GBPJPY – Friday 1AUG08:- my last trade on this pair closed out Friday morning when it hit the 800 SMA on the 1 hour. This pair has bounced off the 800 twice recently. This is a heads up to start looking for Divergent trade setups. Nothing currently, but watch the pair as the week opens to see if we get any good setups.
UPDATE Tuesday 5AUG08: I took two trades off this setup. The first was a quick SR trade Sunday night. Pair was in a range between the 800 and about 30 PIPS below. I took a quick trade on a downward movement that closed overnight for a gain of about 30 PIPS. Monday night, the pair broke the long term SR level and the 800. Entered on a bearish candle that closed below the 800. I had 2 short positions on that were not doing much before the 12:00 a.m. rollover. I felt strong about the overall trade, but due to the FED data coming out Tuesday I did not want to risk a fast spike up/down in anticipation so I took off one position. I ended up +98 PIPS in the a.m. when I woke up. Dissapointed I lightened the position, but I slept much better. I have learned the hard way it is more important to give up some potential PIPS to protect your account balance.
Friday 1 AUG close Tuesday 5AUG08 – completed trade movement
USDJPY Friday 1AUG08: The pair had a Stochastic cross on the 1 hour but it was oversold and the candles did not cross the 200 yet. I am watching to see if the pair can cross the 200 SMA for a possible trend resumption and confirm by closing above the 62 EMA. This would be a good probe for a probing trade with the still in place upward trend. Goal 50 to 100 pips. This is a watch an wait setup for next week.
UPDATE Monday 2AUG08: I took a probing trade on a Stochastic cross and oversold candles but closed it when I saw strong upward movement for a small loss. Good call as the pair continued upward for many candles.
GBPJPY Support/Resistance trade – This is really a continuation of a trade setup from last week that closed out. We had a Channel breakout to the downside last week and traded it down to the 800 SMA on the 1 hour chart. I then took a few probing short trades that stopped out, only to realize price was heading up to the bottom the old Channel, which is exactly where it stopped. Now, we have some clear SR trendlines in place. I think there is more of a chance of it breaking to the downside based on trendlines and oversold indicators. I built a small possition overnight (was stopped out first but eventually found the correct levels) and woke up to 70+ PIPS on a small position. I then doubled up (still below my normal trade size), and moved my SL down to 25 PIPS above the most recent SR line. I was taken out at a 4 PIP profit – B/E. If you look at my last GBPJPY trade idea you can see a good view of the previous Channel and subsequent break out downwards.
After drawing the new downward TL that is now in place, I think I found the TL that price is following. I again have a small exploratory trade on that is in a tight 25 PIP range for most of the day. If price breaks the TL and eventually the old Channel, I may consider a trade up to the old most recent high. The current trade is short back down to the lowest most recent SR level as Target 1, and Target 2 is just above the 800 SMA on the 1 Hour.
UPDATE 29JULY08 – This trade significantly broke the channel on the upward side overnight and stopped out. I decided to take another short probing entry this morning, all in all I have broke even less a few pips after I closed that possition once it touched the 200 and started to retrace. I am now flat in this pair and am watching to see if the pair can close below the 200 on the 1 Hour. If the risk reward ratio still looks good I may consider another small possition trying to get to the 800. Otherwise this trade idea is over.
UPATE 30July08 – This trade is closed for now. The pair spiked up overnight and hit my stops. I still think it is biased to the downside but unless it breaks the long term SL line on the daily, I am not going to re-enter for the time being.
UPDATE 31July08 – Trade setup started trending down, re-opened. Trade is hitting long term trendline. If breaks, I believe this one will run far. I have a small probing trade on now as the Asian session is winding down.
UPATE 1AUG08 – Pair broke through the bottom of the box and shot down to the 800 overnight. My targets were hit and this trade is now closed. 100 PIPS while I was sleeping – nice!
Here is what the Trade setup looked like as of 1800 Monday 28Jul08:
Updated view – showing channel break – 1800 19Jul08
31July08 1 hour and 5 minute chart update
NZDJPY STOCH Cross and 62 EMA cross – This is a quick little trade that I saw. Two of my favorite setups, one is a Stochastic crossover indicating the pair is going to fall, and a cross back down through the 62 EMA which resumes a previous downward trend. I am so hyperfocused on the GBPJPY and EURUSD for the past few days, I am glad to find this little trade. Only going for about 35 PIPS as this is normally a slower moving pair. Risk is very low even if the trade does not work out.
Update – this trade worked out textbook. I closed it at the previous low on the oversold bar below. I scaled in two possitions as this was a nice slow moving trade. I got the bonus of the trade closing during rollover at 12:00 a.m. and a fast oversold spike. I had a stop market on and picked up an additional 18 pips!
Here is the trade opening:
Here is the close – I got out at the large overbought just before breaking the Mesa line
GBPJPY pre-us open – taking a small stab at a mesa trade down to 212.76, trade just opened. SL is at 214.50 and entry is at 213.95. Most likely this is the last trade for the week. This is a quick trade, no analysis, just a reaction to what I am seeing the market do and based on existing trade setups I like.
UPDATE – Trade closed and hit my stop loss almost a quick as I put it on. This pair amazes me at its powerful surges. It is reaching as I type for the bottom on the former Channel Trendline. I jumped into this and should have waited for the candle to close.
Here is the trade setup:
GBPJPY trade that closed earlier has a possible continuation / re-entry if it breaks the old Mesa line at 212.76 that it has been obeying. If it breaks and profit targets are still in line I’ll take a small possition. Possible additional possition could be placed if it solidly breaks the 200 with a final target at the 800 SMA on the 60M
25July08 This Trade is now closed. It hit my profit target pre-European open and promply reversed which is why I was only trading 1/2 my normal size. I am happy this trade closed profitably and did not reverse before my Take Profit target overnight as has so often happened with this pair. It did reverse hard as it is known to do.
Here is the trade setup:
Here is the final chart – 800 hit and then reversal:
USDJPY is classically divergent on the MACD and oversold on the Stochastic. Also a shallow stoch cross and pair recently touched the 800 SMA. No trend clearly in place on 60M. Although this looks like a great setup, I have learned to be careful with this pair as it often reacts differently from what one expects. I will take a short entry only if pair falls out of oversold and confirms at least one candle on the 60M. And only if there is a reasonable win-lose ratio after confirmation. I’d rather miss the trade by waiting for confimation than forcing an early postion due to this pairs historical behavior.
Update 23July08 – This trade idea is closed. The trade technically happened but the potential profit became too small that I decided it was not worth entering. I will watch this pair for another setup as it is about to hit the 800 again on the 60M.
USDJPY Divergent Oversold Setup 23July08:
USDJPY – Trade Setup closed, worked but profit target was too small to take
EURUSD Counter Trend Reversal:
This is a better planned redemption trade second entry to the EURUSD short trade yesterday that closed out after hitting my SL and promptly reversing and record speed. I have a unique talent for placing my stops right at the reversal points – if only it were a talent I could get paid for! After getting taken out on the original entry and waking up nauseous after seeing the takeout happened 1 bar before the break and broke hard.
After I recovered, had some nice expresso and decided to go on with trading in spite of this setback, I waited to see if the pair would break the short term TL on the 60M. I entered after the break and over 2 days followed the pair, leveraging new positions once profitable. Took some off at key danger points, and reentered the trade after confirmation after the momentum continued. This was my best trade both in PIPS and profitability in several months. Well over 125 pips in range. I am still in this trade with one final position to see if we get a continuation break down from the 60M 800. As I write this, the Asian session is just ranging tightly. I expect the Eurpean session will break hard in reaction to the 2 day downward trend but being a mere mortal can not predict the direction. There is fundamental data that also weighed in on my thoughts of this trade. On a purely technical basis, I would normally have closed this final position and waited for a new confirming break.
UPDATE 24July08 – The initial trade setup is now profitably closed. I am watching to see if a continuation trade setup will occur and will take a better look at the overall longer term trends.
See the trade setup below – now ranging oversold around the 800 on the 60M
GBPJPY –> Pair is divergent and overbought. Pair at top of 3 day channel and hitting old SR Mesa line. Waiting for a clear break downward. Would be very hesitant to take a long position due to extreme overbought signals pair is showing.
I am considering taking a small probing position during the late Asian session 1:00 a.m. edt.
UPDATE 23July08 PM – probing position put on early pre Europe closed and pair climbed stongly. Pair is still overbought and very divergent on the MACD. Redrew Channel with higher high and channel TL’s are being obeyed as of now. I still am looking for a short entry on this pair but will enter small probing positions due to the very high volatility this pair is known for. High stops need to be placed to have a chance to catch the eventual movement. Profit Target 1: 62 EMA . which is also now at the lower TL of the channel. Target profit 2: old SR line at 213.66
Second Probing Trade opened: 20:15 EDT. Still overbought, starting to fall. Placed SL above recent highest high. If Successful and break follows through, additional possitions will be added while keeping in mind conservative money management on this pair.
UPDATE 24July08 – This was a great trade overnight. Woke up to my initial profit target being hit at the 62 and 1/2 my positions already in the bank. I added another position once confirmation of breaking an existing SR line occurred. I closed the trade once it started to look like it was going to reverse. Conservatively played due to the high volatility of this pair.
Initial Trade Setup Entry:
Updated Trade Entry and Second probing entry:
Updated Trade Close – PIPS Collected!
GBPCHF has risen too high and at too steep of an angle on both the 1 and 4 hour charts. It is oversold and the STOCHASTIC has recently crossed on the 1 hour. At first glance it looks almost divergent – 2 oversold candle patterns however MACD is not divergent. In my opinion this pair has a reasonable chance of retracing to the 62EMA before resuming it’s very new long trend. It broke out of a Surprise box and kept a tight range for about a day and then took off.
The 4 hour shows we are at the top of a very large range. Last time the pair hit the recent SR line it dropped hard and fast. We are looking for a repeat of this pattern but with a conservative initial profit target only down to the 62 on the 1 hour. If we get PIPS then we can move our stops and PT accordingly. Quite possible this will all unfold in the European session and will be missed altogether.
Watch for clear downward candles on the 1 Hour, preferable out of overbought and set profit target just above 62EMA. Low leverage. This pair can move al ot of PIPS, not worth risking much margin on a weak setup.
UPDATE: 23July08 – This trade idea is closed. The trade happened but I was already deeply in the EURUSD short trade. The trade opened and much of it happened during the European session so I missed it either way.
Here are the trade-setup charts for the 1 Hour and 4 Hour:
1 Hour 4 Hour
I saw some downward movement near the Asian open and thought I’d get a quick 15 to 20 pips. I entered a short trade on the EURUSD with a 20 PIP target and 10 PIP SL. The trade setup worked, however, I was leaving so increased my target and the original target was hit, but then the pair reversed. I was near the session high and bought in again with a 7 PIP additional risk. Trade is still open as of 12:15 a.m. but slowly creeping up. In retrospect, too slow of a market to enter this type of a trade. Results to follow. Aggressive target is now just above the 5 min. 800 which would give about 40 PIPS.
Update morning of 22 July 2008
This trade closed out once last night on a move just above my SL. Just before I went to bed, it started going back in my direction and I re-entered with a higher SL, and changed the goals to just above the 800 on the 5 min. which was also about the 62 on the 1 hour. I like both of these types of setups and this was a 2fer.
I am a bit bummed this morning (I’ll get over it). The trade worked out exactly as I had hoped. So was I wrong about the trade? Nope, just poor execution and that nasty need to sleep affected the outcome. Actually it even ran past the 62 and 800 (5min) at about 7:00 this a.m. The only problem is somewhere around the 5:30 to 6:00 hour my SL was touched and the trade immediately reversed.
So – what have I learned? Sometimes stops happen. I was overleveraged a bit so although my SL was above the trendline on the 60M, it was a bit tighter than maybe it should have been. I should have had a higher SL using the 60 minute frame and given myself more room to ride this one out. It was not a bad decision to limit losses, it justis frustrating when you are so close and your SL is just a fw pips too close to the reversal point. Next time maybe I’ll use less leverage…
Here are the final charts on the now closed trade:
EUR/USD –> Surprise Trade Box has formed last few trading days. Watch for breakout and take position. Tight stop inside box. Goal 30 to 50 pips. Slight trend towards upside, risk is downside correction. Recent high is also alltime high.
USD/JPY –> Price is trading around 800 on the 60 mi and 5 min charts. Surprise box on 60 min. Price now at 800. Trade surprise trade on 60, and trade break away from 800 on 5 minute. Best setup would be if these both correlate at same time.
GBP/CHF –> Large support resistance zone, consolidated into tighter Surprise trade box. Wait for suprise trade on either side. The pair has also been swirling around the 800 for the past few days so I am also looking for a possible divergence setup on either the MACD / Stochastic or a stochastic crossover entry. Nothing setting up, the surprise trade looks the most promising.
GBPJPY –> Watching this pair for a trade setup for a possible bounce up from the 62. It is close to hitting the 62 now. Other possibility would be a break through the 62, which would mean a short trade down to the 200 as an initial target with tight stops and low leverage due to this pairs volatility.
Watchlist as I go to bed for the night: