Price Action Swing Trading - The PAST Strategy
- Thread starter Nigel Price
- Start date
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Good evening Nigel,Hi Basil
Yes absolutely, breakevens are very frustrating. When price action is choppy and lacking direction unfortunately there is nothing we can do about it. I like to think about it like the market making you put in a few hard shifts before giving you your payday. The market can often be quite directionless, especially during the summer. That's why all the big boys leave for July and August!
But I would encourage you to look at it this way - say for instance you traded for two weeks and neither of the weekly signals you traded worked out. You have had a run of breakevens and a few losses and you have lost, say for argument's sake, 200 pips. Hopefully it would not be as bad as that - you might have done better or you may have done worse, I don't know. But say you had a bad couple of weeks and are 200 pips down.
However, when you look at that 200 pips in the context of what is achievable when a weekly signal is successful, you will see that 200 pips is nothing.
The other week I had two shorts on EUR/AUD and from memory I had a floating profit of something like 300 pips, maybe a few more. Both positions ended up getting stopped out at break-even. Frustrating, yes, but it doesn't make me want to give up. Why? Because looking at the weekly chart of EUR/AUD, had it broken down in my direction, that pip tally would have tripled or quadrupled very, very quickly. The average weekly range of the EUR/AUD at the moment is 370 pips!
As long as you continue to control your risk and keep an eye on the bigger picture, the successful trades come along in time.
I might add too, there is nothing wrong with using a daily chart as an anchor and making your entries on intraday timeframes if that is what suits you better. A successful trading strategy will always be the one that is tailored to suit you. It's just that I prefer the weekly/monthly charts, so that is what I concentrate on.
All the best with your trading - any questions feel free to ask
The quality of feedback I received after dropping my small pebble into the Forum pool last Friday, speaks volumes about the remarkable thread you created when introducing the PAST Strategy on 1st July 2013! Thanks to one and all - it is much appreciated.
From now on I shall resist the temptation to dive in until after the CLOSE of the first Weekly candle depicting a new trend. Had I been more patient, as frequently suggested in PAST strategy, I'd not have been stopped out 8 times in succession. And being stopped out twice at breakeven after showing nice potential profits merely added salt to the wounds. OUCH!
I might not be gaining pips yet but I'm certainly gaining experience.
Sláinte.
Classic case of buy the rumour, sell the fact Olu!
Have to admit, reading the coverage over the weekend I was thinking the elections could send USD/JPY on its way again to the upside. Just goes to show, you can never know for sure what way a market is going to react! Pointless trying to predict it.
I was looking at long gold last week and l spent the whole week reading about how catastrophically bearish the gold chart is, 900 and below, etc. Now that it's popped above 1300 everyone is saying massive short squeeze, record shorts, etc.
The news really does just follow the price.
Good luck for the coming week!
Hi Jasper, thanks for the question.
I didn't manage to get in here to post about the gold trade last week unfortunately, I had a few more pressing things going on here that needed my attention.
However I'm more than happy to go through it now for you.
For me, it wasn't a clean trade at all, and I currently don't have a position. Which is unfortunate for me, because price has moved to the upside quite nicely. But first and foremost I always concentrate on keeping my losses to a minimum and I'm happy I did that.
Here is the weekly reversal signal in gold that I was watching:
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And here is the updated chart. As we can see, price did largely follow the path that we thought it would, just not in a very tidy fashion.
As traders, we have to be able to cope with this - price will rarely behave exactly as you expect, in fact most often it will do the exact opposite.
It's not the ability to predict the direction of price that separates the profitable traders from the unprofitable, it is the ability to control losses and exploit opportunities when they arrive.
Hope this helps Jasper. Good luck
As traders, we have to be able to cope with this - price will rarely behave exactly as you expect, in fact most often it will do the exact opposite.
It's not the ability to predict the direction of price that separates the profitable traders from the unprofitable, it is the ability to control losses and exploit opportunities when they arrive.
Hope this helps Jasper. Good luck
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A very good infographic on realistic expectations in trading:
http://forexuseful.com/authors/forex-useful/forex-realistic-monthly-returns-infographic
The combination of wild expectations and the use of large amounts of leverage to attempt to achieve them is what takes many traders out of the game prematurely.
In the case of the PAST Strategy, where it is possible to endure a long period of small losers before seeing a large winner, a lot of traders will trade too large during the losing period and then will not be around for the big winner when it comes.
Something to bear in mind...
http://forexuseful.com/authors/forex-useful/forex-realistic-monthly-returns-infographic
The combination of wild expectations and the use of large amounts of leverage to attempt to achieve them is what takes many traders out of the game prematurely.
In the case of the PAST Strategy, where it is possible to endure a long period of small losers before seeing a large winner, a lot of traders will trade too large during the losing period and then will not be around for the big winner when it comes.
Something to bear in mind...
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