Expert guidance on a chart/trade?

Beginner Questions
1

Hi guys,

I’ve been spending a couple of days with the USDJPY major. I’ve made some nice intraday trades about a day ago, and have put in a short order once it convincingly broke through the 38.2 fib line.

I’m just wondering where you would put your SL and how convincing you think it is that it’ll end up falling down to the 50 (maybe even the 61.8 line) given it’s been ranging between the fib lines since March or so.

It seems to be in a retracement after ranging in the last half-day or so, but I don’t want to get stopped out before it heading back down to the 50 fib line or close to it at least.

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2

Hi,

Newbie trader here.

I don’t trade with the daily charts, I only use it for indication of the main trend. But from what I see, there is a strong ranging channel, so if I’m looking to short this pair, I would look to place my order just below the 61.8 level.

To be doubly sure, I would also keep my eye out on any candlestick patterns that confirms this, like three black crows or divergences. Could be some other pattern, but the more indicators pointing to the same direction, the better.

Good luck!

3

ok mate
first of all (i’m an experienced trader)

secondly, asking where you should put the S/L is like asking someone “what sort of car should i buy” ?

it’s impossible to answer without knowing what my needs are.
and i can’t tell you where to put the stop loss without knowing

  1. Your risk management strategy
  2. Your account Balance
    so, if you are not prepared to disclose your account balance… hehe, then no one can give you an answer
    because the decision to place a stop loss is not dependent on how the market is going

it’s dependeant on HOW MUCH YOU CAN RISK
that’s what a stop loss is

it’s the point at which you decide, THIS IS ENOUGH and i don’t want to lose anymore
it’s a safety blanket
and it’s position is defined by your financial circumstances

so… if the market is booming and you can only afford a 10 pip stop loss, that’s what you can afford
if the market is falling and you can only afford a 10 pip stop loss, that’s all you can afford

if your risk is 1% of your account balance and you only have $100 in your account you can only lose $1 and with a min lot size of 0.01 (10 cents per pip) you can only afford a 10 pip stop loss

now if you have $1,000 in your account and you trade 0.01 lots, you can now afford 100 pip stop loss
SEE WHAT I MEAN.

as for your prediction… will it go to 50% or even 61.8%

mate, this market is ranging (that’s dangerous for you)

let me show a few things… ok
little thing you don’t pick up on as a beginner

SEE THAT CANDLE at approx 18 oct 2016. the really low one
IT IS A CERTAINTY THAT PRICE WILL REVISIT THIS POINT, when a candle does that, it is TESTING
Just like the previous low one at 6 jun 2016
but we are in 2017. so… beginners forget. hehe BIG MISTAKE
now… see 28th Aug 2017 the low at the 61.8% it will revisit that at some point
but ONLY IF… enough people are convinced the market is bullish

you mentioned that the market is ranging between 23.6 to 61.8
well, hehe
that’s what it wants you to think right now

a good entry point would have been 103.770
look where you are in the range ?
You’re in the middle

now… WHAT WILL PRICE DO ?
hehe
ok, it will do one of two thing
go up … or go down…
and after 7 years that’s a very educated answer.

but let me more specific

  1. no one can tell you the direction of the market other than those that run it
  2. don’t try to predict it… roll with it instead, that way you don’t need to guess the future

here is what will happen
Market has tested that 100.0 %
Market has tested 0.0 %
look at the bullish rally 18th oct 2016

now. when the market rallied up, it USUALLY AND COMMONLY retraces to 50% then shoots up again.
BUT… wait for it

it only goes up if MAJORITY OF PEOPLE BELIEVE IT’S GOING DOWN
otherwise, it continues to go down

and look where you are ?
smack bang in the middle… Why ?

also, JUST IN CASE YOU LOSE
do you have other trades elsewhere to offset the loss on this side ?
are you just looking at 1 chart or do you have multiple charts (Correlating pairs) that will confirm the direction of your instrument

here is what i think,
but it’s not a guarantee ok
looking at H4 chart at 16 oct 00:00 it made a low, it TESTED THE LEVEL it then went on a rally and IT CAME BACK DOWN, this was a profit taking exercise on their part
now… it’s going lower. ISN’T IT

and think about this
LOOK AT YOUR EMOTIONS AND SENTIMENTS as a beginner

YOU ARE THINKING IT’S GOING DOWN
at the very least, YOU ARE SCEPTICAL… right ?

well. you know what
you are confused and sceptical because THAT’S WHAT THEY DO, … they confuse you to change your mind
RIGHT NOW… the beginner sentiment would be
it has hit the support and broken through and support has turned to resistance hehe
and now, WHAT THEY WILL SHOW YOU IS… it will appear as if the price at 111.447 is struggling to break through,
i assure you this is bullshit hehe

a beginner would now draw a trend line from the 23.6 Fib level to the curent price and sit there and say … well. THE TREND IS GOING DOWN
and your STOCHASTIC says that as well and so does your RSI hehe

so… YOU ARE GOING TO SELL

me… in this situation… i would BUY111.780 and hold until 113.350

now as for Stop loss, i can’t answer where to put it… because i don’t know how much you have in your account
i would like to put it at 106.395
but again… can you afford this ?

does this help you

4

… nevermind…

5

“it will turn around or before it hits the fib50 line and some time later will touch the fib 0 line.”

Why ‘never mind’?

6

Thank you for your information

7

Tom, you originally said you were looking for expert guidance. My advice is keep looking.

I don’t trade intra-day (my second piece of advice would be give this up) otherwise I would gladly jump in.

8

You’re Welcome
[hehe, look at that, i tried typing You’re welcome but the post MUST HAVE at least 20 characters … hehe… i well, i guess this will account for 20 more characters at least "P]

9

the thing is, i dont use fibonacci, its voodo in my eyes and has the same efficiency like flipping a coin. 50/50 (even less than that tbh). your charts made me post a vague analysis which has the same value 50/50, but i dont trade on 50/50.

the possible turning points in this pair are 110-109,5 ad then again at around 108-107.

10

here, this is the basic layout i can give you. the basic supports which have the highest probabilities of working. the longer the line the more reliable it is. at the moment usdjpy is in a direction finding process. it can just aswell run up to 125 agin but it can just aswell go down as far as 100 or even lower. the deciding moment is “what happens when it hits the lines” a strong upwards pressure picture (example: strong engoulfing or shooting star) will trigger more buyers to jump in the train, then it is a self made runner runner and will yield minimum 10 yen upwards buying.

if the action at the lines is not overwhelming it can be a slow death- hanging around the line and then braking it, once it then brakes the kine new trades get triggered and the drop is very very quick.

If it shoots right through the lines then do not think its the best to short immediately, everytime when something unexpected happens it leaves the pro traders surprised and when they are surprised they love to do nothing and wait it out. so if it shoots right through it like the lines dont exist then it is very likely that it will retest the line and then continue very quick further down. (the ones who missed the down move will use the chance [retest of the line] then go agessive shorts since the direction is confirmed, and agressive shorting triggers more shorting and continous selling).

this is what is called “trading plan and strategy”. to have fit scenarios for what possibly could happen and a set idea of how to best counter it. a trading playn/strategy is nothing you write on a paper on when to open or enter trades and when to close and then follow it blindly, and for sure nothing that is supposed to tell you which direction to trade. that never works because the market always changes and doesnt fit to one single “set of rules” like so many retail traders try to suggest.

its your job to find the direction and then to know how to “use” it the best.

but be warned, TA is only 10% of the real deals, you must always take fundamentals into account, much more than TA. especially in forex (i dont trade forex) which is the most manipulated market someone can trade (manipulated by governments and central banks which are fine/penalty-free and can do and say whatever the want to manipulate the price) you must watchout what the BoJ does when it hits the lines, the BoJ watches the very same charts as i do. their policy since 20 years is th deevalute their currency, so they want it to go up. you can be sure that the BoJ wil give comments right at the tme the price is around that line, comments which are designed to make the yen losw value and therefore the price to go up.

Focus on news regarding japan, the BoJ and political statements once the time is right (when price hits the line) and you will see what i mean…

to be highly profitable you dont need more than what i just gave you, few lines and a clou. all the oscilators and indicators are only telling you what you see on the chart, instead of watching the chart you watch them and they lie, the price does not lie.

on such a trade like this, if you know how to manage it (operation management, read it up, its investors language, not traders language) you can easily double your account within few days or weeks with one trade only- if you know how to manage the trade…

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11

Thanks WestBam, this is some really great advice.

The UJ daily chart is at a point that can be sliced a few different ways, each producing various predictions about the market. I completed my short position before it shot up about 30 pips yesterday and am currently being conservative and watching the market (and the news) to see if the price lends itself more favourably towards a certain TA-based prediction. I’ve found some key SR and range areas that I’m looking out for to see breakouts and have highlighted some trend lines.

I really do agree with you that it could go one of two ways now, and given that my level of MM prioritises not losing capital, I’m staying out until I feel confident in a

This will give me time to wait and so some trading planning to see how I would respond in different reactions to the price and trends. We’ll see!

Thanks again W, really appreciate you taking the time out to educate a newbie.