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  • #941
  • Jan 25, 2012 12:37pm Jan 25, 2012 12:37pm
Quoting AvanishDemo
i see 1674-1670 range as important PPZ..and 'looked like' price was about to turn..(1660 as price to hold)
with a BEOB and break of TL..
oh well i found it a decent trade.

glad did not take a full loss..but frustrating!!
risk was 1% but cut out for 0.8% of it.
I was short but took small profit and reversed after FOMC - you gotta be wary of big news like that when in USD related trades (or any 'risk' related trades) as it can change the technical picture in an instant (and create some nice fundamental based opportunities too).
  • #942
  • Jan 25, 2012 1:35pm Jan 25, 2012 1:35pm
Quoting AvanishDemo
yes i completely ignored it,
still not into fundamentals..(that much)..needs lot of harvesting for it.

letme clear this:
during Interest Rate decision:
when Actual value exceeds forecast -->price moves up.

when Actual value lower as expected forecast -->price moves down.

what if both values are same?


Looking forward to RBNZ IR
FOMC was not about the interest rate, because it was never going to be changed it was about a) economic outlook b) a change in the expected timeframe for an interest rate rise and c) potential for further monetary easing such as QE3.

Trading based on fundamentals / news is not easy, requires a lot of practice and discipline as there are only certain news announcements that create good probability trades. But I am always aware of news that is due out when trading because news has the potential to change sentiment instantly (as well as causing widened spreads and slippage in current trades) and price action only shows you what the sentiment was before the news, thus if the news causes a complete reversal in sentiment from what formed the PA setups then you're going to suffer a reversal in price - just like the Gold setup and other PA setups out there.

It is just prudent to know when major news is out and take measures accordingly - I don't take technical setups just prior to news for the reasons above and of course because of potential slippage and wide spreads - imagine not knowing about news and having a trade at BE with a 25 pip SL - you'll get slaughtered by wider spreads and news volatility instantly on a trade like that.

People don't generally think like this but a PA bar is a summary of the sentiment during the period the bar was formed - it is a suggestion of where price is more likely to head next - if you know what caused that bar or if there is news coming up that could completely reverse that sentiment then trading that PA bar becomes more of a gamble and as traders we don't gamble.

I don't know of any professional full-time trader who doesn't know what news is due in the day ahead. For me it's part of treating trading as a business, we have to undertake our own due diligence and understand the external variables that can affect our trades and news is definitely one of those variables.
  • #943
  • Jan 25, 2012 1:38pm Jan 25, 2012 1:38pm
Quoting lovejoy80
FOMC was not about the interest rate, because it was never going to be changed it was about a) economic outlook b) a change in the expected timeframe for an interest rate rise and c) potential for further monetary easing such as QE3.

Trading based on fundamentals / news is not easy, requires a lot of practice and discipline as there are only certain news announcements that create good probability trades. But I am always aware of news that is due out when trading because news has the potential to change sentiment instantly (as well as...
oh thanks for the detailed explanation.
i deleted my post accidently and was going to write it again..lol

pardon if i sound bit dumb in my post.
  • #944
  • Jan 25, 2012 3:43pm Jan 25, 2012 3:43pm
Quoting lovejoy80
I chose some of the yell stuff.
Nice one. Should take this one instead but did not have much time to digest the news ... So many good short usd setups along the board. Its going to be interesting day tomorrow.
  • #945
  • Jan 26, 2012 3:56am Jan 26, 2012 3:56am
Quoting Greenhaze
Nice one. Should take this one instead but did not have much time to digest the news ... So many good short usd setups along the board. Its going to be interesting day tomorrow.

Indeed it is, took me longer than normal to evaluate trading setups this morning, plenty of good setups / scenarios going on - going to be a busy (and profitable) few weeks I reckon.

Haven't got time to go through all the setups and scenarios on my watchlist on here but my general theme is too look for either a) daily breakout FTB's b) intraday FTB levels or c) breakout setups across the USD majors.

As well as the above I've got a close eye on a) metals, b) commodity majors on the crosses and c) the CHF - unsurprisingly money flowing into CHF right now, but looking for signs of weakness (and/or ECHF to be closer to the peg) to take a basket of CHF pair longs (with preference for the commodity majors again).

Here is a technical setup that is high on the watchlist right now (was discussed yesterday). See the clear daily resistance and how clear it is on the 4HR TF - plus (importantly) there is multiple recent tests as resistance before it breaks up - looks to be a good intraday FTB setup I reckon - have to watch how price approaches it, otherwise this is a trade I'll likely be in

disclaimer (not directed at you Greenhaze!): don't go following me blindly, this is not a trade recommendation!!
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  • #946
  • Jan 26, 2012 11:23am Jan 26, 2012 11:23am
Quoting lovejoy80
Indeed it is, took me longer than normal to evaluate trading setups this morning, plenty of good setups / scenarios going on - going to be a busy (and profitable) few weeks I reckon.

Haven't got time to go through all the setups and scenarios on my watchlist on here but my general theme is too look for either a) daily breakout FTB's b) intraday FTB levels or c) breakout setups across the USD majors.

As well as the above I've got a close eye on a) metals, b) commodity majors on the crosses and c) the CHF - unsurprisingly money flowing into...
Update: It bounced nicely and has gone past the FLR - how it reacts at the 77.60 area will say a lot about the short term trend IMO.

It did however move without me, missed by 1 pip, no point getting frustrated though, the next setup is just around the corner (and I have my Gold long from last night still!)
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  • #947
  • Jan 26, 2012 5:06pm Jan 26, 2012 5:06pm
Quote
On a separate note, for those that got caught with an FTB short on EJ @ 101.10 yesterday, I'll detail why for me this was not a high probability trade (and hence why I did not trade it) when I get some spare time.

Okay, here are my thoughts on this setup and why I didn't trade it:

1. Daily chart - see the commentary

http://i1098.photobucket.com/albums/.../EJ-Daily1.png

2. 4HR chart - see the commentary

http://i1098.photobucket.com/albums/...EURJPY-4HR.png

So we can see that we have a clear, important S/R @ the 100.95 level. So this is essentially a daily FTB - you can see from the chart below the price reaction and where it went to (note it is not an FTB on the 1HR TF) i.e. we had a small reaction.

I didn't take this trade because:

(a) I rarely trade pure FTB's on the HTF's - I find they work better as a LTF strategy.

(b) A good FTB trade for me is not one where price has moved away from the breakout area for a long period of time and a big price range. A standard good FTB trade is one based on the LTF where price has formed the classic arc pattern just like the USDJPY setup mentioned earlier and the AUDUSD setup on Tuesday - these are bread and butter FTB setups - I want the setup to be relatively fresh the more 'stale' the setup the lower the probability (I have found this from lots of experience of trading these types of setups).

(c) UJ was going parabolic at the time, so if I wanted to short EJ then shorting EU would be a more logical option (as if EJ fell then EU would fall further).

http://i1098.photobucket.com/albums/...ild/ej-1hr.gif
  • #948
  • Jan 26, 2012 5:21pm Jan 26, 2012 5:21pm
Quoting lovejoy80
Okay, here are my thoughts on this setup and why I didn't trade it:

1. Daily chart - see the commentary



2. 4HR chart - see the commentary



So we can see that we have a clear, important S/R @ the 100.95 level. So this is essentially a daily FTB - you can see from the chart below the price reaction and where it went to (note it is not an FTB on the 1HR TF) i.e. we had a small...
So bearing in mind the above, what about the 101.10 area?

Well unlike the area @ 100.95, this is a LTF S/R, so immediately it has less importance. You can see the cluster of bar lows forming the support area on the 4HR and 1HR charts below.

http://i1098.photobucket.com/albums/...ld/ej-4hr2.gif

http://i1098.photobucket.com/albums/...ld/ej-1hr2.gif

So given that:

(a) This is an intraday S/R, and
(b) Price has not formed the arc pattern I mentioned in the previous post i.e. price has been away from this area following the breakout for a high pip range and a high time period.

This then becomes a lower probability setup than the last one. Now if you add to this the fact that the chances of price reacting there become more remote because of the close proximity of the previous HTF S/R level @ 100.95 then this easily becomes a passable setup.

Why does the close proximity of the 100.95 level matter - because price has already reacted to a level that is nearby, thus when it comes back again (which it did after a relatively small reaction) it is likely to have more 'strength' than it did previously for it to break above the 100.95 level. The chances of the LTF S/R then causing price to retrace after price has broken through the HTF S/R becomes somewhat remote.

Lastly, a quick word on trade management - efficient trade management is using price action and the tools you use to enter a trade to manage your trades efficiently, that essentially means trying to cut your losses before your SL if appropriate (i.e. for the 'right' reasons and not because of some emotional response) and letting your winners run if conditions suit - the old cliché exists for a reason!

So if you were in a short from 101.10 there is no way you should have taken a full SL on this trade.

If trading it on the 4HR TF then you had a good bullish close above the entry level - this is a sign of a breakout and thus indicated price is more likely to head higher. If trading it on the 1HR TF then you had a BUOB closing above the entry level - again this is a sign that price is more likely to head higher.

This is where you should be asking yourself, if the probability of price doing what I expected it to do before I entered has decreased substantially why do I want to still be in this trade (or at the very least why do I want to be in this trade with the same amount of risk) - the answer of course is that you don't and thus is where you either to look to reduce your risk exposure or cut your trade.

http://i1098.photobucket.com/albums/...ld/ej-4hr3.gif

http://i1098.photobucket.com/albums/...ld/ej-1hr3.gif
  • #949
  • Jan 26, 2012 5:26pm Jan 26, 2012 5:26pm
BTW - look where price reacted when it did retrace to test this area as support - is it any surprise that it was the HTF 100.95 area and not the LTF 101.10 area?!

Now if I was around at the time then this is a setup I would have taken - this is where I do take FTB's on the HTF - following a breakout and pullback on the (preferably) next bar or next 2-3 bars at most.
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  • #950
  • Jan 27, 2012 1:15am Jan 27, 2012 1:15am
Another good FTB setup overnight:

1. Clear S/R (daily TF)
2. Multiple tests as resistance before the breakout
3. Returns shortly after the breakout having forned the arc pattern.
4. SL below the bar with the red arrow marked
5. Goes straight to FLR.

(Note: look how price moved into the entry area - we prefer price moving with momentum, I know it goes against our natural thought process - but good momentum into our buy area is a positive - unless of course it is moving disorderly or because of news).

Entry @ 76.65, SL @ 76.49 (16 pips), FLR @ 76.86 (20pips)
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  • #951
  • Jan 27, 2012 1:25am Jan 27, 2012 1:25am
Quoting lovejoy80
Another good FTB setup overnight:

1. Clear S/R (daily TF)
2. Multiple tests as resistance before the breakout
3. Returns shortly after the breakout having forned the arc pattern.
4. SL below the bar with the red arrow marked
5. Goes straight to FLR.

(Note: look how price moved into the entry area - we prefer price moving with momentum, I know it goes against our natural thought process - but good momentum into our buy area is a positive - unless of course it is moving disorderly or because of news).

Entry @ 76.65, SL @ 76.49 (16 pips),...

Hey LJ,
dont u think 77 RN was a much better option as FTB setup..

i had loss on this one.
entry was above 77..
SL was wednesday's bar low
i was thinking it of as a long term trade & 77 is a very strong area.space was good for price to move up.
  • #952
  • Jan 27, 2012 1:55am Jan 27, 2012 1:55am
Quoting AvanishDemo
Hey LJ,
dont u think 77 RN was a much better option as FTB setup..

i had loss on this one.
entry was above 77..
SL was wednesday's bar low
i was thinking it of as a long term trade & 77 is a very strong area.space was good for price to move up.
If I compare the two areas on the daily TF, we can see that both are daily S/R's. But what I prefer about the lower S/R is the more recent tests as resistance (as shaded in purple).

This is one of the things you want to see when trading an FTB - recent multiple tests of resistance, then the breakout before forming the arc and returning.

Nevertheless, I would not have taken a loss if I was in that trade. Most of my FTB's are reaction type touch trades and thus I@m looking to reduce my risk exposure once an FLR has been hit. (If I was looking for a positional trend trade then this would be different). As you can see by my 4HR and 1HR charts the FLR was hit (arrrow is where your SL was under) and thus for me I would not be taking a net loss from that point forward.
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  • #953
  • Jan 27, 2012 10:52am Jan 27, 2012 10:52am
and another textbook FTB.

Notice a) it's a clear daily S/R (with RN confluence), b) the multiple recent tests of resistance before the breakout and c) that price moved back to the area with good momentum - they don't come better than that.
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  • #954
  • Jan 27, 2012 3:46pm Jan 27, 2012 3:46pm
Hey LJ,

This CADJPY H4 trade was great! Did you take 100% profit at the FLR or just reduce your risk to breakeven at the FLR? Are there ever any times that you do take 100% profit at the FLR/FLS? If so, then when? I always struggle with fear or greed and whether or not to take 100% profit at the FLR/FLS like you talk about in the following quote:

http://www.forexfactory.com/showthre...55#post5322455
Quote
Remember 'efficient trade management' is not taking 100% profit at the FLR/FLS ... and what does efficient trade management lead to - faster account growth for the same given risk
Quoting lovejoy80
Another good FTB setup overnight:

1. Clear S/R (daily TF)
2. Multiple tests as resistance before the breakout
3. Returns shortly after the breakout having forned the arc pattern.
4. SL below the bar with the red arrow marked
5. Goes straight to FLR.

(Note: look how price moved into the entry area - we prefer price moving with momentum, I know it goes against our natural thought process - but good momentum into our buy area is a positive - unless of course it is moving disorderly or because of news).

Entry @ 76.65, SL @ 76.49 (16 pips), FLR @...
http://www.forexfactory.com/attachme...5&d=1327648501
"Dare to live the life you have dreamed for yourself. Go forward and make y
  • #955
  • Jan 28, 2012 4:16am Jan 28, 2012 4:16am
Quoting shephrd
Hey LJ,

This CADJPY H4 trade was great! Did you take 100% profit at the FLR or just reduce your risk to breakeven at the FLR? Are there ever any times that you do take 100% profit at the FLR/FLS? If so, then when? I always struggle with fear or greed and whether or not to take 100% profit at the FLR/FLS like you talk about in the following quote:

http://www.forexfactory.com/showthre...55#post5322455


http://www.forexfactory.com/attachme...5&d=1327648501
Yes, it was a very good FTB setup as was GJ - there certainly was some nice setups this week.

For myself I vary as to what I do at FLR/FLS's as I take into account various factors when assessing a setup - one of those factors is 'experience' gained from years of chart watching. But other factors I take into consideration are:

1. Current trend.
2. Risk Sentiment (and what if driving the broader market).
3. Upcoming scheduled economic data releases.
4. Price action as price approaches an FLR/FLS.
5. Time of day / week.

I use all the above to form an opinion as to what I want to do at an FLR/FLS - of course we can never be 100% certain as to what will happen we can just put the probabilities in our favour - thus it is the exception rather than the norm that I will take 100% at an FLR/FLS.

I also decide before the trade as to whether I'm looking for a longer term 'positional' trade or more of a 'reactionary' touch trade - this again determines what I will do at an FLR/FLS.

I found from my own due diligence and experience that routinely taking 100% profit at FLR's / FLS's is not efficient trade management and leads to significantly slower account growth - of course it is up to the individual to undertake their own research and it is essential that you do so - trade management is far more important than entries (most traders on public forums get it wrong and think entries are what makes the difference) and in order to have the confidence in a trade management strategy you should undertake your own research - it's also consistent with treating trading as a business.

A simple way to do this is to keep a journal of all your trades (a journal is a must when learning to trade IMO) and compare the long term results of taking 100% profit at FLR's / FLS's versus other trade management techniques.

In my opinion as a starting guide taking partial profit at FLR's / FLS's is a great way of getting rewarded for the trade setup (i.e. it avoids the frustration of suffering continuous BE trades) whilst leaving the potential for a much bigger overall win in terms of %R - and it is %R at the end of the day that grows an account quicker.
  • #956
  • Jan 28, 2012 4:29am Jan 28, 2012 4:29am
Quoting lovejoy80
I chose some of the yellow stuff.
If anyone has knowledge of risk sentiment correlations then Gold (or Silver) should be off great interest (in terms of price action - i.e. price movements) ever since FOMC.
  • #957
  • Jan 28, 2012 5:01am Jan 28, 2012 5:01am
Hey LJ,

Thank you for taking the time to answer my question. Your response is very helpful.

Shep.

Quoting lovejoy80
Yes, it was a very good FTB setup as was GJ - there certainly was some nice setups this week.

For myself I vary as to what I do at FLR/FLS's as I take into account various factors when assessing a setup - one of those factors is 'experience' gained from years of chart watching. But other factors I take into consideration are:

1. Current trend.
2. Risk Sentiment (and what if driving the broader market).
3. Upcoming scheduled economic data releases.
4. Price action as price approaches an FLR/FLS.
5. Time of day / week.

I use all the above to form...
"Dare to live the life you have dreamed for yourself. Go forward and make y
  • #958
  • Jan 30, 2012 5:00pm Jan 30, 2012 5:00pm
Was recovering from an illness over weekend and today so only caught one trade (EJ FTB long) but there were some nice setups on UCAD and EG today - UCAD shown below.
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  • #959
  • Jan 31, 2012 2:46am Jan 31, 2012 2:46am
Some Technical setups on the watchlist:

UCHF - Technical confluence @ 0.9095

GJ - FTB @ 119.05

AJ - FTB @ 80.15 (a short @ 81.40 is a possibility too)

ANZD - Technical confluence @ 1.2833

CADCHF - technical confluence @ 0.9005

Watching the EAUD wedge
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  • #960
  • Jan 31, 2012 3:10am Jan 31, 2012 3:10am
Quoting lovejoy80
If anyone has knowledge of risk sentiment correlations then Gold (or Silver) should be off great interest (in terms of price action - i.e. price movements) ever since FOMC.
I wasn't talking about looking for a short - if you think about the role of Gold in terms of risk sentiment (no it's not a safe haven asset at the moment!) and what FOMC meant for commodities then go and look at how Gold has been moving with increasing / decreasing risk sentiment (e.g. rising / falling equities) you'll know why I'm still long Gold from my original position taken just after FOMC.
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