Be careful with all trades tomorrow especially anything Gold or USD related, the Fed speaks at 2pm.
If anyone is wondering why I am pointing this out, take a look at a chart and any significant Fed meeting in the last 3 years and you’ll clearly see why. The last such meeting had Gold stop dead in its tracks in an uptrend, drop hard the rest of that day, and it hasn’t stopped falling since.
All they said was they are not going to “print” any more dollars, for now. The rest is, as they say, ‘history’.
I would like to comment on risk management and correlation based on my observation so far. Because of this, I restrict myself to risk only 1% at any one time. The interesting part is when u start to see a good trade setup, a few other good ones also start to appear some times. This is when the temptation comes in. I will try to choose one with a good trade setup and reward risk ratio. In the rare event that all are equally good, I will then split my 1% and trade on all of them. In short, I will still end up with 1% risk for all trades at any one time. Of course, this is provided I don’t end up with awkward situation where I buy USD in 1 pair and sell USD in another.
It is simpler just to trade one pair at a time and just forget about correlation altogether.
Hi Johnathon,
I have just started to follow u on Twitter and have learnt a few things from there. Thank you.
I agree with dudest it’s value adding. In fact, the moment u r filling up the journal, it starts to add value. Cos that is when u start to evaluate the trade setup in a rational and rule based manner.
To keep things simple, I maintain them in Excel for a start.
Yep that’s fine. Much better way to go about it is marking levels and letting price reach them. Some people do the opposite and find the price action signal and then try and match up the levels. Problem with this is the brain can do funny things and talk you into trades and make levels look better than what they are. If you have them premarked this problem will not exist.
Thank you for the heads up but this thread is for Price Action. I am not worried about who prints more money or who is speaking. Price will lead the way and what happens tomorrow will be reflected in what the price does. I don’t need to look at the economic calendar for that. Fundamentals have zero bearing on trade selection for me as I am a Price Action trader.
I am not trying to come across abrupt at all a, I am simply trying to keep the thread on price and not news.
Id Ben comes out tomorrow and declares the world is going to fall apart then our charts and price will show us that and will guide as by the correct selling of etc. If the Fed is bullish the opposite will happen etc. I don’t need to know what or when it is happening to know this as the price will tell me. It has in the past and it will in the future.
The last thing is yes sometime things happen that we can not predict. This is why we have stops. But if we were to not trade because of the news we would never be able to trade. If we look at the calendar we can see every day there is tons of news out.
Let price be your guide. Trade with stops and never be greedy.
I’ve been following this thread with great interest and wanted to say thanks to all who have been contributing charts for people to learn. I have a question: How profitable is price action trading, can anyone provide some insight to winning trade percentages or monthly account percentage growth?
Pretty solid Pin has now dropped into relevant support area.
This Pin Bar was on the daily chart, rejecting recent resistance and also very big round number of 1.6000 which was acting as a psychological resistance area.
Very choppy market this pair so trading should be done between levels.
I was short this trade hence why I posted it and have take profit out of most of my position.
since it was my first time trying a pending order in mt4 it would not let me execute because i hadn’t yet figured out how many pips from market price to set my entry for it to allow placement. so i had to do a regular order and modify it BUT i set my S/L at exactly 1.6000 and got stopped out pretty much right to the pip before price continued down which now two days later looks like a 90 pip trade had i set my T/P at the first support level (FSA). this was also the beginning of my trade journal so i can look back and learn from it (still lots to learn!)
EURGBP Daily and GBPCHF Daily:
i know this is not recommended since i am starting out but since i am on demo i decided to trade the retracement for both of these against the trend just to see what happens. i finally figured out how to place pending orders in mt4 and placed a buy stop order (eurgbp) and sell stop order (gbpchf) yesterday shortly after 5pm new york time. i set T/P at the major S/R levels (red lines in my previous post) that i was expecting price to retrace to and closed the program. today i can see both orders hit their T/P at about the same time which was about 7am new york time. price then traced back and is now still moving towards S/R, where i will be looking for proper PA trades with the trend. i consider this my first successful trade(s) (yay!)
btw i noticed from my newbie calculations that although both the above trades yielded the same profit, the eurgbp came out to 39 pips and the gbpchf came out to 63 pips. is this correct or did i do the calculations wrong?
Well good luck with that methodology. While I agree with you that price reflects all, I have learnt over the YEARS to NOT trade directly in front of very [B]important [/B]news, there is no need to take such risks when these things are proven to drive to prices and in a big way. I ignore most news too, and agree you really shouldn’t base your trading on it.
If you are already in a position than that is one thing, but to take a new position in Gold right before a FED meeting is just playing a 50/50 game and NOT putting the odds in your favour, which is how you win in this game.
Duly noted anyway that you would rather ignore such things and won’t post them again, I only posted it because someone pointed out a Gold trade and I was [I]trying to help.[/I] While today’s news seems to of had no impact, the last one had a VERY big impact, for anyone who was paying attention.
Thanks for quick and insightful reply Johnathon, much appreciated.
Further informed by your response, ended up not taking it, and it’s climbed higher as you intimated.
I know you were trying to help somone and now looking back on it ig I had realised it was you JayonBeach (which I didn’t) I probably would not have said anything as it must seam every time you post I pick on you! Haha
As I said it’s not that I disagree with anything you have said or are saying just that I am really keen on keeping this away as a thread on news and keeping as a thread on price. That’s all. Just between you and me I also won’t trade going into the NFP but other than that I never look at the news. Ever.
Thanks for taking the time to warn that person and next time I will leave you be!
So pretty good lesson to take from this one. The round numbers like we had here in 1.600 act as psychological support and resistance levels. When you have a trade that has these round numbers in them always use them to your advantage in other words here you should have used the 1.600 level as resistance between price and your stop and had you stop above the 1.600 level. If the level gets taken out fine you are out but chances are that price is going to reject it and go back lower.
