Price Action Swing Trading - The PAST Strategy

[Nigel Price]

This is what i call bad luck, with euraud trade my SL was too tight, got stopped and then pair had a great move in the correct direction, now with audchf in order to avoid that put a SL far away to avoid being stopped (107 pips, next round number that wasn´t supposed to be touched), entered above round number as well and for my surprise got stopped anyway when i was sleeping, once again...

How would you protect from such a violent move against you when you`re not in front of the screen?

Greetings.

Hi Viper77, sorry to see you taking a hit like that.

I'd make the following suggestions:

Don't be too hard on yourself on the EUR/AUD trade. Never beat yourself up for having a tight stop. On this occasion you got stopped out, but there will be other times that you won't.

What is your perspective on your trading business? Are you looking at the next few weeks or the next few decades? There will be ample more opportunities, and if you are still about, some of them will work out for you. They have to, its a numbers game after all.

Missing out on the EUR/AUD has prompted you to drastically widen your stop on your next trade, which is the wrong response, in my view. A one hundred pip stop is huge, far too big.

Be prepared to lose often. Lose regularly. In August's trading, I lost almost 90% of my trades, but still returned a healthy profit. But the losers were all small, when you include breakevens, I think the average losing trade was something like 8 pips. You don't need many winners when your losers are very small.

Keep plugging away, keep your stops tight, leverage low, and have a good reason to enter every trade. If you hang around long enough for a big winner to come along, everything will click, trust me!

Any more questions don't be slow to ask

 

[Nigel Price]

Guys, be careful coming into the Fed meeting next week. It's going to be one of the biggest events of the year and the markets will be jumpy before it.

All of the amateurs will be busy over the next few days trying to force trades out of markets that might have no inclination to go anywhere. Don't be one of the muppets.

Think like a pro - if you had a few billion under management, would you take a punt on what way it is going to go next week? I wouldn't! Trade conservatively and sensibly and if the market isn't playing ball with you, leave the screen until it is.

There's a lot of news about at the minute - the taper, new Fed chairman, debt ceiling, Syria, German election, and more that I can't even think of now. September and October are traditionally pretty volatile months, so keep on your toes!

One thing we can be sure of, for the people who trade responsibly and with discipline and patience, there will be ample opportunity. The ones that don't will get wiped out. Such is the way of the world!

Have a good weekend.

 

[wqst]

hi,

On the monthly anchor chart of aud/usd, aud/cad, aud/chf and aud/jpy reversal happened after a downward preceding trend.

There is correlation on monthly, weekly and daily time frame etc. daily time frame pictures attached.

what should we do ?

 

[Olu]

hi,

On the monthly anchor chart of aud/usd, aud/cad, aud/chf and aud/jpy reversal happened after a downward preceding trend.

There is correlation on monthly, weekly and daily time frame etc. daily time frame pictures attached.

what should we do ?

Aud took a big hit because of the employment figures. In one fell swoop the interest rate outlook has turned negative while it is neutral to positive for other main countries eg Nzd. So shorting anything aud in the short term might be a good idea.

However next week will be more than aud. I am doing nothing till the information about tapering or no tapering is released. Absolutely nothing. Actually I am doing something - sitting on my hands.

olu

 

[viper77]

Thanks Nigel for your wise advice, obviously i try to stay in the FX business for the long haul, been in and out for a few years but it seems i still can´t "get it" to be consistently profitable, at least i don´t give up so easily...
Regarding SL, next time i´ll be putting something along the lines of 45 pips, not too close, not too far to be wiped if something unexpected happens as with the past AUD news.
BTW, how do you manage to close trades going against you for just a few pips as you said without being able to monitor trades all day long?
Also would like to know your criteria to decide if a trade is not worth it anymore, because closing it with just a few pips in the red also means that could be a small retrace and then price could go again in your direction.
Unfortunately, i can´t afford that luxury being stuck at a day job, also lately the worst moves against are occurring at sleep time, i´m currently at GMT+2...

Greetings!

Hi Viper77, sorry to see you taking a hit like that.

I'd make the following suggestions:

Don't be too hard on yourself on the EUR/AUD trade. Never beat yourself up for having a tight stop. On this occasion you got stopped out, but there will be other times that you won't.

What is your perspective on your trading business? Are you looking at the next few weeks or the next few decades? There will be ample more opportunities, and if you are still about, some of them will work out for you. They have to, its a numbers game after all.

Missing out on the EUR/AUD has prompted you to drastically widen your stop on your next trade, which is the wrong response, in my view. A one hundred pip stop is huge, far too big.

Be prepared to lose often. Lose regularly. In August's trading, I lost almost 90% of my trades, but still returned a healthy profit. But the losers were all small, when you include breakevens, I think the average losing trade was something like 8 pips. You don't need many winners when your losers are very small.

Keep plugging away, keep your stops tight, leverage low, and have a good reason to enter every trade. If you hang around long enough for a big winner to come along, everything will click, trust me!

Any more questions don't be slow to ask

 

[myknees]

Brent on the weekly anyone ?

 

[Olu]

Brent on the weekly anyone ?

Hi MK

I dont get data for brent but crude WTI definitely does it for me...

Olu

 

[Olu]

Crude oil Chart

A picture can say more than a thousand words.
Crude chart

Olu

 

[Olu]

Summers is out of the race

An example of how fundamentals affect what we do as trading

Dollar weakened considerably as it was announced that Larry Summers was out of the race for Bernanke's job. The market, including myself, see this as a possible delay in the tapering process hence the gap up in the value of the euro, gbp, aud and all the other main currencies. The stock markets gapped up as well.
By the way this should'nt have happened because he (larry) did not have full support of the powers that be only Obama's support. So it shouldnt have been a surprise he dropped out of the running

What happens now? Perhaps Bernanke will stay on some more. He cant start tapering and the pass the bag to the next person

Sorry it is not a technocal post but I do love this thinking sometimes

OLu

 

[Olu]

A picture can say more than a thousand words.
Crude chart

Olu

Price has broken down out of the triangle...

Olu

 

[Olu]

WTI Crude Oil

Updated chart

 

[myknees]

Nice PIPs !!!!! (I mean points - actually is Oil "points", I assume its not PIPs)

 

[Nigel Price]

Sorry it is not a technocal post but I do love this thinking sometimes

OLu

Not at all Olu, I like thinking through the fundamentals too, although the charts come first for me. It's nice when your perception of the fundamentals line up with your charts though, because it can give you confidence in a market move.

Have to say, I was very surprised to see the size of that gap and the dollar sell-off on that Summers news - I knew he was thought of as being a bit more hawkish than Yellen, but not that much!

What's annoying me about the fundamentals at the moment is the amount of time we all have to sit around waiting for these meetings! As the Fed now almost completely drives the market, you can nearly write off a couple of days either side of any of their meetings, because everything just stops! I think EUR/USD was in like a 9 pip range for most of the US session today! Then there will be some big untradable volatility (with massive spreads) around the announcement and the conference tomorrow, and then we will settle into a tight range until the weekend. Awful!

Need to stay patient!

 

[Nigel Price]

Thanks Nigel for your wise advice, obviously i try to stay in the FX business for the long haul, been in and out for a few years but it seems i still can´t "get it" to be consistently profitable, at least i don´t give up so easily...

It might not feel like it sometimes, but you make progress every time you open up a chart. Every time you watch price move, information is being stored in your sub-conscious brain. Practice makes perfect. You become more familiar with how price moves and you recognise the patterns. Once you see recognise the patterns, you will see how they repeat again and again, over and over and over. The trendline break and retest is one such pattern. I think I have seen so many of these now I have a good feeling as to when one is working out and when it isn't. After that it is just a case of making the most of the winners and cutting the losers.

I'd love to know if there is a short-cut instead of just putting in the chart-time, but I haven't come across one yet!

Regarding SL, next time i´ll be putting something along the lines of 45 pips, not too close, not too far to be wiped if something unexpected happens as with the past AUD news.
BTW, how do you manage to close trades going against you for just a few pips as you said without being able to monitor trades all day long?

If you can't monitor the price during the day, I would recommend you upping the timeframe. For me, because I can usually keep an eye on the charts, I can have smaller stops. So maybe I would have a 20 pip stop and target a few hundred pips reward. So maybe I could do analysis on the daily chart and then trendline on hourly. But if you are only checking the charts after work for example, maybe look at reversals on monthly chart and then trendlines on daily or 8 hourly chart. Target the really big trends!

It will require patience, but day-trading is difficult enough - day-trading while holding down a full-time job at the same time would be incredibly difficult, in my view. I certainly couldn't do it!

Also would like to know your criteria to decide if a trade is not worth it anymore, because closing it with just a few pips in the red also means that could be a small retrace and then price could go again in your direction.

As I say in the ebook, the best place for a stop is somewhere that is as close as possible to the entry price, but also somewhere where the market is telling you something if it moves past it - so if we are bullish, there will be levels pretty close by by that the market shouldn't be moving through if it is minded to go higher. Usually a previous low or maybe even the trendline itself. I deal with this in the ebook.

Unfortunately, i can´t afford that luxury being stuck at a day job, also lately the worst moves against are occurring at sleep time, i´m currently at GMT+2...

What I said above also applies here - it's worth noting that we are working on something that should help us manage these trades. I just need to get the time to work on it!

Greetings!

Same to you!

 

[Nigel Price]

Trading during Fed week - zzzzzzz

 

[Beijin]

Hi Nigel:

Thank you for your detailed explanation!

You did understand and answer well my question.

Concerning you e-book, I love it, and truly enjoyed reading it.

Also thanks Olu for responding at weekend!

I apologize for not replying earlier: was on the road and had no Internet access.

 

[Pips Ahoy!]

i learned a lesson in spreads today at news time : / otherwise i should still be in eurnzd...

are there any brokers that offer fixed spreads or does that not exist? does it matter?

 

[Olu]

Profit Stop Saved My Bacon Today

I tightened my stop in crude before the Crude inventories data so I was out before the 'Bernanke' move

In the bigger picture there is not going to be any tapering soon so dollar weakness is in play again and then strength of relative economies will prevail.

 

[Nigel Price]

Operation Trash the Dollar all going according to plan! Good luck to whoever comes after Bernanke, I can't help thinking there is going to be an almighty mess somewhere down the line!

And Yellen is even more dovish than Bernanke!

 

[Nigel Price]

Concerning you e-book, I love it, and truly enjoyed reading it.

Thank you very much for the kind comments Beijin, very humbling.

Anytime you have any questions, don't be afraid to ask.