The Most Profitable Trading Pattern You Will Ever Encounter

[Forexmike]

Did you end up taking the short on GBP/JPY ?

yes, the last image is the GBPJPY trade…looks good so far, +80 pips…

[leonlee0116jl]

@Bucketman

You don’t need both lines on the Sochastics to cross into the Overbought / Oversold areas. The only one you need is the Main line to cross into Overbought / Oversold. Consider the Main line the faster of the 2. The other Stochastic line - the Signal line doesn’t have to cross into the Overbought / Oversold area to validate an entry (typically it does though following the Main line).

The criteria for Stochastics confirmation are:

• Main line entering into Overbought / Oversold.
• Main line crossing back over Signal line (can be within or outside of Overbought / Oversold area).

I picked a random chart to highlight the Stochastics lines - showing a cross outside of the Overbought / Oversold area. Would have been a theoretical valid entry had there been an EMA cross just beforehand.
.

I enter after the cross on a new candle. Is it right?

[jw1981]

I didn’t enter short. Got busy with other things and now its a bit too late. Also I wasn’t too keen on this GBPJPY short.

Here’s the updated chart.

Note: Price is just a few pips above 200EMA (its my filter)
And then there’s divergence. Osc: Higher Low/Price Lower Low and this current dip if it doesn’t break below 181.58, i’ll take it as a hint to get long.

[Bucketman]

@leonlee0116jl

I enter after the cross on a new candle. Is it right?

yes - you would enter on the open of the candle after the Stochastics cross - which in your example is the open of the candle after the vertical line - so your entry looks pretty spot on.

[jw1981]

Daily TF for GJ meets my criteria (esp. the fact that price is above 200EMA). T1 is 186.784.
Stochs could possibly run off from here without a 100% crossover below 20 levels.

[PhilipPirrip]

@Forexmike

maybe i didn’t express myself correctly, sorry…i would like to know if i draw the fib extension correctly, as it would take nearly 300 pips from my entry to reach the 1.000 level (where we put the SL to BE)…

i attach a new screenshot, maybe you can see it better on this one…

No you don’t lol sorry. You draw it from the high, to the low back all the way to the high. This way the 100 will always line with the low and the 0 with the high.

[jw1981]

Philip… I like this system very much. Do you mind if I start a journal on this?

[jw1981]

GBPCAD… Will short only on break of 1.90213 (horizontal supp/res. + minor TL).
Stochs in OB already and looks like 50 EMA is pushing prices lower. All in all, another 1hr 40 mins. left for this H4 candle to close. If its bullish then another 4hr wait (after which I go to sleep :D). Anyways, by end of day today we should get the answer to GBPCAD.

P.S: Some crazy PA in GBPJPY and GBPAUD. Don’t say I didn’t warn you

[leonlee0116jl]

Feels like a fail pattern on GBPCAD?
Losing 50+pips. ������

[jw1981]

Feels like a fail pattern on GBPCAD?
Losing 50+pips. ������

Were you short? If your entry was timed to the rules, you should be able to get back the pips on a retracement. Long trades would be validated on a retest back to 1.90608 - 1.90275 levels.

[PhilipPirrip]

Feels like a fail pattern on GBPCAD?
Losing 50+pips. ������

Its too early to tell on GBPCAD. GBPAUD definitely will, but we could still make money on it.

[PhilipPirrip]

Philip… I like this system very much. Do you mind if I start a journal on this?

Go ahead mate.

[leonlee0116jl]

Were you short? If your entry was timed to the rules, you should be able to get back the pips on a retracement. Long trades would be validated on a retest back to 1.90608 - 1.90275 levels.

Ha I’m short at 1.90600. Kinda sad omg

[leonlee0116jl]

Its too early to tell on GBPCAD. GBPAUD definitely will, but we could still make money on it.

I don’t know what is the timing? I was just follow the EMAs and stochastic crossover then I enter the trade.

[bioshock]

Current basket,
Short G/A,G/C,G/J,G/N.
With G/N at stop loss (high) but holding to exit on opposite trigger.

[YamYam]

@leonlee0116jl

I don’t know what is the timing? I was just follow the EMAs and stochastic crossover then I enter the trade.

Hi leonlee,

I think you just need to take a little time in your trades and look to see what the higher time frames are doing first before entering on the H4, as Philip has said we need to wait a little first and wait for the correct setup, I will show you how i see the GBP/CAD going at the moment.

DAILY CHART

H4 CHART

Hope you are using Demo account first…! Please dont trade live until you fully understand your actions…

Good Luck…

[jw1981]

Ha I’m short at 1.90600. Kinda sad omg

If you are still short, then hold on. Price is retracing lower and should give you a good price to exit with a lot lesser pips in loss.1.907 through 1.906. You just might get lucky

[leonlee0116jl]

Current basket,
Short G/A,G/C,G/J,G/N.
With G/N at stop loss (high) but holding to exit on opposite trigger.

What is ur stop loss for GC?

[jw1981]

My positioning for the moment

GBPJPY: Short. Besides the EMA bearish crossover, there is also a bearish flag pattern that has emerged. Reversal from 38.2% has given the first clue. Failure to break above the trend line is the second clue.

So i’m short GBPJPY, targeting 180.71 after which i’ll let the remainder run its course. Would remain cautious until the 200 EMA is broken.

GBPAUD: EMA’s gave a sell but price reversed from the 200 EMA and then the 20/50 EMA’s turned bullish. Stochs are also in OB levels, meaning that GBPAUD is likely a long position. Current price action has hit the trend line so a decline is possible.

Note the levels at 1.96298 - 1.96028, the most likely retracement and a level to go long from.

Philip’s method is bang on target here, because if you had went short at 1.962 levels, this retracement will ensure that you exit at a very little loss.

Perfect system here Philip.

GBPCAD: Same scenario as GBPAUD. Price found support at 200 EMA and broke out from the falling trend line. Stochs are at OB levels right now and a dip to 1.90692 is very likely.

Break of the small trend line will however indicate downside momentum likely to build up.

Again, 1.90692 marks a dip back to previous short entry, thus minimizing your loss again to the bare minimum.

So to summarize: GBPJPY is a short, GBPAUD is preparing for long, GBPCAD, we need to wait for more confirmation.
Hope this helps.

[leonlee0116jl]

@jw1981

My positioning for the moment

GBPJPY: Short. Besides the EMA bearish crossover, there is also a bearish flag pattern that has emerged. Reversal from 38.2% has given the first clue. Failure to break above the trend line is the second clue.

So i’m short GBPJPY, targeting 180.71 after which i’ll let the remainder run its course. Would remain cautious until the 200 EMA is broken.

GBPAUD: EMA’s gave a sell but price reversed from the 200 EMA and then the 20/50 EMA’s turned bullish. Stochs are also in OB levels, meaning that GBPAUD is likely a long position. Current price action has hit the trend line so a decline is possible.

Note the levels at 1.96298 - 1.96028, the most likely retracement and a level to go long from.

Philip’s method is bang on target here, because if you had went short at 1.962 levels, this retracement will ensure that you exit at a very little loss.

Perfect system here Philip.

GBPCAD: Same scenario as GBPAUD. Price found support at 200 EMA and broke out from the falling trend line. Stochs are at OB levels right now and a dip to 1.90692 is very likely.

Break of the small trend line will however indicate downside momentum likely to build up.

Again, 1.90692 marks a dip back to previous short entry, thus minimizing your loss again to the bare minimum.

So to summarize: GBPJPY is a short, GBPAUD is preparing for long, GBPCAD, we need to wait for more confirmation.
Hope this helps.

Very helpful information and analysis ! Thanks man. You are awesome.
Btw, I got the same setup of GJ. But I missed that trade to enter once the stochastic crossed. Why don’t you enter at the stochastic cross?