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tjnoon

Choppy Price Action

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I posted this recently, on the SST blog (http://www.sevensummitstrader.com) and thought that the information might be on interest to readers of this UTA/SST forum. So hear it it.

 

How Does the SST Deal With Choppy Forex Price Action?

During our live demos of the SSTFX yesterday, a common question kept coming up, "How does the SST deal with Forex chop?" My answer was that it actually handles it pretty well.

 

"How?"

 

It is a combination of a few critical elements:

 

We acknowledge that there will be losing trades within a winning strategy.

We go onto acknowledge that you can not divorce the losses from the winners or you will NOT get the winners.

Instead of trying to avoid the losing trades (which in our opinion is 'holy grail' stuff and does not exist) I designed the SST (and SSTFX) to mitigate the losses.

It is a combination of great setups that take advantage of edge of the chart price action, smart confirmations, smart RULES that include how to make minor key level adjustments, disciplined dynamic goal setting (we call it, "Power of Quitting" and it really works), tight and concise tradeplans that should be followed the same way every day, a dynamic stop strategy that cuts risk and seeks to get to a risk free position AND two types of targeting -- a high percentage pretuned fixed target and an effective trailer.

With all that, we then accept the losses that we do get, trade through them, and let the magic of the system work itself out, which is why we keep getting all those attractive equity curves you've seen. The losses get you to the winners.

The trade examples today, exemplify ALL these elements, working together, producing the winning edge that the SSTFX will give you IF you have all your '7 summits' covered. The EURJPY 233 tick is one of the original FX daytrade charts that I used to help create the SST. To this day, the plan continues to work.

 

The Session had two trades and two winners, including an add-on position which can be thought of as a third trade but really it is apart of the trade you are adding on to.

 

The first trade was a Reentry short which hit full target for +17 pips. The trailer came up and stopped out for +12 more pips. There was a real nice early move down but it was before our start time. But the time this trade hit its target, there was no more momentum to the downside and our trailer locked in what it could. Net on the trade was + 23 pips after spread.

We reversed to long. This trade took us into a long, slow, grinding, messy 'chop fest' but at the right edge of the chart, how could we or anyone else know. We aknowledge this 'impossibility of knowing' as stated above, but here's a great example of all the elements listed above working together.

Notice how many entries showed up in the choppy action that didn't get triggered in and cancelled out. The price hitting the entry IS the final confirmation.

Notice where the yellow arrow is, a possible add-on position that we did not take. A minor key level adjustment kept us flat on this entry. A 3 pip adjustment to get around resistance is acceptable in this type of price action and that was enough to stay flat.

Same thing happened on the lower side of the channel. A minor adjustment kept us flat. These adjustments are part of the 'smart RULES' as stated above.

Finally we get to add to our original position and get long. The trade has been retuned to the market condition making a much smaller trade. Maybe we'll make it up with our trailer.

We almost get stopped out but again, a key level adjustmet that moved the stop one pip below a key round number, kept us in the trade for a possible greater potential.

Of course you can see, that didn't happen. The trailer took out both positions and only gained a pip or two. Still though, we hit all of our full targets and were done for the session as per our 'dynamically self adjusting goal setting strategy, the Power of Quitting."

 

The Net on this lengthy, slow grinding session was +37 pips. We could have kept trading and if you look at the chart, you can see that more profits were to be had in this market. BUT, that is NOT our tradeplan, the very tradeplan that has been serving us so well for so long. If you remember the big WYSIWYT example that looked like Mnt. Everest during our demo.. the one that got over +300 pips in one daytrade session.. Well, it was the very same tradeplan. We approached today's session the very same way. How can you expect to get the +300 pips on that session if you don't trade today's session the same way? It's the tradeplan that allows you to take 'what the market wants to give you' AND 'allows you to quit positive on most sessions.' Make sense? This is SO hard for people to learn but once you do, you will have scaled a major summit off your own.

 

EURJPY Example; Nets + 37 pips on a slow, grinding US Session

 

EURJPY WYSIWYT example; in case you missed the SSTFX Demo or forgot this example. This is th exact same tradeplan on the exact same market on a different session.

 

One last thing before I end this post. We had a great session across multiple markets and timeframes today. I'll try to post some more of today's trades over the weekend if I have time. But I did want to leave you with this screen shot of a live trade we showed yesterday, which is actually, still going. It's a 4 hour USDJPY. The first target was hit yesterday as I showed, for +86 pips. Our SSTFX Trailing tool has handled the consolidation well, so far, and has moved quite a bit lower. This example is on an MT4 chart. If the price can push lower, we have a chance of another leg down. Regardless, it is already another very successful trade. Check it out and follow along.

 

USDJPY Active Trade; +189 pips guaranteed and still going

022511_eurjpy.thumb.gif.02fdc5a2a37f68e6a7738467bb3d534c.gif

022511_usdjpy.thumb.gif.2257f05972d68e3f019108a32b2098f9.gif

EURJPY_wysiwyt.gif.b2d40062d493e04bb527d0a5200dbfc8.gif

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    • Date : 20th April 2018.

      MACRO EVENTS & NEWS OF 20th April 2018.



      FX News Today

      European Outlook: SNB’s Jordan sees no need for change in policy. The Swiss central bank President told Bloomberg last night that “there is no need to do anything regarding monetary policy at this morning”. Speaking after the CHF broke through the 1.20 per euro mark for the first time since the SNB gave up that ceiling, Jordan said the franc’s drop goes in the “right direction” but added that the currency is still considered a haven and the situation “fragile” and prone to change. So the SNB “remains very prudent” and “convinced that the current monetary policy is still necessary”. Further confirmation that the SNB is firmly on hold while watching also the ECB’s move very closely. If and when the ECB finally starts to reign in its support it will also increase the room for the SNB to manoeuvre. Bloomberg polls predict the first rate hike from the SNB in the last quarter of 2019.

      US Updates: Revealed a Philly Fed rise to 23.2 in April and a 1k initial claims downtick to a slightly-elevated 232k in the BLS survey week of April. The ISM-adjusted Philly Fed beat estimates with only a small April drop to 59.7 from a 45-year high of 61.8 in March, thus outperforming Monday’s Empire State where we saw an April drop to 15.8 from 22.5 with an ISM-adjusted decline to 56.2 from 57.3. For claims, the trend remains tight despite modestly higher readings over the last three weeks, as the moving Easter holiday and school breaks often distort April claims. We still expect a 210k April nonfarm payroll rise. The weekly Bloomberg consumer comfort index hit a third consecutive new cycle-high in mid-April of 58.1, and leading indicators rose 0.3% in March to leave a 22-month stretch without a decline, and a rise in the 6-month annualized reading to a lofty 8.8%

      Charts of the Day



      Main Macro Events Today
        CAD Retail sales – Expectations are for an improvement of 0.5% in February after the 0.3% gain in January. The ex-autos sales aggregate is expected at +0.3% after the 0.9% gain in January. The CPI’s gasoline price index edged 0.7% lower in February after jumping 3.2% in January following a 3.3% drop in December. % m/m inline with expectations CAD CPI – Expect March CPI, due Friday, to expand 0.4% (m/m) after the 0.6% surge in February. The annual growth rate is projected at 2.5% in March, up from the 2.2% y/y pace seen in February that was the fasted rate of CPI growth since the 2.4% pace in October of 2014. The BoC took the recent CPI climb in stride, viewing it as in line with their outlook. The temporary factors that had been restraining inflation, the Bank explained, “have largely dissipated, as expected.” The close to 2% core inflation rates are consistent with an “economy operating with little slack.” Inflation in 2018 is expected to be modestly higher than they expected in January, but due to the transitory impact of higher gas prices and recent minimum wage increases. See the preview. IMF Speeches – Saunders (BOE) Weidmann (Buba) Williams (FOMC) Support & Resistance Levels



      Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

      Please note that times displayed based on local time zone and are from time of writing this report.

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      Click HERE to READ more Market news. 


      Stuart Cowell
      Senior Market Analyst
      HotForex


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