Has anyone else been caught up by the JPY pairs long trades last week? I went long for CADJPY, CHFJPY, NZDJPY, EURJPY, GBPJPY and USDJPY on 3rd Feb. Now, GPBJPY and USDJPY have been stopped out, all other JPY trades are closing to the initial SL. Lost a lot on JPY trades this time. :31:
How is everyone managing the risk of over exposed to one currency when using this system?
Yup, the fib looks right.
One way is selecting the ones based on RSI as explained by Philip. The ones with better trend (but not over bought/sold) will have better success.
I also took the same trades. Some of them went for loss, some of them I closed early for a small profit!!!
I am currently in EURNZD. (+174 pips)
Was in NZDCAD, but stoploss hit because of that big bar. But did make some profit.(+61 pips).
Always keep an eye on fundamentals. They can spoil any sophisticated grid technique hands down.
I made a freaking good amount of pips on HF just watching how credit concerns swell in Europe, Oil falls and fund managers advice clients to buy out JPY because its undervalued. The rest is market psychology 
I agree with profitbaby, trading is about a combination of tools. patterns and candles don’t mean much if you don’t pay attention to what’s going on with the pairs and news etcs .
Yes it is correct.
There is another reason for this, a technical reason.
Now we trade mostly on the 4 hr time frame. We said the pattern is very simple: 1) moving average cross. 2) Stochastic moves to other extreme and cross over its MA. 3) Enter.
Now just like that applies to the 4hr, it applies to the daily, weekly and monthly chart. You entered on the 4 hr chart at a time where the USDJPY long pattern was moving to oversold on the monthly chart. This meant getting absolutely trashed on the 4 hr time frame.
So keep an eye on the Yen monthly chart because a lot of people are talking up yen strength. I think they will be eating their words in a few months.
Who are you referring to?
Because if you’re playing this game in the here & now & by that I mean a timeframe of a few days to a few weeks, which the vast majority of retail clients are, you won’t care what’s going to happen in a few months.
The market could & probably will be operating under a very different set of influences at that time which will offer the same type of opportunities as it has for the last 8 or 9+ handles worth of strength for yen v/s the dollar & corresponding yen based pairs.
Never mind what Yen might or might not do in a few months, just take what’s on offer now & readjust your game plan as & when it warrants it.
The thing is, there is no such thing as trading the present. You can only trade the future. Some people could try trading on the five minutes. Others could trade on the monthly. You can make a profit trading on both time frames, so both are useful. Although its obviously clear that a trend is very defined on the monthly chart. Where on the 5 minute you can find both a bullish and a bearish trend within the same day.
Those who will eat their words are analysts on tv who think hiking rates have led to a reversal in US stocks. So I’m saying that base on the monthly chart, we will have a new high. Following the pattern on the monthly timeframe will lead you to it.
Anyone short USDCHF?
I am NOT shorting the USDCHF right now , because the trend is bullish and strong at. that
Nope. RSI filtered out this one.
Hi Philips ,
Just wanted a confirmation on the below :
Philips i tried reading your thread again on babypips and i found u have mentioned the below :
For Long : if you want to draw fib extension levels for taking profits then you can draw Fib retracement tool from High to Low instead of Low to High and vice versa for Short i.e. High to Low instead of Low to High and exit depending upon the Fib Levels … Is this still a valid exit strategy and can be followed rite Philips ?
Regards
Shaan
I am on short on below
EurJpy , GbpJpy , UsdJpy , CadJpy , NzdJpy , AudJpy , GbpChf
Long on EurGbp .
Regards
Shaan
I’m about to share with you an interesting confirmation filter. We have discussed using the RSI range to filter out trades. Now I’m going to teach you a very powerful RSI technique. Only a handful of traders use the RSI the way I’m about to teach you. Get ready to unleash the real power of RSI.
You will also need parabolic SAR for this one. So let’s start.
You heard a lot about RSI divergence and how it is a powerful way to detect reversals. Now this is true. RSI is very powerful in detecting reversals and trend continuations alike.
Now if you have been to the babypips school or listened to any RSI expert, they would tell you that a bearish divergence forecast a reversal of an upward trend into a downward one. And a bullish divergence means the trend is about to become bullish.
As you can see here is a very strong bearish divergence on the weekly chart of USDCAD. You can clearly see how price completely ignored the divergence and made a higher high.
That’s lesson no.1: A bearish divergence confirms the uptrend. A bullish divergence Confirms the down trend.
In other words, if you see a bearish divergence you should be more confident you will see A new high. And if you see a bullish divergence you should be confident of seeing a new low.
Now you need to use the parabolic SAR to help you locate divergences. The parabolic SAR are dots placed below and above prices depending on several factors I wont get into. You need to compare the RSI of areas above the dots with one another and the RSI of areas below the RSI with one another. But only the last two.
Note: for simplicity, let’s call areas where price is above dots as “bull” and areas where price is below dots as “bear.” We want to compare the most recent two bulls in search of bearish divergence and the most recent two bears in search for a bullish divergence.
For example:
It’s a bit tricky this part, but I hope the pictures makes it easier. Also looking at charts will help. I will have a tip on how to do it effectively but I’m not done yet.
So now let’s say that I have spotted a bullish divergence. That means I’m more confident of seeing a new low. Does that mean I should short straight away? The answer is no, it just means I should not go long. To short I need to see another sign. That is the hidden divergence.
Bearish hidden divergence: When price makes a lower low but the RSI makes a higher high.
Bullish hidden divergence: When price makes a higher low but RSI makes a lower low.
Now to make it easy to remember, a bullish divergence is only accompanied by a bearish hidden divergence. A bearish divergence is accompanied by a bullish hidden divergence.
Example:
So in this example you can see price moving from A to B, then to C ( a lower low.) On the RSI price move from 1 to 2, then to 3 (a higher low.) This is a bearish divergence, we are now confident price will see a new low.
Afterwards, price moved from C to D (a lower higher.) On the RSI price moved from 3 to 4 (a higher high.) This is a bearish hidden divergence.
Now we want to sell when the stochastic crosses below the signal line. This happened at the black vertical line. Our target would be one pip below C and the stop loss would be one pip above B.
Now I will share with you how to use this technique to filter our main trading pattern.
Here is something we can keep an eye together…
The black vertical line is where our trading pattern completed on the 4 hour chart. I moved to the 1 hour chart and observed the two most recent bull and bear areas.
If you look at the RSI I placed two black lines. They marked the levels corresponding to price low and highs.
If you look at the small arrow in the RSI, I placed it to mark that the RSI has crossed below the black line. That means the RSI made a lower low, but if you look at the price it made a higher high. This tells us not to enter as per our 4hr time frame signal but wait for the new high.
Then, as a plan B, you have the red horizontal line at the chart. Price will need to touch that level (which corresponds to the lower black line on the RSI) to tell us price has moved into a down trend.
So let’s see how things pan out. The current high in place is 2.01807.
UPDATE: Unfortunately price gaped downwards so we couldn’t test the method on this example.
Philips strategy looks good but for me it is bit of confusing
Regards
Shaan
