Well I never open trade without placing a SL, I guess my SL’s are maybe just too tight. I really wonder how Dodge determines his SL levels and what is his R:R. Because I can’t imagine having SL of let’s say 80 pips and even bigger TP just to keep the R:R nice :). I guess I am just not patient enough or I don’t trust myself to predict 150 pip moves in either direction. I usually chicken out after 30 pips and close everything >:(
I’m staying out of CHF and JPY from now on… Thanks for your input guys
The charts will show you what has happened in the past and what is happening currently. If you combine it with some fundamental knowledge then, in my opinion, you have a better understanding of why the charts are looking the way they are (especially the longer timeframes). I’m not saying you necessarily need to know that side of things to trade but it helps keep me on the right side of trades and gives me some peace of mind as I like to know the why and find it interesting. Others can trade totally effectively just off the charts. Everybody can take their own spin on things, find what works for them and ditch what doesn’t.
For me though the fundamentals would keep me out of USD/JPY and CHF trades. There’s a lot of selling interest in U/J but you’ve then got the semi-official Kampo bids lined up to try an prevent too much of a fall and after that there’s the possibility of BOJ intervention if those Kampo bids are breached. All this is keeping U/J confined to a really tight range. This is then spilling over into EUR/JPY that pair is essentially vibrations of EUR/USD and USD/JPY but you can see a steady pattern of HHs and LLs on EUR/JPY and buy dips would seem to be the less risky strategy at the moment.
Same with CHF - the SNB finally decided to step in and blow away all those speculative longs a while back. And they’re threatening more steps too such as charging for holding CHF. Unless we get a firm move towards risk aversion looking to go long CHF is a risky move as there won’t be enough interest at the moment in that trade to make your risk acceptable in my opinion.
Long EUR/USD. Didn’t see Distribution on top, bouncing off the 50fib from the daily chart and the pivot, and each candle under the trend line is lower volume.
That SL was about 80 pips. Based on the movement of that pair at the time, that’s what I considered acceptable. My TP was also about 80 pips. I always risk exactly 2% on each trade, and my R:R ratio varies depending on market conditions.
Thank you for your opinion PipBandit. I am thankful for the time you spend with us in this thead.
Let me try to be very short so I don’t bore you with my english :). I personally started with BabyPips like many people out here. But I never started to like technical nor fundamental trading. Then I got to this very topic and started to educate myself with VSA.
I read a lot of things from Wycoff, Tom Williams (Trade Guider), SMART, Todd Krueger and others and they all agree on one thing. That market news are created to manipulate retail traders into doing something that makes profit for the big guys. I don’t wanna be one of those sheeps, so I don’t read NEWS. Never, ever.
I even took it to a whole different level because I don’t even read local newspaper or watch news in TV. Call me paranoid but I don’t believe any of those news are entirely TRUE. (I actually started practicing this after 9/11 and that was way before I even heard about forex :)).
[B]I would rather be NOT INFORMED than DISINFORMED.[/B]
If my experience shows that applying VSA to JPY exchange doesn’t work very well, I just stay out, not wondering WHY exactly. I hope you can see my point of view :).
If whatever you’re doing is working for you then it doesn’t matter what anybody else thinks
Personally I don’t believe in all the market manipulation to catch out retail traders as the forex market is so massive and has so many different parties working in it. There’s sovereigns, sovereign wealth funds, corporates, hedge funds, real money, model funds, central banks, BIS, prime brokers, retail traders, etc., etc. These are dipping in and out of the market for their own purposes and they often have very different timelines that they’re looking at. There is of course speculation along the way that influences the market too but there’s no one entity gaming the market by manipulating the media as it’s just too large and complex for this to work. That kind of market manipulation could work in stock trading as the actual market size in shares of a certain company is tiny compared to forex and is more susceptible to media manipulation.
But anyway, to each their own! For what it’s worth the way I use volume is that I look at the 4 charts and plot horizontal lines at areas which have seen significant reactions in the past. When price gets down to those areas I then look for an entry trigger on the lower timeframes (5m/15m) and also some increased volume which indicates to me that this area is again seeing interest from traders. If there’s not much volume showing at this point I might give the trade a miss as it signifies there might not be much interest around this level this time around for whatever reason. Though you can typically predict on the charts where the volume will show up as it’ll tie in with historically important levels. I’ll also use some general fundamentals to try and keep me on the right side of the trade though I find that trading with the dominant bias helps out a lot here more than anything else.
In the past few weeks, my only losses have been USD/CHF. I’ve taken three trades on this p;air, one got me 100 pips due to a freak news event, and the other two were definitive losses.
If it fails me again, I’m removing it from my chart list.
SNB in their end of month communiqué made no mention of intervening in the forward markets and some Swiss economic minister said they couldn’t hold back the market in anything but the short-term and down she went (I guess he’ll have been told to keep his bloody mouth shut in future). All the CHF pairs are torrid to trade at the moment it seems to me. Great if you catch the lucky move based on what a group or person says but a really quick SL hit if you don’t.
Revenge trading. I was upset over the USD/CHF loss and entered a trade I would normally stay out of. I saw the highest volume candle of the day (pink candle) fail to make a significant upward move, then get pushed back down. Then I saw a (surprise surprise!) lower volume candle rise to the pivot and 50fib and get promptly stopped.
While the background showed strength, it did not match what I was currently seeing, which is normally a requirement before I take a trade.
Looks like you got caught out in some month-end squaring up that came out of nowhere. Market would have been somewhat illiquid at that time as speculation is more or less done for the month by the bigger players so prices would often tend to just meander along. Though sometimes, like today, you can get somebody deciding they need to get a bunch of dollars right before month-end for some reason. Nice if you’re on the right side of the flow though annoying if you get whipped out. I’ve got it noted on my calendar not to trade NY session on month-end as I’ve been whipped out myself a few times.
Dodge, I don’t quite understand your reason to go long gu, I myself went short but my broker stopped me out at be when price actually not hit it. Strength in the background but still some weakness in 5m chart, the trend is down.
That’s very typical vsa setup PipBandit, but today is strange, probably month end as you say, price refused to move during London, then start moving during late London, that’s why I chicken out, set BE early, which’s quite frustrated.
For the Uchf pair, quite apparent weakness Dodge, but always easy to see at the hindsight, the pair is tough to trade. I’m not trading it myself. Long-term trend following could be very good to trade chf pair imo
Yep the short was a nice vsa setup. Also a nice S&R setup with those wicky candles up at 1.6325-30 throughout the morning and it’s trading with the dominant bias which is less risky. Also we had E/U not making a HH on the hourly and G/U making a HH around lunchtime GMT - when combined with S&R this can indicate lower prices for both which is what we got today. But alas nothing for me as I was on the sidelines just watching
I agree, the GBP/USD trade was bad. I wanted to get back in the market after my loss, and entered based solely on background strength. It was a bad trade. The latest USD/CHF trade however, looked solid to me. It still does, I would take that trade everytime, can you point out the quite apparent weakness for me? Note, I entered before the high volume 5 minute candle on the pivot that didn’t move much.
