Da.DesiTrader's FX Journal using Chart Patterns

This is a discussion on Da.DesiTrader's FX Journal using Chart Patterns within the Trading Journals forums, part of the Reception category; Hi All, In order to discipline and educate myself, I have decided to create and maintain a journal. I have ...

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Old Dec 3, 2009, 1:41pm   #1
Joined Sep 2009
Da.DesiTrader's FX Journal using Chart Patterns

Hi All,

In order to discipline and educate myself, I have decided to create and maintain a journal. I have been told by many profitable traders that chart patterns are one of the most profitable ways of trading (if you do it right).

I am trying to approach it in following 5 steps method:

1. Continue to learn about chart patterns and identify them as they are devloping.
2. Analyse the patterns and their likely outcome based on where they are with reference to recent S/R.
3. How the patterns and trends look like on multiple TFs
4. Is there any confluence from other indications (Divergence / Fibs / etc)
5. Analyse whether the risk reward ratio is in order for a profitable trade.

Then I will look to setup a trade with entry, stop loss and trade profit levels. Following that, I will post my results, if I took the trade or else discuss the results if it was missed.

I will very much appreciate in your input into how I can improve my trading strategy (5 steps laid above) and optimise entry/stoploss and trade profit levels.

I will look for all major / minor currency pairs with potential patterns (excluding the exotics which have crazy spreads).

Appreciate your input in advance.

Cheers

Last edited by Da.DesiTrader; Dec 3, 2009 at 2:07pm.
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Old Dec 4, 2009, 12:10pm   #2
Joined Nov 2001
Re: Da.DesiTrader's FX Journal using Chart Patterns

I've just seen your latest trade on WS's thread. Very nice. I shall be watching this with interest.

Split
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Old Dec 5, 2009, 12:43pm   #3
Joined Jul 2009
Re: Da.DesiTrader's FX Journal using Chart Patterns

looking forward to your setups...what times are you looking to trade ?
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Old Dec 6, 2009, 3:32pm   #4
Joined Sep 2009
Re: Da.DesiTrader's FX Journal using Chart Patterns

Da.DesiTrader started this thread Hi All, thanks for encouragement. See attached the EUR/AUD 4H chart. It's a descending triangle with 60SMA plotted on chart.

5 Step methodology is below:

1. Identified a pattern in development on EUR/AUD. It's a descending triangle with possible breakout in either direction. (screen attached)

2. Recent S/R's also plotted on chart. Looks like 16300 was previous resistance and later did not hold as support, became resistance again. Overall, that's a bearish character. (screen attached)

3. On daily chart, the price breached 60MA in a downtrend only twice. Both times, it then continued in the direction of the trend. Last time was around July, and this time on 26 Nove. The July breach lasted for 6 days, this time lasted for 5 days, and price has just fallen below daily 60 SMA. That's bearish on higher T/F as well.

4. Price is in the region of 61.8% retracement from previous swing low (arnd 17 Nov) and swing high (arnd 26 Nov). RSI/ADX/MACD/Williams, none of them show divergence to indicate a move on the upside. They are all in sync with price. Bearish bias established.(screen attached)

5. Regarding risk/reward. I would prefer to enter at the break of previous low candle. (ie, break below 16170.5). The stop loss to be above recent high candle (ie, 16334) which is also above recent resistance and also 50% fib restrace around 16300 region. This stop loss is also above the triangle.

So entry is 16168 with stop loss of 16340 (padded both by a few pips). Total risk is 172. The daily ATR is also below 155 for past few days. So good.

Target would be double of 172 at least 15824 (which is below annual lows, so not great), but let's see. Therefore will be looking to b/e soon as trade goes in blue.

Alternatively, go long at break of 16334 (which is also break of 60SMA) , with similar risk/reward ratio and stop loss reasoning - Just reverse it.

In summary:
Long at 16340, s/l: 16168 (risk of 172), T/P: 16512 and more.
Short at 16168, s/l 16340 (risk of 172), T/P: 15996 and more.


Will let you know how it goes. Any comments on improvement are more than welcome.
Attached Thumbnails
euraud-06-dec.jpg   euraud-06-dec_confl.jpg  
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Da.DesiTrader's FX Journal using Chart Patterns:
http://www.trade2win.com/boards/trad...-patterns.html

London - The City / CanaryWharf Traders Social (organised monthly):
http://www.trade2win.com/boards/t2w-...rs-social.html
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Old Dec 9, 2009, 10:23pm   #5
Joined Oct 2008
Re: Da.DesiTrader's FX Journal using Chart Patterns

Keep up the good work Desitrader.......... all eyes on you !!
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Old Dec 10, 2009, 8:16am   #6
Joined Sep 2009
Re: Da.DesiTrader's FX Journal using Chart Patterns

Da.DesiTrader started this thread
Quote:
Originally Posted by Da.DesiTrader View Post
Hi All, thanks for encouragement. See attached the EUR/AUD 4H chart. It's a descending triangle with 60SMA plotted on chart.

5 Step methodology is below:

1. Identified a pattern in development on EUR/AUD. It's a descending triangle with possible breakout in either direction. (screen attached)

2. Recent S/R's also plotted on chart. Looks like 16300 was previous resistance and later did not hold as support, became resistance again. Overall, that's a bearish character. (screen attached)

3. On daily chart, the price breached 60MA in a downtrend only twice. Both times, it then continued in the direction of the trend. Last time was around July, and this time on 26 Nove. The July breach lasted for 6 days, this time lasted for 5 days, and price has just fallen below daily 60 SMA. That's bearish on higher T/F as well.

4. Price is in the region of 61.8% retracement from previous swing low (arnd 17 Nov) and swing high (arnd 26 Nov). RSI/ADX/MACD/Williams, none of them show divergence to indicate a move on the upside. They are all in sync with price. Bearish bias established.(screen attached)

5. Regarding risk/reward. I would prefer to enter at the break of previous low candle. (ie, break below 16170.5). The stop loss to be above recent high candle (ie, 16334) which is also above recent resistance and also 50% fib restrace around 16300 region. This stop loss is also above the triangle.

So entry is 16168 with stop loss of 16340 (padded both by a few pips). Total risk is 172. The daily ATR is also below 155 for past few days. So good.

Target would be double of 172 at least 15824 (which is below annual lows, so not great), but let's see. Therefore will be looking to b/e soon as trade goes in blue.

Alternatively, go long at break of 16334 (which is also break of 60SMA) , with similar risk/reward ratio and stop loss reasoning - Just reverse it.

In summary:
Long at 16340, s/l: 16168 (risk of 172), T/P: 16512 and more.
Short at 16168, s/l 16340 (risk of 172), T/P: 15996 and more.


Will let you know how it goes. Any comments on improvement are more than welcome.
Short trade trigerred 10 December 00:30 GMT.
__________________
_______________________________

Da.DesiTrader's FX Journal using Chart Patterns:
http://www.trade2win.com/boards/trad...-patterns.html

London - The City / CanaryWharf Traders Social (organised monthly):
http://www.trade2win.com/boards/t2w-...rs-social.html
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Old Dec 10, 2009, 8:18am   #7
Joined Oct 2008
Re: Da.DesiTrader's FX Journal using Chart Patterns

Quote:
Originally Posted by Da.DesiTrader View Post
Short trade trigerred 10 December 00:30 GMT.
off we go to the races ...........
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Old Dec 10, 2009, 8:21am   #8
 
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Joined Mar 2003
Re: Da.DesiTrader's FX Journal using Chart Patterns

good stuff.nice to see traders share stuff an thoughts
thanks
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Old Dec 10, 2009, 10:41am   #9
Joined Sep 2009
Re: Da.DesiTrader's FX Journal using Chart Patterns

Da.DesiTrader started this thread Stop moved to b/e, as trade has moved more than halfway into target. 100+ pips in profit at the moment.
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Da.DesiTrader's FX Journal using Chart Patterns:
http://www.trade2win.com/boards/trad...-patterns.html

London - The City / CanaryWharf Traders Social (organised monthly):
http://www.trade2win.com/boards/t2w-...rs-social.html
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Old Dec 12, 2009, 8:08pm   #10
Joined Jul 2009
Re: Da.DesiTrader's FX Journal using Chart Patterns

rising star.....nice work
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