I don’t use any other “systems”. All my other trades are based on S+R lines, trendlines, candlesticks, chart patterns, etc. I wouldn’t call it a system since there aren’t any real rules to it, just general analysis of the charts.
Before last October I also traded the other aspects of Nick’s system; S+R breaks, reversals, etc. But since GBP/JPY bottomed out and there were no historical S+R lines around I haven’t been able to trade them. But now that price is moving back up I’ll start trading them again soon.
from my understanding, it is becoz of the spread that triggered your long entry. From my chart, current H4 bar high is 1.5979 (3mins+ to go), if the spread is 8pips, then it will hit your Long EP when bid price is 1.5975
Am I correct to say that?
Earlier I enter buy stop at 1.5987 (1.5983+spread), where my broker’s spread for GU is 4pips. Hence, long entry did not trigger.
Btw, Phil838, do you take the spread into consideration when you place your pending order to enter and exit?
Maxximuz is right, you got caught by the spread. Whenever you place a long order you have to take the spread into consideration, not just with this system but anytime!
When you’re going long you’re buying on the ask price, not the bid price. The bid price is the one that’s showing on your MT4 charts, but the ask price is always bid+spread. You got triggered because the ask price did go above 1.5983.
Whenever you enter a pending order for a long trade you have to make sure and add in the spread to account for this. You don’t have to factor in the spread on short orders because everything is factored off the bid price on those.
Hope that made sense… It’s a confusing issue that all new traders have to get used to.
Phil are the RULES in your first post all valid? I’m going to copy them to a text file and try them out next week. I can’t view the Excel document you attached, which is fine.
Seems like a cool system, and simple to execute. Thanks.
I’ll keep an eye at the 1.5983-1.5984 level for a turn around to the upside. Although the GBP has been taking an ass kicking lately due to a few reasons. May fall a bit before it turns around, I suspect that happened yesterday.
Say our profit target is 200 pips, and the first trade goes to +175 then turns around and gets stopped out. If last week’s range was only 300 pips, and we’ve already used up 175 this week, I won’t enter the second trade.
I also look at the average weekly range for the last couple months when making a decision. I don’t have any real “rules” for when to take or not take the second trade. I just use common sense.
On MT4 right click anywhere on your chart and hit “Properties,” then hit the “Common” tab and check “Show Ask line.”
Now you can see both prices on your charts. You might have to zoom in or move to lower time frame to actually see them, since they are so close together.
It’s because the “spread” isn’t just a number the broker comes up with, it’s the difference in the two prices. When you go long you buy at the Ask price, and when you go short you sell at the Bid price. The default line on your chart is the Bid price, so that’s why you don’t have to account for anything else when you go short.
Does that make sense?? It’s a hard concept to explain…
I understand. It’s still interesting that you continue to keep an eye on that level, and how price reacts when it reaches there. Good idea.
If I hit any rifts with the overview of the method I’ll come ask in here but I’m going to go through the entire thread to pick up. I like stuff like this because I use a real basic system for my scalping method, with just the fundamentals you know, trend lines, s/r and price action. So this is a nice addition to start off the weeks.
Ahhh!!! I thought the line we are seeing is the mid-price, like the one xe.com shows when we request for a quote!! So, that’s why I’m asking why not spread / 2, haha!!
Now I understand since it’s bid price that it’s on the chart~
Hey Phil, Question for you…I missed the go long target at 1.5984…At what point should you NOT enter the go long trade if you miss the entry target? Right now price is at 1.6063, so there is approx 160 pips of potential left.
I got in correctly on the short trade and had moved Stop to +50 pips, so I was happy with that trade, though I left some pips on the table!!!
Thanks
Jack
