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  • #2,021
  • Jun 7, 2012 3:44pm Jun 7, 2012 3:44pm
As well as the EURSEK setup which was a superb setup here is one on ACAD today, which a trading room member spotted - clear buyers trap of a daily SR as usual price moves with good momentum following the setup.
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  • #2,022
  • Jun 7, 2012 4:08pm Jun 7, 2012 4:08pm
Now here is one which is not a superb setup like EURSEK and isn't as good as ACAD. I'll repeat what I said earlier in the Trading Room:

The only thing that would put me off that setup is it does look very trendy - the recent move could easily be priming for a breakout. I think its tradable and over the long term I think you'd have a higher than 50% win rate trading this type of setup with at least 1R. It wouldnt surprise me if it worked out but it also wouldnt surprise me if price had a breakout if that makes sense

That might or might not make sense...

When trading such setups we have to ask ourselves what is most likely happening here, is it a case of buyers getting trapped on the break above the SR and thus the order-flow would suggest a move down or is it more likely that the break up was merely supply consumption paving the way for a breakout...sometimes it's obvious (like EURSEK, Gold and to a lesser extent ACAD) and sometimes it's not so obvious like this CHFJPY setup and the other times it's obvious it's much more likely to be supply or demand consumption (as per some of the setups I shared recently). This is the type of objective analysis that should be occurring on these types of setups...

So with CHFJPY it fits into the second category - I wouldn't be surprised with either outcome, so, if it's not an A+ setup why am I trading it? Because as a professional trader I want to be trading setups that I know over time give me a positive expectancy and I will adjust my risk according to the quality of the setup as per my objective analysis. That way I am maximising my long term profit potential compared to if I waited and traded only the A+ setups that came along.

People need to get away from the 'being picky club', forget about quoting win rates, learn to deal with losses and trade what they see adjusting risk accordingly - this is how you maximise your long term gains, don't shy away from your psychological issues with having multiple losses etc deal with them and you will not look back.

For example, in the last month I've averaged 2 trades per day and have a win rate of between 55-60% - do I care about my win rate, hell no, the only thing that matters is that I'm trading everything I see during the hours that I trade that I know produces a long term expectancy and if you're a full time PA trader you should be in the market every day finding multiple setups (after all we have access to many many FX pairs and time frames) - if you're not, then there is something very wrong.
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  • #2,023
  • Jun 7, 2012 4:35pm Jun 7, 2012 4:35pm
Quoting lovejoy80
Yes I liked Gold a lot and am short Gold at the moment. It was the first thing I saw when was going through my charts this morning - I was looking for a discounted entry but missed it when was busy with some other trades, so instead I went short after Bernanke's speech.
So you shorted gold as well as the DAX post Mr Market Manipulator's speech? Are they not too correlated to be shorting at the same time, or was it the setup that presented itself that made you trade these pairs at that moment in time?

T
  • #2,024
  • Jun 7, 2012 4:42pm Jun 7, 2012 4:42pm
Quoting 5.25
So you shorted gold as well as the DAX post Mr Market Manipulator's speech? Are they not too correlated to be shorting at the same time, or was it the setup that presented itself that made you trade these pairs at that moment in time?

T
Yes I did and yes they are both risk sentiment correlated. I saw the Dax as a technical setup with 'Bernanke' confluence and Gold I of course was looking for a short and it was obvious to me it was going to drop following the speech.

The fact that are correlated is just reflected in my risk i.e. I bear in mind that if things go wrong I'm likely to suffer a total loss on both etc.
  • #2,025
  • Jun 7, 2012 5:37pm Jun 7, 2012 5:37pm
Hello LJ, question about your C/J trade, according to you where would the decision point be for an optimal entry. Would that be the base of that WRB (pole).
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Pipcrawler
  • #2,026
  • Jun 7, 2012 5:49pm Jun 7, 2012 5:49pm
A general question about trading a compression, at which point does one in general, say, for an downward compression enter long, do you enter on basis of a bullish PA or when perhaps when price breaks the borders of that compression or simply when it hits demand.
Pipcrawler
  • #2,027
  • Jun 7, 2012 9:15pm Jun 7, 2012 9:15pm
Quoting xmzhang
A general question about trading a compression, at which point does one in general, say, for an downward compression enter long, do you enter on basis of a bullish PA or when perhaps when price breaks the borders of that compression or simply when it hits demand.
I have the same question as you. Wonder when we do a TT or wait for PA when we have CP into a zone...
  • #2,028
  • Jun 7, 2012 10:11pm Jun 7, 2012 10:11pm
Quoting Balhana
Look at the current EG 1H chart too. Looks a bit different from the previous EU chart, but I think they are the same. I also think the order-flow behind this pattern is the same as the order-flow behind QM.

EDIT: Does it always work out? OF COURSE NOT! But I'd say it works more often than not.
Check out the current NU 1H FTB setup!! Price is still moving.

EDIT: I'm at the office at the moment (I'm not a full-time trader). But I took longs at 0.7626 (including spread) with iPhone, set my TP at 0.7660, and moved SL to BE+1. The screen of iPhone is too small for me to trade... I usually don't trdae while on duty.
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  • #2,029
  • Jun 7, 2012 11:06pm Jun 7, 2012 11:06pm
Quoting Balhana
Check out the current NU 1H FTB setup!! Price is still moving.

EDIT: I'm at the office at the moment (I'm not a full-time trader). But I took longs at 0.7626 (including spread) with iPhone, set my TP at 0.7660, and moved SL to BE+1. The screen of iPhone is too small for me to trade... I usually don't trdae while on duty.
Closed 1/2 at 0.7646 for +20 pips and moved SL down to 0.7620 from BE+1 (0.7627).
  • #2,030
  • Jun 8, 2012 12:45am Jun 8, 2012 12:45am
Quoting lovejoy80
Now here is one which is not a superb setup like EURSEK and isn't as good as ACAD. I'll repeat what I said earlier in the Trading Room:

The only thing that would put me off that setup is it does look very trendy - the recent move could easily be priming for a breakout. I think its tradable and over the long term I think you'd have a higher than 50% win rate trading this type of setup with at least 1R. It wouldnt surprise me if it worked out but it also wouldnt surprise me if price had a breakout if that makes sense

That might or might...
Update on CHFJPY trade below, took some off at FLS, moved SL just above and final TP set.

Remember, to maximise your profit you need to learn how to vary your risk and trade according to what will give you a positive expectancy over the long term.

Most people can't handle multiple losses, (it's a confidence and a psychological issue) thus they focus on win rate and being ultra picky - all this is doing is vastly decreasing your long term profit potential. It's the same with SL placement, a lot more often than not I see illogical, mechanical SL placement which bears no resemblance to where the trade setup is most likely invalidated - a SL should go where you are most likely wrong, anything other than this is just decreasing the value in every trade you take.
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  • #2,031
  • Jun 8, 2012 12:53am Jun 8, 2012 12:53am
Quoting xmzhang
A general question about trading a compression, at which point does one in general, say, for an downward compression enter long, do you enter on basis of a bullish PA or when perhaps when price breaks the borders of that compression or simply when it hits demand.
I enter when I know the probabilities are well enough balanced in my favour with suitable risk. I would then potentially look to add more exposure if price moved in my favour etc.

If we see good compression into a well defined supply zone for example then I'd be looking to enter when price hits the supply zone. It the supply zone is wide then I'll be looking to find previous decision points / sources of the original move as where to expect price to turn for an entry.

I much prefer this than waiting for 'confirmation' if possible - if we see compression into supply (or demand) then this IS the price action that tells us what price is likely to do next and thus this is where I try to enter as a) the probabilities are in my favour and b) this provides the most value.

Remember what I said in my previous post, enter where probabilities are in your favour, put your SL where you are most likely wrong and don't be scared to take a loss.

The ultimate compression trade for me is to be in at the start of where I expect price to turn and then add more exposure as price moves in my favour and price action shows me that price is likely to be moving to the first main target (usually the source of the compression).
  • #2,032
  • Jun 8, 2012 1:10am Jun 8, 2012 1:10am
Quoting xmzhang
Hello LJ, question about your C/J trade, according to you where would the decision point be for an optimal entry. Would that be the base of that WRB (pole).
Well price found supply at the previous zone, my entry was based on the trap that was caused when price fell back below the former resistance. It's the same as the recent EU setup, trapping traders with an SR break with price heading straight into supply - who is buying on the break - the amateur breakout trader who are they selling too...the professional trader who is looking to use the liquidity provided from the amateur to fill their shorts and move price back down. Who is now left on the wrong side of the market and looking to bail...the amateur trader.

I wouldn't have been looking to enter straight on price hitting the supply zone because it was not an FTB and thus without further signs it becomes more of a gamble as to whether supply has been consumed from that zone or not - hence I'd be looking for price action. In this case I rarely watch this pair and certainly not below H4 time frame so it was the trap that formed that was the price action that confirmed to me price was more likely to be heading lower etc.
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  • #2,033
  • Jun 8, 2012 1:32am Jun 8, 2012 1:32am
Quoting Balhana
Closed 1/2 at 0.7646 for +20 pips and moved SL down to 0.7620 from BE+1 (0.7627).
The remainder got stopped out for -6 pips (+14 pips in total).

The 1H pinbar didn't work out nicely, but I think it is too early to say the 1H FTB setup didn't work out nicely if SL is placed below low (0.7604) of the breakout candle. It is not my style though...
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  • #2,034
  • Jun 8, 2012 2:01am Jun 8, 2012 2:01am
Quoting Balhana
The remainder got stopped out for -6 pips (+14 pips in total).

The 1H pinbar didn't work out nicely, but I think it is too early to say the 1H FTB setup didn't work out nicely if SL is placed below low (0.7604) of the breakout candle. It is not my style though...
Yeah that's not my style either, if trading the 0.7645 daily level as an FTB then any SL based on the FTB should not be going below the 0.7604 breakout candle.

Why, because price doesn't need to go there to tell me that the 0.7645 FTB level hasn't held as support.

Nicely managed trades BTW.
  • #2,035
  • Jun 8, 2012 5:13am Jun 8, 2012 5:13am
Bought AU at 0.9852
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  • #2,036
  • Jun 8, 2012 6:04am Jun 8, 2012 6:04am
Quoting Balhana
Bought AU at 0.9852
This one looks a lot better imo
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  • #2,037
  • Jun 8, 2012 6:52am Jun 8, 2012 6:52am
Quoting Greenhaze
This one looks a lot better imo
Missed SL by about 5 pips. Greenhaze, is that AU chart?
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  • #2,038
  • Jun 8, 2012 6:54am Jun 8, 2012 6:54am
Quoting Balhana
Missed SL by about 5 pips. Greenhaze, is that AU chart?
Yes... H4 AUDUSD FXPRO
  • #2,039
  • Jun 8, 2012 6:56am Jun 8, 2012 6:56am
Hi all,

My trade on AU.

Balhana, are you still holding yours?
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  • #2,040
  • Jun 8, 2012 7:05am Jun 8, 2012 7:05am
Quoting Greenhaze
Yes... H4 AUDUSD FXPRO
Hmm, I didn't spot it, but I prefer SD and SR. Are you in, too?
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