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Trading spot fx euro using price action
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Trading spot fx euro using price action

  #111 (permalink)
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Zwaen View Post
Hey Adamus,

I put some comments on your chart. Nothing amazing, but just when to look for setups i.e. when to anticipate certain setups and thoughts.
Btw priceaction way too volatile ( no
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) for me right now on 6E

I agree with all of your comments except the first - I think you want to wait a little bit longer in the morning until the danger of a morning reversal has receded.

I see you're quite bullish after midday - you're looking at the higher time frame I guess?

Haven't done today's chart yet. Surely the non-farm payroll made it interesting?

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  #112 (permalink)
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Today's chart mark-up.

Just to re-iterate, I'm marking up the YTC PAT setups I saw, without bothering to work out if I could have traded them in real time. It's all part of the learning process. This is going to go on for some time - this is my 30th trading session approx, and I'm aiming to do 100 this way.

Everyday I'm doing the current trading day, plus a week starting back in Sept 2010.

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  #113 (permalink)
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I see you're quite bullish after midday - you're looking at the higher time frame I guess?

I was bullish at that point because of the upswing from 13.40-14.00. Strenght was on the upside after a breakout above the trading range. So the next setup (imo) is the pullback to breakout point. You could name it a BPB.

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  #114 (permalink)
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Yesterday's chart

Labour Day in the US. Lance in YTC PAT advises against trading holidays as he views the setups in thin markets are less probable.

Anyway I marked up the charts. Again I only marked up the setups that I assume I would have been interested in if trading real-time.

I've done 40 days out of my 100 for the learning programme so far. I'm beginning to be confident about the support and resistance zones I put on my chart, but realistically YTC PAT doesn't require any complexity for that - the most difficult part is finding them from way-back when the market is making new highs or new lows on the hourly chart.

One thing I'm still getting in a mess with: some of the setups look like they are setting up for a textbook trade but then the market does nothing or worse, churns. For example I've attached here a clean 3 min chart and I had resistance at 1.4148 (2011-08-12's low). I don't know whether the 1 min chart helps but I included it as well.

Looking at the 3 min chart bar-by-bar, at 9:27 it broke out, and fell back immediately in the same bar, so it looks like a break-out failure and if the markets hit the break-out traders' stops, then there could be a tradeable move down. So at that point as a keen YTC PAT trainee, I think it's all happened too fast.

But then it breaks out again, a little further this time, and falls back down again to the same level at the end of the bar. No problem. I've had enough screen time to know that markets usually try things twice.

If it's going to be a break-out failure, I should position my self nicely short by working a limit entry order as high as I can. And I can put an OCO entry stop just below these two bars, in case there's no more upward action and the market starts falling.

So the crucial questions for me surround entry. If I use a limit entry order to try to get in short, where shall I put it? Near the top of those last 2 candles is my guess.

So the next bar breaks out and it starts looking good, if I had an entry limit somewhere there I might have got filled. Then though the next bar shoots up 10 pips - I would definitely be in by now and sitting on drawdown. Technically I would arrange my entry execution to place my exit stop and my target automatically, so, ignoring the target for now, where would I tighten up the stop to? 1.4160?

It all seems like trying to ride a bicycle for the first time without stabilisers - perhaps old Lance wouldn't even have looked at this area as a setup anyway.

I just realised that by writing this down on a bar-by-bar basis, I come up with a different analysis than I did when I marked up the chart - as you can see on the marked-up chart, I figured the setup would have led to a failed BPB and a BOF, but in fact by looking at the entry possibilities, it comes out different.

Anybody got any comments?

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Trading spot fx euro using price action-eurusd-3-min-2011-09-05-markup.jpg   Trading spot fx euro using price action-eurusd-3-min-2011-09-05.jpg   Trading spot fx euro using price action-eurusd-1-min-2011-09-05.jpg  
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  #115 (permalink)
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“ One thing I'm still getting in a mess with: some of the setups look like they are setting up for a textbook trade but then the market does nothing or worse, churns. For example I've attached here a clean 3 min chart and I had resistance at 1.4148 (2011-08-12's low). I don't know whether the 1 min chart helps but I included it as well.”



I thought a lot about this, and I think we have to give up searching for a 100% succes setup. I think this is a real problem for beginning ( including me) traders: we WANT 100% succes setups. This can even be an unconscious belief. Until we reach the point we can really accept this does not exist, we can move forward. There is no way a setup always works, and via trade-management we should – when we are filled – minimise the loss when the trade does not work out, and maximise gains when the trade does work out. The best thing we can do is make an " educated guess" . So I think we should put our efforts not in finding “ other” of “ better” setups, but put the energy in investigating:
- How do I recognize a trade which will fail just after I enter? So I can scratch the trade before my hard stoploss is hit.
- How to change my stoploss, in order to lockin profits ( vs being stopped out and markt moves more in our favor ). Some sort of optimalisation process. ( MFA study)
- ...


“ So the crucial questions for me surround entry. If I use a limit entry order to try to get in short, where shall I put it? Near the top of those last 2 candles is my guess.”



I also thought of this. Looking at charts, the absolute worse you can enter is ( depending on market structure ) is just above an uppertail, or under an undertail. So I thought the best thing you can do is to take the other side of the trade and enter there. So I think it is a good idea. I think it is safe to put your stoploss let’s say 3 pips from the tail. In the case the test of the tail does not work your loss is 4 pips. But I ve never tested this because I rather enter via the breakout of a candle.


Last edited by Zwaen; September 6th, 2011 at 12:04 PM. Reason: typo
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  #116 (permalink)
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Zwaen View Post
“ One thing I'm still getting in a mess with: some of the setups look like they are setting up for a textbook trade but then the market does nothing or worse, churns. For example I've attached here a clean 3 min chart and I had resistance at 1.4148 (2011-08-12's low). I don't know whether the 1 min chart helps but I included it as well.”



I thought a lot about this, and I think we have to give up searching for a 100% succes setup. I think this is a real problem for beginning ( including me) traders: we WANT 100% succes setups. This can even be an unconscious belief. Until we reach the point we can really accept this does not exist, we can move forward. There is no way a setup always works, and via trade-management we should – when we are filled – minimise the loss when the trade does not work out, and maximise gains when the trade does work out. The best thing we can do is make an " educated guess" . So I think we should put our efforts not in finding “ other” of “ better” setups, but put the energy in investigating:
- How do I recognize a trade which will fail just after I enter? So I can scratch the trade before my hard stoploss is hit.
- How to change my stoploss, in order to lockin profits ( vs being stopped out and markt moves more in our favor ). Some sort of optimalisation process. ( MFA study)
- ...


“ So the crucial questions for me surround entry. If I use a limit entry order to try to get in short, where shall I put it? Near the top of those last 2 candles is my guess.”



I also thought of this. Looking at charts, the absolute worse you can enter is ( depending on market structure ) is just above an uppertail, or under an undertail. So I thought the best thing you can do is to take the other side of the trade and enter there. So I think it is a good idea. I think it is safe to put your stoploss let’s say 3 pips from the tail. In the case the test of the tail does not work your loss is 4 pips. But I ve never tested this because I rather enter via the breakout of a candle.


That is enlightening. I 'know' intellectually that it is pointless to seek firm patterns that must appear on the chart so that I know I'm on the right track, and I also know that I need to relax and make a judgement about the situation from whatever evidence there is. However I still don't feel confident about doing that and even in simulation and testing it throws me into doubt and I find it unpleasant and frustrating. I guess and I hope that at some point the door in my mind will open.

Thanks for showing me back to the straight and narrow path

Regarding entries, it sounds like you don't follow YTC PAT in seeking out the "last wholesale price" for your last good entry point which should be positioned just before the point where all the "retail" stop losses hit the fan?

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #117 (permalink)
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That is enlightening. I 'know' intellectually that it is pointless to seek firm patterns that must appear on the chart so that I know I'm on the right track, and I also know that I need to relax and make a judgement about the situation from whatever evidence there is. However I still don't feel confident about doing that and even in simulation and testing it throws me into doubt and I find it unpleasant and frustrating. I guess and I hope that at some point the door in my mind will open.

It is easy to write, difficult to do. Btw you can read a very good post of a trader called Ziad: post #98:
https://futures.io/vendors-product-reviews/9298-ten-thousand-education-finally-paying-off-10.html



Regarding entries, it sounds like you don't follow YTC PAT in seeking out the "last wholesale price" for your last good entry point which should be positioned just before the point where all the "retail" stop losses hit the fan?

Guilty. Afterwards I can easy see what the best price would have been, but realtime I just don't dare to do it. But I must say because I don't do it there a times a losing entry is avoided. However I watch price-development just after entry agressively to avoid unneccesary costs. E.g:
(btw these are guidelines, I do not always follow them. But when yor mind blocks because of the emotion, it can be handy to have some guidelines)
-when the second or third candle on the 1 min chart shows rejection -> immediatley tighten SL
-just trail 1min candles until T1 is reached. unless there is enough room)
-trailing the 3 min candles yields a good catch of the wave .

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  #118 (permalink)
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Some comments. Always easy afterwards, very difficult realtime. Always have to anticipate what is comming.
Good exercise for chart-reading skills though

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  #119 (permalink)
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Zwaen View Post
That is enlightening. I 'know' intellectually that it is pointless to seek firm patterns that must appear on the chart so that I know I'm on the right track, and I also know that I need to relax and make a judgement about the situation from whatever evidence there is. However I still don't feel confident about doing that and even in simulation and testing it throws me into doubt and I find it unpleasant and frustrating. I guess and I hope that at some point the door in my mind will open.

It is easy to write, difficult to do. Btw you can read a very good post of a trader called Ziad: post #98:
https://futures.io/vendors-product-reviews/9298-ten-thousand-education-finally-paying-off-10.html



Regarding entries, it sounds like you don't follow YTC PAT in seeking out the "last wholesale price" for your last good entry point which should be positioned just before the point where all the "retail" stop losses hit the fan?

Guilty. Afterwards I can easy see what the best price would have been, but realtime I just don't dare to do it. But I must say because I don't do it there a times a losing entry is avoided. However I watch price-development just after entry agressively to avoid unneccesary costs. E.g:
(btw these are guidelines, I do not always follow them. But when yor mind blocks because of the emotion, it can be handy to have some guidelines)
-when the second or third candle on the 1 min chart shows rejection -> immediatley tighten SL
-just trail 1min candles until T1 is reached. unless there is enough room)
-trailing the 3 min candles yields a good catch of the wave .

Haha, yes I know that blog post. I know it but I don't understand it. Like a tourist who learns the tribal chant in a remote African village and joins in around the fire. He's singing "yeela moja hakuna mutata" but he doesn't know it probably means "feed him to the lions" . I just re-read it. It is very relevant - but assimilating it is going to take time yet

Back to the charts......

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #120 (permalink)
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How crazy can it get?


The biggest / worst / longest / quickest / etc ... is always in the future.

Or maybe not this time, thanks to the Swiss National Bank, although I'm not sure why it boosted the Euro. Haven't read any news - presumably they were selling CHF for EUR, and as the EUR/CHF rose .... er presumably there was a lot of arbitrage going on as the Swissie got out of whack across the big pairs. But it's interesting that the EUR/USD rose so much. My guess is that the SNB was buying equal amounts of EUR, USD and JPY and for some reason the supply of EUR was not as great as the supply of USD, hence the EUR/USD shot up.

Bloody Sherlock Holmes here.

You can discover what your enemy fears most by observing the means he uses to frighten you.
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