Hi all! Long time follower, first time poster. Thanks to all for a fascinating thread. I have been stock trading for years, but as i studied economics (many years ago) i relied on fundamentals for my trading - but without much success. It was profitable but not incredibly so. A couple of years ago i got into tech analysis and have become evermore overwhelmed by the number of indicators and the ‘art’ of the charts.
So i decided a few moths ago to go back to first principles and study each candle - respect the basic info that each candle gives us. More recently i have embraced FX and found babypips. I have now graduated from babypips school and then i found and read the first 50 pages/last 20 of this thread (whew!).
I have a few unanswered questions - and one of them was discussed recently. It is: How do you know choose the swing highs and lows? Which ‘level’ of highs and lows do you choose? I know the definition, but look at this chart - level 2 highs and lows looks so messy so i gravitate to level 1 (yes i know that there is no level 1 LL - but its just an example!)
Trading level 2 results in lots of down legs and lots of chop. Plus trying to line them up with s/r isnt clean.
Good on you for posting a sample chart to work with, makes this alot easier.
Keeping it simple here means asking the question: which are the two most relevant levels nearest to price right now? This is course assumes you’ve nailed down how to identify and draw S/R levels/zones.
Where the GBPUSD is right now, I submit to you that the nearest relevant zones are around 1.5350 and and 1.5200 (check where those line up on Daily and Weekly chart)
I’m with Dudest about hunting for a Long trade on the USD/CAD.
I have attached a chart with my thought process. It really doesn’t need to get more complicated than that. Conversely price could stall at this relevant level and give us a BIG signal to go short but for simplicity sake I have posted up how you would look to get long with the dominant trend.
Could be that price just bursts straight through and keeps going but if you have 4 or 5 of these types of potential set-ups on your charts chances are you will get to pick off one of them.
After a week of pretty much no setups on the daily charts i log in for my weekend checkup and see alot of promising setups forming so i thought i would post some of them up here with my reasoning to see what you guys think
With the trend being so strong up for the last year it might work out to be a nice trade just a shame the FTA is so close to make for any decent R:R (i know this is only half the trade but this would be very small).
As doubt (gut feeling) is pretty much a signal too i would have to let this go but it isn’t easy after such a quiet week
Bro,
This is how I read your charts. AUDJPY is in a too tight range for me to trade. CADJPY has a pin bar sitting on old support, but I wont trade it due to two things -(i) I dont trade on friday daily bars and (ii) It is still a swing high for my liking. Also it might open with a gap and make further trouble for those trying to trade it. But it is sitting on a VBRN and might just work with tight trade management - but certainly not for me. EURCAD looks good, but gut instinct says that we wont get a PA at the level as I feel the play is already over at the level. Still I will keep close watch on that and other CAD pairs at 4h when UK market opens.
Last week I did not get to trade on daily frame, just one trade on 4h that needed tight management which came out ok in the end. Got to say that we are in the best position to be had in the forex market at the present moment -BY NOT TAKING A POSITION- and just waiting :) :)....
I like it that you are taking the trouble to post your thoughts…it helps us all. I wish I were less lazy myself.
traderamateur: If I show you any daily chart (without dates or weekly grids etc.) would you recognize which bar is the Friday bar? I think you could because of weekend gaps (they are there nearly every week at least in a small version) but if you would not see these gaps I think you would not recognize which bar is the Friday bar…
And your point is… ?? I trade the present not the past hence i am always aware of friday bars. IMHO they dont give the best signals due to many traders exiting positions profit taking etc. I like taking things fresh after UK open on monday. But this is just how i trade. Not trading advice for others. With my PA system (a lot of which is adapted frm Johnathon…) this works for me to remain profitable over past two yrs out of which last one year was all live trading. Do u trade friday bars my friend?
EURCAD:
At an interesting place! (RN 1.3200). Friday candle closed below the RN. Let’s see how it looks in the coming day
CADJPY:
IMHO, average-size pin at a great level (VBRN 100.00) but (wait for it…) it has NOT been formed after a pullback. Thus taking it would be buying high (instead of buying low). Johnathon’s written an article about how price on the CADJPY D1 has been winding up with inside bars. Whatever way it goes, the breakout is likely to be fast and furious…
AUDJPY:
Relative to the other bars, that pin is tiny! The level has held at support, but IMHO price seems to be winding up with a bias to the downside
I did not mean it offensive in any way, my point is that, it’s quite nonsense for me to avoid Friday bars (even I agree with profit taking) because if you would not know what day in the week currently is, you would probably trade the valid signal reagrdles it’s Tuesday or Friday. I think if there’s a valid signal for us, it does not matter what day is it formed on (maybe I would be careful about lower TFs before market closing) every setup can fail anytime, of course there are many setups formed on Friday which worked and which did not. In closing, if you can’t recognize that some bars at chart are Friday bars (you can recognize it, because you can count 5 bars from some significant gap), then it’s nonsense for me to avoid some bars just because it’s Friday. If you look back, you will see just candlestick bars, nothing else, the problem is rather in possible gap which often occurs at market open.
Ive just read the first 50 pages of the thread and yes i like this type of trading!
Btw, dudest you are still commenting on this thread! good to know! by now you should be very good at this already!
Anw, this is my first comment here and below is a 1HR EUR/USD chart. What i think is that price would retrace back up and we look for PA signals and Sell at the new resistance area? Please correct me if im wrong!
Also i will continue to read this and try to finish reading the thread asap and absorb as much as i can!
GBPAUD at an interesting place, watching to see what happens in next few days
Unless very solid CT PA is formed, i’m favoring longs in-line with the recent very strong uptrend
I did not mean to sound offensive either bro. Just stated what has been my experience. So do u often trade friday bars live? IME I find more Fake PA signals on friday bars than other days…I am talking about signals from daily time frame only not lowertimeframes at UK open on friday. I wonder what Johno spongy Bryce or dudest etc think about this. When u trade a pin from friday how wud u set ur limit order considering gaps etc?
With Johno’s method, we can trade Friday D1 PA (e.g D1 pin, D1 engulfing, bar, etc). This is because the D1 candle has formed across all the sessions, and thus has sufficient info contained in it.
What we don’t trade are intra-day signals (e.g H4) formed end of Friday. These are usually false reversals formed at a time of low liquidity (hence not reliable)
PS: the rules for setting entries, SL, etc don’t change (some prefer to wait for a few hours after Asia opening to set entries in order to avoid fake entry due to high spreads caused by low liquidity).
@Gaps: Unfortunately, not possible to predict a gap or gap size. So if the gap happens and price takes off, we let it go
