My Basic Chart Analysis Method

[phil838]

Originally Posted by flast150

what do you think about this trade? i took long this week on the G/Y @ 150,51 my target is the orange zone

i attached the Daily and the H4 chart


What do you think about this analyses?

I'd call that a slightly better than average setup, it's not great, but it's enough to make it a good trade... except for one thing. It's NFP Friday!

If you'd have asked me this morning I'd have said not to trade it, because of it being NFP Friday, but it looks like you survived the whipsaws and are on your way to profit!

Even though it worked out for you I still don't think it's a good idea to trade so close to the NFP. A spread increase combined with the 175 pip in 15 minutes move GBP/JPY made could have hit your stoploss if the pair hadn't move up quite so much before the report.

Other than that... It's a great analysis and a good trade!

[phil838]

There's a good lesson to be learned from this setup...






A perfect reversal candle forming right on an S+R area! Great trade setup, right?

Wrong! This candle was caused by low activity, not indecision. It happened because of the bank holiday in the US. You can clearly see this when we throw a volume indicator on the chart.





Notice that the 12:00GMT 4H candle is the most active candle of each day, but this so-called reversal candle has little volume compared to normal 12:00 candles. This candle could be a false signal, so it's too risky to trade in my opinion.

[s050399b]

EURJPY in the daily charts looks like it can go either way?.......range seemed to be getting smaller.

[pipal28]

Phil,

thanks for all the info in the e book. Have you started the trading room yet? Aslo the 2nd e book? I have read all the posts and did not find a link for it?

thanks

[coolpixel]

Hi Phil,
I was wondering where you obtain your Volume info from - do you purchase a feed? Having an account with FXPro (on demo), the volume given is limited, being only generated from their userbase. Thanks and have a good Sunday!

[phil838]

Originally Posted by pipal28

Phil,

thanks for all the info in the e book. Have you started the trading room yet? Aslo the 2nd e book? I have read all the posts and did not find a link for it?

thanks

Hi pipal28,

While I was working on the trading room and 2nd ebook I was in a car accident and everything got interrupted.

Now that I gotten back on my feet I'm still working on everything little-by-little, but to be honest I've got more projects than I can handle. I finished a 75 page book that covers everything my first ebook covered, plus the extra information the second book would have covered, but I'm still not done with the screenshots.

Right now I'm focusing most of my energy on finding something to replace the the NickB method, which stopped working a few months ago and used to make up 75% of my income.

[n_aftab]

Phil.

I dont think there was anything wrong with your original method of channels, support and resistance and candle sticks it works fine.

Dont forget statistically the worst trading months are the holiday months just gone.

Regards

N

[phil838]

Originally Posted by coolpixel

Hi Phil,
I was wondering where you obtain your Volume info from - do you purchase a feed? Having an account with FXPro (on demo), the volume given is limited, being only generated from their userbase. Thanks and have a good Sunday!

Hi Coolpixel,

Volume in the forex market is not based on how many transactions were made or how much money is traded. It's based on how many price "ticks" happened in a given time period. The numbers may be different from broker to broker (because some brokers update more often), but the ratios will be nearly identical.

For example, if price is at 1.5000, moves up to 1.5001, and then back down to 1.5000 then that's a volume of 2, since price moved a total of 2 pips (1 up and 1 down).

Any brokers volume feed is fine to use. Just remember not to compare numbers between brokers, just ratios. If today's volume is twice as high as yesterday's volume it will be that way on every broker, the numbers will just be different.

For example, IBFX may say the volume is 1000 today and 500 yesterday, while Alpari may say 2000 today and 1000 yesterday. Alpari's price feed updates twice as often as IBFX, so the numbers are greater, but today's volume is still twice yesterday's volume.

[phil838]

Originally Posted by n_aftab

Phil.

I dont think there was anything wrong with your original method of channels, support and resistance and candle sticks it works fine.

Dont forget statistically the worst trading months are the holiday months just gone.

Regards

N

I agree! This method works just fine.

I was referring to a separate strategy, the NickB Method, as the one that stopped working.

Up until recently most of the trades I took have been using the NickB method. It's advantage has always been that you can see the trades coming (and set up pending orders) days or week in advance.

The weakness of my method is that you only see the trades a few hours before they happen.

I'm still trading this method just fine, although the profits have gone down in this ranging market. I'm getting about 1 trade per week with little more than a 1:1 ratio of profit.

[coolpixel]

Ok, thanks for clearing that up Phil! And I hope that indeed it was only the holiday period that messed up yours (and many others' I imagine) income regarding NickB. I downloaded, printed and read the book myself not long ago, was going to let things sink in, then study again - so it seems no method is forever...