DislikedHi LJ,
I think I see it but not really sure, so please correct me if I am wrong. Is your take on the FTB because of price finding support and resistance on the daily line as indicated by the blue arrows in the attached chart below? Thank you.Ignored
- #664
- Edited 2:55pm Oct 12, 2011 2:43pm | Edited 2:55pm
- | Commercial User | Joined Feb 2008 | 4,633 Posts
- #666
- Oct 13, 2011 1:21am Oct 13, 2011 1:21am
- | Commercial User | Joined Feb 2008 | 4,633 Posts
i was quite busy so did not take this trade..
bt this was in my mind..
was expecting a bounce on this one..
Confluence:
1)1.55
2)61.8
3)150ema
Needs Practice.
I passed on the setup as preferred the 1.5380 area to go long (daily S/R , FTB, 61% fib)....hit during Asian session again doh!
The reason I passed on the setup you marked was the space to the FLR was too small for my liking.
However, others on the forum did take it and as you can see it did hit the FLR.
My area I wanted to go long on EAUD was also hit during the Asian session! (this had EURx confluence too).
BTW there are plenty of TT setups around today...could be a very busy day.
You spotted a good setup there!
As you can see it's a DT on the daily TF and thus my SL would go above this and then RN with a 10-20 pip buffer.
In terms of FLS's I would ignore the TP1 just because we are bouncing from a monthly resistance and thus I would ignore a minor FLS like that. Your TP2 is a daily support and is what my FLS would be. TP3 is an area I've marked for a potential reverse too.
We can go further than this, we can look at USDx - even though EJ is not directly related to USDx it is indirectly due to the way JPY and USD move together in risk appetite and risk aversion. Along the same theme we can also look at US equity futures - all broad market information that can help form the picture and provide confluence to our FX setups.
- #670
- Edited 5:57am Oct 14, 2011 5:46am | Edited 5:57am
- | Commercial User | Joined Feb 2008 | 4,633 Posts
Yes, but it's a shame I didn't take it. I just need to build more confidence taking these TTs.
Confidence comes with time and lots of research and practice - we become confident trading a method because we know that over a set sample size that if we trade this method it has a positive expectancy.
Once you know a method inside out and have seen it work time and time again and practised it for yourself your confidence grows and taking setups becomes second nature... you no longer see setups as a 'risk' but as an opportunity to make money.
When you are considering a setup and you find yourself getting cold feet over it, ask yourself is there a solid reason (within your own trading rules/guidelines) not to take this trade, if you can't provide one then it's most likely your emotions taking over.
The way to practice of course is on a small live or demo.
DT = double top, correct? The first that came to mind was "down trend", but it didn't really click with what followed so realized that it should be something else.
Yes Double Top :-)
The input on TP1 makes perfect sense, wonder why I couldn't figure it out myself. Recalling your input in previous post, I have a change of thought on TP3, i.e. to still hold some of the short given the weekly down trend instead of a full close and reverse. Please do correct me if I am wrong on this.
With regards TP3 it's up to you as measuring the trend depends on what TF you are measuring it on. For example the most recent trend (from the beginning of October) is up looking at the daily TF, but looking at the weekly then the trend from end of August has been down.
What you could do (if your broker allows it) is to keep the short and take a separate long trade, you might longer term want the short in play still but short term want to trade the long setup.
Another way is to keep it simple to start with and as mechanical as possible - 50% off at FLR/FLS rest of at next S/R etc. It's up to you to figure out what the best way to learn, practice and develop your strategy to suit yourself. But I do generally recommend people start with trading methods like this mechanically - it builds confidence, it helps understanding emotional influences in your trading and also allows you to assess tweaks to a strategy to make it more efficient and to suit your own personality. The paragraph below is a quote from my forum when it comes to beginners trading TT's ...
I would HIGHLY recommend that people try and keep their trade management method as simple and mechanical as possible so you get into a routine of repeating the same process over and over again...whilst doing this you might notice after a period of time an alternative trading management process that is more suited to yourself, but to start with getting into a routine of applying the same entry and trade management process is important
This is an eye-opener and has certainly broadened my perspectives, thank you very much. It would certainly have strengthened my conviction on the trade. However, it's actually the risk-on market sentiment that day (caused by the Slovak's support on the EFSF) that made me hesitant to pull the trigger on this EUR/JPY short. Any input on how you approach such conflict between a supporting confluence and opposing market sentiment will be most appreciated.
I don't really take into account current market sentiment too much unless there is a strong reason too because if an unexpected event. The way I use market sentiment is mainly through the charts and the 'correlated confluence' it provides to our FX setups. Thus although the market sentiment is bullish the technical market picture supported a short didn't it. So it's not so much about what has happened in the most recent past i.e. the current day but more about what our charts are telling us is more likely to happen in the future.
It's very easy to overcomplicate things with fundamentals. I use them to a degree and do follow fundamentals as a) I have a general interest as to what is going on in the world and what is broadly driving global market and b) sometimes fundamentals themselves can provide supporting confluence to a trade or a reason not to take a trade (a sudden economic event or very important scheduled news occurring in which case I might not want to take a TT).
But the way to assess what is most likely to happen to market sentiment is to watch for correlated confluence on our charts.
BTW I do take trades when we don't have supporting confluence, this confluence can be good support to an FX trade setup but I rarely use it as a reason to not take a trade i.e. if I have good technicals on a specific pair the fact I don't have supporting confluence on correlated markets will not stop me taking the trade (unless it's damn obvious) - a GU long I'm in is an example of this - I'll share some charts later.
CJ is something I've had marked for a while, looks good to me ... did you spot the good long setup - FTB with minor swing fib confluence, the FTB by itself without any other confluence (though there was confluence with other risk sentiment associated markets). UC had a similar setup at the same time too which is the one I opted for.
but i will say here that i try to use Fib at 'obvious' swing points as marked in chart..n not somewhere in between..it does not give me that feel to call it as A+ setup..so i choose only obvious swing points & i use only 50 & 61.8 Fib and not 38.2..i feel that way more comfortable..
Firstly did you notice the FTB to this area on the daily TF following the last time it tested is as resistance ... I don't tend to trade FTB on the crosses but this one worked out perfectly.
I'm not sure if you mean it's good for a buy now because it has closed above the monthly/weekly S/R or it's a good area to watch in the future for a TT long on a retest of this area on the expectation it will hold as support?
I'll look at both...
The charts attached show how I view the pair right now and the options to go long.
js my rationale as why i m thinking of long here..as i dont like to buy/sell ech and every S&R
(now only if weekend Gaps should not play spoil sport
)Feedback positive or negative are always welcome..
- #677
- Oct 15, 2011 12:05pm Oct 15, 2011 12:05pm
- | Commercial User | Joined Feb 2008 | 4,633 Posts
hey LJ,really appreciate ur efforts u put in
but i will say here that i try to use Fib at 'obvious' swing points as marked in chart..n not somewhere in between..it does not give me that feel to call it as A+ setup..so i choose only obvious swing points & i use only 50 & 61.8 Fib and not 38.2..i feel that way more comfortable..
I can understand that, at the end of the day you have to trade setups you are comfortable with as without confidence trading is near nigh impossible.
For me fib confluence over the overall swing would definitely be more attractive, but fib confluence over the more minor swing is still enough for me to trade this type of setup. In fact I would trade this setup without any fib confluence because it is a classic FTB setup back to daily support. There was also lots of correlated confluence on this setup ... but technically by itself the FTB is a setup I do trade.
Some would consider this aggressive - trading an FTB like that, but it really isn't at all - I am not an aggressive trader as I like high probability trades and I know from years of research and chart watching that setups like this are high probability - but to gain confidence on setups like this requires a lot of chart watching yourself, practice and time.
- #678
- Oct 15, 2011 1:28pm Oct 15, 2011 1:28pm
- | Commercial User | Joined Feb 2008 | 4,633 Posts
yea i meant good for Long as it CA tough PPZ 1.28 after a long time price broke out of the heavy congestion which was happening below 1.28..
js my rationale as why i m thinking of long here..as i dont like to buy/sell ech and every S&R
(now only if weekend Gaps should not play spoil sport
Feedback positive or negative are always welcome..
Yes, the 1.28 area is a key area and price closing above an area like this certainly tips the balance towards price continuing to rise. Does it tip it in the balance enough to warrant taking a trade - that depends on your own trading methodology and what constitutes a tradable setup.
For me I'd much rather take the CJ FTB long any day over a breakout because price closed above an S/R. From my experience I would probably rate the probabilities (I like to think in terms of probabilities of going to an FLR/FLS when I think about potential setups and whether the probability is high enough for me to want to risk capital on it) of price heading higher on ANZD as 60-70% compared to CJ hitting and FLR at 80-90%.
So for me trading the breakout on ANZD at market price (ignoring any weekend broker gaps) is borderline tradable - but that is how I view things - I don't often trade pure breakouts like the ANZD setup, I prefer to wait for an FTB setup or a confluenced TT setup following the breakout unless we get PA during the breakout (i.e. a BUOB closing above the resistance + RN).
What turns it into a no trade for me is that the FLR on ANZD has already been hit - as per my previous set of charts the FLR is the purple area roughly at 1.2865 - 1.29. If it had not or the FLR was much higher then I might consider a trade but because we've closed above the S/R and in doing so have hit the FLR already then there is not enough information for me to form a good probability opinion as to what is going to happen next.
Hence for me personally, I'll either wait and take:
a) a pure touch of 1.28
b) a TT at the confluenced support + FTB @ 1.2760-70
In both cases my SL will be below 1.2759 - i.e. the lowest low where price has still held the 1.28 area as support.
My FLR would be 1.28 then 1.2865 area and finally for now the 1.30 area (of course for the pure touch of 1.28 my FLR would not be 1.28 lol).
If neither of these setups present themselves then I will wait for a breakout of the 1.2865 area and either PA at the breakout or the usual FTB / TT etc.
Of course if the 1.28 area does not hold as support then I'll re-look at the chart and look for other suitable trading opportunities.
But that's how I analyse things and I know clearly what is a good probability trade for me and what isn't and I know my own threshold. That is what forming a trading system is all about - knowing what constitutes a trade for you, knowing what is an efficient trade management plan and repeating it over and over again.
This pair will be a good one to revisit during the week to see how it plays out.
- #679
- Oct 15, 2011 1:56pm Oct 15, 2011 1:56pm
- | Commercial User | Joined Feb 2008 | 4,633 Posts
On second look, the daily bar that formed the DT was atually the entry bar itself. So in reality we didn't have the luxury of a DT to consider for the SL at the time of placing the TT limit order.
No but in returning to this are price would be forming a DT and we have the previous high to use as our placement of a SL i.e. as it was so close to the RN a SL above the RN plus a small buffer would make the most sense IMO.
Just to be clear, are you saying that you put more weight in correlated confluence than market sentiment if there were a conflict between the two and would still trade in the direction of the former?
Most of the time yes. I mean we are always going against the most recent market move when take a TT whether this is against a larger trend or with the larger trend determines whether we are going with or against the current bigger sentiment for this pair.
Now trends change because sentiment changes and we do not know when the underlying fundamental sentiment (i.e. higher TF trend) will change for any given pair so we can just trade the correlated confluences we see on our charts - this might with the higher TF trend, against it and will either be a continued move in the direction of the underlying trend/sentiment or a small retracement against the underlying trend / sentiment which might result in a small move or a complete change of trend/sentiment - but all we can do is work with the information we have presented to use on our charts and bear in mind whether we are going with or against the underlying trend/sentiment - a lot of the time if we are going with then the chances of a quick move and a good runner are higher which of course is pretty logical.
Times when I won't go against current market sentiment is when the market is either disorderly or we have had sudden unexpected news hit the market causing large impulsive moves - mostly due to sudden economic, political or environmental news e.g. natural disasters, bank failures (!), sovereign debt issues, war, political unrest etc.
Let me guess, this is your GBP/USD long with the blue arrow as entry, red arrow for SL and the sequential LS's in black font. Please correct me if I am wrong.
Times when I won't go against current market sentiment is when the market is either disorderly or we have had sudden unexpected news hit the market causing large impulsive moves - mostly due to sudden economic, political or environmental news e.g. natural disasters, bank failures (!), sovereign debt issues, war, political unrest etc.
