Simple Uncomplicated (obvious) trading

Hey gs... Are you still keeping an eye on the EJ we were talking about last week? Remember I took the trade off the break of the daily pinner? You were right. I ended up closing 1/2 the position for around 35 pips or so & the 2nd half was stopped out at a little over BE.

None the less I'm debating a similar entry on this quasi engulfing bar we're seeing on the Daily today. I fully realize it's not a true textbook engulfing but speaks volumes to me none the less. I might be entering again at the same level on the break of the high.... Maybe even before NY close??

Hope everyone is having good results. Very nice call no the UJ btw gs... I stay away from that pair myself but excellent trade & trade management.

Thank you again for your kind words.

This pair and the GBP/JPY have almost the same look, so what I say may apply to both of them. It looks to me like the makings of a double bottom, but we are not yet in bullish "trend" territory. I do see a lower high that this current bar is trying to push above. As well there is a higher low...thus if you break above this last high you will have the makings of a trend...higher high and higher low...

-- OR --

Price may screw with you...as it does so often with me. it may break above this high just enough to "sucker" in the longs and then get sold off again...and form a range between the low of the pin and the high of this current bar.

This is why I wait for price to break above...pull back and form the next higher low...again OBVIOUS....

As I am really crappy at predicting what price will do I stay away from saying it will or it will not...I just find the low hanging fruit to pick and stay with what I know has a high probability of success...believe me it is EXCEEDING hard to watch price go your direction without you. But I do not trade on hunches or "feelings" anymore...I've lost enough money doing that.

New Trade Opportunity:

USDCAD: The best analysis of this trade I can give was done yesterday when I was presented with yesterday's chart. Post 64 As promised I have kept this in mind and now see an entry signal that I would consider trading.

Entry: Inner bar. Of note on today's candle formation is that it is a lovely doji that opened and closed right on the 50% Fibonacci line. It doen't get any better than that!! Nothing speaks more loudly about a market consolidation than a doji (which means indecision) on an inner bar (which indicates contraction/consolidation), on the 50% Fibonacci line.

As you can see here, I have placed the entry above the high of this doji/inner bar (almost a doji star but not quite)...with the stop below the low of the larger "mother" bar. The take profit level comes in at just below the high of the week...

We'll see if it can't make there there by the end of next week...keep your fingers crossed...

Yup. I'm definitely interested in this UC pair now. My Buy Limit order missed getting filled in today's London Session by less than 1 pip. Most likely due to spread & or slippage.

In light of today's doji I'll most likely be switching gears with a Stop order as well above the doji. Stops below the mother candle will force me to at least shoot for a 2:1 profit target. That will put my tp well above the most recent Daily high.

I may consider a 2 position trade with a 1:1 on the 1st & a 2:1 on the 2nd... I'll have to drink about it.

Good luck to anyone else taking this one.

Hello again fellow traders. EU is about to blow. There is a very tight consolidation pattern developing on the pairs 4 HR PA. We could argue all night over where this pair will continue trading. Bears & Bulls alike could lay claim. What we can all agree on as traders is price cannot continue to trade within this range for much longer. While the direction may be elusive the strength & breadth of the pair cannot be denied nor debated. It breaks 3 -5 trading days every single week for 150 - 250 or even 300 pip moves. Many times without pause or retrace. Completely one sided & impulsive in one direction. Once you look for it you'll see it. Once you see it you trade it. Keep it simple. Price patters like this are all over the chart every week.

The GBP/USD H1, is this an engulfing bar, is this a signal now to go long

Akhil...Your question of an engulfing bar is rather mute...first of all this is NOT an engulfing bar because its range does not completely "engulf" that of the bar before it...while it is a strong indication of bullish sentiment of the hour in question.

However I would not be looking for a long quite yet...(me). You can see from my chart below that your candle formed only the first higher high in the entire week. While there was a higher low just prior to this bar, it appears that price is indicating it will break range it formed over the last few hours. However I see no obvious trend here.

For ME, this is not a trend yet...Hourly charts (and all intraday charts) can be a little more challenging simply because you have to make a decision more quickly. It would appear to me that this is a range break out on the up side for now...but again I am not good at predicting and my statistics didn't measure range breaks...I try to avoid them as much as possible.

Hello akhil. Welcome to the thread. gspajon is correct in his definition on the engulfing bar in that the 'range' must engulf the preceding bar. Investopedia defines the engulfing candle in a similar way. The body of the candle must completely engulf the previous candles highs & lows. Some folks will argue a true Japanese definition of the engulfing bar in question does not have to engulf the previous bars wicks or tails. Chances are you won't see many TRUE textbook engulfing candles on lower TF's such as the hourly. Especially on highly liquid instruments such as the GU or EU. The key word is many... You will have some mostly at market opens or High Impact news events where smaller TF candles will 'gap' up or down giving the opportunity for engulfing.

The main thing is to stay dynamic. This is a very fluid market. Signal candles such as the one on your chart need to be taken into context with the broader context & higher TF's. If you get caught up on rigid definitions & approaches you'll get eat up.

Akhil, gspajon's goal here is to drive traders to keep things simple based on a basic simple interpretation of Price Action. Depending on your personal style & strategy the signal candle on your chart could be just that. It's not a bad example of Pure Price interpretation. Given the right entry & exit strategy this signal candle could have paid off nicely with a very good 2:1 or even 3:1 Risk Reward ratio.

The 1st picture below is the 1HR chart with the quasi bullish engulfing candle in question.

The 2nd picture below is the same bullish move on a lower 15M Time Frame. Fibs are drawn based on the 1HR Signal candle on the lower 15M TF. Depending on your entry you could have easily entered the trade on a buy limit at the 61.8 or the more conservative 78.6 retrace of the 1HR signal candle. Stops below most recent lows & Profit Targets placed at the FIB extension levels of 127, 141 or 161. Any of these levels would have provided a nice risk to reward profile trade all based on an impulsive bullish PA setup.

Eggs and Ahkil,

Your interpretations of price action are spot on...and if you continue to be correct in this manner you will be far more advanced traders than I will hope to become.

Just a word about my style. I was once trading like this and would make some good calls...but statistically over time my calls were more often wrong than they were right...even with the best risk management, you cannot over come a losing premise....

That is why I embarked on my data gathering campaign. I have found that what works most consistently is relatively small trade made within a pull back or retrace traded to at or near the most recent extreme. They hit just about 80% of the time unless there is a categorical shift in price action...ie. a range or a reversal.

From there it is only a matter of finding when the retrace seems to be over...thus the entry signals. Most often those entry signals come after the "exhaustion" candle but not always. I gathered data on my entry signals and found that when they presented in their purest form...price made its target between 76%-85% of the time...that is more than just chance.

So while "interpretation" of price action is a valuable skill to have, (something that I am constantly working on), I have resigned myself to these premises...

1. I am in this business to make money - not be right about my interpretation
2. There is a better than average chance that my signals (under the right conditions) will work
3. I must always be vigilant for the right conditions
4. When the signal presents I take it and let the chips fall where they may.
5. My "interpretation" of the market proves right only about 10% of the time...my signals prove right about 80% of the time....hmmm...which shall I chose?

You guys are price warriors...and I wish you all the best...but as I stated at the beginning of this thread...I want to show that making money does NOT depend on valid interpretation of the market...just statistics, discipline, and patience.

BTW --- Your entry signal on the 15 min chart was picture perfect!! THAT was your Bullish Engulfer. This is what I have been trying to get across...as I said...this works on all time frames...you just have to find the right one...and stick with it.

http://assets.forexfactory.net/nfs/c...tar30189_4.gif gspajon I want to show that making money does NOT depend on valid interpretation of the market...just statistics, discipline, and patience.

--wow-- quite a wake up call-- thanks

It was for me too...and actually made me angry that I had wasted so much time

Hey GS... Are you keeping that Buy Stop open on the U/CAD? Did the lack of follow through in respect to price change your outlook or conviction?

Another excellent question...for now I will leave the trade over the weekend..but if next week I see the price dropping below there my stop would be then I will cancel the trade....these kinds of ranges can be quite aggravating.

Weekly Update:
Here is a quick synopsis of this week's positions:

XAU/USD: Position has retraced to the entry point. As this is a weekly trade no real worries quite yet...I still have a resting position waiting below this entry point to add in if the retrace moves down that far. There have been only two candles since this position triggered...

USD/JPY: The position triggered on the daily chart has moved to within 11 pips of its take profit then backed away. This happens quite frequently but it is still aggravating when it happens. The stop has been moved to break even plus a little. The position triggered off the weekly chart is still at risk but this trade is expected to take longer to unfold.

EUR/USD: The short position triggered from the daily chart is currently positive if only by 30 pips or so. Price has stalled after triggering but so far has not yet retraced back inside the range that it broke out of. I am tempted to move my stop down a bit before the week end, but will not as dictated by discipline.

USD/CAD: A setup was noted on this pair yesterday and I have entered the pending orders but it has not yet triggered. Price continues to range inside the "mother" bar. Should price drop below the low of this mother bar without triggering, I will cancel the trade and look for another set up somewhere else.

That's it for now...have a nice week end everyone.

Once again, at market open, we come within a few pips of my limit then fall away. I was watching another quote service and saw that my limit was actually hit, but FXDD and retail services like to widen the spread on the open just to prevent this kind of thing...or take out stops for those on the other side of the trade...

For those who where short with a stop above 108.40 you were stopped out...for those who were long with a limit in the same area...sorry...no money for you! Quite aggravating what these retail brokers do.

I'll just have to wait a little longer and hope we make it but my live account has triggered the take profit.

What's up gspajon? Hope you had a nice weekend? Stick with the UJ trade it'll punch out eventually. I hope we see a little action this week after too many inside days last week.

Simple trading
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This simple method could be adapted for binary options. What do you think?