Trading: As simple as possible, but no simpler - by a real Cityboy

Thanks !

Don't think it was the real break-out, just a continuation of the little up-trend ..
Nice profit though

Great thread. Looking forward to rereading and watching the vids. Thank you.

Evening all,

So after all my complaining about a counter trend EUR/USD trade - I just took it off for 2.1% profit. Happy days. Also at the same time I closed my USDCHF for 1.6%. I took a 1.1% loss on the AUDJPY but the net result was enough to get my month back in to positive.

(check my trade explorer)

We dont do losing months here!

Anyway - my point earlier was that you can make money up and down in the market, and I'd rather be going with the trend. I've attached a chart of the EURUSD weekly. I believe it's at a really interesting point.

Look how we are at a fresh lower high.

In a perfect world, I'd like to see a small high test bar for next week - which has touched the long term resistance (blue area). My thoughts after that would be to load up positions with tight stoplosses (50 pips or so) and try to get in on the fresh move downwards with large position sizes.

This is how you take really big chunks of equity out of the market.

1.Find a market in a 'correction' - eg. daily is uptrend, weekly and monthly in downtrend

2. Identify a key point for a potential reversal. Lower high/higher low - strong support/resistance.

3. Load up with positions at the point of resistance. Stop losses go behind the resistance. You may get stopped out for a few, but the goal is to end up with like 3-5 positions with tight stoplosses, so you've got a big lot size.

Expect to lose a few to the stoploss because we are aiming to get a tight stop on what is essentially a weekly reversal.

4 - When a few of these start to run, and the overall trend resumes, you could take a real bonus day.



I'm looking at the Euro Dollar now - because the above steps are in progress. Once we get to the res point (blue) I'm going to try catch the reversal with a large position size. It could be upsetting if it keeps on going, but I think it's worth it.

Hi Laurence

Subscribed

Quick question: how many HH, HL would you say it takes to determine a trend ?

How do you determine that a trend is a trend (rather than a correction)

I used to work for Citi Private Bank (was good fun but hard work!)


have a good day

pa

@ Pervaz, I am not Mr. Dale, but for me, seems like you would need 2 of each to confirm the trend, and even then there is no absolute way to know if it will continue.

See this Daily chart of EUR-USD, this is how I read it, after first HH, a new LH is required, then a 2nd HH to confirm but even then, price could have dropped away, but after 2nd LH, there seems to be trend change.

I have marked where price may find support early next week, consolidate and then move higher --- IF that is what it is going to do.

I'm sure Mr Dale will be along shortly with his usual excellent price action readings, maybe even another video.

Regards, E.

Morning Pervaz, welcome to the thread.

Aha I still pitch against Citi quite often. You have some really high roller clients! haha.

In terms of defining when we have a new trend - I would say that Erebus has got it pretty much spot on.

Using his chart for a reference - At the point marked "2nd" is where I would start looking for longs. This, in my view - is the first Higher High, and as long as the price does not move back below the new low (red line after 1st) - buying breakouts of seller bars would be perfectly fair trades.

I've got to head in to work for a few hours today - but when I'm back this evening I'll make a video. I've got a couple ideas of things I want to discuss and actually your question is very relevant.

1 - I wanted to discuss Jesse Livermore's trading method and how I feel we've got a massive opportunity in the EURUSD coming up.

2 - Talking about how I feel I could create a 'system' of the way I trade. So that I could almost make an EA to trade it.
I honestly do not believe that this method of trading could work with an EA - infact, I'd rather not promote the idea of making a system out of this, because I believe that trading well comes from your own personal pattern recognition. HOWEVER, I think this could be helpful to clarify entries in the market. It's a discussion point, and I think it would make a good video.

Pervaz, Erebus - Thanks for the comments and I will put something together when I'm home with a drink, and Chelsea on the TV.

Have a great weekend all,

LD

Hi Erebus

Thanks for the diagram (and your clear explanation)

Hi Lauren e

Thanks for the clarification. Its a nice and simple strategy (simple as in effective). Will be good when your vid comes out (ideally could you start from the 1st step e.g. how to identify the opportunities - do you look at the monthly chart using the 200EMA and determine if monthly trend is long or short, then look at the dailys for a pull back and then on the 2nd HH or LL wait for a good PA - or am i shooting in the dark (has been known once or twice!)

i moved out of PB - too stressful and too many demanding clients !!

Good luck with the match (hopefully this will be a better season for you)

I have read livermoores book and pivot points seem to work much better on stocks (especially with the sector and key industry to provide the general trend on the stock !)

pa

Another perspective to add to your weekly view. My thinking from here is, we either range sideways for a little while or bounce down this week.

Either way, the EU is still in steady decline IMHO.

Evening all,

Hope everyone is enjoying their weekends.

I've put together a video to discuss a few things

1 - review of what I look for in an entry

2 - review of my trades this month

3 - What I think is going to be huge in September


I dont think I've expressed the entries very well in this one - tbh, the first posts on this thread show it better.

This month's trades have been interesting - Some textbook examples of trades, some the went well, and others that didn't go so well. I think they are worth looking at, because it shows my method for it's good and it's bad points.

The video is 15 mins long, so get a drink for this one! Hope it's interesting - Thanks for watching.

Hey Laurence

Thanks for that - its clarified some of the points in me head (i think!)

Im going to load up the currencies you use and test out this method, and hopefully arrive at a similar opportunities to you

Ive been reading your blog as well (nice job!) and going to test out the strategy for a month before punting some cash

P

Ah glad that helped.

Okay so I've been looking at the markets this evening and it's looking ever more that we have a change in underlying trends. Look at the AUDUSD. I don't have a chart to post of it atm - but we could be in a new downtrend. I'll talk more about it soon.

Today I want you readers to look at the daily chart of the EUR/NZD and tell me your thoughts. This is a good example of my trading method in action. What do you think is going on here?

I'd love to hear the thoughts of any of the followers. This is a great example and shaping up to be a really nice trade.

Regards,

LD

Are you sure that isn't the weekly chart dude?

Agree with you on AUD/USD, I'll be looking to go short in the blue area. What do you think?

Well spotted! Yes that is the weekly. My bad. Same question applies though. Having to use my 2nd broker with the horrible charts because I dont have EURNZD on my Alpari MT4.

Yeah I like that setup on the AUD USD alot. I've had a big discussion with one of my trading buddies about this setup. He's going long. (Long term rising trend line ect) I can see where he is coming from, but I want to wait a couple days, hopefully get a little more of a pull back up, before looking to get in short at a nice price. We could easily go for a break of today's bar low, but I'm holding fire, waiting for that nice clean trigger. The risk/reward is really nice for this trade too. We don't have a big gap between current price and the swing high, and there is a ton of space to move to the downside. Watching that setup closely!

Regards,

LD.

Hi Laurence,

what do you think of this setup?
I've got a sell order below todays low. Would this meet your criteria? Maybe even get a double bottom at the low for a new uptrend too although I'm getting ahead of myself now

Hey dude,

Yes I think it is a nice trade.

Something I like to do in this type of setup is to start out with half my usual position size - because the immediate trend is up. From about Aug 15th the Euro is on it's way up and put in a higher low. After your entry is triggered, and price is back on it's way down, you can add to the trade to build up to full position size after we get a bit of a pullback. The stop loss position is really nice. Behind the pivot and close enough to get a large trade size.

I think this would look really nice on the weekly chart as well - and there is nothing wrong with trading the weekly.

Cheers,

LD.

Check out what MIG say about the EURGBP. They also agree this is a make or break point.

http://www1.migbank.com/research/en/..._08_30_web.pdf

They have their stop exactly where you've put yours.

Looking at the chart now - we are putting in a high test already. I think this is going to trigger. I can't trade from my office - but if I could, I'd put on a sell order.

If it goes past .7900, I'll wait for a retest before getting in short.

Cheers,

Got as low as .79016. Not triggered yet!

I've put a sell order on at 0.78991. We are in it together now!

Now I remember it was this week last year when the non farm payroll printed a zero. I was at JP Morgan that day getting pitched the Natural Resources fund. I stopped by at a bar to meet a couple of my trader friends at Schneiders on Liverpool street. Talking with all the prop guys who had tried to get in long on the euro bonds. We all knew it was going to happen but the timing was horrible. This was just a trend continuation - like 90% of my trades.

Easy money.

I'm in the City all day tomorrow for my annual review. Lets hope we get some orders triggered, so I can add some further enjoyment to my gin and tonic at 6pm!

Also, in my video from last weekend where I said I want to see a small high test bar on this week's Euro/USD - Look what we have.

Who says we cant predict price? If you are following the long term trends - it is easy.

If we hold this level for tomorrow - it's shorting time.

Daily has topped and started to roll over. Weekly has stalled at resistance and looks like we are going to turn.

Nice.

We're not quite in it together. My order is for about 7p/pip
Check out my trade explorer and journal. I'm going back to basics. Thanks for the informative posts so far. I'm really enjoying scanning the daily charts for trades and hopefully can build my account without getting bored and overtrading.