Win ratio

[Clint]

Somebody Knew Something:

The news that rattled the GBP/USD came out at 08:30 GMT. The news spike began at 08:26, and by 08:30 the pair had already dropped 55 pips.

I wonder how much the heavy-hitters pay for an advance tip-off?

The 1-minute chart shows the front-running which occurred pre-news.





Here's what DailyFX had to say earlier this evening: Pound may be Oversold, but Data Continues to Deteriorate

More later.

Clint

[Clint]

Notes on the London Overnight Breakout Strategy for Wednesday morning:

The Period HIGH and LOW have been in place for over 4 hours, and the price pattern in tonight's box looks orderly and trade-able.

There is strong resistance 7 pips above the HIGH, but a breakout to the upside will likely take it out without great drama.
From that point, the next strong resistance is 48 pips away.

The situation is tackier on the downside: there are several support levels close together between 1.6100 and 1.6080, which the pair will have to plow through. Once that band of support has been breached, the next 50 pips down are free of significant support.

News is not an issue this morning.

Whatever worked for you Tuesday morning, should work again this morning.


Resistance and Support levels for Wednesday morning:

R -- 1.6275 -- August 17 low -- VERY STRONG
R -- 1.6247/50 -- August 26, 31, and September 1 multiple candle highs
R -- 1.6230/34 -- August 26, 27, 31, and September 1 multiple candle highs -- STRONG
R -- 1.6200 -- century mark
R -- 1.6182 -- August 31 low -- STRONG
------------------------------------------------------------------------------------
H -- 1.61752 -- Period HIGH
L -- 1.61125 -- Period LOW
------------------------------------------------------------------------------------
S -- 1.6100 -- century mark
S -- 1.6095 -- July 6 low -- STRONG
S -- 1.6081/80 -- June 4 low / July 7, 9 and 13 multiple candle lows --STRONG
S -- 1.6032 -- July 13 low -- VERY STRONG
S -- 1.6000 -- MAJOR century mark -- VERY STRONG
S -- 1.5982 -- July 8 low -- VERY STRONG


Scheduled News Releases:

No high-impact GBP news Wednesday morning. One medium-impact news item: Construction Purchasing Managers' Index
at 08:30 GMT.

No USD news until 12:15 GMT.


Entry Orders:

BUY 1.6184, SL(30), TP(20)

SELL 1.6106, SL(30), TP(20)


Last time was a winner. Let's do it again.

Clint

[beehjae]

yep, i'm on it.

although i've got my buy on 1.6182.

clint, your 1.6184 is because of the additional spread, correct?

[Merchantprince]

Clint, I have the same entry points as yourself, but am again going with a 24/48 ratio. Looking at just where the candles closed (excluding the spikes), I see a range of 1.61182 to 1.61669, a range of (you guessed it) about 48 pips. So I am banking on no retracements after the trigger greater than my 48 pip SL.

Thinking of letting it go, but am now noticing that, the same as last night, the first couple of candles after midnight have already nudged up past our High bar. As it's too early (again) for the actual London breakout, I'm pondering whether I ought do as I did last night and nudge that Long entry point a little bit further north to accommodate this movement.

Guess I'll be sticking around to watch this for a few minutes, after all.

[Clint]

Originally Posted by beehjae

yep, i'm on it.

although i've got my buy on 1.6182.

clint, your 1.6184 is because of the additional spread, correct?

beehjae,

On my platform (FXCM) the HIGH for the 10-hour overnight period is 1.61752 (bid). I rounded that off to 1.6175 and added 9 pips to it to get my Buy Entry price of 1.6184.

The 9-pip addition is: the 6-pip buffer + 3 pips for the spread.

The 3 pips for the spread is on the Buy entry only, because we don't buy at the Bid price, we buy at the Ask price, which is higher than the Bid price by the amount of the spread.

To walk you through it step by step, the HIGH is 1.6175 (bid) and 1.6178 (ask). When the price rises 6 pips above the HIGH, it will be 1.6181 (bid) and 1.6184 (ask), at which point my Buy Entry order will be triggered (that is, I will Buy at the Ask price of 1.6184).

Your broker's typical spread on the GBP/USD may be something other than 3 pips. You should add your broker's typical spread to the 6-pip buffer to get your Buy Entry price.

[Clint]

Originally Posted by Merchantprince

Thinking of letting it go, but am now noticing that, the same as last night, the first couple of candles after midnight have already nudged up past our High bar. As it's too early (again) for the actual London breakout, I'm pondering whether I ought do as I did last night and nudge that Long entry point a little bit further north to accommodate this movement.

Merchant,

If you're nervous about those probes above the HIGH line, you can move the Period HIGH up 7 pips. Then your revised HIGH will be at the same level as the 15:50 GMT candle high. (That may be a more natural Period HIGH than the one we are using.)

If you make this change, then your Buy Entry price will be adjusted upward to 1.6191.

[Merchantprince]

Yeah, after those two candles early on moved above the channel, the price went back down within the range and we await the breakout per normal. I had moved my Buy entry a grand total of three pips upward as a result of those two probes.

[beehjae]

Originally Posted by Clint

beehjae,

On my platform (FXCM) the HIGH for the 10-hour overnight period is 1.61752 (bid). I rounded that off to 1.6175 and added 9 pips to it to get my Buy Entry price of 1.6184.

The 9-pip addition is: the 6-pip buffer + 3 pips for the spread.

The 3 pips for the spread is on the Buy entry only, because we don't buy at the Bid price, we buy at the Ask price, which is higher than the Bid price by the amount of the spread.

To walk you through it step by step, the HIGH is 1.6175 (bid) and 1.6178 (ask). When the price rises 6 pips above the HIGH, it will be 1.6181 (bid) and 1.6184 (ask), at which point my Buy Entry order will be triggered (that is, I will Buy at the Ask price of 1.6184).

Your broker's typical spread on the GBP/USD may be something other than 3 pips. You should add your broker's typical spread to the 6-pip buffer to get your Buy Entry price.

i see. that's well explained.

i hope it breaks clean.

am i seeing things? it's like a penant forming

[Clint]

Well, that sucks.

I think every SL up to, and including, 50 pips just got hit.

This morning was just like most of last week --- crappy.

I'll talk to you guys later.

[TalonD]

Originally Posted by Clint

Well, that sucks.

I think every SL up to, and including, 50 pips just got hit.

This morning was just like most of last week --- crappy.

I'll talk to you guys later.

what sux is knowing ahead of time what the price is going to do and still not trading it the right way

ahh it's only money.. I'll make more
:P