Quote:
Originally Posted by cosgrove
What do you make of this USDJPY setup? We've seen a lower low and lower high on the weekly chart, with all of the stochs turning down. On the daily, stochs have crossed down 76.4. The 4h stochs are oversold, and the last 4h bar on friday broke a previous support level around 112.72.
These make it seem like a valid trade to me, but I'm worried about the overall weekly and 4h trends. I guess I can sit this one out.
|
Cosgrove ... you make me smile ... always enterprising... and alert for a nice set-up!
I haven't responded prior to tonight (OZ time is 10pm 01-01-2008) because of technical stuff (had to rebuild my MT4 templates and am now wary of another crash in the Virtual Machine I use inside Mac Safari. So far so good...
All I can comment is to not try to pre-empt the chart direction - just trade the set-up as it presents. Go back over this thread:
Spuds Stochastic Thread Theory
and read it (print it out in full if you can). I was going to say to read specific post numbers in that thread, but it is all so valuable, it must ALL be taken on board. This will make you a confident trader. I can not thank this person enough (Spudfyre) - he seems to have left that forum.
You can see that the Stochs are very "frayed" as if the "rope" is unravelling.
While this condition is OK once you are IN the trade, it is NOT OK to use as an entry ... even if a shorter TF is looking good.
You can see that the 14/3/3 Stochastic (the heavy mid-line stoch) is wandering in no-man's-land, and when it is like this, it can go either way. Trying to trade when this condition presents, is likely to end in tears at some point.
Keep your patience and your head. The more you can discipline yourself to obey the rules, the stronger trader you will become, and the more you will commit the "right" conditions to memory.
This will make for a very confident trader over time, and there are days when you will need that confidence.