26/02/2010

26 FebruaryGBP March 10 Contract:



Following on from the same method of marking off the overnight range and then waiting for a break out. I took a little snap shot of a GBP chart pre GDP figure and I have marked it's trading range. The figure caused a little spike but price quickly retraced back into its range so I'm still looking for the breakout and for price to start moving (in what ever direction that may be) The green circles mark off the swing points of yesterdays move before the range.The red circles show the last swing high and low before the range. The pink lines mark of yesterdays trading range and the same set up. As you can see the breakout got me short and was a fairly nice trade.


11:20


Nothing really exciting happening with this GBP trade. Price is slowly ticking down to the base of the range which I have marked of at 1.5187. Sooo if it gets there then we are looking to trade the breakout however it also presents the opportunity for a naughty range scalp. If price tests that level and bounces then ill be looking to buy and hopefully ride it up to the top of the range. I have several ways determining if price has bounced or not and I'll post the setup if we Ever get there. The same theory can also be applied to shorting at the top of the range. While targets arn't large in this trade plan there is the potential to grab several bites of the cherry and can turn a slow day into a profitable one.


13:03


GBP breaks out of the range however I didn't take the trade. There where a few reasons why, firstly it was right on the border of having done 65-70% of its average day move (A theory which is not mine but a good one none the less and I think there are a few posts on here about it) But ultimately the reason was being a little to close to the GDP figure. As I said earlier I'm not usually too bothered about news announcements and figures however major figures such as GDP, NFP and interest rate decisions are enough to keep me out of the market, mainly just to avoid being stopped out by a spike. If I'm already in a trade there is not much I can do but I didn't want to take a position this close to the number This time it worked out in my favor as the trade would of been stopped out had I taken it however it could of just as easily come off and been profitable.


so had I taken the trade in the usual way. Red circle marks the breakout low, -2 round down to give an entry of 1.5180 (red line) stop goes above the pullback high +2 round up (blueline) at 95 and as you can see I would of just come about 2 ticks shy of the scale but would of been stopped out.On a side note these arn't the only trade setups I'm taking just the only ones im posting at the moment, didn't want you to think I sat here all day doing nothing.

24 Febuary 2010GBP/USD March 10 Contract:

This is a 10 min chart that shows the overnight range nice and clearly. Again the definition of a range for me is price being contained between its previous swing high and its previous swing low (marked with red circles) So mark off the boundary and wait for the breakout.

So the same as I did before. I drop to a lower time frame and wait for the break out.

This happened just after 08:30 and is marked by the red circle. So same process take the breakout low and -2 round it down giving an entry of 1.5300 (red line). Stop goes above the pullback high (blue circle) +2 round it up giving a stop of 1.5325 (light blue line). So thats a 25 tick stop half of 25 is 12.5 (13). So my scale out point is 1.5287 (green line) where I closed out 2/3rds of my trade leaving the last 3rd to run.

Now I know this is a little incomplete about the last the 3rd but I just want to run through this particular trade setup a few times and how I get in and where my stop goes as I think its a solid price action setup. There is no need for complex analysis or indicators all of the place. Its a simple range bound break out setup and I hope it gives a little insight into how I'm trading.

For me on this trade I hit 13 ticks on 2/3rds of my position and my last 3rd was break even. So again not gunna break the bank but if you working from a 3lot position then it boils down to 26 ticks to one lot. (I hope that makes sense)

I promise i'll run through the trade management for this setup soon and this isn't the only stratergy I look to employ I just felt it was a good starting point.Thanks for having a look and please any feedback is welcome.

Thanks

Pozzy

24/02/2010

Ok so im going to try and post in real time, Im only trading GBP/USD and EUR/USD at the moment.


24/02/10 EUR/USD March 10 contract:

Price is pretty much range bound and drifting sideways.I've used a 30 min chart to mark of the range because it is easier to see.















As you can see the Euro sold of rather nicely yesterday and made its swing Low at 1.3500(nice double 00 figure) Its previous swing High was at 1.3580. Now since price is neither making new swing highs or new swing lows I would define it as Range bound. So the range is marked off and its time to sit on hands and wait until there is a break out. Price did poke out for a cheeky false breakout at around 20:30 last night.


GBP/USD March 10 Contract:

As boring as it might be GBP/USD in pretty much the same situation.



















There was the big sell off yesterday on the back of King and the BOE statements and now the market is drifting sideways. It is very easy to look to the left of the chart see the big moves and feel that the range isn't valid or that its an 80 tick range so there is still plenty of potential to scalp within it. However price is caught between its previous swing high and low and until it breaks out the market will chop around within this boundary so for me the kettle goes on and it becomes a waiting game.


10:48 False break out on GBP:






Price on the GBP just pokes its nose out of its currents range signaling the possibility of a Long trade.

dropping down to a lower time frame, (I use a 2 min but thats just my preference) We can see MACD has also made a bullish cross. This gives a nice suggestion that buyers are entering the market and confirms a Long entry for me. I place my entry above the breakout high so in this case 1.5480 (this guards against a false BO) yet before that order triggers MACD crosses again bearish and the trade is canceled. Price drifts back into its range. Back to waiting