FX Trade Setups, Entries, Management and Exit

This thread is intended to allow anyone trading forex to discuss trades they are actually planning on taking or have just taken: The rationale behind the trade, the setup conditions, the entry, on-going management of the trade and the exit.

There is an excellent thread run by Lord Flasheart here: Live Trading and General Chat Lounge which provides traders the ability to make quick calls on trades they are making and that thread is highly recommended to those who simply want to log their live trading action without getting into the details.

This thread is more interested in the thinking behind the entries and exits and in-play modifications to the trade than verifying the realities of the actual trades called. It'll be up to each individual to ascertain how truthful anyone's entry and exit levels are and by all means call someone if you think they are mistaken, but for my purposes I'm more interested in the thinking behind each trader's actions for each trade.

It's totally unimportant how much money you made or lost in any trade. That's your business. What would be interesting though is to know for each trade how many pips you risked to make the pips you made. I'm really into R:R rather than absolute P&L.

I trade the 15 minute chart. I take purely directional trades. My bias is determined by the slope of a longish moving average 130 periods and the price in relation to that. The price has to be the 'right' side of that moving average which discounts me taking any major reversals.

I also have a 49 moving average which also needs to be the 'right' side of the longer term average. The price needs to be the 'right' side of the 49 average and I'm looking at it to pullback to the 49 average to see it there is any support. This, more often or not, occurs if there are other technical support/resistance levels at that point. Who'd have thought.

If the level does show support and I get an indication the reversal has been temporary and there is renewed momentum to the underlying bias, AND if I get entry signals (explain those as I go along) I'll go in.

I'm also experimenting with reactions to an even smaller moving average - the 17. This seems to be useful with the stronger underlying trends where the pullbacks are less likely to come all the way back to he 49.
I endeavour only to short from a lower high and go long from a higher low. I say endeavour as I frequently forget this small, but important factor in the excitement of getting a setup and signals.
I am certain there are other things I do that I don’t know I do, but as and when I discover them I’ll add them to this post (site staff support permitting of course) as it’ll make for an easier read than having to trawl through the entire thread.

Attached are the charts I work from.

Chart-1: Long term (2 days) view giving me context for bias. One screen.


Chart-2: Entry related factors.


Chart-3: Exit related factors.

Chart-2 & Chart-3 sit side by side on one screen.

Chart-4: Rankings – The relative strengths of the individual currencies. One screen.


Chart-5: Signals – entry & exit signals for the 28 major crosses which I use to trigger trades that have valid setups ascertained from Charts 1-3 and after a quick peek at Chart-4 for a sense check. One screen and me squinting really hard.

eur/jpy in an up trend and I'm looking for it to retrace back down to the 49 moving average and see it we get some momentum for another move up. The 133.00 level would seem to be a likely place for this to occur (currently trading at 133.20). This isn't prime Europe/UK session trading (currently 05:32 BST), but I'll take any Asian denominated pairs at this time of day as it's just after lunch in Tokyo and midday in Singapore. The middle-east is just starting up.

gbp/jpy in a similar situation. Currently at 157.98 and will meet the 49 average at around 157.81 so could be imminent.

usd/jpy doesn't fall into the same camp as it's price action shows it has dipped below the 49 average and is therefore slightly more suspect on support. I'd want to see this pair come off the 49 cleanly to confirm continued support for an up move, pass on that setup itself and wait for the next setup to occur before considering going in.

eur/jpy long stop placement could be 10 pips below the century at 132.90, but that'll make it a very tight stop indeed given the expected entry level. I only have to pay a 1.6 pip spread but even so, it'll be little more than 10 pips stop. MY preferred option is to go to the next support level down which is at 132.79 the daily pivot point.

The potential long gbp/jpy offers an easier choice for stop level in the half century level at 157.50. With the stop 10 pips below that at 157.40 I'm also around the daily pivot point.

Entry signals on eur/jpy, but I haven't had the pullback I wanted to see. Suggests (to me) there is little momentum. And while getting into a trade moving gradually in the right direction could be considered a good thing, with so little momentum and it being to so close to its mean, it suggests it won't take much to have it drift lower either.

eur/jpy off the watch-list as prior bar closed below the 49 average.

I don't trade eur/chf, but it's setting up for a potential long. Price is coming back to the 49, perhaps a little too eagerly. Not much support at the current 49 level with 2400 offering a number of technical S/R levels. On any other pair I'd probably be interested, but the SNB-Jordan floor for the eur/chf places an artificial barrier to unimpeded trade on this pair. And I appreciate a floor doesn't impact a long trade, but the fact that artificial constraints ARE actively being employed means that a ceiling is not out of the question either.

Getting bundles of long entry signals on usd/cad, but as the slope on the longer term average is still down and the 49 is still below the longer average, there is no supporting trade setup criteria.

gbp/chf potential long in the making. Currently coming on to yesterday's high at 4713 and possibly coming back up off my experimental 17 average.

gbp/chf if taken long will ave a stop at 4703 which is 10 pips below yesterday's high and just below today's open.

Which is ridiculous as the century level is clearly showing a more obvious area of recent support. So if gbp/chf triggers long, the stop will be 10 pips below the century at 4690.

General Note: Not that we're fussed about absolute P&L here, but any trades taken off the experimental average, such as this one, would only be for a quarter of my standard size for any given number of pips risked. I could as easily just demo the experimental trades, but I've found without some skin in the game, it doesn't get anything like the same level of real game play from me.

gbp/jpy came off the watch-list 4 bars back. Closed below 49 average.

gbp/chf long only pair on watch at moment.

usd/chf making a bid for a change from down to up bias. Will need to show support on the 49 having broken up through it and all aspects, price, 49 and 130 being in the correct order. Don't normally take the first such entry after a change of bias, but use it as a confirmation of that change - ready for the next rise and pullback.

gbp/chf coming on down to 49. No longer an experimental entry trade if triggered.

gbp/chf long at 4721 stop 4690.

A bunch of avg. earnings, unemployment and most importantly claimant data coming out for GBP in 15 minutes.

OANDA blip the spread to 20 pips on gbp/chf at the slightest excuse which in the trades already weakened state could take it out of the game, if indeed it hangs on for that long. Nothing I need to do about it as I have no technical basis for an exit and I've got over the habit of increasing my stop in order to accommodate my brokers needs.