Technical Templates

[jcpfx]

Leave it to us italians to create serious volatility! Italians do it better

Apart from the bad comedy, the situation here in Italy is not looking good. Adn the markets know it. My lack of experience in trading during these times is leaving me pondering about the recent move, how much has been discounted in it, and the amount of ground covered by the Jpy.
Fundamentally, the Euro has a reason to fall but the Jpy does not (for now). Technically, the Euro probably dragged down the Jpy crossed via EurJpy and got a bunch of stops triggered.
Also, today my reasoning would be that the markets would like to stay range bound and/or retrace some of the recent ground BUT I have no experience to justify this scenario. The trend remains my friend (generally) so I'm still looking for EurUsd shorts & UsdCad longs today.

Regarding UsdCad, unfortunately I was stopped out today and wanted to know if it's really a problem of me placing my stop loss below point 3 of the 1-2-3 setup...


UsdCad4h

UsdCad1H

Trade start on 15Min

Stop Loss on 15Min

and by now the trade would have left me various options...

Any thoughts would be appreciated!

Thanks!

[round number]

Regarding UsdCad, unfortunately I was stopped out today and wanted to know if it's really a problem of me placing my stop loss below point 3 of the 1-2-3 setup...

Sorry jc, but I can't see your chart captures very clearly, therefore can't make out your entry/exit etc.

You know the 4 hour trend is bullish on usd/cad, you also know the trend is following suit on the 1 hour, plus there's a stoch hook in evidence!
So if you're tracking a high probability (potential) entry into the early european business day (highlighted in the shaded box), what you should be seeking are higher lows on the sub hourly charts.

And from the material posted on here, the ideal entry in these typical trending conditions is to engage as & when price pulls back in sync with stochastic hooks on either the 5 or 15minute charts and/or clear 1-2-3's.

I don't really see a clear 1-2-3 on either chart, but what I do see as London comes onboard on the 5 & 15m charts is price mirroring the higher low behaviour on the hourly charts.
Therefore the tactic is to get in on the turn of any of those London based pullbacks (which is what a stochastic hook signifies) & if your entry is on or around the highlighted dots on either of those hooks, it would make sense to allow price room to manoeuvre & confirm the next intraday leg of this bullish background.
In that situation it would make more sense to position your stop underneath the current day low of 1.0240

Once you know where your stop needs to be to allow for a common sense entry & you know the amount of capital you're prepared to put at risk for this bet, you can work out your ideal bet size.

[jcpfx]

Thanks RN,

sorry for the lack of clarity on the screenshots... but they represent exactly what you showed. I entered at 1.0253 on the 15min candle @ 10.00 CET but my stop was just below the previous pin bar at 1.0245

I'm not really upset, because the market DID offer the upside expected and given the current state of things, I played with a small stake. But I must correct my stop placement. It's done some harm to my bottom line.

When studying the past price action, I had come to the conclusion that putting the stop below point 3 on the 1-2-3 was sufficient. But in live trading these days, it seems that the stop has to be below point 1 + spread to keep it reasonably tight.

Thanks for putting up the charts & for sharing your thoughts

Edit: by the way, my focus going into tomorrow will definitely incorporate NzdUsd short view & GbpNzd Long view as things are right now... Aussie still has to catch up but may become also interesting...

[zilly]

I entered at 1.0253 on the 15min candle @ 10.00 CET but my stop was just below the previous pin bar at 1.0245
I must correct my stop placement. It's done some harm to my bottom line.

You'll slow bleed your account to death jcp running such very tight stops on most of these instruments.
Sure, you'll get lucky now & again but over the medium to long haul it's a tough ask to make headway adopting that tactic.

If you have an obvious (current day or week) low nearby which was the case on usdcad this morning, it's always worth using those technical levels as your guide.
At the very least, if price violates a level such as that & invalidates the higher low trend sequence, that is decent confirmation the primary reason for initiating the trade in the first place is no longer valid.

my focus going into tomorrow will definitely incorporate NzdUsd short view & GbpNzd Long view as things are right now... Aussie still has to catch up but may become also interesting...

I agree, Kiwi is getting slapped this week.
Yen is also worth putting on the (pullback/continuation) front burner.
Shona's cadjpy short off 92.0 being a prime example!

[jcpfx]

I entered at 1.0253 on the 15min candle @ 10.00 CET but my stop was just below the previous pin bar at 1.0245
I must correct my stop placement. It's done some harm to my bottom line.

You'll slow bleed your account to death jcp running such very tight stops on most of these instruments.
Sure, you'll get lucky now & again but over the medium to long haul it's a tough ask to make headway adopting that tactic.

If you have an obvious (current day or week) low nearby which was the case on usdcad this morning, it's always worth using those technical levels as your guide.
At the very least, if price violates a level such as that & invalidates the higher low trend sequence, that is decent confirmation the primary reason for initiating the trade in the first place is no longer valid.

my focus going into tomorrow will definitely incorporate NzdUsd short view & GbpNzd Long view as things are right now... Aussie still has to catch up but may become also interesting...

I agree, Kiwi is getting slapped this week.
Yen is also worth putting on the (pullback/continuation) front burner.
Shona's cadjpy short off 92.0 being a prime example!

Thanks for the suggestion Zilly. I will definitely pay more attention to those types of levels.

I do have one question: since my ideal trade management is to follow the 15min cycle and pull my stop below the most recent swing, I thought that the stop loss could be realtively tight. If the currency pair starts to violate the cycle, then it's logical that I should be taken out. At least, that's what I had been thinking until getting these stops hit.

Today, in hindsight, I would probably NOT have stayed in for the ride on UsdCad for that exact reason.


UsdCad15Min chart

i would probably have exited at par, given the 15min cycle leading back down to 1.0250s. At a closer analysis, the market created a volatilty expansion, and not a cycle change..so really the initial rationale of keeping the trade on by following the cycle movements would have held up even in this case.

To sum up: my doubt (given the lack of experience) is whether a wider stop is compatible with the trade management I'm adopting. If the 15min cycle starts to change on me, by failing to print a higher high in an uptrend, and then falling below the prior low, then I would get out of the market. So I diddn't think I needed wider stops...

[zilly]

since my ideal trade management is to follow the 15min cycle and pull my stop below the most recent swing, I thought that the stop loss could be relatively tight. If the currency pair starts to violate the cycle, then it's logical that I should be taken out. At least, that's what I had been thinking until getting these stops hit.

If once positioned you're managing your entries via the waves on the sub hourly charts then you're right, you've got no option but to take the hits as they come.
Sometimes you'll get away with tight stops & the wave will kick on with strong momentum without violating the trend sequence on that timeframe, but there will lots of times where you won't get away with it.

If the evidence of your testing suggests that tactic is a worthwhile exercise then you simply have to absorb those regular hits, chalk them down as a business expense & stick to the plan.

Only you know how much risk you're prepared to allocate & take, what kind of trading style you prefer to adopt & how that criteria fits with your trading objectives.

As a group we can all be looking at exactly the same information when evaluating the technical background structure.
As a group we will all be eyeballing very similar set up levels & trigger combinations.
But that's where the similarity usually ends.

It then comes down to experience, familiarization of your plan, personal objectives, risk appetites/profiles & trading styles.

[Se7en]

It didn't take long to pull the spotlight pairs out of the hat this week.
For the moment I've got 4 on my main log going into Monday, but as ever it's open & subject to a re-shuffle if & when circumstances dictate.

To that end I'm eyeing continuation shorts next week in:
eur/usd – only a break back through 1.3160 will violate that view.
gbp/usd – a break back through 1.5220 will violate that view.

Heading the continuation longs next week are:
usd/cad – a break below 1.0210 will violate that view.
usd/chf – a break below 0.9330 will violate that view.

All violation levels are 4 hour swing zones except in the case of usd/chf which also represents a key recent resistance zone.

[visualxray]

Hey se7en,
I've just finished re-arranging my priority pairs for next week too this afternoon & concur with your selection.
Australian Dollar remains on the front foot going into next week & I have another couple of high potential shorts in AUDUSD & EURAUD to add to the two you highlighted.

[Eidriel]

Hi Se7en and visualxray.
Thanks for sharing. I am glad that I happen to have the same pairs you guys picked in my watchlist.

Although not one of the top in my priority list, I also do consider NZDUSD and AUDNZD in my list, if the right trigger does take place!

All the best into next week!

[jcpfx]

Evening gentlemen,

I'm late to the party, but I'd add UsdJpy to the list. Late Friday it's passed into positive territory and looks like a potential candidate for longs as long as 92.40s (friday lows) are intact. I also have Euro & Cable shorts in my plan & UsdCad longs.

Good Luck to all this week!