The post by Jocelyn that Trav excavated speaks very well to the topic, and my answer is much along the same lines.
I’m not a proponent of assigning stops with static pip values any longer than necessary in the course of one’s trading development: once you’ve acclimatized to the behavior of the pair(s) you’re trading and established a habit of awareness of ATR on the TF(s) appropriate to your chosen strategy, stops should become contextual. In my case, this means looking at any one of several features that may be present on the chart that fall under the S/R umbrella.
If there’s some question because some of these features are clustered together on the 1H (e.g. price @ 203.38, a fib retracement @ 203.51, a fib fan line @ 203.64, a S/R line from previous engagement drawn in @ 203.88), I will then look at ATR and wider TFs (3/4H, 1D) to look for direction on potential range and to see which of these feature(s) burns through the lower-TF noise to become more salient overall.
Taking a trade at resistance that then breaks doesn’t necessarily mean an adverse breakaway and a busted trade. This again is specific to context. Did you take a position with a full allotment sizing, or 1/2 or 1/3 with the intent to scale in? If the latter case, the stop is more flexible because the relative size of the trade is smaller. But in general, I will not place a stop on the inside of the next significant topographical feature on the chart. If price breaks past that feature, there is a good chance it will advance further. How far I’ll permit it to go is a function of range and the salience of the features. Risk:reward also plays a significant role of course, but the ratio will vary from trade to trade because I usually take profit in pieces, the size of which also depends on range, momentum, etc.
A great example here from a long perspective was the ascending trendline from March 17 that broke out of the rising wedge on 08/11 around 211.20. The previous swing high was 213.96. Someone who may have taken a long @ the someone in between would find multiple features in the ~270 pip range between the high and the breakout point around which to place stops and take heed of further declines. However, the point past which the fight would clearly be lost was the ascending trendline that had held for the past 5 months. That’s a dramatic instance of what I’m talking about, but serves the point well.
A bit meandering, but there are some thoughts on it.
A stretch - really? It may be invalidated, but the construction isn’t implausible at the point. There was some notable hesitation between 110 and 111.30 late last year, so the contentious price behavior we’re seeing now is no surprise. If we don’t see a close above 110.53 (preferably 110.14 or lower), I’ll begin to look more closely at the possibility of an H&S and on the 1D.
Do you ever feel like we should change this thread to “Yen Crosses: Winning Strategies”? There’s no doubt the majority of the focus rests with the Guppy, but we do justifiably bring in other crosses. What is valuable for GBP/JPY is often valuable for others, and vice-versa…
Well I need to read up on H&S … I never know where to draw the necklines unless they are very obvious. The one you mentioned looked nothing like a H&S to me … can you post a chart with it highlighted?
Do you ever feel like we should change this thread to “Yen Crosses: Winning Strategies”? There’s no doubt the majority of the focus rests with the Guppy, but we do justifiably bring in other crosses. What is valuable for GBP/JPY is often valuable for others, and vice-versa…
That’s a pretty good idea … do you know how to change thread titles? I will see if I can figure it out.
By travpip at 2008-08-24
so my analysis was… if it broke through this ascending trendline go short again… so it did i believe however i was in the field like my friend rram2
my question? Would you wait for another signal/setup (candlestick pattern)to pull the trigger, or would you just enter the trade if it crossed the ascending TL… with take profit near 202.8 and stop los 203.7…
add another position if it breaks 202.8 take profit at 202.00
however i am hearing that it is going lower…ie 198…192
is this based on fundamental feeling or technical…just interested…would you all jjust be looking for shorts…or always even right at this millisecond keeping options open
would you go long if it bounces of 202.8 or 202.
or only short now
Yes it is very interesting how this down move is taking place … it obviously wants/needs to go lower but maybe the Elijah-part of the guppy is fighting the down move
More seriously, at this point I would only play off those trendlines that form the triangle … and only with really tight stops. So if she makes it to 204.08ish I will short again, or if she falls below the bottom tl, I will short again and add as she passes 202.45 (the .75 retracement of the last sw and sl) and 202, of course depending also on momentum and candle-price action at the time.
If she takes out the previous low of 201.74ish, then I think it would be short every bounce from that point on…
This does not look like a cut-and-dried retracement but it could turn into one, so I guess vigilance is key … and try to identify the point where she finally turns because when that happens, she usually does come roaring back with a vengeance.
cadarkitek says 178 … not sure of the timeframe … I don’t see her that far south on this present trip, but … I’ve been wrong before :eek:
I am finding the less indicators I have on my charts, the better I can ‘see’ what she is doing. I’m now looking at 4h, 1 h and 5/15 min charts, only with 50 and 200 sma and then I draw my own trendlines and s/r lines (and occasionally check the MT4 indicator for weekly/monthly pivots)
On the 1 hr, she is fooling around the 50sma, crossing and re-crossing and gap between 50 and 200 sma is narrowing … so she does not look commited to another plunge just yet … but that could change in an instant!
I’m back in with another short as she penetrated that lower trendline, looks like there is some conviction behind this move … probably a result of the UJ imploding as well, I suppose due to dollar weakness. The pound on the other hand has been rising all morning … maybe setting up for a new short as well.
She just made the double bottom at 201.80ish and now has reversed furiously. I think at this point she will head back up again before making the ‘big dive’ below 200.
Where does top tl start? On Aug 13 as well? There is another that could be drawn from the 22 … in any case she seems unable to break 202.30’s, acting very weak now. I closed my short with a little profit, will just watch from the weeds now until she decides on a direction.
As to UJ, my charts say she needs to pull back to 110.26, preferably 110.64 before going short. I’m sure the more experienced could do it earlier … or at least start building positions
Well that news sure had its effect … k-o’d the pound and the euro … which caused an 80 pip reversal in the GY in about 10 seconds … gotta love that pair! Now I am just glad I closed my long before the news, which was not supposed to be that important … but ya never know I guess.
[I]"German business confidence fell to 94.8 from 97.5, the three year low was far below the expected 97.2. Additionally, the outlook for the economy was significantly more disappointing as the 87.0 expectations reading was the lowest since February, 1993. Growth in the country contracted 0.5% in the second quarter and signs are now pointing to further contraction into the third. High inflation, declining demand from abroad and contracting domestic growth has weighed on sentiment. If the region�s largest economy continues to decline the ECB may be forced to abandon its price stability mandate and consider cutting rates in early 2009. � John Rivera, Currency Analyst "[/I]
So I guess this news was more dramatic than at first thought. Remains to be seen what effect this will have on euro/pound today … they were on their way to a nice retracement before this happened. UJ is headed up, GY was soaring, then got knocked down again but held at former support, now trying to climb again. I ‘think’ she will try to tag that upper trendline which I have drawn at 202.89, from the Aug 22 high … I don’t see her getting above 203 now, but … I’ve been wrong before
Oh wow, score one for cadarkitek … see his post #191 below. I managed to get back in short as she crossed that lower trendline … could have been in from 202.70 if I had listened to him
The break below the two previous touches @ ~201.77 looks pivotal if held today. Going back to April you’ll see that 201-201.40 was a highly contended zone before upside pressure prevailed, and then 201 finally acted as a support for the swing low on 05/09. Below 201 (where there’s also fib fan support from a recently drawn study) there’s very little until ~200.15.
Remember that nothing which confirms a reversal in trend is a merely pullback in trend. A good time to add or open, not take away or close, depending on your exposure of course. We’ve seen nothing to negate the bearish picture here, and while I won’t hold a short until ~206.50 (I believe cadarkitek has recently mentioned 207), I see no portent of a bullish reversal until that area is broken. As always I’m content to play the pair both ways, but to keep my account out of the vacillating intraday fray (as I typically do when I’m not available to trade during the day), I’ll dip in short on the throwbacks north.
No time to write more this morning! Everyone have a good day.
I dont know about you peeps but I refuse to read any other post in the other GUPPY thread by RRAMM. I dont think it has nothing to do with trading. Just hopes of gbpjpy rising. Newbies trade what you see not what you think, being able to properly read the charts is essential to trading.
That’s why we’re over here now, this thread was started for some serious guppy discussion
I’ve grabbed a couple of short scalps this morning, but now she is back to bouncing around again, what I’d like is for her to tag that upper descending trendline at around 202.27, then I could load up on a short.
Otherwise at this point, she would have to break down past the last low or better, below 201. Jeb next door now thinks she will retrace back up to 204+ or even 207+! I just don’t see that with the descending triangle the way it is, everything points down and we may be going into a few days of $ weakness which should further push her down.
Only the Shadow knows for sure (and maybe cadarkitek…:D)
