Reading Charts in Real Time

[thalestrader 14]

Hi Folks,

 

EURJPY gave some nice lessons last night in the power of support and resistance, as well as another good example of why you should be careful and trade with a tight stop loss if you are trying to sell a break to new lows against a possible ending diagonal (obviously you also want to be careful when buying new highs against a possible ending diagonal in a rally).

 

Last night's "break down" occurred just a short distance above an anticipated support level. There was enough day light to justify a short, so long as you moved to break even once price moved more than 5-7 ticks in your favor. Price fell to within a whisper of support, and then rallied strongly, "completing" (for lack of a better phrase) the ending diagonal. After that, it was the S&R show, one of my favorite bands. I never tire of their music.

 

 

 

Best Wishes,

 

Thales

Edited January 6, 2010 by thalestrader

[thalestrader 14]

Yes, it has been a long day, sorry once again.. correct image with luck this time!

 

Hi Rustie,

 

If you are asking whether I would have seen a short there, I would likely not have shorted due to the large quick impulse immediately prior to the choppy overlapping price action following. This does not mean that a decline would not develop there, but I would not be participating, at least not based upon what I see on your chart. If anything, I'd be inclined to buy a break to new highs (see chart below).

 

 

 

Best Wishes,

 

Thales

[marketwavez 10]

Hello Thales

 

Ive just read Your PM ---- it is encouraging

 

///////////////////////////////////////////////////////////////////////////////////////

i don't believe in making many trades in a day ( scalping )

 

i'm more of a swing trader looking to hold trades 2 - 14 days

 

and look for 3 - 7 trade set-ups per week on average

 

Thales , just like most traders out there

i've got software that can helps me in the hunt for these trade-setups ,,,,,

but unfortunately i wont be able to talk about them in here ,

because you will think it's commercial ---

 

Just so you know I'm a real world trader ---- and part of a group ---- and is " Not Commercial "

 

Here is this mornings main chart of interest

 

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

 

Edited January 6, 2010 by marketwavez

[Rustie 10]

Hi Thales, thanks for that. I didnt consider the impulse so much as the pattern forming!

I your previous post you mention moving the stop to BE once 5 or so ticks in profit and I've been wanting to ask about this. How quickly do you move to BE once the trade is triggered? I can understand logical chart stop placement but not sure on after entry...

 

Cheers

Russell

[thalestrader 14]

I did not short the EURJPY, though in hindsight it would have allowed for at least a break even effort.

 

Best Wishes,

 

Thales

[Beachtrader 10]

Hello Everyone,

 

My first post on this great thread and a paper trade from this morning (I am without internet at the moment) just showing what I saw with EURJPY. My reasoning for shorting into the strong up move was that the level where price stalled coincided with what looked like a possible natural reversal level if one looked at H4. What is interesting me now is what happens at the level I have marked for taking some profit. I think of these sorts of levels as being a bit like traffic lights!!

 

 

 

 

I hope to be able to post some charts from time to time and would like to thank Thales for a brilliant thread which has done masses for my trading.

 

All the best

BT

 

Edit: Although my TP level is set at 132.23 I would probably have been looking at taking half off the table at around 132.30 and using that level as more of a zone (with the obvious benefit of hindsight!)

[thalestrader 14]

i don't believe in making many trades in a day ( scalping )

 

i'm more of a swing trader looking to hold trades 2 - 14 days

 

and look for 3 - 7 trade set-ups per week on average

 

No problem. Just remember, a chart tells very little about what you are seeing, and therefore nothing as to what you want us to see. As I recommended in my PM to you, you should spend some time reading the thread before posting so that you get an idea of what we are trying to accomplish here. If what we are doing here is not what you are looking for, then you are free to start your own thread.

 

When we post a chart, we expect to see a trading plan that telss us your prosoed entry point, your stop loss, and your profit targets (or if your are trailing a stop, just tell us so).

 

Read the some more of the thread, and look at our charts and how we post our perceived opportunities. I am certainly open to EW traders, and I have no problem with swing traders, but simply posting a chart without any explanation or indication of how one would trade based upon your analysis is without much value. There are more than enough thread like that on the internet. This thread is for posting real time opportunities and showing other traders how to spot those opportunities and manage those trades for themselves.

 

Read the thread, then post.

 

Best Wishes,

 

Thales

Edited January 6, 2010 by thalestrader

[thalestrader 14]

I your previous post you mention moving the stop to BE once 5 or so ticks in profit and I've been wanting to ask about this. How quickly do you move to BE once the trade is triggered? I can understand logical chart stop placement but not sure on after entry...l

 

I usually go to break even once price reaches a point that is equal to my initial risk, or between 1.27 up to 1.618 of the initial impulse leg (points 1-2) of the trade. In the case you mention, I was shorting just 15 ticks or so above support, and price had etched out a potential ending diagonal pattern, and so I go to break even very quickly, once price moves 5-7 ticks in my favor, in such cases. If you go to breakeven at +5 ticks all the time, you may as well stop trading, because you will have too many stop outs at break even. It is not uncommon for a trade to go +10-15 and then retrace to +/- 2 or so before heading on its way.

 

You will need to come up with your own rules and guidelines over time.

 

Best Wishes,

 

Thales

[marketwavez 10]

Aud/Usd

---------------

Long Trade Se-up

 

----------------------------------------

looking to go long @ 9170

 

 

[Rustie 10]

I usually go to break even once price reaches a point that is equal to my initial risk, or between 1.27 up to 1.618 of the initial impulse leg (points 1-2) of the trade. In the case you mention, I was shorting just 15 ticks or so above support, and price had etched out a potential ending diagonal pattern, and so I go to break even very quickly, once price moves 5-7 ticks in my favor, in such cases. If you go to breakeven at +5 ticks all the time, you may as well stop trading, because you will have too many stop outs at break even. It is not uncommon for a trade to go +10-15 and then retrace to +/- 2 or so before heading on its way.

 

You will need to come up with your own rules and guidelines over time.

 

Best Wishes,

 

Thales

 

I really need to work on the management side of things, so many times 10 ticks profit and reverse for a 10 tick loss. But as you say if strangled you'll stop out on good trades all the time.

Thanks for the idea.

Cheers

[marketwavez 10]

No problem. Just remember, a chart tells very little about what you are seeing, and therefore nothing as to what you want us to see. As I recommended in my PM to you, you should spend some time reading the thread before posting so that you get an idea of what we are trying to accomplish here. If what we are doing here is not what you are looking for, then you are free to start your own thread.

 

When we post a chart, we expect to see a trading plan that telss us your prosoed entry point, your stop loss, and your profit targets (or if your are trailing a stop, just tell us so).

 

Read the some more of the thread, and look at our charts and how we post our perceived opportunities. I am certainly open to EW traders, and I have no problem with swing traders, but simply posting a chart without any explanation or indication of how one would trade based upon your analysis is without much value. There are more than enough thread like that on the internet. This thread is for posting real time opportunities and showing other traders how to spot those opportunities and manage those trades for themselves.

 

Read the thread, then post.

 

Best Wishes,

 

Thales

 

Thales

 

These are all things that i am already doing ........

remember, I did all these things you are mentioning in the thread where you met me

[fxThunder 10]

stop moved on my EU short - certainly a marathon hold

[thalestrader 14]

Here is this mornings main chart of interest

 

When we post a chart, we expect to see a trading plan that tells us your prosoed entry point, your stop loss, and your profit targets (or if your are trailing a stop, just tell us so).

 

These are all things that i am already

 

 

I do not see anything in your chart that would tell anyone why they should be interested in your chart, let alone how one might view a trade opportunity on your chart.

 

I do not do much with the 6A/AUDUSD, but here is how I would present the chart currently. The blue line is a short entry, the red line is the intial stop loss, the magenta line is the point at which I would move my stop loss to break even, and the green lines are where I would scale out with profits. These are the conventions of the this thread, and I would ask that everyone follow them in future contributions. If that is too much, then as I said, you are free to start your own thread.

 

 

 

Best Wishes,

 

Thales

[Marko23 10]

...

The blue line is a short entry, the red line is the intial stop loss, the magenta line is the point at which I would move my stop loss to break even, and the green lines are where I would scale out with profits. These are the conventions of the this thread, and I would ask that everyone follow them in future contributions.

....

 

Sorry, my colors were wrong too ....

[Rustie 10]

stop moved on my EU short - certainly a marathon hold

 

Hats off to you eNQ, awesome!

[marketwavez 10]

I do not see anything in your chart that would tell anyone why they should be interested in your chart, let alone how one might view a trade opportunity on your chart.

 

I do not do much with the 6A/AUDUSD, but here is how I would present the chart currently. The blue line is a short entry, the red line is the intial stop loss, the magenta line is the point at which I would move my stop loss to break even, and the green lines are where I would scale out with profits. These are the conventions of the this thread, and I would ask that everyone follow them in future contributions. If that is too much, then as I said, you are free to start your own thread.

 

 

Best Wishes,

 

Thales

 

Aud/Usd

---------------

Long Trade Set-up

 

----------------------------------------

looking to go long @ 9170

 

 

Thales ,,,,,

 

i had posted my entry and target on the chart --- its there

 

Scroll back and see post # 2009

 

here its is again

 

-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Edited January 6, 2010 by marketwavez

[thalestrader 14]

Sorry, my colors were wrong too ....

 

No problem, I could always tell what you were doing from you chart and your text. Keeping the colors standard does two things though: At a glance, anyone here knows exactly what opportunity is being communicated by the chart, and 2) I have a group of friends and we share our charts amongst us. I do not have to redo my charts for them (One of them participates in an FF thread, and he uses the same convention). Eventually, perhaps, it will be an international custom!

 

Best Wishes,

 

Thales

[fxThunder 10]

Not surprisingly I got stopped out on the EU short - think I managed to overstay my welcome on this trade.

[thalestrader 14]

Aud/Usd

---------------

Long Trade Se-up

 

----------------------------------------

looking to go long @ 9170

 

Now I got you.

 

Best Wishes,

 

Thales

[Marko23 10]

[thalestrader 14]

Not surprisingly I got stopped out on the EU short - think I managed to overstay my welcome on this trade.

 

One thing that I have not mentioned, but that you might want to stick in your notes along with distinguishing impulses from corrections, is the factor of time. Take a look at the EURJPY since last night's Tokyo low. See how much territory it covered on its rallies, and how quickly it did so. Look at how quickly it rallied from its low at the Frankfurt open to its high a little over two hours later. Then look at this morning's decline. Nearly 5 hours from top to bottom and it managed to retrace only a little more than a third of its last rally (a rally that took about 1/3 the time of the decline). And now look how quickly it recovered the entire 5 hour decline, making new highs in the process. When price moves quickly, that tells you something. When price chops slowly, that tells you something as well. It is on its own nothing to trade on, but it does offer valuable information that can help you make decisions when added to other information.

 

Best Wishes,

 

Thales

[daedalus 10]

Ok ok ok... i'm a pansy for not "working" more than 10 minutes today but I came, I saw, I took, and i'm walking. Caught two really nice setups on the JY. One ran a bit and I got a great fill for an exit, and the other one I exited right before its final push down and didn't walk away with much. But to be honest... i'm more than happy with my measly 7 ticks. I'm really impressed with the consistency i've finally found in my trades (I'm hitting 6 wins out of 6 trades this year so far). And any day you can walk away with profit is a good day.

 

One other thing i've done (and maybe you guys might consider) is each trade i take i save the image to the hard drive and put it in a folder for all of my trades on a given week. I've found it is a great way to go back and inspect everything your doing and examine those instances where you could've done better or worse on something. And because its visual I find it to be a much better "trading log" than just a excel spreadsheet. Something to consider!

 

Two trades, +5, +2, JY 89T on OEC.

 

Off to shovel more god forsaken snow that won't stop falling!

 

Cheers!

[Beachtrader 10]

Important level for EURGBP - support from December now becomes resistance? Faster moves down than up showing possible strength of sellers? For a short I would be looking for a LrH off the current level (and the entry level below the round number).

 

 

Kind regards

BT

[fxThunder 10]

Looking at a potential GU long setup.

 

This setup might be a bit agressive - Thales, would you consider this an appropriate setup?

 

Cheers,

eNQ

Edited January 6, 2010 by fxThunder
typo

[marketwavez 10]

Eur/Usd

 

------------------ -----------

End of Wave C rally

 

------------------------------- ------------------- ---------------

Long @4370 ....... Target - ( see chart below )

 

 

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