It’s taken me months to work that out, and I’m sure it’ll take me many more to truely get it right.
Wise words indeed and very true.
Keep up the good work.
As mentioned before I had a limit order for USDJPY. AUDUSD made it’s move after the NY open and my order had expired. Forgot to reset it and missed that move.
Taking profit is pretty essential to your success in trading. I wanted to show you the current chart I used to take profit.
This chart was drawn with nothing but trendlines and lines of support and resistance. The trendlines were drawn on both the 4HR and the Daily charts as was the S/R lines.
Do you see the crossing of the lines at 96.88. That was the line that I was waiting for it to break though. Price was testing the support and it eventually broker though. I set my order to fill 10 pips below the low of the candle that broke. Then I went to bed.
During my slumber, the S/R was tested again, this time now acting as a line of resistance. And as you can see price could not move past it and it resulted in a inside bar. Had I been awake I would have set my entry to be 10 pips below the low of the inside bar.
My stop was 97.08, 10 pips above the candle that initially broke through. Knowing that it was going to be a challenge for price to move back up through that, I was confident in this shorter stop. Having a shorter stop, also allowed me to increase the size of my lot as it was still falling within the guidelines of my bankroll management.
Price dropped and it hovered above 95.77. It was here that I decided to take profit as this was going to prove to be another struggle for the price to break through. And seeing that it just took a steep dive, sellers were probably tiring out.
Also, if you were to draw Fib lines from the 94.64 s/r line all the way up to the 97.79 line, you’ll see that the 95.77 s/r line is also the 61.8 fib line. That’s a pretty significant line. So with that convergence, it confirmed to me that taking profit at that point was sufficient.
Take note: I let price tell me when to get out. I didn’t dictate a firm number of pips before pulling profit. And as a result in my tighter stop, my risk/reward was pretty healthy.
Now I’m not sure what price will do from here. I’m under the belief that the dollar is strengthening, so it’s possible this is a turning point for USD/JPY. However, I generally leave fundamentals in the back of my mind. I don’t ignore it, but just do not let it be the forefront of my decision making.
Any questions on taking profit?
Price is 95.79 as I write - good call, great explanation & learning a lot from you & this thread. In particular this example gave me good insight as to where you put your stop, and as importantly, why! Keep up the great work.
AUD USD was good to me today as was NZD USD but still a bit erratic with my trades (in, out, back in etc.)
That’s a great post and bares very close resemblance to an article I’m writing on exit strategies. I grumble at the fact people make it sound so simple to get in to a trade but then simply walk away when it comes to the tricky part of taking profits!
Yes, very nice post MG!
Have to make this one quick as I do not have time to post a chart.
Woke up and missed a lot of good action it would seem. AUDUSD however was chugging behind so it was still within range for me to make an entry.
The was a pin bar about two candles ago on the 4HR chart. The candle thereafter was close enough to being an inside bar, though the high broke it a bit.
However, because of that pin bar bouncing off support like that, I am confident we’re in a retrace here. So I went long. Profit target set at the support of .8337 or until price tells me other wise.
I knew it was going to go up, but boy I didn’t expect it to fly up like it did. It easily hit the profit target I set for it. 69 pips gained. I didn’t mind setting a firm profit target as I was away from my computer for the larger part of the day. But from seeing how price is caught between support and resistance, I probably would have taken profit as it was otherwise, or at the least shortened my stop to the low of the previous candle.
I like where this is now. If price breaks either way I’m going to be all over it. Price is not only bouncing between support and resistance but it’s also on a 61.8 fib line. So I’m thinking a short should be coming soon.
If I’m at my computer when price starts moving, I’ll be sure to post a chart and explain my entry.
Another nice post with great explanation. As I write it is at .8346 so no movement since your post. Holding there for the last few hours. I got in & out for 20 quick pips on the way up but had a good run down. I went short on the EUR AUD after a big pin bar yesterday on the 4H ( I need to find out how to post charts on here!). Short at 1.7164, it’s currently 1.7030 (near resistance) & the Pin bar on the daily is keeping me in.
Hi MG99 (and all),
Sorry I cannot post charts yet (I know that makes it SO much easier) but want your opinion on the GBP CHF at the moment. The way I read it is we have a false break out on the 4H chart which looks like a short to me. It was looking like it was bouncing back up & has potentially reversed down.
In terms of convergance;
- Big Pin bar reversal
- Failed to break 1.7800
- Failed to break a 365 day EMA.
- With daily trend as per 8EMA & 21 EMA
Interested to get feedback.
For the record I am short at 1.77942
I do not trade that pair, so this will only be based on price action itself. Eyeing up the daily chart the pair was indecisive for a few days, then it broke short. It looks like a trend-line was broken and confirmed a short a couple days ago.
The current day is clearly rejecting the previous high from yesterday’s candle. Zooming in on 4HR that pin bar is clearly showing price to go down. Looking over the past few days that looks to be an area of support and resistance. Whereas what was support the last few days is looking to be resistance. I would have personally waited until price broke before the low around .7722 as price could possible retrace at that point as it looks to be another s/r area.
So yes, I agree that the bias is short. My entry would have been different than yours however.
Good trade.
As always I appreciate the feedback, let alone the promptness. I dont trade this pair & based entry solely on PA. Intersting that as I write the price has stalled around the .7722 you noted! I need to have a look at the trend line you mentioned that has been broken as I do not use trend lines much, (perhaps not enough). I have noticed you do and copied your AUDUSD trend lines from your last post.
I am still prone to jumping in, albeit with reasonable confirmation, and should perhaps wait a while longer. Having said that I managed to wait all day to find this one so perhaps its a start.
I must share my win of the week! 227 pips on the EURAUD move down as per previous post. Makes up for some of my impromptu trades.
Thanks again for your invaluable input.
It’s pretty amazing how price respects trend-lines. It’s a fairly essential tool to trading. I really don’t need to draw trend-lines anymore if I am studying a chart as I can just eye them up. However, it’s always good to have the visual up to ensure no silly errors.
A lot of traders struggle with that. They confuse bias for entries. If I spy a reversal, I’ll believe that to be the beginning of price moving in another direction. However, it’s not always the case as the movement can be short lived. That’s another important reason for trend-lines. A lot of time you might think price is reversing when it’s only testing the trend-line.
So remember, when you believe a price is moving in the direction you want it to go, find some sort of confirmation to satisfy your belief and start looking for your entry. If the trend it solid, I assure you that you will catch pips. Remember, you’re not in it to get the whole movement, just some of it. So if price drops 400 pips and you managed to squeeze out 20 pips. Be happy.
Congrats. No don’t go losing it back to the market. 
Look who’s back 
Welcome back. Hope this means we get to see your Asian Box Trading thread reborn.
What a great thread & teacher/mentor. I kinda got lost these last 3-4 weeks but this is now the only strategy I will use. Thanks again MG99. d.
I have attached my first chart! I like this for a long because;
PB 3 days back & has since moved up
Failed around 132.32 reistance
Last candle closed above next resistance 134.88
Bouncing off 200ema
Last candle from fib 50 of current move up
In direction of trend
Bullish PB on weekly
Question: Would you wait for retrace now or go long at the open?
Any feedback & comments much appreciated.
I am thinking of shorting this pair because;
Daily PB
4HR PB
Closed under resistance point
With trend (slopes down very sharp)
50ema (not on charts below) is just above PB tail
Any thoughts?
I would also want to see what the 4HR looked like. Sometimes it tells a different story than daily.
To answer your question, no, I would not go long at the open. When I enter trades I enter them as they move past the high or the low of prior candles. Pricing hit the 38.2 fib line, but who’s to say that it’s not going to retrace from there.
I would wait for price to break the high of the prior candle by 10 pips than move in. If price opens up 10 pips higher or more, I would wait, because gaps often get closed.
Looks like a short to me. Would wait for price action to confirm. I like the pin bar on the 4HR and the doji-ish looking daily candle.
As always your promptness & feedback are invaluable. Is not the PB on the 4HR the price action confirmation?