Jump to content
Sign in to follow this  

RE: EURUSD

Recommended Posts

 Yep.

 

 I use RSI too to see if there is more room for the price to move in the direction without being over bought/sold. Also I use a specific amount of movement in price depending on timeframe/market to help signify a trend change. As I said earlier there are a few other factors to take into consideration but this is just a basic overview.

 

I did short EUR/USD yesterday and usually expect at least 20 pips profit on Daily chart but just missed that amount and ended up hitting my stop for +1 pips.This week has been a bit rubbish as the markets have just been waiting for FOMC/BOJ announcements so not as much movement as usual.

Share this post


Link to post

Agreed , there is a sideways, waiting fo something to happen feeling but overall I see the stock markets trending downwards, also GBPUSD but perhaps EURUSD has a bit more upward momentum about it for a while yet.  Look also at EURGBP, where a bit of a retrace rally is in play.  If that continues to play out then GBP should fall and EUR may rise vs USD, for a short while at least before the lot start ot fall.

Share this post


Link to post

Interestingly  David Jones who was IG's chief Tech Analysis for many years and presented all the webinars, before Brenda Kelly, was a big fan of RSI. He held that on the daily chart he always used a 10 period, the rationale being that it was 2 round weeks of working days worth of data. I'd always presumed you were better off sticking to whatever was most commonly used. Have you experimented at all?

Share this post


Link to post

 I don't think I have with RSI, I'll give that a go and see how it works out.

Share this post


Link to post

  do you reckon the pro's are knocking the small guys out of EURUSD right now? its heading back to 11380 area at the moment .... ?    C

Share this post


Link to post

Timing is always a difficult thing to judge and even the big players can't necessarily go it alone but must wait for suitable momentum. Having said that, watching the DX, that is looking like a very strong 8am opening bear bar straight down to the bottom of the range which would suggest a determined effort to break it. 

 

All of the above are reasons why I prefer to just trade reactionary rather than predictive and on an intraday basis, but everyone is different and more or less comfortable in different scenarios.

Share this post


Link to post

..have you had problems in the past running positions while you're asleep (hence your intraday approach) - I've tried to do this and failed on three occasions.  I'm getting stopped out by overnight volatility either taking a loss or breakeven depending on if I've had enough room to move my stop down to break even or not. I conceptually want to be able to run positions for days but starting to doubt it's possible for me at least at the moment.  I'm always running my positions with a stop loss - imagine not doing that and being the wrong end of anything against the JPY last night. You'd wake up and be wiped out while sleeping!  C

Share this post


Link to post

 In the past when you've been stopped out, did the price later go in your favour and you would've been in profit as you predicted it would? Or complete reversal?

Share this post


Link to post

Hi  you are onto a key issue for retail traders and perhaps are at a key decision point: do you want to be a day trader and try to control every move and position in real time (although there are those who deploy fire and forget approached to day trading too) OR do you want to be a longer term trader?

 

Maybe right now you are trying to be both?  I used to day trade but personally I couldn't make it work and don't want to be a slave to to the market all day every day.  I am a long term/swing trader and seek to identify those pesky turning points and/or ride a good trend.  The trick to this is setting your position size to allow a decent stop level so as not to get stopped out all the time but not so wide as to seriously hit your account balance.  You have to protect your account balance but you also have to accept losses.

 

My view is that I will make more loss making trades than profitable ones, chiefly because it may take several goes to get in on a turn.  The trick is to loose small and win big then overall you win.  It takes a long time to get comfortable ad successful with any strategy so think demo account when trying new things; also testing with historic data and practicing techniques on markets you don't currently trade (in demo).

 

Don't enter a trade on a "feeling", or it it "looks good" this is often a false signal your brain is picking up (again read Kahneman for more on why and how this happens).  Analyse the death out of it and when doing so look for scenarios that are opposed to your bias and then assess all scenarios for likelihood.  then expose them in the forum, or to other people you know who are actively trading the same way you do, and ask for input.

 

Only place a trade when:

  1. You are as sure as you can be based on analysis and all other inputs that you have a decent chance of being right
  2. Right means not just direction but timing too (catching the top is hard, catching a retrace after the top is a bit easier BUT look what just happened, it can turn over night...)
  3. You have a high likelihood set up (e.g. for me: good EW count, support/resistance, indicators in my favour, trams etc)
  4. You won't catch them all, sometimes you have to let the pitch go by, there is always another trade out there.  What ever you do, don't jump in late as you will most likely get caught is the backwash
  5. Above all!  Manage your money and your risk!

Share this post


Link to post

Good points, especially trading an Asian currency (JPY, AUD) there is always a risk of being taken out over night, it just takes a few words from a central banker or politician, avoid overnight Asian positions.

The key to the longer time frame charts is having a large stop, which by money management rules (very important) means necessarily having a small position size (relative to your account). In placing your stop you need to consider support/resistance levels but equally need to consider the Average True Range (ATR) to get some idea of the recent volatility range of the pair. In fact some traders use ATR alone in determining their stop position, but either or both, your stops are going to have to be big to ride out the intraday (American, Asian and Euro session) ups and downs. If you look back you will see that support/resistance levels relative to your time frame are respected more often than not. This is a probability game.

 

Always have a stop in place or one day you will wake up with an account that's negative (not just zero).

 

I did use to play the European pairs on a 4 hour chart with minimal success as I found I was always getting impatient and wanting to fiddle about instead of waiting for the set target (next major level) and simply manually trailing the stop to next high/low. I would change the target, tighten the stop too early, I was not comfortable.

 

The idea of playing the long game with minimal intervention is a good aspiration but will take time (and money) to learn. You might want to consider starting on a smaller scale with a view to building up. Ask  how many years he's been learning but don't be disheartened by the answer.

 

 

 

Share this post


Link to post

I think one can get up the learning curve fairly quickly in terms of technical understanding but the hard parts are finding a method that suits you in the first place; deciding how you want to trade and sticking to it; and practice without loosing your shirt.  The stats are ugly, as I think  pointed out in a previous post, most retail traders get washed out quickly.  Why?  There are many reasons but chiefly I believe it is the following:

  1. Thinking we are smarter than we are - we are risking our hard earned cash!  You have to get as educated and practiced as much as you can.  So many people just start trading without any clue as to what they are doing (I did too, what an ***** I was...)
  2. Impatience or a "need" to earn money trading: this drives the wrong psychology, you become a gambler rather than a trader.  You have to be calm and collected when you trade,  If you feel that "buzz" of excitement then be afraid, be very afraid...
  3. Not having a clear strategy and approach that you have tested (demo and with historic data) and practised.  This isn't just about finding an entry point but also managing the trade to exit.  Do you want to day trade of trade more long term?  This is a critical question because the method is different and so is the psychology (although the macro trend psychology is the same).  
  4. Falling victim to confirmation bias.  In your analysis look for other contrary scenarios to mitigate natural bias and assess all vs likelihood.  Seek input from others and be open minded.  The best at this are swing traders because they are looking for the ebbs and flows and not being singularly Bearish or Bullish (or in reality managing this effectively). 
  5. Not managing your money and risk.  The gambler "feels" his trade will come good so does crazy things like placing too big a position or moving his stops to avoid loosing because "this time it will be different" (been there too!).  Work out your position sizes by market and max acceptable loss.  If the right stop point is outside your loss max then don't take the trade (or adjust the position size if possible).
  6. Over trading and pulling the trigger too early.  Especially a problem for novice traders but also one old times still struggle with.  You done all the analysis and now you don't want to miss it so you start to see the move all the time (this is my particular weakness...).  Often it is more profitable to sit and wait, sometimes for days, for a position to materialize.
  7. There are many more challenges, no doubt a book worth but to conclude I will say, what you have heard on this forum from many people, the chief issue is psychology, of the market place in general (i.e. sentiment) but more so it is about knowing and understanding yourself and your biases and emotional reactions and controlling them (this is so hard because it is counter intuitive). 

Share this post


Link to post

I really appreciate your answers guys, I am struggling with that Intraday / Longer Term trading - my aspiration is the latter but I'll clearly be struggling a bit with that Question at the moment. Take last night on the FTSE.....little case study of a screw up...

 

I did my EW / Fibs / tramlines and worked out the FTSE would turn at the end of the C wave at either 6340 or 6360 (50% or 62%  Fib.) at my calculations. I even wrote it my chart hours before it got there so I didnt forget my planned entry.  I'm using roughly 3% rule so £60-ish acceptable risk (new boy with £2k kick off to prove if I can do this .. or Not)

 

Entry Short £2 a point at 6335.  Had my stop right out at 6370 so if it turned at 62% I'd still be in the game or stopped out if Bull continued.

 

Before I went to bed decided to move stop down to 6338 (big mistake , tired, fed up with getting stopped out so  I'll loose £6 if it goes north overnight Market is at about 6320 when i go ZZZZZ's  )

 

ZZZZZZZZZZZzzzzzzzzzzzzzzzzzzzzzzz  (during which I get stopped out at 6338 - market hit 6338.3 top  I think , .3 higher than my stop.

 

Wake up - market  now down to 6237 but has been around100pts lower than my entry.

 

Conclusion:  

Feel like a ***** not monetising my correctness in what was going to happen.  

Should have not dicked with my stop - stay with the plan.

Take solace in actually working out a set-up correctly (my target was atleast the start of the A-B-C so would have exited at £200 gain).

I'm still here and hopefully can work out other set-ups and finally monetise them!

 

Tale of a 'close but no cigar ' trader........., C

Share this post


Link to post

A good suggestion when starting out is to drop your position size right down with a view to building it up as your confidence grows. 3% is considered aggressive for an experienced trader, in fact I know some people been trading for 10 years and still only use 0.5%.

 

Trading is a probability game and the first rule is to preserve your account. At the start your risk of a run of successive losers is high, most new traders die because they risk too much too soon and simply run out of resources.

 

 

Share this post


Link to post

Tough luck  or is it?  Your case study is all too common.  You don't have a large enough account to play big stops and these markets can move 30 point in the blink of an eye.

 

I'll give you my scenario as food for thought.  I conducted my analysis in a similar fashion to you (so far so good and you are getting it right so take heart) and saw a Wave C so was looking for the likely conclusion and turn point, as were you.  But EW doesn't help you there, it only gives you the general big picture so you "know" a turn is coming up but not when or where.  Indicators support this but also don't tell you when or where, only that it is likely some time soonish (if the analysis is right!).  So I turned to charting (trams and triangles) and resistance (historic and Fibs).  On the FTSE I saw a good set of trams and I was looking for a kiss back, which I got at 6338 at 20.00 (before the US closed.  I was worried about another leg up but for me this was a high likelihood Short point (according to my trading rules) so I went in BUT because I could see another leg up to Fib 50% or even Fib 62% as a possibility I set my protective stop above the Fib 62% level (in fact I set it above the April 22 high at 6370.  Then I adjusted because I usually set a minimum 50 point stop on the FTSE so I wound up with a stop at 6388 (actually 6395, which was above the April 21 16.00 spike) and set my position size accordingly.  Between my protective stop and the market as I went to bed lay Fib 52%, Fib 62%/resistance line and my tramline.  I slept well and woke up to a beautiful day...

 

In you case a £1 bet with a 50 or 60 point stop would have worked.  So I guess my question for you is why place a £2 bet with only a 30 point stop when you can give yourself a high chance of success with the same max loss?

 

Another issue I noted in your account was moving the stops to tiny loss or BE too early.  If you have set your acceptable loss level then you have to give the trade time to evolve.  The market doesn't move in straight lines. Some people have rules for when to move a stop to BE or use trailing stops.  I never move a stop to BE until I have seen a lower low or higher high in the direction of my trade and an EW count confirming.  As I write I have moved my stops to BE because of the close candle at lower low and supportive EW count.

 

Occasionally I have moved a stop to BE early but this is when I am feeling more 50/50 on the trade so the logic there is if I was right the market moves in my favour and the close stop is fine but if wrong the market moves strongly against me so I want to be out.  Truth is I should never have been in such a trade in the first place...

Share this post


Link to post

Fully agree  that's simple and great advice for any trader.  I wish I had known you back in he day, I might have saved myself some expensive lessons, ah well...  What dooesn't kill ya etc etc, which only goes to prove your point! 

Share this post


Link to post

these are great points  and  I've got some discipline about what I'm doing and learning the hard way (is there any other) to get better at the things i'm not doing correctly.  Certainly chatting with you guys here and attending the TA seminars (Tuesday night i was there for Josh) is teaching me loads.  

FTSE is minimum £2 , I'd go £1 if I could.

For that reason I'm prefering Wall St. at £1 but it maybe moves twice as far quite easily which leaves me in same position.

 

One thing I'm glad I've done is take some Option positions.  Buy Longs or Buy Puts.  That way I don't get stopped out on trying to swing trade but have the risk my option even if correct on Strike Price   e.g. Wall St. 16600 PUT JUN-16 - expires worthless because it doesn't get there in my timeframe - but at least my risk is limited to the cost of the option and if Wall St. drops 1000 points say (attainable I believe) I can close in profit without waiting for expiry (either part or all - split bet strategy).

 

I appreciate you guys sharing because it's really helping me stay in the game.  I don't intend to be a 1 or even 2 month washout (nobody does of course) but believe it is possible to gain the skill / experience to make this a rest of life activity.  C

Share this post


Link to post

BTW,  I forgot to mention another failing of new traders is focus, or lack thereof.  Trying to play too many markets.  It is one thing knowing the analytical and trading techniques and methodologies but each market has its own nuances so it is invaluable to come to know each market you trade and that takes a lot of time and live trading, not just demo.  My advice is to focus on a few big markets you already have a decent understanding of and don't get sucked into others just because people are posting on them.

 

If I was to offer advice on which markets to go for initially and which to avoid like the plague, as a beginner:

 

Go for (in order of preference, assuming you are UK based and know more about stocks than currencies):

  1. FTSE 100 (but watch out for the heavy resources aspect);
  2. S&P500 (great massive all round market);
  3. Dow (but watch out for the fact that is is just 30 large caps);
  4. EURUSD (watch out for Fed/ECB)
  5. GBPUSD (can be a bit spiky so last one to trade)

Don't trade all of them at the same time.  The stock indices are basically the same trade because they are correlated at present so maybe pick one to trade and practice the others in demo.

 

Avoid:

  1. Oil (nasty market with just a few massive players)
  2. Commodities generally
  3. Dax (too fast moving for small stop player)
  4. Anything connected to Japan just now (also because of the overnight challenge you have, best avoid until more experienced)
  5. Lesser FX crosses (I generally only play USD crosses with EURGBP being the only exception).  CAD is at the mercy of Oil (see comment on Oil market) and AUS is a mining currency (so basically commodities & overnight issue)
  6. Precious metals: (Gold is hard to make money on without a sizable stake, easier markets out there)

Others will have different views but I think if you stick to the most liquid markets in areas you have some understanding of that are open during your normal day you will feel more comfortable.  However bear in mind it's a global 24/7 market and stuff that happens at any time on any day can impact so watch those protective stops.

 

One final thought, "if in doubt, stay out!"  Especially going into the weekend...

Share this post


Link to post

Ah yes I was thinking of the 1 point spread on the FTSE, sorry.  Dow is an unforgiving market (bit like Dax but not as bad) because it moves fast, so hard despite the £1 min.  Try S&P at min £10, I find it more forgiving.  It is a larger market (largest in the world) with a good balance of sectors.  Alternatively, if you can, increase your account balance so you can increase your stop levels on the FTSE.  May seem like more risk but if you increase your win ratio it will work out.  Do the maths and see what it looks like.

Share this post


Link to post

..coming back to the EURUSD.....   The 76% retrace towards the 21st April high (24th April low) looked like right risk/reward ratio to Short so I have . C

Share this post


Link to post

Thats funny your top 4 are exactly what I'm trading! - thats good, C

 

Share this post


Link to post

76% of 21 April high?  It's near 62% off 12 April high, can you show chart?  On this one, as previously posted, I think it is in a complex wave.  If so I'd stay out until it is resolved.  Complex waves are hard to track and whipsaw traders to death.  My current view is that this is a Wave C up to the end of the complex wave and we are only in W3 of this Wc.  You may get a small retrace now (if I'm right) but keep stops close or cash early.  Too soon on this one for me.

Share this post


Link to post

Yeah I see it  but let me ask you, how does this fit with the bigger picture?  Fib levels don't hold much water if the move is motive rather than retrace.  If you look at my daily chart below you will see that the relevant Fib tops are the potential W4 turn back in Aug 2015 and the more recent Green W3 (possible Blue W2) on Aug 12.

 

There are 2 scenarios that I see:

  1. If 12 Apr is a W2 retrace then we are in a W2 of W3 down and your analysis holds, albeit at Fib 62% from 12 April not the 76%. Incidentally when you get a confluence of 2 Fib levels that is a strong sign of resistance so maybe...
  2. If it is a complex wave then another push up is indicated in a Wc of which we have just completed W4 and are in W5 up (need 1-5 up before the turn).  This is similar to what is occurring on GBPUSD.

My main issue with scenario 1 is that the complex wave has not yet played out fully and the possible W1 off the 12 April turn looks much more like an A-B-C than a 1-5.  If it is indeed a A-B-C then a move above the 12 April turn is indicated and I am targeting a double top near the junction of the red resistance line and green up-sloping tram on the Daily chart (circa 11600).  I am not long because I missed the W4 (green turn) and complex waves can be death to trade so am waiting for the top on this one.

 

What do you think?

 



Share this post


Link to post

I think You're right here  I've probably jumped the gun, working through your scenario's versus my own, might need to bail i'll keep watching, C

Share this post


Link to post

Sure, happens to us all.  Try this as an exercise for yourself.  What probability of success would you give this trade?

  1. High - likely to succeed (depends on definition of succeed of course)
  2. 50/50 chance
  3. Low - might work

And why?  If it is not High then don't take it.  I only trade on high likelihood trades and even then get more wrong than right, why would I go for anything I might assess as lower than that?

 

Also before you trade look for alternative (opposite) scenarios and then decide.

Share this post


Link to post

You have the US GDP number coming up in 1/2 an hour. Everyone is waiting, expecting 0.6% from 1.4% previous. Traders may well start pricing in a June rate hike if the figure is ok, or better than ok.

Share this post


Link to post

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

  • Member Statistics

    • Total Topics
      12,742
    • Total Posts
      65,414
    • Total Members
      86,179
    Newest Member
    Kimming
    Joined 20/10/20 21:24
  • Posts

    • this probably should have been ignored, but IMHO it was a new low.  obviously jlz tried to help someone here, and referred to others to add emphasis to a point.  I'm writing this because I actually asked for support in my earlier response, and I'm very pleased I'm not the only one who reacted to this post thoughtfully, so I think it would be pretty weak if I didn't speak up here. That may make me look ridiculous, and like my tongue is now travelling through a bunch of cracks, but I don't give a **** (like I think you would not either).    I'm actually surprised that you @dmedin  left it to this statement - usually you're significantly more effective in warning people of the hazards we face as retail punters IMHO - I think you definitely had stronger moments. you know what I would find useful:  having a separate, focused thread for insults  - I'm sure by now the respective targets wouldn't mind (to not again say not give a ****), and other discussions could become - let's say "leaner". I genuinely think I got a lot of valuable insights from many of your posts here, and I highly appreciate the honest feedback, and I also believe you have good intentions. I don't know about any history between you, jlz, THT, and Caseynotes.  I further think you play an important role here in this forum and I look forward to more productive discussions with you. But the post quoted above was a new low.     
    • Wall Street holding up still 🤔  
    • I'd given up on Dax but here it comes!  
×
×