Price Action Swing Trading - The PAST Strategy

[Nigel Price]

Can't get much more emphatic than that - price has definitely told me the answer to the question I was asking - the bulls aren't in the mood for rolling over today it seems.

That trendline is too messy now anyway - I prefer my breaks to be clean, and we certainly aren'y getting clean price action today. Its jumpy and choppy - not my kind of market.

I'm not going to spend anymore money fighting them - let them have this battle and then I will come back when the odds are in my favour again.

So for this week so far - 4 trades,

1 breakeven -
-50 pips
-64 pips
-45 pips

EUR/NOK moves very quickly so those figures look worse than they actually are. The weekly average movement is around 1,000 pips, so 160 pips for one day isn't great, but in the grand scheme of things it is very little.

I kept my losses under control, kept an eye on the bigger picture, and stopped when it was clear that the market wasn't going my way. All in all, a decent day's work.

It'll probably need price to be at this trendline below before I get interested in again:

Click for large view - Uploaded with Skitch

Have a nice afternoon guys!

 

[stuart1984]

Can't get much more emphatic than that - price has definitely told me the answer to the question I was asking - the bulls aren't in the mood for rolling over today it seems.

That trendline is too messy now anyway - I prefer my breaks to be clean, and we certainly aren'y getting clean price action today. Its jumpy and choppy - not my kind of market.

I'm not going to spend anymore money fighting them - let them have this battle and then I will come back when the odds are in my favour again.

So for this week so far - 4 trades,

1 breakeven -
-50 pips
-64 pips
-45 pips

EUR/NOK moves very quickly so those figures look worse than they actually are. The weekly average movement is around 1,000 pips, so 160 pips for one day isn't great, but in the grand scheme of things it is very little.

I kept my losses under control, kept an eye on the bigger picture, and stopped when it was clear that the market wasn't going my way. All in all, a decent day's work.

It'll probably need price to be at this trendline below before I get interested in again:

Click for large view - Uploaded with Skitch

Have a nice afternoon guys!

Hi Nigel

Unlucky today but at least you can finish the day knowing that you made an attempt to test to see if the market was going to play out the way you wanted it. In the grand scheme of things, you have not lost much and you have probably learned a little.

I have had plenty of days like this recently!!!!!

My GBPUSD has progressed nicely although slowly and I am now at BE, for me, this is a nice way to begin the week, an open trade with nothing but potential ahead.

Happy trading everyone.

Stuart

 

[Nigel Price]

On the note of work and commitments, I am finding it increasingly difficult to watch the charts regularly throughout the day due to work and so I am going to have to change to trading the breaks of the H4 chart. This is not ideal but the way I see it, the big wins will still completely outweigh the larger stop loss I am going to need to use by trading off H4.

Hi Stuart,

Trading on the shorter timeframes is incredibly difficult if you have your attention elsewhere, like in a day job.

Not only do you run the risk of taking your attention off your actual job - which will affect your performance at work, but you also risk getting frustrated and angry with your trading too. This is not a good situation to be in, and I've seen instances of people ending up resenting both their job and their trading. Not good.

The good news however is that trading is completely malleable and can easily be structured to fit around your day. All it requires is (again, as I am always beating my drum here) patience.

Trust me, try trading on the longer timeframes if you are busy during the day. Challenge yourself to amend and adapt your trading to complement your life, not compete with it.

What changes would you have to make so that you wouldn't have to look at the charts at all during the day? I bet it's not that much.

If your trading is competing with the other aspects of your life, both your trading and your life will be adversely affected.

If your trading is complementing the other aspects of your life, both your trading and your life will improve.

Think your trading returns would be worse over the course of a year if you only checked your charts once a day? I'd suggest the opposite could be true - they may well improve.

Consider it

 

[Nigel Price]

Just on that post above guys - honestly, if you are working during the day, think like an investor or a long term swing trader. Be prepared and content to hold positions for weeks or months if necessary, and enjoy doing so.

Your returns will not suffer - like I said, they may well improve.

Attempting to jump in and out of the market on a short-term basis while doing a full time job at the same time just sounds like torture - it's going to be unbelievably difficult to do successfully, and it's not necessary.

 

[Nigel Price]

Alarms help a bit if you work at a computer, but if I was running an office and one of my employees was using his work computer like a bloomberg terminal I'd definitely raise an eyebrow!

 

[stuart1984]

Hi Stuart,

Trading on the shorter timeframes is incredibly difficult if you have your attention elsewhere, like in a day job.

Not only do you run the risk of taking your attention off your actual job - which will affect your performance at work, but you also risk getting frustrated and angry with your trading too. This is not a good situation to be in, and I've seen instances of people ending up resenting both their job and their trading. Not good.

The good news however is that trading is completely malleable and can easily be structured to fit around your day. All it requires is (again, as I am always beating my drum here) patience.

Trust me, try trading on the longer timeframes if you are busy during the day. Challenge yourself to amend and adapt your trading to complement your life, not compete with it.

What changes would you have to make so that you wouldn't have to look at the charts at all during the day? I bet it's not that much.

If your trading is competing with the other aspects of your life, both your trading and your life will be adversely affected.

If your trading is complementing the other aspects of your life, both your trading and your life will improve.

Think your trading returns would be worse over the course of a year if you only checked your charts once a day? I'd suggest the opposite could be true - they may well improve.

Consider it

Hi Nigel

Many thanks for your comments. I am beginning to see that this is the case.

I will keep you all up to speed on how I progress with this.

regards

Stuart

 

[anukrh]

Hello Nigel sir!


one question :

I taken one BUY trade after saw a signal in weekly/monthly chart (strong bearish preceding trend and then bullish engulfing bar/ Indecision pin bar candle ) Now after +50 pips profit I saw a signal in 4-hour chart ( strong bullish preceding trend and then bearish engulfing bar/indecision pin bar candle) --- in this case what I should do ? whether I close trade with +50 pips and wait and watch to enter again or keep it open and neglect 4-hour signal ?


Anu

 

[stuart1984]

Hello Nigel sir!


one question :

I taken one BUY trade after saw a signal in weekly/monthly chart (strong bearish preceding trend and then bullish engulfing bar/ Indecision pin bar candle ) Now after +50 pips profit I saw a signal in 4-hour chart ( strong bullish preceding trend and then bearish engulfing bar/indecision pin bar candle) --- in this case what I should do ? whether I close trade with +50 pips and wait and watch to enter again or keep it open and neglect 4-hour signal ?


Anu

Hi Anu

Just thought I would give you my 2 cents for what it is worth. If we were to exit a trade based on every opposing signal generated from a lower time frame than what our anchor chart is then we would never stay in a trade long enough to make this strategy work.

The e-book gives the general guideline that you should consider exiting on an opposing signal on the same or higher time frame than your anchor time frame (in your case the weekly). The alternative option outlined in the guide is that you close your trade on a break of the trend line that is created in line with your trade direction.

I saw your post a couple of pages back regarding taking profits around 40 pips. This is something I think we have all considered doing but as NIgel replied, if you close your trades with gains of about 1:1 RR then you need a very high win rate to be profitable in the long run. I get the feeling you are uncomfortable letting a trade run, in which case it might be worthwhile considering exiting a quarter or half your position at something like 2:1 RR. This should give you peace of mind that whatever happens, you have taken something out of the market but you have left yourself open to further gains on your remaining position. The downside to this is obviously any further gains will only be half of what they would have been had you kept the full position open.

No one can make these decisions for you, it is up to you to decide how comfortable you are with any given scenario.

I would strongly recommend purchasing some backtesting software like Forextester 2. you can learn to trade at the far right of the screen and over time you will develop trust in your strategy but more importantly in yourself.

Just scrolling through old charts on MT4 will never give you a real perspective of your trading, you will naturally see all the best set ups that worked and completely ignore the ones that didn't.

I hope this helps a little.

Stuart

 

[anukrh]

Thanks Stuart!

Hello Nigel Sir!

Can you also pls. give your guidance on this ;

Hello Nigel sir!


one question :

I taken one BUY trade after saw a signal in weekly/monthly chart (strong bearish preceding trend and then bullish engulfing bar/ Indecision pin bar candle ) Now after +50 pips profit I saw a signal in 4-hour chart ( strong bullish preceding trend and then bearish engulfing bar/indecision pin bar candle) --- in this case what I should do ? whether I close trade with +50 pips and wait and watch to enter again or keep it open and neglect 4-hour signal ?


Anu

 

[Nigel Price]

Thanks Stuart!

Hello Nigel Sir!

Can you also pls. give your guidance on this ;

Hello Nigel sir!


one question :

I taken one BUY trade after saw a signal in weekly/monthly chart (strong bearish preceding trend and then bullish engulfing bar/ Indecision pin bar candle ) Now after +50 pips profit I saw a signal in 4-hour chart ( strong bullish preceding trend and then bearish engulfing bar/indecision pin bar candle) --- in this case what I should do ? whether I close trade with +50 pips and wait and watch to enter again or keep it open and neglect 4-hour signal ?


Anu

Hey Anu, I couldn't put it any better than how Stuart said it above. He's hit the nail on the head there

The whole idea is to make sure that your winners are as big as possible and your losers are as small as possible.

I'm sure all of us, when reading around the topic of successful trading, have come across the quote - "keep your losers small and let your winners run". It comes up again and again, and has been referenced in one way or another by almost every legendary trader you can think of. The true titans of this game.

We should try to replicate the behaviour of the people we want to emulate. I want to see the returns similar to some of these legends in my own trading career. So I study them, I try to drink in everything they say and meditate upon what they write. I try to copy their behaviour, their approaches, their philosophies, their mindsets.

I'm sure there are exceptions to this rule, but I have seen that the overwhelming tendency amongst these titans, the guys that I have quoted extensively in my ebook, is to structure their trading in such a way that it gets aggressive with the winners and gets conservative, disciplined and dispassionate when it comes to losers.

That is what the PAST Strategy tries to do.

Aligning myself and my trading with the teaching of these titans has transformed my activities in the markets. And that is where the PAST Strategy came from. It is expressly designed to emulate the best bits of what those guys taught.

Read again each quote at the start of the chapters in the ebook. They all say similar things.

Trust me, it's not easy - no-one likes taking loss after loss after breakeven after loss, floating profit declining to nothing. But with patience, discipline and persistence, it does work.

Good luck

 

[Nigel Price]

Stuart, are you still in GBPUSD?

If so I am very jealous!

Very nice sell-off - the market is paying out handsomely there...

 

[Nigel Price]

My EUR/NOK has gone nowhere. But as long as losses were kept under control relative to potential profits, and I still have a seat at the table and some money in my account, I count the week as a success

 

[stuart1984]

Stuart, are you still in GBPUSD?

If so I am very jealous!

Very nice sell-off - the market is paying out handsomely there...

Hi Nigel

Yes still in GBPUSD and it is working out nicely so far. NFP up tomorrow so we will see what happens, currently have about a 90 pip cushion so I hope i survive any volatility that it brings.

Longer term I see potential for this pair to fall much further and therefore I will be looking to add on any meaningful retracements if they happen.

I have also been watching EURNOK, it has been dissapointing but there is nothing on the longer term charts that really shows me the bulls are back in control. I will continue to watch with interest.

End of the month today so I will be checking the monthly charts in the morning.

Happy trading everyone

Stuart

 

[stuart1984]

Thankfully survived NFP today and now at about 5 times initial risk on GBPUSD.

Have a great weekend everyone, ill check charts on Sunday and post any opportunities i see.

Stuart

 

[stuart1984]

Hi everyone
I have just been through my monthly and weekly charts and there are a number of potential set-ups that I can see on these higher time frame anchor charts. There are too many to realistically keep an eye on and so tomorrow I am going to look into these in more detail to see which ones I like the best. I have not yet looked at the lower timeframe entry charts and this may indeed help me to determine which pairs I will looking to trade over the coming weeks.

I will continue to watch my GBPUSD short trade and intend to add to this on any meaningful retracements as long as the longer timeframe charts still look like they are allowing the bears to stay in control. I will also continue to watch NZDUSD for any opportunities to get in short and will be keeping an eye on EURNOK as I think it is bound to make a decisive move at some point.

As for new potential anchor timeframe setups, here we go:

Monthly:

EURAUD - Long
GBPUSD - Short
AUDUSD - Short
EURCAD - Long
NZDUSD - Short

Weekly:
EURAUD - Long
USDCHF - Short
EURJPY - Long
EURCAD - Long
AUDCHF - Short
GBPCHF - Short (this is my favorite at first glance)
CHFJPY - Long

I hope this helps guys and I will post some charts tomorrow once I have decided on the pairs I will be looking at more closely.

Hope everyone is having a good weekend.

Stuart

 

[Nigel Price]

Thankfully survived NFP today and now at about 5 times initial risk on GBPUSD.

Have a great weekend everyone, ill check charts on Sunday and post any opportunities i see.

Stuart

Awesome Stuart - fair play. Ballsy move riding out the big news announcement. But the correct decision, if you ask me. And I don't just say that in easy hindsight, because it seems to be working well.

News announcements will cause you to get stopped out over and over - and it becomes frustrating and demoralising. The temptation is just to get your account square before news announcements and avoid the sting of seeing a floating profit disappear.

But eventually when a news announcement does move in your favour, the rewards on offer can often be multiples of your combined, frustrating, losses.

The other thing as well is that you can often trace the beginnings of huge, multi-year trends back to news announcements. We can never tell in advance which ones will develop, but sometimes the market just focuses in on something and that then can become the narrative, the default position, for the coming months or years.

The Draghi " Whatever it Takes" speech was a recent one that comes to mind, and it seems that that narrative is only really now beginning to become unwound, some two years later. You can draw a trendline from July 2012, when that speech was made, right through to the present, and you will see that is has just been broken last month, July 2014.

Are we beginning to see the balance beginning to swing back in favour of the US dollar now with these broken trendlines? Could this be the start of another multi-year trend, in the opposite direction? We can only tell in hindsight - in the present day, when we have the charts in front of us, all we can do is participate, keep an eye on what may be coming down the line, take advantage if the future is kind to us, and defend our account valiantly if future market direction goes against us.

Current view of GBPUSD:

Click for large view - Uploaded with Skitch

There is no weekly report this week guys, but I will be back in here on tomorrow. I see Stuart has basically done a report for me in his post above - thanks!

There is plenty to chew on there, and I will be in here tomorrow, and will take a look through some of them. As he has done, this weekend is a good one to take a flick through the monthly charts - just to keep an eye on the big picture.

One of the reasons why there is no report is that Jon from ForexUseful has released a Kindle book on binary options this weekend, and so he has been concentrating on that. If you are considering trading binary options or have dabbled in them in the past, it is well worth a read. It will give you a good idea of what you are up against.

Right guys, going to relax for the rest of my Sunday and I will see you in here tomorrow. Enjoy the balance of your weekend!

 

[Nigel Price]

Click for large view - Uploaded with Skitch​

 

[myknees]

Awesome Stuart - fair play. Ballsy move riding out the big news announcement. But the correct decision, if you ask me. And I don't just say that in easy hindsight, because it seems to be working well.

News announcements will cause you to get stopped out over and over - and it becomes frustrating and demoralising. The temptation is just to get your account square before news announcements and avoid the sting of seeing a floating profit disappear.

But eventually when a news announcement does move in your favour, the rewards on offer can often be multiples of your combined, frustrating, losses.

The other thing as well is that you can often trace the beginnings of huge, multi-year trends back to news announcements. We can never tell in advance which ones will develop, but sometimes the market just focuses in on something and that then can become the narrative, the default position, for the coming months or years.

The Draghi " Whatever it Takes" speech was a recent one that comes to mind, and it seems that that narrative is only really now beginning to become unwound, some two years later. You can draw a trendline from July 2012, when that speech was made, right through to the present, and you will see that is has just been broken last month, July 2014.

Are we beginning to see the balance beginning to swing back in favour of the US dollar now with these broken trendlines? Could this be the start of another multi-year trend, in the opposite direction? We can only tell in hindsight - in the present day, when we have the charts in front of us, all we can do is participate, keep an eye on what may be coming down the line, take advantage if the future is kind to us, and defend our account valiantly if future market direction goes against us.

Current view of GBPUSD:

Click for large view - Uploaded with Skitch

There is no weekly report this week guys, but I will be back in here on tomorrow. I see Stuart has basically done a report for me in his post above - thanks!

There is plenty to chew on there, and I will be in here tomorrow, and will take a look through some of them. As he has done, this weekend is a good one to take a flick through the monthly charts - just to keep an eye on the big picture.

One of the reasons why there is no report is that Jon from ForexUseful has released a Kindle book on binary options this weekend, and so he has been concentrating on that. If you are considering trading binary options or have dabbled in them in the past, it is well worth a read. It will give you a good idea of what you are up against.

Right guys, going to relax for the rest of my Sunday and I will see you in here tomorrow. Enjoy the balance of your weekend!

Thanks for the update Nigel, I bought that eBook yesterday, it's actually quite an eye opener and for sure saved me some cash, time and effort - The bit about the deposit bonus and the identity theft is truly scary.

 

[stuart1984]

HI folks

as per my previous post, I have managed to go through the list of possibilities and narrow it down to just a few pairs. This is over and above the GBPUSD, NZDUSD and EURNOK setups that we have alrady discussed in the forum. MY favorite set up is the GBPCHF, here are the charts:

Weeklly:


H4:



Stuart

 

[stuart1984]

My next favorite is the EURAUD

Monthly:


Weekly:


H4:



I also lke AUDCHF and EURCAD and EURJPY but don't have the time to post charts at the moment.

Hopefully some of you find this useful.

Stuart