Trading Naked - Part 2

[Shakone]

Kitejedi, you were running straight into strong resistance with T2 with a 00 number close behind the resistance (and again T3).

 

[Bloodhound]

Kitejedi, you were running straight into strong resistance with T2 with a 00 number close behind the resistance (and again T3).

Yup - trying to get in ahead of the resistance level to be in before the possible bounce.

 

[Shakone]

Ahh I see, small losses but big potential 🙂

It was pretty strong though...

 

[Bloodhound]

Ahh I see, small losses but big potential 🙂

Very true. If that level had been broken then I would have been sitting on a very decent profit for the morning's work.

I guess it may be a case of forwarned is forearmed. I don't mind trading into a level like that one as long as I am prepared for it and have a mental plan in place as to what to do if things start looking a bit ropey. I will be honest and say (and I think this comes from seeing how much support it gave on Wednedsay) that I was expecting to see price make for it like a magnet. As always thoughts trip me up!!

By the way, anyone who had gone short at the same time as me (2pmish) and stayed in would probably by now have SAR'd to go long - I'm not sure if I have the mental strength yet to do it twice in one day!!!

 

[Shakone]

Was short from 1.6693, took half off at 15 pips, then got stopped out at breakeven, probably about the same time you were entering T3, for the rest.

 

[Bloodhound]

Was short from 1.6693, took half off at 15 pips, then got stopped out at breakeven, probably about the same time you were entering T3, for the rest.

Always good to know who I was passing my pips to!!!

 

[Shakone]

lol, don't worry, I pass many pips to you too 😉

far too many actually, give me some back!

 

[trendie]

Was short from 1.6693, took half off at 15 pips, then got stopped out at breakeven, probably about the same time you were entering T3, for the rest.

hate it when you guys get in at such low risk. I still risk 20-30 pips.
wish I could reverse virtually at the top or bottom.

hope you had a good week.

 

[Shakone]

20-30 pips is low risk. My stop was 15 and moves up quickly after entry. I nailed it or I didn't.

 

[Bloodhound]

20-30 pips is low risk. My stop was 15 and moves up quickly after entry. I nailed it or I didn't.

I couldn't agree more.

 

[Bloodhound]

Just a thought

Just a thought as we get to the end of the week and very much inspired by the writings of a support and resistance trader that I hugely admire on another forum....

Up until April I was using a moving average crossover system to basically give me almost the identical entries that I get now. The problem I had was that every time the MA's got close to crossing I would get stressed out, on edge and tense.

When I finally ditched the MA's (and dropped a timeframe) I suddenly found myself incredibly relaxed. Sure there are lots of moments when it can get a bit tense, but, on the whole, I seem to feel a lot more at ease without lots of lines, flashing lights etc.

I have no idea whether this has more to do with this style of trading and its simplicity, or with a growth in experience from outright newbie beginner to just hopefully a fully fledged beginner, but I have a feeling that it is to do more with the former than the latter.

Anyway, just a thought.

Hope everyone has a great weekend 🙂

 

[Vaco]

hate it when you guys get in at such low risk. I still risk 20-30 pips.
wish I could reverse virtually at the top or bottom.

hope you had a good week.

Trendie,

the stops vary depending on volatility but if using a logical stop the range is between15-25.

the main advantage of using these lower TF's is in how aggressively the stop can be moved therefore reducing risk. The second is the sheer volume of set ups which give you the confidence to move the stop up quickly with out worrying about missing out on a move. There's always another one just round the corner!

I was looking back over Mr Charts thread and he places stops below previous candle low on long trades, not previous pull back further reducing risk, but then he isn't hanging on to the trade waiting for it to give him a big move, he exits at the first sign of weakness.

 

[traderbrazil]

Hi Rob,

First post in the thread!
This is the chart that I was trying to email you earlier.
As I mentioned to you... I was actually curious to know how you managed the initial stop in the first trade (break 6608 - if you actually took it)

Many thanks!

Leandro

 

[Bloodhound]

Hi Rob,

First post in the thread!
This is the chart that I was trying to email you earlier.
As I mentioned to you... I was actually curious to know how you managed the initial stop in the first trade (break 6608 - if you actually took it)

Many thanks!

Leandro

Hi Leandro,

I had a feeling that might be the entry that you were looking at so I've knocked up a chart to show the way I might have played it. I say 'might have' for 2 reasons:

1) The entry level was extremely close to a resistance zone that had formed through yesterday and overnight, so the first question is whether it would have been a good entry? Always easy to see in hindsight but I tend to shy away from entries that close to a big level (4 or 5 pips by my chart).

2) If I had entered there then, although I trail my stop aggressively below the swing lows on M1, would I have succumbed to the whole greed / fear issue and actually placed my stop at that third point? I'd like to think so, but sometimes life doesn't seem to play out like that - possibly as I am yet to fully get in control of my emotions!!

Anyway, those 2 points aside, hopefully this chart demostrates what I would like to think I would have done if I had entered there.



The net result would have been to get stopped out at break even but that in itself would have presented no problems as there will always be another entry.

Hope that helps

Rob

P.S. If anything on that chart doesn't make sense please shout and I'll try and explain better

P.P.S. Welcome and look forward to seeing more of you

 

[traderbrazil]

1) The entry level was extremely close to a resistance zone that had formed through yesterday and overnight, so the first question is whether it would have been a good entry? Always easy to see in hindsight but I tend to shy away from entries that close to a big level (4 or 5 pips by my chart). Does this mean that if you see a strong resistance zone you would use a 4 or 5 pip filter to enter the trade? Not sure I follow your explanation...

The M1 trailing makes sense....
Thanks for your help!!!
Leandro

 

[Bloodhound]

The M1 trailing makes sense....
Thanks for your help!!!
Leandro

In essence - yes. The way I look at it is that these levels are likely to produce 'bounces' and those 'bounces are what might cause price to hit my stop loss. In other words, the closer one enters a trade to a strong level (like SbR etc.) the more chance that the 'bounce' may take one offside and, quite simply, I don't like being offside. I read a very interesting post on another forum about breakouts and fakeouts the other day, where the author pointed out that, when traders talk of most breakouts leading to fakeouts, they are actually 100% incorrect in this assertion. They said that one should focus on trying to identify levels that are not likely to produce a false break. To this end Shakone was correct in pulling me up on trading straight into a big level with round number confluence but the problem I have is that I am not yet experienced enough to see these 'good' levels, versus the 'bad' levels and, quite often, the 'bad' levels aren't quite as bad as they first seemed!! (especially if one is extremely aggressive with stop management following entry, and also in comfortable with the knowledge that the winners tend to win big).

From a numerical standpoint, I trade with 20 pip hard stops. The reason behind this is that the average swing on cable M5 tends not to be much more than 40 pips and I view a pullback from swing high to swing low (if price is going up) of more than 50% to be a possible sign that price may reverse. If I enter a trade within 20 pips of the next level up then I stand the chance of the 'bounce' (pullback) taking me offside and, if I entered within 5 pips (let's say) of the next level up then that level could lead to my hard stop being hit, which is an absolute no-no for me.

Hope that is clearer?

All the best

Rob

 

[traderbrazil]

Thanks a lot for the explanation, Rob! 👍
One more piece of information to be considered in the trading puzzle.

Enjoy your week-end!
Leandro

 

[Bloodhound]

Cable - long term position - Part 1

Hello there,

Not sure if anyone remembers me posting a chart in the last thread on what I perceived to be a possible 1-2-3 setting up on cable (monthly). I was particularly interested in this as the levels, both for the trend reversal at around 1.35, and for the current consolidation at around 1.70 looked pretty obvious to me and I am keen to have a crack at a long term position to see what develops from it. Anyway i have just posted my thoughts on my blog and thought I would share them here as well. (N.B. This will probably go horribly pear-shaped but I feel I owe it to cable to have a crack!)

Anyway, here goes......

P.S. If anyone wants to comment, laugh etc. please feel free to. I'm well out of my comfort zone trying to trade this way and am primarily using this to try and develop my trading in a fairly low risk but potentially high reward way. If this doesn't work the first time I may have a few cracks at getting in ahead of the 1.7050 level.
P.P.S All further entries are direct from my blog so apologies if I repeat anything already mentioned above

 

[Bloodhound]

Cable - long term position - Part 2

I've been thinking - always dangerous but at the same time hopefully this has been productive thought and relates to a longer term position I am looking to take in cable. Given that it's a longer term position I am starting with the monthly chart:

Looks like a possible 1-2-3 setting up with the break at a key level:

Sadly the stop on this trade would be massive so time to drop down a level or 2 and put some more levels on:

And why I think they are important levels:

Looking at the weekly price is obviously going up at the moment, which is what alerted me to the potential that the monthly 1-2-3 might be about to be triggered (obviously when I say 'might' and 'about' I am thinking in days and weeks rather than hours and minutes):

 

[Bloodhound]

Cable - long term position - Part 3

Here's a more detailed look on the daily:

The level shown here is the key to my plan as I believe this level to be very important:

And in the spirit of trading continuations this is the daily level that needs to be broken to signal further moves up:

I want to get in underneath the level shown above and, whilst I would usually look to H4 next, H1 is showing a clearer picture to me and also showing a decent SbR level:

With that level in mind, and the fact that I am trying to get in early, before that daily resistance level gets hit, I now have a buy zone where I will be aiming to get an M5 / M15 entry, and then will see what happens:

In an ideal world I will be looking for a break of the SbR level, followed by a retest of the level and then I will enter long with 3 positions. The alternative approach will be to trade off the lower RbS level. Assuming that I get a safe entry, and I will be trading the early phase exactly as I do a normal M5 trade, I will then move back up to the weekly to manage the trade. I will be entering with 3 positions and TP levels will (in round number terms) be 1.76, 1.86 and 1.93. Ambitious, possibly, but an interesting exercise all the same........ I am aware that, given this is a weekly trade, the weekly has yet to pullback again and I might be better waiting for this to have happened but I just want to start to chip away below the 1.7050 and see where price takes me. (1.35 here we come LOL!!)