TRADE Signals

You're probably right about GU. I'm watching the break of 1.5520 very closely. I don't mind taking a bunch of small losses as long as my winners are much bigger.

Didn't like that close below 20 on GU. Closed at 19 for a 16 pip loss.

Market had its day with me today. Not taking the UJ short as previously mentioned. Seem to be off today. Reaction was good at the levels I stated, just no follow through. Tomorrow's another day.

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28 hours late.....h
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240 chart sell....h
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Busy morning. Just shorted NZDUSD at 0.6303 initially targeting 0.6266, tight stop at 0.6316.

I will be looking to buy EURGBP at around 7150 area. Wish I had stayed short on EURJPY, as you can see it kept coming down. Lot of signals, unfortunately no time to be in front of the computer. I will try to start posting my "strategy" tonight so maybe I can get a couple of people on board with my trading style.
Its all about areas and expected direction (either continuation or reversal). More on that tonight hopefully.

Just so I don't have to keep posting later, because this is really time consuming for me, NU trade at 0.6285 SL moves to break even. At 0.6266 partial take profit, let the rest ride, free trade.
Of course it could turn and hit my SL, but like I said before, I don't mind the small losses. Back later.

TDS, good call on the NZDUSD, it might go down to 6270 area before a bounce, heavy resistance above 6300.
Hayseed thanks for the charts. I want to clarify my statement about keeping comments to a minimum or bare minimum, I meant that sometimes in the forum people start "talking" back and forth about a position, an idea, why this or why that, and I want to keep this as streamline as possible. You, or anyone for that matter, can have a huge post, perhaps explaining trading method, point of view on a pair, etc., but what I dont want is the back and forth. I believe that everyone should take a signal (reason for the thread name), take it to his/her method of trading and agree with it (jump in the market) or disagree (stay out).
So hayseed, thanks again and hopefully you can keep posting more charts (and maybe a brief explanation on how to use it, TF, indi's?)
Thanks
Richard

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Ok, time to talk about my strategy and how I see the forex market. First of all I trade areas and expected direction. I look for the areas of support and resistance and then gauge if the areas will hold. What are the areas and how I do determine that? In the next post or so.
Now, let me get 2 things out first: 1)I do believe in averaging down (or up for a short), and I will explain more about it in the next posts, 2) your trading size (micro, mini or standard lots) should be determined by the account $$ size you have and here are more or less my ideas.
If you have less than $5000, you should trade the micro lots (10 cents a pip), from $5000 to around $50,000 trade mini lots, over $50,000 then standard lot is ok.
I am talking about trading 1 lot the first time and then adding (be 1 extra lot or 2) as the position goes against you. YEAH, sort of a Martingale strategy but more "manageable" or "refined".
I mean, lets be honest, how many times you enter a trade and it goes your way right away? If you do, please take over this thread and I'll follow you.
Why average down or up? Because I hate to lose (dont we all?) and it has happened too many, too many times in my trading career, that I have been stopped out only to see it go my expected way without me. So I have reached the conclusion that it's ok for me to be wrong the first time, even 2nd or 3rd time, but if I manage the position right, I should come out ahead or at least close to break even. The position that i just had on EURJPY proved it. Why did I got stopped out before? I was not using the right contract size.
Now, again, adding to losers I know goes against most "guru's" recommendations, but this is the conclusion that I have done and why I believe that it works.
NEXT POST

First, in order to add to losers, you have to have a couple of things in place: 1) The reason for the trade (what were the charts telling you), 2) The maximum % you will lose regardless how many times you added to the losing position.
Before we go into an example on how it works, let me give you how I decide when or how much to add to a losing position.
Let's say my charts tell me that I should buy EURUSD at 1.1200. The odds of it going to 1.1198 so I get hit and then rebounding from there and giving me a profit are probably higher than winning the lotto and we know how stacked up the odds are against the players on that one. So it would be arrogant, stupid, or idiotic (however you want to call it) for me to expect that at 1.1200 that should be the bottom and then EURUSD will rocket up or at least move in my expected direction and give me a nice profit.
So I place my order to buy 1 lot @ 1.12. BAMM!! get hit, now it's trading at 1.1195. Goes up? I'm making a profit, I decide when to get out.
But now it starts going down, drop to 1.1190, consolidates a bit, drops to 1.1185, consolidates again, drops another 5 or 10 pips, you get my point.
First thing that comes to my mind is, WHY IS DROPPING, if I thought 1.1200 was good support? What do I do: Check the other charts AND check the news. Other charts still tell me the same, so check the news. And here comes your discretion on how you want to play this:
Say, there are no news, or nothing major, or some sort of useless news like A HOMELESS AMERICAN DIES IN FRANCE!!! OK, maybe a few traders got scared (knee jerk reaction) and thought it was an act of terrorism, french people really dont like americans, bla bla bla, and sold the eurusd because the US is going to bomb France. We know that is baloney so here is where you decide, should I add another position or just wait. Now is sitting at 1.1175, its up to you. Personally I wouldn't trade another position that close, SPECIALLY, if I'm going to increase my lot size to say, 2 lots.
Now lets take the other scenario. You get hit and the thing is really collapsing. I would go to the news and you see that Greece says that they have blown thru the $$$ they got and they dont give a damn about repaying it. HOLY COW!!!, would I add 1 more lot? HELL NO!! I just wait until there is some clarification or a rebound from whatever level it settles, check news again and then decide if to add another lot or not. Most likely I would add, if I do, just 1 lot instead of 2.
So, as you can see, there is different approaches to you getting hit on your entry price and the position going against you. YOU BE THE JUDGE when to enter, if to enter.
NEXT POST

Now, let's do the math on why averaging down might work. Say you have an account of $5000 and you will trade micro lots AND you will risk (to make it easier for calculation purposes) 10% of your account or $500.
So you go in long EURUSD @ 1.12 and you are going to risk $500. Well, $500 with 1 micro lot is 5000 pips. Unless the US bombs France I don't expect the EURUSD to drop to $0.62.
So lets say the EURUSD drops to 1.1100
If you were trading a mini lot you are down $100 and your original stop will be 500 pips below 1.12 or in other words 1.07 and if you were trading standard lots you would have been stopped out already at 1.1150.
So you have 2 options: 1 lot with the micro losing $10, or 1 lot with the mini, losing $100. You add 2 lots on either contract size, now your average entry on either one is $1.1133. You still losing $100 on either contract size. But your stops have to move up.
Let me do the calculation and I'll be right back. Got to shower and eat as well.
NEXT POST

Eagerly looking forward to this. I am in front of the computer all day so no worries I can watch for it.

So now, your stop loss on the mini account is only 133 pips aways (you already lost $100 and every negative pip is an extra $3 against the $500 risked). Your micro account has the stop raised to 1,330 pips from 1.1100 to around 0.9770
Now, it drops to 1.1000, it would be foolish to add another position on the mini lot since now your stop is so close to 1.10 that most likely your are taken out.
On the micro account you still have room to keep adding while the stops keeps coming higher.
Bottom line, in this example EURUSD has dropped non stop for 200 pips without a bounce and you have added an extra lot on every entry, but that does not have to be the case, you can add just 1 lot everytime, you can do it every 150 pips, 200, whatever the combinations are endless. Its all on how you feel about the outcome. That is up to you.
To recap, I think that a trade should be given ample margin of error and the entries should be scattered from your original point of entry to at least halfway between your entry and your stop. You can do 1 lot on first entry, 1 lot on 2nd entry, then 2 lots on 3rd, 2 lots on 4th, or 1 the first time, 2 lots the 2nd entry, 3 on the third and so forth. You can space out your entries far apart or close as you wish, BUT THE MAIN THING to find out is WHY THE TRADE IS MOVING AGAINST ME. If there are no apparent reason, then it's mainly technical, sentimental. If there are news involved, then its up to each one of us if we feel that we should keep adding OR maybe hedge by doing the opposite with another pair. For example, on the EURUSD long scenario described above, one can go long USDCHF or short EURJPY. It doesn't work 100% or as they say, its not a perfect correlation, but should mitigate the losses.
So, how about that support and resistance? NEXT POST

Ok, now for support and resistance. Here is a chart of the daily UJ with the main areas I use for S & R. There is more to the chart, but lets do it little by little.

Here is the same chart with possible entries.