P2: A batch of FX market trades

[peter2]

A few of you might have noticed that the EURUSD setup (T02) was the third one in this move down. There is also a support level slightly lower (dashed line). These aspects make the +2R target unlikely and I've modified the target to +1.5R (1.1540) and lowered the TS to +1R (1.1553).

T02: EURUSD short: Closed at +1R after failing to get to new target by 3p.
Now that I've grabbed this profit I can let the GBP trade go with the TS at BE.

 

[peter2]

T03: GBPUSD short: Closed at 1.2805, (+1.5R) 30min before news.

I know I should let these run, but I like grabbing quick profits when I get them.

 

[kid hustlr]

Enjoying this Pete,

Do you risk 1% as per your stock systems or does FX trade risk vary?

If it does vary, any reason why?

 

[aus_trader]

When we use intraday setups we're starting trades within the noise of the 4H chart. So the possibility of a quick loss is increased with intraday setups. We've got to be prepared to have a second go and this means we have to manage our money carefully in order to have these couple of chances.

This has been my experience as well with Forex. I think they are called complex pullbacks when there is a set of smaller counter-trends against the main trend and I've been caught up in these so many times. It does take courage to keep trading the pull backs on say the 1H time frame since you can get stopped out a number of times before the main trend continues based on my past experience.

 

[Lone Wolf]

WIth the EURUSD H4 chart, the last probe down prior to the trade created a large green bar with a long tail. Did this bother you at all? Do you look for signs that the trend may be coming to an end, or do you ignore any signals against the trend and say simply that if the trend is still down then you're looking for a reason to short?

 

[peter2]

@kid hustlr The value of R does vary across accounts and with trade setups. I'll use 1/2R amounts for intraday setups like those mentioned using 1H, 15min charts because I'm prepared to have two goes at getting into the 4H trend. The benefit of these intraday setups is that they can get to +2R (and better) much quicker because the initial stop size is smaller than the corresponding setup in the 4H chart.

@Lone Wolf At the time I took the trade and posted it, no it didn't. The low of the bar was my target and I knew it wasn't +2R. It was only once I realised that the setup was the third one in the move that I knew I'd have to keep a close eye on it. Grabbed the +1R quickly as it stalled near my +1.5R level.

Wow, I see there's been some huge moves (reversals) in the market. I'm not going to get them unless they go with the 4H trend. They do sometimes. The green bar with tail may have been an early indicator of this reversal.

 

[captain black]

Great thread @peter2 , following with interest.

 

[peter2]

We can't get them all. I was checking out the currency relative strength indicator to note the strong/weak currencies. It shows that JPY, CHF remain strong with AUD,NZD weak. This suggests that the trade possibilities are short AUDJPY, NZD JPY.

Checking the 4H charts I notice that the best entry was overnight. I've marked the 4H bar that we needed to be watching to get in on after the big red bar established the trend down. On both charts (AUDJPY top, NZDJPY bottom) there was a clear BO or break-down setup and trigger. Prices have drifted lower and reached their +1R levels already.



That's what I mean about not getting them all. I do sleep and I know many of you work. I hope that by now you're seeing the process, One bar can establish the trend and we can either enter on the open of the next bar or wait for an intra-4H-bar setup.

There's a structure and a process that can be adapted to suit your lifestyle. Don't worry about missing great trades. Trade the ones you can. It's better to trade less and do it well than over trade and make mistakes.

 

[peter2]

There's a structure and a process that can be adapted to suit your lifestyle.

ASF has seen many wannabe fx traders visit and IMO never do the work. They wish to be profitable traders but don't want it enough.

The next 4H bar ends at 7pm (AEST). Are you going to do the work to see if a new trend started?
Will do do the work again at 11pm?

Note: I don't hold these trades over a week-end, seeing it's Friday, if there's any entries I'll grab the profits to avoid holding over the week-end.

I've offered to assist and we've got this thread to discuss anything.

 

[aus_trader]

Note: I don't hold these trades over a week-end, seeing it's Friday, if there's any entries I'll grab the profits to avoid holding over the week-end.

Good point Peter, I also don't like holding over the weekend unless it's a really longer term trend trade that's allowed to move 100's of pips up and down. The reason is the usual gapping in price when trading re-commences the following week.

 

[peter2]

T04: EURUSD long: System 4T
Bought 1.1635, SL 1.1635, target 1.1675 (2R)

There's a bit of EUR news over the next few hours. May help or not. There's nothing too significant.

 

[Trading Athlete]

T04: EURUSD long: System 4T
Bought 1.1635, SL 1.1635, target 1.1675 (2R)

There's a bit of EUR news over the next few hours. May help or not. There's nothing too significant.
View attachment 89212

Hi peter2,

Do you have a rule about how long you need to wait before entering prior to news i.e. 1hour?, 4hours?

I never could get my head around this when it comes to Forex.

That's why I am only interest in Index daytrading.

Thanks

 

[peter2]

FX News: I won't start a trade about an hour before major news. These are shown in red on the forexfactory calendar. Reactions to major news can increase the significance of a bar that is produced when the news is released.

Major news tonight for the CAD and USD at 1030pm (AEST) may impact the significance of the 4H bar that started at 7pm.

 

[peter2]

T04: EURUSD long was closed for a small loss (-0.5R).
Price went to +0.5R and I raised the exit trigger to -0.5R.

 

[Trading Athlete]

FX News: I won't start a trade about an hour before major news. These are shown in red on the forexfactory calendar. Reactions to major news can increase the significance of a bar that is produced when the news is released.

Hi peter2,

I only focus on the news in red on Forexfactory as well. I totally understand what you mean about how the market reacts to major news. 1 hour does seem a bit short but whatever works for you of course.

Forex trading is so tough due to having to constantly worry about the next news announcement. I was thinking about looking at it on daily bars to avoid this problem but got to much on my plate.

Thanks,
Trading Athlete

 

[peter2]

Be patient and wait for your setups. Markets need time to settle after a sharp move. We know this and we're happy to wait. I'm posting this as I wait.

One of the markets I was stalking today was gold. The 4H trend is clearly down and the third 4H bar this week was a rally back to the MA's. This is where I stalk my setups. However much to my disappointment there was no clear reversal setup on the 1H chart. No trade. There was something better on the 15min chart but I wasn't watching it on that time frame.

What about silver? You can see that the third 4H bar was a huge up bar that changed the 4H trend to up. Even though there was a doji on the 1H chart I couldn't take this short because the 4H trend had changed to up.

We've got to wait for perfect setups. Near-enoughs aren't good enough for us. If we ignore our own setup guidelines then we'll ignore important rules that define our edge.

 

[peter2]

I'm also stalking reversals in a few indices (SP500, DAX). They're not system 4T compliant yet although the 4H trends have just changed. If there's further follow through in the US session and tomorrow, they could provide good opportunities. I'll try to remember to post the trades here if the setups are perfect.

 

[peter2]

11pm (AEST) update: as it's getting near...

AUD: 4T down buy rally is only small, not much happening on other crosses
EUR: 4T down, outside reversal bar qualifies as a System 4B setup as it's sitting on a clear level of support.
GBP: 4T just up and I prefer this outside reversal bar for a little trade.

10:55 Whoa, WTF just happened?
I had a trade on GBPUSD open with an exit stop as close to my entry as lycra is to the body (not mine). The take profit was miles away at 1.2998, just to have one in the market.

GBP just spiked straight through my target price. Some one must have said something as there was no news. I love fx when good things happen.


Ignore the update: Things have definitely just changed! I've got to find out what it was.

 

[peter2]

Thank you Mr Barnier, whoever you are.

 

[peter2]

T05: EURUSD long: System 4T trend is up, outside rev bar, buy next open.
Bought 1.1605, SL 1.1580, 25p risk, Target 1.1643 (+1.5R) recent highs.

Sorry I'm a bit late with this but I thought my comments on why I selected this one might be of interest.

1. The 1H chart shows that there was an earlier doji reversal setup with a smaller pip risk. However I don't take intraday setups during the Aussie session unless the AUD is involved.

2. Why not the AUD (outside rev bar also) or the GBPUSD strong trend.
The trend of the AU is down, so no setup using system 4T. The outside rev bar can be used by itself as a setup as described at the start of this thread, but I preferred the EU.

The trend of the GBPUSD is much stronger, so why not buy this one. For me it's too far from the MA's and is due for a pull-back which may provide a much better RR opportunity. Or price just bolts higher and I miss out. I'm happy with either outcome.

As I post this I hear a ka-ching sound in the background that tells me the EU trade has already hit it's +1.5R target. This target was selected because it's the level of the recent highs. I've replaced the chart with a more recent one that shows this target level. I should also point out that I specialise in these types of quick momentum trades that last an hour or two at the most. Most of these happen in the UK session.