Cable Musings

[Anna-Maria 10]

Right....I've pared out more contracts at 8870 & moved remaining stakes to the b/e.

 

These will now sit back at entry (8910) & remain there as I observe this journey & adjudge whether this current support zone is likely to hold water.

 

If price kicks back looking for trailing stops, fair enough.....if it takes my remaining stops, then this present "intent" for price to continue isn't genuine.

 

If it continues to move lower, I'll look for an appropriate level on my 15m/60m frames to trail my remaining contracts.

 

I'm looking for the "genuine intent" of this move. If it attracts Bearish support, I'd expect it to continue down....if not, & this is merely a false pop, then I don't really want to be positioned.

 

Simple - let price action tell me whether it's genuine or not!!

[Anna-Maria 10]

So, where do we go from here??

 

If you look back at the 240m chart I posted up y'day, you'll observe we're approaching a 50% Fib @ 8850......a likely next stage (potential) reaction zone, given a good percentage of folks observe these levels religiously.

 

Again, I'll want to see how the bars react to this level.

 

I've moved stops down to 8895, above the large 5m thrust bar thru this 1.89 Round Number, thus compounding my remaining contracts.....

 

One IMPORTANT RULE of trading - NEVER allow a winner to turn into a loseR!!

 

No point playing the "hero" - you can't pull every available pip out of the market, but it's prudent to allow price to breath & test the short-term flow.....

[Anna-Maria 10]

Looks like price has had enough on this run down to the 8850 Fib.

 

I've trimmed out some more @ 8858 & have a tiddler left back up @ 8895.

 

We'll see what occurs a little later when NY comes to the table!

[torero 10]

I see forex adventure will be exciting yet somewhat complicated for a dummy like me. I've decided to create a small program to help me visualize things better.

 

This is a quick and dirty PaintBar for TS platform identify the 4 major market opens and closes (London, NY, Sydney, and Tokyo). Please edit the time (24-hr format) accordingly. You can also edit the placement and color of the text and bar. Have fun!

 

[torero 10]

Tex, I'm following very closely so keep posting. I'm adding notes and automate a few things to ease my understanding of new concepts. You may just win me over with Cable yet!

[Anna-Maria 10]

This is a quick and dirty PaintBar for TS platform identify the 4 major market opens and closes (London, NY, Sydney, and Tokyo). Please edit the time (24-hr format) accordingly. You can also edit the placement and color of the text and bar. Have fun!

 

 

Don't overcomplicate it. I mentioned in a previous post that I pay no attention whatsoever to the Wellington/Sydney activity. They have no effect at all on Cable's volumes either inside or outside of the London flows.

 

The Tokyo-London-New York sessions are the focal point of activity in this pair - period!!....especially the 'overlap' periods, where Tokyo is winding down as London opens - and again when NY begins to crank up, & then London closes it's doors for the day.

 

From 19.00 EST to 03.00 EST are the levels I'm interested in to determine my Asian range barriers.

 

London is the hub of the main volumes across most of the majors. Outside of normal London trade, volumes dissipate noticeably.

 

Therefore, the overlap from Tokyo to London, which encompasses the 03.00 EST to approx 04.30 EST is the first uptick activity zone....the next overlap occurs at 08.30 EST, when NY hits the desks, & the final wind down period of the FX trading day takes place @ midday-12.30 EST when London packs up for business.

 

The vast majority of volumes are transacted within the London trading session. All the major Options activity occurs within this timeframe as does the main institutional & wholesale activity.

 

It makes sense to focus one's attention around this timezone, especially if you're intending trading via an intraday or short-term momentum play.

 

Which is why I place a lot of emphasis on the Asian range breakout potential & plot my s&r levels based around the end of the day's activity at the NY close.

 

Those 2 occurances account for 95% of my short-term/momentum strategy base.

 

All you really need do, is plot the Asian range, observe the prev 2 day's high-low levels (for a quick heads up to the initial barrier potential) & place some sensible near term levels to help guage the propensity of a trend continuation move and/or a possible reversal shunt against the secondary trend.

 

That's all my momentum strat consists of....I'm not concerned what goes on in Sydney or Wellinton - only Tokyo/London & NY.

 

The previous day's high-low (which covers the prior day's play) are notable levels to observe, as are the Asian range - that's it

 

Keep it nice & simple - don't clutter your charts or your head!!

[torero 10]

Right, I added in there in case others wanted to use it for AUS-based pairs like Raul. But I've added a feature to disable it. I understand your simplicity to the letter!

[Anna-Maria 10]

ok, cool!!

 

Just be aware though, the % s&r levels/defined Asian range parameters etc which I plot are unique to the European pairs behaviour?

 

I haven't undergone any in-depth study of the Australasian trading pairs. Their volatility, range extreme behaviour are likely to be different to the European trading instruments. The very structure of their volumes & participation will affect the research results. This needs to be considered if a similar strategy is deployed to trade those instruments.

 

As ever - do your own research & apply due diligence

 

Glad to hear you find the overall structure of how I approach Cable to be constructive & simple in it's application!!

[surfer 10]

Newbie mistake...

 

Saw that the price went through the 50 Fib. I jumped into at @42 but it was a false break.

 

Think there will be a lot of them

[torero 10]

I'm going to wait firmly for a rally and use 50 as resistance before getting in. It has done 2 cents today. If it expands more, than a monster trend might be in store? So far it looks like 50 is resistance now, but I have to see the downturn before getting in.

[Anna-Maria 10]

Yes, you need to take care around these consolidation zones surfer. Price has a tendancy to lure money in, then zap it!!

 

The lower risk (value) zone is when London kicks off, & out of it's early doors range level.

 

On the occasions I miss the early break, or decide to let it go, I generally stand aside until either next session or unless price offers me a clear cut trigger to enter.

 

This type of price action we're witnessing down around 8850 after a consistant morning move is very 'trappy'

 

As with my normal entry criteria, I'd tend to wait for a break out, followed by a re-test or pullback, just to ensure the break is a genuine attempt to resume the flow.

 

Sometimes it simply moves without pulling back....on those occasions, it's tough & I'll let it go without me - but playing safe usually protects me from inferior entries.

[surfer 10]

texxas

 

Thanks for your tips. I will try to realize them. You are talking often from "price action". I have problems to visualize/understand this.

 

Can you recommend a book or is it only learnable through "chart sitting".

 

 

thanks

[Anna-Maria 10]

surfer:

 

I wouldn't know where to start re: recommending books etc.

 

Fortunately, my & my brother & sisters trading education has come mainly via our Parents & their colleagues. In fact, they actively discouraged us from poring over trading related material when we were youngsters.

 

During the past 10yrs or so, we've browsed various online sources etc & had a peek at a few journals/periodicals - but in the majority of cases, I realized why they directed us away from them in the first place

 

I'm sorry I can't offer you any realistic avenues to persue, maybe other members might be able to assist in recommending said material??

 

I understand the Martin Pring material is supposed to be a decent reference? A guy called Steve Nison is also reckoned to attract favorable comments amongst traders for his straight-talking advice in his books...please don't take these as direct recommendations, as I've never referred to them personally.

 

Also material like the sites below, which offer a base from which to explore further might be helpful??

 

Introduction to Candlesticks

 

Candlestick Charts Explained

 

 

If I were in your position, I'd ask around the Forum & see which other material folks have found helpful. Like I say, sorry I can't be of more help.

 

As a matter of interest, how or what do you currently use to base your trading decisions on if you don't mind me enquiring?

[Soultrader 12]

texxas

 

Thanks for your tips. I will try to realize them. You are talking often from "price action". I have problems to visualize/understand this.

 

Can you recommend a book or is it only learnable through "chart sitting".

 

 

thanks

 

Surfer,

 

If you want to really learn price action you will not find this in any book. What you need to do is to take all indicators off your charts. Plot a bar or candlestick chart. (I prefer a 233 tick chart) Open up a time of sales and then plot support and resistance levels. Now here is the best part. Simply stare at this for a few months. If you dont understand it good. Just stare until your eyes hurt. This will probably bore you to death but you will start to see how prices move and act. This is price action. Look at the time of sales and price when they reach a key S&R level. Do they hold? Do they break? Study the pullbacks... decide what is a healthy pullback from one that is too deep. Observe for higher lows, lower highs... are price going to reverse or continue?

 

Once you truly understand price action, study market internals and start developing setups. Go from macro to micro. Find your trading style and find your edge. Hope it helps.

[surfer 10]

Thanks for your responses texxas and soultrader

 

At first i want to say that my english is not the best.

 

So let´s start.

 

I started 3 months ago with forex. 4 weeks ago I wired some money to oanda. The few things that I knew i learned from candletalk.de, a german side for derivates and forex. But the problem is that the good forex traders are gone.

 

After watching 4-6 pairs my confusion grew in unbelievable measures. So i decided two weeks ago to focus only the cable.

 

I´m watching him/her/it at 1min, 5min, 15min, 60min and higher timeframes

to understand how does the cable work. Like soultrader mentioned " it´s very boring".

 

"Now here is the best part. Simply stare at this for a few months. If you dont understand it good. Just stare until your eyes hurt.":p

 

I can complain now i see things which i didn´s see before. But it´s a long road....

 

 

I use the combination of different timeframes, channels and trendlines. No indicators. For a better understanding a pic. This trades are from this morning. Oh my god, i must make an english course:rolleyes:

[torero 10]

Hi surfer,

 

Here's an article that might be helpful to you. Texxas was very lucky to be taught by her family, uncontaminated by rubbish that circulate out there. I as well am very lucky to have a mentor.

 

The article touches on price action on a superficial explanation from what he taught me. It is a simplistic as it can get but as you already know, trading is easier than many are led to believe and simplicity is key. There are other articles you can check out on price action. Ask questions here if you have doubts or not understanding. I also recommend you drop into the chat room sometime. We exchange ideas that you might find educational. Good luck.

 

http://www.traderslaboratory.com/forums/f43/price-action-modern-tape-reading-771.html

[Anna-Maria 10]

At first i want to say that my english is not the best.

 

After watching 4-6 pairs my confusion grew in unbelievable measures. So i decided two weeks ago to focus only the cable.

 

I use the combination of different timeframes, channels and trendlines. No indicators.

 

Your English seems fine from where I'm sat

 

Personally, I think you made a wise decision in focusing your att'n on only 1 pair.

 

Get to know the behaviour on ONE pair first (especially if this is your first introduction to currencies), it will instill confidence & hone your discipline/patience skills.

 

Each pair display slightly differing price behavioural traits & due to the sensitive nature of Cable, it requires a patient & cautious approach.

 

Cable likes to 'channel'....it also tends to extend or over-extend it's range moves, making it a decent candidate for trading false breaks (2b's) & 1-2-3 reversals.

 

Once it breaks out or breaks down from a mini-trend move, it often slips into a tradeable channel for a day or two....similar to the 60m picture on the accompanying chart.

 

I like to observe these patterns on the 60 & 240m charts. The lower tops/higher bottoms are easily identifyable & as they play out, I generally only look for intraday entries in the direction of the prominant trend.

 

Once you determine your primary trend from these mid-frame chart references, it becomes a little easier to pin point your entries, which also allows you the luxury of placing good r/r stops.

 

Cable's daily range is larger than it's fellow major instruments, another positive!....and upon data releases, it usually moves faster & farther than Euro/Swiss/Yen.

 

Just be careful of it's spikey, whippy behaviour - especially around key levels. It has a tendancy to lure traders into false traps!!.....which means your set-ups/executions need to be tailored to it's unique behaviour traits. When it decides to "slap you" it hurts LOL...

 

But, if you persist in experimenting with Cable & can build a sensible strategy around it's price behaviour, you'll have yourself a pretty consistant wage earner

 

update: I'm now flat on today's positions, having been stopped out on final contracts as price meandered back to 8895. Although price has stalled at that level, I'm satisfied that zone represented fair value for my final stops!

[surfer 10]

@texxas

 

Just be careful of it's spikey, whippy behaviour - especially around key levels. It has a tendancy to lure traders into false traps!!.....which means your set-ups/executions need to be tailored to it's unique behaviour traits. When it decides to "slap you" it hurts LOL...

hehe, yeah today he got me again. But i´m still fighting:D

 

Thank you very much for your "view".

 

@torero

 

Thanks. I will read it.

[Anna-Maria 10]

Patience is a virtue.....sometimes!!

 

Scrappy price action this morning leading into the UK Retail Sales release, which on this occasion, saved an awful lot of stress had you executed prior to the data.

 

Although the low end of the Asian range was penetrated, price was bouncing off today's S1/240m Fib combo level. A dodgy, trappy zone indeed.

 

These are typical trappy, high risk zones to execute. I've been caught with my pants down on a few occasions in the past attempting to do battle in these scenario's....never a pleasant experience!!

 

This week has offered far more lucrative opportunities to engage, & I'm not partial to giving back profits needlessly, hence adopting a flat stance this morning.

 

We have Stateside CPI & the TICS printing later in NY trade, that may or may not offer forth a tradeable opp....but for now, I'm flat & happy to remain so.

 

Notice how the post-data spike bounced cleanly away from the Asian top?....cool huh

 

Hope no-one was caught 'short' on that spikey affair

[surfer 10]

Very cool.

 

I took a position at 30 minutes before the news because i had an uptrend line.

I had forgotten the news at 10:30(newbie, newbie). So i was writting a little bit on my pc and was very astonished when the price broke out at 10:30:rolleyes:

 

Through your very usefull hints i saw that we were at the high of the asian level . Long at @60. Flat at 1.8996.

 

thanks a lot:) :)

[surfer 10]

I see your support and resistance level´s but i´m not able to dry them on my own.

 

So I decided to take the high´s and low´s of the last two days.

 

Is this correct?

 

Thanks

[Anna-Maria 10]

Yeah, you need to be very careful around sensitive data surfer. A lot of folks get burnt badly engaging prior to, or attempting to bluff news releases.

 

I was still looking for 'short' angles this morning in line with the intra-week trend, but the lower supports at this 8850 zone were holding price pretty good into early London trade & ahead of the Retail Sales.

 

It was just too close for comfort (to the release) as price popped thru the Asian low for my liking.

 

It wouldn't have done too much damage to "shorts" in this instance, but in the main it's prudent to be cautious when they're nearing their release on the clock.

[Anna-Maria 10]

I decided to take the high´s and low´s of the last two days.

 

Is this correct?

 

Thanks

 

Sure, prev day's session high/lows are ok. Price stalled at those levels for a reason, same as they do at key levels on the larger timeframes. You'll generally find some confluence (Fibs, prev daily highs-lows-closes etc) on the 240m + frames which coincide with a previous zone of activity. Those levels assist in adding relevance to a potential entry or exit.

 

Just observe the price bars on your smaller frames (5/15m) as the bars approach these levels to better guage the potential of next stage development.

[torero 10]

tex, in addition to opening and closing of markets, are there predictable schedules when important news are release, either London and Tokyo? I'm already aware of the US-based news time but not sure about the other 2.

 

I watched the London open as it moved down toward S1. I took Raul's strategy and short scalp with 5 pip gain when it broke Asian low level.

 

Thanks.

[surfer 10]

Thanks texxas:) .

 

Another aspect of my young trading repertoire are Pitchforks. These 3 lines help me to identify some important areas. Not everytime but often enough. I use them till 2 weeks. Very interesting tool. Like channels but with a little more explanatory power.

 

This was the reason why i went long.

 

Greetings from the sunny germany (18 degree Celsius)