Not much of the London trading day left here, so might not get much of a break now, if at all, but certainly I will be keeping an eye on this come Monday morning! 
Price Action Swing Trading - The PAST Strategy
- Thread starter Nigel Price
- Start date
- Watchers 91
I don't know why, I just have really like the look of short equities recently.
I took a bit of a loss on SP500, as I posted here last week, but there are quite a few equity indexes around the place that just look vulnerable to me.
The FTSE here looks a good one, and the German DAX looks a bit broken to me too.
As always though, I could be completely wrong on this outlook.
I took a bit of a loss on SP500, as I posted here last week, but there are quite a few equity indexes around the place that just look vulnerable to me.
The FTSE here looks a good one, and the German DAX looks a bit broken to me too.
As always though, I could be completely wrong on this outlook.
Risk-wise, I am going to be very impatient with this one - it is very close to the weekend.
It will either move into my direction nice and swiftly, or I will cut it.
Don't need the extra exposure heading into the weekend, the market will open again on Monday
It will either move into my direction nice and swiftly, or I will cut it.
Don't need the extra exposure heading into the weekend, the market will open again on Monday
Just nicked out there for a 12 point loss.
I have a position higher up though, currently +23 points, with a stop at breakeven, as you can see on the chart.
That's it for me this week.
I will be looking for more opportunities to sell this on Monday though, if that major trendline holds.
Hope everyone has a great weekend!
Liverpool v Chelsea will be my highlight (or lowlight)
I have a position higher up though, currently +23 points, with a stop at breakeven, as you can see on the chart.
That's it for me this week.
I will be looking for more opportunities to sell this on Monday though, if that major trendline holds.
Hope everyone has a great weekend!
Liverpool v Chelsea will be my highlight (or lowlight)
Hi Nigel,
After seeing a trend reversal signal, can I draw trend line from any time frame ,means lower like 5 mins also,as in 1 hour chart difficult to find lows to connect some times. If not ,is there any specific rules to look into time frame in charts
Thanking u
After seeing a trend reversal signal, can I draw trend line from any time frame ,means lower like 5 mins also,as in 1 hour chart difficult to find lows to connect some times. If not ,is there any specific rules to look into time frame in charts
Thanking u
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Hi Mandir - as I say in the ebook, I don't really approach the idea of timeframes the same as most people do.
Most often people talk about timeframes as if they are almost different instruments. But they aren't, its exactly the same price data, it's just a different way of displaying it on your screen.
So it is whatever you are most comfortable with and whichever timeframe you think best displays the set-up you are intending to trade.
What I would say is though, no matter what timeframe you are using, always take a zoom right out to start with, and fit as much price data as you can on you screen. This helps you to get a good feel for the overall structure of the market.
It's a bit like reading google maps - you start zoomed out to get an idea of your bearings, what general direction you should be going in, and then you start to zoom in to look at the exact route to take to get to your destination.
I see you mentioning the 5 minute chart there - if that is what works for you, go for it. But one word of caution - if you are using the 5 minute chart to draw very short-term trendlines, like multiple trendlines in one day, you have to be very careful.
When you start looking for lots of trading setups during the one trading session, you start to become very prone to overtrading, and forcing trades.
Whether we like it or not, the market does not throw up great trading opportunities on demand. There are plenty of days where price does not really move at all.
That is just a fact of life, and we have to learn to accept it, and trade what the markets give us, rather than attempting to impose what we want on the market.
It would be great if we could depend on the market offering a few good trading opportunities everyday, and all we had to do was turn up and trade them, and get a nice steady daily income. Like you do in a normal job.
But that's just not how it works. It's quite possible for days or even weeks to go by without a good trading opportunity.
What separates the winners from the losers in trading is that the winners understand and accept this as being the reality that we are confronted with, and adjust their trading to suit. They understand that it's not the market's job to provide us with a steady stream of predictable and regular trading opportunities.
They understand that if they try to impose what they want on the market, there is only ever going to be one winner - the market.
So they tailor their own trading behaviour to fit in with how the market works, rather than the other way round.
The loser, on the other hand, expects to the market to jump to their tune. He wants daily trading opportunities, nice predictable returns, regular market behaviour. He will be sorely disappointed.
Here is a graphic from the video course that covers this topic:
So I would have no problem at all with you or anyone else moving down the timeframes Mandir - if you see success on even the tick chart I will applaud you. But just be aware of the risks involved in trading in that way.
Rarely is the answer to a trading problem - "trade on a lower timeframe".
It's usually the opposite.
Clarification
Hi Nigel ,Thanks for replying. If am not wrong, we can see more trend line break outs in 5 minute chart as compared to 1 hour chart. So If I use trend line break against my favor , as exit strategy,it may limit the profit right?
Ex :After seeing 5 min chart I entered into long position,but after some time,trend breaks against my position,telling me to exit in 5 min chart,but at the same time in one hour chart does not show break out. So I may keep the position open by seeing 1 hour chart. So I think lower time frame chart provokes us to get in and come out of position more frequently as compared to seeing in longer time frame chart. Please correct me if am wrong,
Hi Nigel ,Thanks for replying. If am not wrong, we can see more trend line break outs in 5 minute chart as compared to 1 hour chart. So If I use trend line break against my favor , as exit strategy,it may limit the profit right?
Ex :After seeing 5 min chart I entered into long position,but after some time,trend breaks against my position,telling me to exit in 5 min chart,but at the same time in one hour chart does not show break out. So I may keep the position open by seeing 1 hour chart. So I think lower time frame chart provokes us to get in and come out of position more frequently as compared to seeing in longer time frame chart. Please correct me if am wrong,
Hi Mandir
Good question. Yes you will definitely see more trend line breaks on the 5min chart both for signals to enter and to exit.
Let's deal with entries first -
I am not against entering a position on the break of a 5 min trend line, I do it myself and it has at times meant I have gotten into a trade at a far better price than If I had waited for a longer term trend line to break. However, if you are going to trade 5 min breaks, you need to be fairly disciplined and totally honest with yourself. As Nigel mentioned in his previous post, 5 min trend lines can and will develop multiple times throughout the course of a day and you have to have a clear idea at the outset of how many times you are going to try. If you are trading a daily or weekly set up, it's conceivable that you could have multiple "valid" trend line breaks that you would be tempted to trade before you eventually decide that it is time to give up. By this time, you could have lost a significant percentage of your account on 1 single higher time (anchor chart) set up.
And now for the exits -
To be honest, if you are trading this strategy on the same rough principles that the PAST ebook describes, you probably shouldn't be thinking about exiting your trade until it is at least a good few multiples of the risk you took on to establish your position. The most important thing is to get your stop to BE. once this is done, you need to sit back and let the market play out how it is going to play out, this is easier said than done I know but with a bit of practice you can do it. Think about your long term expectancy rather than the instant satisfaction of closing a winning trade. Rather than exiting if price moves back against a 5 min trend line, give your trade a chance to develop and form a trend line on a higher time frame. You could then use this is a guide for exiting a trade.
Hopefully this helps Mandir and the above are only suggestions based on my limited experience and the knowledge I have gained from Nigel and other Forum members in the past.
Best of luck, any other questions, don't be afraid to ask, everyone in here can learn from others, we all have different experiences that we can share.
Stuart
Hi folks
Quick scan of the charts and I am interested in the weekly chart of the USDCAD and the JPN225, here they are:
USDCAD Weekly:
JPN225 Weekly:
Stuart
Quick scan of the charts and I am interested in the weekly chart of the USDCAD and the JPN225, here they are:
USDCAD Weekly:
JPN225 Weekly:
Stuart
Morning Guys!
FTSE took a jump up at the open, triggering my b/e stop.
Will be keeping an eye in any further weakness today.
By the way, Stages 6 and 7 of my mini-series were published yesterday.
Stage 6 and 7 here
For anyone who hasn't read it from the start, Stage 1 is here.
Good luck for the coming week!
Nigel
FTSE took a jump up at the open, triggering my b/e stop.
Will be keeping an eye in any further weakness today.
By the way, Stages 6 and 7 of my mini-series were published yesterday.
Stage 6 and 7 here
For anyone who hasn't read it from the start, Stage 1 is here.
Good luck for the coming week!
Nigel
Just a quick update on my FTSE chart here:
Bit messy this morning - not perfect by any means. But the market will frustrate us far more often that it will do exactly what we want. We just have to recognise that and be patient.
Needless to say, if price establishes itself above the red trendline, I would be standing aside. If price gets above there, it is communicating something to me - something along the lines of:
"ehh..no, I'm not moving down, I'm moving up."
If you want to be selling when the market is rising, good luck to you - I personally will sit that agony out, thanks very much. It's rarely worth the hassle.
Bit messy this morning - not perfect by any means. But the market will frustrate us far more often that it will do exactly what we want. We just have to recognise that and be patient.
Needless to say, if price establishes itself above the red trendline, I would be standing aside. If price gets above there, it is communicating something to me - something along the lines of:
"ehh..no, I'm not moving down, I'm moving up."
If you want to be selling when the market is rising, good luck to you - I personally will sit that agony out, thanks very much. It's rarely worth the hassle.
Hi Mandir -
There's not a huge amount that I can add to Stuart's excellent answer above.
The whole idea of the PAST Strategy is to manage risk (stops) on the small timeframes, and manage reward (targets, take-profits) on the larger timeframes.
So I take potential market direction from a higher timeframe. Say in your case this might be the 4 hour chart. So the four hour chart looks like it is turning to the upside.
I will drop down to the lower timeframe, say in your case the 5 min chart, for my buy entries. With the 5 minute chart I should be getting really, really tight entries.
If a trade moves into profit, I bring the stop to break-even and then forget about it. If it gets knocked out, so be it. If it survives for a while and moves in my direction, I move back out to the 4 hour chart. I will keep that trade open until I see a sign on the big timeframe chart that tell me to close that trade.
Risk small, reward big.
Again, this is all explained very clearly in the ebook.
Remember, we will see a lot of small losers and break-even trades with this strategy. But the winners come, they always do. And when they do come, they more than wipe out the small losses.
So in that case that you referred to above, if price started to move against me on the 5 minute chart, one of two things would happen -
(1) it would hit my stop for a small loss, or
(2) it would hit my break-even stop for no loss.
Then, for the occasions that it moves for me in the direction of the big timeframe trend, there is a third:
(3) big profit.
That's the only 3 outcomes there can be.
Your trading breakdown will look something like this:
(1) some small losses
(2) quite a few break-evens
(3) very few large winners
You'll find that very few of (3) more than make up for (1) and (2), and will leave you with a profit.
Almost all of the famous trading giants that we read about espouse the strategy of keeping losers small and running winners. There is a reason for that - it works. It's not very comfortable, and it will test you, and it's never nice going through long losing streaks, but no honest person has ever said profitable trading is comfortable or easy.
No pain, no gain - it's true of most things, including trading.
I really hope you are understanding what I am saying here Mandir! Perhaps that will help.
Good luck!
Nigel
Hi Stuart,
Today I entered into a trade as trend line break out in 5 min chart. In the same 5 min chart, so many trend lines broke against me but I dint exited. Am waiting for good return ,as trend line dint break in longer time frame chart. But I dont know the target, so am confused when to exit. As I dont know the target I may wait undefinitely. So please help me with exit strategy
Today I entered into a trade as trend line break out in 5 min chart. In the same 5 min chart, so many trend lines broke against me but I dint exited. Am waiting for good return ,as trend line dint break in longer time frame chart. But I dont know the target, so am confused when to exit. As I dont know the target I may wait undefinitely. So please help me with exit strategy
Did the trade go into profit Mandir, and if so, did you bring your stop to break-even?
Right guy, I have to head out here for a while, so I have put on the trade below. As we can see, price has been contained between to the upside with a retest of the underside of both the long term and the medium term trendlines.
The risk on this trade is 15 points - you can see the stop there at 6610.
Let's see what happens here….
The risk on this trade is 15 points - you can see the stop there at 6610.
Let's see what happens here….
Following on from my post to Mandir earlier - there are only 3 ways this can go.
Many people seem to trade from a position of uncertainty. They are unsure of themselves, the market, the strategy they are using, and so on.
They have no faith, no confidence, no stability, no foundation to their trading.
It doesn't have to be that way.
For this trade there are only 3 possible outcomes:
(1) I lose 15 points. Not exactly pleasant, but I have done the sums, and that represents an amount that I am comfortable with. If I lose the 15 points it will not cause me to become a gibbering emotional mess.
(2) Trade moves into profit and I bring that stop to break-even, after which price retrace and hits my stop. Again not exactly pleasant, but not earth shatteringly bad either. I will have lost nothing, my account will be intact, and I will still be here to fight another day.
(3) The trade moves nicely into profit. It develops into a winner of a fairly significant size, I eventually see signs of reversal on a longer timeframe (usually at least the daily for me, but you can be different), and I close out and take my profit.
Note how a large loser is not on the agenda. It simply must not be allowed to happen. As long as I keep trading with the above philosophy, I will be following trade rule number one - protect your capital.
No one trade can ever be bad enough to take me out completely or inflict a catastrophic loss. I can cope with the bad days when they come, sit them out and still be here when the good days come around again.
Once you have that structure to your trading in place, that risk is under control, you can then turn your attention to reward.
You will quickly find, that if you keep those losers small, it doesn't take a whole lot to get profitable. Trading becomes less of a battle to figure out what the market is going to do next, and more just an exercise in staying alive - a money management and patience exercise.
As long as you take the prospect of one big loser dealing you a hammer blow from which you cannot recover, either emotionally or financially, you are in with a shout. And with some time and practice, you'll see that the winners come. You just have to make sure that you are around long enough to wait for them.
Many people seem to trade from a position of uncertainty. They are unsure of themselves, the market, the strategy they are using, and so on.
They have no faith, no confidence, no stability, no foundation to their trading.
It doesn't have to be that way.
For this trade there are only 3 possible outcomes:
(1) I lose 15 points. Not exactly pleasant, but I have done the sums, and that represents an amount that I am comfortable with. If I lose the 15 points it will not cause me to become a gibbering emotional mess.
(2) Trade moves into profit and I bring that stop to break-even, after which price retrace and hits my stop. Again not exactly pleasant, but not earth shatteringly bad either. I will have lost nothing, my account will be intact, and I will still be here to fight another day.
(3) The trade moves nicely into profit. It develops into a winner of a fairly significant size, I eventually see signs of reversal on a longer timeframe (usually at least the daily for me, but you can be different), and I close out and take my profit.
Note how a large loser is not on the agenda. It simply must not be allowed to happen. As long as I keep trading with the above philosophy, I will be following trade rule number one - protect your capital.
No one trade can ever be bad enough to take me out completely or inflict a catastrophic loss. I can cope with the bad days when they come, sit them out and still be here when the good days come around again.
Once you have that structure to your trading in place, that risk is under control, you can then turn your attention to reward.
You will quickly find, that if you keep those losers small, it doesn't take a whole lot to get profitable. Trading becomes less of a battle to figure out what the market is going to do next, and more just an exercise in staying alive - a money management and patience exercise.
As long as you take the prospect of one big loser dealing you a hammer blow from which you cannot recover, either emotionally or financially, you are in with a shout. And with some time and practice, you'll see that the winners come. You just have to make sure that you are around long enough to wait for them.
Ya of course turned in to huge profit,but as I don't know the target, am keeping position open.Stop loss moved into BEP,but profit came down as I was not knowing when to exit.
Please help me with exit strategy
ya stop loss moved to BEP. But as I don,t know when to exit,profit is going down. So please help me with exit strategy
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