ElectroFX Pure Price Action Trading - Page 3
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  1. #21
    Join Date
    Apr 2008
    Location
    RN-Brazil
    Posts
    1
    -Follow these lessons since today and I'm interested in this new concept because for me that I am in the early phase of learning the trade of currencies it is important to follow advice from those who have experience. Thank you for sharing your knowledge.

  2. #22
    That should be a fair bit of information for you to go and spot these 2 setups on your charts both live and backtesting.

    I will wait to see if there are any questions before I move on

    Not seeing too much interest here.. please click my username and visit my homepage for more lessons
    Last edited by efxpa; 06-08-2011 at 03:36 PM.

  3. #23

    Default Swing Trading cont..

    OK, so lets move on and rewind back to the first trade I showed in this thread and take a look at a not so perfect set-up that required patience in order to take the safe entry. As you may remember I call this the core trade.

    In the image below I have tried to mark as much as I will need to explain this trade rather than having several pictures.

    Points A - E show how the market is swinging about.
    You can see that the TL was broken but point A did not make a Higher High than the previous swing High so this is only a half core trade. The PA is not yet correct. If you wanted to try and trade Point B you will notice that the RR was no good anyway and so this becomes a trade where you need to risk more than you can intelligently expect to aim for. So there is too much against this trade even though as you can see it was worth pips. The point is that the % of chance that this trade would have worked out is significantly less than the % of chance a full core will work out and so if you are trading big money you may aswell stick to the higher % trades.

    Points C and D then show you the market opening up, a Higher High followed by a Lower Low. At this point you can however see that the Gray Support box is still holding and as an experienced trader you will see this is a contained Low whereas the previous High was pushing into some more open ground. An experienced trader will trade Point D because there is great RR on the trade and a small SL with not much against the trade. However I want to really emphasize the basics with this thread at this point so let this serve as an intro to some more concepts that I will get back to later.

    Points E and F then set up some proper PA after the TL break and finally we have a Higher High followed by a Higher Low back at that Support box. Now everything I outlined at the start of this thread is in check and the trade is looking much cleaner. SL goes in its obvious place and entry is the break of that IB. Point E is a conservative TP and place to make sure RR is 1:1 or above. You are however anticipating a HH due to the PA but don't worry if you take profit at point E. It was still an intelligent trade if handled that way.

    TP options 1 and 2 are an intelligent way to judge the Higher High that you are anticipating. TP option 1 would have been my original choice when plotting things out as a set and forget trade and it wouldn't have bothered me that I could have reached TP option 2. Point E is a clear cut place to move your SL to BE if you do decide to shoot for the Higher High and not use it as a TP

    Please feel free to ask questions so I can make sure my explanation here makes sense to everyone
    Attached Images Attached Images  

  4. #24
    jusiur Guest
    thanks for your efforts, I´m learning your PA, I´m in touch.

  5. #25
    Join Date
    Jun 2011
    Posts
    178
    Hi efx,

    I'm new to trading but have read lots of info. Am trading slowly and swing trading would suit my present situation.
    I'm keen to learn your methods also. Have downloaded your e-books, will contribute when I have absorbed info.

    Regards

  6. #26
    Join Date
    Jun 2011
    Posts
    178
    Hi efxpa

    Just to update you on my trial.

    I have been studying all manner of analysis, oscillators etc. and have been trying to work out what to use with what and in what time frame. In the end I found Ichimoku clouds which is based on support/resistance areas in a similar fashion, which I have been testing.

    Last night I placed a trade in GB/USD based on Ichimoku and my effort of wave counting to short @ 1.6053 with a view of taking profits @ 1.6002, SL @ 1.6024 and went to bed.

    Anyway, I checked on it's progress this morning @ 6:00 am GMT to find current price rising towards my stop loss!
    I re-figured my position using the instructions from your thread here and managed to place a further short @ 1.6085, by now I was £32 in the red, expecting to move my SL further up as I was convinced was in downturn by wave count.

    Finally saw double top on M30 chart and confirmed downtrend as you describe here with bearish candle. To cut to the chase, I re-set my TP to 1.6008 to be on the safe side of resistance @ 1.6005. Both sells came in with a 122 combined pips!

    Many thanks for your thread - I'm now an avid follower

  7. #27
    Join Date
    Sep 2010
    Location
    Kristiansand, Norway
    Posts
    150
    Can someone help me figure out this trade, I am wondering what went wrong, or rather, how I could have done this differently?

    After a sharp fall in the EUR, I saw the opportunity to go long with about 30 pip T/P. I got stopped out, and then the market soared 80 pips on the EUR/JPY. Did I place the stop loss too tight? Entry was at 115.889 Initial stop loss was 115.602 and T/P was 116.224.
    I currently work and stay in Norway and so I missed the bullish rally with the EUR/JPY. Any help is appreciated, thanks.

    Name:  06,07,2011, EURJPYLong.jpg
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  8. #28
    Join Date
    Sep 2010
    Location
    Peak District, UK
    Posts
    2,405
    Quote Originally Posted by kummi90 View Post
    Can someone help me figure out this trade, I am wondering what went wrong, or rather, how I could have done this differently?

    After a sharp fall in the EUR, I saw the opportunity to go long with about 30 pip T/P. I got stopped out, and then the market soared 80 pips on the EUR/JPY. Did I place the stop loss too tight? Entry was at 115.889 Initial stop loss was 115.602 and T/P was 116.224.
    I currently work and stay in Norway and so I missed the bullish rally with the EUR/JPY. Any help is appreciated, thanks.

    Name:  06,07,2011, EURJPYLong.jpg
Views: 2877
Size:  34.0 KB


    Certainly for me that Stop was too tight. I did not take that trade, but the overall trade idea looks fine. However, that low test on the Hourly (1500-1600 GMT, the first low test into 115.50 in the right-hand cluster on your chart) would, for me, have established the Support area I was trading out of. It low-tested beautifully right off the 115.50 level, so my Stop would have been at least five pips below that level, so at the most 115.45.

    There are often repeated low tests before a level of Support causes a move up - this is what happened on this occasion, and one of these stopped you out. For me, the Stop on a Long trade has to be a few pips below the most recent Low, or there is too high a chance of being stopped out.

    The chances of a retest were increased by the Monthly Pivot running through at 116.05 - Price came back to retest Support as it struggled, initially, to breach the MP.

    So I think that you are right, your Stop was just a little close. There are many traders who knowingly place their Stops tight, in order to increase their R:R and accepting that they will have more losing trades as the price of this. But for me, a Stop somewhere around 115.45 or below would have been the way to set this trade.

    Hope that helps, and does not sound too preachy. Take a lot of comfort from the fact that Price did what you expected it to, your trade only failed on a detail!! So you were very close.

    ST

  9. #29
    Join Date
    Sep 2010
    Location
    Kristiansand, Norway
    Posts
    150
    Quote Originally Posted by SimonTemplar View Post
    Certainly for me that Stop was too tight. I did not take that trade, but the overall trade idea looks fine. However, that low test on the Hourly (1500-1600 GMT, the first low test into 115.50 in the right-hand cluster on your chart) would, for me, have established the Support area I was trading out of. It low-tested beautifully right off the 115.50 level, so my Stop would have been at least five pips below that level, so at the most 115.45.

    There are often repeated low tests before a level of Support causes a move up - this is what happened on this occasion, and one of these stopped you out. For me, the Stop on a Long trade has to be a few pips below the most recent Low, or there is too high a chance of being stopped out.

    The chances of a retest were increased by the Monthly Pivot running through at 116.05 - Price came back to retest Support as it struggled, initially, to breach the MP.

    So I think that you are right, your Stop was just a little close. There are many traders who knowingly place their Stops tight, in order to increase their R:R and accepting that they will have more losing trades as the price of this. But for me, a Stop somewhere around 115.45 or below would have been the way to set this trade.

    Hope that helps, and does not sound too preachy. Take a lot of comfort from the fact that Price did what you expected it to, your trade only failed on a detail!! So you were very close.

    ST
    Thanks for your help SimonTemplar!

    Nope, didn't sound preachy at all. However, it seems to me that the support already was tested twice (well TESTED only once actually) before I entered the trade, and it still tested it once (or twice?) more before going up. I guess I just should have been there at the rally to catch it. So how many times do you let it test the support? Especially after such a fast move down?

    Oh also just realized that my stop loss was weirdly placed and if I actually placed it 5 pips below the FIRST long red whick I actually would have managed the trade. Guess I wanted a better R/R. Thanks for your help!

  10. #30
    Join Date
    Sep 2010
    Location
    Peak District, UK
    Posts
    2,405
    Quote Originally Posted by kummi90 View Post
    Thanks for your help SimonTemplar!

    Nope, didn't sound preachy at all. However, it seems to me that the support already was tested twice (well TESTED only once actually) before I entered the trade, and it still tested it once (or twice?) more before going up. I guess I just should have been there at the rally to catch it. So how many times do you let it test the support? Especially after such a fast move down?

    Oh also just realized that my stop loss was weirdly placed and if I actually placed it 5 pips below the FIRST long red whick I actually would have managed the trade. Guess I wanted a better R/R. Thanks for your help!

    You're welcome.

    I don't have a set rule for how many times Support should be tested, but certainly the more times Support (or, for that matter, Resistance) is tested, then the stronger I would consider that S/R area to be.

    And yes, I did not see the specific logic behind your choice of Stop placement. I get the argument for maximizing R:R, obviously, but over time I do think that a Stop has to be placed somewhere safe and logical - this one seemed to be neither, which did mightily increase the chances of being stopped out. As you say, a more conservative Stop would have led to a winning trade, on this occasion. In my experience, a (slightly) conservative win beats a brave loss every time...

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