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  • #321
  • Edited 10:28am Jan 29, 2013 9:52am | Edited 10:28am
Quoting Seneca pilot
I want to address all your questions completely. I am in a trade currently. First though I want to say read the thread carefully. I think you missed something. I don't buy weekly highs from below. I am afraid you may have a problem. Now your buy may work here but only if the breakout of the previous week high holds. I sell weekly highs from below and buy weekly highs from above. I will post a chart when I reply fully later to make this clear.
Yep. you got me, i admit i have a problem,so you are going to help me clear my mind. From what i bolded, i can see that your method is "BUY EM' LOW, SELL EM' HIGH". Anyway, the weekly high of last week was at 1.3478. This was a resistance right. Now suppose the PA was running from 1.3425 to 1.3490 like it was in the last two hrs. Does it make sense to sell @1.3478...when i know that the target is 1.3500. In addition, if i am below the weekly high of last week, isn't that a signal that buyers are lined up at that point(1.3478) to propel the momentum upwards if the PA is in that trend! Ok. Say now the price is at 1.3490, i am wondering why i should place a buy order @1.3478.. ok maybe it will hold as a support since price is lingering about the point. #Just a thought....looks to me as though its now going down...not up. I know it will go up to 1.3500 where people have placed sell orders, but if i don't have the guts to wait for a big loss, i will stop it at my usual -20 loss.


I hope you also touch on the issue of risk management.
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  • #322
  • Jan 29, 2013 10:18am Jan 29, 2013 10:18am
Quoting square1
Yep. you got me, i admit i have a problem,so you are going to help me clear my mind. The weekly high of last week was at 1.3478. This was a resistance right. Now suppose the PA was running from 1.3425 to 1.3490 like it was in the last two hrs. Does it make sense to sell @1.3478...when i know that the target is 1.3500 and in addition,buyers are lined up at @1.3478 to propel the momentum! Ok. Say now the price is at 1.3490, i am wondering why i should place a buy order @1.3478.. ok maybe it will hold as a support since price is lingering about the...
Ok don't take this personally but the only buyers at weekly highs are poor retail traders. The odds are in favor of selling the level. I am not saying it can't go up here but the odds are for the weekly highs to send price down. Yes price was gunning for 1.35, there is supposedly a large DNT option at that level. Those levels are VERY heavily defended though and no guarantee of hitting it. I promise I will post a very thorough explaination of my trade and all your questions within a couple of hours. I need to see what happens when London closes first.
  • #323
  • Jan 29, 2013 10:19am Jan 29, 2013 10:19am
Quoting Seneca pilot
Ok don't take this personally but the only buyers at weekly highs are poor retail traders. The odds are in favor of selling the level. I am not saying it can't go up here but the odds are for the weekly highs to send price down. Yes price was gunning for 1.35, there is supposedly a large DNT option at that level. Those levels are VERY heavily defended though and no guarantee of hitting it. I promise I will post a very thorough explaination of my trade and all your questions within a couple of hours. I need to see what happens when London closes...
Also 1.35 is well within my stop range for the short.
  • #324
  • Jan 29, 2013 10:28am Jan 29, 2013 10:28am
Watching this play out with interest. In the past 20mins we've seen price react to 3477 from the underside on 1m chart. It's broken above again but clearly there is selling interest at the level.
  • #325
  • Jan 29, 2013 10:34am Jan 29, 2013 10:34am
I guess you are right...1H Chart.
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  • #326
  • Jan 29, 2013 10:36am Jan 29, 2013 10:36am
Quoting Seneca pilot
Also 1.35 is well within my stop range for the short.
I agree, it was the first to get my short.
  • #327
  • Jan 29, 2013 11:00am Jan 29, 2013 11:00am
Quoting square1
I agree, it was the first to get my short.
I'm not necessarily right London closing above the high. If you are still holding you still have a chance. I covered my short at last weeks close so I am flat and will now post the answers to your questions.
  • #328
  • Jan 29, 2013 11:02am Jan 29, 2013 11:02am
Quoting Seneca pilot
I'm not necessarily right London closing above the high. If you are still holding you still have a chance. I covered my short at last weeks close so I am flat and will now post the answers to your questions.
You don't necessarily have to be right to make money. It all depends on your time horizon for trades.
  • #329
  • Jan 29, 2013 11:05am Jan 29, 2013 11:05am
Thanks Seneca, s i wait for the answers, i have been looking at the week of 14-21 .The weekly high appeared at 04:00 am on 14th.
when i look at how PA by passed this point last week on 25/01/2013 at 08:00 Hr, it just did it like it did today. Had no drawbacks! Anyway, i am GMT+3.
  • #330
  • Jan 29, 2013 11:17am Jan 29, 2013 11:17am
Quoting square1
OP, thanks for the thread. I had to read every word and every posting bit by bit. BTW, i used your method to place a buy @ 1.3478 (Weekly high of last week) and worked exactly like you explained it. It's Charm. Today my range was low 1.33590 and 1.35000. Was it right for me to place a sell @1.35000?
One thing that i keep noticing and coming across is the type of orders that people take. Most newbies go for instant orders because of their anxiety to jump on the train when the "Money Bags" are at it. On the other-hand experienced traders like you...
The type of orders you use are not really important. What is important is that you are not buying big green bars and selling big red ones. We don't just enter because the market is moving. We enter because we have identified tested and reliable levels where we want to trade. I don't always use limit orders to trade. Sometimes I like to be watching the market at entry. It isn't that I won't enter due to some type of price action, its that I am somewhat greedy and like to improve my entries. If I have decided to trade a level and price is moving fast when it gets there I may let it overshoot a little and take a better entry. This allows me to reduce the stop a little and get a little better profit at my target.

You must use a stop. I am not one of the people who believe in not using stops. I have explained my process for setting stops so I won't bore you too much with it but I make mine based on daily ATR.

If you choose to risk two percent on your trades then you simply size your position to make that possible. Example 500 dollar account. You determine your stop needs to be twenty pips. Two percent is ten dollars. Your position size would need to be 5000 units fifty cents per pip. I never target a set number of pips. I trade short term and usually target levels I have identified. If there is no close level I will generally target two or three times risk. In my next post I am going to post a chart with today's trades so I can explain better what I am saying here.

I need to know your trading time horizon to help you with stops. Are you a short term trader who is flat every day? Are you a swing trader holding trades for a few days? Are you a long term trader holding trades for many weeks? The time frame you enter on and your trading horizon both have an effect on the size of stops you should be using. And obviously that stop size controls the size of your positions.

If you have any other questions feel free to ask.
  • #331
  • Jan 29, 2013 11:53am Jan 29, 2013 11:53am
A warning: I am posting my trades today. The second entry is a little above the level I intended to go this early but I feel it will be educational and give you guys something to think about. Be careful if you choose to use these advanced techniques. Practice it on your tiny practice account. You did open the practice account I said you would need for testing, didn't you?

The first entry is simple bread and butter sell the daily open. I made a mistake here with the exit. I had the thought that price may target the 1.34 level we spoke about yesterday. I placed my take profit just above the level but price got stopped by yesterday's low. I should have had the TP there and I screwed up targeting below a level I knew would be difficult. I exited when it was clear we were going up. Why didn't I sell the weekly close? Intuition I guess. I figured when the low from yesterday held that we were targeting the weekly high. I got it right this time maybe wrong next. I don't have any pain in missing an entry. My pain only comes from losing money so I tend to err on the side of caution when deciding when to trade. Also it is fairly common for price to cross the weekly close a few times early in the week so I generally ignore it until there is a fairly strong move and it gets tested for the last time.

Now the short at last weeks high. DANGER: I have years of experience and I can cut my losses without regret. If you don't have the discipline to do this DO NOT try what I am about to explain. Some of you will be at the level to be able to make use of these techniques. DANGER: this takes experience only practice this for pennies until you have it.

You will see on the chart below I made two entries in quick succession. At these big levels there are usually stops just above. You often get an overshoot. I initially enter at the level (1.3478 weekly high). I enter with a little smaller position than normal here because I want to average in. Now you will see that price does in fact trigger the stops and shoots up about ten or fifteen pips above the level. Now I have my partial position and I am watching the price behavior closely. I can see by the price behavior that it looks as if the level is going to hold. I enter a full position about nine or ten pips above the actual level. Now I have covered a nice portion of the stop distance and haven't really taken on too much risk but only because I have the discipline to exit fast if things change. When price trades back below my original entry I kill it and make about 120.00.

Price then trades back up into the area above the weekly high again but I have my entry with full size and am resigned to the stop out if it happens. Also I paid for a decent chunk of it with the earlier scalp. Again use caution this is not beginner techniques.
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  • #332
  • Jan 29, 2013 12:18pm Jan 29, 2013 12:18pm
Well Square 1 it looks like you may get the breakout after all. The time of day isn't good for you and you may have to sweat it out a while. Could still go either way. If I were long I would probably have my stop around 1.3455 and be ready to move it to BE as soon as it broke above today's highs. This is NFP week and Fed tomorrow so anything can happen.
  • #333
  • Jan 29, 2013 12:55pm Jan 29, 2013 12:55pm
Quoting Seneca pilot
Well Square 1 it looks like you may get the breakout after all. The time of day isn't good for you and you may have to sweat it out a while. Could still go either way. If I were long I would probably have my stop around 1.3455 and be ready to move it to BE as soon as it broke above today's highs. This is NFP week and Fed tomorrow so anything can happen.
I am a short term trader and i trade 30mn, 1H. i touch 4H and Daily when looking at history.
Yep. Its 21:50 here in Nairobi, and i want to snooze. I was long and I am gonna stop it. at least its ranging -10 to -15.

In your snapshot, which is your 1st, 2nd..nth entry?
  • #334
  • Jan 29, 2013 1:11pm Jan 29, 2013 1:11pm
You said it. So am gonna be patient! Am not closing soon, it has started.
  • #335
  • Jan 29, 2013 1:14pm Jan 29, 2013 1:14pm
Quoting square1
I am a short term trader and i trade 30mn, 1H. i touch 4H and Daily when looking at history.
Yep. Its 21:50 here in Nairobi, and i want to snooze. I was long and I am gonna stop it. at least its ranging -10 to -15.

In your snapshot, which is your 1st, 2nd..nth entry?
First entry closest to green line. Second entry is the higher one.
  • #336
  • Jan 29, 2013 1:19pm Jan 29, 2013 1:19pm
Going back to our earlier discussions about longer term holds. The chart below illustrates what could be the entry for the week, quick touch of last weeks close. Maybe, maybe not. With NFP week you never know and I tend to use smaller positions and take profits earlier. Unfortunately i didn't buy here because I was busy taking profits on my short and I am generally an idiot sometimes.
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  • #337
  • Jan 29, 2013 1:28pm Jan 29, 2013 1:28pm
Thanks for the heads-up. It has broken out, now i need my breaks.
How did you know? Is it because of NY close!
  • #338
  • Jan 29, 2013 1:41pm Jan 29, 2013 1:41pm
Quoting square1
Thanks for the heads-up. It has broken out, now i need my breaks.
How did you know? Is it because of NY close!
London closed above the level. I would have closed my short after that close if I wasn't already out. London are the most important forex traders in the world and they wanted their market to close above the level. Don't fight the 800 lb gorilla in the room. Keep a close eye on your trade in the coming hours and tomorrow. Like I said this is not a normal week.
  • #339
  • Jan 29, 2013 1:43pm Jan 29, 2013 1:43pm
Quoting square1
Thanks for the heads-up. It has broken out, now i need my breaks.
How did you know? Is it because of NY close!
Your next critical level is 1.35. If the price retraces back below last weeks high after hitting 1.35 you may be in danger. Remember anything can happen be ready for anything.

The current weekly ATR is about 225 so in my view the short at last weeks high isn't violated until price goes 45 pips above the level.
  • #340
  • Jan 29, 2013 2:26pm Jan 29, 2013 2:26pm
Quoting Seneca pilot
Your next critical level is 1.35. If the price retraces back below last weeks high after hitting 1.35 you may be in danger. Remember anything can happen be ready for anything.

The current weekly ATR is about 225 so in my view the short at last weeks high isn't violated until price goes 45 pips above the level.
Thanks again, i closed all my remaining longs with a +20, each +10. so, i am good. I have a sell at 1.35, i will watch it when i wake up in the next 6 hours. I am sure, if it is hit and price goes up, it will retrace back at some point.

But Seneca, i haven't yet mastered using ATR and am a little reluctant to use it because like other Indis, it shows the previous price movement and my mind has a problem validating an entry with that. Am surprised that its the one you use to determine your stops.
So, like you requested, below is my trading horizon:
I am a short-term trader and i trade with the 30mn, 1H TFs. i touch 4H and Daily when looking at history.
I use MT4, Lot size per trade= 0.1, leverage 1:500. Every entry has a TP ($10, $15 or $20).
So, help me, suppose my A/C has $1000 and i have placed a one EURUSD trade, with a TP of $20, what should i target as my stop loss.
Please, be free to use ATR to explain, i am open to learn more from you.

Nice trading...my neck cant hold anymore.
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