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Price Action Swing Trading - The PAST Strategy
- Thread starter Nigel Price
- Start date
- Watchers 91
Ok so this ended up being another great week for me. I am still in my 3 trades: GBPCHF, GBPUSD and EURNOK.
I think this a good time to reflect on the power of risk and reward. Following 2 months, June and July of frustrating trading I reduced my risk per entry to 0.5% (normally it is 1%) but I felt that I was not in flow with the market and everything I have read states that you should cut your position size while you get back in tune with the market.
The trades that I have taken to establish the positions I am in at the moment were all taken with 0.5% risk and my account is currently floating at a 15% profit for August, not bad for an initial risk of 0.5% per trade. I have taken a couple of small losses and BE trades to get here but that just reinforces the power of this strategy.
Now that I feel as if I am back in tune with the market, any fesh opportunites on new pairs will be taken with m standard 1% risk. I have a bit of cushioning again now to absorb any losses establishing new positions.
Anyway, just thought I would share with the forum how things are going.
Stuart
I think this a good time to reflect on the power of risk and reward. Following 2 months, June and July of frustrating trading I reduced my risk per entry to 0.5% (normally it is 1%) but I felt that I was not in flow with the market and everything I have read states that you should cut your position size while you get back in tune with the market.
The trades that I have taken to establish the positions I am in at the moment were all taken with 0.5% risk and my account is currently floating at a 15% profit for August, not bad for an initial risk of 0.5% per trade. I have taken a couple of small losses and BE trades to get here but that just reinforces the power of this strategy.
Now that I feel as if I am back in tune with the market, any fesh opportunites on new pairs will be taken with m standard 1% risk. I have a bit of cushioning again now to absorb any losses establishing new positions.
Anyway, just thought I would share with the forum how things are going.
Stuart
Good insight Stuart. Since you are a disciplined trader, I imagine the floating profit is several multiples of any drawdown in June and July.
I read some of your prior posts discussing different ideas on taking profit. Any profit taking plans on your current positions? Thanks.
- A
I read some of your prior posts discussing different ideas on taking profit. Any profit taking plans on your current positions? Thanks.
- A
Hi Abercrombie, thanks, I wouldn't quite say I was a totally disciplined trader yet, I am getting there but it takes a long time to really trust yourself and your method.
I have been doing a lot of testing recently and the outcome of this is that the most profitable way to trade this strategy is to really go for the big moves, circa 1000 pips and more. The problem is, it doesn't happen very often, you might get a few opportunities in a year and it is still very difficult to know when to exit.
The psychological strain of seeing a huge pip profit evaporate in front of your eyes is also a very real problem that you will face employing this method.
And so I have come to the conclusion that we cannot set a rule for this type of trading, each trade will need to be viewed on its own merits. Look at the longer term charts, are there areas that we can see that might logically attract price? if so, I will aim for these areas but I will still exit on an opposing anchor chart signal IF my trade is at least 5 x my initial risk. If it is not, I will leave it open and hope for the best. I am really looking for a minimum 10 x initial risk before I start thinking about exiting but it will depend on what the charts are saying.
I am currently at about 10 x initial risk on each of the trades but I do think there is a chance these trades could go a long way further down yet. I will not be looking at the charts of these very regularly, I don't want to scare myself out of a winning trade. If I see an opposing Weekly signal and I am above my 5 x risk I will probably exit.
I don't know if this helps or not but I think this is probably the most difficult part of this strategy.
Nigel - I know you have covered this before but if you have any fresh perspective on exits it would be great to hear?
Thanks
Stuart
Hi everyone, hope you all had a good weekend, couple of charts that interest me this weekend.
EURUSD and USDCHF - A quick glance at the EURCHF says that the USDCHF may have more likelihood of succeeding. here is the weekly:
And the H4:
See next post for USDCAD.
Stuart
EURUSD and USDCHF - A quick glance at the EURCHF says that the USDCHF may have more likelihood of succeeding. here is the weekly:
And the H4:
See next post for USDCAD.
Stuart
Morning Guys, hope you all had a good weekend!
Spot on with the above point there Stuart. When you start out, this is an absolute killer, no doubt about it. It is a big hurdle to overcome, I'm not going to pretend otherwise.
But the point remains that there will be big hurdles to overcome to master any trading strategy. I think I said this last week - you have to pick your poison when it comes to losses.
Which would you rather see evaporating away, floating profit (i.e. the market's money) or hard account equity (your own money)?
I know which one I want to be playing with - I'll be playing with the market's money every time.
Another thing too - the way the forex industry is set up is to encourage traders to actively trade, with high leverage, because that is what increases the broker's turnover. Most material you read that is generated by brokers is always about getting in and out of the market regularly, opening new trades. Insanely high leverage has become the norm now in the retail forex industry - because it increases the spread value for brokers.
I'm afraid I don't have any magical formula to ease that pain we get when retraces are occurring - I feel it too, trust me! If you didn't wince during a retrace there would be something wrong with you. All I can do is encourage you to keep the eye on the bigger picture, and with practice, it does get easier.
Jon is doing a google hangout on his trading strategy in a few minutes, if any of you would like to pop in and say hello
Morning Anu! How are you keeping?
Thanks for the question - I am sure it is something other people have wondered about too.
My favourite way to look at and interpret price charts is by using trendlines and candlesticks.
So while I wouldn't necessarily ignore a big psychological level or a fibonacci level or a S/R line on my chart, I don't really make a habit of marking them.
The reason why I do this is because, for me, the most important thing is not what I think price might do, but more what it is actually doing.
I went through a phase of marking all of these things on my chart - lines every hundred pips or so. And I found what happened was that I started to pre-empt what price was going to do, rather than concentrate on what it was actually doing. There is no brick wall at any of these levels - you can't automatically assume just because price is approaching a big level that is definitely going to reverse.
The other thing too is the potential for paralysis by analysis, or more simply, where do you stop? If you marked every S/R level, Fib, Trendline, psychological level, you would pretty much have enough stuff on your chart to justify price doing anything. Plus, all the lines can distract your attention away from the most important thing, the price.
So, for, me, its definitely a case of less is more, and I try to keep away from over analysing things. If price is going to reverse, I will see a long wick or a strong reversal candle regardless of whether it is at a particular level I had marked on my chart or not. The candles will tell me what is actually happening, and I prefer to concentrate on that.
But each to their own - if you like doing analysis with fibs or whatever and you find they help you, go for it and use them. But just make sure they don't distract you from the bigger picture.
Hope that helps Anu - thanks for your question!
Morning Guys, hope you all had a good weekend!
Spot on with the above point there Stuart. When you start out, this is an absolute killer, no doubt about it. It is a big hurdle to overcome, I'm not going to pretend otherwise.
But the point remains that there will be big hurdles to overcome to master any trading strategy. I think I said this last week - you have to pick your poison when it comes to losses.
Which would you rather see evaporating away, floating profit (i.e. the market's money) or hard account equity (your own money)?
I know which one I want to be playing with - I'll be playing with the market's money every time.
Another thing too - the way the forex industry is set up is to encourage traders to actively trade, with high leverage, because that is what increases the broker's turnover. Most material you read that is generated by brokers is always about getting in and out of the market regularly, opening new trades. Insanely high leverage has become the norm now in the retail forex industry - because it increases the spread value for brokers.
I'm afraid I don't have any magical formula to ease that pain we get when retraces are occurring - I feel it too, trust me! If you didn't wince during a retrace there would be something wrong with you. All I can do is encourage you to keep the eye on the bigger picture, and with practice, it does get easier.
Nicely put Nigel. Hope you had a good weekend.
Stuart
Not too bad thanks Stuart. Did a 10 mile road race yesterday afternoon, so slightly stiff today, but overall I'm happy with how it went. I'm threatening to do the Dublin marathon in October if my knees hold out!
There's a half marathon in Belfast in September, so that's gonna be the next target - if that goes according to plan I'll take a rattle at the big daddy in Dublin at the end of October!
Great way to de-stress and get away from all the screens we have stuck in our faces all the time nowadays
There's a half marathon in Belfast in September, so that's gonna be the next target - if that goes according to plan I'll take a rattle at the big daddy in Dublin at the end of October!
Great way to de-stress and get away from all the screens we have stuck in our faces all the time nowadays
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Not too bad thanks Stuart. Did a 10 mile road race yesterday afternoon, so slightly stiff today, but overall I'm happy with how it went. I'm threatening to do the Dublin marathon in October if my knees hold out!
There's a half marathon in Belfast in September, so that's gonna be the next target - if that goes according to plan I'll take a rattle at the big daddy in Dublin at the end of October!
Great way to de-stress and get away from all the screens we have stuck in our faces all the time nowadays
Good for you, I couldn't agree more, I am a qualified personal trainer and so I am well aware of the psychological benefits of getting some exercise!! Let me know if you need any training plans!!
I have never done a marathon myself, I have done a couple of half's but it is definitely on the to do list.
Stuart
Ha, don't start me on training plans, I could talk about that stuff all day!
But it's probably not all that dissimilar to the trading though - you can have all the great intentions, but it's actually getting out on the road and executing the plan - that's the hard part! I did a marathon a few years ago, but my training was pretty ad hoc and I didn't really take it seriously enough, either the training or the preparation for the race.
I'm more determined on this occasion to put the miles in and hopefully do it in a decent time. It's just a matter of trying to keep the injuries at bay I find - if I can steer clear of ITB syndrome/shin splints/etc, I'll be in with a shout.
Here's hoping anyway!
Thanks Nigel sir
as I shared previously on the basis of weekly as well as monthly signal I was LONG trade of EURCAD, trade opened 28th july (run around two+ weeks), it went +200 pips profit, but still since in second week also I not saw any trade direction turning signal so left it open.
later yesterday sunday signal was - go short for this pair but still monthly signal was go long for this pair.
so thinking higher monthy anchor chart I kept it open today also, just 1 hr. back its hitted my BE 1.4540 ( trade opened at 1.4521)
can u give your words on this
Anu
as I shared previously on the basis of weekly as well as monthly signal I was LONG trade of EURCAD, trade opened 28th july (run around two+ weeks), it went +200 pips profit, but still since in second week also I not saw any trade direction turning signal so left it open.
later yesterday sunday signal was - go short for this pair but still monthly signal was go long for this pair.
so thinking higher monthy anchor chart I kept it open today also, just 1 hr. back its hitted my BE 1.4540 ( trade opened at 1.4521)
can u give your words on this
Anu
Just bear in mind Anu, trading on the monthly chart will often produce the largest gains, but it requires a commensurately large degree of patience. It moves very, very slowly. Just 3 candles will take a quarter of a year to complete!
Looking at the monthly chart of EURCAD, yes, there is still a decent long wick reversal candle. It might play out, or it might not, and there is nothing to say that the market couldn't take a few weeks yet, before it makes up its mind.
On the weekly chart, last week's candle closed with a bearish candle, which closed blow the open price of the most recent bull candle, which I generally take as being that the bears are in control of the market.
If I was playing this, I would probably draw a trendline on the four hour chart something like this:
In short, it could still well turn out to be a good trade on the monthly chart, but it might end up taking a while to play out. In the meantime, there could well be better opportunities arising elsewhere.
But remember, Anu, you are doing well. A break-even trade is a successful trade. You define your success not by how many pips you make, but how well you control your risk and exploit your opportunities. If you do that consistently, the pips will eventually follow. So by that metric, you are trading like a boss - keep it up
Looking at the monthly chart of EURCAD, yes, there is still a decent long wick reversal candle. It might play out, or it might not, and there is nothing to say that the market couldn't take a few weeks yet, before it makes up its mind.
On the weekly chart, last week's candle closed with a bearish candle, which closed blow the open price of the most recent bull candle, which I generally take as being that the bears are in control of the market.
If I was playing this, I would probably draw a trendline on the four hour chart something like this:
In short, it could still well turn out to be a good trade on the monthly chart, but it might end up taking a while to play out. In the meantime, there could well be better opportunities arising elsewhere.
But remember, Anu, you are doing well. A break-even trade is a successful trade. You define your success not by how many pips you make, but how well you control your risk and exploit your opportunities. If you do that consistently, the pips will eventually follow. So by that metric, you are trading like a boss - keep it up
Ha, don't start me on training plans, I could talk about that stuff all day!
But it's probably not all that dissimilar to the trading though - you can have all the great intentions, but it's actually getting out on the road and executing the plan - that's the hard part! I did a marathon a few years ago, but my training was pretty ad hoc and I didn't really take it seriously enough, either the training or the preparation for the race.
I'm more determined on this occasion to put the miles in and hopefully do it in a decent time. It's just a matter of trying to keep the injuries at bay I find - if I can steer clear of ITB syndrome/shin splints/etc, I'll be in with a shout.
Here's hoping anyway!
Well fair play to you. It does put an incredible amount of stress on your body but I think the sense of achievement would be worth it.
Morning guys
I have just added a half size position to my GBPCHF short based on the break of the hourly trend line that was created yesterday. This is a fairly aggressive move as we have important data out of UK at 09:30 GMT +1.
I will keep the forum, updated on how this additional trade progresses. As always, when I add to a position, I am even more aggressive in getting to BE.
Stuart
I have just added a half size position to my GBPCHF short based on the break of the hourly trend line that was created yesterday. This is a fairly aggressive move as we have important data out of UK at 09:30 GMT +1.
I will keep the forum, updated on how this additional trade progresses. As always, when I add to a position, I am even more aggressive in getting to BE.
Stuart
Well it looks like the initial move has gone in my favour. I have moved to BE on the position I added this morning.
Stuart
Stuart
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