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Trading spot fx euro using price action


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Trading spot fx euro using price action

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  #621 (permalink)
 Adamus 
London, UK
 
Experience: Beginner
Platform: NinjaTrader, home-grown Java
Broker: IB/IQFeed
Trading: EUR/USD
 
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Posts: 1,085 since Dec 2010
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Finally managed to do a sim trading session.

Didn't get any trades. In fact I was an absolute beginner again. Don't bother looking at the chart either - I was messing around with an indicator that lets you change text color really quickly.

What I want is an indicator for text editing. The NT7 text box is rubbish. It doesn't show tabs at all, it won't left justify, you have to click too much to change font size or whatever, you can't display images. I'd like to be able to paste in little thumbnails of the 1-min or the 60-min chart for example.



The support at 1.2973 is from a year ago, as the market sat in a range from Feb to May. I think I've checked to see that it's not caused by anything else, so to me, it's more proof that good S/R levels don't ever die even though they get broken a lot.

I also had a bug with the chart trader "extra" indicator that I wrote. The indie has a button placed on the Chart Trader called "Center Price" which is exactly what it does. While the big 50 tick bar was building today, I clicked on "Center Price" as the bid/ask dropped off my screen. Nothing happened. Stupidly I had coded it to use the last Close price as the price to center to the middle of the chart. Had to recode it using GetCurrentBidPrice.

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  #622 (permalink)
 Adamus 
London, UK
 
Experience: Beginner
Platform: NinjaTrader, home-grown Java
Broker: IB/IQFeed
Trading: EUR/USD
 
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Stuck in a hole trying to find time to code my support / resistance indicator so for now I'm just going to go back to placing the lines on the chart, starting with monthly, then weekly, daily, and hourly, and then the Asian session high and low.

I was doing this using a monthly, a weekly, a daily and an hourly chart and switching windows backwards and forwards to place the S/R lines, and even keeping a spreadsheet. I was obsessed with having chart windows open. Why I was making it such hard work I don't know. My response to the workload issue was to try to code an indie to do it for me, but the indie is taking too long and I want to trade so I'm just going to use one chart window, changing time-frame as I go so I only have to place the S/R line once, and not recording it, no labels, no complexity, done.

Another change is with the notes. I hate putting them on the chart, so I won't, I'll put them here.

7:00 EUR German Trade Balance
7:45 EUR French Industrial Production m/m

Still stuck in a minor congestion zone at the start of a long term down-trend so it seems. Perhaps the down-trend is doomed after all, but it looks too congested to be a normal swing point.

This is the bottom of the big congestion zone / swing high peak from the first 4 months of 2012. Maybe the world economy is in exactly the same place it was back then.

20 day volatility 109 (10 year max 287)
20 hour volatiliy 25 (10 year max 96)

Low volatility, down on last week but up on month.

Asian session: tiny gap at week opening, bullish trending with average swings, not too much of anything that says anything to me.

London AM session: clocks still on winter time while NY changed already. Tried to rally but couldn't drag itself out of the mud. Lots of short ugly tails up and down, looks like barbed wire.

Started trading at 13:30. Basically nothing happened here either as I hung around feeling dissatisfied with my whole trading set-up, from the S/R to my note-taking and my other indicators which I thought were bug-free.

Stopped at 15:30 as the market stalled trying to rally out of the trading range. It looked like it might be trying to break-out upwards with the one big bar at 15:12 and the retrace, but no triggers came so no trade. I admit i have no ability to trade ranges.

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  #623 (permalink)
 Adamus 
London, UK
 
Experience: Beginner
Platform: NinjaTrader, home-grown Java
Broker: IB/IQFeed
Trading: EUR/USD
 
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Posts: 1,085 since Dec 2010
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Trying to find a reason with the benefit of hindsight that could have told me to enter the break-out.

Problem number 1 was the tiny range at the time @15:30 - we had just over 45 points and the 20 day avg is 109.

As I said, I don't have much idea about range trading because my only technique so far is to identify a small range day and assume it's going to remain that way and end up ranging.

Simplistic.

OK just looking at it all now I realise I completely missed the resistance level at 1.3017, an hourly swing after the steep dive on Friday. Not so bad because I just took the 3-min chart swing highs from the last couple of hours.



Argh NT7 just fell apart trying to change time-frames. Enough of that then.

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  #624 (permalink)
pfabcTrader
Leicester England
 
 
Posts: 35 since Apr 2012
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Adamus View Post
Finally managed to do a sim trading session.

What I want is an indicator for text editing. The NT7 text box is rubbish. It doesn't show tabs at all, it won't left justify, you have to click too much to change font size or whatever, you can't display images. I'd like to be able to paste in little thumbnails of the 1-min or the 60-min chart for example.

Hi
I have the same problem marking my charts. As I'm not into NT7 programming
I solved it by making a little standalone program as
an overlay. It takes text and pictures and can import/export standard
word rtf/txt files. It is very basic , have a look at the picture(4 overlays).
pfabc


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  #625 (permalink)
 Adamus 
London, UK
 
Experience: Beginner
Platform: NinjaTrader, home-grown Java
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Trading: EUR/USD
 
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Posts: 1,085 since Dec 2010
Thanks: 471 given, 786 received

Hi @pfabc that's great but right now I came to the conclusion that my charts are just too small to fit everything onto, and I want to try working with even smaller charts for my journal, so that each chart shows just one thing, rather than the whole trading session with all the notes and pics.

But what you've got looks great and I'd love to try it out in the future - have you made it shareware?

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  #626 (permalink)
pfabcTrader
Leicester England
 
 
Posts: 35 since Apr 2012
Thanks: 2 given, 23 received

Hi,
You can download it from the address below.
I only programmed it last weekend but does what I want so it is very basic. It is a very basic Rich Text Editor and therefore allows the mixture of Text and Pictures on the same page. If you wish a special layout eg. your
trading results in a tabular form you can design it in Word and export it in rtf
format and then import into PicOverlay (silly name)

Tested it on XP and Vista and needs NO installation (just copy it into a folder).
It is programmed in Visual Basic 6 and therefore needs Microsoft Visual Basic runtime library installed on your computer. Most older computers will have it installed or can be downloaded from MS.
You can run as many instance of PicOverlay as you like.
Good Luck!
Pfabc

https://docs.google.com/file/d/0B-69kAigNCAnQW1CcDZ5d1hwVDQ/edit?usp=sharing

(public domain - use at own risk)

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  #627 (permalink)
 Adamus 
London, UK
 
Experience: Beginner
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Trading: EUR/USD
 
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Nice one, thanks.

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  #628 (permalink)
 Adamus 
London, UK
 
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The goal for the next few months is to get my IB paper-trading account from 95K up to something impressive and undeniably profitable. I don't think the number is important, I think the shape of the equity curve is the correct indicator... maybe 3 months of equity highs. I've got enough in the tank for rent and food until mid-2014 - although of course I want to be profitable way before that and if I'm not, I'll have some serious explaining to do.

My journal self-assessment and review is going really slow - there is so much to process and feed into the trading plan.

Same applies to my psychology theory review - I'm still on "How We Decide" by Lehrer but have started reading "Willpower" by Baumeister and probably after that I'm going to move onto "The Chimp Paradox" which @mokodo has mentioned. A lot of this literature is purely descriptive of how the psychology works, but what I really need is applicable techniques for personal improvement.

I've already got a lot of good sports-related stuff from 10MT by Selk, but it doesn't really stand alone, not sufficiently for trading. It depends too heavily on sports activities-type stuff for its effectiveness, and a lot of it's not possible from a trading perspective.

The NT7 S/R indicator is also going really slow since taking up more or less the whole of the last fortnight, or at least the reduced time I had to work due to plumbers, doctors, landlords and all sorts of other distractions. But essentially the indicator is "in progress" but I can't spend more than 1 hour per day on it. It's too dangerous, it's a complete digression. Talking over the weekend with a trader friend I went through all the options, of spending time on programming it, spending time launching a new automated NT7 strategy using it, even selling it, but at the end of the day, the main goal here is to learn discretionary trading.

So I am placing my S/R lines on the chart manually until further notice, and taking extra care to make sure I don't miss the important ones.

I decided I'm going to use 2-part exits again, one at the first target and one either at the second target or trailing as per market conditions. This time, because it's pretty much counter-trend on the big picture, I'd put both exit orders as targets.

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  #629 (permalink)
 Adamus 
London, UK
 
Experience: Beginner
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US Daylight Saving Time in operation already, London still on GMT - didn't get out of bed on time (late to sleep again as ever - insolvable problem) - the aim was to start the trading session at 12:00PM London time to catch the NY opening, but that's already on the chart.

The goal today is just to go through the process of prep, trading, session review. If I don't see a single set-up, no worries. I just need to go through the 1,2,3 of what I've got in my trading plan.

Today's Events:
00:01 GBP Low - Rightmove HPI m/m
09:00 EUR Low - Italian Trade Balance
10:00 EUR Low - Trade Balance
14:00 USD Low - NAHB Housing Market Index






Long-term market conditions: on the monthly and the weekly, there's a great looking down-trend in its first leg, but on the daily it's all got messy and on the hourly, we're firmly into a consolidation phase (until the opening of this week which breaks through the consolidation zone floor). The bottom of the weekly trend is so far away, I don't think we'll ever see it unless Germany suddenly left the Euro. So the long-term trend is decelerating but what we really need is a nice lower high swing point on this trend to enable to trend to get going southwards again. From today's open though it looks like that's not required.

The Asian session was bearish. A big gap down of 150 points according to IB's opening/closing bars. That was followed by several cycles grinding downwards with a high initial volatility, unsurprisingly - sharp reversals, large ATR. The volatility wore off and the focus was presumably the 1.2900 line - the last swing down made a good low at 1.2880 but rose up to close around 1.2900 where London took it over.

The London pre-US session turned properly bullish with a 75 point rally, not so much chop, paid at least lip service to the S/R lines I created, including 1.2900 and the Asian High. It put in the usual churn after 11:00 until NY opened. Other chop from 6:00 to 8:00 doesn't look pretty either, but the moves between levels look tradeable.

Checklist -
physical health: good
mental health: high level of stress at the moment from outside trading, worth keeping an eye on possible impacts.
fatigue levels: also not so hot
motivation: definitely not England Rugby

My session ended without any trades, although I was watching the action around 15:30 with an increasingly bullish bias, despite the big tails at the top of the 14:30 swing high which failed to touch the London High.

First, I don't like the so-called fundamental reasons in the newswires about the drop today. The Cyprus bail-out with the so-called "dangerous" theft of 6% off everyone's bank accounts is not going to lead to contagion of the crisis and runs on banks. It's a fait accomplis and it's a one-off. You think they'd do that in Greece, Spain or Italy? So fundamentally I think there is a good reason to be bullish because that 150 point gap is just volatility.

And now it looks as if the bears are weakening, with slower, shorter pushes and the bulls look more promising.

I marked up a fair amount of S/R where I saw it and to be honest I couldn't see any stand-out entry points or potential setups before 15:30. Looking at it now at 16:00 I guess bar 370 left a good bullish tail hanging down that I could take as an entry trigger, with stop at 1.2950 and target at 1.2975.

Looking at it in real-time, it looks good. I'm waiting to print the chart to post it here. That 375 bar is just what the trade would have needed, probably a bunch of traders caught short by that stab down over the MA at 370.

Looks great. I would pull up my stop to under the small red candle 376.

Woohoo. Straight through the first target at the London High. I realise I didn't work out where the second target would go. There's resistance at:
  • 5 points higher @1.2980 from highs on Thursday last week
  • the hourly 50 bar MA (thanks @SammyD) in gold
  • then there's 1.3000

It would be a little brave to put the target above the 1.2980 R but then it was only an Asian session swing high. It makes little sense to put the target only 5 points higher than the last anyway.

The hourly MA-50 is a big question mark, so I guess putting it at 1.2998'5 would be a reasonable idea, but bailing out at any sign of weakness before that.



Looking at it in hindsight now, I think the tell-tale sign is the 3-bar reversal just before 15:30 as price bounced back up from the blue zone I painted in. That must have swept up a lot of people expecting another good sell-off.

And then the entry trigger was the stall and stab down getting pushed back up so quickly.

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  #630 (permalink)
 SuperSaan 
Amsterdam, The Netherlands
 
Experience: Intermediate
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Trading: EUR/USD
 
Posts: 19 since Oct 2011
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Hi Adamus,

I traded the Euro as well yesterday. I saw your trades are (partly) based on Al Brooks strategies. Mine too.

Here is my chart.

At 9.05 there was an inside bar with an almost perfect bull body. There is also an entry on your 3min chart. Its the first pause in a micro channel which makes the probability higher. I did not take it because because I was afraid of the fact that we first made a lower low and the leg up had tails. In hindsight I think I should have taken it because the risk/reward was big enough even when the probability is low.

At 9.35 there was a great wedge bull flag. Pullbacks often end after three pushes against the trend. It does not have to look like wedge. In fact, it often looks nothing like a wedge. The 3 pushes are also visible on your 3 min chart. The ii entry makes it a breakout mode situation, which is great in strong legs. The body's also looked very bullish. The only problem here is that we are right under the 20EMA of the 60m chart, so you have to swing for at least twice the risk. The leg is very steep and has strong bull bodies and you can also argue that it is another first pause, so it obviously is a great trade. Stop is below the first inside bar. At 9.50 there is another bull inside bar. Place stop below after it breaks out. It is the third push and I have made more than twice my risk so my hand is on the flat button to get out as soon as it starts to struggle.

Good luck today!

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