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RE: Forex Trading Journal, June 1st 2017
So glad to have your comments here!
I saw a trading range from Oct last year with upper resistance near 1.2767, and broke out at 18/4. Then the resistance become support and the price is now coming testing this level.
But as you said, this has a massive downside potential. I am not sure how much effect the large bullish bar (26/5) has. If that bar closed below 1.2767, then I definitely won't enter this trade.
But the price maintains above this level, so I decided to play with the probability. lol
Lots of downside potential, but if price is coming back up to test a level, then that is a major indication of the consensus of the market. Prices test levels because they want to break them. The more they get tested, the weaker they become!
What pairs do you trade?
Do you have set patterns that you look for?
Or do you adjust to the markets resistance points and trade off those as they develop?
Not to get too nosey...just love that I get to talk with other traders now!
Sure, I am happy to have this kind of talk. :)
I think maybe you are right. Two days passed and we still don't see any obvious upward move.
I trade mostly major forex pairs and metals. Basically, I will go with the longer-term trend, and look for major support and resistance levels. I will take rejections at those levels as my entry signals (like pinbar or false break-out from inside bar etc.).
To say frankly, the trade we are talking now is not the one with a typical signal that I should take based on my plan. The type that I take with more confident is a pinbar formation at a pivot point near SR level. I found that those are the trades with high enough probability if I enter every trade with risk and reward ratio more than 1:2.
Yep. I think thats a good way to go about it too. I had a period there where I traded the exact same way as you do! I found this worked well if you could scan through charts, looking for trends. And pinbars are such as obvious trade signal that they generally create a reaction just based off their presence alone...if that makes sense.
THIS, however, is the exact trade I look for. It is a trade where buyers come in early at the first breakout, set their stops at an obvious spot, the market moves to these orders like a magnet, creating a great price to get in.....AND what is essentially the trade you like to take as well (false breakout of inside candles)...which is a rejection of a strong level. In this case, replace the word "strong" with "significant", and you have the same trade setup you normally take. Except the context is different; trend vs range.
I personally feel the range trades have more potential though. A lot of orders build up outside the range during congestion, and makes for a fairly predictable movement!
And you catch massive long-term trades by getting in on a shorter-time frame! I generally enter on the 15min, using the 4hour and daily charts for setups.