FCVR

FCVR

Forex Cliff/Valley Reversal

Hello to all,

I have been inactive at ff for quite some time now. I have decided to share my long term trading style as a place to have fun and talk trades.
I will not be introducing a so called system but a way of trading with a few structures.

As you see the name of thread says it all. I look to pick up trades off the top or bottom when it has stretched far enough from the side way action so to say, get in off the Valley or Cliff for the Reverse move. I only use the daily chart.

I use two sets of tools just for guidance, they are: 200ema and Macd. The ema to show me on one glance how far price has stretched a way and Macd to see if how far and long PA is been on one side for a possible divergence.

I do not use a Stop loss nor take profit. I tend to let my positions have enough room and time to find its way to my direction without any premature interruption that is why I cannot place stop loss on my trades.. I let it free flow with focus on trade/portfolio management.
For such style of trading MM (Money Management) becomes extremely vital. To make it short and understanding it becomes all about betting size which must be very small.

Long term forex trading should be treated like an investment: minimal risk, smaller but realistic returns.
On a 10k account your risk should be no more than $1 per pip. The key is to have a big account in order to capture satisfying returns. That's something most of you may not like but its a true fact of successful forex trading IMHO. Your longevity and consistency is what's needed to overcome in the long run.

Entry details: I dont have one particular firm type of entry. I look for some type of confluence when I place a trade. It could be any as far as a ob/os, engulf, doji, macd divergence etc,.. I look to find some kind of weakness when it looks to be falling off the Cliff or rising off the Valley.. Or, when it is a trending PA, pullback and resuming. At such situations I look to see if I got some kind of indication worthy enough to place an order.

I look to achieve a profit target of 100+ pips and accepting a loss going south on for not much more than 500 pips, that is my comfort range when it gets more than that I have to buckle up and make serious decision on it. I am very flexible when it comes to this part since I free flow and let the market kinda dictate as I could be making 100pips or 500 pips or vice versa, yes I know, the RR is not great but my winning percentage and overall portfolio management prevails, its unorthodox but actual key to my success. Achieving a 5% to 10% a month is a realistic goal, however it may not seem a lot to some or most of you but those who been around trading long enough know what I am talking about. A 5% gain per month is 60%yr!! On a 10k account is only $500 but on a 100k account is 5k and a mil 50k. I can't think of any business where you could make a 50k on a million by just spending half an hour a day 5 days a week with no hassle what so ever.
If I see a trade is going in my favor nicely and strong, I keep it till real threat arrives and when one going against, no reason to panic, I let it be to see firstly how real it is! then how bad it actually can get, and if its really that bad then I look to exit off the pull back for lower damage which most time it resumes back for a whole reversal move and have become some of my biggest winners... it would also be all decided based on the health of my whole portfolio to make exit decision on winning or losing trades.

The time I spend on trading is no more than half an hour per night just to observe my positions for any changes. At this time I have the daily candle for the day closed to make any decisions about. I live in California so I am on west cost time zone. I do check my positions occasionally during the day but rarely make any changes on an ongoing candle, ever.

I am sure there will be lots of questions and concerns which I will address them when they come up as your interest may arise.
My hope for this thread is to become a good place to have fun and discuss trades more than anything else... share thoughts on developing new trades or ongoing ones, important events, management, etc

I will also intend to attach a small TE to this thread which will copy my trades to it, so things are more realistic and transparent.
on the following post I have attached a chart picture just for you to get familiar with my chart. For now I will put up screen shots of my new trades and often talk about it till I close it for a loss or profit and I very much invite you to do so as well.

lets have a great time here...

usd/cad short... I had a sell order on which triggered a few days later and doing well so far.. is merely based on the nice engulf on top of the key where pa has stretched nice enough from 200ema.

Also in this trade, gbp/jpy short... I got the engulf with bounce of the last recent high where I have drew the line, it was doing well but now its stuck maybe heading back up who knows time will tell.

hello Tycoon,

interesting way of trading you got here.
risk: you say on a 10k account, $1 a pip.
normally risk is measuring stop loss and account equity.
seeing that you don't have a SL, what do you mean exactly with $1 a pip risk?

Hi yonnie, thanks for your question.
Look i gotta bet and i got to go by something... So,
I already assume every trade may go 500 pips south on me, that is 5% of the account. But on a average is about half of that and that is a ok drawdown even at 500pips south with a few trades going on at the same time.
I hope that answers your question and thanks for interest.

hello Tycoon,

thank you for your reply and understood.

one of the systems I trade is the same as yours, but with a little twist.
if for instance GBP is meeting resistance, I pair all 7 main currencies with GBP as long as it is swap positive.
of course my positions are a lot smaller at just 0.15% each.

I will also cost average at considerable distance from first entry.
my EUR trades are in the red at the moment. no worries - small positions.
when it looks like the EUR is stalling and is going down, I will enter new 0.15% positions as long as price is
at least 3ATR from first entry at that moment.

I am also on this losing trade, eur/aud short triggered couple of weeks ago.. I spot a nice doji/hammer followed by a nice engulf solid bear candle... but it's in a loss now currently awaiting to see what it does this week sitting at about -300 now... I like to see how it reacts at the last Septembers high and then to make a decision about it, but, hopefully it drops down from where it is now at the small bump

Nice long-term/investing approach.
Do you care when having high exposure on a single currency ? Or you do trade pairs independently ?

I sure care, you have to.. however it has to be pretty evident and big.
Thanks for your reply.

Nice thread...not to many threads looking at long term trading.

Thx, glad you like it.

Can we assume you are watching EU for a possible reversal?

And what about the spike on ec? Would you be watching price action around here?

EJ has similar price action to the UC trade you took. What are your thoughts on it?

Hi, yes watching it, nothing yet though.

Ok thanks.

I don't trade this pair.. looks like a mac divergence shaping nicely, I would be looking for a solid engluf to confirm it.

Ej was good to go on the solid string engulf that you have highlighted.. the only reason I am not in it is bcz I was already on gj and kinda loaded with a few other trades.
However I think is solid for a good profit. It's in my radar atm if good hammer or engulf shows up on a dB I wold take it and bank what I can on ej.. that's the plan jpy for me for now.