Thanks for that write up, I appreciate it, it takes a lot of time. I didn’t get back to you on Friday because I was arm wrestling Ikea furniture again and the NFP day is a dangerous one to trade.
You are right, I did not consider the swing height. I guess it is like a yoyo, the string length is the same so the amplitude of the swings will not change. I will need to remind myself to also look at this when I look at the market. I noted the resistance that you drew, but I did not think that it would extend so far down.
I have a question, if the price had approached that swing high using an N-wave structure, like going up stairs, instead of making an impulsive move, like a piece of elastic stretching, would you have also been certain of the retracement?
One of the aspects of the RH being kicked from a previous site is that I am still on their member list, and I guess they are trying to raise their click-rate. From time to time I read stuff that is interesting and this particular mail-shot had an enticing line. So I went looking…
6. If you were to teach a class of newbie traders, what would be the very first thing you’d tell them about forex trading?
Don’t start with Indicators. Just pull up a plain Price chart and stare at it.
Then stare at it some more.
Then look through a lot of different charts for a lot of different pairs, and try to get a feel for how a chart moves, how patterns play out, and how a pair can move over time. The second thing I would teach them is find your preferred lane and trade like that, don’t just trade all the hours with no focus. EOD trading via orders is my staple – it’s what I enjoy and it works. My Intraday trading is secondary.
Someone else will disagree entirely. But as long as we each know and understand why we are trading the way we are trading, then we’re both right.
I read that, and thought of you, Jim. @Leatherneck
I doubt my reflection is the cause for both wild and dull markets. I usually correlate the former with high impact news and geopolitical events, and the latter with bank holidays.
I love that man. I was holding some longs on the usd/jpy in late January. The market went south pretty hard. Next thing I know, it starts shooting up and I break even. Why? Because Trump went on TV and said “I want a strong US dollar”. That man saved me from some hefty losses. I love that man. Also, there is the Trump curse, so it’s best to be on his good side.
The S&P just printed a death cross and the Dow looks like its gonna follow.
That’ll take rate hikes off the table and be bad for dollar and good for PM’s.
On the 15 min we see that we have an up trend that we can see up until the 1 hour chart. We have just had a massive impulsive move the price has stopped on a weekly close and formed a hammer on the 15 minute. It is quite likely that the price is going to move up and close the gap, probably moving past the magenta monthly line to the obvious resistance there. Later the price wedged on the 1 minute which was probably a better entry point.
I assume no long terms plans to stay where you are if you are suffering with Ikea !
I hope this is not misconstrued as being a smart arse but NFP or indeed all the other Red releases doesn’t really alter the sequence of events and in many ways it’s a great help. Where it bounces both up and down clearly shows you where the orders were sitting and you can keep those levels for a rainy day. I’m not talking out of my arse when I say this but picking out those bounces is very much the same as any other day in that 20% of the time it will miss. If you dig on some of my old posts you will see I have evidence to support that, picking the bounces prior to release, so it’s not anecdotal nor is it anything super human. It’s just familiarity. The only difference is the pace. Anyway I’m not advocating trading it, like most things, you walk before you can run.
It is interesting that the same weekly levels I placed on my chart to discuss your prior long trade is where it bounced from again on Friday just after NFP release and featured again today. Compress your hourly chart and take a look back March to May 2016, Jun-July 2016, Aug 2017, Oct 2018 and perhaps the most interesting is if you go back and look at 23rd June 2016, referendum day, it dropped 500 pips from this same level and just like the actual Brexit farce we came back to where it all started. Isn’t it a funny old world !
Well nothing is rigid in terms of how long that string is, I generally compare it to elastic, the more it stretches without any pullback the higher the probability of some ping back.
I’m not sure whether you are talking about those weekly levels I drew here or not, with saying how far down it would extend ? Or do you mean you did not think it would bounce down so far to find support ? As it did a fairly normal bounce back to where structure was broken.
So if looking at that channel type structure then no but I don’t trade shapes etc I trade the level. I only using the waves on the final approaches using the 1 min and each time it’s never perfect stair step approach like in the text books as you know.
I took that short trade based solely on all that I’ve said here before and gauging that final run up on the 1 min and the tick activity telling me it looks like there is still some emotion at the level, that’s it and the fact that there was untested space below. As to your question about being certain of a retracement, I’m never certain of anything. If you are certain, you have clear bias, I take the trade in the now and the last piece of the puzzle told me I’m good to click for at least a small journey. Yes there was potential for more but happy on this occasion to grab the loot with what I consider to be very small risk. That to me is main aim of the game, always trying to mitigate risk.
So if we look at both trades on the probability of expectations I will always say mine had the least risk attached to it. I had stretched elastic, a historically important level, multiple interactions last few years, 2 recent significant weekly levels, building tick volume on approach.
Added risk to your long trade. Elastic stretched on everything from 5 min to 1hour ( can it stretch more ? Of course but we look at probabilities), longing so close to weekly level, not longing from at least a 1 min pullback position.
Another thing I don’t buy into is the talk about momentum and impulsive moves etc. I see it as no man’s land, it’s insignificant, it really is the space between any low and high, the path to next batch of significant orders and chasing it really is a dangerous pastime IMO.
Again SM this is all according to how I view things and we know we don’t all see things the same. It’s probably best if you ask others as I clearly don’t trade or view the market in the way you do, my specialist area of proficiency is identifying low risk entries, not entering once a move is started. I’m not saying that is the only way but I can only comment based on what I do and I can’t rationalise how you view things, so can’t help with talk of hammers, wedges, trends or impulse moves etc.
That was from Friday, I haven’t traded it as not been around, it still remains to be seen if around 1.1343 will be swing but I picked those out from prior daily levels that looked ok to me on the hourly chart. I would not just trade the levels without closer scrutiny and the usual ritual on the 1 min, that is always the finale.
EDIT: Can’t put this in separate post because of the 3 consecutive posts rule.
No mate, just moved into a new place, but it is completely unfurnished so I am building everything myself. Ikea did offer to build everything, but the engineer in me is too proud to let someone else build all my furniture for me. I regretted that after building my second wardrobe that wasn’t cut exactly right so I had to Macguyver the slidey door onto to it so that it works. I don’t plan on staying in this country more than 5 or 6 years so i’ll be happy to leave most stuff when I go.
I do appreciate you writing those long posts and I am sure that more people than just me are reading them. The reason that I keep talking about candle patterns, consolidation, impulsive moves, etc etc is because that is material that I have learnt in the past. I don’t think that I ought to be listening to everything that you are saying and trying to become a clone of you for two reasons. Even someone fresh faced and with no idea about the markets wouldn’t see things the way that you do because we are all different and second, I can’t really throw away everything that I haven’t learnt in the past. What I need to do is to understand what you are telling me and then add that to the body of knowledge that I already have to improve my understanding of the markets. I wouldn’t agree with adding extra indicators on a chart to try and improve outcomes, but since we are only talking about looking at a blank chart and trying to understand what the market is telling us, then I think that more knowledge is always useful. So please understand when I don’t follow you exactly.
In saying that, here is today’s trade:
1 minute at the top, 5 min in the middle and then 1 hour on the bottom. On the one hour, we can see that we are in an uptrend, but with a large amount of volatility. The swing heights are about 100 pips high, except for the last one which was a little shorter. Afterwards, we can see that the price did not make a new high whereas it had done so after the previous swings. Hence, after the impulsive turn down I was looking to make a decision when the price crossed the blue line. I felt that the bias of the market had changed and we were due for a downturn. I sold when the price broke the swing on the 5 minute (that should say breached), took profit about 7 pips later at the low and then let the remaining position run until the next blue line. On this occasion it worked and I read the market correctly.
Stu, I imagine you are going to criticise my entry point, but I am having a high success rate on these. You have taught me to look at the swing heights, price returning to previous swing points (analogous to closing a price gap) and to pay attention to the hourly closes. This is helping me, but it is difficult to incorporate everything into one congruent whole because I have only just learnt it.
Hi Stu, from what you are saying, your zone is the bigger blue zone; whereas, my zone was the thinner yellow zone above. I simply wondered why you drew the zone so big.
I agree mate but equally I can’t change my thought process to fit you, I can only explain things the way I see it. I am just explaining why I don’t respond on the specifics of those things you mention that are alien to me. If you quote me directly I give you my opinion as you asked for help. If you think I will be critical and don’t want me to be, don’t quote me is probably the best. If what I say doesn’t sit well with you that’s absolutely fine. The way you want to trade and what I have to offer are not compatible mate just accept that and move on with what you have or you could end up with a very grey beard and still collecting bits of info from here there and everywhere 10 years from now.
Good week but too busy to post. Off early and back late. Posting this from this morning as a example of “lady luck”. No matter how talented a trader you are, you will occasionally have to deal with her. One of two things will happen. She will smile and give you a friendly nod or slap you upside ya head.
Entered this trade as the 15, 30 and hourly all bullish. Gold and oil up so felt it was a good entry. She started dropping – that drip, drip that is a killer. Had my finger on the kill button if she dropped below 25 for a 3.25% so loss - then BOOM - up she went. Italy news. Watched her - knew the pattern and got a additional 4 minute short. Ended up with a 3.87% profit. Been some good ranging trades if I would have had the time.
I feel that coming here to post my thoughts about my trades is actually helping my trades and this week I have made 12% off of a 1.6% drawdown over 8 trades (each trade is two positions). This is only on demo, but I don’t want to bet real money until I can do it on demo for a few months. Hence, I want to keep posting and I welcome discussion, but that doesn’t actually mean that I will change anything
Here is today’s trade. It looks perfect, which is really luck more than anything, but I was able to predict the correct direction, enter near the top and set a TP at this bottom. I took half off of the table at the halfway point and set my SL to b/e.
On the 30 min timeframe we can see that we have a downtrend. The last swing high doesn’t make a new high, but makes two areas of consolidation before sharply breaking down. This is bearish indication number 1. If we look more closely, we can see that the price retraces to close the gap made by the impulsive move down indicating that it is likely to continue its move downwards; bearish indication number 2.
The one minute shows an obvious N wave structure that is moving down. I have a support from the 30 minute and I was watching the price as it approached. The price stalled on the previous support, didn’t do anything for a few minutes before moving downwards with a bigger candle than the last few candles. I sold on this candle, watched the retrace and then saw the price descend to hit both TPs. Nice when it all works perfectly.
Jim, today Draghi was speaking after the rate announcement … guaranteed EUR weakness.
However due to too much going on at the moment I was not watching…
I usually correlate the former with high impact news and geopolitical events, and the latter with bank holidays.
You already did, you got in where the least amount of risk was, in prior trades you haven’t done that.