Question Phil. When you lay down S&R line and scalp lines, do you zoom out all the way on mt4?
I just did that and the scalp lines, and why they are scalp lines, that nickB posted last week were very obvious. It also made obvious what you said about 153.44. Man makes me wish I had one of those huge 50" monitors so I could have it zoomed out and detailed at the same time.
This seems to be a popular thread at the moment because of its apparent simplicity.
So I thought I would jump on the bandwagon with the latest trading point.
It is 12.36 am here in Western Australia, that makes it 12.36 pm in New York and 5.36 pm in London (daylight saving).
[B]Here is my latest analysis >>>[/B]
By tymen1 at 2009-06-04
After doing a bottom, then hitting a top, the price action went thro the bottom at 155.70 for a distance of 55 pips to 155.15
A 5 pip buffer delay would have brought in exactly 50 pips including spread.
That is just for now.
Latest look shows a slight retrace but I am sure the price action will continue to go down [U]in the short term[/U] because the red candle marking the upper resistance line is a [U]quality dark cloud cover pattern[/U] against its previous green candle.
However, I see that the price action [U]in the long term[/U] is looking to go up again probably past the upper resistance line.
[B]Why now, do you insist on trading only GBP/JPY in this way?[/B]
What is wrong with doing the majors in the same way?? 
The 5 pip buffer is a good idea since it helps confirm the momentum in your favour. 
The same principle is used in Keltner channel trading. 
I also looked at this trade but wouldnât there have been a break around 10:12 am (New York) that would have gone for a loser?
My charts show a break to a low of 155.46 and then rallying up to 156.49.
I am a newbie but if I am doing the system right then a short of 155.70 would have resulted in a 50 pip loss and then invalidated the scalp line and when the market dove back down around 00:00 no trade would have been taken.
Iâve been using 7 myself. That is my brokers spread for GBP/JPY. That way the trade isnât entered until the bid line, which forms the visual for the candles, hits the line. Probably doesnât make a difference, but just makes more sense to me visually.
I had a low around 155.50, so I put in a sell order at 155.45. It was triggered and hit my stop for -50 all in the past hour or so while I was away from the computer. I think I was too eager to take a trade and chose to see a scalp line where there wasnât one. PatienceâŠ
Ah yes!!
I forgot about the spread which you have to pay first.
For me its 6 pips in Dealbook.
To [B]Pizal [/B]and [B]Lavaman[/B] :
I am not exactly sure what your problems are here?
I posted the chart to show that the trade is very straightforward.
Enter at 155.70 and ride it down for 50 pips (± 1/2 pips :D)
[B]This chart shows that the expectancy for the price action to rise is correct [/B] >>>
By tymen1 at 2009-06-04
My prediction is based on analysis of the famous Guppy Multiple Moving Average (GMMA) developed by Darryl Guppy, and Australian Master trader, who lectures all around the world.
The short term moving averages (blue) have taken a dip downwards.
However, the long term moving averages (red) have not changed direction nor have they changed their spacing character.
This indicates that the trade upward is sound and a [U]stop loss placed below would be ignored.[/U]
The price action is expected to rebound and continue upwards, but more slowly since the red averages are not so steep anymore.
[B]At last observation since this screen shot was taken, the price has risen to 156.19 with a top of 156.44[/B]
Hey Tymen,
Your chart is at too high of a timeframe to show what really happened. Price passed 155.70 briefly before shooting up about 145 pips, so any kind of reasonable stop loss would have been taken out for sure. The only way to have made 50 pips with an entry at 155.70 would have been to have a stop loss over 145 pips away, or not use one at all (which I know you do not advocate :D).
I just thought that because the scalp line was broken earlier (around US news) and a loss was taken that the later trade you showed would not have been taken. Is that correct?
Not that your input isnât welcome, but I thought this thread was about, ânickB method, trades,â not just about the GBP/JPY in general.
As you probably know nick doesnât even use indicators, just candles and price action as it behaves at his S&R and scalp lines. He does not try to predict or use lagging indictors of any sort. Trades are placed on how price is behaving around the placed lines, and of course using your own brain.
Good point ThePhoenix, I was thinking it but wasnât sure I had found a polite enough way to say it.
I think there is another thread focusing on the GBP/JPY in general that would probably welcome the input Tymen.
Yeah, I do zoom all the way out for S+R lines. I can see where it would help you find scalp lines too, but Iâve been doing it so long I can see scalp lines a mile away nowâŠ
I do remember having a lot of problems finding them when I first started trading Nickâs method, so donât feel bad. Itâs a simple concept but it takes a little practice to get good at it.
Yep, if anybody traded 155.70 it would have been a loser. I didnât consider it a valid scalp line so I didnât trade it. While price did spike up to almost 300 pips away at one point, the closing and opening prices of the 4 candles after the 155.70 hit was pretty much just sideways movement.
Sideways=bad!!
The main reason NickB, others, and myself only trade this on GBP/JPY is because it simply works best on this pair.
GBP/JPY has a rhythm all itâs own. I donât really know how to describe it⊠Iâve heard other people call it âThe Beastâ because it moves so much differently than other pairs.
Nope. Thatâs just a spike and not a change in price direction over a period of time.
We need a significant reversal in price direction over a good amount of time. For current market conditions 400 pips of movement over 4-5 or more candles would be ideal.
Other factors, like the double bounce yesterday, can influence things, but this is a good rule-of-thumb.
158.56 did have a 350 pip movement away, which is good enough, but it only had one bearish candle after it before it started going back up, so itâs not a valid line in my book.
ThePhoenix,
How did you get rid of the new idiotic extra decimal point that IBFX added to their charts?? I noticed it wasnât in your picture.
That thing is driving me crazy!
If the current candle doesnât go much further long, and the 3 or more after it go short, would you consider 158.56 a good scalp line then?
Iâm just trying to see where other nickbmethod traders are coming from, when they draw their lines.
I donât have an extra decimal on my IBFX live account either. Is yours a practice account?
