Well this trade is another one that kinda breaks my rules being that it is a bit mid range. Directional bias is non existent at this price level and this pair has been hovering here for some time - CAD is expecting some CPI data next week and this may cause a drop if the data is bad. I can afford the pips on this trade so in order to sort out where it might go I decided to go short given that most of the JPY pairs are flakey (with the exception of EUR/JPY)
Given that I'm breaking my own rules with this trade I actually expect the stop to get taken out - I am more bullish on CAD than Bearish and that's why I expect to lose on this one
I have had a few messages asking what I mean by lineing the range so this post is to demonstrate
My trading style is fairly ridged but sometime I do break my own rules on a hunch. All emotions aside these hunches carry about a 60% win ratio - When I break my own rules of trading I expect to lose. Losing is not always a bad thing as it helps me determine where price action may be going. Yes I lose pips but NO ONE is a perfect trader NO ONE - I do not use trading systems or strategies based on candles etc.. My rules for trading are very simple.
Line the Range! Trade within it - ANYTHING in the middle is nothing but risk to the up or downside! I do not trade news releases but I do tend to trade the results!
Here is a chart example -
You can do this with dailies, 8 hour & 4 hour charts but try to use at least 1000 candles to start with-
The first is a blank chart of 4 hour bars and I like to squeeze at least 1000 candles in it. As you can see the GBP/JPY pair is in down trend. Lets line the top and the bottom - The second pic will be lined out - I also like to line the middles - this creates a bit of a longer term Fibonacci - Sometime I will line out the MACD indicator and if I'm using RSI or Stochastics I may line those out as well.
Next I will move to a one hour chart - The 1 hour chart is my most used chart as I stop and check in - It can give you a preview of what might happen on the 4 hr etc...
You can see my lines from the previous 4 hour chart and I will line this one hour chart - with 1000 candles one can see a pretty good picture of what the pair is doing a little more short term. Since 1 month is an eternity to forex traders the 1 hour helps me keep the end in sight - 3rd pic is the one hour chart with lines showing range top and bottom - I have also lined a good middle area - the 4th pic will be the same 1 hour chart with a Fibo placed on it (small dotted lines) as you can see one doesn't need to use Fibo tools to see the markets average - I don't use Fibo often and the reason why is that I tend to line it out naturally anyway
Clearly one can see where this current range is trading and the outer extremes of these ranges. I tend to stick to this extremes when planning a trade - No matter if it's long or short - I will temper my self to stick to these extremes as it reduces risk. Support and resistance is clearly defined on all of these charts and one can see where risk is the highest on any side of the trade when the price is anywhere near the middle - with this particular set of charts you can see that risk to the upside is nearly 1000 pips and risk to the down is 1000 pips. Whether you use stops or not the risk is maximized here in the middle of it.
Next is of a shorter time frame - I'm not to worried about which time frame as I tend to use them all for timing purposes (except ticks and mins) 5 minutes is about the smallest I ever use. The next set is of the 15 minute time frame and here is where I use indicators predominantly - I find they help me predict market turns.
I'm certainly not a perfect trader but I do find that tempering my trades to the extremes of these ranges really does pay off - When compared to scalping it not hard to find 1000 pip gains when using these charts and this trading style. I'm happy with the results and have never been very good at scalping since it nets a zero loss and zero gain for me. If you are a scalper I hope this tip helps you keep yourself in the black - I'm sure these simple study techniques would help. Try them for yourself let me know if the do help!
Happy trading and all the pips you can catch!
Cheers
Oh ya forgot to ask anyone reading:
Where would you trade this pair GBP/JPY given it's current price action? Are you long or short? and where are you long or where are you short?
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Line Range - GBP-JPY-1hr-Fibo Added Feb. 13 10.32.jpg
EUR is experiencing some selling off - this may be caused by the east-west situation
My stop is 200 below for now I'm long since we are currently in a support zone - As you can see from the chart that this long is underwater right now and was up for a short time. If this support zone holds I will move this stop up to zero the trade risks
After closing a profitable AUD/USD long from the 6308 area I have taken a long on the AUD/JPY - It is near the lower end of the support zone and I have placed a stop 200 pips below the entry.
Japan data is not favorable and it's likely due to the yen's current strength
I'm am more long against the Yen at these low levels and will wait to see if JPY gains any further. When I can I will raise this stop to prevent large losses
For now I'm long until the market tells me otherwise
After a nice long in the 113 area I closed for several 100's of pips profit I waited for a lower correction - it has not come near my previous entry yet so I decided to go long with a 200 pip stop set below for now it's under water but I think it will head higher towards the 120's handle
I'm long for now at the 116.688 price and will remain long until I'm taken out.
After taking a nice short in the 135 area and locking in a 500 pip stop for profits I was hoping that this pair would continue heading lower - That hasn't happened yet so on the pull back I went long at the best price I could get. So far it has paid off and I have been able to raise my stop to lock in 10 pips profit - one must be careful with this pair as it can whip you out of a trade very quickly.
My stop is locked in and there is no longer any risk to this trade. It's all gravy from here.
Should the support zone of 130 break we will likely see a print near the 120's
I have been patiently waiting for price action to move lower on this pair to go long at a decent price. My preferred long price range is @ the 170 level and thats a long way away. Since I'm almost always long on this pair I waited for a pull back in the upward movements to get a decent price.
For now I'm long and I have raised my stop to lock in 100 pips profit
<y short on this pair was stopped out for a 200 pip loss. This pair is heading upwrads towards the 140 handle and shorts will be tricky up to there. I'm going to wait for an optimum entry for a short. Unless this pair breaks through resistance zone of 139-142 I'm shorter at these levels than long. If it breaks through I will go long at the best price I can get
I was waiting for a dip to the 1.24 area before going long and it appears that it may not get there so I took a long at the best price I could get and that is 1.2606 It has jumped up 100 pips and I have locked in 10 pips profit stop to avoid losses should it swing lower. The EURO has been sold down quite a bit and I feel this is a good area to go long as opposed to short
With my stop locking in 10 pips profit I'm protected and it's now a free trade
This long took a while before it popped above my entry line. This is why patience can be a virtue and coupled with a wide stop one can live out long enough to realize they are in an ok position.
This one is a bit flaky so I will be keenly watching the CHF pairs to monitor where this one might go. For now I'm up but in a few hours I may be down again.
My long on this pair has been traveling north of my entry line. I am more bullish against the yen at these low levels than I am bearish since I see more upside potential than down.
This long is turning out to be a nice mover. I was a bit leery at first expecting my stop to get hit but it's turned around and proving profitable. I was expecting a lower print and to have to re-enter at a lower price but that has not happened. The forex is always able to prove me wrong even when I'm right.
Total Profits and losses for this week As of Feb 19 2009
After taking a withdrawl I had to trade this account back up to a comfortable level again and this week has proven to be a pretty good one
Here is a list of the trades and the pips lost or gained
GBP/JPY Short @ 132 lost 200 pips (-$2000)
EUR/JPY Long @ 116 Up 300 / 100 locked in (+$1000)
EUR/USD Long @ 1.26 up 100 pips / 10 locked in (+$100)
EUR/CHF long 1.485 up 30+ pips stop still below (-200) (-$2000)
AUD/JPY Long @ 58.9 up 200 pips stop locked in +100 pips (+$1000)
GBP/CAD Long at 1.77 up 300 pips stop locked in +100 pips (+$1000)
Total pips lost -200 (-$2000)
Total Pips Gained 800+ (+$8000)
If I closed all these trades right now I would net 8000$ I may just do that soon considering that Friday squaring is about to happen later tonight.
Here is a photo of the new trades I opened after the last group of trades I closed - Check previous postings
1 trade not listed is the GBP/JPY pair short at 137 stop was hit - Re-entered short at a higher price stop is now locking in 100 pips profit
The list of trades are:
Yen pairs - Short stops locked in - this is counter trend trades so they are risky - I'm very long against yen at this time but ... just not long enough at these prices - For now I'll play short side looking for a drop to former support zone of 130'ish they yen has lost some ground but one can never be to sure as to it's direction at these price levels. For EU/JPY resistance is 130 and for GBP/JPY resistance is right here at these current levels of 140 zone
CAD/JPY has had a nice run up but looking to correct back towards mid 70's zone I will look to keep this short open to see if my profit stop is hit.
EUR/CHF is long at these current levels - USD/CHF & GBP/CHF is not really a good trade at moment - EUR/CHF is hovering around it's current support zone and I will look for support to hold. I'm long in this area unless market moves it lower to a new range.
There are a few trades underwater but no big deal - that's the way it goes in forex - that's why I love it!
CAD/JPY GBP/JPY EUR/JPY All Shorts and All are up several hundred pips
Have no screen shot this morning as my capture software is for some reason F**kd -
However take a look at the previous post and note the short entries
USD/JPY stop hit -200 pips - Waiting for new short entry closer to channel top
GBP/JPY: Short @ 141.465 is up 300+ pips (currently)
EUR/JPY: Short @ 125.897 is up 200+ pips (currently)
CAD/JPY: Short @ 79.13 is up 300+ pips (currently)
EUR/CAD: Long 1.5851 is up 400+ pips
All others are not changed and are roughly were they were since I posted the last account snap shot
I like this broker - Excellence in execution - no slippage
