Price action practice journal

[rod_falcon]

Position trading with price action, support and resistance.
Trading on the daily timeframe.
All trades placed at the daily close: 17:00 EST.
Trading 1 mini-lot.

 

[rod_falcon]

LONG USD/CAD @ 1.0180, ST: 1.0050 ==> 130 pips = 1.4 x ATR(10)

Reasons for the trade:

- Price bounced at major support
- Bullish Engulfing pattern
- Market is sideways
- Momentum on the last swing down is low
- No trend strength favours reversal rather than continuation

Risks to the trade:

- Fundamentals: Federal Reserve widely expected to expand asset purchases (QE2), BOC is not easing (though most of the speculation has focused on currencies other than CAD)
- Current volatility contraction could lead to a range expansion with downside directional momentum

NOTE: I'm still learning

 

[rod_falcon]

I need to work on the exit rules. I am hoping to find a way to also use price action, support and resistance for that. Nevertheless, I still wanted to take this trade to test the entry.

 

[rod_falcon]

Some exits I could evaluate:

- Exit when price starts consolidation/congestion
- Exit long at the next resistance, exit short at the next support
- Fixed target (some multiple of risk)
- Volatility based targets
- Use a trailing stop (problem is how wide should it be)
- Take partial profits and trail the stop for the rest
- If the market is weak, use a time stop
- Bollinger Band exit (if market is range-bound)
- Some combination of the above
- Re-enter if the trend continues

The nice thing about profit targets is that you exit on strength, whilst with a trailing stop you exit on weakness (i.e. leave pips on the table).

 

[rod_falcon]

USDCAD Weekly Chart

 

[Chartsy]

that long USD could be a damn good trade if you hold onto it and add to it

 

[rod_falcon]

Chartsy, to be honest I am not very confident about its chances. May be we are still up against too much dollar weakness. Bucky was holding up well against CAD up to now, but it looks like it wants to break down.

Still in this trade, let's see how it goes.

 

[rod_falcon]

Eur/jpy

SHORT EUR/JPY @ 113.85, ST: 115.05 ==> 119 pips = 1 * ATR(10)

Reasons for the trade:

- False breakout at major resistance
- Uptrend decisively broken
- Bearish Engulfing pattern two bars ago
- Hanging Man pattern on the previous bar
- Market is sideways
- Global Yen strength

Risks to the trade:

- BOJ Intervention
- Falling volatility
- Previous uptrend with decent momentum

 

[rod_falcon]

Usd/chf

SHORT USD/CHF @ 0.9569, ST: 0.9700 ==> 131 pips = 1.2 * ATR(10)

Reasons for the trade:

- Forceful penetration of long term support
- Current bar is a combination of:
* False breakout of a previous inside bar (2 bars ago)
* Pinbar candle formation
- Strong downtrend with accelerating momentum and falling volatility
- Global CHF strength

 

[rod_falcon]

USD/CAD Stop

Stopped out of USD/CAD.

 

[rod_falcon]

Mistakes

Couple of mistakes on the USD/CAD trade:

- Used D1 timeframe to draw major support and resistance. Must use Weekly or even Monthly for that (I've made the same mistake on the EUR/JPY trade).

- Bullish Engulfing pattern should have smaller shadows on both candles and the engulfing candle should have a lower low and a higher high.

 

[selmer6]

Re: Mistakes

Couple of mistakes on the USD/CAD trade:

- Used D1 timeframe to draw major support and resistance. Must use Weekly or even Monthly for that (I've made the same mistake on the EUR/JPY trade).

Hi
Try drawing your SR on a weekly line chart if your trading off a daily. Makes it a lot easier to see the areas.

 

[rod_falcon]

Re: Mistakes

Hi
Try drawing your SR on a weekly line chart if your trading off a daily. Makes it a lot easier to see the areas.

Thank you Selmer,

Actually I have tried now and I see what you mean.

 

[rod_falcon]

USD/CAD Again

LONG USD/CAD @ 1.0121, SL: 0.9970, 151 pips (1.5 * ATR(10))

Long Legged Doji reversal at major support with confirming Big White Candle.
Close above previous minor support turned resistance.
Market is sideways unless it closes below 0.9930.
Bearish Momentum still looking weak.

 

[rod_falcon]

Stopped out of USD/CHF @ 0.9700, -131 pips.

For book-keeping: Previous USD/CAD loss of 130 pips.

 

[rod_falcon]

USD/CAD moved stops

Moved stop on long USD/CAD to B/E + 20 pips = 1.0141

 

[rod_falcon]

USD/CAD Profit Target

I have decided to use a 2 times risk profit target for range-bound trades. Hence:

USD/CAD PT = 1.0421 ==> 300 pips

 

[rod_falcon]

EUR/JPY stop moved

SHORT EUR/JPY @ 113.85, ST: 115.05 ==> 119 pips = 1 * ATR(10)

Move stop to B/E + 20 pips @ 113.65
Profit target of 2 times risk @ 111.45

 

[rod_falcon]

EUR/JPY stop hit

Move stop to B/E + 20 pips @ 113.65

Stopped out of EUR/JPY Short, +20 pips

 

[rod_falcon]

EUR/JPY New Short

SHORT EUR/JPY @ 113.21, sl = 114.80, pt = 110.00