Bullseye Shot on the Euro

On Thursday I shorted the Euro based on a 4h triangle forming. Normally, I don't like trading inside of consolidation, but on the 4h there is usually sufficient range for swing trading. Especially the past few weeks where the daily ranges on the Euro are over 200 pips. Initial entry was based on the trendline as well as confluence from price-time squaring analysis.

Through the Euro session into Friday, price fell into a channel on down to the 50% area and bottomed on one of my time points. A very profitable start and a good place to exit. However, the plan was to swing trade the larger pattern. I figured price would meander on back to the 23.6 or 11.4 for a setup to add on to the short. Again, being a swing trade, I wasn't too concerned about the retrace eating up the profit of the 1st position because the 4h pattern is strong.

Price congested at the 50% mark after time and there were no signals when price reached the minor time lines. Price finally busted on through the 23.6 with gusto and that made the next time marker the key time marker. I used a trend line cross on the 15 min. as a time mark which also coincided with a 13 bar count from the recent low on the 30 min. Remember, time lines are most important when price is falling or rising into them for 5-8 bars or more.

When price breaks through a key resistence/support area with gusto against the larger pattern or trend, it is many times a false breakout or pattern failure. I was not shaken out because there was still one more key Fibonacci level of resistence. Also, price had gone parabolic. I didn't draw it on the screenshots, but it's plain as day. See if you can see the parabola. Parabolas are nice setups because what goes straight up must come down in time related to the angle of ascent.

When price reached the price level right at time I didn't even wait for a closed candle. This setup is like getting AK and then flopping a full house. 11.4 and it's 88.6 opposite are relatively unknown fib ratios but they're so powerful when they hit. Combined with the 13 bar count, there is no choice but to short. Based on time, I'll be holding on for possibly 3 full trading days and watching for more price-time squaring or key levels of support to fall to add on . A pretty good ending at the end of trading Friday.

One last bite of sushi....

Shorted GBPJPY at a trendline. Closed on a time line. The beauty of trading time is being able to walk away and come back when the time line is up and see how things are going. 160 pips or so. Nice way to end the day. There isn't a reversal signal yet, but I'm outta here anyway.

Another short trade

Static time cycles, oscillator divergence, 360* of price, and a larger frame double bottom led to a nice trade on the GBPJPY today mid morning. Candle charts are 15m. The one showing sq9 squares is 1h.

Entry:
http://img219.imageshack.us/my.php?image=tp_70Nov13.gif
http://img219.imageshack.us/my.php?image=tp_71Nov13.gif

Exit:
http://img219.imageshack.us/my.php?image=tp_72Nov13.gif

The exit was a bit pre-mature in that I existed at the cluster of pivot levels without waiting for any kind of reversal or end of move indication.

A bit later today or tomorrow I'll post some other trades I made yesterday that show that even nailing tops and bottoms to the minute don't guarantee profitability.

Scalping Yen in the Asian Session

I had some time to kill yesterday after work so I decided to scalp the USDYEN pair in the Asian session. I haven't scalped in ages so I thought it would be a nice way to break in to trading again. The Asian session is usually pretty mild so I wasn't expecting any monster moves.

I started with a 1m chart and setup a few static cycles off of some of the most recent major highs/lows. In my research, I've found that any number will work as long as it comes off of a point of change. I'll usually start with Gann or Fib numbers like 12, 13, 45, 68, 120, 144, etc. I may also divide the number of minutes in the session evenly. So for the US stock market it would be 390 minutes divided however. Forex can be 1440 for a 24 hr period or 480 for a specific session.

I didn't have a lot of time to get intricate with top down charting and analsysis so I just went with basic trend lines, channels, chart patterns, pivot points, and oscillator plays.

The first trade was based more on price hitting the top of a down sloping channel and hitting a pivot line. There was upward divergence from the oscillator and a time line had just barely hit, but I felt the pivot and trend line would be solid resistence. I waited for 2-3 candles to close to make sure price wasnt' going to push through and then went short. (Charts are clickable thumbnails.)



Price moved on down to the next pivot line and bottomed at the next time division at which time I closed the short and entered long. Normally, I wouldn't trade against a channel, but price was coming down to a lower range pivot which is usually strong enough support to get some action. Price had also pushed through the oscillator trend line.



There was some erratic action for a few bars and I took a chance adding another long when the next time division came up. The target was the next pivot line. Also, there is a cluster of 3 time points coming up.



Price achieved the target and both trades were closed. Now the task was to wait for price to drop into a time line for another chance to go long and see if price could push through the pivot line convincingly. I jumped the gun on the first opportunity and went long before the candle closed on the time line. It's best to wait for the candle to close at the earliest. It's usually best to wait one or even two candles after a time line especially if there is no discernible support/resistance. I also drew in some saw wave lines to gauge cycle overlap. That provided enough confidence to wait for the next time line to add another long.



Price moved on up through the pivot but did not break the previous highs. The saw wave showed the cycle was up as well as price rising into a division of time so I exited both positions for small profit.



All told, the trades yielded about 75 pips in just under two hours during a relatively quiet time. I wanted to stick around for another opportunity to go long and see if price was able to reach the next pivot (which it did) but the wife showed up. Either way, the first scalp session was a good example of adding some simple time cycle techniques to traditional chart analysis for picking market reaction points to the minute. I don't know if I'll make a habit of scalping since I don't like sitting around in front of charts for more than 20-30 minutes. I much prefer 20-30 minutes of analysis, set entry orders, and then coming back later to see how things played out.

I'm back

I took the last year off from trading in order to focus on school and some other things. I've actually been back to watching charts for the last few months to try and get my "legs" back so to speak. In doing so I've had to re-learn quite a few techniques and figure out what the heck some of my old blog posts were even talking about. On the bright side, I've also gained a better understanding of some of the things I used to do and added some new dimensions.

One of the things I haven't done in a long time is intraday and scalp trading. I've got a whole statistical based system that did quite well for intraday and scalping but like most systems out there it doesn't do a good job accounting for time, although it does give a general ball park.

The problem with scalping and intraday is that things can happen on such a wide scale without the benefit of getting too intricate on the analysis. For example, it wouldn't be the most practical to use my new crop circle method on a 1 min. chart because it would take 10-15 min. to get the patterns right. However, by simplifiying things and just going with some static cycles along with basic price measures such as square of nine price levels, pivots, Murry Math levels, fibs, or just trendlines and support/resistence, there are plenty of spots to pick market turns on the pip and to the minute.

Intraday and scalping also present another aspect that I haven't dealt with in a while and that is trading with the poker mindset. When I say poker, I don't mean gambling. I mean sitting there making quick decisions based on a small amount of information. Folding hands ie cutting losses and moving on to the next hand.

Anywho, I'll be updating the blog shortly with some new findings.