The disciplined ​trader

As a financial trader, if we say we are performing well, we mean that we have substantial and consistent profits over a large sample size. But they are two different goals. ‘Consistent’ has to be achieved first and maintained as we gradually introduce the ‘substantial’. Each brings its challenge.
In doing so, one of the skills discretionary traders work hard to develop is the ability to see beyond arbitrary divisions in chart structure and to perceive the flow of the market for what it is.
However, the more we trade, the more we firmly realise that the market works in some wonderfully counterintuitive ways. And to add to that, there are significant differences in the ways that equities, futures, and currencies trade. We should not think that one trading system fits all.
My trading foundation is the knowledge that (as Grimes says) “markets tend to work in mean reversion mode after a period of expanded volatility, and in range expansion mode after a period of contracted volatility; this is a price-pattern expression of an underlying cycle in volatility. Cueing into this cycle, and being able to predict the most likely emerging volatility regime, is perhaps the most important skill for the discretionary trader.”
Grimes continues, “in the best case, discretionary trading techniques are an ideal fusion of reason and intuition—right-brain and left-brain thinking—that tap into the most powerful analytical and decision-making abilities of the human trader, but everything depends on a deep understanding of the true tendencies and forces behind market action.”
Once realised my job is to have a detailed trading plan that understands the above quantitatively proven occurrence and then to put on trades dictated by my methodology, setups and system.
In other words, as a trader, my role is to follow my trading process and to do what it tells me at the right time. That is the principle behind any disciplined trader.

A not for the faint-hearted FX set-up.

From our ‘live’ skype trade room chats. A couple of 70 per cent add-on tactics that are not for the faint-hearted. And a useful quote from the ‘Dealer’ book.

(Buzz) With a build-up below or above a round number set limit entries at zero, five pips and ten pips. Stop 20 pips. Exit 5 pips below (or above if long). 70% probability he (the author) says.

From the ‘dealer’ book, a tactic with a 70 per cent probability.

(Buzz) The author keeps 1/3 of the trade to take further as required.
That is Cable but applies to all.
What is happening is the ‘dealers’ are going after the stops of those that entered short early with tight stops above.
It’s not our broker – not big enough. It’s the big banks.

Further on the above. It’s not real money that’s doing this. Imagine if you usually traded at the 100 million or higher level. And if you don’t do it too often, say you put a limit order in the system (one that you have no intention of activating) the computers would pick this up and make immediate alterations to the currency effected in anticipation. Once the order is removed as a non-event the market re-corrects.

According to Al Brooks, (since the publication of the ‘Dealer’ book), the market has moved on in size. It now apparently takes more than one bank to move the EUR/USD during London/NY open times. But the principle stays the same despite that.

Another comment from the ‘Dealers’ book)……In order to reach this pot of gold, you have to be able to find an approach that accurately trades market corrections rather than predicts them, since technical and fundamental analysis are simply not enough to beat the crowd. The secret to success is actually not such a big secret. Everyone knows that with proper money management and a half-decent strategy you can make money. Yet most still find themselves failing. To become truly successful, if you are a beginning trader you should immerse yourself completely (and I mean completely) in the subject in order to find your edge. If you are already a winning trader, then you had better make sure that you understand exactly what your edge is. What is it that sets you apart from the other 90 % of traders? Is it sheer luck or something different? Knowing what keeps you in the game is the only way to find your way back during tough times. In the end, no one can ever hope to master the FX market; but for those that manage to set the dollar signs apart and focus on the intellectual enjoyment trading provides them, a fortune usually lies along the way!

Silvani, Agustin. Beat the Forex Dealer (Wiley Trading) (pp. 146-148). Wiley. Kindle Edition.

(Nick) A lot to take in there, going to have to read all this a few times, but some fantastic ideas on first read through. (Referring to the above and several items not included).

The round number strategy again. This time Cable. Only works if the build-up is an extension. I’d be aware of a build-up any closer to the round number.

Round number tactic, GBP/USD.

Exciting add on strategy for backtesting. It’s from the ‘Dealer’ book in this instance short at a test of the ten ema. Price action up to that point is critical. In this instance three engulfed bars. Also, as now with all my trades, the trend must be affirmed — exit on the first close above the ten ema. 50 pips.

Aggressive add on to our strategy with a test of the ten ema.

The importance of the spread.

The following is from our Skype ‘live’ trading room chats. Includes: know when to trade and when not; sometimes a trade is too close to call; being stopped out is part of trading, accept it; and two book recommendations.

(Buzz) A case of not only knowing when to trade but knowing when NOT to.
The following trade looked okay. But the context was poor (double bottom 6-hours prior not shown) and again news about to be released. I also didn’t like the seven pip distance to a first stop option.

Know when not to trade.

(Buzz) It’s interesting how if I take a higher entry I’m reluctant to accept as easily a worse price even though it’s a better entry?

(James) I agree. The money isn’t yours until it’s cashed out of the trade. But it doesn’t seem that way when you’ve been 10 pips in profit.

(Buzz) If I hadn’t have taken the failed higher entry, I’d not have thought twice about the short at 7:45.
I’d probably have been entered at the 7:35 bar.
However, the 7:40 bar gave a hint of a reversal. If the 7:40 had closed as a stronger bull, it would have produced a trend break buy.
All in all, some just get missed or are best left.

Sometimes it’s too close to call, best left.

(James) It quite often puts it on a knife edge before it takes off. That was another example.

(Buzz) Took what I thought was a pbc (Pattern break combi). I was way too early. Got to work on the harmony of my takes—a 90-minute hold. Aimed for ten pips but took it off at nine pips profit. Three down and tailless bear close. At that time of night, I couldn’t face another pullback — still, nine pips to balance up some earlier losses.

The upper ellipse marks a high that came within a pip or so of the stop.

(James) Well done holding for that long! Especially at that time of night.

(Buzz) Started reading this, (below) good info so far.

Published 2008, but good insight into dealers.

(Buzz) An interesting point from the book I mentioned earlier, Take each 4-hour session and calculate the pivot point. It’s a guide. Above the pivot point for the follow-on session is only longs and below the pivot point just short. Here’s an example.

Example of how to calculate ‘pivot points’.

(James) Good point, these pivot points are critical.

(Buzz) A good price action trader can look at the chart and know where the pivot point is. The calculation, however, provides some confirmation.

Took the 11 pips profit at the close of the extension bar. But a continuation is on the cards.
Known as a ‘wedge’ which is often followed by a reversal.

(Buzz) In answer to a question. Reference Alan’s question about MT4. Designed specifically for FX. He needs to watch for the spread offered on MT4 as sometimes higher than a broker’s charts. I prefer MT4 to anything else I’ve tried except ProRealtime.

Another book recommendation.

(James) Haha nice hair doo! Good opening para.

(Buzz) Yes, ignore the 1980’s style; a classic and still very much relevant.

(Buzz) About MT4 and the spread that we talked about yesterday and Alan’s question; this is a footnote from the ‘dealers’ book. Spreads were much higher back in 2008. But the principle remains.

The importance of the spread.

Some skype trade room chat from this week (EUR/USD)

I’ve backtested and will continue to regularly backtest the last 10,000 units (about 4-weeks worth on the 5-minute chart). I’m not only working hard at ‘Bob‘ type entries but at my exit criteria. 20 pip is my goal, but I will adjust for market size, reversals, resistance and (something that Bob does not mention too much) price action. For example, an extended bar in a particular context (see below) will see me exit; I will also exit with engulfing bars too, but context always rules.

An example from my back testing.

The last hour makes for an interesting analysis. I took bar 4 below as a signal bar. However, it was much too weak against the pullback of bars 1, 2 and 3. Bar 5, my entry bar, touched a full pip below bar 4 – my entry. Bar 6 closed above the long-standing resistance, now making it support and a possible entry long on the following bar. Bar 7 provided a floor (ceiling) test. All a bit weak against the previous bear bars, but if not a long a good reason not to be short?

Signs to watch for that indicate a turn in the market.

My understanding had me orientated for a trade short for some odd reason only known to me. (see below)
Short at 1 and out at 2!
Then long (thank goodness) at the 11:40 bar.
I held thinking it would do the 20 pips. But It’s been consistent recently at 10-pips. (Refering to how much the market has been moving)

The importance of staying neutral as price action builds.

James,
Good timing on the long! (Still on the chart above)

Buzz,
Out soon after the 12:05 reached a high and pulled back.

James,
It did pull back, looked strong on the way up. 10-pips in this market is a good call. Reasonable resistance from yesterday at that level.

That’s the move of the day

…so far

Buzz,
On the last take, I entered on the first full pip above the 11:35 bar. The bar had closed above my pattern. However, the momentum came in at the ‘double’ pressure created a pip above the double top of the 10:20 bar. It’s not apparent looking at the bars now.

Buzz,
Below is an excellent entry set-up except for no signal bar.

No signal bar, let it go.

I was all ready to enter short at a full pip below the signal bar (pb horizontal) when the price shot down to the ema. It left me behind. The pullback, on the bar after the planned entry bar, was very slightly short of my desired entry position.

A still screen shot does not provide the speed of price movement. It’s often more difficult live.

I gave this one a small run for its money (See below). It was held to see if it would break the top, already reasonably high in this bull push.

A trade already high in a trend is an uncertain trade.

(Below) Bar 1 as an entry bar was against the trend. However, the prior legs were a lower low and a slightly lower high. I took this trade but came out after 3-pips as it ‘felt’ too early to be making a short. Bar 2 had no signal bar. The pullback to the horizontal pattern break was acceptable, and I would probably have entered at the pattern with bar 3. But a bunch of news was due for release on the following bar.

A good trend does not always provide good entries.

The patient day trader

“The stock market is a device for transferring money from the impatient to the patient.”- Warren Buffet


In this blog, I will talk about that rather apt comment by Mr Buffett and how it is relevant not only to the long term fundamental trader but, surprisingly to some, the day trader too.
I will also take a look at how the amount we place on each trade can often be an oxymoron.


The impatient.


Bob Volman says “The more a trader adheres to a strict set of entry and exit rules, the less likely they are to fall prey to challenges of the emotional kind”. From my own experience, I know the importance of those words. That is why many trading seminars can be dangerous for a traders bottom line.
Some such events provide a plethora of trading strategies, and this leaves a massive door open to an individuals interpretation and intuition. Or, in other words, a traders impatience. Successful traders refer to working without the need for a reward – if we want the money, it will be elusive for us. What keeps us emotionally separate to the financial outcome as much as is humanly possible is holding to an understood, extremely well practised, strategy. Within that strategy, we ought also to know without question where our boundaries are for an aggressive take and at what point we skip (but not through fear) a set-up even though we have waited for the longest time. That is a mature, unemotional, trader at work. Our success is not necessarily the trading system we adopt (or create), but how we apply it. An obvious consideration maybe, but probably the most significant reason that prevents a seasoned ‘breakeven’ trader from graduating.


The amount traded.


Connected to our thoughts above is the amount we place on each trade. At one extreme we have a demo account with no real risk attached, and at the other, we have an amount that is beyond reasonableness for our consideration. My blog ‘conservative breakout trading‘ covers this in mathematical detail. What I want to marry here is patience and the risk we give to each bet. Of course, it would be foolishness of the highest order to trade large within a strategic vacuum or where a strategy has not been tested, practised and, therefore, approved. However, once at this point in our trading journey, if we remain a light trader (that is a trading risk significantly below our potential), then we most certainly invite impatient trades back into the fold with its inevitable cousins, uncertainty and fear. A proficient day trader who regularly compounds their trade amount (say, to match a 2 per cent risk to account size but not beyond the margin requirements) have a trade approach that is, well, professional.

Margin-of-safety list March 2019

Companies selling at a discount was last reported by this blog back in March 2017. On that occasion we provided the figures from the FTSE 350 only.

Nick has recently rerun the programme to see where we are in respect of contenders. Twenty four companies from the S&P 500 and FTSE 350 combined qualified.

Therefore, 24 companies made the ‘value’ list from a total of 850. From our list in 2012 the share price increase has been dramatic but not particularly surprising as it was over a significantly bullish period.

What we are more pleased about is that only one company from that 2012 list came out with a lower share price today.

These are the prices in 2012 of the companies on Nick’s spreadsheet compared to their current value.

Altisource Portfolio Solutions – 5,000 to 15,000
Cognizant Technology Solutions Corp – 3,400 to 8,000
Google Inc – 31,100 to 120,000
EZCorp Inc – 3,000 to 1,000
Ebix Inc – 2,000 to 8,000
World Acceptance Corp – 7,000 to 13,000
Apple Computer Inc – 4,000 to 17,000
Oracle Corp – 2,500 to 5,000
Monster Beverage Corp – 1,000 to 6,000
priceline.com Inc – 48,000 to 200,000
Western Digital Corp – 3,000 to 10,000
Balchem Corp – 4,000 to 10,000
Middleby Corp – 3,000 to 12,000

Nick’s list is a consequence of a detailed financial analysis of a companies figures inline with our ‘value’ criteria in providing investors with a financial ‘margin of safety’. What it does not provide is such things as the remuneration of management and whether a company has what Buffet refers to as a ‘moat’.

Finding discounted companies is an investment approach, whereas our day trading is a speculative angle. We keep both separate. They are of two extremes not only in attitude, as one is from purely fundamental information and the other technical, but also in a meaningful timeline context; one is in and out within a few hours, the other many years (or even a decade or two) would not be unusual.

Previous posts on value investing provide additional detail; however, the concept follows the teaching of Benjamin Graham. The general idea of which, best given in Graham’s (updated by Jason Zweig) book ‘The Intelligent Investor‘.

The Intelligent Investor by Benjamin Graham updated by Jason Zweig.

Below is a list of stocks and shares (March 2019) that satisfy our ‘value investment’ criteria of so-called buying a dollar bill for not more than 60 cents. In other words, we ‘look for values with a significant margin of safety relative to price’.

Nick’s value stocks and shares March 2019.

Note on P/E. Graham rates growth potential far more than quality of earnings when determining P/E ratio. He (Graham) looked at the long term potential of a company rather than the recent price. That’s why we only flag P/E in the spreadsheet rather than use it as an automatic filter. However, “a P/E ratio much above 25 made Graham grimace”. We feel that in today’s market a P/E of over 40 warrants consideration as to its suitability as an investment vehicle. Of particular attention in this regard, therefore, are Amazon P/E 83 and Netflix P/E 132.

The full pip and nothing but the pip

The following discussions represent a tiny sample of our Skype debates that are ongoing throughout the week. This small selection highlights the importance of measuring horizontal support and resistance in full pips. A real issue if trading the lower intraday timeframe.

Buzz, 10:29 Friday 1/3/2019

Worth a thought is the entry one pip beyond the signal bar. Bob’s bars are to a full pip, meaning a whole number. Therefore, we have the advantage of the complete price action but the disadvantage of the tail. In the example below the black arrow is at a total pip. The bit of tail beyond is 0.8 of a pip and therefore wouldn’t paint on Bob’s chart. His entry (if he took this) would be at about where our tail finishes, and as the bar clears the trend line and the ema.

The full pip and nothing but the pip.

James, 10:54
I see what you mean.

Buzz, 10:54
The arrows in the chart below show the full pip so a tail would have been evident to Bob also.

Buzz 11:00

This means we cannot disregard the tails, but a quick check of the whole pip would give a better idea of how the trade is viewed by algorithms and many traders. (The above was from th mornings chart/discussion.)


Buzz, 11:09

At the risk of going on about it too much, this example (black arrows below) shows the full pip. Bob’s chart would not paint the tail 0.8 of a pip below the black arrows. If Bob were to take an entry short (obviously not a setup), he would enter at the base of our tail where we would open a full pip beyond that. Worth a reflection I think.

Buzz, 09:15 Monday 4/3/2109

In my trade below I’ve drawn the horizontal support lines at a full pip as discussed on Friday.

A reasonable entry short from the break of a full pip support line.

Buzz 09:38

From the chart above, I had a larger box pattern which did not give me an entry, particularly against the bull power bars at the time of 6:20 and 7:10. However, this subsequent simpler break (which I only redrew later looking for the signal) provided a solution.

James14:48

James’ chart screen shot showing a trade he’d taken.

Buzz 15:15

That was a very nice trade. (Referring to a screenshot above of James’ chart) Combi coupled with a pattern break of the 11,337 level as marked by the black arrow. Well done.

The same trade as above as it appeared on Buzz’s chart highlighting the break of the full pip support line.

Buzz 09:50 Friday 8/3/2019

I saw this possible entry last night. Almost took it but it was tea time. I didn’t like the tails on bars 1 and 2 which kept me out. The lows of bars 2 and 3 formed a support level the break of which provided a possible entry short at bar 5. A little distant from the ema for my comfort. I also think I would have ejected the trade at the bar 6 pullback — however, the full pip horizontal support lines working their magic again.

Price action bar by bar

Day trading tight stops

Many thanks to Nick for providing notes from the book “Understanding Price Action – Practical Analysis of the 5-minute Time Frame” by Bob Volman.

We have permission from Bob to provide ideas and information from his book, but we want to avoid posting large swaths from the text that can be unfairly copied and pasted to any mainstream financial trading forum.

Hence our page on ‘day trading tight stops’ is password protected. Our page on ‘day trading wide stops’ (a strategy developed by Buzz) is also password protected to prevent confusion as we discuss more heavily within our blog posts at the moment the ‘tight stop’ version.

Before we post any more extracts from our real-time day trading Skype chats, we thought it worth a brief explanation, of the salient parts and hopefully improved understanding of our conversation. Of course, the best way is to buy Bob’s book and get reading, but we appreciate that it represents a substantial commitment in time. If the gist is all you require, then you may find it in this blog.

As you will know the number of financial trading methodologies and platforms is large. But we can place each method into the broad categories of fundamental and technical. The former generally involves the analysis of financial statements and the latter the reading of price on a chart.

For our business, our only concern is technical. That in itself attracts a myriad of approaches, systems and timelines. Determining which, if any, is suitable to our personality and situation can take years. It is good to have a trusted mentor that can guide us from confusion to productiveness in the briefest of times. Bob has done that for Buzz and he, in turn, has introduced others.

For those wanting a no effort solution to earning lots of money sitting in pj’s day trading the financial markets then we’re sorry as this is not it. Spending a few pounds on a book, dedicating several weeks to reading and jumping in is not going to produce results. For a start, it is not a read but a dedicated full-time study over an extended period.

As with many good things the concept is magnificently simple but the correct execution of which is quite monumental to achieve. In brief, we day trade conservative breakouts from tight price action build-ups.

Price action is the understanding and interpretation of a financial chart (in our case a bar chart) in a similar way that a musician will read a sheet of orchestral music. The difference being that in financial charts the music (so to speak) never stops and with the prior harmony, tone and rhythm we can only interpolate how the next and subsequent notes develop. More often than not the music is by Charlie Parker rather than Kenny G.

“The more a trader adheres, Bob says, to a strict set of entry and exit rules, the less likely they are to fall prey to challenges of the emotional kind”. These rules and our interpretation of them is what you may glean from our Skype chats. You will notice how we debate the merits of each of our trades taken or missed and how we managed the trade to its most successful or otherwise conclusion.

In our chart notes you will come across Bob’s abbreviations:

pb: pattern break pbp: pattern break pullback pbc: pattern break combi pr: pullback reversal tff: trade-for-failure @: entry somewhat aggressive exit: news exit exit: resistance exit exit: reversal exit F: false break T: tease break W: W-pattern middle-part M: M-pattern middle-part Ww: Ww-pattern variant Mm: Mm-pattern variant SHS: head-and-shoulders variant MS: Morning Star ES: Evening Star

We will endeavour to explain and provide an example as necessary as supplementary to our chat notes. You will also be taken through our trade setups and be provided with chat discussion on price action theory and importantly how that fairs in practice.

We will venture into the all-important psychological understanding both of the crowd type and its effect on price and our personal feelings and how they can favourably or adversely affect our decisions.

Finally, you may have to ignore some of the more delicate points of writing as our Skype chats, relatively unedited, are thrown on in the moment of trading.

Trading frequency

As a technical price action trader, I know that it is essential to work to a strategy. However, that is not the entire story, not by a long way. Within a plan, I have to define my trading frequency. The best way for me to explain is through an example. The diagram I have chosen is from the 5-minute chart on Thursday 7th February 2019 of the currency pairing AUD/USA.

Price in the chart above is ranging, but the last move long was from a higher low and before that a higher high; this ought to indicate that the dominant price direction is becoming long.

However, set against this is my understanding that the magnetic effect of the double zero number (in this case the price level 7,100) is still a dominant factor below our current price. In other words, my direction of trade at this point is undefined.

The next three and a half hours provides many exhausting false or aggressive opportunities that in one way or another match the criteria for my strategy but ultimately would avail to nothing other than a gradual depreciation of my account.

The box, drawn around the possible high and low levels of the period, was not so clear at the time. Moreover, something I am not able to show is the fluctuation (or flickering) of the open bar that adds to the frequently incorrect temptation of the determination of dominate price direction.

A substantial opportunity presents itself at the close of bar 1 shown above; this results in a false break of the lower part of the price box I have drawn.

The close of bar 2 either reconfirms our entry short at bar 1 or for the more conservative trader bar 2 is the real signal bar that has arguably closed below the breakout box drawn and demands a trade entry short into the face of the double zero number.

Bar 3, following the entry bar, provides a ceiling test of the bar 2 signal bar. Often a positive sign and another entry opportunity for the sharp trader. I can draw the box representing my best assessment of support and resistance with all the price action of the last few hours in place. Therefore, all well and good in hindsight.

But unless I sort my ‘trade frequency’ out in my mind, the result will not be as clean as I have demonstrated above. To decide and understand my ‘trade frequency’ can turn a mediocre account into a genuinely winning proposition.

To help sort the infinite frequency possibilities, I will classify them into three broad definitions: (1) Always-in or high frequency, (2) positive entries but aggressive, and (3) stable entries. Within each of these bands, there is the possibility for a wide range of clarity; for example, the final definition of group 3, could itself be classified from the stable aggressive to the conservative. But for now, the three bands are sufficient.

Our first definition very much appeals to me. The absorption or total engagement necessary to survive in this operation is electrifying. However, it is a fool errand. Very few highly experienced traders (or computer algorithms) are successful at ‘always in’ or high-frequency trading. Moreover, any form of spread commitment places this form of business into the impossibility category.

So that only leaves me with band 2 or band 3. In my opinion, over a series of trades, ‘positive aggressive’ is where all my losses reside, and ‘stable’ is where I get my wins. By making a conscious decision to disregard band ‘2’ (positive aggressive) trades and only to consider band ‘3’ (stable) entries is essential to the fruition of a compounded winning account.

In the example I have examined today, both signal bar 1 and signal bar 2 are stable entries; bar 1 being slightly on the bold side of this band, and bar 2, I suggest, being more on the firmly reassuringly conservative end of the stable definition.

A week of day trading

What follows is an unedited transcription of a selection of the week’s real-time trades as relayed on Skype between Nick, James and Buzz.

The idea is to provide a feel for the day trade decisions as they occur.

The abbreviations used include ema (exponential moving average, set at 25), pb (patten break), pbp (pattern break pullback), pbc (pattern break combi), pr (pullback reversal) and shs (shoulder head shoulder pattern). Moreover, comments are about the currency markets EUR/USD (Fibre) and AUD/USD (Oz).

The strategy is from Bob Volman. A page will appear on Slow Trader in the next few weeks providing comprehensive notes from Bob’s book titled ‘Day trading tight stops’.

A word of caution, those using some of the trades shown below as examples should note that many are too aggressive for the intermediate trader. Start slow with the obvious (cautious trades) and move up as experience builds.

(Monday 28/1/2019)

Nick, 08:58
Looks like a bit of volume in the Fibre this morning. Spotted a good trade at 7:35 for a pr

Buzz 08:59
Well done with that. I had a limit entry set but the pb missed me by a fraction.
Did you come out at the double zero or hold for a swing?

Nick, 09:03
I didn’t take it as I wasn’t convinced at the time there was much volume. I just marked it on my charts to observe where it went. It went for the full 20 pip though.

Buzz 09:05
Okay, nice. The 07:05 was quite strong but I was happy to set a limit entry. I was too ambitious with the price I wanted.

Have gone for a slightly different look. Only two markets now (Fibre and Oz). Sensibly! Thanks, James. But I’m also looking at employing the ‘wide’ stop as well as the (Bob) tight stop strategy; this is only possible because of the auto qty. (A software on prorealtrade)

James, 09:10
Looks good. 🙂

Buzz 09:48
An aggressive entry short in the Fibre. Signal bar (9:15) with a long wick. I considered this as a pb on the resistance horizontal drawn or even as a pr – took the ‘out’ at breakeven.

James, 09:51

I took the same trade but on the Oz.

Came out after 3 consecutive bull bars.

Round number doesn’t help on the Oz. (Round number is the magnetic pull of the 7,200 price level)

Buzz 09:53

That was a better entry proposition. I missed it so put my attention to the Fibre.
Are you referring to the pull of the 7,200?
Seems like a good out. Possible higher low (Oz)

James, 09:58
It was! although I would have accepted a pull-back to exactly where it has got to as it is a ceiling test with the low of the 09.10 bar. Just did it in too many consecutive bars for me.

Yes the pull of the 00 level.

Buzz 13:45 (no chart snap as too busy at the time to take one)
I liked the Fibre short on bar 12:50 (signal) and 12:55 entry. Immediately went against me and to within a pip of stop. I am looking for best out before the ECB, Draghi in 15 mins.

James, 13:46
Can’t ask for more than the EMA I think.

Although the bulls had 3 up.

reasonable signal short at 13.30

Buzz 13:47
Tricky, but thanks, I exited the trade at the ema (as James suggested) for a small loss – fortunate though.

James, 13:47
Yes it has been a tricky hour.

I took it long off the 13.05 combi.

Didn’t get the break-out, quick out.

Then immediately shorted the Oz.

Buzz 13:49
When it looked like it wasn’t going to break the double top. Well done.

James, 13:49

Took 2 attempts shorting the Oz.

Bounced off the bottom. I think that second short was high probability off the EMA despite a weakish signal bar

Good out on the Fibre (referring to Buzz’s last trade).

James, 14:25

Caught the break. Came off at what I consider a reasonable support.

Don’t mind trading the Oz when Draghi is on. What do you guys think?

Buzz 14:32
Linked (Fibre and Oz),I’d say, to a certain degree anyway. But I would probably trade a good signal.

James, 15:03
Good time for a cuppa. Not sure how long Draghi is on for. And then it’s Carney!

Buzz 15:07
Not sure, difficult to find a link. I reckon the chart will tell us when it’s over.

(Tuesday 29/1/2019)
Buzz, 09:10
A contrarian Oz scalp. Not a ‘Bob’ strategy. I was happy with the three pushes up and the possible exhaustion before entry. The risk was 1.8 pips but a high probability of being hit. It was a comfortable 4 to 1 return in the end.

Took the eight pip scalp.
Buzz 16:39
Entered a pbc long. Somewhat concerned about this take as clearly counter-trend. However, it was coming from a higher low (at least the close of the bars were higher). I waited until the entry bar had cleared the combi then set a limit long; this got taken but the next, a little pullback, so I exited. It then, of course, went exactly 20 pips.

(Wednesday 30/1/2019)

James, 09:24
Haven’t found good market conditions yet today.

Buzz 09:25
Oz nestled on the double zero and Fibre waiting to do something.

James, 09:25
Exactly.

Buzz 09:40
Moving the support line down.

Buzz 09:47
A reasonable pbc on the Fibre. Maybe too early to go long?

James, 09:53
Only problem is it’s counter-trend and still sitting under the EMA

But it does have a shs pattern.

Buzz 09:54
Yes, I let it go

James, 09:58

Buzz 10:58
One issue with a limit entry: missed opportunities. (The trade below did not take).

Nick, 11:02
I’ve decided not to use it (limit entries) on that bases. I would happily use it if it were an on stop entry.

Buzz 11:03
That’s a very good point.
Buzz 11:13
I’ve had another go at the ‘Mantra‘ on slow trader if anyone wants to take a look. Thoughts.
Buzz 11:49
Took limit entry short once the signal bar was activated on a pb. the exit was one pip above the high.

James, 11:59
Small price to pay for a good opportunity with trend. A false break-out of horizontal support? Pull from the 50-level.

Buzz 13:01

Target achieved. Went for a resistance target from a limit entry short. pbp.
I manually executed the exit at 10.8 pips as price touched the target. I had not allowed for the half spread and it looked like it wouldn’t push past the support.

Had just taken a chilly eye-watering stomp along the beach. Good for clearing the head.
Non-farm news out soon.
A reminder. The 1st Friday of each month is the non-farm day. The build-up starts now, and with a few events tomorrow.
They are most certainly best avoided.

James, 13:14
Amazing trade! Well done. (Referrin to the trade above).

James, 13:28
Much simpler and precise. (refering to the new Mantra on slow trader)

I always have it open on the side. (Mantra)

Buzz 13:30

I was happy with my out. Notice how price went exactly to my measured support.

James, 13:36
That’s when you know you got it just right.

Thursday 31/1/2019

James, 08:01

Typical 8 o clockers turning the chart (Referring to the European market opening)

Fed interest rate stayed the same yesterday at 19.00

Buzz 08:03
Thanks. Yes, some ‘good’ movement in the Fibre but no setups for me.

James, 08:25

Was expecting a break-out.

Buzz 08:27
Yes, I had that marked. Maybe too far from the ema for me.

James, 08:28
Yes I thought so too, wasn’t going to hold if it didn’t look like it was going to break-out. Although that bear closed on it’s low pip, so it still might.

08:29
It looks strong. You could be ‘right’. Sorry, will stop highlighting right and good.

James, 08:29
haha

Buzz 08:49
A lot of financial news to work around today.

James, 08:51
Yes there is.

Tricky scenario on the Oz.

EMA and trend but a weak signal bar.

Buzz 08:53
Yes, had that line marked. Easy in hindsight but at the time I thought the 8:30 bear bar was too strong to take a ‘long’.

James, 08:54
Yes it is a reasonable bear bar, but maintained a higher low.

James, 11:23
Critical moment

Buzz 11:32
The slightly higher close of the 11:25 (Fibre) has kept me out for now.

James, 11:40
I waited as the bear signal bar was poor then took the long off the 11.25 close. No evidence of double pressure so I’m out.

Buzz 11:41
The long was aggressive but a good call. I think the power is still with the bears.

James, 11:41
Your out and my in were the same trade.

The seven consecutive bull bars persuaded me that the bears were done after three down. (three distinct moves represent what is known as a wedge pattern, often has a precise effect).

Buzz 11:43
Yes, they were. A very good point. Double pressure is shown.

James, 11:44
The bears failed to capitalise.

James, 11:48 (USA interest rate decision effect the previous evening).

We reached the base of the bull trend. Often forms the base of a TR

Buzz, 11:50
That it does.

Buzz, 12:01
As you said, the ‘bear’ bar at 11:20 was weak. The wick was too long (making it difficult to activate the entry bar) and closed at the open of the bar before. The close of bar 11:25 was a reasonable entry (aggressive) scalp long. Probably a 4 to 5 pip stop risk, i.e. below the 11:20 bear bar.

Buzz, 12:17
Took the short at entry bar 1. Bar 2 was too strong so exited the trade.

Bar 2 with a bull combi is a long entry but too high in this move for me to take.
Of course the 11,500 level is taking effect also.

James, 12:21
More difficult now with the trend line break. But still a valid trade.

I mean the long

Buzz, 12:21
Yes it is.

James, 12:22
Not a bad follow-though bar either with the doji

That looks more like a double-pressure bar.

Buzz, 12:23
It does.
Great, going out for some sea air.

James, 12:24
Enjoy

Buzz, 12:25
Actually, frosty sunny foggy sea air.