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firewalker

Trade Discussion and Analysis

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  pipMonster said:
It's most likely the 15-min chart triple bottom at 205.26, which is within the 20 pip zone of previous 240-min support of ~205.15. If anything, this is finally the level to be long from as the Asian session quieted down in a big way.

 

Cowpip - I hope you have your alarm set to check in on your trade before the 4 hr interval is up because your trade is jamming!

 

I could be wrong, but here's where I see support. Price right now is attracted by the middle of the range from April & May, which is quite typical behaviour. I would expect some pushing and pulling around, then perhaps a retracement back to 208'ish before eventually reaching 204-205.

 

7513d1218615209-live-fx-trades-gbpjpy3.gif?stc=1

 

On this timeframe, I would only take trades from the outer extremes, but that's just me :)

gbpjpy3.thumb.gif.1ef8997b67256d190b7656966ec9b54d.gif

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  firewalker said:
I could be wrong, but here's where I see support. Price right now is attracted by the middle of the range from April & May, which is quite typical behaviour. I would expect some pushing and pulling around, then perhaps a retracement back to 208'ish before eventually reaching 204-205.

 

On this timeframe, I would only take trades from the outer extremes, but that's just me :)

 

I don't look at it like you though. I do not think ahead at all. I act on the now and now alone, irrespective of the timeframe etc.

 

Whilst you may well be right that the overall trend is still down, price has rejected 206 and sellers are taking some profits/buyers stepping in. Until such a point where the opposite happens at resistance, I will be staying long.

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  firewalker said:
Not sure what you mean by that, a trendline is not an indicator and it's not lagging either. Obviously you don't need a trendline to tell you that momentum was picking up to the downside, but I just wanted to illustrate it graphically...

 

I could post you 3 charts from occurances on my screen right now contradicting that view! ;)

 

  firewalker said:
Doesn't sound unfamiliar really... last time I messed up was when I had other things to attend to. I could trade, but I had only 90 minutes and in that time for some reason I desperately wanted to put a trade on and didn't follow the plan. Why do we let these external factors influence our trading decisions?

 

I know, pesky life getting in the way of business and money!

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I think part the problem with mycurrent ways is that I am reluctant to go under 4hr charts as it means I end up seeing multi options, and taking more trades. One of the good factors about the current way is no chance of over trading.

 

I see your points FW and when I have 5 minutes, I will post 10 charts that chuck the trendline theory out the window!

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  wasp said:
I think part the problem with mycurrent ways is that I am reluctant to go under 4hr charts as it means I end up seeing multi options, and taking more trades. One of the good factors about the current way is no chance of over trading.

 

I see your points FW and when I have 5 minutes, I will post 10 charts that chuck the trendline theory out the window!

 

Looking forward to that :)

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  wasp said:
You dare doubt my skills! :fight:

 

Always :o

 

That last leg down in GBP/JPY just looks awfully much like the ones we had in the indices at the beginning of this year. Sure you can buy on the way down and when selling is exhausted a decent bounce can occur, but that doesn't change the fact it's risky business!

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  firewalker said:
Always :o

 

That last leg down in GBP/JPY just looks awfully much like the ones we had in the indices at the beginning of this year. Sure you can buy on the way down and when selling is exhausted a decent bounce can occur, but that doesn't change the fact it's risky business!

 

Oh yes, its always risky business though, that's just the nature of trading.

 

Both these charts end at the same point............

 

A) up

B) down

C) sideways

 

?????????

a.gif.9a4bfab68333df4ec5e3dda82020933c.gif

b.thumb.gif.09cbb78836d837d3020ce4b06450de0d.gif

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GJ is amazing... One week its hard to get out the 100 pip range, this morning its pulled back 175 already and only just giving a solid long signal now!

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  wasp said:
Come on then Belgium?

 

Where is the long signal here? (I am long and nicely in profit based on my 4hr rules alone).

 

Just for the record, it's not because my plan doesn't give a long signal, that you or anyone else can't make profit on the long side.

 

Having said that, if I was short, and if I had reason to believe your lines at 205.08 and 205.92 represent important support, then I would definitely close out a good part of my shorts. I would not reverse, because the odds favour a re-test, V-reversals are rare.

 

Now, as the downtrend accelerates it usually ends in a selling climax. I would be looking at volume for clues here, but since we don't have that I can only observe price. I would zoom into a smaller timeframe and see what happens: the close of that candle on the right chart clearly indicates buying pressure coming in. If, again this is crucial, this happens to occur on support where you say it is, then a lot of people will be looking to buy some here.

 

So yes, if that suits your style you might go long here, but I would not given the potential reward is not that much. I'm not sure at how many pips you're looking, but I prefer trades with a risk:reward of 1:4 or higher.

 

I'm interested to know what your stop is on this trade, and the target...

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Entry @ 206.18

Stop @ 205.60

Target @ none

 

Now shoo, I was up 100+ just now and missed it as it dropped and gave all back whilst talking to you!!!!!

 

 

  firewalker said:
Just for the record, it's not because my plan doesn't give a long signal, that you or anyone else can't make profit on the long side.

 

Having said that, if I was short, and if I had reason to believe your lines at 205.08 and 205.92 represent important support, then I would definitely close out a good part of my shorts. I would not reverse, because the odds favour a re-test, V-reversals are rare.

 

Now, as the downtrend accelerates it usually ends in a selling climax. I would be looking at volume for clues here, but since we don't have that I can only observe price. I would zoom into a smaller timeframe and see what happens: the close of that candle on the right chart clearly indicates buying pressure coming in. If, again this is crucial, this happens to occur on support where you say it is, then a lot of people will be looking to buy some here.

 

So yes, if that suits your style you might go long here, but I would not given the potential reward is not that much. I'm not sure at how many pips you're looking, but I prefer trades with a risk:reward of 1:4 or higher.

 

I'm interested to know what your stop is on this trade, and the target...

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  wasp said:
Entry @ 206.18

Stop @ 205.60

Target @ none

 

Now shoo, I was up 100+ just now and missed it as it dropped and gave all back whilst talking to you!!!!!

 

That's exactly what I was talking about... a short-lived bounce. Risking 58 to gain +100 is only just 1:2 and that's lower than the trades I want to select. But that's just me :)

 

PS: good book

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was anyone expecting that 200 pip 30min drop?!

 

Right. I am off to nurse my wounds as this has been the shittiest week of the summer for me and the best movement to rub further salt in the wound :frustrated:

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  firewalker said:
I don't want to sound smug, but I thought you read my post in the analysis thread... especially the part about going long in the middle...

 

sod off! :crap:

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yep, I was totally expecting it. Reuters was putting out a good bit of info that stated UK data was expected to be very weak. The UK is on the verge of, if not in, a recession. Add to that the low liquidity of the market in August and traders can expect substantial movement. I don't know if you checked out cable, but it tanked equally as much.

 

I was short eur/jpy and scored a 'measly' +30 before price encountered the 38.2% fib from the hourly chart.

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  JT1 said:
I've had a go at what i think wasp is looking out for with the S/R, but on the daily GJ chart, with one trade max. per day/candle.

 

 

I've added S/R lines where price reacted back to about 1992.

 

 

Entries are based on a rejection of/reaction from an S/R line.

 

Entries are also based on if the open was closer to the line above or the line below.

 

 

The candles with magenta arrows only, represent entries that should/could have made profit.

 

The candles with crosses and RED arrows represent taken trades that i think would have resulted in a loss. The arrow shows the direction that the trade was in.

 

The trade entry arrows are placed as close as possible to the S/R line used to determine the entry.

 

 

Some trades go into a decent profit, then back to zero on a later candle, but what can you do, without a trailing SL.

 

 

The chart is fairly busy with 36 trades in 5.5 months. Maybe a few too many trades?

 

 

I hope its not too confusing!

 

 

What do you guys think of this. Am i getting the right sort of idea?

 

Cheers.

 

Well I've slightly modified the chart, changing a few trades, replacing the arrows with simpler ticks & crosses (wins & losses), and looked back over the last 119 days, which is 45 trades.

 

I feel the walkthrough simulation is fair and not cherry picked.

 

With a 150p max sl, there were 15 losers, 27 wins, and three trades that would have benefitted from a BESL or TSL from +160-+272p

 

The overall net profit being +5130 pips.

 

So not bad i think, as the method/rules/logic are consistent and make sense.

 

This 5.5 month period shos a mixture of chop ad trend, mainly chop i would suggest.

 

As wasp mentioned earlier, the problem with this S/R SAR method is the possibility of messing up the trend - i.e. trying to SAR on a rejection of a S/R level, only to see price/trend continue to move against you.

 

PS. All my S/R lines were drawn using the open/close of the candle (the body).

 

PS2. If you ignore all my pointing label lines, its not all that complicated! Milod eye strain only!

5aa70e7c05796_dailygjsr.thumb.gif.2b8f4fc2feb82c4cae7562378e6b8347.gif

Edited by JT1

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I was in very nice profit until that blasted BoE report came out (while I was sleeping!). Took my stop like a hot knife through butter.

 

This has been a beautifully ugly week.

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What in heavens name was so bloody bearish about the BoE's inflation report? I don't see it! Certainly nothing justifying a 200 pip drop in cable and a corresponding free-fall in GJ! The market is in a "let's fall and see if the firemen can catch us" mode.

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Now I have stopped beating myself up and put my frustrations into my blog, I have come to realise that a 240m S/R plan is not any good alone, despite the last few weeks being near perfect!

 

These knife catches are causing problems so I will now incorporate a 30/60m S/R chart also and only reverse if those timeframes also agree. Bit of testing to do there but need something else as this is a tad too unreliable.

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  wasp said:
Now I have stopped beating myself up and put my frustrations into my blog, I have come to realise that a 240m S/R plan is not any good alone, despite the last few weeks being near perfect!

 

These knife catches are causing problems so I will now incorporate a 30/60m S/R chart also and only reverse if those timeframes also agree. Bit of testing to do there but need something else as this is a tad too unreliable.

 

What we've seen in the last couple of days is a little bit on the unusual side, Wasp. Is it possible you will be over-complicating your proven strat solely due to unusual circumstances? Or are you looking for an addition/confirmer solely for these times of unusual circumstances?

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