LJ Forex Group

Though I missed the no brainer trade of the week - daily BEOB which was a breakout too off the 100 level and thus qualified for a HTF FTB trade and we got the FTB retrace - a no brainer trade at that BRN!

Brilliant Charts and explanations, as always. Everyday I learn something new on this thread.

Thanks

Hi Mark,

I would appreciate, if you could shed some light on GBP & EURO Crosses.

GBP/AUD
GBP/CAD
GBP/NZD

EUR/AUD
EUR/CAD
EUR/NZD

When risk aversion is there and GBP / EUR / AUD & NZD are going DOWN against USD than why above crosses are going UP (opposite direction).

Would appreciate your reply.

Thanks


Alifari

I do see a fair amount of traders focus a lot of their time on entries, it's not entries that make the real difference, it's your mind set coupled with trade management - they both go hand in hand together.

A great trader could take an entry using a flip of a coin i.e. a 50/50 chance and still make money over the long term if they have 'efficient' trade management! But of course we can do better than 50:50, I always personally look to take trades where the probabilities are in my favour, it's just some will be more so than others and this is reflected in the % of my account I risk on each trade setup.

I don't see the logic in looking for the 1-2 trades per week or less - especially as a full-time trader, what's the point (and where's the fun) in waiting and waiting for the 'right' setup, if you have to do that to make consistent gains then something is seriously wrong with your methods or your mindset. You should be able to trade with a free mind and if you have a wide set of trading tools you should be able to spot multiple setups where the probabilities are in your favour week after week.

For example, I know some people wouldn't have touched the YM trade or the GU trade I recently took as they would consider them far too aggressive - but the probability of price doing what it did was > 50% - I would have a long term success rate of 65% ish trading those day in day out and a risk/reward average > 1, so why would I only wait for the higher probability trade setups when I have a positive expectancy with slightly lower probability setups? (I made just over 5R on those two trades this time around). IMO win rate is only relevant to your confidence, you need confidence to be able to trade well and a win rate is related to this...that's where trading with methods that suit your personality is essential, but other than that win rate is a meaningless metric.

If people started thinking along those lines rather than focussing all their efforts on finding the few great setups or being an ultra picky trader they would go much much further in their trading.

I've attached a small section from the private forum that explains this.

Note:

1. Commodities are correlated to risk sentiment and US Equities (explained in a separate section).
2. Correlations are never 100% and do not work all the time.
3. With Euro at bearish sentiment extremes it is hard for the Euro to bounce during risk aversion against the other majors - this has been the case recently, because the sentiment is too severe.
4. The flip side to the above is that market reversals happen at sentiment extremes - no-one left to sell etc. and that's when you get volatile retracements - the big short squeeze / covering takes place.

Thanks for your detailed explanation. Really appreciate it.

Alifari

Hey LJ,
A Q to u..
are you still looking for shorts on gold and silver @ 1670 & 31 level respectively?

i see that price reach 'somewhere to the PPZ' and reversed back..

this clouds my judgement sometimes..

(looking at the charts)i still believe this levels will hold..price is not there yet.

Those setups are still valid IMO and are still on my watchlist - price has come close to them (more so in the case of Silver) but not close enough for me to consider the setup now invalid.

I also have UCHF, ANZD, ECHF, UCAD and CADJPY on my active watchlist whilst also watching for general signs of trend retracements / a short squeeze in Euro and GBP in particular.

Hi LJ,

I hope you had a great weekend

I have this on my radar today. Well defined mirrored setup on EU & UCHF. Good job on the EU long.

I did thanks, and you?

I had a long order on UCHF @ 0.9472 but price missed it first time around.

I like the symmetry between UCHF and EU you pointed out though.

It was a last minute decision before bed to go long EU, glad I did

I cancelled my order long on UCHF @ 0.9472 when it missed it on the first approach and didn't like it when it came back again, nothing wrong with the technical setup but the other USD pairs, equities and usdx/eurx were pointing to further USD losses. Was one of those setups where a discretionary approach proved ideal over the pure technical setup.

The symmetry of the EU / UCHF levels looks good, gotta be careful IMO of those short squeezes in Euro though given the huge extreme sentiment, other than that looks to be good technical area to get involved.

Took profit on my overnight EU long, 50% on the first approach to 1.28 and then the rest when other confluences suggested price is more likely to retrace from this level than push through.

Managed the AU trade tight due to the proximity of the 1.0400 level so hit BE when it bounced. Went long UCHF after the other risk sentiment pairs gave the supporting confluence I was looking for.

Taken some profit on UCHF at a clear resistance level.

Some other perfectly good setups today, NU/AU/Oil and EJ are the ones that spring to mind.

UPDATE: remaining 25% hit SL, that's me done for the day, 3 trades +2.4R made.

Quick update on couple trades from yesterday which ended up losing trades:

1. CHFJPY - FTB, took a partial loss (-0.36R) on this as I already had CHF exposure with UCHF and some long standing ECHF longs - CHF was moving fairly violently (which was later confirmed as a fat finger trade) and although my risk exposure was fine, in the event of something major happening with the CHF I wasn't comfortable with this exposure across multiple accounts - being able to act quick enough and the affect of slippage on any fast moves was too much of a concern so I cut this trade - as you can see it hit the FLS.

2. UCHF - this was more of a speculative positional trend trade - the area I was looking to hold didn't and thus I cut the trade when price closed below it on the daily TF (-0.71R loss) - I really wanted EU to be higher at the time so now on the sidelines reassessing from a trend trading perspective.

3. Currently long ENZD using the HTF daily BUOB to take the trade on the LTF.

New blog post uploaded to my website

We've had a a big short squeeze in the Euro and a much weaker USD this week - how far can it continue I don't know, but this chart is very interesting.

If you were watching the above chart then it is only logical to be watching it in conjunction with these charts...

Chart for next week..
1.5575.

easy!