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fxpaulm
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Everything posted by fxpaulm
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JP, No worries, just asking. I'm not looking for a "way" or trade advise or anything like that. Just being a casual observer I think Gamera is often late and uses SLA poorly, perhaps depending too much on lines rather than price behavior. Good example is trying to use lines when price is in a range -- one should not use demand/supply lines when price is in a range, instead use AMT. That is just one misuse of many, but everyone learns differently and must find their own way of understanding. Trading is a job to me and I sometimes like to talk theory, hence my question about action/reaction lines. Personally that is way too many lines for me, but to each his own. I think Wyckoff said to look for the motive behind the action and interpret the behavior of the market, not getting caught up in lines which are in the individual traders mind. God luck.
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JP, Are you using action/reaction lines or something else?
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The pound has been in a tight consolidation for 7 days. It has broken some TL and has been making higher lows. The new highs have not been very substantive and the recent decline has been decent at a little over 4 cents. Problem is that long term it can fall much further. The trend is down on the daily, but this may be a moderate correction starting. I'm waiting to see how it reacts off of the TL.
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One of the benefits of trading higher time-frame is the time it gives one to really try and understand what price is doing. Looking at the pound/yen chart it is clear that this is not a hinge, if it is, it is not a very good one. The main reason is the dynamics do not align with what you would expect if it were a hinge. Knowing that sheds more light on exactly what price is doing. For instance, price is approaching a resistance area that it has been unable to break, but the thing to notice is that price is making higher lows. maybe it will reject again or maybe this time it will break through, but one thing is for sure price is telling us what it wants to do.
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Update on the two pairs shows that the GBP/JPY broke up, but not very decisive and the other is just hanging out.
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Seems to be a pattern in the cross pairs.
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Chart says it all, but if no movement soon this may just trickle out of the hinge and lead to nothing.
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Taking a break from SLA and getting into Wyckoff I came across this EUR/CAD chart. Price has rejected the 1.4450 area and the last swing made a new high. As long as price does not break the low, I would think that the path of least resistance is up. Today price again tested the 1.4450 area and stayed above the lowest low. I believe the pair is in Position 1 and should go up, plus the R:R looks favorable to the long side. I would be interested to read what some Wyckoff traders think of the chart.
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The Pound broke the SL, ret., and fell again, but not making new low. It now looks to be forming a hinge and we wait to see which way it is going to go.
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The Aussie trade was entered and it profit was based on how one managed it. If I waited for DL to be broken, the trade would have b/e at best or lost 1 -2 pips, (DL is not pictured). However, trading is not static and is extremely fluid. Taken into account the trading range between .9387 - .9372 and seeing price reject strongly when it approached it again, it would have been justified to exit the long or move SL up very close. Another thing to have been aware of is that price ret. 50% of the recent down leg. If your big on confluence, then this would be another factor to exit, (the 50% ret. is not pictured, but is clearly evident).
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The Nzd/Jpy is a good example of the SLA keeping me out. While the SL was broken, price never came back to trade in the trough and the long trade was never triggered.
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Here is a trade set-up in the Aud/Usd 4-hour. The chart is self explanatory.
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Here is the Nzd/Jpy chart where the SL is broken on Daily. The green dot is where a buy order is and I've included the 4-hour chart. Here I can see that price is approaching the low again and price broke a DL not pictured. I am basing trade on Daily for this pair and would still buy as long as the low was not broken because then I would just fan the SL and there would be no buy.
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Here is the Pound on the 4-hour that has broken SL.
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It has been awhile since my last post and during that time I have tried to get a better grasp of SLA and how to effectively use it in my preferred market, forex. Along the way, I got sidetracked and turned in multiple directions just trying to re-invent the wheel, but I always tried to get back to SLA. One problem was the lines, hard to believe straight lines would be so much trouble, and exactly how to best use them. There are several examples on the SLA thread where the lines are skintight and others where the lines provide some room. I’ve decided to use the DL/SL that give price room, but not so much that they do not serve their purpose. I am using the approach that Db spoke of when he wrote “For those of you who are taking this out for a test drive, if you are trying to catch every twist and turn, you should compare your results with what you might achieve if you were to give price its head and just flow with the major shifts between demand and supply. While on the face of it you may be "giving up" points by not keeping your DLs and SLs skin-tight, you won't be getting chopped up and frustrated, either.” I also will be using mainly daily or four-hour charts to trade from because this gives me plenty of room to catch the runners and fits my trading best. Now that that is out of the way I will post charts as I see them and trade according to the rules of SLA.
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The Pound and Cad trades were never triggered and both have broken SL. The drill is to wait for ret., then buy in the crest. The Swiss/Yen trade is still going. Attached are the relevant charts.
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The Gbp/Usd broke SL and I have buy order in at 1.6739 and the Usd/Cad broke the DL so the short order is placed at 1.0949. I'm still in the Chf/Jpy. Here are the two charts for the pending orders.
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While waiting patiently on the Gbp/Usd and Usd/Cad to retrace, I thought I would post my current trade that is live. It is in the Chf/Jpy and I'm short on the break of the DL and the retrace. The short was taken at 115.60 and I have a stop loss order in at 116.25, this order is only used for emergency exit, say i lose connection and am unable to manage trade.
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Here is the Usd/Cad and the Usd/Chf, The Usd/Cad just broke the DL, so wait to see if that holds then short the ret.
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It is my intent to trade SLA based on the four chart. That being the case, some charts with SL/DL.
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Here is how the A/U trade ended up. A break of the SL and exit at 0.9380.
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I'm short at 0.9397 and thought it would be time to post a longer term chart of the pair, so here is the daily. Price reached the upper channel line on both the daily and weekly. Trade is still based on the hourly and now just need to manage it. Also, obviously if price breaks the SL the trade is exited, but I also have a stop at 0.9430 just in case my computer blows-up or I lose connection.
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I have order in to short A/U at 0.93970. Attached is what I'm looking at and why the trade. It broke the DL, I waited for ret. and am now looking to short in the trough of the ret.
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The long would have been exited with the break of the DL, now we wait for ret. to get another short entry.
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The A/U did as expected. I did not take the trade because I was asleep. Here is updated chart.