Best Thread Phil Newton's Range Break Out strategy

[Newtron Bomb]

Todays set ups and updated technical analysis on the Forex Currency pairs for trading opportunities.

Enjoy
Phil

 

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Todays forex set ups revolve around GBPJPY EURJPY USDJPY, other comments can be seen on USD currency cross rates.

Enjoy
Phil

 

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add cadchf to the list, I never ran through it on the video... nice clear Range set up

 

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Trades overview video

 

[trendie]

great vids, NB. (wont let me rep you again)

the initial set-up seems to be trading 3-lots, with closing 2-lots very quickly, and managing the third.

I get the overall impression that your stop-loss is twice the distance as your first scale out.
ie, risk 25/30 pips, then scale out 2-lots at 15 pips; run the third.
is this about right? (have only been focussing on your EURUSD and GBPUSD trades)

also, how many trades do you get to take per day?
thanks

 

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I look to scale out quite quickly taking 2/3rds of my position off at 50% of the stop loss size...

You can of course use any combination you like... 3/5ths scale 2/5ths scale, 1/3rd initial scale 1/2 initial scale... and so on... this is one of those down to personal preferences things... ultimately you dont have to scale out which a few of my room members do.. or dont do depending on your view

Number of trades, how long is a piece of string... seriously though, the number of trades is revolved around my objective for the day which is to capture the main move of the day... ideally 1 trade per pair on my break out set ups... it might take a few attempts to get on a trade sometimes, but that is the nature of the beast.
Today for example 9 trades set up on 6 pairs for me with 3 of those voiding and one stopping me out requiring a re-entry... several others triggered a wait situation for me as outlined on the video

 

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Today I take a look at the overnight ranges and the potential for trading set ups. Looks like lots of things setting up not just ovenight but on a slightly larger time frame view as well

Enjoy

 

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The Forex currency pairs have been quite dull this morning with not a great deal of action. Also there is not a lot of news items out that could potentially influence the pairs I'm looking at.

There is some USD related news out at 3pm this afternoon which might put a spark in the USD cross rates.

Later in the week there is also employment data out which I suspect is what the market is waiting for.

Overall there are a lot of consolidation patterns that have set up quite nicely which could well lead to some interesting movements when they start to move outside of the range boundaries.



Happy Trading

Phil

 

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options, thanks for your kind words, it is much appreciated.

Trading doesnt have to be complicated at all the simpler the better in my opinion. Sticking to the plan, waiting, and for me today letting a trade go without me as it didnt fit my trading plan can be some of the toughest things to learn.

Sticking with it and being top of your game is hard work. I dont think I'm the best trader in the world I know many traders who have excellent performance records but I am consistent in what I do. This is where a lot of people can fall down, jumping from one method to another and not giving it the time to learn about the tools that you are using and make them work for you and your trading objectives.
As a new traders, If you dont have a plan then I would suggest that you put pen to paper and write down exactly what you are going to do when you are going to do it and why you are going to do it... if a trade set up isnt on that plan then there is no trade.

Long term profits come from long term consistency

 

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Todays trade review looks at the trades that I did take on the currency pairs that I reviewed this morning. You dont always get a winning trade each trade and you can see a few losses on todays Forex Trades video today.

Enjoy
Phil

 

[euro_dude]

Range Reversal?

Hi Phil:

Can you elaborate on Range Reversals?

I saw you try one today on EURYEN where there was a smaller overnight range at the bottom of of a larger range.

Sometimes you don't trade the smaller range but wait for a breakout of the larger range!
But, today you took the breakout of the smaller range to get an earlier jump on the breakout of the larger range.

Is this because the move into the larger range was UP and you were counting on a continuation pattern UP?

It's not clear to me when to trade the smaller range within a larger range or just wait.

Thanks,

 

[Newtron Bomb]

Hi

The two obvious examples would be eurjy today and gbpusd today both had overnight ranges at a good location which is at the previous days high/lows.

Taking the larger picture into account there were also slightly larger ranges on both these pairs.

EURJPY's overnight range was at the low of the larger range I noted on the earlier video, while the GBPUSD overnight range was still a short distance away from being at the high of the larger I had marked up which is not for me the best place to take a trade on.

OK so looking back with hindsight on GBPUSD you could have taken teh overnight trading range break out, but what will often happen price price is in the middle of the identified ranges is that it will continue to be range bound... for me me that is a step aside situation.

Sometime you get them others you dont... and in hindsight they do look pretty good set ups... but in real time I opted to wait.

With EURJPY I also wanted to illlustrate to my live room members a range reversal set up which mixing with the time frames was actually traded as a range breakout on the lower time frames... patterns witin patterns

65% of the time these ranges are continuation patterns and we had a good up trend moving into the consolidation... IF I was right I would have looked like a trading god :clap:... but as it is it didnt work out.

Other supporting evidence for the long was that usd jpy was already running up and had trigered a long trade while I considered that euro was still range bound. Euro eventually starting moving... but more importantly was moving in a greater magnitude that jpy which translated onto eurjpy meant that we saw a sell off on eurjpy as the euro side of the cross rate was moving in a larger magnitude that the jpy side of the cross rate.

Ive not read this back, and I'm just going to post it as it is so if there are corrections to be made on this I'll do them tomorrow as its getting late.

Enjoy

Phil

Hi Phil:

Can you elaborate on Range Reversals?

I saw you try one today on EURYEN where there was a smaller overnight range at the bottom of of a larger range.

Sometimes you don't trade the smaller range but wait for a breakout of the larger range!
But, today you took the breakout of the smaller range to get an earlier jump on the breakout of the larger range.

Is this because the move into the larger range was UP and you were counting on a continuation pattern UP?

It's not clear to me when to trade the smaller range within a larger range or just wait.

Thanks,

 

[euro_dude]

Hi Phil:

Thanks for replying.

I understand it better now.

Would this be a rule of thumb:

"If the overnight range is at the top/bottom of a larger range and there is enough room on the average daily range to the larger range - you can take on a break of the smaller range to the boundary of the larger range. Also, there is a higher probability if the smaller range break is a continuation move of the move into the larger range"

I think this issue is very timely because yesterdays massive moves may produce overnight range within very huge larger ranges. My trigger finger gets very itchy waiting for a e.g. 200 pip larger range to break when the smaller range is breaking....!

Others like myself may stil be struggling with the concept of whether to take a smaller range break or wait for the larger range to break.

Thanks,
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Hi

The two obvious examples would be eurjy today and gbpusd today both had overnight ranges at a good location which is at the previous days high/lows.

Taking the larger picture into account there were also slightly larger ranges on both these pairs.

EURJPY's overnight range was at the low of the larger range I noted on the earlier video, while the GBPUSD overnight range was still a short distance away from being at the high of the larger I had marked up which is not for me the best place to take a trade on.

OK so looking back with hindsight on GBPUSD you could have taken teh overnight trading range break out, but what will often happen price price is in the middle of the identified ranges is that it will continue to be range bound... for me me that is a step aside situation.

Sometime you get them others you dont... and in hindsight they do look pretty good set ups... but in real time I opted to wait.

With EURJPY I also wanted to illlustrate to my live room members a range reversal set up which mixing with the time frames was actually traded as a range breakout on the lower time frames... patterns witin patterns

65% of the time these ranges are continuation patterns and we had a good up trend moving into the consolidation... IF I was right I would have looked like a trading god :clap:... but as it is it didnt work out.

Other supporting evidence for the long was that usd jpy was already running up and had trigered a long trade while I considered that euro was still range bound. Euro eventually starting moving... but more importantly was moving in a greater magnitude that jpy which translated onto eurjpy meant that we saw a sell off on eurjpy as the euro side of the cross rate was moving in a larger magnitude that the jpy side of the cross rate.

Ive not read this back, and I'm just going to post it as it is so if there are corrections to be made on this I'll do them tomorrow as its getting late.

Enjoy

Phil

 

[Newtron Bomb]

Hi Phil:


Others like myself may stil be struggling with the concept of whether to take a smaller range break or wait for the larger range to break.


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If in doubt stay out, its better to be out a trade wishing you were in, than in a trade wishing you were out.

 

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enjoy
Phil

 

[Jabel]

Hi Phil

I've got a question regarding your stop strategy: Suppose on the first trade, you trade 3 contracts, take 2 off at half the stop loss level, and the final 1 contract gets taken out, so you've broken even. On the next trade, you buy your 3 contracts, but the trade goes against you immediately, and you get stopped out on all 3. On the third trade, you're able to sell your 2 contracts at half the initial stop loss level, but now have to make 3 times what you lost on the previous trade (as you only now have 1 contract in play) just to get back to breakeven... Am I right in thinking that for this methodology to be successful you hardly have any losing trades at all, or am I missing something?

 

[options]

Phil.

Couple of points m8.

You used to work with 10 min charts. Now you use 15?

Overnight asian range or previous days range in your view for better trading.
How about the high/low put in around the 7 am onwards (Cable mainly).

 

[Newtron Bomb]

Hi Phil

I've got a question regarding your stop strategy: Suppose on the first trade, you trade 3 contracts, take 2 off at half the stop loss level, and the final 1 contract gets taken out, so you've broken even. On the next trade, you buy your 3 contracts, but the trade goes against you immediately, and you get stopped out on all 3. On the third trade, you're able to sell your 2 contracts at half the initial stop loss level, but now have to make 3 times what you lost on the previous trade (as you only now have 1 contract in play) just to get back to breakeven... Am I right in thinking that for this methodology to be successful you hardly have any losing trades at all, or am I missing something?

Hi you quite right in your example that I would need to make more pips, the object of my scaling out is to remove teh risk as quickly as posible and for me without moving my stop loss as I have been stopped out for +2 on moving my stop loss level too many times to count. Havent we all

The point to consider is that if YOU dont want to scale out then dont. you dont have to do this it is just my prefered method of trading and money management tactic within the overall frame work of my trading plan and my trading objectives

 

[Newtron Bomb]

Phil.

Couple of points m8.

You used to work with 10 min charts. Now you use 15?

Overnight asian range or previous days range in your view for better trading.
How about the high/low put in around the 7 am onwards (Cable mainly).

Hello Options,
Ive always used 15 mins primarily on FX, I have taken a look at 10 min charts but usually cone back to 15 mins.

todays trade set ups I will mostly be looking for breaches of previous days highs and lows due to yesterdays chop... video pending upload...

their have been strategies floating around regarding a BO of the 7am 60 min bar or some other variation I did some work into it and some other variations... and came up with a few conclusions which can be intergrated into a trading plan... but nothing definitive rarding taking the breakout of the 7am 60 min bar.

 

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