:43pm Mar 19, 2011 2:43pm
Quoting Majestic12
Thanks for the advise LJ. I've read it 5 or 6 times now so it sinks in. Didn't get a chance to do all the trading i wanted to last week and missed out on some great setups i think i would taken looking back at the charts.
Targets have been removed from my immediate trading plan and i can see exactly what you mean and the reasons why they can be destructive. My initial reason for having targets of say 1R per week was to make myself realise that this was all i really need to build an account. Over trading has been a problem for me and i considered...

Sounds like good strategies to me. With touch trading it has the ability to create some decent %R winners quite regularly thus taking all profit at the FTA you are not achieving anywhere near the potential you could if you let some of the trade go to an obvious daily PPZ.

I definitely agree with the philosophy of being rewarded for correct analysis - it keeps you sane, but you should also make sure you are rewarded handsomely at times too and thus like you said start by leaving just a portion of the trade on say 25% and take the rest of at FTA and have a pre-defined daily PPZ as a TP in mind from when you start the trade - as you state this will take you of the equation in terms of having to make decisions mid-trade of how to manage the exit, thus from the moment you take the trade you know exactly what your exit management plan is and all you have to do is implement it.

Like you said a measure of your performance should be a) have you taken trades as per your 'rules' and b) have you implemented your pre-defined exit management plan. If you can consistently do the above this will build your confidence and your account at the same time whilst keeping the gremlins that exist within at bay.
  • #3,436
  • Mar 19, 2011 4:37pm Mar 19, 2011 4:37pm
tl + s/r + 50/61 fib ret confluence, stop above s/r level
also head & shoulders showing, if tl is broken, we might be looking at 85 & lower.
not really bothered, just following where she goes. i think ill close this trade at 96 ...much safer imho
LJ, do u have a summary explaining risk appetite, carry etc and rxns to forex ....e.g. oil shoots = cad falls and so on
cheers
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Simplicity is the key to success
  • #3,437
  • Mar 19, 2011 5:07pm Mar 19, 2011 5:07pm
Quoting kk21
hi LJ,
can u please throw more light on what u were trying2 say above(those highlighted especially)? i find it somewhat difficult to understand.

i thought the higher yielding commodity currencies are affected more whether it is in a risk-averse environment or when there is risk appetite- just only in opposite directions and not the magnitude(just like a stock with a higher beta coefficient is more volatile than one rated lower).

the point i am trying to make is, since the higher yielding currency pairs were affected more now that the...
I'm not 100% certain what you're trying to say but I'll try and explain in a bit more detail what I meant and see if that answers your questions:

1. Last week (which has been the case all year) when we had risk aversion in the market (as can be seen technically by falling equity futures or just by plain common sense) you can see that out of the 3 traditional safe haven currencies (CHF, JPY and USD) the CHF and JPY were clearly much stronger than USD (as can be seen by a chart of USDJPY and USDCHF). Therefore you saw the majors which for me is EUR, AUD, GBP, CAD fall harder against CHF and JPY than they did against the USD broadly speaking.

2. Now I also noticed that out of the majors against the USD (i.e. EU, GU, UC, AU) EU and GU broadly held up much stronger than AU and UC did - which is to be expected as UC and AU are commoditiy currencies and higher yielding currencies will generally fall harder in times of risk aversion ( 1) because investors sell their higher yielding assets, 2) because commodities were also falling and 3) the broad outlook for CAD and AUD in terms of interest rate increases is very low whereas Eurozone will likely increase interest rates next month and there is continuing speculation that the UK will in the next few months).

3. Thus with this in mind if the USD is going to temporarily suffer broad weakness it's pretty safe to assume that GU and EU will rise considering how well they have held up relative to the other majors when USD was strengthening.

4. It is also pretty safe to assume that if the USD has been weak during times of big risk aversion that if risk aversion is going to lighten up temporarily then out of USD , CHF and JPY the USD is the one that has a higher chance of weakening.

Thus with all the above in mind when we had the sign (YM) that equity futures were going to bounce temporarily and with USDX at strong resistance that USD pairs would strengthen and that EU and GU were very high probability for a rise from their respective support areas.

In terms of risk aversion and risk appetite and what currenices rise harder and slower, of course higher yielding FX pairs are going to be more attractive to investors than lower yielding FX pairs as measured by the interest rate differential...but bear in mind at the moment as I touched on earlier that it is more about the expectation for the further interest rate rises that is playing a part in market moves, we know the Eurozone will most likely raise interest rates next month (and Trichet pretty much confimed this on Friday) and that there is speculation that the UK will follow within the next few months (though IMO this is plain stupidity) compare this to the NZD, CAD and AUD...NZD jus decreased interest rates, CAD just had a very poor inflation data and AUD stated wont be raising rates in the near future.

Also bear in mind that when equities bounced and EU rose with it it wasn't the case of risk appetite returning, it was just a let up of the current large risk aversion so I would have still been classifying the market in risk aversion mode at the time.

Anyway this is far more detail than you need to take the setups I was talking about, the EU setup was good enough in itself its just with the extra information I guage from chart correlations and risk appetite I can interpret that the EU setup was a no brainer setup for me.
  • #3,438
  • Mar 19, 2011 5:13pm Mar 19, 2011 5:13pm
Quoting squeezy
tl + s/r + 50/61 fib ret confluence, stop above s/r level
also head & shoulders showing, if tl is broken, we might be looking at 85 & lower.
not really bothered, just following where she goes. i think ill close this trade at 96 ...much safer imho
LJ, do u have a summary explaining risk appetite, carry etc and rxns to forex ....e.g. oil shoots = cad falls and so on
cheers
I think oil may rise given the events in Libya today...

I'm in the process of preparing something for another project but it's a few weeks away from completion but in the meantime this post contains some basic information which might or might not be what you're looking for.

http://www.forexfactory.com/showpost...postcount=3124
  • #3,439
  • Mar 19, 2011 6:04pm Mar 19, 2011 6:04pm
Quoting lovejoy80
I think oil may rise given the events in Libya today...

I'm in the process of preparing something for another project but it's a few weeks away from completion but in the meantime this post contains some basic information which might or might not be what you're looking for.

http://www.forexfactory.com/showpost...postcount=3124
Hi LJ, i hope you are feeling well

Assuming that oil will rise up on monday, which pair would be on your scope?

My guess would be to buy the most secure currency right now which is imo CHF against the EUR (mainly becouse of frenzy buying on friday without any long covering).
  • #3,440
  • Mar 20, 2011 6:18pm Mar 20, 2011 6:18pm
Quoting Greenhaze
Hi LJ, i hope you are feeling well

Assuming that oil will rise up on monday, which pair would be on your scope?

My guess would be to buy the most secure currency right now which is imo CHF against the EUR (mainly becouse of frenzy buying on friday without any long covering).
I wouldnt be buying a currency just because Oil might rise, it's not the sort of trade I take. If there are signs of continued risk aversion then I'd expect the typical risk aversion currencies to rise. But the GJ JPY intervention does complicate this somewhat.
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