UPDATE: T33 Copper Short: Now Freerolling.
TUESDAY 5/3/19 UPDATE:
We are still waiting for most of our set ups. Two of our forecast plans didnât play out and we didnât have entry points. Two of our three open trades are now free-rolling and the last one is going against us at the moment but we still have hope.
AUD/USD: Didnât form any of the patterns we were looking for and now we are on waiting mode.
COCOA: Still waiting for a Long Entry opportunity on the Daily Chart.
COFFEE: Our long trade is playing against us at the moment but it hasnât stopped us out yet. We have a chance for a Right Tip of a Bear Crown to form at current 786 levels but I do not have high level of confidence. It is a wait and see scenario,
COPPER: Currently at Break Even and half way towards our TP. Also, a wait and see scenario.
CRUDE OIL: This is one of those MANY times when I question my TP choices. I already compromised (as explained before) my 162% Fib Extension and am taking the 127% extension in all my trades. However, there are many trades where the market choses to hit the Low or High of the Fib Swing and turn around. Like it did on our 618% EUR/CAD trade causing us a loss before giving us a nice profit from the 786 trade.
In the case of this Oil short trade, we wouldâve picked up 3:1 had we placed our profit at the Swing Low, or about 180+pips for a 50pips risk.Yet we are going for 300pips or a 5/1 prize. Similarly, with the EUR/CAD trades we would have had two winning trades from both the 62% and the 79% instead of one lost and one nice win.
Luckily, it is early on the year, and I will keep consistent on my TP (127%) whilst keeping an eye on the marketâs behaviour and how much profits I am missing out on trades that only hit the âHâ or âLâ of the fib swing versus the loss in opportunity when hitting the 127% extension.
To make changes to a method, we need to have a âscientificâ approach. We need to gather data, and unfortunately when we donât have an auto-system that can provide us with data, we must keep the course, collect it, then review it.
I usually need at least 100 samples. So this might take me the rest of the year! Unless I can back test manually.
So far, based on 4 completed trades (since reporting) where we couldâve had caught the fib swing high/low ONLY versus going for the 127 (as we did) the difference in Win Dividend or Units are 0.5 units in favour of the 127 approachâŚ
I have exactly the same feelings and same situations that had happened to me for the past 15 years in professional punting. When I back my horses I have the rule of backing only horses paying between $2 and up to $13. A few times, my âpre-selectionâ ended up winning at say $21 or $17 which made them a NOT QUALIFIER. I felt âoh man, I had that horse in my list!â Then I go back ten years of data including most recent results, and overall those horses LOST in the long run. This reinforces my believe to STICK TO MY RULES STICK TO MY GUNS.
So I doâŚ
Letâs wait and seeâŚ
GBP/JPY March 5th, 2019: TemptingâŚ
I wanted to share this. In previous posts I mentioned I was BULLISH on the G/J up to about 149.50/80 due to the fibonacciâs extensions sitting around that area which is also Day Resistance levels.
However, the pound has entered overbought territory in the Day Chart as shown below and furthermore it has formed a beautiful Evening Star or at least if it doesnt quite meet the requirements of an ES, it has definitely formed a Bear Engulfing Candle.
The reason I started the title as âTemptingâ, is to share this. In the past I wouldâve jumped to trade this set up which is a very WEAK trade AGAINST THE TREND. And furthermore, forgetting my previous Analysis and plans.
Yes, of course many of these trades can win, but most of them will lose too. Even more terrifying, is the thought that even though this type of trade would cost me like 120 pips! I would still have entered in the past! Now that is BAD TRADING HABITS!
Ignore my limits in pips costs, ignoring the trend, ignoring my plans, etc. I first need to re-define my plan if it needs adjustment, then I need to look at the strength of the set up in front of me, then I need to look at the cost in pips, and together with the Risk: Reward ratio, etc etc before even considering jumping the gun.
Anyway, It looks that the pound is either exhausting its bull strength or is simply pausing before continuing. Eitherway, all we can do is keep an eye for a possible SHORT entry opportunity in the Intraday Charts. Given that this BEAR set up is WEAK in my eyes, I would need a set up in the 2h chart as minimum. Nothing smaller.
And it would need to be either a Bear Crown or Bear Gartley.
But it is most likely we will stay in the sidelines for a little whileâŚ
Wait and seeâŚ
Happy tradingâŚ
AUD/USD LONG TRADE SET UP
We are now getting closer to a Long Trade set up on the AUD/USD Intraday Charts
As shownâŚ
UPDATE 6/3/19 15:00 The set up we were looking for didnât play up. Instead AU bounced at the 618 but we really didnât miss this since the candle formation didnât give us the right equity management. Back in Waiting mode againâŚ
COCOA LONG TRADE SET UP ENTRY
Cocoa is now ready for us to buy it. It has formed a Day Harami at the 61.8%.
Although I wouldâve liked it much better if this set up was right at the intersection of the 786 and the up trend line. But we canât ask for perfection!
So we are buying cocoa as soon as the market opens or at the first opportunity.
Our entry should look a bit like this:
BUY: 1633 area
SL: 1613 (about 20 pips)
TP: 1823 (about 190 pips)
T44 GOLD LONG TRADE ENTRY 30m CHART
As per my previous post of yesterday while we are waiting for the âAâ point of a Day Bear Crown/Gartley to form we are looking to ride the âA->Dâ Leg. Hence this entry at a Fib 38.2% on the 30m chart. Because it is a 38.2% and not a 62% or 79% we are placing our stop under the last low.
BUY: 1288.89
SL: 1279.89 (9pips)
TP: 1313.89 (25pips) or about 2.5/1
Now wait and seeâŚ
On another note, in the Daily Chart so far we have a few steps of the Bear Gartley formation that has taken place:
- Market trending for a while (
) - Market showing exhaustion ie RSI Divergence ()
- Market taking out recent short term trend line and the last low with force. ie RSI moving from 70% to 30% ()
At this juncture, market has formed a nice BULL HARAMI so we are taking this as a sign of going Long. We are only going for 2.5:1. Arbitrary number? Not really, we are just aiming for profits below the bear fib 62% area where we are planning to go short upon a Day-2h Bear Candle Pattern (Point âDâ)
Anyway, thatâs coming up in a few daysâŚhopefully âŚ
HAPPY TRADINGâŚ
UPDATE: T34 COPPER SHORT CLOSED AT 1:1 PROFIT (+1unit)
Due to a Day 392 Bull Engulfing candle I have closed this short trade at 1x profits or 1unit.
Based on 1unit = 2.5% risk we are up 3.1 units or 3.1x2.5% = 7.75% since reporting.
UPDATE: T45 COCOA LONG TRADE ENTRY
BUY @1640.5
SL @1613 (27.5pips)
TP @1823 (182.5 pips)
Based on Day Harami @ the 62% fib. If this trade doesnât play up then we will look at entering LONG at the 786 fib.
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7/3/19 UPDATE: T45 COCOA LONG ENTRY NOW RISK FREE.
Today when the Cocoa Market opens we can move our stop to break even.
I love trades when they just work from the get-go!
Gold:
Itâs funny how we can easily forget our plansâŚon the 5th march I wrote âwe must wait for a Day Bull Candle formation to start looking at riding the âA-Dâ leg of the Gold Bear Gartley in formationâŚâ yet I look for a 30m entry on a possible Reverse Bull Crown. Not too bad a thing, but a high risk trade and NOT in the original planâŚ
Lesson Learnt? Even if the long 30m trade (T44) works, not my best performanceâŚ
ADJUSTING PROFIT TAKING METHOD
As I have mentioned above, for quite a few trades now I have noticed how many âpaper profitsâ I missed out. It has been a bit of a frustrating topic.
I am talking about setting my TP at the 127% Fib extension VS the Fib High/Low.
I had decided to record aS many trades as I can to compare the two and make a decision after 100 trades. Reasonable approach I would say. However the pain of seeing trades closing at b/e when I had some times as much as 3:1 in paper profits is hard to ignore.
After some soul searching I came up with a temporary solution while I record data.
I will have two TPS:
50% of the trade at TP Fib High/Low
50% of the trade at TP Fib 127%
I will stick to this and because I havenât set my results tracking tools for this I will just do my best when I report the results here.
Like I said previously I only care about one thing âHow many units of profits I make over the yearâ which is easily expressed in %
I invest 2.5% per trade which is 1unit.
so for my cocoa trade I didnât split my trade into two entries so I will set up a price alert and reduce my position by half when we got close to the last high
Please remember that the market doesnât always hit at the perfect price so I always go for a few pipe below/above
Either way I will update the respective trade post as soon as I take action
In the future I will have two separate entries per trade so I donât have to wake up in the middle of the night!
Happy trading!
T44 GOLD CASH LONG: SAVED BY THE PIPâŚ
How much more can I say⌠When one enters a trade with a set up that can be rated at 40% success rateâŚone has to âsweat it!â. The Gold just came down as low as 1,280.69 (sell price) just under a pip of our stop which sits at 1279.89âŚ
We are not out of the woods yet, but it appears that we might have a glimmer of hopeâŚ
The 30m chart ended up with a very beautiful textbook hammer creating a âTweezer Bottomâ at this level and timeframe.
And in less than 20min we will find out if we get another hammer in the 1hâŚ
just sweating it⌠not really, though, I am writing this as a reminder for me to STICK TO MY TRADING METHOD. I only have TWO Reversal Patterns I am versed with and that I love trading: The Gartley (Or Crown) and The 3-point RSI Divergence on the Daily Chart, . Any other attempts to trade a reversal like a 2-point Daily RSI Div or a 3-point 4-hrly RSI Divergence, or an Oversold+Break of Trend Line, or a Double Top/Bottom, whilst they may work, I am not verse on identifying these properly to give me a high strike rate. And they do not suit my styleâŚMainly because I never have a Identify-able Take Profit target.
AnywayâŚfood for thoughtâŚ
On the other hand, when you enter trades with the trend like the Cocoa Trade (T45) a beautiful high % trade set up, well âŚwe donât have to sweat it!..
Just chilling out now, waiting for the Cocoa market to open.
I expect that our Oil trade will be stopped out at b/e tonight, but if not, then we might get a second chance at re-catching those paper profits we let go offâŚ
COMPARISON RESULTS BETWEEN 127% FIB & FIB SWING HIGH/LOW:
On this topic here are the results so far:
Out of 5 trades Fib Swing High/Low is ahead by 3units HOWEVER, this is only because the OIL Trade #42 hit the Fib Swing Low whilst it missed the 127% BUT the trade is still OPENâŚ
We also have in this race with neither of the two TP methods hitting their respective targets yet, the Cocoa T45 trade.
I canât wait to see the final resultsâŚI might have to do some back testing to add a few more numbers to this research, and if so, I will update hereâŚ
Wait and seeâŚ
T42 CRUDE OIL SHORT STOPPED OUT AT B/E [0units]
So it is official, Fib Swing H/L is beating Fib 127% by 3unitsâŚout of 5 complete tradesâŚ
T39 COFFEE LONG -TP & SL MODIFIED
We have a 786 bounce on the Buy Zone of the Broken Downtrend line in the 2h chart
As such I have modified my SL to 93.74 (26p) and TP102.32 (60p)
This has reduced the cost of our Long Entry by 30% so I have added this 30% of 1 unit (0.3units) back into the long trade AS FOLLOWS:
LONG1 96.32 / SL1 93.74 / TP1 102.32
LONG2 96.06 / SL2 93.74 / TP2 99.96
T46 AUD/USD SHORT ENTRY
CHART: 2h
SOLD @ 0.70375
SL @ 0.70545 (17pips)
TP @ 0.70035 (34pips)
Risk: 2.5% TP 2:1
T45 COCOA LONG TRADE STOPPED OUT AT 1:1 (+1unit)
I had trailed my stop at 1:1 when I saw the sharp drop. Now Hoping to re-enter LONG at the 786. Wait and see
T39 COFFEE SHORT TRADE S/OUT: -1u (-26pips)
T46 AUD/USD SHORT TRADE CLOSED: +1.3u (+22pips)
AU just missed out 127% fib tp by 3 pips so I decided to close it since this was its intended target.
190308 GBP/JPY
While being busy managing my open trades, I missed out the opportunity to ride the G/J Short in the Intraday. As I mentioned earlier, at the Daily Chart there was a âtemptingâ short trade. It wasnt to be traded at this time, but last night/yesterday was a different story at least in the INTRADAY charts.
No need to cry over spilled milk. âLike in first grade, nobody likes a crying babyâ 
So, we will look for a Intraday Short Set Up with a look out for this ride target at the 618% fib of the daily upswing (143.90 area) where we will wait for a Day RSI near 30% & 4h or 2h Bull Candle SignalâŚ
PS I hope I remember my own wordsâŚ