I know that this question should probably have its own thread, but I am really interested in your guys point of view is on managing longer term trades.
So how does you folks manage a trade that you expect to take a few days to come in, especially once your 50-100 pips in profit. Do you move your stop to break even? Do you close a portion of your trade, securing profit, then let the other part run, once again moving your stop to break even? Do you look for intraday support and resistance to move your stops? Do you leave the trade alone and let it play out, especially if its in the direction of the medium/long term trend?
Obviously, one does not want to cut a trade short just to see it run in your favor. Nor do I want to have something that is a good amount of pips to the positive turn into a stopped out trade. Coming from focusing mainly on intraday and some scalping the answer for me is usually move my stop to break even, or close 1/2, move my stop to break even and let the other 1/2 play out. Unfortunately now, I find myself struggling to find the answer on a longer trade that I have open.
I am sure the answer is not all that straightforward and depends on market conditions, therefore I would probably on the side of moving the stop down to a point of “interest”.
I think maybe you�ve answered your own question in amongst those options someplace there Dale, huh?
Simple answer is: no-one knows what the market is going to do or when it�s going to do it�
A unique event can rear up & scupper the best laid plans - & you need to plan for such an eventuality
An item of data or news release can get unexpectedly whacked out of line & exert (temporary) heavier than anticipated influence on the market - & you need to plan for such an eventuality.
I guess if it was a technical event that legged you into the move in the 1st place, you could trail your stop up underneath your trigger timeframe chart & let the natural rhythm of the momentum or market pulse cash you out?..in other words, trail it to the technical swings.
If you�re running in tandem with fundamental flavors, then you need to account for that in your forward planning & see whether the volatility has any bearing on the present conditions.
The options you�ve highlighted in your post are all valid.
It comes down to how comfortable you feel about your trade management & whether your view on the current market flow suggests continuation of the move, consolidation and/or a change in directional bias��…that will reveal itself via the fundamental breeze & the technical signals from your timeframe template of choice.
No easy answer���.it�s down to your preferred game play!
You need to experiment & see which option, or combination of options suit your preferred game plan for that specific purpose.
You�re never going to milk the last pip from a long-range move. The best you can do is to compromise & ensure you obtain maximum value for the risk you undertook to take the odds on the bet
I also had that 1.38/3750 area marked on my chart,
for possible long triggers.
But as price didn’t quite get there, I found that Cable was offering me a
better value when it based around the 1.58 RN, and I was able to ride
some of the upside move from there.
Do you see enough value in Euro to establish new long entries at current levels (1.40 area),
or only retracementsto to those key areas you marked would be of interest to you?
hi edu
he�s not in the office now until Friday so I�ll step in.
he means that anywhere from that level on his chart (c1.3900), back to that little consolidation channel where the 38% Fib lives, is a decent enough area to add to an existing long or engage a fresh entry, if you�re of the opinion that this slide off the near term highs is merely a profit taking & assessment exercise.
if you spot a playable signal anywhere inside that zone he mentioned, then you got a good chance of picking up a little value ahead of the days high at 1.4030 & the previous highs at 1.4050.
one such set-up might be an inside bar on a smaller timeframe?, it might also be a 1-2-3 continuation type trigger (as indicated on the chart) which is quite an aggressive punt, but it is honoring the generic price flows on this pair.
the benefits of this type of play is it gets you in ahead of quite a stiff resistance zone & if it breaks you�ve got a solid value base to add more contracts as it breaks-out through the previous highs (at c1.4050).
the other (risk) benefit being of course, you�re paying a reduced price to test the continuing momentum, & should this be a top failure of the recent bullish push, then you got adequate room & time to scratch the trade & re-assess.
as always, it�s assessing & quantifying the value v/s risk balance. Some folks will take an aggressive play if they spot their value odds, others will play it more conservative.
it just comes down to what you see & [B]where[/B] you see it!
Good afternoon my “gangsta” friends from the other side of the pond. I am sure that you guys are looking forward to a nice weekend.
I was reading my daily news this morning and noticed that there seems to be a more than normal talk about currency from the different news outlets that I have aggragated on my blackberry.
Most of the articles in the main stream press were about how people are now starting to get an appetite for risk (in the currency markets of course) with all of the good indicators that the global economy is getting better or at least hitting bottom. Also, there seems to have been numerous articles on the Dollar getting weaker. This leads me to thing that the rallies that we see against the USD/Yen should be carefully watched over the next month or so.
I remember either reading or listening to something that said that once the analysts are speaking of the current direction and trend, then it is almost over. Basically, the “herd” is always late to the part, is usually in opposition to the smart money, and when the herd starts going to the trend, the smart money is slowly taking profits and reversing.
Take a look at the EU as an example, when I look at the chart I see at least 3 months of a bull market, how is it that it just started withing the last couple weeks? To me, its seems like this may be “powers that be’” way of getting the herd into buying into the trend so that they can take profits and start the selling. Of course, I do not expect this overnight, but I would suspect that the current bullish risk appetite may be changing in the near term.
I guess its just food for thought, but I was wondering how you guys felt about these types of news reports as it relates to the market(s).
Hey Dale,
Yeah, we got some (rare) heavy duty sunshine over here in UK, so we’ll be making the most of it while it lasts
I think with all the available information easily & readily accessible by those (retail & institutional) who wish to avail themselves, the edges aren�t quite so blurred these days Dale. Everywhere you look these days you got this analyst & that analyst jawboning all & sundry attempting to tempt folks to their websites with the aim of flogging them some add-on service or other.
To be honest, all manor of different tiered players (including retail) have never had it so good regards accessing decent quality information streams. Certainly of sufficient quality to enable those interested to utilize said info alongside their technical plans.
As far as slipping in & out of trends or directional bias flows or keying into risk appetite? That�s going to depend on your aims, intent & strategies.
I�m afraid we don�t buy into all that smart money/dumb money garbage.
That kinda talk is usually bounced around by slick, fast talking marketers & product salesmen, eager to justify flogging the latest in a long line of worthless, technical software nonsense or shoeing punters into some other money making racket & trying to make something appear more important than it really is.
Believe you me, there are just as many so called ‘dumb money’ professionals running around out there as there are smart cookie operators. Dumb or clueless isn�t a descriptive term exclusive to the retail or amateur trader. There are whole packs of those characters running around Wall St in droves lol.
You�re always going to find individuals/desks legging into a move earlier or later than you & there will be individual/desks exiting a move (for whatever reason) earlier or later than you.
It�s going to be wholly dependant on their specific aims (client instructions, order book balances, bias for a particular strategy, timing reasons etc etc) for that pair or currency.
There are as many reasons for trading a pair at a particular level, for a particular period of time & a particular purpose as there are traders.
You simply got to pick your favored strategy/set-up/trigger/timeframe etc & ensure you got your value & risk in balance.
When that opportunity opens out, you act.
Never mind what anyone else is doing or why. If you got the target lined up smack bang in the middle of your crosshairs, then you�re sure as hell good to go!
Which it has done into the latter part of the week on Euro & the Aussie after their determined stair-step rises since beginning of this trading quarter.
Cable has experienced the smoothest 2 way price action, which no doubt have unearthed a few choice opportunities for you to leg into again huh Tony?
Frustrating end of week play for the dip buyers�.and a party jig for the short-range punters!�.at least Jimmy�s smiling for a change
price sure offered the taxi ride back out of that s&r box play this morning that Sean highlighted.
nice little 1-2-3 pop out of the zone for a bit of pocket money.
might struggle to put any further miles on the clock as the volumes dry up into the London closing prints, but momentum plays inside normal business hours are usually ok to take a whack at it via the faster, gambling timeframes if that type of play floats your boat of course.
It�s a mirror fulcrum zone on the single currency too at circa3725-3825.
That�s quite a loud decision zone to test the potential strength of upside support.
If you�re going to take a value swing at a speculative �long� you could do worse than trigger it from these type of technical pivot area�s. If the risk stacks up, it�s all aboard!!
Tracking the peak/trough steps & using the higher lows, amplified via the gambling frames (5 or 15min) will keep your stops bouyed as/if the move attracts support & is considered genuine.
That 50% pivot is definitely the fair value marker for pitching this thing back to the post NFP spike beyond 6125.
Wouldn’t really want to see price flopping around below that shoulder if the bullish bias is to gain legs.
Jimmy just noted that your 6110 number is vibrating a fib area on the opposite track down off the years high to recent swing low - nothing to get too concerned about as yet, just that these fibo & wave fella’s tend to get in a flap when they blink up on the radar.
We keep telling him not to mix with these unsavory characters, but will he listen?
this is the kind of price action you want to see if the move is attracting decent participation. You don�t want to witness price flopping & flailing around in jerky range/consolidation behavior for too long.
strong, directional bias kicking off the higher low pullback zones where the trailing continuation buy orders (pyramid or compounding orders) are congregating, will tell you a lot about the appetite of the spec players & the order flow.
again, Sean�s highlighted grids are simply the obvious, common sense levels that you would expect price to honor & react to if the move is still hot.
if you get a trigger to get you aboard on an add-in or a fresh entry, then as long as you can calibrate acceptable risk, you�re cooking on gas.
That double bottom at the secondary pullback line or the 1-2-3 clip a little further up are certainly cool enough signals to take it on.
that 50% zone he marked out back there is where the sensible trailing stops will be to test the continued upside. Too close & you�ll burn your value & get prematurely unseated, too far back & you�ll dilute any potential profit & waste the odds of getting aboard in the first place.
it doesn�t need to be complicated or complex.
what you see is what you get. If price fails to get propped at the higher low/higher high ledges then is it really worthy of pumping more bets into it?
these types of aggressive moves away from support & resistance zones or buy-sell pressure zones require heavy participation to justify betting the odds. If you compound these mini legs aggressively, they�ll pay you above average returns every time � but they absolutely have to adhere to the clear, obvious peak-trough behavior traits in order to generate confidence to support the move.
you�ll identify that behavior more clearly via the shorter timeframe examples. the planning & plotting can be mapped via the higher frames (60 & 240min), but once you get activity vibrating around your identified levels, you might find it easier to drill down into the gambling frames (sub hourly) to get you aboard.
hey John
yeah Jos & Tess are on summer vacation now until end of August.
Sean & a couple others flit off tomorrow for 6 or 7 weeks, so it�ll be quieter in the office (& on the thread) for a while.
as Tess mentioned in the 2nd paragraph of the prior post, we�re cherry picking the set-ups on FX off the smaller timeframes as they vibrate away from our higher timeframe key price levels.
larger size tailored to smaller expectancy!
nothing more than maybe 2 or 3 grade A pops per week across the majors on that game play until prices stretch out a little further beyond the range boundaries.
we don�t really chase too much during the lower activity summer period. If an obvious level comes into view on the radar then we�ll stalk it & give it a whack for a slightly longer (intra-week) play as long as it attracts sufficient participation.
1.6600 through the top, & last week low: c1.6185 through the floor are quite visible barriers on the Cable. Inside there it�s a case of mugging it via short-range set-ups as preferred.
if nothing takes your fancy or you don�t got a specialized short-range strategy then best advice is to keep your powder dry until conditions flip to your preferred execution mode.
no doubt they’ll be the usual (inexperienced) casualties getting smoked trying to force their money in these quieter volume periods trading inappropriate strategies.
if nothing takes your fancy or you don�t got a specialized short-range strategy then best advice is to keep your powder dry until conditions flip to your preferred execution mode.
great advice!!! The summer i usually focus more on my business anyway. Well i hope everybody enjoys there vacation.
I’ve been trying to mini scalp at the 15 minute scale with aususd but I’m not sure this is what you’d call a short term strategy - I feel like I spend alot of the time praying that there won’t be a massive breakout against my position. Before a few months’ break I’d been doing this sort of thing for a while but seriously burnt the account with a few hedge runs when gu went from ~1.5 to ~1.6, (still had a few shorts with SLs I didn’t want to give in to until it’d run too far).
Should I just avoid this sort of thing all together and just wait for more trendier times? Not sure if this has been covered earlier in the thread or the last one but what makes a specialised short-range strategy?
Since this market has been range bound for the past few weeks(seems like forever), I’ve employed a strategy consisting of RSI(14) divergence on the 5m chart, MACD 8/12/8(w/ histogram) and Stochs 10/3/3 on 15m chart. The stochs and the MACD are redundant so one of them will be dropped at some point here in the future. This is in addition to horiz S/R from 4hr and daily charts(these are the most important alerts I use). Fibs from the long terrn charts. Overall trend is of course a big consideration, but in this range bound market it’s dropped down in importance until a break out can be established. All this is used to grab tighter entries off the 5m chart when these areas signal confluence. Of course all of this has to be supported by a confirming price pattern on your entry frame. This set up takes a good bit of patience and discipline. It throws off about four entries across the Asian and Euro/London sessions per pair, sometimes more sometimes less.
The kinds of trades I’m getting from this range from 15 to 100 pips, with the average being around the 25 to 40 pip range. It seems to work well on GU, GJ, EU, EJ, AU and AJ.
Hope this gives you an idea of how I’m playing this current range bound market.
Depends how you prepare & set up your template for the exercise I guess.
one mans range is another mans trend. By that I mean you can actually locate mini trends inside the larger range boundaries if they extend out enough.
first though, you got to identify the more likely range barriers on the larger frames then drill down into the timeframe of your choice to pick off the trades as they vibrate off those range lines per your defined game play/strategy.
The object of the exercise is to mark off these barriers (primary & secondary if they exist), look for confirmation that the barrier will hold water on any test & step in where the greatest value to risk ratio exists.
here�s how I see it for what it�s worth, & it follows the general templates laid out in this, & the original thread:
4 hour view boxing in the obvious primary & any secondary reaction points
once you got them identified on your major template, they’ll be visible all the way down the timeframe grid. This is how it all looks on your 60min chart:
then you simply leave them there & wait for the price action to begin hustling the levels on your preferred trigger timeframe, in your case the 15min chart.
Like I say, each time price migrates up or down to your identified range barriers, you need to wait until the range continues to attract confirmnation before you take action.
The idea is to get onboard at the most likely level of lowest risk.
You can use whatever actual trigger mechanism you care to. I’ve highlighted a 1-2-3 reversal type play, which is a very common price action kicker.
You could use an inside or outside bar, a pullback & thrust through a previous high (as in the 2nd blue line on the chart) if you’re a more conservative trader?
Point being, if you get the confirmation you require then as long as you can compute acceptable risk, you’re good to hit the button!
Have a play around on your own charting software & see if & how you might have taken a trade or two on in your own circumstances. If there’s anything there can help or maybe get to you to take a look at the situation slightly differently, then use it
You can pitch this type of play off any pair that displays obvious range behavior.
I mentioned the above levels in last weeks post on the Cable.
If you plot a couple horizontal lines through those levels (1.6600 & 1.6207) & dial out on your big hourlies you�ll notice not only do they tick boa the previous weeks high-low barriers, but you�ll see they pretty much marry up with specific supp/resist grid markers going back the entire month of June also.
You�ll often observe that these previous days high-low & previous weekly high-low barriers match up with s&r reaction zones going back weeks & months.
There�s a reason they signal up so often!!
It�s this type of stuff that has been constantly repeated on these 2 threads since the girls wandered in here more than 2 years back.
Identify the market conditions currently playing out
Marry those conditions up with the appropriate game play (strategy)
Plot your box markers on & around the key numbers/levels
Set your preferred trigger levels up as price vibrates them.
When you receive the appropriate confirmation from your set-up
Take action if you can calibrate safe risk & value ratio�s.
Given we got range behavior playing out on the currency map, then if & when price begins hustling the big levels, dial into your preferred timeframe trigger chart, wait till you can spot a set-up playing out & hit the button.
If you can engage inside the normal high volume business hours (European morphing into New York etc) then the momentum shift should offer you a decent lift.
Couple of 15min Cable examples highlighting the same gig.
You�re welcome Dave.
Like I said, it�s nothing that hasn�t already been covered a million times before on here. But I guess it does no harm to bump it every now & again huh?
If more folks paid keener attention to [B][U]where[/U][/B] & [B][U]why[/U][/B] they engaged their entries & exits rather than how they engaged them, I�m pretty sure they�d be a lot less stress & nervous energy playing out & a lot more lower risk, higher value tickets being waved around!
