Forex Playmaker - Symmetrical Trading

[Forex Playbook]

Hey babypips members...

Now I know what you all are thinking ... here comes another arrogant newbie posting his own thread for all the world to see. While I understand the frustration, I do hope you take the time to get to know me and recognize that my intentions are good.

While I am a newbie at babypips, I am by no means a newbie trader. I have been trading Forex on a professional desk for several years and before that I was an equities trader at the same firm.

I like to describe my approach to Forex as Symmetrical Trading, though most others will refer to it as Technical Trading. By necessity, I am 90% day trader in my professional life and 10% swing trader. On this thread, however, I will focus 90% on swing trading, which is in fact my preferred trading style. Plus, my current employer would be extremely upset if I were posting on forums between trades!!!

My hope for this thread is to discuss some swing trading strategies that I have developed over the years and perhaps offer a bit of education in the process. I also believe that I still have a lot to learn and that the feedback and ideas posted to this thread will help me grow as a trader as well!

OK, enough introduction for now ... there will be time for us to get acquainted as this thread develops!

Forex Playmaker
(not my given name!)

[Forex Playbook]

I've had my eyes on the USD/CHF for some time now. Over the past 3 or so months, a descending triangle formation has developed amid a longer term downtrend. IMO, the next leg down will bring the USD/CHF to near parity.

[Forex Playbook]

Ideally, the opportunity to short the USD/CHF at 1.07-1.0750 will present itself over the course of the coming trading week. As far as a stop loss, I would look to the 1.0950 level with a target of 1.0125.

A trade setup like the one described above offers a great RR Ratio (reward to risk ratio), paying approximately a $2.66 reward for every $1.00 at risk.

[Forex Playbook]

Across every major time frame, the USD/JPY is trending lower and over the next couple weeks it will likely revisit the 90.00 level (if not lower). While shorting the USD/JPY is an easy call, the problem is that the pair is in retracement mode, which makes finding a good entry point with a favorable RR Ratio very difficult.

In cases like this one, I like to test the waters with a small position and a tight stop. If the retracement continues against me, I will be taken out of the position at a small loss, though correct timing will yield a disproportionately high payoff.

BTW, I do not personally trade on holidays, nor do I recommend it, as liquidity tends to run dry, causing currency movements to be erratic. But I do have the day off, which allows me a little time to post a few ideas before resigning to the couch to watch college ball. In case you're wondering, I'm taking Miami (Florida) +6 over the Gators

[Forex Playbook]

For an entry point on the USD/JPY, I am looking to the 5 minute chart, which appears to show the makings of a head and shoulders pattern. Longer term charts, meanwhile, all point to an obvious downtrend -- it's always nice when a trend can be confirmed across multiple timeframes!

Were I to take this trade, I would place my stop around the 93.30 level, though I would plan to adjust it toward my entry price should the pair move in my favor. Once my stop price = my entry price, I would simply let the trade play out.

[Forex Playbook]

Keep in mind that under general circumstances a head and shoulders pattern on a 1- or 5-minute chart is not that reliable. There is simply insufficient data to validate the pattern. In the example above, however, it does provide a low risk entry point for the USD/JPY, which is exhibiting a clear longer term downtrend.

[Forex Playbook]

It's always good news when guys like (cftc.gov/newsroom/enforcementpressreleases/2009/pr5711-09.html)Beau Diamond are caught and disposed of:

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained an emergency federal court order freezing the assets of defendants Beau Diamond and his company, Diamond Ventures LLC, both of Sarasota, Fla. The court’s order also prohibits the destruction of documents and grants the CFTC immediate access to defendants’ documents.

Unfortunately the punishment never quite fits the crime.

[Forex Playbook]

Originally Posted by Forex Playbook

In case you're wondering, I'm taking Miami (Florida) +6 over the Gators

Now that was a great call!

[tradertan]

Hi,

Read your thread. Good solid info. Keep it coming.

How does the EUR/AUD look to you after the current USD moves?

[savedbygrace7777]

Hey.

Read your thread. I am super new to this game, but am studying on this site, and I have been trading on a practice account...today is first day...done about ten trades....made some mistakes....SURPRISE, but at the moment I am only down $37.

Forex Playmaker...some questions....

I think that I am more suited to swing trading, but I am going to be starting with a micro account (in three months...hopefully I understand what I am doing enough to risk real money...this ain't pokerstars...), and I will have $1000 max to work with...how effective could I be at swing trading with such a low bankroll to start...I am thinking margin will be my issue?

Which broker would you recommend for my situation?

What three or four pairs would you stick to if you were me?

Given that I have been in the car business for my entire career (read, I am just a dumb car guy), I am just starting to watch cnbc, mad money, etc. Is there a source on the net for information for someone like me? Can you give me particular news type indicator ideas for the three of four pairs you would concentrate on trading if you were me.

Thanks in advance.
God bless.