[thalestrader]

Originally Posted by thalestrader »

Hi folks,

Here is the current 6E. This is not an ideal situation, but the buy stop would be 1.4793.

I will add a few annotations to the chart and post it in a subsequent post, but I wanted to get this posted before it triggers (and of course, it may not trigger at all).

Best Wishes,

Thales

The first chart shows how I determine a potential zone of support. As you can see, there is nothing fancy or mystical involved. Within that zone, I look for price to "find a figure," i.e., I prefer that within that zone, price "picks a tick" that becomes the proverbial line in the sand between prices likely declining or prices resuming the rally. I also look for price to move in clear, distinct, swings.

As I said, this is not an ideal situation in that price has not yet "found a figure" and price has been moving in choppy, overlapping swings as price is consolidating at the recent highs. I would also not be inclined to play a downside break while price is between 1.4756-1.4773.

The second chart basically lays out the manner in which I map out this particular type of trade. Again, this is not an ideal situation, largely because any trade here is still in the chop, and as such possesses much lower probability than it would have had if this same scenario had played out yesterday immediately following the rally into the 1.4822 high.

I will post more favorable situations as they occur, rather than going back in time and showing complyed trades taken under better conditions.

For this particular situation, the buy stop would be 1.4793, the stop loss would be 1.4763, and the profit targets would be a very anemic 1.4811 and a better 1.4838. The fact that the first profit target offers an 18 tick reward for having taken a 30 tick risk disqualifies this trade for me, and therefore I am not trading the 6E at this time. Also, any trade belwo 1.4764 would invalidate the long opportunity.

This is basically the very same kind of opportunity that I taught my daughter to look for this summer, and she did very well with it, primarily trading the EURJPY. She would identify zones or beds of S/R, look to see if price picked a tick, and then she would wait for price to move from a low to a high to a higher low, and she would buy the breakout to a higher high; or she would wait for price to pick a tick, and then she would trade a breakdown of that figure. Obviously this would be reversed when price is rallying into a zone or bed of resistance.

None of this is very complicated, and it is best learned by observation and doing.

Best Wishes,

Thales

EDIT: I have been doing other trades and so it has taken quite a while to complete this post. During that time, I see that price has broken down, and the long would be off the table.

[thalestrader]

Originally Posted by thalestrader »

I would also not be inclined to play a downside break while price is between 1.4756-1.4773.

Price has declined to 1.4756 (1.4753 actual low at this point). I would here prefer to see a bounce/rally attempt and sell a break below that level. If the decline continues, then I would prefer to see price pullback toward this level, and then sell a break to new lows.

A break of 1.4753 has to continue quickly below 1.4747, or risk an immediate reversal. Profit target is 1.4722, entry 1.4752, and stop loss 1.4782. R/R works (barely).

Still, trade seems very uncertain and uncommitted, and I will stay the same way by standing down. I have had a good morning elsewhere, and I am going out to sit on y hands until after the market has a chance to react to the Fed Theater this afternoon.

Best Wishes,

Thales

[thalestrader]

Originally Posted by thalestrader »

I would here prefer to see a bounce/rally attempt and sell a break below that level. If the decline continues, then I would prefer to see price pullback toward this level, and then sell a break to new lows.

These two charts do not represent predictions nor actual trades. These are simply two schematics that are meant to provide examples of the type of price action I look for around S/R and how I trade it.

The pulback.breakout is somehwhat easier in that I am looking for price action in and around a zone of S/R, whereas the simple breakout requires that price action find a figure near the edge of a S/R zone.

Also, for every rule a reader perceives in my posts, real or imagined, is subject to being broken, especially the imaginary ones.

Best Wishes,

Thales

[forrestang]

Originally Posted by thalestrader »

....... She would identify zones or beds of S/R, look to see if price picked a tick, and then she would wait for price to move from a low to a high to a higher low, and she would buy the breakout to a higher high;

Originally Posted by thalestrader »

or she would wait for price to pick a tick, and then she would trade a breakdown of that figure.

Thales,
Two quick questions:
1.) In the picture below, would you say that this is too loose to fit the criteria I quoted in the first quote, for price drawing a line in the sand if you will? I was just trying to find an example, not the best example. Would a long at either the 1st or 2nd green arrow make sense based on the quote above?

2.) I've been more so doing the thing mentioned in the 2nd quote more often than not. Is there a way you go about picking which way you plan to trade, i.e. shorting the breakdown that picked a figure or playing the continuation? In this second picture below, it may not be the best example but I am trying to find something real time.

Would you say that price has somewhat drawn a line in the sand to the downside along with that swing high to the far right from which I have drawn the red line. And either a BO above the green line at top or down the green line bottom make sense?

Again, this isn't the best example but looking for something showing the general 'swings' and how it might relate to reasonable direction.

[HAL9000]

FOMC after two beers on sim.

This might have nothing to do with reality,
but while I traded up too three contracts,
at the beginning I traded on hope or on impuls,
then I've watched my charts.

Well, its just sim, and my timing chart is attached.

Hal

[HAL9000]

LOL, two beers: wrong thread. Excuse me please.

Regards,

Hal

P.S.: 6B is still falling as I write this.

[thalestrader]

Hi Folks,

Update on the GBPUSD: My daughter and I are going to manage this potential position trade together in her micro account (I included a screenshot that should be familiar to fxcm traders). We had an order to sell short a small initial position at 1.6327, which was just filled within the last few minutes. This is a small "attack," and we will close the position with a small loss should price move against us.

Our main point of interest is still a break of 1.6100 with a special interest in a weekly close below that figure.

The plan will be to establish an initial core position and add to that position if the market does move favorably. If the market does not move favorably, we will cut our losses and look for other opportunities.

Best Wishes,

Thales

[thalestrader]

Hi Folks,

A last look at the Yen futures before bedtime. Three items of interest:

1) Look at where the decline halted from this afternoon's sell-off - prior support turned resistance turned support.

2) Note the price action following that low (Low-high-higher low) which triggered a long trade into resistance turned support turned resistance

3) Note price action subsequent to price reaching that resistance level. (High at resistance, - a pullback low - and as of this moment, a potential lower high).

For those interested in this sort of thing, it might be useful to compare these Yen charts to the 6E charts I posted earlier in post #339 of this thread.


Again, I am not making predictions (I am not among the initiates in the predictive arts), I am just making and taking notes.

Best Wishes,

Thales