JJP

Copper looks like it is in a very interesting place. My thinking... Demand is dropping as factories are slow to get back to work and GDP is falling in the major economies. On a positive note, demand in China, the biggest market, would appear to be coming back. On the supply side, mining has help up during the response to Covid_19 and supply seems strong. Lower demand, higher supply and price at a 2 year high... perhaps a correction is due. I am considering a short position and will start thinking about an entry level.

Interesting analysis. I wonder if AUD can maintain its strength given how low the Australian interest rate is. With no carry trade benefit and the economy in the biggest contraction for the last 30 years, I feel it does not currently offer a good expectation of return. However, as you say, it is very buoyant. Maybe the speculative market is mistaking general dollar weakness for risk on sentiment.

Currently you cannot short certain stocks because around the world the various stock markets, central banks, government authorities and regulators banned shorting unless you actually hold the underlying asset as part of dealing with negative market volatility during the Covid-19 crisis. These rulings apply regardless of what instrument you trade. To short one of these controlled stocks you have to demonstrate that you hold the actual stock and are actually hedging, not shorting. If you look on the internet, you will find that each country and stock market lists those companies that cannot be short traded

6 days later and it could be that we are on the way. Does the market still feel buoyant after the Chancellor's Summer Economic Update? I went long today and immediately lost 30 points before restoring. I hate long term trading. Back to scalping for me. :-)

🙂 I am sure that is an Elliott wave bat, or giraffe or something

Here is an old quote. “Markets can stay irrational longer than you can stay solvent.” - John Maynard Keynes... and one of my all time heroes of economics.

Hi. I agree with Caseynotes, except that, in addition, I also feel there may be a little optimism for the pound as well. Two consecutive days up, and going up today also. Has broken up through the down channel from the 10 June. There is a slight buoyancy in the market I think from a belief that a Brext deal can be reached before the end of the summer and that a widely available Covid-19 vaccine may be within reach too. I think the Europeans are beginning to realize that a no deal is actually quite bad for them, especially given where the Euro is economically. Therefore, they may be more accommodating of the UK trade deal terms. I feel this has also added to the strengthening of the pound in this week. On the down side, Britain just picked an argument with China over Hong Kong. Covid-19 will come back to bite as we open up the economy (look at Leicester) and the EU has announced that it is bracing itself for a no deal with the UK. I wouldn't accept that the pound is in a proper upward trajectory until it broke above 1.285, and then 1.35. Let's see what US NFP brings and the outlook for the US economy.

I'm a scalper, and so it is important to get out early in both a win and a loss situation. Especially when markets are as bouncy as they are at the moment. I take half profit at Target 1 and move SL to breakeven. My expectancy is that a winning trade will average 2.4*R, so I normally fully close the trade at 2*R. If I am going to leave it running in the hope for more, then I move the SL up to 3 pips under the 3rd bar back from the current price. My strategy gives me at least two entry opportunities every day, so I don't mind getting stopped out in profit.

Sorry for not being on the forum in a while. I tried it in October / November... just a simple question, could you use a 0-1, 1-2 wave movement to predict a 2-3, 3-4 and 4-5 wave movement. I used Fib numbers to predict the last 3 waves once the first two were formed. I made a very small long in October after the first up day of wave 3. I can't be bothered to calculate all those bats and butterflies and flying donkeys or whatever. I think it was simply luck that this followed the plot I had made. You can see that from time to time it deviates. I have not traded Elliot waves since.

But, I'm staying out as I traded the Elliot Wave from September 2019, and now I think it lacks direction. I feel like it is thrashing around because of the Covid-19 repercussions and waiting for a Brexit answer before setting off on a new trend.

So, it went up first:

lol, you know me so well

In addition to all the great education sites already pointed out (definitely do those free courses, you don't have to pay for a course, lie the one on babypips.com), have a look at these: https://www.fxstreet.com/ - great for economic calendar and historic price ranges based on previous data news releases and variation of data released from market expectations... this is the real money maker in FX. The market generally only moves in a predictable direction if it has a reason to. https://tradingeconomics.com/ - great for a comparison of all economic indicators across countries https://www.dailyfx.com/ - great for finding out where all the other IG traders have placed their bets. It takes contrary positions to the majority of IG traders on the basis that most people lose, so bet the other way to the majority. https://www.tradingview.com/ - great for making sure that you are getting a price, comparable with other providers

IG, What is going on. There are candle sticks missing from the charts, and other glitches. This mornings example. 5 min chart GBPUSD between 5:25 and 07:00. To other readers, could someone please check their charts for GBPUSD and confirm whether this is a platform issue, or just IG failing to provide my profile with data. Thank you

Common settings include the 200, 100, 50 and 20 SMA/EMA. Most traders will use these to analyse trend on longer time frame charts. I like 9 and 21 on a 5 min chart. But, I never have been able to make a cross over strategy work consistently within my risk parameters. Try plugging in the fib numbers on different time frames and back testing that. It's as good an approach as any cross over strategy.

If you are using spread betting, then it depends on the leverage ratio of the asset you are trading and the risk amount per point you are proposing to trade. For example, a 50p per point trade on EURUSD requires £187.95 of margin, plus surplus in the account to cope with the trade going into a loss making position. So if you started with £250, made a trade on EURUSD for 50p per point. The trade goes against you and you start loosing. Unless you close the trade before your account is depleted to £187.95, you will get a margin call. That is a request to top up your account or IG will close the position for you. At 50p per point and £250 in the account, if you set a stop loss of 20 points in each trade, you could loose 6 times in a row before you would get a margin call on your 7th trade. Of course, as a retail trader, I think that you are protected by new regulation which means that IG will never let your account run into a negative amount.

and that strategy played out in the ranges formed today in EUR/USD London open: Loss Interestingly a mid-morning Head and Shoulders. Breakout candle at 10:35. Win. Hits Head & Shoulder height target. Asia break not traded as was in the H&S trade and too close to US Open. But was not triggered, close call ! Is a loss US Open. Win. Trailing stop out at 11300. Moved up based on swing lows and not deviation. London Close: Not Triggered. Also lucky escape.

I've completed some back testing on what I call the European and UK Open. It assumes a range is formed between the Asia session close and the European early trading. That is between 06:00 and 06:59 UK time. It then assumes that this range will be broken in the UK Open (07:00 to 09:00). Rules: No trading this strategy on days when a major UK news event is scheduled. Trade the news instead. Ignore trend and trade the break out candle. Entry 3 pips above or below break out candle. Stop 3 pips beyond the other side of the break out candle Break out candle must not be a counter break doji, hammer for break down or hanging man for break up and must close outside the range. Trade order is cancelled if opposite side of break candle is breached before trade is triggered. Move the trade to break even just as soon as the minimum stop distance will allow. Trail the stop towards the trade in increments of 1 deviation. Test Range: GBP/USD 10 June 2019 to 30 September 2019 Trade dates for one quarter, selected at random. Results: 81 Trading days 11 News days 70 Trading opportunities 15 Not triggered 13 Losses 20 Break Even 22 Wins Average R:R on wins 3.04 Average R:R on wins after 1 very large win removed 2.41 Candle Loss, but Range win 3 Candle Break Even, Range win 7 Candle Break Even, Range Loss 12 So this gives us a 24% loss rate on trades taken. It shows that when the break out candle is broken to the opposite side of the trade, it is more likely that the range will also be broken, and so we can cheapen the trade and make a SL saving by using the candle as the SL position rather than the range. Foot note to readers. Please do not take this as trading advice. This is not a trading recommendation.

The neck line of the double bottom coincides with the break out of the range. Perhaps conventional, but I always thought double bottom, or top, should be traded on the break of the neck line. I am very open to learning otherwise. I scalp because I just don't have the psychology to trade longer term positions. I've tried trading on the day chart and even down to the H1, and through multiple wave cycles. I just hurt too much when a trade is in the red and so I want it to be over quickly. I like a quick decision. I want a quick, small and relatively painless loss, or a big win. Because of the way I manage the trade when it is live, more than 70% of my trades close in profit. A very small number of these in significant profit. I want to continue like that but with an even cheaper risk position so I can make better trades and maximize overall profitability.

Thank you Caseynotes, for this valuable, and much appreciated feedback. Entering on the close of a strong break out candle is not something I had considered. However, I will now give it thought and run it through back testing versus waiting for the break out candle to be broken. If it has at least the same win ratio, it does make for a cheaper entry, which, of course, is desirable in a scalping trade. Yes, it is a low win, high reward strategy, which, as you have clearly addressed, is why a low risk position is sought. Placing a SL below the range is just too expensive. However, ignoring the bottom of the break out candle and placing a SL just back inside the range, as you have highlighted, seems like a good way to avoid larger than necessary losses. I will also run this through back testing and hope to see a cheap system with sufficient rewards over time to merit trading it seriously. Thanks again, I think this allows me to move forward.

They were never designed to be taken seriously, were they ?

Yes, I use the higher time frames to understand the trend and to identify areas of support and resistance and areas of potential supply and demand. I take these into consideration while planning a shorter time frame trade. That done, then would you place a SL above or below the break out candle from a consolidation area, or above or below the consolidation area itself? Given, of course, that there is sufficient room for the trade to run in order to meet a reasonable expectation of an acceptable risk : reward.

Hi, Thank you for taking the time to read my post. I have been trading for a while, but I still consider myself as a beginner. I have built up a small number of scalping strategies largely based on momentum movements out of identified ranges and macro economic news releases. I am trying to improve my entry technique and reduce my exposure through assertive stop loss positioning... without over smothering the trade. I am very interested to understand the views of other traders, and welcome your comments. In the chart below we see a typical quiet day on EURUSD, i.e. no major news releases. It is taken from Tuesday 2 June 2020, just last week. A double bottom, at least it appears this way to me, forms at the bottom of the Asian session range, and then a break occurs above the range. Despite a bearish outlook by analysts, we are about to enter a bullish trend for the rest of the week. Forgetting, for now, about the red resistance line I have drawn above the range (which might make us hesitate from this trade) the trade plan is to go long, catching the break and scalp the market to the blue line, Target 1 (T 1), take half the position as profit and move Stop Loss to Break-even and then on to Target 2 (T 2) where the position will close entirely. My first question: What is your advise on trade entry and stop loss position. Is it best to enter on the break candle by setting a buy order above the range (Entry a), and if so, how many pips above the range should the order be placed. Or, is it better to wait for the break candle to close, seeing if it closes above the range, and then enter the market at a break above this candle at Entry b. If Entry b, how many pips above the break candle should the position be taken? My second question: In either entry scenario, where should the stop loss go. At the bottom of the break candle (SL a) and if so, how many pips below? Or at the bottom of the range (SL b) and if so, how many pips below? Or perhaps somewhere else? On the second question, my back testing shows that when a strong break occurs, the bottom of the break candle is rarely tested. However, on a weaker break, the bottom of the break candle can be taken out. In this instance, the market will sometimes bounce back at the bottom of the range and take the trade into profit. Of course, it can also continue its down movement and reverse the direction for the entire day. In short, I don't want to take a loss of the entire range box, but I can be frustrated when the break candle is breached against the trade, taking SL a out, and then rebounding only to take the trade into a profitable position and leaving me with a stop out loss.