Fail Better

Just thought I would update on the only trade that has so far triggered from the last four high probability plays I outlined in the post above.

EUR/JPY hit the level this morning. This is one hell of a level and I hope you guys are short. Target is 112.68. Did tweet this one this morning too.

Keep an eye on that AUD/USD too. That's going to be an extremely high probability play. There was a "spider" before the breakout too :-)

Hi, your welcome.

Here is one I tried yesterday - (obviously the ATR indi is now showing todays range but at the time the ATR high was pretty close to the SFP bar high)

Remember I am only trying this - I am a newbee to this and so dont necessarily take my examples as being any good lol.

I just listened to what Tom told us in the Webinar about SFP entries with 20 pip stop, 20 pip TP and I am trying to see if this ATR gives any clear advantage.

Like I said, its early days and too soon to tell.

Hopefully if I am making a pigs ear out of it Tom (or someone) will chime in and let me know !!.

Cheers

I'm short Eurostoxx50...Nice resistance

Heres the updated chart from yesterday with the SFP bar breaking the level but not closing below (only by 1 pip though !)

Entry again on close of SFP bar with S/L at bar low. TP is at FTA which it just made it too. S/L was 17 pips with spread and TP was 20 pips gives R of 1.2.

Cheers

Unfortunalty Tom missed by a few pips. Green Daily Level above for a short! But none the less what a LEVEL.

It was the first real trade after almost 2 years of demo-trading and was profitable. TP at 112,93- FTA. R=2. If you would explain your target and SL(if you had any).
Thank you very much.

SFP with ATR high Confluence forming on Gold 1HR.
FTA looks a bit tricky but might be worth watching

Cheers

Thank you for all the good examples/demo trades.

I do look for SFP paterns but only on Daily or H4 some times.. but never watched them on H1. I also never looked for the confluence with ATR indicator. But I think, it defintely adds value to the overall confidence.

I will start using it.. lets see how it goes.

Oh no! The level was 51s! Just shows you why you have to be precise.

Malarky,

The 20 pip stop / target trades were off D1s. They were not related to the SPF. But SPF is a great pattern and I am hearing such great things from everyone that is trading it.

I cannot believe I have just discovered this recently and also cannot believe I have never seen this anywhere else before after absorbing everything I can on TA over the last eleven years!

Hi Tom

Yes thanks - I remember you saying about the 20/20's being dailys.

I just mentioned that as it had got me thinking about this 1HR SPF that you also mentioned.

I was remembering what you had said about looking at SPF on the hourly's and I guess I am just trying to figure out if I can find a low risk entry/exit strategy for these.

Using the ATR confluence with SPF (particularly if it is at a level) with an exit at the FTA is how I am trying this at the mo.

So far the idea seems ok but the stop at the high/low of the bar has been taken out a couple of times before the price respects the SPF rule.

I am now looking at maybe placing the stop at/behind the last support/resistance level, as long as the R is not becoming untenable.

Let you know how it goes.

Thanks for showing and sharing all your knowledge and skills with us Tom - it is very much appreciated.

Cheers

Gary

Hi Tom and Gary,

On holiday at the moment but there is a section similar to SPF in Larry Williams - Long Term Secrets to Short Term Trading (about page 110 from memory). It is called Specialist Traps.

Will give more precise details when I get back if anyone's interested. The book is worth the read IMHO.

Pse keep me on your seminar list Tom!

Hi Al
Thanks for that info - I will have a look for it - hope the holidays good.
Cheers
Gary

Hi Gary,

I can certainly recommend Mauritius!

Looks like you're trading well! Great stuff!

Al

Thanks for rubbing it in my friend !! - I am sat in the conservatory with a fleece on at the height of summer in Cornwall !

Cheers - (seriously, enjoy it Al)

LOL my sister lives in Cornwall. Love it down there although can't take it for too long. Too much of a City boy at heart...

Ha, I'm born and bred London but been here since 92.

Did 4 years at Trinity College of Music back in the late eighties and have fond memories of Marylebone High Street/Bond Street bars and clubs.

Still pop back to the smoke now and then but cant get my head round why everyone is running. (Or more likely that I've slowed down lol !!)

I've got a couple of mates who work in the square mile that come down regularly but like you said, they want to get back to the bright lights after a while.

Small world.

Cheers

It's on page 108

Damn, I'm so upset I missed today's webinar. Can anyone offer a recap?

How and where to draw levels

- Practice makes perfect. However, if you mark a chart up, then sit back and watch price react to your levels and you feel like you haven't found the holy grail, then you are doing something wrong. OK, flippancy aside, you should be seeing price reacting pretty much to the pip to the majority of your levels. If not, you are drawing them in the wrong place. It's as simple as that.

- Start at recent swing highs and lows and follow back to the left to see if it marks other swing points.

- Look from right to left which is counter intuitive since we naturally go from left to right which is the way we read (these last two points mean we focus on what price is doing most recently).

- For pinpoint accuracy, aim to identify either the level which has attracted the most order flow (has the most touches) or if this is not immediately obvious, place the level in the mean of the zone.

The information that it is important to record in your journal

- The usual, which naturally includes : Date, entry price, stop price, target price, why you got in, where you got out and why.

However the most important part is examining how the trade played out after you exited. This is where you look for patterns. Here are some of the things I am interested in :

- On my winners, what is the drawdown? (e.g. is there scope to tighten my stop over time?)

- On my losers, is there a way to have identified it was going to be a loser and taken action to get out sooner?

- Did the trade get to my original target before it would hit my original target REGARDLESS of where and whether I got out?

These are the elements that help you finesse your performance. There are many others that you might think of. Journalling is hard work and there is no template as far as I am concerned - some traders will want or need to focus on some areas more than others.

Selecting Targets

- If I have D1 bias, I usually take 50% at the FTA (First Trouble Area) and 50% at the STA (Second Trouble Area).

- If I don't have D1 bias, I am usually all out at the FTA.

- Markets move in cycles. Right now there is no sustained follow through in many of the plays I make. You need to recognise when markets change or you are going to pay the price.

A big mistake I made last week and how to avoid it

Had a fantastic entry on the USD/JPY but made an amateur mistake trying to run it past the FTA. I got stopped out.

Remember, the highest probability play is usually to get out at the key level and enter again on the break and RR, rather than trying to gamble with it.

It was a mistake. I don't say "oh well, never mind". I don't say "Well, I didn't lose that much". I don't say "Well the entry was good and these things happen I shouldn't be so hard on myself". If you want to succeed in this game you need to make sure you don't make these mistakes. It is as simple as that.

A rant about something that drives me crazy

- People trying to automate everything. Especially when they have only just discovered it and their understanding is limited enough that they don't even have the parameters right! (I had a fair amount of correspondance about making an EA for the swing failure pattern...)

Some of the best opportunities last week

- The EUR/JPY short at 113.48.

How the entry was AT the level. It was not when price came off 48 pips and traded below the BRN - (Come on guys!! We're entering at the source!)

And no, there is no need to wait for price action here. Not unless you want to be 50 pips behind the curve.

Regardless of confirmation, when it comes to high probability levels I now think of price action (e.g. candlestick patterns) as a lagging indicator.

- A Bund long I took at 126.65 which was a significant S/R flip. An explanation of how I got squeezed but the trade was a winner.

A look at the week ahead

AUD/USD : Long at 1.0789

GBP/USD : Long at 1.6195

USD/CAD : Weekly swing failure at a potential double bottom. The D1 is not showing convincing signs of strength (Friday saw a close well off the highs) but if the S&P goes offered, that USD/CAD is going to go up...hard

We finished up with a warning about the US and the debt ceiling crisis.

It's going to be a tricky start to the week. Don't be discouraged if good levels don't work. From time to time, fundamentals are going to push price through levels and you are going to get stopped. But don't be scared to step infront of things.

Healthy respect for the market is key but so is balls of steel.

Good luck.