Reading Charts in Real Time

[am5001520887468 10]

Thales,

 

Do you find much difference in the success of these simple breakout trades between the asian-euro-US market hours?

[MidKnight 12]

I'm back on the usd/jpy thing again....orders are out there with targets covering 2/3 of the position. See if it can breakdown this time. Entry set for 90.12 with a stop at 90.35

 

Got in on the short and have small profits so far. Stop is moved to BE. Here are 2 charts, one showing the trade as it got stopped into, and the other just moments ago.

[MidKnight 12]

Finally a little love on this gbp/chf short. Been over 4 hours so far. 1/3 has been exited for an average gain of 25 pips. The horizontal red line is my stop sitting at BE. I gotta say, this has been a very humbling experience though as at least a dozen times (probably more) I was sure the market wouldn't go any lower.

 

Any comments on this entry, too aggressive? range not picked well?

 

With thanks,

MK

 

This one is all over now. Best exits gave me 2/3 layed off before sharply reversing on a false break low. Unsure how to trade this much differently other than exit more heavily around that low rather than pray for more downward movement. If anyone has other ideas pleas chime in. It did suck to give back ~75 pips on 1/3 of the position Overall R/R on this trade turned out to be about 0.66 - too low for getting a decent amount of MFE I feel. This could have been approximately doubled if I'd used the stop that Thales suggested earlier.

[thalestrader 14]

Question: have you tried to automate those H, L labels? Seems like something that could be done. Maybe you have already...

 

I used the labels in this instance for illustrative purposes only, and I would not want all that scribble on my chart, let alone have it auto-plotted. I think it might be a good tool for those who are struggling to "see" price, but once one finally trains his or her eyes to see price in terms of trend (which is all this is) one will no longer need to annotate.

 

I think that once someone gets comfortable with watching price in terms of simple highs-lows, then some of the less obvious pieces should fall into place with practice, e.g. which S/R are significant, how to distinguish between a mere retracement and a reversal, distinguish range from trend, etc. and so on.

 

Best Wishes,

 

Thales

[thalestrader 14]

Last look at the EURJPY shows H - L - LH.

 

Best Wishes,

 

Thales

 

And when you see a H-L-LH you should be prepared for potentially lower prices ahead.

 

Best Wishes,

 

Thales

[thalestrader 14]

Thales,

 

Do you find much difference in the success of these simple breakout trades between the asian-euro-US market hours?

 

No, not really. Price is price no matter what time of the day or night. However, if you eyeball currency charts, the best moves occur around the Frankfurt and London opens, followed by the New York open, and then by the Tokyo open. Of course news releases also produce good volatility and range expansions. The Asian sessions seem to produce a disproportionate number of tight ranging periods, which of course explains the success of those breakouts that occur during the early hours of the European session (price cycles between periods of rest (range contraction) and volatility (range expansion). Europe and New York tend to be periods of volatility, while late New York and early Asia serve as periods of rest.

 

Tha being said, if you have watched this thread for a while, you will no doubt see that Asia does offer plenty of opportunties to profit from price changes as well. Therefore the best approach is to accept that price is going to act like price, regardless of the time of the day, so trade accordingly.

 

Best Wishes,

 

Thaels

[thalestrader 14]

This one is all over now. Best exits gave me 2/3 layed off before sharply reversing on a false break low.

 

Unsure how to trade this much differently other than exit more heavily around that low rather than pray for more downward movement.

 

 

Hi MidK,

 

It might help if you take a longer view of the markets you are trading. If you look at a four hour chart of the GBPCHF, you will see that what you call a "false break" based on the 15 minute view you were trading was merely a final push down to test support from 10/28/2009.

 

So, as to how you could have traded this differently, ask yourself this: Had you been aware of that support level, would you have planned and managed your exit differently?

 

Best Wishes,

 

Thales

Edited November 3, 2009 by thalestrader
spelling

[forrestang 10]

Does these count as possibly putting in a L-H-LH?

 

Right now the LH is not in place, but if it does break above the apex, w/o dropping below the "L," is this it?

 

----EDIT-----

Or where these not full swings, i.e. not pronounced or a 'full' move as someone once mentioned?

 

---EDIT2-----

I'm in the long on the E/J

Edited November 3, 2009 by forrestang

[thalestrader 14]

Does these count as possibly putting in a L-H-LH?

 

Right now the LH is not in place, but if it does put one in and break above the apex, is this it?

 

Yes, though the EURUSD looks a bit better (in terms of the swings) than the EURJPY at the moment (which can change quickly).

 

Also, I didn't mention it in my last post updating the last EURJPY short from last night,but if you look at price action within the blue ellipse (you can see it in the chart I posted in post #855 of this thread), that area, for me, was the buy point. I missed it myself, as neither I nor my daughter were up and at it at that time.

 

You are definitely on the right track.

 

Just use your eyes, not your brain.

 

Best Wishes,

 

Thales

[thalestrader 14]

----EDIT-----

Or where these not full swings, i.e. not pronounced or a 'full' move as someone once mentioned?

 

Just use your eyes, not your brain. Let's worry about degrees of swing later. Focus on what your eye is drawn to as a distinct high and what it is drawn to as a distinct low. Over the course of a few days, your eye will sharpen its focus.

 

Best Wishes,

 

Thales

[thalestrader 14]

I am going to be off the forum until lunchtime or so - I have some trading to do.

 

Good luck to all.

 

Best Wishes,

 

Thales

[thalestrader 14]

Last look at the EURUSD prior to assuming internet silence.

 

Best Wishes,

 

Thales

[fxThunder 10]

Hi Thales,

 

I think your entry should read 14670 vs 14770.

 

Had me guessing for a second there.

 

Tx,

Emini

 

Edit add: where would your stop go, at lod or below hl?

[forrestang 10]

Does these count as possibly putting in a L-H-LH?

 

Right now the LH is not in place, but if it does break above the apex, w/o dropping below the "L," is this it?

 

----EDIT-----

Or where these not full swings, i.e. not pronounced or a 'full' move as someone once mentioned?

 

---EDIT2-----

I'm in the long on the E/J

 

 

P1 hit on first half:cool:

 

Stopped at BE on second half. May have squeezed just a pinch too tight?

[fxThunder 10]

Spent the day waiting for price to make it to the circled area for an entry - triggered Thales style just now with a dash of speed...

 

Am considering swinging one contract to the other end of the channel.

 

Emini

 

Nothing more to consider - got stopped out of this one.

Edited November 3, 2009 by fxThunder

[DynamicFx 10]

Thalestrader,

 

Could I just ask, why fifteen minutes for the timeframe? Have you looked at other periods and came to the conclusion that fifteen is more reliable?

 

Thanks.

[brownsfan019 17]

Thalestrader,

 

Could I just ask, why fifteen minutes for the timeframe? Have you looked at other periods and came to the conclusion that fifteen is more reliable?

 

Thanks.

 

If you look at previous charts, we've seen everything from a 1 minute to 240 minute chart. I've actually looked at a few daily charts for swing trades w/ this premise.

[DynamicFx 10]

If you look at previous charts, we've seen everything from a 1 minute to 240 minute chart. I've actually looked at a few daily charts for swing trades w/ this premise.

 

I should have clarified in relation to currencies. It's just that I looked into the concept of HH/HL - LL/LH a few months ago, and I too found fifteen minutes to be more comfortable. Maybe I just couldn't identify the relevant swings on anything lower.

 

On another note, I was looking at S/R in general, and was trying to figure out which trigger called to my attention the easiest. I'm still undecided, as I can see merit in the breakout, but I also see merit in the reversal bar that often comes before the breakout.

 

The attached chart is an example. The grey lines are S/R from a slightly higher timeframe. What I dislike about the breakout, is the almost inevitable re-test of the break, whereas the reversal bar has a better chance of remaining untouched, at least in the short-term.

 

What is the general consensus on reversal bars, from the breakout traders in this thread?

 

Thanks.

[brownsfan019 17]

I should have clarified in relation to currencies. It's just that I looked into the concept of HH/HL - LL/LH a few months ago, and I too found fifteen minutes to be more comfortable. Maybe I just couldn't identify the relevant swings on anything lower.

 

On another note, I was looking at S/R in general, and was trying to figure out which trigger called to my attention the easiest. I'm still undecided, as I can see merit in the breakout, but I also see merit in the reversal bar that often comes before the breakout.

 

The attached chart is an example. The grey lines are S/R from a slightly higher timeframe. What I dislike about the breakout, is the almost inevitable re-test of the break, whereas the reversal bar has a better chance of remaining untouched, at least in the short-term.

 

What is the general consensus on reversal bars, from the breakout traders in this thread?

 

Thanks.

 

Personally, I love reversal trades. Your chart is a great example of one at work. IMO it's just a matter of whether or not your S/R is reliable.

 

In this thread though it's about taking that short below the previous low.

[thalestrader 14]

Thalestrader,

 

Could I just ask, why fifteen minutes for the timeframe? Have you looked at other periods and came to the conclusion that fifteen is more reliable?

 

Thanks.

 

Price is going to do what price always does. Here it is again, doing its thing on the weekly GBPJPY.

 

Price cannot be judged to be reliable or unreliable. Price is a fact. It simply is. We can be reliable or unreliable. Our analysis can be reliable or unreliable. Our trade management can be reliable or unreliable.

 

Price can only be itself. It is not moral.

 

Best Wishes,

 

Thales

[thalestrader 14]

Last look at the EURUSD prior to assuming internet silence.

 

Best Wishes,

 

Thales

 

This trade was breakeven. We can call it a loss if anyone wishes to, as I failed to mention that the stop would move to breakeven with a print at 1.4687. And yes, eNQ, entry was 1.4670, not 1.4770.

 

The EURUSD did offer a second opportunity that hit both of the (revised) targets, but I was involved in other things, and I missed that trade.

 

Going forward, be aware that in addition to an entry level, stop loss, and profit target(s), I always have a level at which the stop loss will be moved to break even. This level is based upon the extent of the first leg up (for a long) or down (for a short).

 

 

Best Wishes,

 

Thales

[brownsfan019 17]

Hey guys, I decided to take a look at these w/ daily charts as I have been so focused w/ intraday trading that I've done very little w/ swing trading. I didn't want to take this thread off track, so I started a thread here. Feel free to stop by!

[thalestrader 14]

where would your stop go, at lod or below hl?

 

I would typically place it beneath the HL, though at times I would place it beneath the low, e.g. if news is pending I may use a wider stop. In this case I used the higher low, which would have been hit before the first profit target for a loss unless you had gone to breakeven seeing that price rallied to within 3 ticks of the profit target before reversing.

 

Best Wishes,

 

Thales

[Dinerotrader 10]

However, if you eyeball currency charts, the best moves occur around the Frankfurt and London opens, followed by the New York open, and then by the Tokyo open. Of course news releases also produce good volatility and range expansions. The Asian sessions seem to produce a disproportionate number of tight ranging periods, which of course explains the success of those breakouts that occur during the early hours of the European session (price cycles between periods of rest (range contraction) and volatility (range expansion). Europe and New York tend to be periods of volatility, while late New York and early Asia serve as periods of rest.

Thales

 

Maybe a dumb question. What time is considered the open for London, Frankfurt, New York, and Tokyo? I would like to at least be aware of when I should see the open of those markets begin to influence price/volatility.

 

Thanks.

[forrestang 10]

Maybe a dumb question. What time is considered the open for London, Frankfurt, New York, and Tokyo? I would like to at least be aware of when I should see the open of those markets begin to influence price/volatility.

 

Thanks.

 

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