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  • #101
  • May 11, 2011 5:05am May 11, 2011 5:05am
So far in my trading I have pretty much ignored the news calendar here at Forex Factory. I know when NFP day is, so I just keep it in the back of my mind.

This morning, at 4 AM CST, there was a BUOB on the GBPUSD. The bar didn't stand out as anything special so I passed on it.

I then look at the chart around 4:45 AM and the next bar went long strongly, making this a quick profit trade. I then looked at the calendar to see that it was a strong news time for the GBP. I have often heard that PA will tip off which direction upcoming news will take a pair.

Was this a trade any of you experienced guys took, or would take? Should I have seen this mediocre BUOB, but realized that huge news was coming out and the hand was being tipped?

Thank you so much.

T.J.
  • #102
  • May 11, 2011 9:12am May 11, 2011 9:12am
Quoting unlv_tj
So far in my trading I have pretty much ignored the news calendar here at Forex Factory....
Can you send a chart so I can see exactly what you were looking at / thinking?

News / fundamentals is a personal thing, some people can't handle discretionary trading and do better keeping things as mechanical as possible, others are more analytical and like to pull in many things when make a decision regarding a trade, it's about finding what works for you because everyone is different.

I do think it is worth knowing how money flows in times of risk aversion, esepcially following sudden events, this can defintely help avoid trades which have close to zero chance of succeeding and making sure you are on the right side of the money flow.

You are right IMO, PA can give a heads up prior to news of where price will move at and after the news...this is lilkely to be mainly because a lot of the time there are rumours of the data before the release or at least some firm expectations of what the data will be so the market starts to react before the news and this is where PA forms close to news and then the news confirms the market's thoughts and continues on its merry way. Like everything in trading, nothing is 100% though.
  • #103
  • May 11, 2011 9:33am May 11, 2011 9:33am
Quoting lovejoy80
Can you send a chart so I can see exactly what you were looking at / thinking?

News / fundamentals is a personal thing, some people can't handle discretionary trading and do better keeping things as mechanical as possible, others are more analytical and like to pull in many things when make a decision regarding a trade, it's about finding what works for you because everyone is different.

I do think it is worth knowing how money flows in times of risk aversion, esepcially following sudden events, this can defintely help avoid trades which have...
Mark, thank you so much. If I wasn't working 3 jobs, and taking care of a house (the yard grows like crazy this time of year), I would sign up for your private forum. The help you have offered over the years has been amazing. And I need a kick in the a** to get my a** in gear. I turn 33 soon, and I will remain unhappy until I teach myself to do this.

I have attached a chart of the GBPUSD from this morning. The small BUOB with an arrow under it closed at 4 AM CST this morning. It alone was a temping trade, but the small size and the fact I was trading against a weeklly BEOB kept me out of the trade. The news of GBP came out at 4:30 AM CST. You can see the strong bullish move upon the news.

I am thinking I need to check the calendar before I go to bed. So I know what pairs I can expect strong moves on the next day (if any at all). And then look for price action to confirm where these events want to take the pair (except for NFP day, which I normally just skip).
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  • #104
  • May 11, 2011 2:01pm May 11, 2011 2:01pm
Quoting unlv_tj
Mark, thank you so much....
I thought it was the same BUOB I looked at this morning too, but just wanted to double check. I passed on it given the resistance that was just above. For the way I trade straight PA bars it was an average setup, a PA bar in the middle of a lot of chop going straight into resistance. However there were warning signs that price might attempt to breakout out of this area give the previous 4HR pin and 8 HR pin before this one.

I am pretty picky with PA though unless the location is superb. I still much prefer the touch trade short at 1.6500 though (daily PPZ, RN 50% fib), didn't take it as been too busy shorting Euro this week with an AU short added in today for good measure.
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  • #105
  • May 11, 2011 2:05pm May 11, 2011 2:05pm
Quoting lovejoy80
Yes, that FTA is far too close for my liking.

It's refreshing when the logic plays out ...the very close FTA was hit then price went and tested the PPZ that I said must hold (on the balance of probabilities for the PA to work out) before shooting up briefly to hit the next confluenced resistance and returning eith a bang...right back to the PPZ again.
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  • #106
  • May 11, 2011 6:06pm May 11, 2011 6:06pm
Quoting lovejoy80
It's refreshing when the logic plays out ...the very close FTA was hit then price went and tested the PPZ that I said must hold (on the balance of probabilities for the PA to work out) before shooting up briefly to hit the next confluenced resistance and returning eith a bang...right back to the PPZ again.
Indeed! The first PPZ did not hold. And amazing how price bounced off of the 50% fib. You always make it look so easy LJ!
  • #107
  • May 12, 2011 4:53am May 12, 2011 4:53am
Quoting lovejoy80
I would only be looking for shorts on EG given the weekly BEOB. Whenever I see a big weekly/daily PA like this I'm looking at using a retest of former support as resistance as a reason to take a short trade and/or looking for lower TF PA to get into the higher TF PA at a discount.

Thus on this occasion price retraced back to the former support to test it as resistance and although it formed a 4HR BUOB this wouldn't be off interest to me as I would only be looking for short as per above and thus when price broke and closed below the RN + PPZ on...
Going back to this pair and what we were talking about in terms of entering PA on a retrace at areas that 'should' hold if the PA is going work out (i.e. that the momentum that caused the PA in the first place will continue), that PPZ I marked did indeed hold and then price went and formed a daily BEOB yesterday. Once again there was an obvious PPZ where, if price reached it, it should act as resistance and drop.

There are many examples if this happening this week from the weekly PA from last week and some daily PA that has formed this week. It also helps to realise how the market is moving, i.e. at the moment the market is driven by risk aversion and in particular the Euro is underperforming the other majors (no surprise there!). When we have prolonged risk aversion volatility increases and thus we get some fast moves and some larger 'ranges' ... when the market moves like this any retraces to good solid daily PPZ will likely hold as the market is using any pullbacks as a reason to take price down again. Hence when we have good daily/weekly PA taking touch trades purely on a retrace to a daily PPZ will have a pretty good probability of holding and thus you have a position based on the higher TF PA but with a much smaller stop and at a discounted price.

This is pretty much what I've been doing all week, just playing the retraces based on last week's weekly PA and the daily PA that has formed this week and adding positions as we go...mainly on the Euro pairs (in light of the weekly PA and clear bearish sentiment towards it from last week).
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  • #108
  • May 12, 2011 5:01am May 12, 2011 5:01am
Quoting lovejoy80
Going back to this pair and what we were talking about in terms of entering PA on a retrace at areas that 'should' hold if the PA is going work out (i.e. that the momentum that caused the PA in the first place will continue), that PPZ I marked did indeed hold and then price went and formed a daily BEOB yesterday. Once again there was an obvious PPZ where, if price reached it, it should act as resistance and drop.

There are many examples if this happening this week from the weekly PA from last week and some daily PA that has formed this week. It...
Another exmaple from the daily EJ BEOB that formed yesterday.

Daily BEOB that formed off resistance and closed below support. Price then retraced back to this broken support to test it as resistnace before dropping to the next daily support area.

I don't trade pure touches of PPZ's all the time, but the market has been in a state of risk aversion since last week and there have been no signs of this letting up and thus you don't get major retraces when risk aversion is the dominant force, any minor retraces to daily PPZ's which are backed up by a daily / weekly PA have a pretty high chance of working out an providing some very decent %R moves.
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  • #109
  • May 12, 2011 7:15am May 12, 2011 7:15am
Quoting lovejoy80
Going back to this pair and what we were talking about in terms of entering PA on a retrace at areas that 'should' hold if the PA is going work out (i.e. that the momentum that caused the PA in the first place will continue), that PPZ I marked did indeed hold and then price went and formed a daily BEOB yesterday. Once again there was an obvious PPZ where, if price reached it, it should act as resistance and drop.

There are many examples if this happening this week from the weekly PA from last week and some daily PA that has formed this week. It...
Thanks for the examples LJ

I've been watching these today, but have been waiting for PA. What sort of stop loss sizes are you using on the retrace touches?
  • #110
  • May 12, 2011 9:02am May 12, 2011 9:02am
Quoting pmn100
Thanks for the examples LJ

I've been watching these today, but have been waiting for PA. What sort of stop loss sizes are you using on the retrace touches?
In my mind there are two places to the place the SL, either above the (for example) daily BUOB, you are still in at a discounted price but with the same Sl you would have if you traded the bar in the normal way, but normally I'm not comfortable with this logic as if taking the trade at a discount i.e. at a PPZ you are expecting to hold then there is little logic in then using a SL above the daily BUOB is there so my SL would normall be a set number of pips based on either volatility of the pair or below some 1hr/4hr wick low/high.

My entry and SL on EJ was 115.45, SL@ 115.80 and this was really just based on volatility of the pair as there was nothing else obvious to me to use to place the SL. Playing it safely the SL should have been above 115.99 - the high of the pin that formed on 4th March i.e. the highest high where price has tested this area as resistance before ...this is normally what I use as a guide to sensible areas to place my SL. On this occassion I was more aggressive as I've been short Euro all week (mainly across EG, ECAD and EU) so opted for an aggressive approach this time.

I waffled a bit there but am rushing asbusy watching the market, hope it's clear enough.
  • #111
  • May 12, 2011 10:31am May 12, 2011 10:31am
Quoting lovejoy80
In my mind there are two places to the place the SL, either above the (for example) daily BUOB, you are still in at a discounted price but with the same Sl you would have if you traded the bar in the normal way, but normally I'm not comfortable with this logic as if taking the trade at a discount i.e. at a PPZ you are expecting to hold then there is little logic in then using a SL above the daily BUOB is there so my SL would normall be a set number of pips based on either volatility of the pair or below some 1hr/4hr wick low/high.

My entry and...
Very clear. Thanks LJ.

Concerning E/CAD shorts. Did you take the H1 pin off 1.3710 this morning? Yesterday's daily candle closed clean through this PPZ, and I was looking for PA on retrace to it today. Didn't take it myself as it looked unconvincing. Has sinced failed, but did give some pips.

I also took a short on E/J today, but off 115.00 PPZ, as price closed nicely through it earlier. Stop loss at 115.40, went to BE at +20 pips, price moved +40 pips came back and took me out. It has since retested 115.00 and moved back down a couple of times and I'd still be in the trade. But my thinking is, if it makes a good push down, that is the order flow right there, and I shouldn't watch price retrace and take out my SL when I was up close to 1R. Is that a sound way to manage touch trades, or are you comfortable letting price retrace on you a few times in the expectation the order flow is still there and strong?
  • #112
  • May 12, 2011 4:03pm May 12, 2011 4:03pm
Quoting pmn100
Very clear. Thanks LJ.

Concerning E/CAD shorts. Did you take the H1 pin off 1.3710 this morning? Yesterday's daily candle closed clean through this PPZ, and I was looking for PA on retrace to it today. Didn't take it myself as it looked unconvincing. Has sinced failed, but did give some pips.


I also took a short on E/J today, but off 115.00 PPZ, as price closed nicely through it earlier. Stop loss at 115.40, went to BE at +20 pips, price moved +40 pips came back and took me out. It has since retested 115.00 and moved back down a couple of times...
No I didn't take that trade, like you said it wasn't the best bar in the world...it did give some pips like you said it went to a former congestion area so no surprise that it was problematic for it to overcome this. Plus I didn't like the location of EU and UCAD, I would have liked UCAD to be @ 0.9700 area when that pin formed to take it. I'm in from much higher up so started scaling out now.

As I stated in the post above I took a trade on EJ today but from 115.45 down to 114.20, I don't have a PPZ at 115.00 - it's a BRN so if there was a PPZ there I'd expect it to be very clear but it isn't it's very choppy and not clean enough for me hence my PPZ's were (and still are lol) @ 114.45 and 114.10 areas as per the chart in one of the previous posts.

There are various ways too play touch trades, the 'standard' way I trade is to look for the initial reaction and then implement my trade management plan at the FTA, this is what I do more often than not, but sometimes, for example in a strong trend or if I have suiper confluence and believe the confluenced area in question just won't be broken I'll leave my SL where it is and give the trade time and room to make it's move i.e. I'm expecting a big move at some point so a few bounces away and back again I ignore, but I do bear in mind that generally the longer price stays near a PPZ and bounces back to it the more likely it is to break through.

But I by far prefer trading just the initial touch and reaction and then commonly moving to BE when the FTA is hit as I'm mostly looking for a strong high momentum reaction.
  • #113
  • May 12, 2011 7:50pm May 12, 2011 7:50pm
LJ, looking at the following charts would you or not be considering to take the trades (Daily pbs) and why?
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  • #114
  • May 13, 2011 1:08am May 13, 2011 1:08am
Quoting jeffokes
LJ, looking at the following charts would you or not be considering to take the trades (Daily pbs) and why?
Why dont you tell me whether you are considering taking these trades and why? You'll learn more if you think for yourself first and then have someone offer their views than the other way round.
  • #115
  • May 13, 2011 2:03am May 13, 2011 2:03am
GU; A sentiment and touch trade.

GCHF and EG; Correlation and touch trades.
.
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  • #116
  • Edited 7:13am May 13, 2011 5:39am | Edited 7:13am
Way to go folks, bookmarked for sure. Im also thinking hard about similar things. My day is done for today though so catch yah monday!

Oh by the way meanwhile you can check out my trades for today, im particularly proud of these.

Mainly i tried to imagine the future based on how price reacted to levels of price historically.


UPDATE: A thing that just struck me is that i would want to see the things going in this thread focused on EUR/USD pair, that would be usefull to me since thats what i trade, and really get down to some discussion on support and resistance, supply/demand, orderflow levels and such.

So i dunno, maybe have separate threads for each pair or something? Think about it and catch yah later folks.
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My signature is: "Classified".
  • #117
  • May 13, 2011 7:17am May 13, 2011 7:17am
Quoting nasir.khan
GU; A sentiment and touch trade.

GCHF and EG; Correlation and touch trades.
.
Youre thinking is a lot like SKFX, and i like it.

Here is kind of what im thinking

Red if supply/demand ish levels
Blue is S/R.

Vertical lines is just separators for the days.

Also H4 if you want a bigger picture:
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My signature is: "Classified".
  • #118
  • May 13, 2011 3:35pm May 13, 2011 3:35pm
Quoting lovejoy80
Why dont you tell me whether you are considering taking these trades and why? You'll learn more if you think for yourself first and then have someone offer their views than the other way round.
I just saw this and thought I should reply before getting my platform online for updating.
First I want to thank you and Nasir for saving me from getting carried away trying too hard to incorporate fundies and correlations into my trading the other day. These your words “You have highlighted some nice areas to be watching across the pairs in question but you don't seem to be waiting for these areas to be hit before considering a trade…. I would recommend you take things a bit slower….” Serve as both encouraging and saving to me; I packed those trades up though at little profits but the way they later played out proved you just too right. I have decided now that I would rather focus more on getting the technicals and possibly simpler correlations strengthened for now than trying to do everything together. Ok, with that said this has been my stand wrt the set ups.
This had been my decision and why: On the basis of pure technical set up I wouldn’t take the gold trade because of the position of the pb relative to the Daily ppz RN (1510) resistance, if it was on it I could consider it but yet the minor ppz which is confluennced with fib 50 and another RB (1525) would be considered strong enough to act as effective barrier to the move. But if the confluence was not there and it is only one of those resistance and the pb is on the Daily RN ppz it would be for me a good enough technical set up to be taken. But as is like this NO! A similar reasoning goes for the AUDUSD as well.
For the oil the FTA there is the minor ppz confluennced with a BRN (100), if the pb was to be sitting on it I would take the trade and ppz “A” wouldn’t be that much of worry for me, I would rather be looking to take profit at ppz “B” which confluennced with a RN (105)and fib 50. I did not include USDCAD earlier but if I were to be taking the trade I could be playing the two together…again in this case too both oil and USDCAD are NO!
The pbs may break and work out well but I wouldn’t regret not taking these trades.
Please note that I am only trading Daily Tf for now until I start getting consistent positive result then I will start going to H4 Tf.
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  • #119
  • May 14, 2011 6:05am May 14, 2011 6:05am
Quote
I have decided now that I would rather focus more on getting the technicals and possibly simpler correlations strengthened for now than trying to do everything together.

Sounds a very sensible plan to me.

Quote
This had been my decision and why: On the basis of pure technical set up I wouldn’t take the gold trade because of the position of the pb relative to the Daily ppz RN (1510) resistance, if it was on it I could consider it but yet the minor ppz which is confluennced with fib 50 and another RB (1525) would be considered strong enough to act as effective barrier to the move. But if the confluence was not there and it is only one of those resistance and the pb is on the Daily RN ppz it would be for me a good enough technical set up to be taken. But...

I've attached charts of Gold, AU and UCAD with my thoughts below. I've not included a chart of Oil because the setup doesn't warrant one, you said all that needed to be said about it - it's not even a pin bar in my eyes and a close below the BRN of 100, based on the technical setup I'd never take a trade on a setup like that.
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  • #120
  • May 14, 2011 10:31am May 14, 2011 10:31am
Mark congrats! I just woke up on a Saturday and checked the forum and your thread is no longer in the "Under Evaluation" section.

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