Up and under price pattern

Wow...this is a nice style of trading...I like your set-ups. I have a question though, Quidsey...if you are around. On this post...I think post #5, the UC. You have noted on the chart that 'price needs to engulf before it comes back here' to a price level it looks like you might be interested in buying at.

I Have been curious about this aspect of price movement. Why does price have to engulf before it retraces back the price line you would be willing to sell at?

Apologies if you have covered this...i am looking through the thread now.

Cheers,
Bryn

I'm sorry...quoting my-self

"Why does price have to engulf before it retraces back the price line you would be willing to SELL at?"

I meant to say....

"Why does price have to engulf before it retraces back the price line you would be willing to BUY at?"

derp...

Bryn

Hi Bryn, well I could fill this reply box with techni babble explanations about big money and who's doing what and when and order flow and bla bla bla, and repeating shit I've seen others talking about, and making myself sound awesome....... but I'm going to be honest with you....... I really don't know why. Sorry.

A lot of people talk about stuff here that they're really only repeating what they've heard elsewhere, it maybe true who knows, but most of them are just pissing into the wind, and sometimes it works and they cheer and then sometimes their theory doesn't work and the back peddling begins, and the 'well yes this was here and that was there, but it's because this went up here and then they all bought there'...... jeez give me a break.

All you have in this game that you can count on for real is your own stats. Get yourself two or three price based strategies for different market structures and get hacking away, create over time your own truth about what works and what doesn't.

I like price to engulf because since I've been trading this way it's given me more winners than losers, it's really that simple.

Probably not the answer you were looking for but I won't bullshit you..... nice avatar btw

Cool...I totally get it. Thanks for being straight. I've taken some time to view your thread a bit more and see the engulf has come up several times....part of the thinking.

Anyhow I like the style, not too far off from ways I've traded in the past...Your presentation is just so sweet it kinda made some things click for me, thanks. Gonna work with it a bit...trading 1h/5m ATM so I I think I'll keep it there and be aggressive with the entries and enter at market on the first up bar on the 5m after the quick retest.

glad you like my avatar

Cheers,
Bryn

Quidsey,

very nice strategy. I saw you play flips--retest of broken level. What is the success rate of flip plays compared with that of straightforward up- and-under plays?

thanks,

Another example.



Some thinking about price structure.



1 - major swing marker point, price makes a 350point move breaking multiple previous swings before coming back to the same price.
1a- A short order here has a high probability of at least catching a bounce. A SL of 20pips would give you a 1R trade straight into the previous swing high @6223, the FTA. Depending on your appetite you might target 6177 looking for 3R but you'd have to suffer a retest of your conviction. A SL to BE here would have taken you out of the game. These retests happen all the time.

2 - another major swing marker point to look to trade off, initially I'd look to short with a 15pip SL. Be aware here that you are shorting back into BRN 6100, you don't want it to find support there which it does and stops out the trade -15.
2a- Price moves strongly away from that broken level and forms a round structure over time back to the same level where you could switch direction and go long. Again look for the FTA and weigh up the cost of your SL in relation to it. Again there is a retest of the entry level. The level at 1a is the ultimate target.
2b- This pivotal level breaks again but this time the retest is very quick. The strength of the break is important to wether I risk a trade but this is all discretionary.

3 + 4 - possible swing marker points of the swing 6056. I prefer markers that are close to the swing as in example 1 + 2. Here I would prefer 4 over 3 because it's the actual previous swing before 6056.
3a- price not quite getting to the order level so no trade here but again that double bounce retest before moving off for 40pips or so.
4a- quick bounce off this level just how we want but the previous swings create an FTA which is limited to 20pips but that's a 1R maybe more depending how tight you play these.

Hi, yeah coincidently I was just marking up a chart to show those flip trades.

Shamefully I don't have that stat, I should do, but these two trades are lumped together globally. Laziness

I tend to have a smaller TP on the flip trades which may account for the idea in my head that I win more of those but I don't have anything in black and white.

Some other thoughts on trading recent EU price movements.

It doesn't. There are other more important things that decide if this will work or not.

Thanks...I know there are a variety of factors involved. My question was specific to Quidsey's style of trading.

Cheers,
Bryn

The pattern has an engulfing stage to add confirmation that price will change direction.
Think about the 5 steps of the pattern... price makes a high, prices pulls back, prices makes a higher high, price makes a lower pullback (the fact that this pullback is lower than the previous one suggests that the trend is changing), so when price goes back to the initial high we can expect to see a nice sell off from there.

You can read more about it here: http://www.nobrainertrades.com/2009/...r-pattern.html

Yes I like the NBT site too.

I'm going to keep to my some might say 'philistine' point of view that the actual 'why' this or that happens, or at least the illusion of knowing why this or that happens in the forex market will not make you a profitable trader, but I understand some people need that.

A simple analogy of my rather simple point of view is that you don't need to know how a car engine works to drive it, you just need to know how to drive.

Time spent working on your own psychology and discipline will do so much more for your bottom line.

Quidsey,

How do you like the setups in the following charts?
Any filters (besides engulfing) do you use when you decide to take the trades or not?

Quidsey,

did/do you take trade like the one marked in the chart? why or why not?

Pattern wise no, I like to hit price on the line, I don't wait for any PA signal.

There are MM considerations to weigh up though, stop loss and target, where could price realistically go to, where's the FTA. If the previous price structure is looking tight I'll pass.

Your charts look good to me, remember my opinion isn't gospel, I make plenty of mistakes

These are mine:





I don't think I've ever looked at a chfjpy chart before but that looks technically fine, only thing would be to know if the pair had any particular characteristics that might effect the outcome, I know nothing about how it moves.

Quidsey-

Thanks...

I didn't take it but I was certainly looking at it.

Your level is the dashed line, mine was the dotted line, "they" chose the solid line. I prefer to get as close to the swing top as possible.

Why not just short the swing top? you might ask, well you could but I found that you miss a lot as they turn before they get there. It's a play-off really between getting in to early and missing the boat completely.

USDCAD is a fiery pair and can swing quite violently at times, very mean reverting.

In my book your trade would have still been a winner or at least a BE trade, the stop didn't get taken.

The reason I didn't take my trade was the small ridge of resistance created at your level just before, I would have been shorting straight into that with the possibility of it becoming support and price moving higher.

This is what I did today, two long trades and a short that's just been stopped BE.

Thanks for your previous answers.

regarding to your M15 EURUSD charts.........

For the first long, SL below previous 2 bar spike would be too big. Where did you set your stop loss?

For the second long, I actually watched it but didn't take it. So engulfing is not an absolute requirement for you?

For the flip short, again, where did you set your initial stop? right above FTA ?

I will regularly post some charts here for your advises, criticisms and suggestions.

Many thanks,

1st long SL @ 3474.

For the 2nd long you see I circled an area on the spike (sorry I didn't label it) which if you go to a 5m chart you'll see better. This was my marker and the price has engulfed right up to 3524 before coming back to this level.

The broken flip level SL was 3490.