My Basic Chart Analysis Method

[johnnykanoo]

hey mumpips all the arrows point to inside bars

*note the 4th arrow is an ib but for some reason when i take the picture it doesn't show the wick of the candle before it.

[bulhata]

Originally Posted by phil838

People keep asking me how I do my chart analysis, and I keep saying I'd have to write a book to explain it all. Well... Here's that book!

Calling it a book may be a bit of a stretch, it's only 12 pages, but I think it's a good entry point into the world of trading "without rules."

I'm happy to answer any questions you have, but I just spent the better part of a Saturday writing this, so at least read the whole thing before you ask! Your question may be answered later in the ebook.

Phil, this e-book is the best one i have read. Everything has been explained simple and very easy to understand. I had read many articles, forums.....before but noone else could have explained it better. After i read your e-book I know how to place trades now.
THANK YOU SO MUCH!

all the best

p.s. Phil, where are you going to post part 2- breakouts? I'd liketo read it

[phil838]

Originally Posted by mumpips

HI Phil,

Great to see your new book. I can't wait to read it and I know it must be a good one. Personally, I like your style of answering questions....details,patience and most important is humble.

Do you have any blogs for people like me to learn more from you.... I am just started to throw away all the indicators after I found NickB's method and I am glad that I also have found an experience trader like you, thank you for being there whenever I have those funny funny questions inside my head.

Wish you all the best in your trading journey.

I've thought about doing a blog, or even a whole website, but don't have one right now. Maybe in the future...

I am trying to get a part-time live trading room started, but I'm still looking at software. I want something that's cheap enough that I can run a free room, but still does all the things I want, like desktop sharing, whiteboards, etc...

Anyone have any ideas?

[phil838]

Originally Posted by mumpips

HI Phil,

I have just finished reading your ebook. It's a good one. Thanks for sharing.

I have few questions, hope you can help:-

(1) Can you explain Stop loss on mini lot?
(2) Ref to IB, does the colour of candles matter? let say, red & green...the price will move up and green & red...the price will move down?
can you show more example on IB?

Thanks for your great help.

Sure!

Using the same example from the ebook, say you wanted to risk $20 and your trade had a stoploss of 50 pips. That's $20/50, which is 40 cents per pip. A standard lot is $10 per pip, a mini is $1, and a micro is $0.10. If 1 mini lots is $1, then .4 mini lots is 40 cents.

Some brokers won't let you trade fractions of a lot though. If that's the case then you'll either need to get a new broker or move down to a micro account.

As for IB's, the color does not matter. Using Johnny's picture he posted the only IB I would have used to help base a trading decision off of would have been the fourth one where price bounced off the S+R zone. I only use the IB's to help confirm a reversal and to determine an entry point (a few pips above or below the IB).

[phil838]

Originally Posted by bulhata

Phil, this e-book is the best one i have read. Everything has been explained simple and very easy to understand. I had read many articles, forums.....before but noone else could have explained it better. After i read your e-book I know how to place trades now.
THANK YOU SO MUCH!

all the best

p.s. Phil, where are you going to post part 2- breakouts? I'd liketo read it

Thank for the kind words Bulhata! I'm glad I could help!

I'll post part two in this thread when I'm done with it, which should be sometime next week.

[mumpips]

Originally Posted by phil838

Sure!

Using the same example from the ebook, say you wanted to risk $20 and your trade had a stoploss of 50 pips. That's $20/50, which is 40 cents per pip. A standard lot is $10 per pip, a mini is $1, and a micro is $0.10. If 1 mini lots is $1, then .4 mini lots is 40 cents.

Some brokers won't let you trade fractions of a lot though. If that's the case then you'll either need to get a new broker or move down to a micro account.

As for IB's, the color does not matter. Using Johnny's picture he posted the only IB I would have used to help base a trading decision off of would have been the fourth one where price bounced off the S+R zone. I only use the IB's to help confirm a reversal and to determine an entry point (a few pips above or below the IB).

HI Phil & Johnny, Thanks for the reply.

Phil,

(1) I usually having problem to decide my exit point. When I look at the candle moving against me, I will exit prematurely and my profit is always very small even though i got a good entry. Any advice on the Profit take?
How do you get 630pips?(shown in your last page of ebook) How long do you need to stay in that trade? Do you check news for exit? what type of trader are you- intraday or long term?

(2) Correct me if I am wrong, anything falls within S&R zone is in the no man's land, so, will you attempt to enter trade if the momentum is high?
If not, what will you do then?

(3) What is your win:loss ratio base on your trading method? How many pips you get per week?

(4) Looking forward to your live trading room,btw, where do you located? will you hold it during Asian time or Europe time?

Sorry for all these long winded questions and thanks for your great help

[phil838]

Originally Posted by mumpips

HI Phil & Johnny, Thanks for the reply.

Phil,

(1) I usually having problem to decide my exit point. When I look at the candle moving against me, I will exit prematurely and my profit is always very small even though i got a good entry. Any advice on the Profit take?
How do you get 630pips?(shown in your last page of ebook) How long do you need to stay in that trade? Do you check news for exit? what type of trader are you- intraday or long term?

(2) Correct me if I am wrong, anything falls within S&R zone is in the no man's land, so, will you attempt to enter trade if the momentum is high?
If not, what will you do then?

(3) What is your win:loss ratio base on your trading method? How many pips you get per week?

(4) Looking forward to your live trading room,btw, where do you located? will you hold it during Asian time or Europe time?

Sorry for all these long winded questions and thanks for your great help

(1) You should always have a clear profit target before you enter a trade. My target on reversal trades is usually the next S+R level or an area close to the opposite trendline. That's not to say I won't exit a trade early, but you need a reason to exit early. Saying "Oh crap, that candle is moving the wrong way" isn't a good reason to exit early.

I can't say exactly what a good reason would be, because it all depends on the situation. It just takes experience to be able to see problems with your trade. Practice, practice, practice!!

The trade in the last picture was on a 4H chart and lasted 5 days. That's pretty much the longest I've ever had a trade run. Sometimes my trades are over in a few hours, sometimes a week, but most are 1-2 days.

I picked that particular trade because it was the first one I ever took where I used an IB to enter. If you want to see it on your charts it's EUR/USD on Oct 14, 2008. I risked 2% on it and gained 7.5%, so it was worth waiting a week for the trade to happen.

(2) I disagree. I say anything that's between S+R zones is no man's land. If you look closely, you'll see I'm not really entering in the S+R zone, I'm entering the trade on one side of it, after a bounce, and placing my stoploss on the other side. It's a very safe way to trade.

(3) Pips per week is meaningless with a system like this, because every trade has a different stoploss and exit point. I keep detailed record of trades for the two systems I use (Sunday Breakout and NickB Scalps) but I don't for chart analysis trades. Each trade is different so recording that information doesn't really help me. My account keeps going up, and that's all I care about. If I had to guess I'd say I get around a 70% win ratio on these types of trades.

(4) I'm located in the US, but I don't have a normal sleeping schedule like most people. I'm awake when there are trading opportunities, and asleep when there aren't.

Since I'm not getting paid it won't be an 8+ hour per day trading room, more like 1-2 hours per day, and I'll spread the times around throughout the week so everyone can benefit from it. We'll go over the upcoming trades for the day, and review the ones that are finished and see how we could have made them better. I'll have a schedule posted somewhere so people know when it's open for the week.

[mumpips]

Originally Posted by phil838

Since I'm not getting paid it won't be an 8+ hour per day trading room, more like 1-2 hours per day, and I'll spread the times around throughout the week so everyone can benefit from it. We'll go over the upcoming trades for the day, and review the ones that are finished and see how we could have made them better. I'll have a schedule posted somewhere so people know when it's open for the week.

Hi Phil,

Million thanks for the details reply. I will keep practising till everything goes right.

You are really someone! Big thanks

[Pukey]

Just finished the e-book, Phil. Nice work! I found it very helpful and your timing was perfect for me. I'm looking for ward to the next one.

[dobro]

Thank you Phil. This ebook plus "Price Action Hero" should make me a good intraday trader. Thanks, d.