bobmaninc's quest to short the Aussie into extinction

[bobmaninc]

Since I have been getting a lot of messages as of late asking about how I trade the Aussie I have decided to start a thread. Since to com dolls section does not get much activity I figure this is a good place to bring it to bring in more interest to this section. Before I get started there are some things you should know before hand. Although my way of trading is different than most you will not find a single concept in my trading that is not already on babypips somewhere. I have stolen every concept from one thread or another on this forum. Some concepts have been tweaked to fit my style of trading and other concepts were good straight out of the box. I am not going to steal (at least not trying to) any credit for these concepts and will refer you to the other threads from time to time. There are 2 main threads you will need to know of to understand my trading and the concepts used.

The first is a thread by Nikitafx
Pure Price Action For Dummies.
You will need to know and fully understand (if that is even possible) price action. As That is a foundation of my trading. There are other threads popping up lately on price action that have good stuff on it. However I was a contributor to this thread and I like what the thread has to offer. I do not use everything discussed on the thread but it is golden to understanding my trading style.

The second thread and of equal importance is by ICT (Inner Circle Trader)
What Every New & Or Aspiring Forex Trader... Still Wants To Know
On this thread you will get a great head start on the tools I use as reference in my trading. Again I dont use every concept on this thread in my own trading but consider every concept worth there weight in gold. When these concepts are combined with my style of price action results can be amazing.

I only trade 1 pair the Aussie Dollar (AUD/USD) and I only trade in one direction (short). The purpose of this is to keep my life simple. Instead of going through trying to find trade setups and what pair has the best setup and what direction is the pair going. I prefer to keep it simple and just wait for my set up to come to me and then I take it. Keeps my focus in check and zeroed in. Instead of spread out over a wide range. Just like a sniper. A sniper knows his target and hunts it. Snipers care not for any other target but the one they are after. The rest is just a distraction.

Now before we proceed any further I must warn you. If you intend to follow this it will take extreme discipline and extreme patience. I can say that only shorting any market is a loosing strategy and I can tell you that you WILL loose money. Even though I can show you how to profit off a loosing strategy this is not for the faint at heart. If you are that person then look at another thread or take up knitting (recommended). THIS WILL REQUIRE DISCIPLINE LOTS OF IT.

Now this brings me to the first lesson and most important lesson a trader will ever learn in trading. This concept is risk management. I know you all have herd it so lets move on right? Wrong lets take a step back and revisit this. Especially when going short in bull markets. Again the Aussie has been in a bull market for almost 10 years with only a couple retracements along the way. As I have said already shorting bull markets is suicide unless you have impeccable risk management and extreme patience and discipline. So there are 2 videos I want you to watch from ICT that I feel explain what I would try to get across better that I ever could. You will see me refer you to others threads on here all the time. As I am not a mentor, a teacher, or a signal service. I am a trader. I trade not teach but I will go out of my comfort zone and give the people here what was given to me. If I need to slow down or dive deeper into something then please dont be afraid to ask. You help me I help you. Anyhow enough rambling the to videos I want you to check out first are
Forex Risk Management - YouTube
Handling Losses and Inevitable Drawdowns - YouTube

More to come.

[Nikitafx]

hehehe I like the tittle very much.

On a swift glance, readers might assume you dont like The Crocodile Dundee nor the Kangaroo much!

[bobmaninc]

hehehe I like the tittle very much.

On a swift glance, readers might assume you dont like The Crocodile Dundee nor the Kangaroo much!

HEHEHE its nothing personal but they are the ones I set my sights on. Also here in florida we have a problem with alligators so I like gator tail. Always wandered what a croc would taste like lol. We actually do have them trun up in our waters from time to time. Its not uncommon. Some even suspected to have traveled as far as from the great outback. Not sure how they get here but they keep showing up. Got to love the over grown lizzards.

[SxL54L]

Will be following

[salimvp]

Great Bob, Great...

It's very good to see you start a thread especially on AUD/USD. I hope you analyse and post analysis the mentioned pair everyday. LOL...

Waiting for more..

Whenever I spot a trade idea on AUD/USD, I thought to ask you about the signal strength. But I afraid. I think this is the best place to ask questions. Lets trade together. :P

Regards and Best wishes,
Salim

[sharebazar]

Bob I will follow your thread.your explanation always great help for me.

[bobmaninc]

Good to see people are interested. I will get back later on a few more topics. Also I went home for lunch and entered a short off the retest of Pairty. Kind of a risky trade seeing as how the daily has not closed below it yet. However I will show as to why I entered and what the results are later. Has a pretty tight stop so could get stopped but if it dont it might look like a nice entry.

[bobmaninc]

The next topic I want to touch on goes hand in hand with the first one STOP LOSS. I consider it more trade management than money management. If you watched the ict videos in my first post. He covers money management very well. Now once you understand how much risk to take on the trade and you have a possible entry (will get into that later) guess what your not even close. Depending on the trade setup my stoploss will be different (in terms of pips). To me setting a certain number of pips stop loss is a bad idea. If the chart is not telling you there is a reason your stop is safe then guess what? Its a sitting duck and so is your account. Now if you have the charts telling you your stop a most likely safe at X location that still dont mean its safe to take the trade. What I mean by that is it dont mean you can afford to take the trade. For example if you have a 1000 usd micro account and risking 2% on this trade you can risk 20 usd. This can mean you can risk up to 200 pips (does not mean you should). The basic idea here is if you get your stoploss small then you can up the pip value and make more money on any given trade. This concept is very important and will not be learned overnight. You will experience pain trying to get this down to a fine science (and when I do I will let you know). But once you do the rewards will be incredible. Generally I look for pin bars to form on the higher time frames at a S/R level and look to enter on the 50% retracement of pinbars wick. Well on the daily that is still a pretty big stop loss. Some wicks on the daily can be 50-100 pips. So look down to the lower time frames and with methods from nikitas thread and ICT concepts mixed with other pin bar setups on the lower time frames I have shown you all stops as low as 9 pips that ran well over 100+ pips. I am also here to tell you it is not hard to do psssh BS it is very hard to do. Remember this takes extreme discipline and patience to do what I am going to show you. I will also say if you are trying to become a millionaire find another thread (I dont have a million so how do you think you will make a million) unless you have the capitol to do so realistically. I will also say you will loose trades often very often if you cant take a loss then check the holy grail forums and good luck. However risking 10 pips to make 100+ I will say you dont have to be right very often to make money. IF you have to trade every day again find a scalping method for you. With this method you may make 1-2 trades a week (its all you need). Another thing I will show is my methods of entry and trade management and show you how most of the time even when your wrong about the market you can still walk away with out a loss.






I left the space above for a trade to show ideal trade set up using my pin bar method. I did take a trade today but it was not a typical trade. I will show it on the next post just to show some basic concepts I use to find my entries. Even with out a pin bar set up or candle formation at all. Although this does not happen often.

[bobmaninc]

Here as promised is a trade I took on my lunch break today. The reason for entry was simple we broke pairty today and retested it. This level also lined up with the daily S1 pivot (not shown), the 61.8 fib (shown) and broke the bottom of the daily traders trinity but retested at this level (not shown), momentum is down. I didnt get a pin bar as I like but there was enough to enter. Since I could place a stop 10 pips away. The first chart I will show the fibs are incorrect. When I came home my power was off and laptops battery died. I tried to redraw the fibs but drew them in the wrong spot. I drew them off a swing that happened after my entry. The only reason I am even showing it is to show the original entry. The second chart the fibs are correct. It also shows my stop at break even and 1 lot cashed out. Since my stop was 10 pips I look to take my first lot off the table and move stop to BE at 1:1 so I needed 20 pips on this trade.

First chart

Second chart with correct fibs after stop to BE

If after this retrace breaks the previous low I will move stop to the high of that swing (about where price is now). But as you can see even if I am wrong I make money. That is the biggest point of this thread. To show that it does not matter what the market does if you are nimble and quick what the markets want to do is irrelevant. You can get out with profits even when wrong (as in this case I think i am but what I think also is irrelevant). Hope this helps there are other reasons for this trade but thats a story for another day. For now if you have any questions please ask.

LOL I just realized after looking at this post the 2 charts do not match. The first is a 15 min chart the second is a 10 min chart. Trade was taken off the 15 min. Not sure I must have clicked the wrong tab and clicked the 10 min instead of the 15. but will not bother and fix it as you can see on both charts they say the same thing. There was no candle formations I was looking at.

[sharebazar]

For example if you have a 1000 usd micro account and risking 2% on this trade you can risk 20 usd. This can mean you can risk up to 200 pips (does not mean you should)

Bob very well said.

looking forward to see some pin bar method.