Nice input, mselva! But to be fair, it’s possible in one month to suddenly have many A+ trade setups, and in the other month to have few setups if any. I have seen traders with 10 A+ setups in a month, only to have like 2 A+ setups in the following month.
Glad to see Panupat, my brother-in-arms is also doing well here. We joined FSO at almost the same time.
Agree with mselva, you still need to improve your A+ criteria, Panupat. I only entered one trade so far after joining FSO, and it ended up with full profit. The reason for that is I only focus in basic trade setup at D1 chart at this point, so my option is kinda limited.
Agree, Krugman. The temptation is always there. The actual method in this thread is only the one approved by Johnathon at FSO. There are lots of great methods outside FSO, but even greater numbers of crap to be honest. I’ll stick to Johnathon’s method through and through at this point as we are wandering in a brave new world of Forex here.
[B]Offtopic[/B]: Hey, I also have read that O’Neil book! CANSLIM is good stuff, although I don’t really like the way O’Neil heavily advertises his newspaper and website as you read through the later pages. The best investing references is ‘the Intelligent Investor’ by Benjamin Graham and ‘One Up on Wall Street’ by Peter Lynch, imho.
Thanks Aaron & Willy for the informative posts Those explanations clarifies my confusion.
I think I will give this method a shot with daily AUD/USD today. Please correct my newbie ways if it is on the wrong track. Especially my S/R lines, lol. I just looked at the area with most high or low hits and find the nearest whole round number (Again, I’m waiting for someone to correct my analysis :D)
This is based on my subjective view of the chart. Please correct anything that is wrong
I saw a 1-2-3 formation, which supposedly initiated an uptrend. Also we could see from the upward slope. If I’m on the right track then a pullback is happening as we can see from the chart.
So my theoretical trading plan is:
Entry Price: 1 pip above the last candle that touches the support line if it forms any type of bar taught in this thread, otherwise no trade.
Exit Price: 1-3 pips below 0.9600 (line drawn from weekly chart since my newbie eyes can’t see any resistance on daily chart, lol)
Initial stop loss: 1 pip below the marked #3 point, i.e. at 0.9222 (according to my FXOpen chart)
Trade management: half at 0.9399, the rest at original exit price
Surely waiting for a comment from Johnathon and other experts Thanks a lot guys!
It seems like you’re in the right track, Alvin! I’m always glad to see the new member really show how much he or she wants to succeed in this business.
In short, it looks good for a beginner. You have correctly identified the possible S/R line, although I see there are several possible closer S/R line that you can use there.
The buffer there needs to be much higher than 1-3 pips. Krugman, for example, always puts up to 10-15 pips buffer in Daily chart! You can discuss more with him why he chooses that particular number as buffer.
I want to say more, but I’m afraid I’ve talked too much at this point. Seniors like Krugman and Kasravi, or even FSO Officials like Johnathon and Dudest should be able to give you more accurate feedback here.
You started in 2002) I mean you are into this thing for more than a decade .Such stories really sometimes scare the shi-t out of me lol and makes me think how much more i am going to struggle))
Krugman never said he was strugling, he just mentioned that he started his trading career back then. Doesn’t mean he wasn’t cleaning up eversince!
I believe for him , me,yourself and many fellow peers this strategy gives us a superior edge and comfort. And from your comments I don’t think you are struggling either, as a matter of fact I think you are doing very good mate!
Keep it up and a big thanks to every contributor it’s been always a pleasure.
Thanks for your input, I must be getting confused with the swing lows and highs, Dudest also mentioned it with one of the last charts I posted here. Perhaps you can help me out, this is how I am seeing the swings:
I also realize that this pin bar does not stick out from the rest but thought that the large engulfing bar sitting next to it might make up for this?
In my opinion your pinbar is in the middle of traffic, not really a swing low, see what you have on the left of your pinbar… you have to see the whole context. Also your pinbar doesn’t really stick out. Hey maybe im wrong, Let’s see what the more expert guys have to say.
Thanks gmatav, perhaps your right I am still learning and have a long, LONG, long way to go. I have to say that your pin bar does look very nice!! And I am tempted to place a pending order.
Haha, no worries, as Kas said I have never really struggled as a trader. I traded only stock options for a number of years which is vastly different and might I say much more complex, than trading currency. In options trading you not only have to overcome the brokers fees, but also time decay. Which means as you hold a position it loses value every day. Also in my career in options, I had much less experience and spent very little time learning how to read the market, and wasn’t nearly as serious about it. When I moved over to Forex I became consistently profitable on the 2nd month, and now trade much more professionally and with a larger account.
Just like Johnathon mentioned earlier, it took him years to become a profitable trader, but he also didn’t have the resources that we here in this forum currently have. The same is true for me, the path that took me years to go down, I could have done in a few months if I had the correct teachers and teaching materials that I now have.
Don’t lose heart, as I said it only took me a few months to become profitable trading PA in Forex!
This is very inspirational and gives even a washed up ex actor like me some hope!! I am very new to trading in general and feel lucky that I have found Johnathons thread first trip out. Let me know if your taking on any pupils Krugman!!
You did a great job identifying the correct S/R level and looking for PA. I’m not sure if I agree that you have a 1-2-3 there as the pullback you have marked as #2 is very small. I am pretty strict on trend definition, in my case I would just consider the #2 “noise” in the overall uptrend. Although I do think a reversal has happened just based on the double bottom that has occurred and price breaking and holding about your marked S/R line. Overall price has moved into the kill zone and this is where we would look for good PA signals.
If things closed the way your charts look I personally wouldn’t take the pinbar, as it is too small for me. I am hoping that the pair closes more like a 2BR or an engulfing bar, and I absolutely would take the trade.
I have my S/R (based on the D1) on a different level than you, so to me the PB is in nobody’s land and therefore no valid signal. But I’d like to hear the opinions of the more experienced traders as well.
Thanks for mentioning the buffer Willy. I base my buffer on the typical pip range of whatever chart i’m trading. Your pip range is the pair your trading and the timeframe. I.E. the higher the timeframe I got the larger my buffer gets. Also some pairs have larger ranges than others. I.E. the EURAUD as a higher range than the USDCAD. For non exotic pairs I generally do 10-20(depends on the currency) pips on the daily, and 5-10 pips on lower timeframes. Just from looking back at all the trades I’ve taking, most false breaks get filtered out in the 10-20 pip range. I use to do very tight buffers, but I realized if I am willing to give up a few pips per trade for a large buffer, I more than make it back by filtering out a few losers in the bunch. I always do a little dance when I see price came within 1 pip of my buffer and then pulled back, lol. Same with my stop loss.
Let me get nerdy again for a second. The range of pips a currency pair moves is based primarily on its price and volatility, and the decimal place of the pip. So USD/CAD which has a value of around 1.0300(4 decimal place pip) has a much smaller daily pip range than USDNOK which is 6.0000(4 decimal place pip). So my daily USDNOK weekly trade had a 35(which I thought was pretty small) pip buffer. My ZARJPY(price of 9.85 and 2 decimal place pip) weekly trade had a 3 pip buffer. But looking at it in light of how I explain how pip ranges work, both pairs had about the same buffer even though one was 35 and the other was 3.
Although you don’t have to waste your time calculating all that out, after you trade long enough you will get an idea for what a good buffer is for certain pairs.
Edit: I wanted to add in an illustration to explain of why the price of a currency and its decimal matters. Why does the USDJPY move about the same pips are EURUSD, its because if you take USDJPY which is a 2 decimal pair, lob off 2 places from the whole number and move the pip over 2 decimals, you would have 1.0000(assuming USDJPY is 100.00). So scale of USDJPY @ 100.00 is exactly the same as the scale of the EURUSD @ 1.0000. So on my ZARJPY pair, with a value of 10.00, it would have the same scale as a 4 decimal pair with a price of .1000. Since that is 1/10th of say the EURUSD, and I normally would put a 20-30 pip buffer on a EURUSD weekly candle, I decided to put a 3 pip buffer on ZARJPY since a 3 pip buffer is scaled for the pair i’m trading. I don’t want to over complicate things, but I think the point should be made that a 10 pip buffer on one currency pair may not be the right distance on another.
Those explanations clarifies my confusion.
