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Where can I learn more about Price Action like those in James16 charts? 9 replies

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james16 Chart Thread

  • #133,581
  • Jan 15, 2015 6:55am Jan 15, 2015 6:55am
I don't think I have ever saw such a big move on one of the main currency. 20% in no time.
  • #133,582
  • Jan 15, 2015 7:02am Jan 15, 2015 7:02am
Quoting prasad99
Do we have to wait till the price goes past the pin bar to enter the trade. I am in one trade right now and felt that I could have waited till the bullish bar breaks the pin bar. {image}
There was some abnormal move on the CHF/JPY trade. It almost fetched me 1300 pips and my profit target has been taken out. I could not net a large profit because of using a a micro account but this is a good lesson as to what happens if there is no stop loss for the folks on the other side of the trade.

I have always been wary of using JPY in my trades because of its volatility but yesterday as it was hitting bottoms /pin bars with a lot of other currencies then I knew something is going to happen. I was pulled into this trade. I moved my profit target to around 122 and slept.
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  • #133,583
  • Jan 15, 2015 9:45am Jan 15, 2015 9:45am
Quoting Pumlitch
{quote} I guess you got very quick profit thanks to SNB :-)

I got 1300 pips yesterday and if it is a regular account I would have netted 10k with trading one lot of currency. I would be saving 10k by March for trading.
  • #133,584
  • Edited 1:31pm Jan 15, 2015 9:51am | Edited 1:31pm
Quoting prasad99
{quote} There was some abnormal move on the CHF/JPY trade. It almost fetched me 1300 pips and my profit target has been taken out. I could not net a large profit because of using a a micro account but this is a good lesson as to what happens if there is no stop loss for the folks on the other side of the trade. I have always been wary of using JPY in my trades because of its volatility but yesterday as it was hitting bottoms /pin bars with a lot of other currencies then I knew something is going to happen. I was pulled into this trade. I moved my...

I actually thought I would get one more trade on this one on the downside but I had to pray and go to work so could not look into the charts. Just now I looked at CHFJPY and we have some PA on the one hour chart. If I had entered at right time this would fetch one more risk free trade. But it is a nasty volatile market for sure. You enter the trade at 132 and move it to break even.

CHF seems to the culprit in this big move. And CHF has done this before -please look at the weekly chart of AUDCHF
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  • #133,585
  • Jan 15, 2015 10:38am Jan 15, 2015 10:38am
Quoting prasad99
{quote} I could not net a large profit because of using a a micro account but this is a good lesson as to what happens if there is no stop loss for the folks on the other side of the trade.
Stop loss is of no use if a huge gap forms. Especially if you trade small time frames you can not only go broke but lose more than the deposit. For me it's very important to trade with a broker where you can't lose more than the balance. Unfortunately there aren't many brokers who won't sue you if you have a negative balance (FXCM and FXpro are the only brokers I know where you can't lose more than what you have in the account). And this is because traders don't care about this possibility. A lot of them think they can only lose what they have in the account.
  • #133,586
  • Jan 15, 2015 11:19am Jan 15, 2015 11:19am
Quoting str8
{quote} Stop loss is of no use if a huge gap forms. Especially if you trade small time frames you can not only go broke but lose more than the deposit. For me it's very important to trade with a broker where you can't lose more than the balance. Unfortunately there aren't many brokers who won't sue you if you have a negative balance (FXCM and FXpro are the only brokers I know where you can't lose more than what you have in the account). And this is because traders don't care about this possibility. A lot of them think they can only lose what they...
str8

You see this is one of the thing that gets me worried about trading. We use stop loss with every trade and then there is thing called margin balance and if your account hits the margin balance you are taken out of the trade. But in this instance the price move which can be termed as extreme (30 percent volatility of CHF to dollar) still I see that price moved without forming any gaps. Gaps are a common occurrence in stock charts but I dont see that many in currency charts. The same risk might be experienced trading options with the price going through a gap wiping out your trading account.

It is important to understand the policies of different brokers with respect to these gaps in both Fx and Options trading. Also it is important to keep only so much money in the trading account as it is required.
  • #133,587
  • Edited 12:00pm Jan 15, 2015 11:39am | Edited 12:00pm
On daily it appears there is no gap but on smaller time frames the gap can be seen (depending on the broker, on plus500 I also don't see the gap on 1hr charts but I see on 15 min charts). In fast market conditions even if there is no gap because of slippage the broker may still take you out of a trade at a bad price and don't respect the stop loss. You may not see a gap even on 1 minute charts but the price sometimes move a lot in only one second so the gap can still form even if you can't see it.

If you buy options you can't lose more than the premium. But in forex it's possible you lose more than the deposit if you risk too much or if you trade small time frames and the broker doesn't have a no debit policy (and most of them don't have this policy). You are taken out of the trade if the account hits the margin in normal market conditions (this I think is applied by almost all brokers) but the news from today aren't normal market conditions.
  • #133,588
  • Jan 15, 2015 1:09pm Jan 15, 2015 1:09pm
Quoting str8
On daily it appears there is no gap but on smaller time frames the gap can be seen (depending on the broker, on plus500 I also don't see the gap on 1hr charts but I see on 15 min charts). In fast market conditions even if there is no gap because of slippage the broker may still take you out of a trade at a bad price and don't respect the stop loss. You may not see a gap even on 1 minute charts but the price sometimes move a lot in only one second so the gap can still form even if you can't see it. If you buy options you can't lose more than the...

Thanks for correcting me on options risk. You are right in options the maximum risk is the premium we pay to buy the contract. Options are definitely safer than Fx. However in forex it seems like if the market gaps too much and if you are risk too much (and this risk is controlled in US accounts because of margin balance requirements, the broker does not let you place the trade or take risk beyond your margin balance allows). In the US for a 10k account and if I need to trade a one lot of EURUSD the margin balance is approximately 3000 dollars so basically you cannot take more than 3 lots because that uses up 9k of your 10k account. Now there is risk if the market gaps like more than 500 pips (loss is 15k and the broker can sue you for 5k ) which is highly improbable. The market can gap like 50 or 100 pips and the loss the 3k which is like the risk of trading you have to accept.

The bottom line is one should be willing to accept the possibility of losing the entire trading account. I wonder if it is worth to keep more than 10 to 15k in the Fx trading account and we should not take more than two trades at a time. Also we need to make sure that this trading account is not tied to our bank account.
  • #133,589
  • Jan 15, 2015 2:49pm Jan 15, 2015 2:49pm
Quoting str8
On daily it appears there is no gap but on smaller time frames the gap can be seen (depending on the broker, on plus500 I also don't see the gap on 1hr charts but I see on 15 min charts). In fast market conditions even if there is no gap because of slippage the broker may still take you out of a trade at a bad price and don't respect the stop loss. You may not see a gap even on 1 minute charts but the price sometimes move a lot in only one second so the gap can still form even if you can't see it. If you buy options you can't lose more than the...
We should get the opinion of more experienced members probably MIke will post his opinion on this one.
  • #133,590
  • Edited 3:33pm Jan 15, 2015 3:23pm | Edited 3:33pm
I don't like to lose all my account. This is why I trade forex with FXCM and I don't deposit all my money. So let's suppose I deposit only 20% of my trading money. If I lose more than this due to a gap FXCM will cover the losses. If I would have deposited 100% of my money then I will be the one who loses not the broker. It doesn't matter how small the probability is. Why take even a small chance of losing money?

I've read in another topic that a FF member has a negative balance of over $100K due to CHF news from today:

http://www.forexfactory.com/showthread.php?t=521759

You can read more about all trading risks in the broker's terms and conditions. Many brokers are tricky and don't tell you on the first page that you can lose more than the deposit but it's all written in terms and conditions. In Europe the leverage has no limit.
  • #133,591
  • Jan 15, 2015 3:35pm Jan 15, 2015 3:35pm
Quoting prasad99
{quote} Thanks for correcting me on options risk. You are right in options the maximum risk is the premium we pay to buy the contract. Options are definitely safer than Fx. However in forex it seems like if the market gaps too much and if you are risk too much (and this risk is controlled in US accounts because of margin balance requirements, the broker does not let you place the trade or take risk beyond your margin balance allows). In the US for a 10k account and if I need to trade a one lot of EURUSD the margin balance is approximately 3000 dollars...
The move today in the swissy is a perfect example of where options would be a much safer way to trade a market if you think there's a possibility of something like this happening. A few months ago I posted in the EURCHF thread that I was only looking to take short trades on eurchf after reading a couple articles in which they laid out the reasons why they thought it was very possible the peg got pulled. I agreed with the reasoning. I was called an "idiot" by the guru of the room for even thinking it was possible:-) You mention only being able to take 3 positions($10K account) because of margin requirements but if you use options you could take many more positions because your risk is limited unlike buying/shorting FX spot where your risk is unlimited.
  • #133,592
  • Edited 4:19pm Jan 15, 2015 3:53pm | Edited 4:19pm
The CHF has started to move the market again. I am in the GBP/CHF trade and will be soon moving to BE. I am 138 pips into this trade so far.

It made 350 pips and my broker app refuses to liquidate the trade. It says trading suspended. Finally I could get out of this at 270 pips. Time to watch for PA and go long on this pair. IF swiss frank goes nuts who cares traders will make money on that.

The price reverted and the broker refuses to liquidate the trade...can they legally suspend the trade like that when you are in a trade and losing money?? They should be honest during such times.
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  • #133,593
  • Jan 15, 2015 4:15pm Jan 15, 2015 4:15pm
The more crazy a market is the more cautious you have to be. I have been exploring important levels in trading concept which I can use as supporting factor or confluence to PA. If a key level supports the PA then the probability of the move is very high but I am still in the process experimenting this so dont have a final word as yet.
  • #133,594
  • Jan 15, 2015 4:32pm Jan 15, 2015 4:32pm
the behavior of CHF being irrational , may be not so irrational from the perspective of the weekly chart...a new pin bar seems to be developing if anybody has noticed. This may not turn into a full blown pin bar and it is hard to trade CHF right now...but still the chart is tempting.
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  • #133,595
  • Jan 15, 2015 4:45pm Jan 15, 2015 4:45pm
Quoting str8
I don't like to lose all my account. This is why I trade forex with FXCM and I don't deposit all my money. So let's suppose I deposit only 20% of my trading money. If I lose more than this due to a gap FXCM will cover the losses. If I would have deposited 100% of my money then I will be the one who loses not the broker. It doesn't matter how small the probability is. Why take even a small chance of losing money? I've read in another topic that a FF member has a negative balance of over $100K due to CHF news from today: http://www.forexfactory.com/showthread.php?t=521759...

Are you sure FXCM covers these losses. They may promise anything but do they actually cover when the real crises happens and the price gaps. I am not sure I have to look into all this.
  • #133,596
  • Jan 15, 2015 4:48pm Jan 15, 2015 4:48pm
Quoting srt
{quote} The move today in the swissy is a perfect example of where options would be a much safer way to trade a market if you think there's a possibility of something like this happening. A few months ago I posted in the EURCHF thread that I was only looking to take short trades on eurchf after reading a couple articles in which they laid out the reasons why they thought it was very possible the peg got pulled. I agreed with the reasoning. I was called an "idiot" by the guru of the room for even thinking it was possible:-) You mention only being...
Now you seem to say you can use options to trade Fx market and that is new to me. I have to look into that. But as you can see this is a rare event ...as chf was going flat in many charts for years on end for anybody to take any real interest or even predict that such a thing can happen. However these gaps can happen with less known pairs or the ones where manipulation is possible.
  • #133,597
  • Jan 15, 2015 9:04pm Jan 15, 2015 9:04pm
Quoting str8
I don't like to lose all my account. This is why I trade forex with FXCM and I don't deposit all my money. So let's suppose I deposit only 20% of my trading money. If I lose more than this due to a gap FXCM will cover the losses. If I would have deposited 100% of my money then I will be the one who loses not the broker. It doesn't matter how small the probability is. Why take even a small chance of losing money? I've read in another topic that a FF member has a negative balance of over $100K due to CHF news from today: http://www.forexfactory.com/showthread.php?t=521759...
And FXCM is in trouble because of that
http://ir.fxcm.com/releasedetail.cfm?ReleaseID=891597
  • #133,598
  • Jan 16, 2015 7:23am Jan 16, 2015 7:23am
Quoting prasad99
{quote} Are you sure FXCM covers these losses. They may promise anything but do they actually cover when the real crises happens and the price gaps. I am not sure I have to look into all this.
They explicitly say on their site that they will credit debit accounts to a zero balance. I think they have no chance of winning if they sue traders because of what is written on their site. And if they refuse to credit the account to a zero balance I can find another broker. There are other tricky brokers who want to let you think that you can never owe money to them. However they don't say on their site that they will credit debit accounts to 0. They say you can't lose more than the deposit because of margin calls but in their terms and conditions they say you are liable for negative balances. These brokers can win if they sue you (it's your fault if you didn't read all terms and conditions), but I don't see how can FXCM sue the traders if they explicitly say on their site they will cover the losses.
  • #133,599
  • Jan 16, 2015 9:02am Jan 16, 2015 9:02am
wow guys just wow

I was a bit shocked that we didn't hear much broker news until so late in the day. Many have sent out emails that they are fine but it appears alpari (maybe others) did not make it out. That's very upsetting although not a complete shock.

I truly hope that they kept their accounts segregated as they are supposed to. But we've witnessed brokers scamming before and I wouldn't be shocked if they didn't. If they complied and hopefully that means the FCA checks up on these brokers that they make follow these rules after the incidents from prior years(i haven't heard of many brokers going under since) then everything should be ok and those users hopefully will get their money back .

Now with that said let me offer some personal things I do. Take from it what you will but also realize that I can not give direct financial advice about anyones situation. Part of the laws in the US so I have to always be careful.

I personally use MULTIPLE brokers not only for their different goods and bads but for catastrophe type situations. By spreading my money i have much less of a chance to take a larger hit pending something bad goes down. I also since I take very few trades at any one time ever have the need to keep more then a small % in any one account. As long as I can cover margin on a handful of trades and a bit over. There is NO need to keep a hundred percent in an account. I am not taking high leveraged trades and trading ten-50 things at once. Keeping that money in an insured account on standby is simple enough. Wires hit quick these days and many brokers even offer faster options.

For us people stock accounts are treated differently an insured under FDIC rules. This means I keep much more money in my stock/futures/FX accounts via these brokers. It frankly just makes sense.

My stomach dropped this morning when I woke up to hearing this. I hope it works out for the best for all parties involved and also puts brokers on awareness that these events do happen. Like clockwork guys. And another will happen again in the future
  • #133,600
  • Jan 16, 2015 9:16am Jan 16, 2015 9:16am
Quoting mbqb11
wow guys just wow I was a bit shocked that we didn't hear much broker news until so late in the day. Many have sent out emails that they are fine but it appears alpari (maybe others) did not make it out. That's very upsetting although not a complete shock. I truly hope that they kept their accounts segregated as they are supposed to. But we've witnessed brokers scamming before and I wouldn't be shocked if they didn't. If they complied and hopefully that means the FCA checks up on these brokers that they make follow these rules after the incidents...
Thanks for that Mike - Ironic given my post above, but I've been hit as I am with Alapri! Didn't realise the seriousness of this Swiss crash, but I do now!

Hoping I will get my money back - I've been in touch with the FCA and they are apparently in discussions with Alpari already, so hopefully things will be good. If not, it's a good lesson for me and I will definitely take on board and think about what you have written above.

I've never traded with more than 1-2% in one trade and rarely have more than 1 or trades on at once. I've followed this practice due to what I have read in this thread - and now I can see first hand the reasons why this message is repeated time and time again.

Anyway, back to demo again until I can get some more cash saved!
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