Still out of USD/CAD, doesn’t seem to want to go in either direction this week.
I’ve reviewed the JPY trades that went pear shaped and can see 2 reasons why that happened now.
Using the method of drawing major S/R lines on the weekly chart using the line graph I can see that where I entered EUR/JPY it was just above a major support level. I’ve attached my weekly chart with some rough (probably not that accurate) S/R levels drawn on the line chart.
Now looking at the second attachment you can see the trade entry signal.
The trend channel trade I entered looked good with a bounce off the upper line for a short trade in a downward channel. The entry signal was a BEEC that looked pretty solid, stochastic crossing over and heading down out of overbought territory - textbook trade right?
It was until it hit the major support level at around 121.79 (probably inaccurate but close enough ballpark) and headed straight back up.
So in retrospect I should have either:
Banked the 100 or so pips at the support level - or
Never even entered based on risk/reward rules of 1:2
Also this news is probably what triggered the reversal:
So now those bad JPY trades make perfect sense. What I’m taking from this is:
[ol]
[li]Do not double (triple in this case) up on positions with the same currency
[/li][li]Identify support and resistance levels on the weekly line chart
[/li][li]Draw weekly pivot points as well
[/li][li]Don’t trade into major S/R levels!
[/li][/ol]
Those JPY losses are now wins in terms of eduction and a few beers well spent
Lookng back at the EUR/JPY trade - Wednesday’s bullish engulfing (that stopped us all out of our short trades) is actually more like an entry signal to go long all the way up to 129.66.
EDIT - Looking again at the 1D chart in previous post the price seems to be making a reverse head & shoulders around the support level. We like no?
Looks like it’s breaking out to the downside. Could just be a news reaction though. If this is a real break to the downside will it go all the way to 1.000?
Its always best to wait, I was wondering why the other entered yesterday before the daily bar was closed. On the eurjpy entry you took, it seems you entered after the engulfing bearish pattern on the daily as shown on your chart, but the thing is the bar left of that was a Sunday candle hence it would be a false signal, seen that we only have 2 or so hrs of data within most Sunday candles. Oh, candle formations is apart of my strategy on daily and weekly charts.
EJ stalled at the extension creating all sorts of formations signaling a possible retrace(short term). You mention Wednesday engulfing bar, this was another sign of a possible rally seen that it forms after a retrace.
Thanks for your input! I’ve been following your trade ideas as well.
Yeah - I only saw this when I looked at the support line right below it which I wasn’t looking at before. It makes perfect sense now, it’s like someone turned on the lights - and it’s up >125.00 already
That’s a bit of an experiment of making marginally tighter stops, no particular method yet - work in progress. I’m thinking of putting it around the high/low of the previous candle - or recent swing high/low. Really will be trade dependant.
[B]EUR/JPY[/B] - entered Tuesday am after large bearish engulfing bouncing off 125.00 resistance. Alsmost got stopped out but stayed in with a S/L at 125.10
Entry - 123.82
S/L - 123.52 (B/E + 30 making a risk free trade)
T/P - 121.51
[B]GBP/CHF[/B] - set entry stop buy order that got triggered on Tuesday at 1.6080. Moved S/L to B/E + 30 and got stopped out for + 30 pips. Entered again yesterday:
Entry - 1.6157
S/L - 1.6080
T/P - 1.6300
[B]USD/CHF[/B] - see post above for entry signal and trigger
I’ve been spending a lot of time over at the other place and getitng through all the strat/J16 stuff. There’s a good few books worth of info to get through there, it’s starting to make more sense though.
I’m officially a ‘no-indicators’ trader now MAs, trend lines/channels and volume don’t count
In reflection of the GBP/CHF trade I can see one reason where it went wrong – ignoring news etc.
I was banking on a trend reversal and trying to pick out a bottom. This isn’t something I want to be attempting, I want to take corrective retracements in the direction of existing and confirmed trends. Preferably in their earlier stages when momentum is strong
I can see GBP/CHF flapping around and testing 1.6000 for a while yet before either reversing up or continuing further down
Another loser turned winner
Edit - Reverse head and shoulders anyone? Think I’ll wait for confirmation and any institutional stop hunting games/traps!
The Swiss Franc has extended its broad based rally during Friday’s European session as reaching levels close to all-time high against the Euro which adds reasons to expect some action from the Swiss National Bank
I thought one of the main reason’s behind yesterday’s price move was that new SNB guy saying that they weren’t going to intervene and just let Mr. Market dictate the price of the CHF?
Note to self regarding fundamentals - ignore them!
Set stops accordingly so when dumb money decides to stampede over the edge of a cliff it won’t affect my positions :mad:
