FX Trade Setups, Entries, Management and Exit

Purple Brain said:
....Confusion generally precedes clarity so please press on with your comments as something's got to stick eventually.....
Click to expand...

ok, well let's start off from square one as I see it.

When you trade you are looking for price to move to a significant degree in the direction you want, to the extent you want and in the time you want. That requires momentum and the greater the better (as Split said "didn't it move fast!").

You have two choices: You either anticipate places where that momentum might start or you wait until you see momentum and get aboard as soon as you can.

The "pattern" side of TA is about anticipating places where momentum might start. The significant word here is might. There is no certainty whatsoever and they merely represent places where momentum has started in the past.

So, what of momentum. This is the hard bit because there's no easy dial to tell you when it's come in or is going. It comes from your "feel" for the instrument of your choice and that comes from experience. You get clues from the way price is moving - either directly looked at or via transactions that have been made (tick charts) - and futures traders have the advantage of DOM and T&S where many of them look at nothing else and have no chart in sight.

Momentum is king and that's the skill you have to develop.
 
barjon said:
ok, well let's start off from square one as I see it.

When you trade you are looking for price to move to a significant degree in the direction you want, to the extent you want and in the time you want. That requires momentum and the greater the better (as Split said "didn't it move fast!").

You have two choices: You either anticipate places where that momentum might start or you wait until you see momentum and get aboard as soon as you can.

The "pattern" side of TA is about anticipating places where momentum might start. The significant word here is might. There is no certainty whatsoever and they merely represent places where momentum has started in the past.

So, what of momentum. This is the hard bit because there's no easy dial to tell you when it's come in or is going. It comes from your "feel" for the instrument of your choice and that comes from experience. You get clues from the way price is moving - either directly looked at or via transactions that have been made (tick charts) - and futures traders have the advantage of DOM and T&S where many of them look at nothing else and have no chart in sight.

Momentum is king and that's the skill you have to develop.
Click to expand...
Excellent post. Thanks for your insights.

Probably not the right forum to ask this question, but as you've mentioned tick charts a few times, what's the best way for me to pull up a tick chart on MetaTrader?
 
Purple Brain said:
Probably not the right forum to ask this question, but as you've mentioned tick charts a few times, what's the best way for me to pull up a tick chart on MetaTrader?
Click to expand...
I've just realised you've already told me indirectly I don't need tick charts. You suggest I get a 'feel' for how price is developing. By looking at the current bar and watching how it's moving I effectively get both tick data and volume data. I can see each tick as it impacts the current level of the price and I also get informed on the relative volume of that tick by the amount the level changes with each tick.

I was watching eur/usd in a separate window and it has no indicators on this chart - just the data. As I was thinking about what you were saying (this was on the 15:15 bar) I could see the price level blipping up and down - and then I saw it move down in one go a relatively large number of pips. I interpreted that as a large volume going through on the sell side.

If for instance one the price is moving down in small bursts of pips, but now and again you get a single large burst of up pips, the resultant candle will be a record of where the price started and finished and where the high and the low was, but it will have nothing to tell me about how it was formed. So although it may end up as an down candle, if there was more significantly large and discrete up blips than down blips, the probability is there is more buy side pressure? Is this the sort of thing to which you're referring?
 
In which case, not that I'm preparing to buy eur/usd at the moment, but there is more upside than downside based on the way the last three candles have formed / are forming.

Although the price has been steadily moving up the previous bar showed little move between the open and the close, but the price action while that bar was forming had far more powerful up blips than down blips. There were obviously more of the down blips than up blips as the price finished 1 pipette down, but the intent was clearly upward based purely on the size of each up move compared with the size of each down move for each tick.
 
Yes, that's the sort of thing. It's hugely difficult to explain in terms of "if you see this then this follows". Just keep watching and noting what happens after "unusual" action (like the sudden large pip move you saw) to start with. It's about trying to gain "feel", not some mechanical formula you can apply.
 
At the risk of sending everyone to sleep, eur/usd on the latest bar has had far more significant down blips than up which might suggest the buying pressure has either been fully met or everyone has gone home.

Again, I'm not planning on shorting this pair right now, but if I was long, would, if my assessment is correct, this be a good time to get out?
 
The problem that I have with this is that I don't watch the chart or price on the platform all the time.

I have other things to do. What you seem to be implying is that one must sit looking at the screen. I, mostly, work on orders. I might be away for only a short while, before I come back but, there you have it, price can, and does, move considerably in that period.
 
Splitlink said:
The problem that I have with this is that I don't watch the chart or price on the platform all the time.

I have other things to do. What you seem to be implying is that one must sit looking at the screen. I, mostly, work on orders. I might be away for only a short while, before I come back but, there you have it, price can, and does, move considerably in that period.
Click to expand...
Splitlink, I'd also like to just set my orders at the start of the day then head off down the beach. Come back in the evening after a lobster dinner watching the sun set over the bay where my yacht lies at anchor and check my account to make sure I'd hit my 2% minimum capital increase for the day.

But if I have to sit in front of the screens all day long to make even a small profit I'm more than happy to use any and all tools and facilities I can to do that.

I'm probably poorer and therefore hungrier than you are. You also sound like you already have a life. I'm still saving up for one.
 
Splitlink said:
The problem that I have with this is that I don't watch the chart or price on the platform all the time.

I have other things to do. What you seem to be implying is that one must sit looking at the screen. I, mostly, work on orders. I might be away for only a short while, before I come back but, there you have it, price can, and does, move considerably in that period.
Click to expand...

Split

Yes, if you want to catch momentum as it occurs you've got to be watching. That doesn't mean you can't just assume that there's going to be some in the way that you do and rely on your money management to ensure you limit disadvantage and gain from advantage to keep your bottom line healthy. You're leaving more to chance that way, though.
 
:D
Purple Brain said:
Splitlink, I'd also like to just set my orders at the start of the day then head off down the beach. Come back in the evening after a lobster dinner watching the sun set over the bay where my yacht lies at anchor and check my account to make sure I'd hit my 2% minimum capital increase for the day.

But if I have to sit in front of the screens all day long to make even a small profit I'm more than happy to use any and all tools and facilities I can to do that.

I'm probably poorer and therefore hungrier than you are. You also sound like you already have a life. I'm still saving up for one.
Click to expand...

I could be washing dishes, for all you know. :)
 
I'm calling it a day. Apologies to all those who have suffered my stream of consciousness posts today. I do try and limit it, but I get into the moment and forget someone will probably take the trouble to read all this stuff. So thanks.

Two trades today. One with netted me +8/40 and one which netted +4/35 (not +4/40 as reported earlier).

An average R:R of 1:0.15. Ridiculously small. But, my account is up 0.62% on the day. Well short of the magic 2%, but still a profit. And here's another thing - no losing trades.

What stands out for me today is the number of trades I haven’t taken. Some of them that even as recently as yesterday I would have done. But with the advice and help I’ve received, I’m paying more attention to the individual bars and what they might mean as well as keeping the bigger picture as a context within which to work. It made a big difference.

Apart from the two trades I did take, I looked at 7 other potential trades today and either they didn’t develop as per my setup criteria or they did, but I reasoned it more sensible not to take them based on newly acquired knowledge. Of those 7 my 07:17 call on a long eur/jpy was one that would have worked and would probably have netted me around 15 pips on what would likely have been at least a 30 pip stop – so nothing sensational, but a useful profit. A couple this afternoon; again eur/jpy long and eur/gbp long would have been valid entries but would have had my work cut out to exit even with a miniscule profit. Basically a lot of risk for very little reward had I taken even the two borderline valid ones. In all, had I taken all those trades which without the counsel I received from you guys over the last day or so I would have done, I’d have been in the red again today.

But most importantly of all with regard to today, far more important than making a profit, I have received so much detailed advice and such extremely helpful suggestions that I really can’t thank you all enough for sharing your experience and insights with me. From the arbitrary nature of the timeframe we select to trade from and the relevance therefore of local highs and lows through to the momentum indications of tick data. All of these will require a great deal of effort on my part to assimilate and hopefully utilise successfully. But all of these ideas will eventually percolate through to my unconscious, take root and reveal their deeper secrets in the fullness of time, and this can’t but help to immeasurably improve my trading. Thank you all again for your selfless generosity.
 
Purple Brain said:
..........I really can’t thank you all enough for sharing your experience and insights with me........
Click to expand...

For my part, it's a pleasure. However, don't take anything I or anyone else has said as gospel. Just use it to stimulate your own thinking as you plot your own route through the minefield.
 
At 09:30 BST today there is the GBP data event of the BoE minutes - Votes for cut/hike/unchanged. Before last week's insights from Martinghoul on why sterling reacted as it did to an apparent non-event I would have assumed this wasn't a biggie. But with that exposition of the intricacies and nuances of what really moves the markets on baord, I'm interested to see how the market reacts to data that effectively is largely already known and presumably factored in.

I know the individual members of the MPC enjoy and are expected to show a high degree of latitude in their views on the tools and methods to use to shape and manage the economy, but I just don't see too many showing their hands against the new boss' directives. While 'unchanged' may not have been unanimous, I would be surprised if any more than 1 voted otherwise.

Perhaps that is what the market may react to - if there is any indication that Carney does not currently enjoy unanimous backing. Given that his forward guidance came at a time when the data suggested he could afford to be less dovish maybe there was greater dissent than anyone expected. It'll be interesting either way.
 
usd/cad stop will be placed at 0315 which is 10 pips above the weekly low above the daily pivot and of course above the century at 0300.
 
You must log in or register to reply here.

Similar threads

B
entry and exit point?
Replies
4
Views
6K
blueday
B
FetteredChinos
Random Entry, Controlled exit
Replies
12
Views
5K
FetteredChinos
FetteredChinos
L
Entry and exit using point and figure charts.
Replies
3
Views
3K
rajtest
R
P
The Asymmetric Nature of Entries & Exits
2 3
Replies
47
Views
8K
Purple Brain
P
G
Entry and Exit points
Replies
17
Views
6K
fudgestain
F
Top