What to focus to be consistent in trading

Be selective in your entries to ease the task of existing the trades. Following the below check list will be a great help to traders.

- always look left for support/resistant (S/R)

- is price parking at new high/new low or a retracement (how deep or shallow of the retracement)? 

- what price is currently doing? any divergence? any higher high (HH) higher low (HL)? or LH LL?

- what TDI and stoc are doing? are they out of dangerous zone (overbought/oversold area)? Are they at S/R (draw lines like you do for price  to find out its S/R)

Happy trading!

L

 

GBPJPYM30 week ended 24.3.17 winners.png

Price actions

Price actions topic is as old as the earth and have been mentioned over and over again regardless of methodology we use. I will not go into details of what price actions is as you can easily do Google search and find out more about it if you are not sure.

Ironically, we all started learning  the basics before introducing to indicators  ( I am talking about my own experience here), but because there are so many indicators with colours and functions and looking more interesting and convenient, we then got distracted from the basis and got attracted to those indies. Why should we not better to have such enhancement  for our  trading? (very similar to someone said negatively about technology making our lives bad since we got addicted to its and don't be bothered to interact with one another in a normal humanity way). Everything has good and bad side depending what side we are paying attentions to.  

Back to trading, I recently edited my 1st post on TMS for M30 thread with Divergence and Hidden Divergence as requested by some traders. The reason I did not do it earlier as there are more than just spotting a divergence or a hidden divergence, which should be referred as basis FX, that is checking nearby support/ resistant, how price reacts (HH HL, or LH LL, pin bars, inside bars, outside bars, etc.). It is like driving,  you probable drive differently  after 10 years than when you just had your driver license. I  tried to put myself into newbies' shoes when I had to explain or answer their questions, drawing and put notes on my charts to illustrate my answers.

Here is a snapshot from one of my ECAD trade which has price actions and divergence.

Choppiness

As promised,  I am going to illustrate how to identify choppiness to avoid stressful time (if one monitoring the trade).

Time not to trade is important that is avoid lunch time of each session which can be Asian or European or New York.

Having a habit of drawing along price movement (if you have not developed visual skill to see PA), marking peak/trough helping you to see if price is stepping up (buy) or going down (sell). If price makes one step up and one step down, it is indicating choppiness.

To trade, we can play pending orders for a breakout, stoploss has to be 10-15pips away from last swing high/low to avoid sweeping out.

Only trade if price bounces off a strong S/R.

Here is one of snapshot of my chart that I marked where price made high/low then higher high higher low or lower high lower low...

2 ways treet

Good  things about FX trading is that it is opened almost 24 hours per day with big volume in and out, while traders enter their trades from any time frames from 1 minute to 1440 minutes (Daily), not to mention trading from tick or volume or range charts.

Ordinary people get confused and worried asking me that if I have a buy signal and enter and many/most traders should have the same signal and also enter the buy, who is on the other side to sell if they have a buy signal ....to balance the market and so on. Despite what I tried to explain, they seem never understood.

For us as a trader, there are always 2 ways street (buy and sell) which one should we better choose to go if a TDI buy signal  confirmed and next 30 minutes a short sell signal formed ? Here what is called following the trend. You would ask which trend and what time frame  I am referring?

I m focusing on M30, so all I talk are about what on my M30 chart and next time frame which is  H1 chart  while H4 is used for break out if there is an inside bar (but be careful of fake breakouts happened quite often during Asian session). I put on M30 chart 200EMA, 50EMA for direction, that is if price above those EMAs, I only think about buying if TDI and price confirmed and only  if price is below and  far away from both EMAs and has divergence or double  bottoms, visa versa for short sell. Levels on the chart (Yesterday High/Low, Daily Open Line, Fib levels such as 50% retrace ,etc.) and  how price reacts from those levels ( pin bars, doji,) are very useful for  making decision both entries and exits. 

M30 signals 80% of time deliver profit of  30 pips to 50 pips for G's pairs while E's pairs move 20 pips to 35 pips. Your profit target (PT) can be increased if there is a confirmation on higher time frame which can be H1 or H4. 

What is right for stop losses (SL)? and when to move SL to break even (BE). I usually have 1:1 which is if my PT is 50 pips so is my SL ( I mentioned this in trading challenges post). I found myself exit my trades if price closed below 10EMA (if I was in a buy), or if price closed above 10EMA (if I was in a sell). Using ATR (7) x 1.5 is very helpful (considering you are not greedy:-)). I don't normally let market take me out by my SL if I am available to monitor my trades, therefore, whether I have 30 or 50 pips SL does not really say that I have to bear with such losses, but rather treat it as for emergency and avoid my trades stopped out from small retracements.

Falling into choppiness is where traders get chopped out and get stressed out. I will talk more about that in my next post.

Happy life happy trading to all.

Lkc

Trading challenges

I had been busy with life and trading recently since I created my own thread  'TMS for M30 charts' to share my trading on ForexFactory.com (ff). I have been really enjoyed posting my trading experience and also receiving many sharing from others who have followed my trading style from TMS thread. 

My trading stepped into another level where I am now looking at chart on a different angle by focusing on price actions rather than any indicators. I became one of the top 1% on ff. Big thanks to those who supported me on my trading journey. I hope I am going to be  more consistently successful. 

Money management is one of challenges most traders find it really hard to do it right. I read a few comments from other seniors who advised to take partial profits and let the rest running and cutting our losses if the trade goes wrong.What if you could only have one shot to be in and out due to small capital?

In my opinion from what I have learnt and experienced, I would set R:R at 1:1 , that means if I were happy with my analysis, I would get in a trade with my stop loss at 50 pips and the same for my profit target,  I would let market do the job to either give or take if I was not able to monitor my trade.

What if I were monitoring the trade and it went in negative 30pips? I then looked at last recent swing low/high and current candle close and re-assess the market condition to see if market had just changed or it were a minor retracement by looking at if a lower high or lower low had just formed, etc., or was it facing support/resistant that I overlooked before entering the trade? If you trade on M30 chart like I do, you have time to do such thing and make your decision whether to leave or to stay. 

I heard a lot of traders stumbling up and down when they were in a trade before Frankfurt or London Open (FO/LO), then FO/LO came with a big wave up and down and shook those trades out...unless you entered with solid reasons or you could not stay with the trade. I was there many times. If that is your issue, think about why you entered the trade in the first place and stick with it if your reasons are solid and still valid and within your trading rules, provided you have a trading plan which is a must have.

Over trading is another big challenge when we have a few losses in a roll where it happened very often on a choppy day (Mondays during Asian session with no news or on Fridays during US market). My best advice is you should take a rest and come back to see the chart when our mind and our heart are in a calm condition. Any decision made by emotional drive is usually not a wise one.

Here is a snapshot of a set up of short sell on EUD/AUD on M30 chart before FO/LO where price created divergence (DIV) and had a pullback  (PCRF) which is my favourite set up I combined my trading style (DIV) with Phx62's style (PCRF) who is one of the top traders we all followed on ff. If you got out when FO/LO  pull back, you would have only +30pips, if you stayed in since you trust the setup, you could bag +100pips. 

Happy  trading and greens to all.

19th Jan 2015

Monday morning in Melbourne.

A new week has just begun leaving behind a big shock to the FX market caused by SNB’s action last Thursday 15th Jan 2015.

Thanks God that I did not get caught by X/CHFs fall, that does not mean I am not worried about my fx trading. Whether we trade Futures or Forex or something else, money markets is big where it has big impact on almost every corner of our lives.

Well, you might say it is the big guys’ jobs to fix or balance it out what considers not balanced. Of course it takes time to think and to act, but in the meantime, what should we as small retail traders do with our trading for living? Avoiding anything to do with CHF obviously, due to brokers have increased their margin requirements and xCHF’s are crawling since the sharp fall on that day where UCHF fell more than 900points by the look at my M5 chart before and after that secret scheduled news out from SNB.

Is is possible to make money from such a chaotic situation? I believe it is possible. However, if I have another way to go, why shouldn’t I go with the  stable pairs (for now I meant).

Hope we have our mind ready and calm for trading this week.

Green pips to us all !

UCHF Daily chart with big dive on Thursday 15th Jan 2015

UCHF Daily chart with big dive on Thursday 15th Jan 2015



22nd Nov 2014

The currency market week ended very bearish on the Euro. 

Should we, day traders who take trades on M15 H1 really care about fundamental? Or should we trade based on what we see on those charts telling us?

It is quite funny to talk to about something that sometimes I found very confusing.

I am wondering if those who have power to make the Euro diving actually looked at Euro 4 Hours chart and said ‘let sell the Euro since it is at resistant (near 200MA) and has divergence’J.

By the way, Euro has been in down trend (moved more than 1500 pips) since early May this year and retraced about 240 pips up recently.  Lots of scalpers got stopped out from their longs as their technical analysis based on M5, M15 told them to go …

I am lucky to have those seniors on forex factory.com forum keep talking about how relaxing they trade on H4 and Daily charts so they can enjoy their days. That made me thinking to change my currency chart displays to M15, H1 & H4 and D1 instead of M5, M15, H1 which I still do for my oil trading from 4.30AM – 10.30 AM EST.

The challenges a scalper faces when moving charts to higher timeframe are widening stop loss and do not dare to stay in the trade for bigger profit since we used to look at next S/R on small time frame and jumped out, and staying in the market too long making us stressed because we stared at our charts for every movement of candles worrying market would take back our profit.

Will see you next month, the last month of year 2014.

Happy trading and don’t forget to be disciplined and stick to your trading plan.

 

1st week of Oct 14

Another week has just past adding many good things to traders whether collecting green pips or achieving new level in trading.

Volatility has been back in oil (USoil/WTI/ CL) and Aussie dollars (6A/AU). Good pips could be collected both up and down sides but stop loss has to be wider to avoid fakeys if day traders respected the main trend. Oil and Australian dollars have been on down trend mode so short sells produced better results . 

As a day trader trading both Futures and FX I normally enter trades from 5 minutes (M5) charts, using 1 hour (H1) and 15 minutes (M15) charts for trend direction.

Some basics are very useful to be mentioned whether trading  from naked charts or with indicators.

Here is the 1st basis that helps in making breakout trades: indecision candle (IC) which can be red or green or doji (a cross), body has to be small and both tails (wicks) have the same lengths.

The trade will work nicely if the IC bounces off support/resistant which can be off 10 moving average (10 MA), 50 MA, or 200 MA, pivots, etc. In the below example, IC bounced off 10MA and 50MA from CL (oil futures) on M5 chart.

indecision candles (small body).jpg


New trading hours for Aussies (Melbourne and Sydney traders) changed from AEST to AEDT. From Monday 6th Oct 2014, for Singapore open is 12pm, London open is 6pm, Oil open is 10pm.

Best wishes and happy trading.

LkC

First Post

While looking back from my trades taken on last Friday (ah, I just realised it was Friday 12th ☹), I was so surprised about my entries on those USOil trades that failed to deliver green pips, which did not meet my criteria. It made me thinking how our mind and our body work as a team, if one is not well, the other fails to function in a good manner. I don’t try to blame my health for my trading result but it is relating to lack of focus.

Friday trading is a challenge for a lot of traders including myself. I am not sure if it is because of weekend mindset coming or maybe our body and mind due to a rest.  Market offers green pips every day whether we are there having fun or serious about trading.

Here is my snapshot from my Oil trades on Friday 12th Sept 2014. Nice and easy huh? Take it easy and happy trading!