From Preparation to Execution: My Journey in Forex Trading

[Jag757]

We could be in a breakout area right now. A break of the 15 minute trend line would also be a break of the 4 hour trend line and that would be significant since it’s held for multiple days.Right now that trend line is holding. It could be a news event that moves it. I would not attempt to trade that but would wait till after the market settles.

15-Minute Chart Analysis:

1. Consolidation Range:

• The price has been oscillating within a defined range, with the recent high and low serving as boundaries. This suggests that the market has not yet committed to a clear direction.

2. No Clear Breakout:

• The price movement within the range does not constitute a breakout, as it remains confined within the highs and lows established previously. The moves up and down are likely testing the boundaries of this consolidation zone.

3. Indicators:

• RSI (Relative Strength Index): The RSI fluctuates around the mid-range, indicating a lack of strong momentum in either direction.

• MACD (Moving Average Convergence Divergence): The MACD also reflects a lack of strong momentum, with relatively flat histogram bars and MACD line movements.

Context with the 4-Hour Chart:

1. Larger Trend Context:

• On the 4-hour chart, the broader trend still shows a series of lower highs, suggesting an overall bearish trend. However, the recent price action indicates a potential base forming around the recent lows, suggesting possible support.

2. Support and Resistance Levels:

• The 4-hour chart also highlights a significant support area around 1.2800, which has been tested multiple times. The resistance area around 1.2855 to 1.2860 remains a key level that the price has struggled to break above convincingly.

3. Wedge/Descending Triangle:

• The consolidation on the 15-minute chart fits into the broader descending triangle or wedge pattern visible on the 4-hour chart. The convergence of the descending trendline and the horizontal support level suggests that the market may be gearing up for a significant move, but it remains unclear in which direction.

Summary and Implications:

• Current Market State:

• Both the 15-minute and 4-hour charts show a market in a state of indecision, with prices bouncing between established support and resistance levels. This is characteristic of a consolidation phase.

• Potential Scenarios:

• Bullish Scenario: A breakout above the resistance levels around 1.2855 to 1.2860, especially on increased volume and momentum, could signal a move higher. The next key levels to watch would be previous highs around 1.2885 to 1.2900.

• Bearish Scenario: A break below the established support level around 1.2800 could confirm the continuation of the bearish trend, with potential downside targets at lower support levels.

• Trading Strategy:

• Given the current consolidation, it may be prudent to wait for a clear breakout in either direction before committing to a trade. This approach minimizes the risk of getting caught in false breakouts and allows for better risk management.

[Jag757]

A quick look at the EUR/USD 15 minute chart. I was watching trades and this move out of consolidation suckered a lot of people who went long without clear confirmation and with major US news coming soon. Patience is key!

[Jag757]

Moving forward into the day. The Fed chairman is due to speak today and most likely something will be said that affects Forex trading.

Today’s Federal Reserve meeting is closely watched, with the market expecting no change in the overnight rate of 5.25 - 5.50%. Fed Chair Jerome Powell’s comments will be pivotal, particularly concerning future rate cuts. Market participants are increasingly expecting rate reductions, possibly starting as early as September, with some forecasting cuts totaling 100 basis points by the end of 2024. However, Powell has emphasized the need to avoid getting ahead of the data, suggesting a cautious approach to monetary easing .

The GBP/USD has recently dropped, reflecting market concerns over the Bank of England’s upcoming rate decision, which may involve a cut. This week’s economic data and central bank meetings are likely to bring significant volatility, especially in USD and GBP currency pairs

[Jag757]

Preparing for the trading day. Here is a quick analysis. I am not sure anyone is even taking the minute or two to read it but it helps me.

Chart Analysis for GBP/USD

4-Hour Chart:

• Trend and Moving Averages: The pair is trading below the 50 and 200-period moving averages, indicating a bearish trend. The 50-period MA is acting as immediate resistance around the 1.2860 area.

• Fibonacci Levels: The price has retraced towards the 61.8% Fibonacci retracement level of the previous downtrend and is currently consolidating near the 1.2860 level.

• Support and Resistance: The 1.2819 level is marked as a significant support area. The price has been oscillating around this level, indicating its importance.

• Indicators: The MACD is showing a lack of momentum, with the MACD line close to the signal line. The RSI is around the 54 level, suggesting neither overbought nor oversold conditions.

1-Hour Chart:

• Trend and Moving Averages: The price is trading below the 200-period MA and slightly above the 50-period MA. The consolidation around the moving averages indicates indecision.

• Fibonacci Levels: Similar to the 4-hour chart, the price is hovering around the 61.8% retracement level, suggesting possible resistance.

• Support and Resistance: The support around 1.2819 is reinforced on this timeframe, with the price testing this level multiple times.

• Indicators: The MACD on the hourly chart shows a slight bearish crossover, and the RSI is around 50, indicating a balanced market.

15-Minute Chart:

• Trend and Moving Averages: The price is below the 200-period MA and has recently crossed below the 50-period MA, indicating short-term bearishness.

• Fibonacci Levels: The recent move has retraced to the 38.2% Fibonacci level, with the price struggling to break above this level.

• Support and Resistance: The 1.2819 support level remains crucial, with the price showing a bounce from this area.

• Indicators: The MACD shows a bearish crossover, and the RSI is around 50, consistent with other timeframes.

Summary

The GBP/USD pair shows signs of consolidation with a slight bearish bias across multiple timeframes. The 1.2819 support level is crucial, and a break below could signal further downside. Conversely, a move above the 1.2860 resistance could indicate a bullish reversal. It’s essential to watch for a breakout or a breakdown from these levels, as the current market indecision suggests a pending significant move. Additionally, monitoring the moving averages for potential crossovers could provide further insight into the trend direction.

For August 1, 2024, several significant economic events could impact the GBP/USD currency pair:

United Kingdom:

1. Bank of England (BoE) Interest Rate Decision:

• Scheduled for 11:00 GMT. The market closely watches BoE’s rate decisions, as changes or hints about future policy can significantly impact the British pound.

2. UK Manufacturing PMI:

• The Manufacturing Purchasing Managers’ Index (PMI) is set to be released at 08:30 GMT. This index provides insights into the economic health of the manufacturing sector. An index above 50 indicates expansion, while below 50 indicates contraction.

United States:

1. ISM Manufacturing PMI:

• This report, due at 14:00 GMT, is a critical indicator of economic activity in the US manufacturing sector. It can provide insights into economic conditions and future trends.

2. Initial Jobless Claims:

• Scheduled for 12:30 GMT, this data reflects the number of individuals filing for unemployment benefits for the first time. It is an essential indicator of labor market health.

These events can create volatility in the GBP/USD pair, particularly if the actual results deviate significantly from forecasts

[Jag757]

I took a short position and have already taken half at my first target and moved the stop loss up and will continue to do so. Good Trade! I will explain later.

[Jag757]

I just hit my second take profit. It was a very good trade and a typical breakout but I was patient and waited for the second candle out of consolidation to swallow the first. I took 50% profit at my first target and immediately moved my stop loss into profit. I followed the trade with my Stop Loss until I hit my second target.

[Torchwave]

Thanks for the link to your thread,Jag757. With your permission, I will be contributing my thoughts and observations. Again, congrats on your GU trade.

[Jag757]

Absolutely, I would love to hear your thoughts and observations.

[Jag757]

Caught a Breakout, but Missed the Full Ride: Reflections from a 20-Year Trader

Hey everyone,

I wanted to share a recent trade experience on GBP/USD that was both a success and a learning moment for me. As many of you know, I’ve been trading for almost 20 years, but this trade reminded me that we all face challenges, no matter how experienced we are.

The Setup and Execution

I spotted a potential breakout on GBP/USD, which I acted on by shorting as the price bounced off a resistance level. I set my targets based on key support levels and used the 4-hour chart for a broader perspective—a crucial step that I almost overlooked. I managed the trade well, taking partial profits and moving my stop loss to break even to secure gains.

Reflecting on the Missed Opportunity

However, the price continued to plummet, eventually moving down around 100 pips, while I captured only about half. Why didn’t I ride it all the way down? Despite my experience, I found myself facing the same fears and nerves that many new traders experience. The fear of losing profits led me to exit earlier than necessary, missing out on a larger portion of the move.

What I Should Have Done Differently

In hindsight, implementing a trailing stop would have been the ideal strategy. It would have allowed me to lock in profits while giving the trade room to breathe. This is a classic example of how even seasoned traders can benefit from the basics—like using trailing stops—to manage trades more effectively.

Key Takeaways

1. Trust the Process: Stick to the plan and use tools like trailing stops to protect profits and capture more of the move.

2. Manage Emotions: Acknowledge the fear and nerves, but don’t let them dictate your trading decisions.

3. Continuous Learning: No matter how long you’ve been trading, there’s always room for growth and improvement.

This experience reinforced the importance of discipline and sticking to proven strategies. I hope sharing this helps others see that even with years of experience, we all face similar challenges and have opportunities to learn and grow.

Happy trading, and stay disciplined!

[ayodimej1]

I do miss lots of setup i would have take, i have learnt to let it slide and wait for another one. No island of setup, you miss this one, there are tons of it on their way.

Astonishing you’ve being trading since 2014, what have you found different in all these years of experience if you dont mind sharing?

[Torchwave]

Your experience nicely sums up the fact that traders can never do away with the basic trading principles, and your conclusion mirrors my trading convictions developed from my experiences in the markets which includes similar one you just experienced. In my case, I have had to learn more than twice. Lol.

[Jag757]

I have actually been trading since 2005. Time flies! I don’t think much has changed really. I’m still using MT4 although I have used other charts as well. The GBP/USD used to have a bigger daily range. You could count on it moving from 100 to 180 pips per day. It was a little easier in my opinion.

Thanks for the question and I look forward to talking with you again.
J

[Jag757]

I think trading brings out your personality and I have always liked to lock profit in. I had a bigger stake last night and simply did not want to give back the gains. It made me a little jumpy and way too cautious. That has always been my weakness when it occurs. But, I had no way of knowing I was in such a large move and my targets were set and I stuck with the plan. So there is some good and bad.

J

[Torchwave]

Obviously, your bigger trade size cranked up your emotion. Perfectly normal. You acted in the best interest of your capital preservation. Who wouldn’t? The sobering truth from this experience of yours is that we can never be rid of emotion try as much as we can because we are humans. We all share the same weakness, but the most important thing is you won.

[Jag757]

Thanks, I appreciate that as a fellow trader. I do think it’s important to review what you do right and wrong after a trade. Also, I think when you are sharing on a forum, it’s important to be honest with the people reading your posts. Trading is not easy and I hear that from people who are much more successful than me. But, as you said, we all share some of the same weakness and fear. Just recognize it and move on.

J

[Jag757]

This is what I am looking at the moment. We are breaking out of consolidation now.

Comprehensive Analysis for GBP/USD with Upcoming NFP News

Current Market Conditions

1. Overall Trend:

• Bearish across multiple time frames (15-minute, 4-hour, daily).

• Trading below 21, 50, and 200-period moving averages, indicating a strong downtrend.

2. Indicators:

• ATR: Stable to increasing volatility.

• RSI: Near oversold levels on shorter time frames, indicating potential for short-term bounce.

• MACD: Bearish momentum across multiple time frames.

3. Price Levels:

• Support: 1.2715, 1.2685

• Resistance: 1.2905

Upcoming NFP News

• Event: Non-Farm Payrolls (NFP) Report

• Date and Time: Tomorrow, typically released at 8:30 AM ET.

• Expected Impact: High volatility across USD pairs, including GBP/USD.

Strategy Considerations

1. Pre-NFP Trading:

• Expect reduced volatility and choppy market conditions leading up to the NFP release.

• Avoid taking significant positions immediately before the NFP release to minimize risk from unpredictable price swings.

2. Post-NFP Reaction:

• Monitor the initial reaction to the NFP release. There may be sharp movements and increased volatility.

• Allow the market to settle and confirm the direction before entering new trades.

Potential Scenarios

1. Bearish Scenario (NFP Beats Expectations):

• Strong NFP data typically strengthens the USD, potentially pushing GBP/USD lower.

• Confirm a bearish breakout below 1.2715 with increased volume and bearish candlestick patterns.

• Entry: Short position on a pullback to the breakout level (around 1.2715 or higher if there’s a retest).

• Stop Loss: Above recent highs or the breakout high.

• Take Profit: Target next support levels (e.g., 1.2685 or lower).

2. Bullish Reversal Scenario (NFP Misses Expectations):

• Weak NFP data may weaken the USD, potentially causing a reversal in GBP/USD.

• Confirm a bullish reversal above 1.2715 with strong bullish candles and increased volume.

• Entry: Long position if price moves back above 1.2715 with confirmation.

• Stop Loss: Below recent lows or the breakout low.

• Take Profit: Target next resistance levels (e.g., 1.2905).

Key Points to Monitor

1. Volume and Volatility:

• Increased volume and volatility post-NFP can confirm the breakout direction.

• Use volume as a proxy for market strength and commitment to the move.

2. Candle Patterns:

• Look for strong candlestick patterns (e.g., engulfing candles, pin bars) to confirm entries.

• Avoid trades based on weak or ambiguous candles.

3. Major Market Sessions:

• Major market sessions (London, New York) provide more reliable moves.

• Plan to take positions when these sessions are active for better confirmation and follow-through.

Example Trading Plan

1. Pre-NFP:

• Avoid major positions and watch for price action near key levels (1.2715, 1.2685, 1.2905).

2. Post-NFP (Bearish Scenario):

• Wait for the initial reaction to stabilize.

• Enter short on confirmed bearish breakout with volume.

• Entry: Around 1.2715

• Stop Loss: Above 1.2750 (recent highs)

• Take Profit: 1.2685 or lower

3. Post-NFP (Bullish Reversal Scenario):

• Wait for confirmation of a reversal above 1.2715.

• Enter long on confirmed bullish move with volume.

• Entry: Above 1.2715

• Stop Loss: Below 1.2680 (recent lows)

• Take Profit: 1.2905

Final Notes

• Risk Management: Ensure each trade has a favorable risk-reward ratio (e.g., 2:1 or 3:1).

• Patience: Wait for confirmed signals and avoid impulsive trades, especially around major news events like NFP.

• Review: Post-trade analysis to understand the impact of NFP on your trades and refine strategies for future events.

[Jag757]

How about a little bonus analysis tonight. I have been trading this pair some during the summer range and find it follows the same patterns as the Eur/Usd and the Gbp/Usd

Let’s analyze the NZD/USD charts provided and incorporate the upcoming NFP news release into our strategy.

Chart Analysis for NZD/USD

Chart 1: NZD/USD 15-Minute Chart

1. Trend Analysis:

• The price has broken below the 200-period moving average, indicating a potential shift towards a bearish trend.

• The 21 and 50-period moving averages are also trending downward, confirming the bearish sentiment.

2. Indicators:

• ATR: Indicates moderate volatility.

• RSI: Near the oversold region, suggesting a potential for a short-term bounce.

• MACD: The MACD line is below the signal line, indicating bearish momentum.

Chart 2: NZD/USD 4-Hour Chart

1. Trend Analysis:

• The price has recently crossed below the 21, 50, and 200-period moving averages, indicating a bearish trend.

• The overall trend is bearish with lower highs and lower lows.

2. Indicators:

• ATR: Moderate volatility.

• RSI: Close to the oversold territory, suggesting potential for a short-term reversal or consolidation.

• MACD: Bearish momentum with the MACD line below the signal line.

Strategy Considerations with NFP News

1. Pre-NFP Trading:

• Similar to GBP/USD, expect reduced volatility and potential choppiness leading up to the NFP release.

• Avoid taking significant positions immediately before the NFP release to minimize risk from unpredictable price swings.

2. Post-NFP Reaction:

• The initial reaction to the NFP release will likely cause sharp movements and increased volatility in the market.

• Allow the market to settle and confirm the direction before entering new trades.

Potential Scenarios

1. Bearish Scenario (NFP Beats Expectations):

• Strong NFP data typically strengthens the USD, potentially pushing NZD/USD lower.

• Confirm a bearish breakout below recent support levels with increased volume and bearish candlestick patterns.

• Entry: Short position on a pullback to the breakout level (around 0.5935 or higher if there’s a retest).

• Stop Loss: Above recent highs or the breakout high.

• Take Profit: Target next support levels (e.g., 0.5900 or lower).

2. Bullish Reversal Scenario (NFP Misses Expectations):

• Weak NFP data may weaken the USD, potentially causing a reversal in NZD/USD.

• Confirm a bullish reversal above key levels with strong bullish candles and increased volume.

• Entry: Long position if price moves back above 0.5950 with confirmation.

• Stop Loss: Below recent lows or the breakout low.

• Take Profit: Target next resistance levels (e.g., 0.6000).

Key Points to Monitor

1. Volume and Volatility:

• Increased volume and volatility post-NFP can confirm the breakout direction.

• Use volume as a proxy for market strength and commitment to the move.

2. Candle Patterns:

• Look for strong candlestick patterns (e.g., engulfing candles, pin bars) to confirm entries.

• Avoid trades based on weak or ambiguous candles.

3. Major Market Sessions:

• Major market sessions (London, New York) provide more reliable moves.

• Plan to take positions when these sessions are active for better confirmation and follow-through.

Example Trading Plan

1. Pre-NFP:

• Avoid major positions and watch for price action near key levels (0.5935, 0.5950, 0.6000).

2. Post-NFP (Bearish Scenario):

• Wait for the initial reaction to stabilize.

• Enter short on confirmed bearish breakout with volume.

• Entry: Around 0.5935

• Stop Loss: Above 0.5960 (recent highs)

• Take Profit: 0.5900 or lower

3. Post-NFP (Bullish Reversal Scenario):

• Wait for confirmation of a reversal above 0.5950.

• Enter long on confirmed bullish move with volume.

• Entry: Above 0.5950

• Stop Loss: Below 0.5920 (recent lows)

• Take Profit: 0.6000

Final Notes

• Risk Management: Ensure each trade has a favorable risk-reward ratio (e.g., 2:1 or 3:1).

• Patience: Wait for confirmed signals and avoid impulsive trades, especially around major news events like NFP.

• Review: Post-trade analysis to understand the impact of NFP on your trades and refine strategies for future events.

[Jag757]

I absolutely don’t trade right before or after Non-Farm Payroll. Even if I post an analysis, I don’t do it. There are too many other times to find a good trade. Trading will probably be okay during London but I would be careful of false signals even then.

Technical Analysis for EUR/USD (Without NFP Considerations)

Chart 1: EUR/USD 15-Minute Chart

1. Trend Analysis:

• The price is oscillating around the moving averages, indicating a potential range-bound market.

• The 21 and 50-period moving averages are close to the price, suggesting a lack of clear direction in the short term.

2. Indicators:

• ATR: Indicates low volatility, suggesting limited price movement.

• RSI: Around the midpoint, indicating no extreme conditions.

• MACD: The MACD line is close to the signal line, indicating a lack of momentum.

Chart 2: EUR/USD 4-Hour Chart

1. Trend Analysis:

• The price has recently crossed below the 200-period moving average, indicating a potential bearish trend.

• The 21 and 50-period moving averages are also sloping downward, supporting the bearish sentiment.

2. Indicators:

• ATR: Moderate volatility.

• RSI: Slightly below the midpoint, indicating a bearish bias but not in oversold territory.

• MACD: Bearish momentum with the MACD line below the signal line.

Chart 3: EUR/USD Daily Chart

1. Trend Analysis:

• The price is below the 21, 50, and 200-period moving averages, indicating a bearish trend.

• The overall trend is bearish with lower highs and lower lows.

2. Indicators:

• ATR: Indicates moderate volatility.

• RSI: Around the midpoint, not indicating extreme conditions.

• MACD: Bearish momentum as the MACD line is below the signal line.

Potential Trading Strategies

Scenario 1: Range-Bound Trading (15-Minute Chart)

1. Identification:

• The price is oscillating around moving averages, indicating a range-bound market.

2. Strategy:

• Trade within the range by buying at support and selling at resistance.

• Support: Around 1.0920

• Resistance: Around 1.0950

3. Entry:

• Long: Enter at or near support (1.0920) with confirmation (e.g., bullish candlestick pattern).

• Short: Enter at or near resistance (1.0950) with confirmation (e.g., bearish candlestick pattern).

4. Stop Loss:

• Place stop loss just below support for long positions and just above resistance for short positions.

5. Take Profit:

• Target the opposite end of the range (1.0950 for longs, 1.0920 for shorts).

Scenario 2: Bearish Continuation (4-Hour Chart)

1. Identification:

• The price has crossed below the 200-period moving average, indicating a potential bearish trend continuation.

2. Strategy:

• Look for opportunities to short on pullbacks to resistance levels.

• Resistance: Around 1.0950

3. Entry:

• Short: Enter on a pullback to the 1.0950 resistance level with confirmation (e.g., bearish candlestick pattern, MACD crossover).

4. Stop Loss:

• Place stop loss above the recent high or the 200-period moving average.

5. Take Profit:

• Target the next support level (e.g., 1.0880).

Scenario 3: Bearish Continuation (Daily Chart)

1. Identification:

• The price is below the 21, 50, and 200-period moving averages, indicating a bearish trend.

2. Strategy:

• Look for opportunities to short on pullbacks to resistance levels.

• Resistance: Around 1.1000

3. Entry:

• Short: Enter on a pullback to the 1.1000 resistance level with confirmation (e.g., bearish candlestick pattern, MACD crossover).

4. Stop Loss:

• Place stop loss above the recent high or the 50-period moving average.

5. Take Profit:

• Target the next support level (e.g., 1.0880 or lower).

Final Notes

• Risk Management: Ensure each trade has a favorable risk-reward ratio (e.g., 2:1 or 3:1).

• Patience: Wait for confirmed signals and avoid impulsive trades.

• Review: Post-trade analysis to refine strategies for future trades.

[Jag757]

It’s highly unlikely I will trade on Non Farm Payroll day. Unless things come out exactly as expected. You don’t have to trade every day.

[Jag757]

Never say never, I bought here and followed it up for about 30 pips. I will take that. It might retreat a bit and then head back up to the previous high. There is possibly more pips for the brave. I wanted to take a picture of the chart as I exited the trade but had to move fast. But you can clearly see the entry.