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firewalker

Trade Discussion and Analysis

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Right, I don't care what FW might say, he didn't think of it! anyhow.....

 

Chart should be self explanatory but notes on slight adoption to current way of trading. Adapting to any situation not just a set of rules.... Wouldn't want to go against new_traders theories!

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idea2.thumb.gif.cccf0b08627df3b0ff988756b0d7eeee.gif

idea3.thumb.gif.52407a766a5cf655d77a23513871c7db.gif

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Prep for week ahead.

 

Key levels and areas I will be watching for.

 

Rather than pollute the live FX thread and for ease for me, if anyone is watching(! :(), I will be trading with a strict 25p stop so I will only post entries (ie EJ Buy/Sell @ 156.00 - without posting the stop)...

240m.thumb.gif.9faddded9dc3037552cd438dd592519e.gif

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5aa70e6440c22_6m2.thumb.gif.19ef29c4916ab5dc035ef24056b4ab4b.gif

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I should point out I will probably cease posting these analysis here, and keep them together in my blog. It's easier for me to keep them together. Anyway, whether I post them or not doesn't matter much, I make these analysis each day for my own. However, I found today especially interesting (volume wise)... attached is 5-min chart of the DOW e-mini. Keep in mind that I am typing this 90 minutes before the close so I don't have the full picture yet.

 

Note that all of the lines on the attached chart were drawn there before the day opened, in fact these are the same lines that were already on my chart on Friday. These lines are S/R, depending from what side price is approaching it. The only added is the light blue dotted one, to indicate the support zone might be slightly lower than 12970.

 

Green dot is the entry. Other dots are scale out, exit points.

I entered on a failure to break support (entry on a 2min timeframe). I did not anticipate such a strong rally, and I was prepared to close my trade quickly in case there was no follow-through. But, there was, so I had no reason to exit and had my eyes set on (a) the next resistance level at 13030 to scale out, and (b) a break of this. The next resistance would be a good 100 point further down the road, around 13130.

 

Why did I believe the odds favoured a break of 13030?

(1) we had higher highs and higher lows on the hourly chart, which means the last swing was higher and this still signaled strength

(2) the last we touched 13030 we sold off, but the selling was less aggressive than before, and the market quickly found its way back up

(3) it's the third or fourth time we are at this level

 

At 13030 ("X") there was a, typically seen at highly traded levels, volume spike and I suspect a lot of people were trying to pick a reversal there. You never know if it's actually going to break, so I took some off. Volume retraced in the following 30 minutes, and a break higher followed. After that I drew a nice resistance line (dark blue dotted line), because I realized the "line in the sand" might not have been 13030 but 13040 instead. When price, near the end of the day, came back at that level and stopped its fall at 13040, that would seem like a more correct number.

 

At "Y" another volume peak and a little stall. I had no real reason to exit the trade: the demandline was far from broken and there was no lower high. But, as we were approaching lunchtime, and since we were trading around the middle of 13030 (support) and 13130 (resistance), and since we had moved +100 points in such a short time period, I felt enough reason to lighten my position at this point and move my stop up (all of this was posted live in the trading thread and the chat room).

 

I kept my eye on the screen a while longer and was pleased to see price already taking off towards the next resistance level. I exited the rest of my position on the break of the demandline (third pink dot). The final exit and potential reversal signal (depending on the strategy) was at "Z" for me. Huge volume with no follow-through, after which price falls back below resistance immediately. If I'm correct, I believe Sperandeo calls this a "2B setup". At "Z" price makes a higher high but comes down and breaks the last swing low (13110) on decent volume. I was already out by then and didn't plan on taking another trade.

 

I entered pretty much near the low, and I exited pretty much at the end of the move. This is one of the best trades I took in terms of "riding the move", but so notes to myself:

 

-> this is the second time in as many days that the final exit signal shows a potentially very profitable SAR

-> patience is a virtue, and although the first scaling out was justified, the second was more on "taking the profits" then relying on the exit signal.

 

If we break back below 13030, I believe this could lead to some selling further along in the week.

 

attachment.php?attachmentid=6538&stc=1&d=1211227170

 

Observatory note: despite the YM re-testing the recent highs, the NQ made new 4-month highs (2050) and the ES got back into price levels, unseen since the beginning of January. Although all of this signals strength, it's also remarkable how fast any attempt to go higher gets rejected and it sold off again.

ym_20080519.thumb.GIF.03709458f6516154db2805d6d46ddf1e.GIF

Edited by firewalker

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I know last time I looked for a down day, market caught me out on the wrong side. But given yesterday's action, it's pretty hard NOT to think of a down day for today... anyway, I'll stick my head in cold water before the US open so I'm free of any bias :o

 

Daily chart from YM:

 

attachment.php?attachmentid=6558&stc=1&d=1211275879

 

And daily ES:

 

attachment.php?attachmentid=6560&stc=1&d=1211275994

ym_20080520_daily.thumb.gif.71b38a337d005d7b2fd02151efb847f4.gif

es_20080520_daily.thumb.gif.b386be095f96f2274315ad9c3a7728de.gif

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Whilst trying to be a trend trader, I know the markets are not that simple, especially on a short term intra day view.

 

I'm watching, as per the att., main levels on the hourly chart from the 240m (bold) and the 60m (norm) levels with the short term trends crossing over on the 30m. This is a slight adaption to what I have been doing as I (now) try and incorporate both, and seems to be going well so far...

 

A tasty equilibrium.

multi.thumb.gif.adac765a4284438b66b7ee8f21e684b3.gif

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Whilst trying to be a trend trader, I know the markets are not that simple, especially on a short term intra day view.

 

I'm watching, as per the att., main levels on the hourly chart from the 240m (bold) and the 60m (norm) levels with the short term trends crossing over on the 30m. This is a slight adaption to what I have been doing as I (now) try and incorporate both, and seems to be going well so far...

 

A tasty equilibrium.

 

Have you got some kind of back-up plan, if the market stops trending nicely for say, couple of weeks? I don't know about FX, but in indices the amount of trending moves lately has been extraordinary... once it goes back into ranging mode the fun will be over :\

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Have you got some kind of back-up plan, if the market stops trending nicely for say, couple of weeks? I don't know about FX, but in indices the amount of trending moves lately has been extraordinary... once it goes back into ranging mode the fun will be over :\

 

Well FX is renowned for being a trender first, range bound second.

 

This is why though I am trying to mesh the 2 (trends and S/R) together so whatever the condition becomes irrelevant.

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Despite my constant postings about the 4hr chart and the obviousness of the upmove, stage by stage, I unfortunately missed this and gave back my overnight gains...

 

This is not usual behaviour for EURJPY IMO though....

5aa70e66d2130_goingup.thumb.gif.238a57f73b41869328c76e41905e52b6.gif

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whats this "Money Supply" news?

Not marked on the FF eco-calendar. news was mostly german stuff.

 

EURJPY rockets skyward, as does EURUSD.

 

I have no idea as never pay attention to the news.

 

The clues were there in the charts but just outside my plan so retraced to zero and missed it all. Very frustrating.

 

It moved the kiwi alot too yet the USDJPY hardly budged!

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Well, a dire +103 so far on the week. This mornings shot up wiping overnight gains. Whilst the 4hr level was apparant again, my other 'signals' weren't showing so missed the rise too..

 

Waiting for a short setup now after a rejection (again) of the highs.

 

Did anyone catch it this morning? This range, albeit big enough, is getting on my tits.

5aa70e66da6c7_bouncybouncy.thumb.gif.a7c2c1bc30e59c99e3f2f6c742e8ff15.gif

Edited by wasp

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First level at 163.40 is holding off at the moment. Could be the point for a little retrace and print the higher low.

 

Really wasp, yes wasp, ahh, cheers for that. Good to have all these FX traders here to talk these things through with. I know wasp. Exactly wasp.

 

Bit dead in here, shall we go down the pub wasp, okay wasp, I'll get me coat......... :D

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these trend crossover / reversals are not working so well after all......... even with S/R levels from the 240m and 60m, I'm still getting fake signals which, I can SAR into or watch continue. ATM though, its good for half the position, take a loss and watch it continue to rise...

 

I can't put my finger on it though. The first HrL or LrH is faking it then the 2nd is right but I could post a chart where every time, the first cross is the one and any later and bye bye.....

 

There is nothing that I can see that distinguishes the correct from the incorrect...

 

Any thoughts............?

hmmm.thumb.gif.051c814c30368de5ab2210115782f0aa.gif

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There is nothing that I can see that distinguishes the correct from the incorrect...

 

Any thoughts............?

 

 

Couldn't resist.....!

Shorted @ 163.37

 

Out for another -25 and up it goes to hit my original target as expected. Oh, and looks like it will surpass it too now! Damn these fake crossover signals. Damn me too for not SAR'ing when I was meant too! Damn it all :crap:

 

I'm sorry but I have to say... why the hell short it? Just because it was at resistance?

 

(a) you were in long, nicely positioned

(b) the last swing low signaled strength

© look at how the middle of the range was exactly where the latest swing held (50% retracements are also very common)

(d) this was 4th or 5th time at resistance => increased odds for breakout in my experience

(e) the move prior to that was up... if you look at this from a bigger timeframe whole this 'range' from 161.50 to 163 will look like a congestion, which often leads to a continuation, especially after a reversal took place from around 159.

 

I know your exits are entries, but you're making a hell of a lot effort + a lot of extra trades imo. I'm not saying the SAR is by definition wrong (I've seen it work nicely myself), but perhaps you should filter some out ...

 

Was the short a valid signal or was it more a "couldn't resist and felt like scalping some" trade? :\

 

attachment.php?attachmentid=6646&stc=1&d=1211482732

 

PS: I hope some of the other guys join in as well to discuss this.

eur_jpy_mid.thumb.GIF.ea4861a722930433e6c719f238da8740.GIF

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I'm sorry but I have to say... why the hell short it? Just because it was at resistance?

 

I totally agree with your chart and said something similar earlier to you and even posted charts in the same vain myself but.......

 

(a) you were in long, nicely positioned

 

Yep, and took a profit, seeing resistance and cross of the trendline.

 

(b) the last swing low signalled strength

 

That was then, this is now.

 

© look at how the middle of the range was exactly where the latest swing held (50% retracements are also very common)

 

Yes, but too bigger TF IMO.

 

(d) this was 4th or 5th time at resistance => increased odds for breakout in my experience

 

I have always found it the opposite :\

 

(e) the move prior to that was up... if you look at this from a bigger timeframe whole this 'range' from 161.50 to 163 will look like a congestion, which often leads to a continuation, especially after a reversal took place from around 159.

 

Yep, as above, I saw that and mentioned it but, as a shorter TF trader, you look in more detail. Take my short the other day, no hanging about and from a 240m chart (the on you posted), I wouldn't have got that so well.

 

I know your exits are entries, but you're making a hell of a lot effort + a lot of extra trades imo. I'm not saying the SAR is by definition wrong (I've seen it work nicely myself), but perhaps you should filter some out ...

 

By definition, my entries are exits because they used to be the optimimum change in direction.

 

Was the short a valid signal or was it more a "couldn't resist and felt like scalping some" trade? :\

 

Completely valid as per my attachment.

 

PS: I hope some of the other guys join in as well to discuss this.

 

So do I, you suck :o

 

 

I like (did anyhow) how I trade using these combinations of S/R and TL crossovers but you are right, I do need a filter. Whilst we both came to the same conclusion on direction, when it gets down to the smaller TF's my little setup is ideal...

 

So the filter I shall contemplate will require a slightly larger stop but hopefully fewer mistakes and that will be a break of the recent high or low dependant on direction as per the chart.

 

Needs some looking into but it will give a more solid reasoning but just a bit later than normal.

filter.gif.ffc1fb7f63eed0ed1daaee13bdc1a8b7.gif

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I have always found it the opposite :\

I'd be interested in some examples of that...

 

 

Yep, as above, I saw that and mentioned it but, as a shorter TF trader, you look in more detail. Take my short the other day, no hanging about and from a 240m chart (the on you posted), I wouldn't have got that so well.

I realize that, but I prefer not playing the range more than one or two times. It's easy to have the false breaks or spikes caught you offside. And wider stops aren't always worth it, especially if there's no sign of a break coming anytime soon.

 

So do I, you suck :o

Respect My Authority! (with Cartman accent)

 

 

I like (did anyhow) how I trade using these combinations of S/R and TL crossovers but you are right, I do need a filter. Whilst we both came to the same conclusion on direction, when it gets down to the smaller TF's my little setup is ideal...

Show me some statistics by morning :)

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:yes sir::yes sir::yes sir:

 

I'd be interested in some examples of that...

 

I'll find some, don't you worry!

 

I realize that, but I prefer not playing the range more than one or two times. It's easy to have the false breaks or spikes caught you offside. And wider stops aren't always worth it, especially if there's no sign of a break coming anytime soon.

 

Well more work is needed before commiting anything but the current state of play is not going so swimmingly anymore!

 

Respect My Authority! (with Cartman accent)

 

Up yours!

 

Show me some statistics by morning :)

 

Whilst I appreciate your assistance, that response will only get 2 words from me! You can guess them too!

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I'm sorry but I have to say... why the hell short it? Just because it was at resistance?

 

 

PS: I hope some of the other guys join in as well to discuss this.

 

I can't hardly join in because I don't trade this, but will comment on one issue. Shouldn't one have a strategy for a when price is trending and one for when price is in congestion, where identifying s/r would be different for each approach? And then there is when one should sit out because he has no edge?

just thinking :)

 

erie

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I can't hardly join in because I don't trade this, but will comment on one issue. Shouldn't one have a strategy for a when price is trending and one for when price is in congestion, where identifying s/r would be different for each approach? And then there is when one should sit out because he has no edge?

just thinking :)

 

erie

 

That's not a problem erie, I don't trade FX neither, but a chart is a chart :)

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