Price Action and Trading Discussion

EJ just keeps on grinding lower.

Droping like a stone

AUD/NZD break to the downside.

I've entered a bit impulsively here. Normaly I try to avoid friday afternoon entries.

Oh well...

I have also got an entry on the same pair Quezoy. Here is how I was looking at this.

Locked in some pips on this AUDJPY daily position now.

Well im done for the week guys, have a great weekend.

WHAT ON EARTH HAPPEND TODAY?!?!?

Went from +780 pips on EU and EJ to closing my trades with 320 pips -.-!!!!

My SL allready got hit. To hell with this friday entry and my impulsivness.

I see you have a very big SL. You do that always? You close the trade if it runs against you?

Sorry to hear that.

I'd say smart money decided prices are low enough, therefore attractive, and started to buy.
Across the board there was huge volume today, especially towards the end of the day. Its called stoping volume in VSA, and signifies the end of a trend.
So now we'll probably see an accumulation phase and then upmove, when enough supply is removed.

Thats at least how it looks to me.

I would simply say a combination of Friday afternoon profit taking and mix in there some economic data and there you have it.

Will that effect the overall trend of the market, who knows.

There is absolutley no doubt that there will be a retrace of some description it is inevitable.

When trading on daily and 4 hourly time frames there is going to be the need to have wider stops than you would if you were trading smaller time frames.

Many traders will get spooked off by wide stops, however the size of your stop loss placement should not matter at all.

I simply place my stop in what I think is the most logical place, I place it an area that I believe it may be protected by some sort support or resistance. I place it in area that I believe if the market reaches that area then I no longer want to be in that trade, there is the distinict possibility that it may continue.

With this particular trade I was going to place it above the 1.3000 level but pushed it down slightly, I am looking at the base of the consolidated area around the 1.3000 area for resistance, therefore have my stop slightly above this. My trade was taken on the daily and your view is from the 4 hourly which obviously gives different areas for stop placement depending on how you are viewing the chart.

Yes sometimes I will get out of the trade manually before hitting my stop loss if after taking an entry I look back on it and think that I do not actually want to be in this position for whatever reason and am not comfortable with my analysis. Otherwise I will usually let the trade play out.

The size of the stop should not matter if you are practicing the correct risk management procedures. Put simply the position sizing of your trade should be calculated to your stop loss placement not the other way around. Too many traders place their stop at X amount of pips as that is what their position size allows them, but there is no logical reason for the stop to be in that place as far as market movement goes, for it to be placed there.

If you are risking 1% or 2% per trade then no matter how big your stop is it will be still be that risk percentage. A 300 pip stop will carry the same risk as an 80 pip stop.

To me, stop loss placement and risk management are the most important and fundamental aspects of trading.

If you are unsure of how to calculate the correct position sizing for risk management reasons then take a look at this site, this is the one I use as it very easy to use. You can use this as a set % figure of account size or simply set it to a set $ figure that you are prepared to risk and it will work out the position sizing for you.

http://www.earnforex.com/position-size-calculator

My thoughts on the EUR/USD. The daily candle closed an engulfing bar with a rather long bottom wick. Stop was gathered here no doubt. This promises a potential upside move on the next bar.

Looking into H4 for signals, the most recent bar closed rather bullish. As of now, I plan on setting a buy order at the break of the bar to the upside and stop loss and the bottom. This of course would change depending upon the Sunday open.

Hi biDc,

There is no doubt that there would have been some stops under that area causing a market reaction, being both stoploss placement and proft take orders.

I tend to trade with caution when going against such a strong trend. I am sure there were a few traders that got caught out with the previous bullish outside bar also thinking it was the bottom of the move. There is some resistance just above the current price.

However there is some weight to where price is at the moment by looking at the support that is evident on the weekly chart. You could say that on the weekly view it is currently at the bottom end of a large range.

There is some long term support at this area.

This is without doubt one of those areas that becomes the battleground for Bulls vs Bears. Will support hold or will it give out for a new resistance area.

I guess early next week we will find out.

I definetely need to work a bit on my stops, as they are usually a bit to tight. Thats because I am trading PA setups just for the last 10 weeks or so and am not to sure of my judgement. So I want to minimize losses. But things are coming together slowly.
Just this week it happened 3 times that my tight SL was hit (20-30 pips) and then price continued in my direction.

Position sizing is a problem, because my account is small and limits my possibilities. I am demoing but do it with the amount I am willing to risk once I go live (400$). So if I want to risk 2%, using 0.01 lot, my SL can be maximally around 80 pips.
Another issue is, that if I trade the minimun lot I cannot manage it well; for example, close half at a certain point.

I was thinking about nano lots but not much choice out there. Besides, Im sick of changing brokers.

I still have a few months of demo before me and I may adjust my starting amount to the upside. I guess I have to...

20~30 pips stop-loss should be enough if you place your trade on right place or(and) right time. I usually use 15~20 pips and look for 80~120~180... TPs.

Look into market, how many times you can find that after start of a session price have moved to a direction for 100,200,.. pips?

Short stop loss could work when market is volatile but could be hit if market is hesitating. Also it could be hit if you don't place it in right place(Look for daily, H4 supports, H1 if trend is strong...)

Many in market look for big R:R, so watch the market closely on session starts and news releases, when it is close to a support. In this situation I put my stop loss behind the minor resistance level that is behind the major resistance level I want to trade.

This market is for big R:R, when you take a good moving position let it run. For this if I use a H1 support, I look for a Daily profit. So for example, it lets me to take 120 pip for 20 pip stop loss(Something you can see on many sessions).

I hope this help.

Well bro, the problem is you cannot know what the right place or the right time is.
You may have many indications (fib, trend, sup/res)that something will occur, but you dont know if it will occur right now, or 3 hours later.
And when it occurs it may go 50 pips in the "wrong" direction, hitting your SL,before going into the "right" direction.

You can minimize your SL by, for example, going for a retracement entry after a pinbar but this way, you may miss some good moves.

Anyway, personally, I will go for bigger SL-es in the near future, see how it plays out.

Definitely right about the trend here. This CT trade would be even more risky had it not been the strong support.

Decided to short the Euro on 2 pairs.

E/C is approaching resistance and downsloaping trendline.

E/G is at a supply level. It tested it late on friday, got an reaction but not a big one. Returned now again and Im looking for a drop.

Based on the D1 bias, I made an entry on the H4 chart signal. Stop is currently at BE and once the current bar closes, stop will be moved to lock in 1R or to bottom of the bar whichever comes first.