Here's the chart of the GBPJPY and as you can see my first buy level got totally crushed. The strength that was there early yesterday totally evaporated. In fact for a long time today the GBP was weaker than all other pairs and JPY strongest so I didn't even buy my next buy zone (green bar) I waited for the weakness to end and bought the breakout of consolidation right under the whole number 138.00. There was so much weakness that I was out of half at 138.50 and other half at 139.00. I'm a big pullback buyer of strong trends but didn't in this case but should have, it went up another 100+ pips after pullback.
I don't normally trade the USDJPY, just don't like this pair but did today. It hit my buy zone and didn't have much weakness, the USD was strong at my level but the JPY was just slightly stronger so there wasn't much FX Power Index weakness. Got out with a small win and bought the double bottom breakout then again later at around 97.00 when my support area held and there wasn't much weakness. Any Power Index reading under 75 and Multimap reading of -20 and greater I'll take a shot at it.
I only took a small trade in NZDUSD but I did predict it to be the weakest and it did break down as I expected. The lines on this chart are not trades I took, I was focusing on better opportunities at the time but this illustrates how I trade the trends. Wait for WEAKNESS and then short rally when trendlines drawn off the lows are broken. The 6am one is the best as the NZD was the weakest of ALL the pairs for awhile and USD strongest! No brainer trend trade and the breakdown of the trendline found a quick 30 pips and the next breakdown went another 30 pips. I didn't take these trades, was focusing on other trades and I can't seem to manage more than 3 to 5 at a time without getting very nervous so didn't take these. I only made about 20 pips on breakdown of yesterday's low and stopped trading this pair.
Amy, This is quite an amazing thread...wow and great trading! I am very impressed! I look forward to reviewing over the weekend. Questions: 1-how do you monitor so many pairs at once?...you trade like 10-15 pairs, correct? 2-how many standard lots per trade?...ever "micro-mini" lots? 3-did I read correctly, your stops are 10-15 pips per trade? 4-what are your best times to trade?... 5-are you in the USA or from what country and timeframe do you trade? 6-what is the average length of trade you take?..minutes, 1/2 hour, hours, days? 7-do you have a bias towards "buy" or "short" set-ups? 8-what are your chart timeframes? 9-use any MA or EMA's? 10-do you literally sit i fron of monitor all day or...rely on actual "pre-set" stops etc to exit/enter while you are "shopping" for instance...or are you purely a "manual" trader in that you must place the trade right there at your monitor etc. thanks in advance...please forgive me if any/all these answers are in your thread...I have not read through it yet...again...great trading and thanks... IncreaseNow
1) I rarely have more than 3 to 5 positions on at once even with the trend strategy I use which this thread isn't about, more about my levels I come up with at night. I'm watching the USD, JPY, EUR, GBP, CHF, CAD, AUD, and NZD and trading the pairs that most make sense. If the EUR is the STRONGEST pair and USD weakest then I'm buying it on pullbacks. Also I typically focus on the strongest and weakest pairs so rarely more than 4 or 5 I'm watching. Look at the AUD/NZD last night and early morning. Both were statistically weak against most other pairs so its dumb to trade a weak pair against another weak pair. You'll almost ALWAYS get chop and I like to trade STRONG TRENDS. 2) Most of the time I'm doing 2 to 10 lots per trade and the reason I'm trading so small based on my account size is I do have multiple positions on usually at the same time. I've traded stocks, futures, oil, gold for a very long time before I started almost exclusively trading Forex and I find Forex the easiest to trade by far because the trends are so strong and often last for so many hours. For new traders I recommend 1 mini lot to start and then scale up. Keep your maximum risk per trade at 2 to 3% of your account. So for $2k account with a 10 pip stop you can risk $40 which allows you to trade 4 mini lots. 3) Yes of course I use tight stops, I'm always shocked to hear how wide some Forex traders have their stops but if your system is profitable the TIGHTER the stops that does NOT affect your winning % is the best so you can trade LARGER size. 4) Best times to trade are when strong trends are existent. Usually 3am EST till noon. You have to adjust your lifestyle and learn to take naps to be a Forex trader! I find the US session is 30% more difficult than London as often the trends are over and you have to learn the finesse of counter trend trading which is harder for most traders to learn. I can go over my counter trend systems at some point if anybody is interested. 5) Yes in USA of course. 6) Length of trade is 100% determined on when my trailing stop gets hit or profit target. It can be 2 minutes to 3 to 5 hours. I like trendlines for entries AND exits! Also use Fib targets and will often exit after the second wave up. Usually that maximizes the winning trades. 7) Yes of course I have a bias, what do you think my overnight predictions in this thread are about??? 8) I use 2 min charts and 50 Tick charts for entry and usually a 2 min chandelier trailing stop or fib targets or trendline breaks or major support/resistance levels for exits. It's a gut feel thing mostly for exits and what the longer term trend is. If longer term trend is steeply down and I see some strength I'll take fewer pips and hold less time. 9) No of course I don't use MA or EMA's in the way you are probably meaning, I don't use stochastic, RSI, or any other tools. I do use 20, 50 and 200 day moving averages on Daily charts but only in my overnight analysis and only factor them in if the markets up or down too much and I think they could be CLOSEST support/resistance so I may end up using them once or twice a week at most. 10) No I don't sit in front of monitor much at all. I use TopGun's VB scripting language to alert me when one pair is super strong and another is super weak when I'm awake and trading. And when sleeping or napping I'll use my price levels. I have programmed in alerts that send me a cell phone message ONLY when my levels get hit and ONLY when the market's not too strong/weak to take trade. If markets too strong to short I don't even get the alerts and will sleep through it. I get about a total of 5 to 6 hours of sleep a night and usually nap for an hour in the afternoon. I also try to take off a day every week when I feel the probability of my setups is not too high and not worth waking up to take trades.
thanks Amy for your great answers and for taking the time...really really appreciate it...I look forward to learning and reading your journal...best to you...
My pleasure. I'm happy to help and I've not seen too many REAL and concrete systems or methods discussed on here so thought I'd try to be a trail blazer. If I share what works for me I'm hoping somebody will also share with ME something I may not have discovered that can improve my trading as well. Two more pieces of advice. I find I made 50% to 300% MORE by not watching the markets tick by tick. Find yourself a software platform or even try to code it in Excel that will alert you some how when the markets come to YOUR price that in your overnight analysis you have decided you'd want to buy/sell or WATCH for entries to buy/sell. That way you're NOT TEMPTED to trade out of boredom or a sudden market move making your emotionally wanting to GET IN ON THE MOVE! Many traders, including myself, love the EXCITEMENT of trading but you have to FIGHT this urge! Most traders in some ways are gamblers, myself included, and we need to fight this. I still find myself taking at least 1 or 2 trades a month because I FEEL the market is going to go up/down and it DOES NOT MEET MY SYSTEM'S RULES yet I take the trade anyway. I'll be honest and say that when I do this I usually lose and overall its a horrible thing to do. To fight this urge I allow myself to TAKE the trades anyway still however I cut my size way down to 1/2 a lot or 1 lot max and still obey my rules on stops. This way I can occassionally have some FUN with the markets but don't lose much. You have to find a way to minimize the DAMAGE to your account by your urge to Gamble and by Gamble I mean the desire to GET INTO the market before a low risk trade happens or high probability setup occurs. This could be jumping in on NEWS as the market explodes up! Fight this urge! I have some questions for the traders in here. I don't currently use the Pivot Points R2 and S3 or the midpoints around them, have you found these to work? Do they mostly work in daily pivots or also in weekly/monthly? I also want to know if you all find midnight to midnight daily pivots MORE effective than 5pm to 5pm EST pivots? The software I use uses eSignal data and eSignal uses 5pm to 5pm but I've heard some in our group chat room talk about pivots they've calculated from midnight to midnight Eastern time with superior results. I do not currently use daily pivots but am considering adding this to my charts but still testing and wondering about this. If anybody could post screen shots of midnight to midnight pivots on EUR/USD or any currency with big moves I'd like to see it. I suspect Europe traders may use 3am to 3am pivots and also curious on the affect of this and do they work too? Let's all share at least one concept we find helps us make money and get some REAL benefit from these boards. If anybody emails me the system that works for them and makes good money, 50%+ profitable with at least 2-1 win/loss rate I'll email them back my strategy for finding real time counter trend trades. I didn't come up with this strategy but have come to fully understand why it works and can explain it to you.
I've done extensive pivot work in my days. The time of day isn't critical. All pivots are essentially doing are taking a range for a specified period of time and then calculating subdivisions of that range with the central pivot starting from the mid point. For forex, the difference between using a different time ie 5:00 pm vs 12:00 am or whatever is usually negligible. The levels will usually be the same but may be slightly offset. IE the central pivot might be R1 or S1. Where you might see a difference is if you use 5:00 pm and then the Asian session sets a new high or low outside of the calculated range. But again, the pivots are still valid, they'll just be offset even more compared to a midnight calculation. The main thing for me wasn't what the pivots were labeled. I was after confluence with other calculated levels such fibs, standard deviations, average daily range, etc. So if I knew the euro put in 100 pips per day on average, I'd look to see what pivot was 100 pips away from highest high or lowest low of the day. That pivot would typically also line up with the standard deviation of a range for one or more time frames and also fib levels. I would also calculated all of the levels just because I would use those as add-on levels since there would usually be some sort of price reaction around them. A pull back opportunity or price falling through support/resistence. Fishing with a net vs fishing with a pole.
I'm predicting the CAD itself to be very weak tomorrow which is why I feel GBPCAD, USDCAD and EURCAD should go up and CADJPY down. Trends do change though so watch LIVE charts and if for some reason the CAD's weakness reverses then be careful. LIVE DATA Rules and is King. Likely to go UP GBP/CAD Buy 1.8205 to 1.8200 and 1.8100 USD/CAD Buy 1.2671 to 1.2650 and 1.2600 EUR/CAD GBP/USD Carefully buy 1.4100 to 1.4094 and 1.4040 to 1.4025, Sell 1.4450 to 1.4464 USD/CHF Buy 1.1635 to 1.1600, Sell 1.1800 to 1.1807 GBP/JPY Sell 141.55 to 141.77, if it breaks out over buy pullbacks and buy 136.35 Likely to go DOWN USD/JPY Sell 98.71 to 99.00 and Buy 96.09 to 95.97 AUD/USD Sell breakdown of Friday's low and Sell .6550 EUR/USD Sell 1.2800 and 1.2894 to 1.2900, look for shorts under last weeks low NZD/USD Aggressively sell last week's lows!! AUD/JPY Carefully sell 63.15, again at 64.57 EUR/JPY Carefully sell 125.00 and 125.80 to 126.00 EUR/GBP NZD/JPY Short under 49.00 and sell 49.50 and 50.00 to 50.11 CAD/JPY Sell 77.30 to 77.50, may find support at 74.00
Excellent point about using them in relation to OTHER support/resistance areas. That's how I come up with my levels too and also use statistical ranges, nice to know others do too with success. I do know the pivot itself = (H+L+C)/3 so if during the asian session as you said if high/low changes it can affect the center pivot but also if the close changes enough it seems like it can affect the pivot dramatically also. For example say EURUSD on 2/20/09 High=1.2884 Low =1.2558 Close=1.2831 So the pivot would be 1.2757. If the close was 1.2700 then the pivot would be 1.2714 which is significantly away. Also since S1=2*Pivot - High and the distance from the high to the now lower pivot is greater then S1 may be significantly changed as well! I think on volatile days the difference between a 5pm pivot close and one at midnight can be very significant even if there isn't a higher high or lower low! I do 100% agree that when you have many different support/resistance within a close distance of 5 to 20 pips they work a lot better. It would be interesting for some firm to develop a Pivot point DRAWING TOOL so traders can pick their own spots and create ON THE FLY PIVOT POINTS. At least then we can visually see how much of a difference they are and also find CLUSTERS of them close like you suggested.