LJ Forex Group | Page 51 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

JPY Group - Best Group to Trade 60 replies

Your experience with Forex.com [GAIN Capital Group, LLC] 37 replies

Forex Techniques Development Group 24 replies

FOREX, Robert Gray, FXLQ, and Nfa/ctfc... PLEASE REPOST IN EVERY GROUP 0 replies

Attachments: LJ Forex Group
Exit Attachments

LJ Forex Group

  • #1,001
  • Feb 17, 2012 1:58am Feb 17, 2012 1:58am
Another chart on the watchlist.

This is where you need the 'tools' to be able to interpret price action at this area - it is an obvious area, lots of traders will be participating at this area - if you think about who is participating, why and who ends up on the wrong side of the market you'll start to understand what I mean by price action - I don't mean an inside bar for example - that is the result of price action it is not price action itself.
Attached Image (click to enlarge)
Click to Enlarge Name: oil.gif Size: 26 KB
  • #1,002
  • Feb 17, 2012 6:56am Feb 17, 2012 6:56am
An analysis of a potential confluenced resistance trade yesterday that I passed on.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: GU25.png Size: 48 KB
Click to Enlarge Name: gu2.jpg Size: 174 KB
  • #1,003
  • Feb 17, 2012 7:00am Feb 17, 2012 7:00am
...and today's potential trade
Attached Image(s) (click to enlarge)
Click to Enlarge Name: GU3.png Size: 95 KB
Click to Enlarge Name: GU4.png Size: 69 KB
Click to Enlarge Name: gu5.jpg Size: 183 KB
  • #1,004
  • Feb 21, 2012 3:47am Feb 21, 2012 3:47am
Quoting lovejoy80
GNZD didn't come back so setup was invalidated, same for CADCHF and CADJPY. UJ did trigger though.

There was very little chance that price was going to break down through that S/R area on the retest - if you think about who is participating at this area, what types of buyers/sellers will be present then you'll understand why professionals trade these setups day in day out.
Not been actively trading the last few days, but back to work today. I'm still long UJ from last week from 78.20 (with a 25 pip SL - there really was no need for a SL greater than this - if you can't see why then you need to work harder at understanding price action and order-flow).

I did go long GAUD yesterday from 1.4726 (will explain why another time) and this morning went short AU (1.0718), long UCHF (0.9104) and short ACAD (1.0705) - these are all small risk positions. For me trading successfully is not about focussing on being extremely picky it's about finding setups with the probabilities in your favour (and adjusting your risk accordingly) and managing the trades efficiently - letting winners run and adding further positions and cutting losers early.

Don't have much else on the active watchlist (i.e. an active setup waiting to be triggered), but plenty of setups on the 'potential' watchlist.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: uchf trade1.gif Size: 15 KB
Click to Enlarge Name: acadtrade1.gif Size: 18 KB
Click to Enlarge Name: gbpaudtrade1.gif Size: 20 KB
Click to Enlarge Name: AUtrade.png Size: 12 KB
  • #1,005
  • Feb 21, 2012 3:54am Feb 21, 2012 3:54am
Here is a setup from yesterday that is just golden. Even without the TL and Fib confluence this is a good probability setup.

You won't find many better opportunities to make good returns (a good return for me is an average %R > 1) than this.
Attached Image (click to enlarge)
Click to Enlarge Name: ecad1.gif Size: 21 KB
  • #1,006
  • Feb 21, 2012 8:09am Feb 21, 2012 8:09am
Missed my Silver long this morning.

On the 1HR the arc was just about acceptable, but on the 30min TF it's a good setup. It also had minor swing fib confluence, though you don't need this extra confluence to trade an FTB like this.

If you take trades like this all day long you'll never look back. Most retail traders don't understand why trades like this work and how to turn it into a profitable system, instead they perceive it to be too aggressive and pass up on it. Professional traders make it their business to search for setups like this every day, it's how the real money is made.

There was a similar setup on Gold at the same time - but Silver was technically superior IMO.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Silver.jpg Size: 104 KB
Click to Enlarge Name: silver2.gif Size: 21 KB
  • #1,007
  • Feb 21, 2012 8:47am Feb 21, 2012 8:47am
I've had some emails over the last couple weeks about growing an account and have also been referred to some articles / posts etc made by others (not necessarily on Forex Factory). Thus I'm going to use a recent trade setup that I shared with my members last week to demonstrate my views on this.

As I mentioned earlier I wasn't trading towards the end of last week so didn't take this one, but it panned out as I expected it would.

Retail traders would generally see the pin and their analysis would conclude that it's not at a true swing low, it's not off a great size relative to other recent bars, it's in a messy consolidation with no space etc etc.

If they took it they would enter on the break at around 1730 with SL below the low @ 1705 and the FLR would be the line marked @ 1736.

That's 0.24R to the FLR. Some will bank profit here, others will move to BE (and would have been taken out as price retraced) whilst others would hold out for the 1749 level - that's now 0.76R - still a lot of effort (and waiting - 3 trading days) for little reward.

As someone who had to grow an account in order to be able to trade full-time (i.e. I didn't just save up until I had enough to trade) and has to earn a living from trading I can say with 100% certainty that you don't grow an account at anything other than a snail's pace trading as per the above.

You don't grow an account by risking e.g. £1k to make £240 on a trade. Some would counter this by saying if you wait for the best A+ setups etc your win rate will be high enough that it will work... so ok you're supposed to sit all day waiting all week for just the 1 or 2 best setups so you can bank quick money to an FLR/FLS?! Really?!

The next counter to the above is that cos the win rate is so high cos you're being so picky you can risk more on a setup. Ah ok, so we sit here all week, waiting for 1-2 great A+++ setups risk 5-10% per trade and get out quick at an FLR/FLS.

I've actually seen people who educate others and who supposedly trade full time recommend the above!

If anyone doesn't see the problem with this approach then they should just give up now, honestly, the above approach is just plain crazy - go ahead try it, try and wait for 1-2 setups per week and risk 5-10% on each one, what do you think will happen when you take a some losses that take 5-10 winning trades to just make back again? What do you think your mindset will be like after throwing away 5-10 winners on one trade and knowing that it will take you a couple months just to make those losses back - cos losses do and will happen...
Attached Image (click to enlarge)
Click to Enlarge Name: gold2.gif Size: 16 KB
  • #1,008
  • Feb 21, 2012 9:19am Feb 21, 2012 9:19am
The charts below were my charts just after the pin had formed that were posted in my Dropbox for members to view.

This is how I (and other professional traders) analyse setups, I use my knowledge of S/R's, order-flow, price action to determine where the logical entry, SL and exit areas are.

Retail traders see a pin and trade it mechanically with entry above a high an SL below a low - they never ask themselves why they do this they just do it. They don't consider whether those prices have any meaning to the market at all.

Professional traders use the daily candlestick bar as a sign of which direction price will head in the near term and look to buy at a discount. They also focus more on what caused the reaction off the daily support area (which in turn caused the pin) and what that rejection means to current market participants which in turns tells them what is most likely to happen in near future - the size of the daily bar itself is not overly important it's the what happened at the S/R price bounced off in forming the pin (i.e. the order-flow that occurred there).

The next step is too look clear S/R areas where price will be attracted to and which (because of the expected order-flow at this area) they can expect (with good probability) a 'reaction'. They base their SL on an area which price shouldn't go below if it is to continue in the expected direction (i.e. long in this case). They thus have a discounted entry and logical SL based on what price / charts are telling them.

In terms of exits professional traders use their underling reasoning for the trade to determine what an appropriate FLR/FLS is, they don't use single bar highs close to their entry, they have a directional bias from the daily TF and thus pick exits based on similar time-frames. They don't use %R / profit made to determine their exit.

Lastly, professional traders follow news and know that markets are inter-related and thus in managing their trade they look at other variables that could give them a sign as to whether price is likely to reverse or push through a particular S/R in it's path.

Thus where a retail trade would have made 0.76R max, a professional price action trader would make 2.9R if both took profit @ 1749 area. If someone tells you the probabilities of the trade working out differ materially then they don't understand how price action works.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Gold3.png Size: 57 KB
Click to Enlarge Name: Gold4.png Size: 70 KB
  • #1,009
  • Feb 21, 2012 10:21am Feb 21, 2012 10:21am
Quoting lovejoy80
The charts below were my charts just after the pin had formed that were posted in my Dropbox for members to view.

This is how I (and other professional traders) analyse setups, I use my knowledge of S/R's, order-flow, price action to determine where the logical entry, SL and exit areas are.

Retail traders see a pin and trade it mechanically with entry above a high an SL below a low - they never ask themselves why they do this they just do it. They don't consider whether those prices have any meaning to the market at all.

Professional traders...
In view of the above, have a think as to how retail traders would analyse the UJ daily bar in the chart below...you can see the way I approached it on the chart (the entry I got in the end was 78.20 - how low did price go 78.18!)
Attached Image (click to enlarge)
Click to Enlarge Name: UJ1.jpg Size: 136 KB
  • #1,010
  • Feb 21, 2012 10:58am Feb 21, 2012 10:58am
Hi LJ,
some cool rants . .

personally im watching UJ 80.23 intervention level.
i see this as a very important level as it nearing 80 region again(decent S-R zone).

Cadjpy also approaching a huge band of S-R zone..81.20.

i see G/J also drooping below 127.
so there are a few Jpy pairs approaching the Resistance.

personally i like UJ,CJ more in terms of probability.

as per the fundamentals,xxx/jpy sentiment is more on the upside but i do expect some bearish retracements on this levels.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: uj.gif Size: 18 KB
Click to Enlarge Name: cj.gif Size: 19 KB
  • #1,011
  • Feb 21, 2012 4:56pm Feb 21, 2012 4:56pm
Quoting lovejoy80
Not been actively trading the last few days, but back to work today. I'm still long UJ from last week from 78.20 (with a 25 pip SL - there really was no need for a SL greater than this - if you can't see why then you need to work harder at understanding price action and order-flow).

I did go long GAUD yesterday from 1.4726 (will explain why another time) and this morning went short AU (1.0718), long UCHF (0.9104) and short ACAD (1.0705) - these are all small risk positions. For me trading successfully is not about focussing on being extremely...
Okay, reasoning for today's trades:

1. ACAD - all contained in the chart that I shared with members last night - updated chart attached too. I've taken some profit at the FLS marked and aiming for the 1.0570 area for final TP or a retrace back to 1.0660 area to take another short.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: ACAD2.png Size: 67 KB
Click to Enlarge Name: acad3.gif Size: 19 KB
  • #1,012
  • Feb 21, 2012 5:15pm Feb 21, 2012 5:15pm
2. GAUD - charts are self explanatory - it also serves well to highlights some of the points I mentioned earlier. I bet a lot of retail traders look at that pin and dismissed it straight away or are in it having made virtually zero %R.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: GAUD1.png Size: 34 KB
Click to Enlarge Name: GAUD2.png Size: 42 KB
Click to Enlarge Name: GAUD3.jpg Size: 139 KB
  • #1,013
  • Feb 21, 2012 5:23pm Feb 21, 2012 5:23pm
3. UCHF
4. AU

Much more discretionary. After the EU bailout vote passed last night I was keen on the whole 'buy the rumour sell the fact' approach and given the large run up we've had in risk-sentiment, coupled with the technical slow down in momentum that was occurring (look at AU, NU daily charts for this sign) it made sense that we could viably see a pullback in risk sentiment.

AU or NU made the most sense because of their technical structure, the big uptrend without a retracement and the fact these are generally the weakest during risk aversion - hence why I shorted AU. UCHF was more about the above combined with the current technical location of price.
Attached Image (click to enlarge)
Click to Enlarge Name: uchf.gif Size: 25 KB
  • #1,014
  • Feb 21, 2012 5:41pm Feb 21, 2012 5:41pm
Quote
personally im watching UJ 80.23 intervention level.
i see this as a very important level as it nearing 80 region again(decent S-R zone).

I have the same level marked too. The 80 area is a very big area for this pair and there will off course be lots of order-flow at this area and of course a sizeable options barrier.

It's nice to see my fundamental and technical thoughts on UJ from last December start to play out


Quote
Cadjpy also approaching a huge band of S-R zone..81.20.

i see G/J also drooping below 127.
so there are a few Jpy pairs approaching the Resistance.

personally i like UJ,CJ more in terms of probability.

as per the fundamentals,xxx/jpy sentiment is more on the upside but i do expect some bearish retracements on this levels.

I agree with CJ too, another big level to be watching. Should be some nice opportunities at these levels I reckon.

I'm also of the same view, price is more likely to retrace lower before heading much higher - this is something I'm looking at closely for some potential position (trend) building opportunities.

However (as I know you are aware) it's important to not get married to your views or bias i.e. be prepared to change it if price shows your differently, a common fault I see amongst traders is that they get married to their bias and it becomes an emotional relationship - often with disastrous results.
  • #1,015
  • Feb 22, 2012 4:06am Feb 22, 2012 4:06am
Quoting lovejoy80
Okay, reasoning for today's trades:

1. ACAD - all contained in the chart that I shared with members last night - updated chart attached too. I've taken some profit at the FLS marked and aiming for the 1.0570 area for final TP or a retrace back to 1.0660 area to take another short.
For the very same reason that I sold ACAD yesterday I was looking to buy EG - but couldn't react fast enough when GBP MPC Minutes was released.

Retail traders generally consider the more touches of an S/R the stronger it is. Professionals know this and know where they place their SL's hence why the big guys can exploit the behaviour of the retail herd.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: EG.png Size: 47 KB
Click to Enlarge Name: eg2.gif Size: 26 KB
  • #1,016
  • Feb 22, 2012 4:23am Feb 22, 2012 4:23am
This also highlights the importance of being 'aware' of major scheduled news events.

Had I not been aware of the GBP MPC Minutes I would have taken a small loss on a GU long, but because (a) I knew the news was due out and (b) I could interpret that the 'news' was particularly bearish for GBP it was pretty easy for me to stand-aside.

The flip-side of this is that 'news', just like technicals, can provide you with good probability trade setups as well as providing confluence to technical setups. Just take a look at the GBP reaction against CHF, JPY, USD, AUD, NZD, CAD, EUR following that news release - you don't get easier trades than that.

The problem for most is that they don't understand economic events, thus consider news events irrelevant and just dismiss them whereas the professional trader who treats trading as a business makes it their job to go and learn about economics and how news can affect price. If trading really is a business you should be learning about any major variables that can provide you with trading opportunities and affect trades you have open, if you don't then you're putting a material part of the outcome of a trade to 'chance' and that certainly is not treating trading as a business - running a business involves knowing your risks and minimising them, not ignoring them. That's why you'll find most professional traders have a good grasp for fundamentals, news, risk sentiment and technical analysis - they are all complimentary to running a successful business as a trader.
  • #1,017
  • Feb 22, 2012 5:04am Feb 22, 2012 5:04am
Quoting lovejoy80
2. GAUD - charts are self explanatory - it also serves well to highlights some of the points I mentioned earlier. I bet a lot of retail traders look at that pin and dismissed it straight away or are in it having made virtually zero %R.
Out of GAUD long now - exited 75% yesterday and 25% this morning (notice how knowledge of what the outcome of the MPC Minutes meant for GBP enabled me to cut the remaining portion of my trade for more profit than if it had hit my SL).
Attached Image (click to enlarge)
Click to Enlarge Name: gaudtrade.gif Size: 17 KB
  • #1,018
  • Feb 22, 2012 7:42am Feb 22, 2012 7:42am
Quoting lovejoy80
This also highlights the importance of being 'aware' of major scheduled news events.

Had I not been aware of the GBP MPC Minutes I would have taken a small loss on a GU long, but because (a) I knew the news was due out and (b) I could interpret that the 'news' was particularly bearish for GBP it was pretty easy for me to stand-aside.

The flip-side of this is that 'news', just like technicals, can provide you with good probability trade setups as well as providing confluence to technical setups. Just take a look at the GBP reaction against...
Hey LJ,
i read a bit on google about MPC.
i got to know that Interest rates are set by Bank's MPC,
i am only aware of news which has 3 star ratings,
can u enlighten more about why you were 'bearish' about this news.?

will be helpful
  • #1,019
  • Feb 22, 2012 9:53am Feb 22, 2012 9:53am
Quoting AvanishDemo
Hey LJ,
i read a bit on google about MPC.
i got to know that Interest rates are set by Bank's MPC,
i am only aware of news which has 3 star ratings,
can u enlighten more about why you were 'bearish' about this news.?

will be helpful
Yes, that's right, the MPC (Monetary Policy Committee) sets the interest rates.

http://www.bankofengland.co.uk/monet...y/overview.htm

However, although the interest rate is normally the main event, it's not so at the moment. UK interest rates have remained unchanged for a while now and like the US there is no expectation of them rising any time soon. Thus it's almost certain that they would have voted 9-0 to keep the rates unchanged (which they did).

The other main matter that they also discuss and set at the moment is the level of Quantitative Easing - this was increased by £50bn at the last interest rate announcement (the minutes are released two weeks after).

It was expected that this was a unanimous decision but it turned out that 2 out of 9 wanted a larger increase of £75bn.

These were the type of headlines I was reading at the time.

http://www.forexlive.com/blog/2012/0...-favour-of-qe/

So why did this cause GBP to tank across the board - QE is effectively printing more money and increasing the supply of money within the economy. One of the side affects of an increased supply is that the currency has a weaker purchasing power - hence why the value of GBP falls.

Therefore because I saw these headlines and because I know that this type of news is very material and will cause some significant moves I was able to cut my GAUD long before it hit my SL.

Does that make sense?
  • #1,020
  • Feb 22, 2012 10:37am Feb 22, 2012 10:37am
Quoting lovejoy80
Yes, that's right, the MPC (Monetary Policy Committee) sets the interest rates.

http://www.bankofengland.co.uk/monet...y/overview.htm

However, although the interest rate is normally the main event, it's not so at the moment. UK interest rates have remained unchanged for a while now and like the US there is no expectation of them rising any time soon. Thus it's almost certain that they would have voted 9-0 to keep the rates unchanged (which they did).

The other main matter that they also discuss and set at the moment is the...
i am noo prof. trader but boy,this stuff really interests me.
thanks mate.
it does make sense..

PS : missed my entry on EG by 4 pips. .(entry was 0.8410)
the setup had good probabilty of working out.
i will wait for pull back
1 trader viewing now