Yeah, that’s a good call. The double top is a little visible on H4 too. And I don’t like the fact that price is spending too much time at this supply level without rejecting. This is one of the spookiest signs that something’s not right (you saw it happen with my trade before also). Since your stop is @ BE, nothing to worry about. We’ll see how it goes.
One little level I’m watching on EURJPY.
On EURUSD, this demand level might be worth a shot. It’s in an area of bricks upon bricks, not fresh (reaction to H1 demand), but is the origin of a nice move up from today, so it should provide a bounce. Profit potential is good, supply on the daily got chewed up quite a bit today (and the next one is 1.3430-1.3500), so if we test this demand before that supply, fractality is decent and there’s a chance of heading towards the daily supply. Depending on how we approach the level, I might move my entry to the lowest brick instead of the middle one, but I like this one because it seems to be the real origin of that up move.
And now I’m out. +.77% to my demo account. I may have trailed my stop too tightly, but I’m happy with my decision considering what the price action looks like.
Yes, good job. I prefer to let my trades stop me out or hit my target, but that’s just my style. Your approach is much better if you can keep your objectivity after the point of no return (entry). I am more emotional and tend to see things that aren’t there while I’m in a trade, so I just let it develop.
I’m still trying to decide how to best approach this for myself. I bought Forex Tester 2 and I’ll be putting in some practice hours and generate some numbers to help me figure out whether set and forget or actively managing the trade works best for me.
Forex Tester is good. It’s going to help quicken your learning curve. Nice.
Retest of ellipse, so the safest stop would be few pips above the top of the ellipse area.
I remember someone asking a while ago if I trade breakouts. Trying to profit from this USDJPY bubble burst :). A good breakout trade starts by spotting a weak supply/demand area (residual energy), then waiting for price to gradually absorb it, by consolidating right below (supply) or above (demand) it, before everything is absorbed and the break happens. We use limit orders for our regular bounce trades and stop orders for these breakouts. The consolidation before the breakout gives us a good place to put our stop loss. I rarely trade them, because you have to babysit the charts a lot before you actually place the stop order, compared to bounce trades, which I sometimes plan days ahead and set and forget them…
Right now it’s late here, so I’ll have to decide between moving the stop to breakeven and letting it run or just leaving it as it is until tomorrow. My final target is 90.80.
I am new to the forex world and want to thank Toplessons for this awesome thread. I am still processing the information, hopefully I will have something to add soon.
I did take a short off this level with a stop above the ellipse. Target just hit for a nice 3.5:1 return. 
Hi, pocketfullofpips. I am (unfortunately) a result-driven person, so it’s posts like this that keep me going. They give me a sense that what I write has a good purpose :). So, thanks for watching, thanks for writing and take your time with the thread. When you’re finished, write down any questions you might have, then you can dive into charts with us.
Cheers!
Way to go, Nick! That was a neat level.
Left it over the night. I’m moving my stop to break-even and see where it goes from here. Not much juice in this breakout, I was expecting it to move during the asian session, so my expectations are for a breakeven exit here. I’ll give the “trading gods” a chance to prove me wrong by holding the trade till it either hits breakeven or breaks above this latest consolidation
I mentioned corelation a while ago as a means of improving odds. Here is a H8 (8 hours) chart of the US Dollar Index over the last 40 days. We’re at demand, low on the curve, with good odds of price going up to 80.50. There is some price absorption at this demand area (we had quite a few tests), but we didn’t get too deep in it, which shows that there’s still a good chunk of buy orders in there. As long as 79.50 holds, we should see some downtrends in the counter-dollar pairs (EURUSD, GBPUSD etc.) and some uptrends in the dollar vs. other currency pairs (like the USDJPY long I am in).
Trade progress (above 1:1 profit so far):
There are three types of entries I use.
A. [B]Limit[/B] (confident order)
The area is identified and a limit order is placed at the extremity of the area that is closest to price (+spread), while the stop is one or two pips on the other side of the area. This is used for very strong areas, that are in line with the higher timeframe trend and haven’t been touched yet.
B. [B]Tight Limit[/B] (moderately confident)
The core energy area is identified (like I explained in post #15), so as to make the risk smaller. In other words, the entry is somewhere inside the residual energy area. This is used when the profit potential would be less than 1:2 otherwise (with normal limit), or there’s high volatility and momentum in the market on the way to the area or the level has been tested once, but is still strong.
C. [B]Stop[/B] (confirmation order)
If the area has been tested one or more times or the trade would be in line with the trend and the trend is very strong, but the level doesn’t score so well (in very strong trends, low scoring areas still hold and price takes a long time to get to the stronger ones) or if corelation is against the trade or it is counter-trend, or we are simply not sure about it, we can let price enter the area and monitor it on a smaller timeframe. For example, if I trade an H1 level, I might let the price come inside an H1 area, then look at the M5 or M15 chart. Once price is a decent amount of pips inside the area (even up to 50% or more), I place a STOP order (sell stop couple pips below area for supply or buy stop couple pips above the area for demand) that gets triggered when price actually rejects from the area and leaves it. The stop loss is placed the same as with limit orders, so if it goes beyond the area before retracing, we DO NOT take the trade and we consider the area absorbed.
Stop orders are also used for breakout trades. We will get more into trade setups later, both bounce trades and breakout trades.
What source do you use for USDX, Marian?
FXStreet: US Dollar Index
PS: Such a boring day today for me. I am now 22 hours into that USDJPY long, currently +25 pips (went +60 max) and going nowhere :). I canceled the USDCAD 15 min short because of the fresh obstacles and good call it was. My EURUSD pending long is also gone now. Price didn’t go there yet, but the arrival is messy again.