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  • #1,261
  • Apr 3, 2012 3:31pm Apr 3, 2012 3:31pm
Quoting MinceMeat
Pity this one was missed ..... would have been a very nice end to the day with the FOMC minutes.
Yes definitely...price is now 145 pips lower than the entry area and with a 25 pip planned SL it certainly would have been the biggest runner I've seen for a while.
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  • #1,262
  • Apr 3, 2012 3:57pm Apr 3, 2012 3:57pm
Quoting lovejoy80
Some fundamental based trades to finish the day.
Nice trading mate. Dint had the access to platform at the release of the mins.

But I was nicely positioned for some Dovish minutes with trades in EU,Uchf and UJ and was looking at profits of around 4% before the Mins.

Dint worked out.

Though had a short on AU from 380 and it also sucked by not being able to break the 300 barrier.
.
  • #1,263
  • Apr 4, 2012 9:12am Apr 4, 2012 9:12am
Reason for the EU trade I mentioned on twitter...(part1)

1. Chart 1 shows the daily S/R level
2. Chart 2 shows it as a clear S/R level on the 4HR TF - on this TF you can see we have the good strong breakout and now price is returning for the FTB.

3. Quite often a HTF S/R level is also a LTF S/D zone - hence chart 3 shows the same HTF level on the 15min TF (back in March) - this clearly shows where the 'decision' (i.e. where the big money came in) to break higher was made and gives us the zone where we can expect the S/D imbalance to occur again - this was the reason for my entry price being where it was - that coupled with the fact I was waiting for price stabilisation as Draghi was speaking at the time.

4. SL (on this occasion) was placed based on the 4HR TF (didn't want to take any chances with volatility) - with the SL placed below the previous spike low price has made through this S/R level whilst holding it as support - i.e. the 07.03 16.00 Fxpri 4HR bar.

Just like I could zoom into the HTF S/R level on the LTF to fund the actual S/D zone I can do the same for the FLR - it's clearly marked as a price S/R level on 4HR and you can see from the same charts why I took some prifts at the 1.3139 area.
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  • #1,264
  • Apr 4, 2012 9:21am Apr 4, 2012 9:21am
part 2 - correlated confluence.

All of these charts give confluence to a bounce in EU.
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  • #1,265
  • Apr 4, 2012 5:44pm Apr 4, 2012 5:44pm
A FTB to an S/D zone that one of my Trading Room members spotted earlier - huge imbalance arising due to FOMC so a very high probability setup on the first return - look how we can pinpoint to a few pips where we expect the demand imbalance to arise again to by zooming into the 1min TF.
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  • #1,266
  • Apr 4, 2012 5:47pm Apr 4, 2012 5:47pm
If you follow the above setup it leads to a 1hr S/R which is a valid FTB short setup.

As per the EU FTB long earlier, we can at times find the exact decision point by looking for the LTF S/D imbalance.
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  • #1,267
  • Apr 5, 2012 3:05am Apr 5, 2012 3:05am
Trade I'm in from overnight...

Chart 1 - the setup - breakout + pullback on daily TF.
Chart 2 - the expected reaction has occurred.
Chart 3 - searching for the source of the initial S/D imbalance which caused the breakout i.e. where the decision was made to move higher (which is where the big money came into the market) - which can be seen by the purple shaded area.

Booked 75% profit at the level marked which is also a 1HR / 4HR S/R and an obvious FLR.
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  • #1,268
  • Apr 5, 2012 10:23am Apr 5, 2012 10:23am
Quoting lovejoy80
Trade I'm in from overnight...

Chart 1 - the setup - breakout + pullback on daily TF.
Chart 2 - the expected reaction has occurred.
Chart 3 - searching for the source of the initial S/D imbalance which caused the breakout i.e. where the decision was made to move higher (which is where the big money came into the market) - which can be seen by the purple shaded area.

Booked 75% profit at the level marked which is also a 1HR / 4HR S/R and an obvious FLR.
Took the remaining 25% position off the table @ 1.7977 - reason should be clear.

Initial entry was @ 1.7891 (6 pip spread), SL @ 1.7865, thus a +2R winner.
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  • #1,269
  • Apr 5, 2012 10:43am Apr 5, 2012 10:43am
One other trade setup today - price bounced from the monthly level on AJ and closed above the daily level on the 4HR TF and in doing so back within the small consolidation.

For who have watched the webinar you'll recognise this as a false breakout trade setup - it's probably the lowest quality setup of this type that I'd trade (thus my minimum risk would be applied on this type of setup) and I really only took it today to demonstrate it to the members of the Trading Room (in that I was taking it easy and not fussed about opening any other trades).

Entry was on the bar close @ 84.56, SL @ 84.30 - below the bar to the left of the false breakout marked on the chart below and I took 50% off at the FLR (top of the consolidation) @ 84.82.

The important thing to consider when a) assessing your SL and b) deciding on trade management is how do you expect price to behave for such a setup i.e. if you understand why a setup like this should work you'll understand how price should move after this bar close which helps in determining when the setup has a low chance of working out (i.e. where to place your SL) and when to cut the trade (when price is moving not as expected).

This is a BIG mistake that a lot of retail PA traders make i.e. they are too mechanical in the way they approach trade management because of a lack of knowledge of what is actually happening on the chart and what price is telling you - merely looking for specific bars is not price action trading, understanding what is happening behind the scenes and why IS.

For example if you would put your SL below that false breakout bar low, not only have you destroyed any value in the trade you are demonstrating a lack of understanding of what the bar means, what this means price should do and thus where the setup is most likely to tell you that the probabilities have shifted from in your favour to the other end of the spectrum.
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  • #1,270
  • Apr 5, 2012 1:27pm Apr 5, 2012 1:27pm
Quoting lovejoy80
One other trade setup today - price bounced from the monthly level on AJ and closed above the daily level on the 4HR TF and in doing so back within the small consolidation.

For who have watched the webinar you'll recognise this as a false breakout trade setup - it's probably the lowest quality setup of this type that I'd trade (thus my minimum risk would be applied on this type of setup) and I really only took it today to demonstrate it to the members of the Trading Room (in that I was taking it easy and not fussed about opening any other trades).

Entry...
Closed the final position - no other reason than the fact I'm shutting down for the day and not around much now until Tuesday. +1R made on the trade setup.
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  • #1,271
  • Apr 6, 2012 8:50am Apr 6, 2012 8:50am
Quoting lovejoy80
Some fundamental based trades to finish the day.
Another big news event and some more winning trades...only some late entry scalps this time...the NFP data was so much worse than expected the moves happened too early and were too fast to realistically get in with good entries. Plus I had my brokers setup for the other scenario of the number outperforming expectations so had to re-adjust everything first.

However, the subsequent move across multiple pairs occurred as predicted and as we planned in the Trading Room - most won't believe this (most don't recognise that news events are even important in price action trading!) but news events can produce some of the best trading opportunities you'll ever come across .
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  • #1,272
  • Apr 10, 2012 1:35am Apr 10, 2012 1:35am
A nice %R winner to start of the new trading week.

Setup was an FTB following a breakout of a 1HR/4HR S/R. I scrolled down to the 5min TF to find the S/D zone that caused the breakout and used this to pinpoint my entry and SL (this is taking the lessons learned from my free educational video one step further and will be the subject of some future videos).

Therefore my entry was @ 1.3105, SL @ 1.3096 (9 pips). Exited 50% @ the FLR of 1.3114 and the rest at the next S/R and yesterdays high @ 1.3131 (the SL remained @ 1.3096 until the FLR was broken).

Result +1.94R
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  • #1,273
  • Apr 10, 2012 2:20am Apr 10, 2012 2:20am
This is another great setup from overnight and anyone who has watched my free video should be able to understand this setup.

FTB to a 4hr S/R (not an overly clear one) with a clear 1HR S/D zone with 50% fib confluence and the top of what is looking like a bear flag.
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  • #1,274
  • Apr 10, 2012 2:24am Apr 10, 2012 2:24am
Quoting lovejoy80
This is another great setup from overnight and anyone who has watched my free video should be able to understand this setup.

FTB to a 4hr S/R (not an overly clear one) with a clear 1HR S/D zone with 50% fib confluence and the top of what is looking like a bear flag.
Following this we've had a clear false breakout of the current range. I would consider this a more aggressive FB setup than usual but given the current strong HTF down-trend and the 1HR bear-flag this is one that would have been off interest - I'd be looking for a relatively quick move down to the bottom of the 1hr bear-flag / channel and seeing if price can break lower. If price didn't move quickly down to this area then I'd be looking to reduce exposure or cut the trade.
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  • #1,275
  • Apr 10, 2012 3:08am Apr 10, 2012 3:08am
Quoting lovejoy80
Therefore my entry was @ 1.3105, SL @ 1.3096 (9 pips). Exited 50% @ the FLR of 1.3114 and the rest at the next S/R and yesterdays high @ 1.3131 (the SL remained @ 1.3096 until the FLR was broken).
Hey LJ,
hope u had a nice weekend.
i don't go below h4 or h1 given the other commitments i have.

just a Q,wat was ur risk on this trade?
with that tight stop isn't there is a fear of quick loss??
Many Thanks
  • #1,276
  • Apr 10, 2012 3:36am Apr 10, 2012 3:36am
Quoting lovejoy80
Following this we've had a clear false breakout of the current range. I would consider this a more aggressive FB setup than usual but given the current strong HTF down-trend and the 1HR bear-flag this is one that would have been off interest - I'd be looking for a relatively quick move down to the bottom of the 1hr bear-flag / channel and seeing if price can break lower. If price didn't move quickly down to this area then I'd be looking to reduce exposure or cut the trade.
Hi, LJ

I'm a long time lurker of this thread and this is my first post even on Forex Factory. My name is Sang. I do like your trading style!!

I had been watching the same setup on AU, but I was a bit late to the party due to my job.

Well, anyway, Good trading to us all!!

Sang
  • #1,277
  • Apr 10, 2012 5:18am Apr 10, 2012 5:18am
Quoting AvanishDemo
Hey LJ,
hope u had a nice weekend.
i don't go below h4 or h1 given the other commitments i have.

just a Q,wat was ur risk on this trade?
with that tight stop isn't there is a fear of quick loss??
Many Thanks
Hi Avanish,

I generally trade H1 and H4 TF's too but if I have time I'll look for an opportunity for a lower risk entry and SL via LTF S/D zones.

Your SL IMO should ALWAYS be set at the point you are most likely to be wrong whether this is 5 pips or 50 pips is not important. If you lose you lose either (for example) 1% in a quick time period or 1% over a longer time period, the end result is still the same - a 1% loss. There is no place for emotions in trading and fear is an emotion!

If for example I opted for a larger SL on that trade then all I'm doing is decreasing the potential reward and thus the value within the trade...all because of what would essentially be a psychological issue as to any potential loss being a very quick one. Thus in the long run all I'm doing is drastically reducing the reward on each trade and thus my overall returns - all because of a psychological issue of having an element of fear about taking a quick loss. The only upside is I'd have a higher win rate...but contrary to popular belief a higher win rate is of very little importance in trading.

There is no logic in having a SL larger than what is needed to tell you that you are likely to be wrong.

It can be a difficult psychological issue for some to overcome and using larger than needed SL's and illogical SL placement is fairly common place from my experience.

I used 1% risk on the setup BTW - I assess risk based on a number of objective characteristics and the SL size certainly doesn't come into it.

FWIW the reason for 1% risk was the fact its a LTF S/R and the time of day - my stock starting point for most of my setups is 2% risk and then I work up or down from there based on some objective characteristics that have shown to be to be important in determining the quality of the setup.
  • #1,278
  • Apr 10, 2012 5:21am Apr 10, 2012 5:21am
Quoting Balhana
Hi, LJ

I'm a long time lurker of this thread and this is my first post even on Forex Factory. My name is Sang. I do like your trading style!!

I had been watching the same setup on AU, but I was a bit late to the party due to my job.

Well, anyway, Good trading to us all!!

Sang
Hi Sang, thanks for the post and welcome to the thread.

Balancing trading with an alternative job is never easy, it's very important to have a strict routine and plan everything (where possible) in advance from my experience.
  • #1,279
  • Apr 10, 2012 8:40am Apr 10, 2012 8:40am
I wanted to go short at 81.80 (the blue arrow), but was late just like the setup on AU. I placed a buy pending order at 80.90 (the red arrow), but missed it by 2.6 pips.
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  • #1,280
  • Apr 10, 2012 8:55am Apr 10, 2012 8:55am
Another example of finding the where the decision was made for price to breakout of an S/R and using it as a basis for pin pointing a precise entry and SL on the retest.

1HR S/R that is broken, price retraces back and if we zoom into the 5min TF we can see where the price found supply and a clear S/D zone forms. When price comes back again following the more immediate retest this is where it will find supply again and indeed price reacts right at the bottom of the marked zone.
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