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Buk

week 2

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how well do SAR strategies work in forex? Anyone has good or bad experience with this?

 

They work fine.

 

If you've got the wherewithall to trade Stop & Reverse scenario's & your objectives fit, then why not?

 

They certainly play out ok on the pairs we trade. Doesn't take too much to send these instruments into a short-term frenzy, as you've no doubt already witnessed :D

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jobbing? I need to learn new forex or forex English terminology. So are you long or short, tex?

 

I'm short from yesterdays level.

 

In certain cases we incorporate a 'protective' counter position via the fast timeframes when instigating a possible swing position from the off.

 

It's wholly dependant upon how quickly the original (swing) entry moves away. If it begins to dawdle or display resistive behaviour, but we're still comfortable with the level we shorted from, then either I or one of the others will run a half sized (in relation to our original stake) position back against the short to reduce risk on the stops. Given we receive choice-1pip spreads & good fills on size, we can scalp in & out on our usual tech entries until the majority of the stop risk is covered.

 

It's only operated once!! If the original entry gets snatched, the position has more or less flattened.

 

Once price moves away in our desired direction, the trade continues as normal.

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I've pulled this short for a loss of 7pips.

 

We're heading into the UK Indust Production numbers in 30mins & this is just faffing around aimlessly down here.

 

We'll have another peep at it as the numbers print.

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Lets just play this via the shorter intraday levels Anna.....it's not ready to step in on wider stops/step thru's as yet....way too jittery........

 

30m - hourly reversals off the Fib-Pivot-bar signals.....wait till we get a better nod from the fundamental sway...........

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Yep, possible I'm jumping the gun before London. I'm still learning to incorporate market openings and closings. But for the moment, I'm focused on the price action on chart and see if openings can be seen in the charts.

 

 

quite the contrary......in fact you look like you've got a handle on a good, solid method of playing these pairs by your chart & trade examples........

 

if it aint broke, don't fiddle with it!!!............

 

your style clearly suits your surroundings & you're obviously bringing skills from your index futures life onto the currency field?........

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Yes, it seems that way, I've never seen any instruments that trend so well. I mentioned to Tex that my performance is much better than futures so far (been only trading forex 2 months I believe). Not enough to say but so far so good. The big move back in December helped alot, but can't say I may see it again until next December?? Lord knows how I do well or better because what I use there is same as here. I get the impression that there is less noise and moodiness and not many outside factors affecting forex than futures. Thanks for Tex of course for guiding me since the beginning of this forum, and now you. Thanks for the compliments! They suit me well too LOL!

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:D yeah, they do their fair share of trending that's for sure!........don't get too loved up with Cable though ;)

 

there are a good few instruments out there which truck along handsomely!.....I know most of the examples hauled up on here carry a heavy Cable bias, & that's partly our fault - but it's not the be all & end all......

 

I don't think it would do any harm to expand the flavor of these weekly threads to incorporate "other" pairs??.......after all, technicals are technicals, whatever the picture.........

 

sure, Cable/Euro & Swiss attract major participation, and account for a good lick of traffic during the London-New York crossover, but to neglect the other instruments isn't really doing justice to the currency canvas.........

 

if you've got a workable & tight strategy template, you can very easily switch & swap between those displaying the more favorable set-up triggers ;)

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Buk, I'd like some insight from a dilemna I had in the previous thread was how to deal with an intraday and make it a swing. I had paper profit position and thought it was appropriate to take to swing a trade. It didn't pan out. What criteria do you use to find which intraday trades are suitable to become swing trades?

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Yes, great idea. I love to see some charts of other pairs as well, food for thought. I started trading EURJPY a few days ago, in fact I'm long that pair now. I'm slowly opening myself to up others. But I have to be careful not to spread myself too thin and become careless with each. Tough choices.

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I took a long entry at 29 - going in the same direction as the dominant asian trend, on that famous asian/london cross pull-back I like so much.

 

:) nailed that one (again) huh??......it's certainly favoring the shorter range signals for the time being..........

 

our mid-term outlook is getting trashed at the mo - time to skinny down to the smaller frames on this pair for the time being me thinks!

 

appears Jan is showering you in a nice smelling scent of $$'s LOL........

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What criteria do you use to find which intraday trades are suitable to become swing trades?

 

well judging by the recent performance, you'd be better popping out to your local supermarket & engaing in conversation with the 1st old lady you come across..........:D she'll have more of an idea than we do at present!!!

 

but the tack we take regards running positions, always matures or morphs from an an intial intraday entry........

 

for that, I use the 4hr frame....that's my template!........I love bullish/bearish engulfing & doji-hammer formations....period!

 

if we see a stall or consolidation occuring on or around a major Fib-pivot zone, & the 4hr-1hr is setting up at one of our favored candle formations, we'll drill into the 5/15m charts & look for a low risk entry..........

 

once we get positioned, we focus purely on the next stage tech levels in relation to the 4hr timeframe..........we'll scale out at our (yours will be different) usual reference points: next stage pivot/fib line, or a defined s&r zone on the hourly & keep remaining stops tucked back at entry to test whether the move is genuine or not.........

 

65% of the time, those remaining stakes/stops will get snatched somewhere between it's resting level & next days activity - that's simply the rub of the green with currencies............

 

once price continues in the original direction, we compound back (those stakes which we banked) on fresh intraday signals & trail remaining stakes to either an hourly or 4hrly bar of technical significance..........

 

on a decent move away from a technical turn, we'll achieve an avg 2.5 - 4c return from an approx .5c risk...........

 

however, you have to get used to dropping a portion of your stake in return for testing the intent of price?!........it's a "trade-off" in seeking larger value.........

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appears Jan is showering you in a nice smelling scent of $$'s LOL........

 

I have a loooong way to go yet, I'm afraid. But days like this sure do help offset the bad ones, thanks. :)

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however, you have to get used to dropping a portion of your stake in return for testing the intent of price?!........it's a "trade-off" in seeking larger value.........

 

That is by far the hardest part of swing trading that I have found. You have to have the guts to give up (sometimes considerable) numbers of pips in order to let price test genuine momentum. It's a tough psychological nut to crack at the best of times. :)

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well judging by the recent performance, you'd be better popping out to your local supermarket & engaing in conversation with the 1st old lady you come across..........:D she'll have more of an idea than we do at present!!!

 

but the tack we take regards running positions, always matures or morphs from an an intial intraday entry........

 

for that, I use the 4hr frame....that's my template!........I love bullish/bearish engulfing & doji-hammer formations....period!

 

if we see a stall or consolidation occuring on or around a major Fib-pivot zone, & the 4hr-1hr is setting up at one of our favored candle formations, we'll drill into the 5/15m charts & look for a low risk entry..........

 

once we get positioned, we focus purely on the next stage tech levels in relation to the 4hr timeframe..........we'll scale out at our (yours will be different) usual reference points: next stage pivot/fib line, or a defined s&r zone on the hourly & keep remaining stops tucked back at entry to test whether the move is genuine or not.........

 

65% of the time, those remaining stakes/stops will get snatched somewhere between it's resting level & next days activity - that's simply the rub of the green with currencies............

 

once price continues in the original direction, we compound back (those stakes which we banked) on fresh intraday signals & trail remaining stakes to either an hourly or 4hrly bar of technical significance..........

 

on a decent move away from a technical turn, we'll achieve an avg 2.5 - 4c return from an approx .5c risk...........

 

however, you have to get used to dropping a portion of your stake in return for testing the intent of price?!........it's a "trade-off" in seeking larger value.........

 

So you plan from the top down also. Basically you scale in with each pullback showing new higher highs/lows (longs as examples).

 

Regarding setting stops, are they set from 240-min or from 15-min? This is the problem is that if I decide to take my intraday trade to swing, I may have to widen my stop to fit the new swing. This is somewhat psychological difficult to do as I'm taking more risk than I'm willing to take. There isn't a better way then?

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firstly, let me try illustrate in as near a 'real time' scenario as possible, to give you a flavor of what I'm currently looking at??..........

 

what I'm seeking is confirmation I want the chart to tell me I'm wrong & should be staring in the opposite direction!

 

so, sticking to my strat guide & observations from my template frame, I have the mid-term view of current positioning.......we've broken a strung out range & are attempting an each-way battle to either re-engage the range for another attempt to gain lost ground...........or a continued bearish decline toward the next major technical zone.........straightforward from this timeframe perspective?

 

attachment.php?attachmentid=471&stc=1&d=1168513787

 

 

 

then drilling down into the 60m frame, I clearly see my markers from the recent H-L activity & I'm again looking for weakness in line with current momentum...........OR signals to the contrary that I ought to looking for a reverse & strength back into the range.........my chosen price aids (Fibs-Pivots) are the tools, alongside the price bars, which will prove me right or wrong........I'm still seeking confirmation that we're changing course from bear to bull??

 

attachment.php?attachmentid=472&stc=1&d=1168513826

 

 

I then drill further down to my smaller frame buddies to see what's occuring at that level...........are there any common themes there which we like to trigger??..........are we butting any major s&r or attacking a prev top line from the higher timeframes??............is price pulling back in an attempt to strike North thru the next technical level of resistance..........or is it weakening further as the demand dies & supply kicks in??....what shape are the price bars taking on at this juncture??

 

attachment.php?attachmentid=473&stc=1&d=1168513826

 

 

is it worth "shorting here" (in line with the prev flow) & absorbing small risk to test the intent.........or should we wait a while & see if the $ bulls can hold this line...........a break up here negates the short-term bearish flow....and renders my "selling the rallies" stance impotent...........

 

therefore, we then require to slip back to a shorter model, intraday stance to again negotiate the "range trading conditions"...........

 

time & patience..........we've already gotten a bloody nose from trying to short it farther back.....so, I want to ensure this recent price activity isn't a sustained move on the part of the $ Bears to kick this North again..........

 

my hunch (& Anna's trigger button) is for the "short" at a better value area, in line with the higher timeframe flow to give it another test of intent..........

 

I'm not particularly bothered whether I'm right or wrong to be honest (coz they'll be ample opportunity to grab the losses back later), only that I obtain decent risk in exchange for fair value................

 

the stops will reside at the TIMEFRAME OF ENTRY.......& once/if the move gets underway, the scenario will be adjudged accordingly & altered as required.............

tech18.gif.40870ce5bd98a97487962994b6d501ae.gif

tech19.gif.920eacaad37423e55a6b298f7c0fe71c.gif

tech20.gif.9a3edbe3d951863a79f129d658964461.gif

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Buk, what do you do when you notice price attacking key levels of interest during a time when an important item of news is due for release. Taking your above example, price is attacking the 78.6% fib, but we are also due to see whether the UK rates are revised higher or left neutral.

 

Do you take on a position such as this even when we are within a few hours of a major news announcement? Or do you hold fire until the news has passed and possibly suffer the consequences of not getting in at your desired level?

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For the record, I decided to close my trade pre-UK news for +55 on my remainder, due heavily to a nasty problem that Oanda is currently having. During the last 4 hours, Oanda's connection has dropped out on me probably 20 or 30 times. I don't feel as though I can maintain and reliably manage a position when they're having problems this severe - particularly with an important news item due for release. I'll bank my profits and go home instead of pulling my hair out on the off-chance I might have a connection when I need it. I've talked with their tech support twice now, and they're about as all-knowing concerning this problem as rocks are in an open desert.

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Blimey!!! Wouldn't you know it - they'd throw a surprise rate decision out now! Sheesh... what a rotten time to close a position. Ah well, better out wishing I was in than in wishing I was out.

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Buk, what do you do when you notice price attacking key levels of interest during a time when an important item of news is due for release. Taking your above example, price is attacking the 78.6% fib, but we are also due to see whether the UK rates are revised higher or left neutral.

 

 

Good question Cary, & by now ( I mean historically) you'll already know the answer to that!

 

Never ignore the key announcements. Everyone & his dog (including us) has been caught out by the major Fundamental traps. You only really make that mistake once, if you're fortunate!

 

We already had positive news out earlier which bounced it up. And just look what occured on the surprise hike. Most of the talking heads were poo pooing & hike this month, shows what they know.

 

You haven't got a cat in hells chance of bailing out if you step on the wrong side of a skewed news release, certainly not one of the major releases, of which any countries interest rate announcement qualifies.

 

You can live & breath if you happen to miss a technical entry or exit & have to take a few pips to the negative, but you'll quickly bleed if you stupidly take on the major news announcements.

 

There are plenty of empty/blown accounts to testify to that fact.

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That'll do it for me today, folks. Oanda's up and down like a Mexican jumping bean on a hot griddle. They're completely unreliable today - which is, I must say, the first time I've seen them have this big of a problem since I started trading with them over a year ago. Nonetheless, there's no way to get a decent entry when their platform is up and down so much. Just too unreliable today.

 

I hope some of you are able to extract profits from this suprise rate decision! I'll try to hitch a ride tomorrow, if the market is willing.

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Good question Cary, & by now ( I mean historically) you'll already know the answer to that!

 

There are plenty of empty/blown accounts to testify to that fact.

 

 

Yeah, that is precisely the response I was hoping I'd hear. Buk's comments had me wondering whether he would attempt to tag a position so close to the UK news, so I just had to ask. You hit the nail on the head concerning my feelings.

 

For those who aren't as familiar with forex, take a good close look at the TICK prices of this release and you'll see how hopeless a bad position would have been. Also take into consideration the whopping 20-pip spread that many brokers tack onto prices a mere few seconds before the major news is released, and you'll quickly discover why it's a dangerous game to engage positions near the news. So far as I know, there is NO STRATEGY that is immune to the wicked plays that occur around major news releases. I've tried several (and died trying) when I first started learning forex. You might as well play Russian Roulette, cause the odds are about the same.

 

Thanks again, Texxas!

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what I'm seeking is confirmation I want the chart to tell me I'm wrong & should be staring in the opposite direction!

 

.....we've broken a strung out range & are attempting an each-way battle to either re-engage the range for another attempt to gain lost ground...........or a continued bearish decline toward the next major technical zone.........straightforward from this timeframe perspective?

 

........a break up here negates the short-term bearish flow....and renders my "selling the rallies" stance impotent...........

 

 

aaah well, back to the drawing board LOL.........

 

and back to the 240min for some guidance............

 

same process when starting out again from scratch.......what is price doing now & what are the options based on the current scenario?!

 

re-assess the conditions, pick the strat & try get a leg onto the next potential move away!

 

 

attachment.php?attachmentid=474&stc=1&d=1168518808

tech21.gif.c0d973f7efaefc6eebdd19cf8152993e.gif

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we've travelled +2c from the Tokyo low print to current highs, with NY just about to stretch it's arms & decide what it wants to do with the mornings events..........

 

it's currently sniffing around at the R3 pivot & wondering how much gas it's got left in the tank............

 

hmmmm, time to let it sweat a while maybe!!

 

see what occurs after the NY kids have slurped their donuts & coffee........

 

 

attachment.php?attachmentid=475&stc=1&d=1168520157

tech22.gif.ae6c7ef281b33a840919bccad84ebf0c.gif

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