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ForexTraderX

Watch A Typical Day Of A Real Day Trader

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well, ended up grabbing another 200ish on crude short. but, went so fast didn't get a chance to post the entry or exit. Anyway, as I mentioned earlier...anything above 94.00 looked good to short, and we peaked out around 94.05.

 

Not bad all things considered.

 

Anyway, done for the day now. up about $500ish after comissions, and made a bit in spot forex too.

 

Good trading to all.

 

FTX

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well, feel free to drop me a line on skype folks... so far, only had 3 people contact me since starting this thread, and one other person post up on the main thread here.

 

I really only care to do this if there is some interaction. ask questions, or spit some ideas of your own out. lets discuss or debate theory, whatever. It's more fun that way. Really! (at least I hope so!)

 

ForexTraderX, I commend you for what you are doing and I am interested in what you have to say. I day trade some of the same instruments (CL, GC, NQ). However, I find it hard to follow your thread due to the large number of posts and sheer volume of commentary. Perhaps you would get more interaction if you posted less often, showing annotated charts that explained reasons for entry and exits (see Thalestrader's posts on Reading Charts in Real Time thread). Perhaps these could be end-of-day summaries. Forums like this do not lend themselves well to real time trading in the short term. The live chat room could be reserved for the real time commentary.

 

Just food for thought. Again, thanks for making the effort.

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ForexTraderX

 

Thank you for providing this interesting and informative day trading thread. Your methods for analysing the markets looks very good.

 

I have some questions if you don't mind:

 

1.

Are you trading using a Forex broker or a regular futures broker like Interactive Brokers ?

 

2.

Do you trade currency futures on the CME or with a Forex broker using their interbank price quotes ?

 

3.

What intraday time frames are looking at when trading ? You mentioned an hourly pin bar on a currency trade in one of your posts ? Is that your shortest time frame ?

 

4.

You mention entering at certain price levels. How do you enter ? Do you enter long for example using a buy stop ?

 

5.

Once in a profitable trade, how do you move your stops ? Do you use moving averages or trend lines or previous S/R to determine your stops?

 

6.

When trading how many days in the past do you look at to determine S/R.

 

7.

For futures trading do you just look at RTH charts or 24 hour charts ?

 

8.

What is your expected reward/risk per trade ? In other words if you had a 10 point stop would you be looking for at least a 20 point gain ?

 

9.

How long are you in a typical day trade ?

 

10.

Do you look at volume ?

 

Looking forward to your answers

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ForexTraderX, I commend you for what you are doing and I am interested in what you have to say. I day trade some of the same instruments (CL, GC, NQ). However, I find it hard to follow your thread due to the large number of posts and sheer volume of commentary. Perhaps you would get more interaction if you posted less often, showing annotated charts that explained reasons for entry and exits (see Thalestrader's posts on Reading Charts in Real Time thread). Perhaps these could be end-of-day summaries. Forums like this do not lend themselves well to real time trading in the short term. The live chat room could be reserved for the real time commentary.

 

Just food for thought. Again, thanks for making the effort.

 

Todd, I think that's a dandy idea. It was looking pretty weird to me when I looked back over some of the posts.

 

Ok... since my bread and butter is spot forex, and those trades take usually 12-48 hours to resolve, this will be a better way to go about it, and i'll be sure to post pictures and such... would love to see some folks give some contributions and input, opinions, etc. and I think what you suggest makes this all the more conducive to doing so.

 

Will post more over the weekend. Frankly, I'm a little burnt out this week... slow week for me over all, and I don't feel much like trading until after the weekend starts.

 

But, will respond to all other inquires, (such as Henry1000) as well as give a blow by blow analysis over the weekend, in the hopes that others can try it out, and maybe we can get a little group going or something. would be fun.

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First things first... for my daily analysis, it is all based around recent price action. Every day, around 5:00 pm E.S.T. (the "close" of the futures and forex markets), I open up the daily charts, and see if I can get a fairly clear picture of what direction the next day is most likely to move.

 

In other words, I look to see if i can find a pretty obvious bias, either bullish or bearish, based on recent price action.

 

How do I make this determination? I look for a couple of different things:

 

  • does this candle have an average or bigger than averge daily range?
  • Does this candle look similar (or exactly) like a bullish or bearish engulfing candle? Or does this candle look like a pinbar?
  • Does this candle come after a period of several consecutive bullish or bearish days?
  • Is this a range expansion candle?
  • Is the low or high of this candle bouncing off a support or resistance level?

 

These are the most important factors I consider to conduct my initial screening for a trading opportunity.

 

Below is a picture of a daily chart of the AUD/CAD. I chose this market because it is one of 9 that has met my criteria for the sunday/monday trading day, and I think it'll make a pretty good example from which to view all of these factors through.

 

  • First of all, does this day have an average or bigger than average daily range? Well, the previous 14 day ADR is about 57 pips, and this is about 52 pips. It's about 10% smaller than average, but that's OK. it's NOT good... but, it's at least worth moving on to factor 2 for consideration.
     
  • Now, it doesn't look like a bullish or bearish engulfing, but it does look a bit like a pinbar. It's not a very substantial looking pinbar, but it does fit the definition. So, another threshold met, lets see the next...
     
  • Does this candle come after several consecutive bullish or bearish days? Yes, it does. In fact, it's now the 5th bearish candle in a row. This is better than "OK", this is good. So, that's the first solid thumbs up, now I move to the next criteria.
     
  • Is this a range expansion candle? No, it's not. it's a bit smaller than the average of the last 14 days, and it's not bigger than the previous 3 or 4 days... so, it's just not a range expansion candle.
     
  • And finally, is this candle reacting off a support level? Well, it isn't the most clear cut support level, but back around the first week of july, we have several days make highs between 1.0425 and 1.0460. This shows there has been some interest at this level, and it is there we had price bottom out on this last friday (yesterday) So, in this case, i'd say yes, but it's not the clearest level, and therefore, not the most convincing level.

 

If I were to score this, I'd say we have about 3 considerations that just meet the basic threshold, one that doesn't (the range expansion one), and one that exceeds the basic criteria (the 5 consecutive bearish days).

 

So, i'd keep this on the list for now, but barely. It's pretty much "meeting the basic criteria", it's not a setup I will jump up and down about.

 

By the way, I don't actually write out these criteria. I just look at a chart, and make a determination. I've been doing this for years now, and it's really done subconciously at this point...but these are the factors I consider, and how I go about the general process.

 

Having done this analysis for about 25 markets, I've found about 9 that fit the bill for this coming sunday/monday session. They are:

 

AUD/CAD - long

EUR/AUD - short

EUR/CAD - short

GBP/JPY - long

GBP/USD - long

NZD/USD - long

USD/CAD - short

USD/JPY - short

AUD/USD - long

 

It is from one of these 9 markets that I will take a trade, and only in the direction stated by each market. I won't try to trade any other spot forex market, in any other direction.

 

But, this is just the core concept to help me find good profitable trading opportunties. Next, I put these 9 markets through a battery of filters, to help ensure I have CONFLUENCE in my decisions, and as many winds to my back as possible.

 

Continued in the next post...

AC-dailyPB-aug9th-2012.jpg.2c12045e9ef6ec6860601f933ca0ad73.jpg

Edited by ForexTraderX

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Now, this next step is something really simple, and it doesn't always have any relevance, but it seems this week it does. It's just a matter of looking over my selected markets, and seeing if any are standing out as very likely to be strong over the rest.

 

This is easier to show than tell...

 

For example:

 

On my list, I have 9 different currency pairs that I have a basic bias for going into this next trading day.

 

3 of those include:

 

AUD/CAD Long

USD/CAD - short

AUD/USD - short

 

Notice how the AUD is making bullish price action against both the USD and the CAD. HOWEVER, the USD looks BEARISH against the CAD... so, if the Aussie is looking strong against the CAD, and the CAD is looking strong against the USD... it doesn't take much brainpower to figure out that the BEST best for a strong bullish day is most likely the AUD/USD, rather than the AUD/CAD. And that AUD/USD will likely be better than a USD/CAD short as well.

 

This shows up one more time as well, with these three markets:

 

GBP/USD - long

GBP/JPY - long

USD/JPY - short.

 

Again, the GBP looks strong against both the yen and the dollar, but since the dollar looks weak against the yen, it's likely that the best bet is to look for a long in the GBP/USD, rather than look for trades in the other two markets.

 

This "filter" I use here does not eliminate any of the markets I listed from being traded, but it will help me maybe choose a more aggressive entry, and higher risk amount, and more distant targets, in the GBP/USD and the AUD/USD than the other markets listed.

 

Now, moving on to the many filters for market elimination.

AU-dailyPB-aug9th-2012.thumb.jpg.dec626b680103c87d2a1f81112708293.jpg

AC2-dailyPB-aug9th-2012.jpg.cdc424ed358f8f25255ca5a2df64f7e8.jpg

UC-daily-aug9th-2012.thumb.jpg.a88373624a56ca0f4e5b295b3e1fbee3.jpg

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Alright, now, I use a charting program that gives me each currency against a weighted basket of the other major markets. (it's free from liteforex.com - it's their stock MT4 download)

 

Essentially, this helps me to determine relative bullish or bearish price action not just in a single forex currency pairing (like EUR/USD), but against a weighted basket of all the other G7 currencies. (like EUR/G7 Currencies).

 

See, the eur/usd could look bullish, but if the eur/gbp, eur/aud, and eur/jpy all look very bearish...well, it wouldn't be the smartest idea to go long eur/usd... probably best to find other markets to go long against the USD, since the odds would better be in ones favor this way.

 

So, this is what I do. I look at the daily, weekly, and monthly chart for each major, and give an overall score to each one based on a summary of what I see on the daily, weekly, and monthly charts.

 

Again, a bit easier to show than to tell. Below, i've uploaded pics of the GBP and the USD against the other G7 currencies, and you'll likely see why I give an overall score of the GBP as being "slightly bullish", whereas I give an overall score to the USD as "bearish".

 

Here are the scores based on this filter for all the markets I trade (currency markets)

 

USD - slightly bearish

EUR - bearish

JPY - neutral

GBP - slightly bullish

AUD - slightly bullish

CAD - slighly bullish

NZD - slighly bearish

 

Using this filter, I've determined that of the 9 markets I like for tomorrow, they all look good, except the NZD/USD long is a bit questionable. the both the NZD and the USD scored out as "slighly bearish" when I looked at the daily, weekly, and monthly TF for them against the other G7 currencies. So, although 2 markets having the same rating for me does not disqualify them, it does give me pause, and i likely will not be placing orders on that market. It basically just got a "yellow flag".

 

Now, the next filter...

GBasket-daily-aug9th.jpg.8e765e6ffe2620372132434c21444e6e.jpg

GBasket-monthly-aug9th.jpg.7021ffde0633fd381420c94eb6176906.jpg

GBasket-weekly-aug9th.jpg.0818e05150e8dac5cc124b7dbcf89b5d.jpg

UBasket-daily-aug9th.jpg.e69a42572702e75eb359d7e83a822e8f.jpg

UBasket-MONTHLY-aug.jpg.4a1bc86b4ec3d7fc32553680afcfdbdf.jpg

UBasket-weekly-aug9th.jpg.39c50ed3aae8f1869bd16efbd25e1a9f.jpg

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Now that I have an idea of specific possiblities for tomorrow, as well as an idea of how each market is performing overall against the others... I now look at each individual markets weekly and monthly chart, to see if any are opposing the daily price action and potential setup.

 

The AUD/CAD is a good example here. On my daily chart (posted previously as a pic), it shows a 5 day selloff, and a slight bullish pinbar on the last day of the week, the friday sessions. This qualified it for a potential bullish trade for tomorrow.

 

However, when I pull up that same AUD/CAD market on the WEEKLY TF, it clearly shows we have a bearish engulfing candle on the weekly chart. This is opposing the daily price action. Therefore, it immediately disqualifies the AUD/CAD from being a tradeable market on monday. Daily shows slight long potential, weekly shows good short potential, and this all together equals no trade either way.

 

So, I look at each markets weekly and monthly chart. if EITHER chart looks like it is in opposition to my daily chart analysis, I just throw that market out. It gets disqualified.

 

Now, if the weekly chart looks neutral, and the monthly chart looks neutral, but the daily chart looks bullish... that's OK. I just don't want a BEARISH weekly or monthly, that's not OK.

 

Here's a pic of the AUD/CAD weekly chart, and you can see why it is NOT ok for me to consider the daily chart a valid setup, considering the weekly chart looks pretty bearish here.

 

With this criteria, it looks to me like the weekly and monthly charts of the NZD/USD are starting to roll over to the downside, and the AUD/CAD clearly looks bad for a long.

 

This means I have now eliminated both of those markets from trading tomorrow.

 

I am now down to 7 possible markets to trade for tomorrow:

 

EUR/AUD - short - OK

EUR/CAD - short - OK

GBP/JPY - long - OK

GBP/USD - long - OK

USD/CAD - short - OK

USD/JPY - short - OK

AUD/USD - long - OK

audcad-weekly-aug9th.jpg.65dc0a5470c6a574b5d41296160b4f86.jpg

Edited by ForexTraderX

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Now, I don't give a lot of crediblity to any indicators, including moving averages.... however, I've found that they do in fact increase my probability of success (from mid 60% win rate, to low 70% win rate in back testing, and somewhat similar in actual trading)... so, I use them.

 

But, I only use them to filter for what I call a "clear and compelling trend". For this, I use 2 simple moving averages, a 21 day, and a 50 day MA.

 

I define a "clear and compelling bulllish trend", if the 21 period is over the 50 period, and both have a positive slope.

 

I define a "clear and compelling bearish trend", if the 21 period is under the 50 period, and both have a negative slope.

 

If it is anything else, I don't consider the MA's to be showing a "clear and compelling trend". If this happens to be the case, then I can go long or short, based on my analysis thus far.

 

However, if there DOES happen to be a clear and compelling trend...say, a clear and compelling bullish trend.. well, it means I cannot take any bearish setup, no matter how good the price action looks.

 

Oh, and of course I only use a daily chart for these MA's...nothing intraday. only a daily chart.

 

So, based on this moving average filter, it shows me the following:

 

 

EUR/AUD - short - clear trend down

EUR/CAD - short - clear trend down

GBP/JPY - long - no clear trend (MA's show slight positive slope, but fast MA under slow"

GBP/USD - long - clear trend up

USD/CAD - short - clear trend down

USD/JPY - short - no clear trend (50 MA is flat, not negative sloping)

AUD/USD - long - clear trend up

 

It seems the best opportunties will likely be for an AUD/USD long, or a GBP/USD long tomorrow, since they pass all the filters with the most compelling results of their analysis. the USD/JPY and the GBP/JPY may be a bit questionable to trade, but still make the grade, and the rest listed here are somewhere between them.

 

However, the markets that do have the MA's showing a clear and compelling trend, well, the trade setups all correlate with this clear trend, so there are no further markets to eliminate.

 

Now, going into tomorrow, I have 7 possible markets I will look to take a trade in, with the GBP/USD and AUD/USD long being my 2 favorite opportunities.

 

Here is a daily chart of the AUD/USD, to give you some ideas of what I mean by a clear and compelling trend.

aud-usd-clear-trend-daily-chart.thumb.jpg.42e0de1680142502d97f3e2d871c072b.jpg

Edited by ForexTraderX

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Now, at this point, I have it narrowed down to 7 markets, 2 favorites, 2 a little on the weaker side, and 3 that are in the middle.

 

I will focus on the 2 best first, then the 3 behind, and if I even set orders in the other two, they will be on the very conservative side.

 

Later on, I will go through some of the process that I undertake for phase two, which is a bit more filtering, using trendlines, market sentiment, and some fundamentals.

 

This next phase doesn't so much eliminate potential markets to trade, but it helps me narrow down how much risk I will take on a setup, as well as whether I just want to get in when the market opens, or whether I want to put an order further away from the market, for a pullback, etc.

 

It helps me determine just how aggressive or conservative I want to be in terms of looking for a pullback in price action to get in, or whether I'll take a breakout because it's just that strong of a setup, or whether I want to risk 1%, or 1.5%, or 2%...etc.

 

It won't usually prevent me from placing any order...but it may prevent me from playing a specific level, if a better level is further away from price right now, but it is in a "weaker PA situation" based on the analysis I've already done.

 

Will get more into that later...right now, I'm gonna take a break, and will pick it up in the next 6-10 hours.

 

BTW...please give feedback, or ask questions, etc. I will have all questions answered before london opens tomorrow.

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I forgot to mention one other thing I look at before I move onto picking specific price levels to set orders... I want to know what the recent market condions are... in other words, did we just break out of a range? are we rangebound? bouncing in a clear and obvious channel?

consolidating? choppy? in a strong trend making higher highs each day?

 

Just a general idea of what the markets are doing. I will do this for each of the 7 markets i've narrowed my opportunities to.

 

Why? Again, it's about making the most informed decisions possible in order to make the best decisions on risk and reward with my money.

 

For example, if a market is obviously range bound the last 4 or 5 days, well, maybe I won't be so keen on taking a potential intraday technical level in the middle of that range. Maybe I wait for price to get back near the edge of the range before I enter. A good example of this would be the last 5-8 days in the USD/JPY.... it's been stuck rangebound, so this nice bearish engulfing type candle from last thursday/friday session... well, it's not AS exciting as it could be if the market was in a different situation.

 

Or, like in the case of the EUR/CAD... we are a bit oversold, having moved down for 5 straight days... however, price action indicates a further move down, and we are NOT in a range. If anything, we have until about 1.2135 before we hit the downward sloping trendline, and really nothing much until that point. We are not ranging, and price is in a downtrend.

 

With this market, i'd be more willing to make a more aggressive entry, say, between 1.2200 and 1.2220, and then depending on price action, i may enter again if it's stopped out. Point is, i wouldn't necessarily need much of a pullback, as it isn't stuck in some range, and the strength of the recent price action as it got near the previous lows of 1.2200 is still looking like more downside is coming.

 

Here are some pics to give a better idea of what i'm talking about.

GU-ranging-aug12th.jpg.0f9b006cea7e00f494524c6ff5e5c2be.jpg

EC-norange-trending-aug12th.jpg.9b41bc0136f9e27a17acb3de910c6a0f.jpg

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Below, I will post up my notes from the major news articles I've read through today. Now, I haven't taken notes on every one, but i've looked to pull out the most prevalent themes, and common opinions as well as most compelling facts, and use that to get a picture of what the current money flow global trend is, as well as what may affect that going into this trading day.

 

I do NOT use this information to get into or out of a trade. I do use it to determine potential targets, risk amounts, etc. For example... if something lines up with this sentiment analysis, maybe I will put a little more on the line, or maybe go for a further target.

 

Conversely, if it is not in line with this sentiment analysis, I may look to move stops to BE at an earlier point, or maybe I will risk less, or just take a single target at 1:1, or something like this.

 

It's just to further give me a different perspective on how strong my bias should be, and consequently, what to be aware of that may help or hurt the trade in the coming 24 - 48 hours.

 

Here is that analysis, including conclusion and summary below:

 

==========================================================

 

Seems hedge funds have reduced their long bets on commodities about 1.9% to 1.2 million contracts. Commodities have risen for 8 straight weeks of gains, the longest streak on record. It seems the driving force behind this was an expectation of increased stimulus by the U.S. primarily, but also the EU and possibly china and japan. However, as last week came to a close, it showed that U.S. data was a bit better than expected over all since the NFP report, including the jobless claims, payrolls, and the median price for a US single family hojme. This blunted the belief that the Fed will ease.

 

However, a fair amount of this upward movement in commodities is being fundamentally driven, particularly in agriculture with the droughts, and overall global demand. Furthermore, the EZ is working now as it’s reported that they are planning to buy bonds, and the higher the yen rises, the more likely it is that the BOJ will interviene... so other than the U.S., there is still reason to see commodity prices increase over all.

 

This will likely bode well for Comdolls... though I’m not sure if this trading day it will have anything more than a very mild influence to the upside.

 

For the euro, the data out of europe last week was not improving, fundamentally speaking, as it seems reality started to set in regarding how quickly and effectively europe will actually be able to implement on the rhetoric it has been preaching since last week. and China was printing softer data as well.

 

It seems the real winners are safe haven currencies with strong fundies... the sweedish krona was the biggest winner against other major currencies, and most traders have seen the AUD hold up fairly well, for similar reasons. The reason why is they get both some status as a safehaven against the euro, AND they are desireable due to simple fundamental underlying reasons. In fact, a headline today is printing that NZ bonds are seen as a safe haven by chinese investors.

 

so, moving flow out of the euro, and into safe havens, plus good fundies on those safe havens is a recipe for bullish safe havens. Futhermore, many of them are commodity currencies of a sort, and that is being bolstered by the rise in commodity prices.

 

I personally expect this to continue, though a pullback may be coming fairly soon here, as technically it’s coming into some resistance zones.

 

China seems to be the biggest X factor here, simply because it is not well understood what their intentions really are. However, it is showing weaker fundamental data, and this may weigh a bit on the “risk on” trend.

 

Spanish and Italian bond yields rose again, which is particularly noteworthy regarding the shorter term issues, since this is what Draghi said he would focus on. And, it’s no surprise that the old euro zone squabbling over who will do what to save the euro is increasing again, and Merkel will again be discussing things with some EZ leaders due to the split in their views of what is necessary to start buying bonds. The ECB itself is also internally split on this issue. THis will just further euro weakness.

 

Summary: euro continues to be weak, although the dollar is losing favor as “the safehaven” currency, and the winners seem to be perceived safehavens with good fundamentals. Stimulus is still on the table for europe, china, and possibly japan. the U.S. not so much.

 

Conclusion: look to get long safe havens that are strong in fundamentals, and short on the euro, as this will likley be the best bet today. In general, risk off environment, look for higher risk currencies to trail behind safehaven currencies, although not by a great deal, due to many of the comdolls and even the yen being somewhat overbought at the moment.

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ForexTraderX

 

Thank you for providing this interesting and informative day trading thread. Your methods for analysing the markets looks very good.

 

I have some questions if you don't mind:

 

1.

Are you trading using a Forex broker or a regular futures broker like Interactive Brokers ?

 

2.

Do you trade currency futures on the CME or with a Forex broker using their interbank price quotes ?

 

3.

What intraday time frames are looking at when trading ? You mentioned an hourly pin bar on a currency trade in one of your posts ? Is that your shortest time frame ?

 

4.

You mention entering at certain price levels. How do you enter ? Do you enter long for example using a buy stop ?

 

5.

Once in a profitable trade, how do you move your stops ? Do you use moving averages or trend lines or previous S/R to determine your stops?

 

6.

When trading how many days in the past do you look at to determine S/R.

 

7.

For futures trading do you just look at RTH charts or 24 hour charts ?

 

8.

What is your expected reward/risk per trade ? In other words if you had a 10 point stop would you be looking for at least a 20 point gain ?

 

9.

How long are you in a typical day trade ?

 

10.

Do you look at volume ?

 

Looking forward to your answers

 

Ok, to answer your questions:

 

1. I have 3 brokers, one for futures and equities (IB), and one for spot (Oanda).

 

2. For futures trading, all is done through the CME... I actually didn't know it could be done another way...not that I would do that had I known.

 

3. For my shorter term futures trades, I'll go down to 1 min or tick charts, for my spot forex trading, usually no lower than about 1 hour, but on occassion down to 15 minutes.

 

4. for my spot trading, it's 85%+ limit orders. for my futures, it's about 50% limit, 50% market orders.

 

5. For my spot trading, it's pretty mechanical. I look to move stops to a BE once I have about 1:1 profit based on my original risk:reward. That typically is between 30 - 50 pips of risk. So, once I get between 30 - 50 pips of reward, I'll generally take 1/4 - 1/2 off, and move my stops to my entry price plus 1 pip. For my futures trading, it's usually about 1:1, and any stop adjustment I do will be based on small time frame technical levels, such as the point of a breakout on a 5 minute chart, or a daily or session low... etc.

 

6. This may sound odd, but I don't limit S/R to days. I've found support and resistance of various types tends to hold up even years in the past. Silver peaked in the early 80's around $50 an ounce, and did it about a year ago as well around that same price. Previous monthly lows from the march and august lows of 2007 in the ES futures became signifncant resistance points for the April/May retest of 2011. (around 1375 on my charts) Exactly what emphasis I place on this, and how I deal with it, is another issue, but in general, there is no time where I will say "oh but that was too long ago, so I won't consider that for potential support or resistance"

 

7. for futures trading, it depends on the markets. for currency futures markets, 24 hours since much trading occures outside of RTH. however, for ES/NQ/TF/YM equity futures for example, i'll look at both 24 hour and RTH charts. It really is a function of volume. If there is a particular 6 or 8 or 9 hour block of time that has 80-90% of a markets volume, I'll look at that. However, in general, I look at both for all markets except the currency futures markets, which I really just use 24 hour charts.

 

8. I start each trade looking for at least 1:1, and then I adjust my expecations from there. However, particularly for spot forex, I'm looking to be in a risk free situation once we hit a reward amount that is equal to my risk amount. (say, 35 pips of profit on a trade with a 35 pip stop, i'm taking some off and moving stops to BE)

 

9. "Day Trade" isn't the way I look at my spot forex trading. It's just "trading". Most resolve between 12-48 hours. For my futures trades, we're talking about 20 minutes - 1 hour, for most of my trades.

 

10. I do consider volume, but primarily for short term trading in the futures markets. For my spot forex trading, I will consider it on occassion in the form of a tick based market profile, but that's just a very very small part of my analysis, if it is used at all. For futures on the other hand, I use volume both in terms of market profile, and traditional volume on a semi-regular basis. However, one finds after using such tools for a while, one can see on the charts where volume is spiking or not, at what price points it dries up...etc. But to answer your question: yes for my futures trading, not really very much for my spot trading.

 

Let me know if there is anything else, or if you want clarification on anything I've posted in response here. Thanks!

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Ok... so, the next step here is... once a good idea of what the next day or so will likely bring, the next question is...where to get in on that potential opportunity.

 

I'm not going to get into everything here right now... but, I'll start with one component of it, and go from there.

 

Probably the single most important consideration is previous daily highs and low, followed by previous session highs and lows.

 

the "sessions" start at 5pm EST (aussie session), then at 8 pm EST (toyko), then again at 2:00 am EST (euro session), and finally at 8:00 am EST (new york).

 

For the session highs and lows, the logic here is that when a market starts to move during a session, there are stop loss orders placed above and below the session highs and lows.

 

Again, this is easier to show than tell... so I will use an example from the GBP/JPY that set up last week.

 

In the first picture, we see the price action of the daily candles.

 

In the second picture, you see how a previous session low was used to pick an entry point for a long trade.

 

In the 3rd picture, you see where that entry point was on a 15 minute chart, as well as a good exit point.

 

In conclusion, once I have determined based on daily, weekly, and monthly price action, as well as sentiment and fundamentals, as well as considering the underlying trend, I then will look for places on a chart that will likely become targets for the "smart money" to find liquidity they will need to fill their orders with minimal slippage.

 

And of course, I place my order just a pip or two in front of where that liquidity is very likely to be.

 

previous session highs and lows, daily highs and lows, weekly highs and lows, monthly highs and lows, etc. These are places that orders tend to build up at a disproportionally high rate... and the big players know this, so they use the stop losses that congregate here as the liquidity to fill their orders. So you are not only buying with the trend, and with price action on multiple time frames, but you are buying at a price that major players will likely be buying also.

 

Not because they want to, but because they have to, in order to fill the size they need with minimal slippage.

 

Of course, there is a LOT more to picking price points in which to take advantage of a potential opportunity in the markets, but this is probably the single most effective, and simple to use, tool to have in your trading tool box.

GJ-daily-session-low-entry.thumb.jpg.6272c7d66b6770c9aab3bff8d971d0e8.jpg

GJ-1hr-session-low-entry.thumb.jpg.2cf54bee5a65ed6190b277e30fc8e24f.jpg

GJ-15min-session-high-low-exit-entry.thumb.jpg.d38397d4c76f43f5c1e11ba7ca226a22.jpg

Edited by ForexTraderX

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A good example of the above "going long at previous session/daily/weekly lows" is occuring right now on the NZD/CAD. if you notice, around 0.8030 was a previous euro session low around july 26th. then, we have an asian session low around 0.8020, then we have a previous aussie session low around 0.8005, and then a previous U.S. session low around 0.7997.

 

So, in this 33 pip range, there are 4 previous session lows, none of which has seen price revisit it yet.

 

I'm not sure if I'll trade it, but I will say this: I believe it is more likely that price sees 0.8070, BEFORE it sees 0.7990, from where it is right now at 0.8030.

 

Watch those price levels, and see how price reacts as it gets near them.

 

P.S. Why would I say 0.8070 is a potential targeT? well, that is about where we made a high on last friday, during the U.S. session. Lets see what happens here.

Edited by ForexTraderX

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Here is how the last day or two played out considering previous session highs and lows in the GBP/JPY pair. This is a 15 minute chart.

 

Again, this is not the only form of analysis I use to pick good entry points intraday, but it's probably the best over all, and also the easiest to understand and put into use.

GJ-stop-run-examples.thumb.jpg.2c14fec7f666418ecd94440d78739096.jpg

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Another market that just broke it's prevoius U.S. session low is AUD/CAD, around 1.0450

 

It was the low of the U.S. session last friday. I would expect us to revist 1.0470 at the minimum, and likely 1.0483 (last weeks closing price)...

 

In fact, this COULD be the low until we retest 1.0500, or 1.0540.

 

But, no promises anywhere. Just pay attention today to these prices, and if the AUD/CAD gets there, watch how it reacts.

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Hey all, feel free to join in here and ask any questions or make any comments you may have. Post up here on the forums, of if you have skype, i'm trying to get a little trading room together for whoever wants to join.

 

Skype me at forextraderx. so far, got about 5 people here who have contacted me via skype, and i've been able to talk a bit more with each of them, and it's been cool. So... yea. if you want some help trading, and you want to ask someone who trades, you can do so, either here or via skype.

 

I've never worked so hard to give away free good trading info, but hey, everyone's gotta have a hobby, right?

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Here is how the session and daily lows from friday played out in the AUD/CAD, and the NZD/CAD, as I mentioned above. Here are 30 minute pics of each...

 

it shouldn't take a genius to see that once I have determined my directional bias, to place orders at these previous session and daily highs and lows can often times be the entry of the day, heading in the correct direction:

AUDCAD-stop-run-aug12th.thumb.jpg.0c0742491c256a81dcd1af7d616c14d2.jpg

NZDCAD-stop-run-aug12th.jpg.5602fc889f57100dbbd5aba02d0d7b43.jpg

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Ok, to answer your questions:

 

1. I have 3 brokers, one for futures and equities (IB), and one for spot (Oanda).

2.

.................

 

ForexTraderX

 

Thanks for taking the time to answer my questions. Btw your market charts are exceptionally clear and well thought out, like your answers.

 

Can you tell me what your win rate is and ROI % ?

 

Also which of the markets that you trade do you find trend best ?

 

Which futures emini or Forex pair would you suggest for a beginner to trade ?

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Hey all, skype me today/tonight (right now) to be included in the forex trading chatroom. Going to be doing realtime analysis of some trading opportunities in the forex markets, plus posting up developments live from my newsfeed such as:

 

 

EUR/USD, EUR/JPY up early, Japanese among buyers.

Japanese turn sellers later, consistent model sales in small amounts.

EUR/USD offers in place from around 1.0230, trail up.

Topside stops above 1.2390-1.2400.

Some bids around 1.0220 but light stops sub-1.2310, 1.2300.

 

and

 

0441 GMT [Dow Jones] The NZD/USD has spent the day in a narrow range after weakening overnight when better-than-expected U.S. data gave the USD a lift as "the potential for any quantitative easing is just being pushed back a little bit rather than actually being removed from the table," says Western Union Business Solutions Corporate Dealing Manager Chris Hunter. The pair is at 0.8050 vs 0.8045 early in New Zealand. Hunter says markets are now looking ahead to U.S. inflation, industrial production and manufacturing data later in the global trading day and "if we continue to see moderately positive data coming out of the U.S., that is going to reaffirm the position that the U.S. economy might actually be in better shape than expected," he says. He tips support at 0.8030 and resistance at 0.8100.

 

etc... plus discussing some market profile ideas for finding intraday SR levels, price action for directional clues, and hopefully making some real time trading calls (and even more hopefully, a profit)

 

Anyway, I'm just going to do it via skype tonight, since maybe this will encourage more folks to get involved...

 

Of course, feel free to ask any questions here, and if I see questions, I will answer them. I just don't want to be (for the most part) sounding off into the internet void here... thanks to those who have so far posted questions or been around for a skype session.

Edited by ForexTraderX

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    • Thanks for your suggestions man!! Our own decision surely makes us or breaks us. Thanks once again, buddy.
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