Price Action Swing Trading - The PAST Strategy

[Nigel Price]

Out, minus 7 pips.

Might try once more if we see a long wick on a 15 minute chart

 

[Nigel Price]

Last try at 1.0004 - stop above the highs

 

[Nigel Price]

Current state of play - entry at purple, stop at red.

Total amount spent so far today, 7 pips. Another 8-10 pips potentially at risk.

Will watch to see if I can get the stop to b/e on this one too at some stage.

 

[Nigel Price]

It's always hard to short risk assets - (such as the Aussie dollar) during the US session because they just always seem to drift up. Today's been no different and my third position was taken out at the stop level for -9 pips, so the total cost of today's operations in the market has been 16 pips.

This is insanely good and I am very happy with today's trading. I still think that the AUD/CAD pair is ready to roll over, but it might take another day or two to pan out.

I'll still be keeping an eye out for some good short term trendlines tomorrow, and maybe into next week.

I hope this has been of some use to readers today. I know it clutters up the thread a bit, but I thought that some people might like to see I work in real time.

All the best for now

 

[Shiner452]

Nigel can you explain what you mean by 'risk assets'?

 

[Nigel Price]

Since starting the PAST strategy on 26 August 2013 I have closed my first position in profit on 11 October 2013. It was the Wall Street 30 futures contract for a net gain of 322 pips after all small losses was subtracted.

In terms of Forex I have 2 healthy open positions, the one is the NzdUsd long since 9 September @ 0.8020 and the other one is the AudChf long since 8 October @ 0.8532. Currently 329 pips in the green after subtracting all small losses.

The last week I did not open a single trade as none of the weekly anchor charts was very convincing to me, but the sitting on my hands resulted in account growth. This week may be more of the same. Will keep my eye open for anything that may look convincing on the daily time frame.

Thank you once again Nigel for this strategy.

Fantastic trading pa-pips - well done

Much more than the results, it's obvious that you are thinking in terms of risk/reward management. Once you get in that groove, the sky's the limit

 

[Nigel Price]

Nigel can you explain what you mean by 'risk assets'?

Hi Shiner452, welcome to the thread!

When investors are feeling optimistic they allocate money to "riskier" assets, which usually come with a higher yield.

So if you were feeling good about the economy, you might invest your savings in a business, the thinking being that as the economy improves, your investment will appreciate in value. Riskier assets usually come with higher yields, so greater reward for greater risk.

If you thought the economy was in for a rough ride, you would probably avoid investing in the business, because you would be thinking that it might struggle in a weak economy, and therefore there would be a greater possibility of you losing your money. So you would invest in safer, low yielding assets. You might just leave your money as cash in the bank, or in government bonds.

Generally risk assets are usually things like stocks, emerging markets, commodities, and the currencies of countries that are exposed to commodities, like the Aussie dollar.

The opposite, safe havens, would usually be stuff like the US dollar, US Treasuries, Japanese Government Bonds, the Yen, and to a lesser extent German Bunds and the Euro.

When you read financial news you often come across the the phrase "risk-on" or "risk-off". On a risk-on day , when everyone is feeling good about the economy, you'll see most of the risk assets rally. And on a risk-off day, when there is something happening that is worrying investors, the safe havens will rally.

In relation to my comment above, I just notice that very often after the London session finishes, risk assets have a habit of just slowly drifting to the upside during the US afternoon. Although of course that could come to sudden stop any day - it's impossible to tell

 

[Nigel Price]

I think so! I was lucky enough to get in on this mornings retest of the upward sloping trend line. I got stopped out twice, then it dropped! good luck all!

Welcome aboard russian30

 

[GRS]

Hi Nigel, just finished the ebook, nicely done. From your posts that trading is your 'day job'? Do you trade any other systems, or just PAST?

Also curious about your EA, does it use trend line breaks as well? EAs teams to struggle with logical trendlines, so maybe you use an alternative lower TF entry?

 

[Nigel Price]

Morning

Back to AUD/CAD -

The highs of the indecision candle hasn't been taken out yet so I am still hunting for shorts.

Keeping an eye on this trendline in the chart below...

 

[Nigel Price]

in short at 1.0009

10 pip stop for now

 

[Nigel Price]

Not getting any follow through here - price has just hovered pretty much at my trade open price. Need to be careful here - it does look like it is dying to roll over, but there's nothing to say it couldn't spike up before doing so.

At this stage of the process our minds needs to be laser focused exclusively on one thing - risk. Never spend a pip more than you have to - you don't throw a twenty in on top of your bill for for the weekly grocery shopping, just for the fun of it - why do so in trading?

 

[Nigel Price]

This baby doesn't want to roll over yet! Out minus 10 pips.

There is one more trendline coming in at around 1.0005 now, which if it broke this afternoon, I'd probably short it, but otherwise that's me for the weekend.

Just before I go - a quick look at the stats: Last 2 days I had 4 trades - a total loss of 26 pips, or an average loser of 6.5 pips.

The average daily range for AUDCAD now is about 68 pips.

So say I only target one average daily range for a winner. In truth, I will target much, much more than that but let's just say for example we just are looking for one decent average-size down candle.

What strike rate do I need to be profitable at these statistics? Less than 9%. I can get 91 out of 100 trades wrong, and still return a great profit.

Say we target one week's average range, which is currently about 190 pips? About a 3.5% success rate required.

Do you think that is possible? Of course it is

Have a good weekend!

 

[Nigel Price]

Unlikely that this is going to do much now this close to the weekend, but it might be worth keeping an eye on early next week - chart below

Just before I head off to the pub ( woohoo ) I wonder could I ask you esteemed gentlemen traders for some feedback.

What aspects of implementing the strategy do you find annoying, difficult, or could use some help with? The reason I ask is that I have been putting together some tools that are designed to assist my own trading - which is almost completely based on the ebook, but it then occurred to me that while I was solving my own problems, there might be others that haven't occurred to me which I could take a look at.

I'll get the ball rolling - for example, although it might not seem like it, I actually find it quite difficult sometimes to close out the losers, particularly when there are a few in a row. We are all human! There is always the little devil popping up on my shoulder telling me to loosen the stop out a few pips more in the hope that it might turn around. No I know that this is the road to nowhere, and almost every single time I have ever listened to that little devil I have regretted it, but nonetheless, he is there!

What aspects of PAST, or even just trading in general, do you find really difficult to overcome? Anything that would make your trading life that bit easier?

Thanks for any responses!

Have a good weekend

 

[Shiner452]

First, closing out losers is without a doubt the hardest part of trading. But like you said, if you get the math right its not that hard. The book 'Trading in the Zone' really made a huge difference on my trading success. I never sweat the losers anymore. I'm a business man and I just look at the losses as a direct cost on my income statement. I'm methodical about it. I set a stop loss at 10-15 pips off entry depending on the pair and then move it to break even after 10-15 pips and then i ride the profit. I keep moving my stop to the next S/R level to protect profits after that.

Second...a part I feel you may have missed out some. I find that there were plenty of opportunities to short AUD/CAD at the 1.0025-1.0030 range. I do this often and I find risk is minimal as S/R bounces occur more frequently than breakouts. This may not reflect your strategy but there were a few opportunities to make 20 pips off the bounces while waiting for the breakout. The breakout could still be traded for the larger gain.

 

[Pips Ahoy!]

has anyone applied supply and demand trading on the h1 with the past method?

here is the video i learned from. 3 to 5 pip stop (imagine the leverage!), set and forget

i'll call it the s.a.d.i.s.t. method. supply and demand incredible swing trading (we can workshop the name ;p)

 

[myknees]

GBPUSD, NZDUSD, AUDUSD on the short list

 

[Nigel Price]

GBPUSD, NZDUSD, AUDUSD on the short list

Hi myknees, I put GBPUSD in the weekly report this week, but I'm also with you on the other two, especially NZDUSD. The price action there last week was pretty violent, and I wouldn't be surprised to see it continue next week, perhaps after a brief retracement.

Good luck!

 

[VictorFX]

Happy Monday everyone

I'm going to do a bit of talking on here about this week about how we might think about taking profits once we get into a position that's growing.

But rather than me just whining on, does anyone what to take a stab here first at describing how when and where they decide to take profit?

1. What are your objectives and aims when your trade is open?
2. What steps do you take to implement those objectives?
3. What are the main challenges/obstacles to you achieving these goals?

I'll leave this up for a couple of days to wait for anyone to chip in who wants to and then I'll do a few posts describing how I like to tackle it.

All the best for the coming week

How and when I decide to take profits:

1. What are your objectives and aims when your trade is open?

Aim: To bank profits from my winning trades that are very high multiples of my risk.

Objective 1: Enable winning trades to easily cover my losses that were taken in order to estalish profitable positions
Objective 2: Maximise the unknown profit potential of a trade by letting the trade "breathe" after stop has been moved to breakeven
Objective 3: Only closing the trade after I see a reversal signal against my trade on the anchor timeframe.

2. What steps do you take to implement those objectives?

Step 1: Move my STOP to Break Even as soon as "logically" possible.
Why: This is the first step for me in controlling my emotional state so I know a trade that was winning doesn't turn into a loser. I feel that trades which were nicely in profit that then turn around and take out my stop for a loss emotionally affect me more than say a trade that goes straight to a loss after entry.

Step 2: Try to be patient enough to trust that if I am able to make a good entry at a turning point on say a weekly anchor chart, more often than not I should be able to gain a large profit by keeping my stop away from the inevitable market swings and waiting for a reversal signal on the weekly anchor chart.


3. What are the main challenges/obstacles to you achieving these goals?

Challenge/Obstacle 1: Although it hasn't happened to me yet, seeing a trade that was in profit say greater than 300 pips then turn around and get stopped at breakeven.

Challenge/Obstacle 2: Getting tricked by the market when a lower time frame (not anchor time frame) reversal bar prints and I close my trade early thinking the run is over. Then watching as the trade just keeps on going in my original direction without me.

Challenge/Obstacle 3: Self-Control to be able to take many small losses and break-even trades without it affecting me emotionally so that I can take the next entry signal.

Challenge/Obstacle 4: I need to be patient and let open profitable positions to keep running even if my monthly statistics are showing that I'm negative for that month.

Nigel, back on the 15th of October you made a post about profit taking and mentioned you'd leave it up for a few days and let anyone give their thoughts and then you'd share yours.

I seemed to have been the only one to take a swing at it and would appreciate your thoughts if you have time to share them.

Although, going by your most recent posts it seems you may have already moved on to your next topic.

 

[Olu]

Like the GbpUsd Too

I have been looking at the charts to see which pairs set up for the PAST strategy for this week. Saw the pound and thought to put up a chart on the forum. I see Nigel and MyKnees have already picked up on the Pound. I am happy we are thinking the same way and seeing the same opportinities. We are on the right track with Nigel's strategy. My chart is below.