This was the best play zone for the rejection off the SR zone
I was going to post up that chart which Tess posted magnified into the upper resistance line, but I see Tony has hauled up a similar scenario.
When you’re executing off s&r levels or supply-demand zones (which is what you’re really dealing with when price approaches these zones), you have to try get your ticket at the premium entry.
It’s no good shorting when prices are half way down a recognized channel, as all you’re doing is increasing your risk.
The line that Tessa posted (213.50-70) is a clear, defineable area of likely supply (resistance). If you pull up your 4hr chart & take a look at prices from 3 Jan to 11 Jan, you’ll see a very orderly channel of supply playing out.
Once prices pop down thru that area prices will need to be re-tested & breached in order for the GBP Bulls to advance.
You can see that price gets repelled on each attempt to break back up after 11 Jan. Therefore, that area represents stiff supply & is a decent risk play to short prices back towards the lower support bases @ 207.0-209.0
Only when demand overcomes the supply (a break & successful re-test) will this resistance level be tradeable from the long side.
Until then, shorts will hold the best odds of value & success. Stops can be placed to the topside of 214.0 to test the resolve of the GBP Bears.
As close as you can get to shorting at or near the resistance level will increase your profit potential & thus reduce your risk of loss.
By observing these clear levels from the 4 hr or 1 hr frame, you can then drill down into your favored shorter timeframe (as Tony highlights) & pick your weapon of choice (trigger) to negotiate the trade.
As ever - if a dominant flow exists…then simply run with that flow?
And the flows on this pair are still bearish.
Hello,
I’m getting bored with all this ranging stuff. Thought I’d share a trade with everyone to pass the time…
This is the first of two trades I’ve taken this week, both short on GY. There was an IB trigger on early on Monday. It was close to an S&R area I’d highlighted, and the divergence convinced me it was a worthwhile opportunity.
Not sure if my attachment is very clear, but the first arrow is the entry, and the others are take profit points - the first at 1R. The last arrow is where I exited completely.
Personally, I still struggle staying in trades. Despite covering half my position at 1R so that I’ve got a BE trade at worst, I still get trigger happy. I’m getting better at hanging in there, taking profit at round numbers and other likely snagging points, but it’s something I still need to work on.
Nice trade Mr A. Well thought through with a plan and some reasoning behind it. I would also add that at the time there was good trending action on the pair at least on the H1 unlike the EY which has been forming higher highs and lower lows. Agree with your overall sentiments though and I am not doing much at the moment
What is your take on this?I think to myself once I get a go from the 15 min.Once stochs have crossed and heading back down is what I am waiting for.I looked back on the S&R and this point has held up as well as flip flopped from resistance to support.What would you guys do with this pair?What sort of confirmation would you need for this?Are we going to see a retrace then possibly a trend reversal?
For me the more important area is a little further on at 9720-9760. Then as usual I will look for clear rejection or a breakthrough and retest. Difficult to always define what these look like and this was clarified for me by Tess and Jocelyn when they pointed out how much action there is in these areas. The trouble with where you are at currently is it doesnt seem such a strong area and we are well out of the trading timezone for this pair. I guess a lot of people will be anticipating a turn back given yesterdays 200+ move (which I got none of!) but that can be a trap
Tonymand,
I can clearly see my assumption of a reversal was not very accurate.After really looking at the chart,of course after seeing your charts as well.You really have an eye for these area’s.What is you take on the gyp/jyp.I am seeing divergence on the 1, 4, hour charts.I attached a couple pics.Good trading!!
Hi Josh, agreed but we are in no mans land at the moment on GY. I am looking to play at 212 or 208.70. There is a minor level at 210 which might come into play but not that exciting. I look for the area to play and then look for the entry signals including divergence rather than the other way round. Doesnt always work but then stand aside if the market doesnt want to play. I have posted the EY which I signalled as a short last monday. After a win and a loss trying to get short I have stood aside - the market is telling me something if I listen. The higher lows suggest the possibility of a turn up at this point in which case long on a retest of 159.58 if we get a breakout with target in the 162 area (nice return if that comes off). Personally I would now want a further rejection of 159.58 and break of the trendline and then retest of it to get short target at 157 (weak, perhaps lighten here) then 155.77 hoping to hold to at least 154.28. May not happen of course but these are my plans as I wait to see what the week brings. I have a possible long and short off each of the 3 pairs I am interested in and the rest just passes me by!
Glad I stayed out of the GU, took a loss on the GY but as equities were driving the game the retest on EY was pip perfect for the long
Nice place to add to the trade or get in if you missed yesterday. 78.6 retrace, inside bar, stoch oversold or put the stop outside the swing low
Hi!
That long rising candle after the rebound was a news candle. I personally would have stayed away from that trade you mentioned. What do you say?
I see you guys trade the YEN pairs too. Do you open positions on two pairs paralelly and split risk, or just stick to the one that looks the best?
thanks
- No major news today as far as I am concerned
- This is not a short term trade with target in the 162 area, so news volatility irrelevant
- Most news (interest rates aside) are not trend changing
- An entry more than half an hour before news would only be compromised if looking to scalp (a waste of time and money in my view)
- Even if news occasionally takes you out of a good trade you can get back in and unless there is some kind of bias operating its going to give an equal number of boost to your other trades
No, personally i do not split across pairs and dont see how this can reduce risk
- There were 2 german news with medium importance at that time (according to forexfactory)
- Indeed! my mistake. im pretty new to this but now as i recall price always pulled back to the previous trend after an opposite news effect
- I agree. Scalping is way too exhausting compared to other trading styles of forex.
By splitting risk i meant that in case you open a position on two congruent pairs you have to split that 3% risk (or whatever you use) between them, considering the two positions as one.
But then, i guess you never open positions on lets say EY and GY in the same time if both look good.
Its a good idea to get used to following news yourself and make a decision about what is really affecting the market. This changes over time. FF makes a good job of estimating this but experience is the best teacher. Of the German releases only IFO seems to move the market much and that hasnt happened recently so I prefer to ignore it. Of course occasionally it will bite me! A news release pushing against the main trend is often a good point to get into the trend and I will use this on occasions. I follow news closely as we all have to but rarely trade it directly. I know what you meant regarding splitting but this does not reduce risk which is a complex concept you may need to do more work on. In any case it would be rare for more than 1 pair to give an equally strong signal at the same time. I now give preference to the EY trade over any other options for this week. I took half at the initial thrust off the retest, added a lot on the 78.6 retrace and took half of that this morning at the threatened double top so I have banked 4R so far and have a full lot riding at breakeven
Nice new high this morning so still all set for 162.30 and hopefully beyond. Given the established trend with the daily up since the 500 point candle on 22 Jan and the 4H and 15 min both up you might look to a good retracement on the 15 min to get in although personally I would now wait to see what happens at 162.30. Again we may have a turnback and short or a break and retest allowing us a further long although bear in mind we are now 900 pips into this run on the daily and we are in the 78.6 retracement area for the last downleg. As always the ambiguity makes this challenging and fascinating to say the least
This is certainly being better behaved than the bucking broncho ride on the GY and this is another important lesson. With the position on GY newly opened getting out at a minimum of break even was important. However with EY we have been in the trade several days and already banked substantial profits. We can therefore heed Jocelyns advice about giving the pairs room and also recall earlier lessons about the increased volatility at these areas. GU also reacted dramatically last night off its 4H resistance (there is a message here!!). The 78.6 retrace last night on H1 gave the opportunity to load up further on the EY trade and this morning, again at the high I have taken off half that position. My stop was below the swing low for this new position (although using the IB technique would just have worked and allowed a substantially bigger trade size). So we have banked another R, so now up 5R on this trade with 1.5 lots now riding (half the initial plus half of each addition). All we are doing is as much as possible load up on the dips and lighten on the peaks. This is 2 successive 78.6 retraces on the hourly so that has really helped this trade along.
Well Tony,
Let’s see if I am right on this.I appreciate the patience with my slow journey through this.It looks as if we are headed back down? Can you agree with this.I am planning on getting into this trade very soon here.Pics attached:)
Well I am still committed long as I am trading this very clear uptrend on the 4H. Volumes are low this time of day and with a divergence you then need your entry signal to act on it. If you are trading a lower timeframe and looking to get in on a retracement of the longer term trend then sure that could work well and if you happen to catch the turn of the longer trend then could be excellent. My only discomfort with the long position is that the GY has turned down with a second rejection at the R and a trendline break. If I was looking for a short might be more tempted to do it there although GY has not been good to me this week!
Yes that is where I was going with it. Was going to catch a few pips on a retrace.In your opinoin do you perfer to catch these retraces after they happen(On the way back up)In other words always trade with the trend.
Depends really. If I see a good set up I will usually take it. There will usually be some longer TF trend against it. However once in a trade I dont try and trade it back and forth. I find it too psychologically taxing. In other words once out of this long I will usually stand aside to assess my next move although like everything in life there are exceptions. Just remember we are not at a key turning point at the moment so if you do jump in stay tight on it and have a clear plan of campaign
