Making Money Trading

[MrGecko]

That's what good trading is about in my opinion - identifying the important levels (whether they be s/r pivots, fib levels etc) and then reading the price action as the market trades into them.

I absolutely agree; IMO most trading (not only PA, but indicator and orderbook trading too) is about spotting patterns in price (or bids/offers etc) that, in your judgement, are likely to repeat a specific behaviour. Then acting accordingly to profit from it. There are an infinite number of patterns in any one series of prices over time - the skill lies (partly, at least) in picking the time to start "recording" the price behaviour and then watching it for any patterns you have in your arsenal to make a profit.

Moving on, there are a couple of things that I want to add to my previous post; nothing important, just that from the daily chart, I entered a trade before the days (now yesterdays) bar had closed - which I believe is advised against across the board.

I'm still bullish on the pair, but using the daily and the daily alone, my conditions are buy (today) at a break of yesterdays high @ around 1.99, with a stop below 1.9730 again (or maybe a stop trailing the 365ema to be fancy).

I only mention these points because I am already up around 50+ pips from the trade with a stop above B/E - so I'm gaurunteed a profit from my hourly trade, even though the daily trade hasn't been triggered yet, and I dont want to mislead anyone.

 

[nine]

MrGecko (love those lizards tho they do leave little black presents around),

The reason its advised against is that you are trading a pattern that has not actually happened. So it is "probably" a low return activity. Much worse it is a breach of discipline and gets you into the habit of breaking your system - which may eventually be fatal to your trading career.

But maybe not. If you think that "beating the pattern" is a good thing to do you simply need to define the trade and then test it to see if it worked in the past. If it did then feel free to forward test it with good conscience, knowing that you are now in discipline and trading something that has historically had a positive expectancy.

Good luck and good trading.

 

[MrGecko]

out of curiosity, did anyone take the pin on the 1hr schatz? Will 104.35 prove to be good resistance?? I Didnt btw.

p.s. my cable trade was stopped out for 16 pips (having given back 50 more), not fussed about it though - got an exit signal from the hourly earlier that would have given me just over 50 total, but held out for a move on the daily. Trades on different timeframes are like drinks - you shouldn't mix them (and I should know better)! Anyway, i still think the daily cable price looks interesting; after what looks like consolidation, we may see a big move either up or down on a break of 1.99 resistance or 1.9750 (ish) for support. thoughts?

 

[TheTick]

out of curiosity, did anyone take the pin on the 1hr schatz? Will 104.35 prove to be good resistance??

No - toyed with taking the Bobl pin, but decided there wasn't enough supporting evidence and passed. Now I've looked a the Schatz, I'm of the same opinion - just not enough to enthuse me. Resistance in both seems a little higher than where they formed. It's too quiet out there ahead of jobless figures so didn't fancy the chances of it moving very far before the release. Hope the data gives the market a bit of a spark.

 

[MrGecko]

I'd want to see a test of the 110 handle before taking anything on the Bobl, and the 104.35 level on the schatz

 

[TheTick]

I'd want to see a test of the 110 handle before taking anything on the Bobl, and the 104.35 level on the schatz

Agree with that on the Bobl - and it's nearly there, but looks a strong move in reaction to jobless so wait and see what happens when it gets there. The resistance I have in the Schatz is slightly higher - 104.37. And it's just broken as I type this, so see if it sustains it.

 

[MrGecko]

its too late to call now, but FWIW this bobl 1hr 110 handle looks to be good resistance. not including this hours bar, the last two candles look to be making a bearish pattern that won't break through it (although what you might call it is tricky. Like the GBP/USD candles I gave as an example on the daily yesterday, they dont really form any "textbook" patterns, more a mish mash of "double top bearish harami" except without the double top. Perhaps 2/3rds of an evening star? this is what i mean about reading the PA ). If this hour's bar closes below the low of the prior, there could be a trade here.

 

[DiscoPete]

Just seen this pin bar on the eur/usd daily. Comes off the 22% fib and also of the ascending TL. What do we reckon?
Cheers
Pete

 

[trader_dante]

Just seen this pin bar on the eur/usd daily. Comes off the 22% fib and also of the ascending TL. What do we reckon?
Cheers
Pete

Pete,

The pins nose does not poke out from the preceeding bar.

Also, I don't pay any attention to the 23 fib.

Finally, if it's not a rude question: what is that for a trend line?!

Tom

 

[rider5]

Hi TD,

I'm still short this eur/usd trade off the dailies.

Would you consider these two last bars as an area of consolidation, as it's a double bar high with four pips difference? And if so would you move your stop to just above that, or not?

I apologise if it sounds like I want to be spoon fed, but would appreciate the master's views on a trade like this.

BTW, thanks for recommending my previous post, must mean that I have learned a little something along the way.

 

[trader_dante]

Hi TD,

I'm still short this eur/usd trade off the dailies.

Would you consider these two last bars as an area of consolidation, as it's a double bar high with four pips difference? And if so would you move your stop to just above that, or not?

I apologise if it sounds like I want to be spoon fed, but would appreciate the master's views on a trade like this.

BTW, thanks for recommending my previous post, must mean that I have learned a little something along the way.

Hi rider5,

It looks to me like any attempt lower is being met with considerable support and my bearish enthusiasm is fading fast!

I would personally put a stop on half my position a little way above 157.00 and the remaining half at breakeven. That way, you rescue something from this trade.

If you have to exit all at once it's a hard call. I would probably put it at breakeven because the volatility before non farms may take out a lower stop.

Tom

 

[MrGecko]

Hi rider5,

It looks to me like any attempt lower is being met with considerable support and my bearish enthusiasm is fading fast!

I would personally put a stop on half my position a little way above 157.00 and the remaining half at breakeven. That way, you rescue something from this trade.

If you have to exit all at once it's a hard call. I would probably put it at breakeven because the volatility before non farms may take out a lower stop.

Tom

i would recommend this post if i could figure out how.

 

[brutusdog]

i would recommend this post if i could figure out how.

click the little star shaped medal logo on the post underneath the name of the member you want to recommend.

 

[nine]

Mr Gecko

Where you see the little medal / star under the users name you can just click it and then add a reason and OK.

 

[MrGecko]

Just seen this pin bar on the eur/usd daily. Comes off the 22% fib and also of the ascending TL. What do we reckon?
Cheers
Pete

dont think that qualifies as a pin bar mate; Its not at a recent swing high or low.

I'd sit this out and wait for; Non farms, and a test of the 1.57 resistance from the hourlies.
Even after that, IMO it's just farting around in no-mans land, and doesn't look like it's bolting somewhere anytime soon. Have another look on Monday.

 

[rider5]

Thanks for the advice TD.

Not the best trade, as things are at this moment. But, hey, at least I stuck to the plan of trading on PA off the dailies. Must count for something. Although at this point it seems it would've been beneficial to have scaled down to the lower TF's.

But as a wise man once said: "Plan the trade and trade the plan."

Thanks again and good luck to all.

 

[MrGecko]

Although at this point it seems it would've been beneficial to have scaled down to the lower TF's.

TBH I don't agree with this.

If you're going to trade from PA, then you need to give the market the opportunity to digest, interpret and react to the behaviour you've spotted. Combining weeklies, dailies and hourlies is more than likely going to give you conflicting signals all over the place.

Picking bad trades is inevitable; but if you make an entry from the daily, IMO you should at least give the market the opportunity to prove you right from the price behaviour over the following day. A short on the daily may well be a good trade, but closing it from an hourly bull run isn't giving the market a "fair" chance to turn your trade into a winner.

 

[grantx]

Mr Grecko,

In your illustration above re "enter on break of high", this is good practice but I would suggest you buy as low to support as possible because while you have to wait for a relatively large point move up to confirm the bottom/turn, in the meantime you would have added a few extra points.

Moreover, if the last turns out not to be the bottom, the confirmation (stop) is closer and therefore your stop is minimised.Conversely, if the price fails to break the high, you would still have made a few points.

Of course, all this may only be applicable to quick in-and-out trades.

Grant.

 

[MrGecko]

TBH Grant, my entry would be higher still.

When I say "enter on break of high", what I really mean is "place a buy stop above the high of the bar that closes above the high of the pin bar".

In the attached example, I've quickly sketched out what I mean (it's an over-simplified example, but it gets the point across).

Here we see a SETUP SIGNAL - a test of multiple support levels. I like to see price dip below support but never close below it. In this case we have a typical 2xLHC...

...Immediately followed by a TRIGGER BAR that closes above the high of our SETUP pattern; the market is comfortable with prices closing above our support, and it appears a new trend is being started...

... giving us our ENTRY BAR; a buy stop just above the prior high; we are seeing higher highs and higher lows; Three white soldiers; sell stop is placed discretionally, but never below the low of our SETUP pattern (e.g. low of TRIGGER BAR to be conservative).

Obviously there are a load of other conditions that make this a no-go *like where in the hell the bloody thing happens in the first place!!!!*, but thats the gist of my entry conditions. What we are trying to capture is the part of a trend where price is moving with the greatest velocity (without relying on stochastics etc...), which is why we leave it for so long.

OK there isnt a pin bar in sight, but there is more than one way to skin the Price Action cat.

Also, I feel I should mention that there are other traders who do the exact opposite; they may try to enter on a fib retracement level of their setup signal, or split their setup signal into multiple bars of a lower timeframe and enter on the low of the most recent, and so on... and some of them do very well out of it, with better entry and smaller risk. This is just my approach, swimming with the tide.

 

[rider5]

TBH I don't agree with this.

If you're going to trade from PA, then you need to give the market the opportunity to digest, interpret and react to the behaviour you've spotted. Combining weeklies, dailies and hourlies is more than likely going to give you conflicting signals all over the place.

Picking bad trades is inevitable; but if you make an entry from the daily, IMO you should at least give the market the opportunity to prove you right from the price behaviour over the following day. A short on the daily may well be a good trade, but closing it from an hourly bull run isn't giving the market a "fair" chance to turn your trade into a winner.

MrGecko,

I wholeheartedly agree with this. My position is still open off the dailies and will remain that way untill I'm kicked out or there's a valid reason to get out.

Scaling down to a lower TF will sometimes earn you some pips in a losing trade that you opened off the higher TF. This is all in hindsight though, as you don't know that it's a losing position untill it has, infact, lost.

A profitible system needs consistency, and scaling down whenever you get nervous will definately bring you the direct oppisite.

Thanks for everybodies comments and advice.