Comment by Honest Sarjono on November 17, 2012 at 5:06am

Hi Oasis,

Please choose first what's exactly your trading style, mention it here. So, member who will give you their opinion would be selected as same as your trading style. Because If there's too many opinion, then you can be more confused.

1. Technical is nothing if not supported by fundamental, I mean how deep we know about the country that have the currency. Because technical tools/analysis was born from that situation. We cannot force the situation of the country to follow our technical analysis :)

2. Only selected news calendar that able to show what's really happen out there.

3. When you have read all the fundamentals, and you're still in doubt in technical, then it is better to stay away from charts to secure your capital :)  .. or ask your friends like this is good.

4. When you have received an answer from a friend and it turns out you do not understand how and why, then do not open the transaction. Capital intact is better than the floating minus.

5. etc, you know that :)

Regards,

Honest

Comment by Peter jcp on November 17, 2012 at 10:09am

Hi Oasis and Honest. I appreciate Oasis wants to know whether to take a long trade ( buy) on the GU around current prices with an approx 66 pip stop and 140 pip approx target ? ie a trade that gives a risk to reward of just over 2 if successful - ie risking say 66 dollars to make 140 dollars.

Honest quite rightly is asking whether this type of trade fits it with your type of trading style and whether you have considered all the options open to you etc. I think you would classify it as a "medium term" swing trade - as 140 pips normally would take over a day and even up to 3 days to be achieved in just one direction. If that is your preferred style or method that's fine and there are lots of experienced swing traders in the Street who can and i am sure will assist you on the probability of it being achieved.

You only need a few experienced medium term traders to say yes - we are looking at buying and we see that potential etc and then its just the fine tuning of the stop size and target etc,

From my own perspective I cannot really help you too much - as I am a shorter term intraday trader ideally looking for targets of 7-25+ pips based on 4-8 pip stops. I am only average at forecasting anything over one hour or so - so 4 hr - 12 hr or 3 day trades are just not my forte.  

Saying that I have during the year had trades over 500 pips - just by leaving part stakes on from scalps - but when they have been obtained I have not known once I am up over say 70 pips whether I will be stopped out with say 50%+ or not. - ie if I am up 200 pips - I would risk half - 100 pips as stop etc.

With regards the chart you have posted - technically it is supporting your buy view on initial reading. There is a longer term up trend line that as not been broken so far. The pair is due a retrace up as the down ward channel price is at a low and is meeting the up longer term support

If you did find a suitable buy price from above a support on a lower frame than you do have the red dotted resistance area as your first hurdle. Price will always take the least line of resistance - other than when it is being manipulated etc - and so will test supports and resistances until it break through the weaker one.

With regards to the news out on the pound this next week - it worth checking the calender to see if you can spot bullish UK / Pound news and news that might be weaker on the dollar.

I hope this initial response based on your own chart helps Oasis. I will be looking at my on charts over the weekend - but would not be entering any buy or sell scalp on the GU until after the European Open on Monday.

Hopefully you will get a few members support or differ with your post and then on Monday if you are still keen etc - I can certainly assist you more on purely the session intra day moves on what might be happening.

Good Luck with it and have a great weekend 

Regards 

Peter

Comment by raj patel on November 17, 2012 at 2:35pm

Hi Oasis,

From your posting it is clear you are looking to go long in cable  based on the channel top of 16020. The 2 indicators you base  your move is probable but not confirming. You will need to use additional tools a) to show   the move as confirming b) The previous moves are exhausted c) why the rise so far has taken place.d) The projected price is also supported by more then one indicator.As starters you will need to go back look at the charts of last 10 days and understand what has happen to price vs time, The part that Fundamentals have played, The part that Technicals have played, The part that crosses have played  and how supportive they remain.

The tools you can add to enhance your chances are E.W. and Fibs which gives you a balance against the lagging indicators you have on your chart.E.W. and FIBS will also show if the past flow has been in line with the moves that you see now and in future. Remember these are probability that gives the best that the rate will anticipate.Self drawn S&R are more accurate and simple then indicator related. Expand your Trend line channel to show the bigger picture on a larger time frame so large breaks are visible . Have a go at these additional tools  put them on the chart  and see  if it gives you a more informed view.

Work on this planning stage first.

Regards

Raj

Comment by Honest Sarjono on November 17, 2012 at 3:58pm

Yes, good point from Peter and  Raj Patel.
About "mathematical perspective" that you mentioned above, one of all about mathematical technic has been written very well (passed the test) by mathematician Mr. Leonardo Fibonacci in the thirteenth century.

See also detail at http://www.investopedia.com/ask/answers/05/fibonacciretracement.asp
The difficulty only when determining the zero point before drawing it into the chart :)

Another example of the mathematics was moving average (MAs). The difficulty is just about lagging or when there is no trend (sideways). Or containing the standard deviation is Bollinger Bands, These bands are set 2 standard deviations above and below a moving average. 

see detail at http://stockcharts.com/school/doku.php?id=chart_school:technical_in...

Regards,

Honest

Comment by Brian Twomey on November 17, 2012 at 4:12pm

Oasis,  Take your long from 1.5882 present levels to 1.5946 for + 64 for now, you'll be just fine

Comment by Honest Sarjono on November 17, 2012 at 5:41pm

Hi Brian,

I think Oasis needs a hook, not a fish :)

He needs to know why the position was taken.

Regards,

Honest

Comment by Brian Twomey on November 17, 2012 at 6:35pm

Hi Honest, I entirely agree with you so the hope is he will learn from that trade by analysis and adjustment of his channels, indicators and SMA;s

Comment by raj patel on November 17, 2012 at 7:41pm

Hi Brian,

Why not throw in the analysis of how you arrived at 15946  may be his Ma 253 might not point at 15946 but it will be close. I do't want steal your show.

Appreciate as always

Raj

Comment by Oasis on November 17, 2012 at 8:01pm

Thank you all for helping me with this trade. Actually it's more than just this trade - your comments have enlightened me about how to go about trading and I really appreciate your willingness to share what you have acquired over time. 

Honest Sarjono - I liked that matrix. I am a medium term trader, have no problem in holding positions overnight or over 2/3 days. However, sometimes I will exit within the day too if I find that my analysis is incorrect or the market starts ranging. So many times I may exit with a small loss or small profit of 5-10 pips but this does not make me a scalper. Scalping is not my preferred mode as I find it very intensive and the heart rate goes up. All the other points you raised are very valid and understood and will help me in future. Thanks very much.   

Peter jcp - You have seen in my post exactly what I saw, so I am happy that your views coincide with mine. That tells me that at least I am on the right path. I had already checked the news while considering this trade. While there is red tag news for USD on Monday and Tuesday I am hoping that this will not make the GBP stray too much from its path. The GBP news is not until Wed. Unfortunately London open happens when I am in dreamland, so I will have to make my decision a few hours prior to that. Thank you very much for analysing this trade in such detail.

Raj- You have made me realize that there is a need to go into greater details with my analysis and to cross check using other parameters. I am not at all familiar with Elliot Wave but do know the basics of Fibs and will look at that during the next day. I like the part where you said to look closely at the last 10 days and try to understand what has been happening. Like many traders I do like to keep this simple, but can now see that I have not looked at this trade closely, have not given it enough consideration. I have taken the easy way out of drawing a couple of trend lines and s/r levels and said, hey lets go - this one is headed up. I appreciate sharing your thoughts and teaching me how I can do this better, thereby improving the chances of success.

Brian - Short and sweet, the words I wanted to hear. Thanks. Your method works really well as everyone here has seen. I wish I had the aptitude to learn it. Hope that you do not stop at 20. 

I will just conclude this lengthy piece by saying, how much I appreciate all of you taking the time to give me the advice I need. It is quite rare to find successful traders so willing to share their expertise, so willingly. There is so much genuineness in what you have written that I am quite overwhelmed by it. I am indebted to you all. 

Comment by Oasis on November 17, 2012 at 11:22pm

There seems to be some relevance to 1.5956 area (Nov 2011) so perhaps Brian's suggestion coincides with that. Also 1.5956 would be a 38.2% retracement, while 1.60020 would be 50% of the down move that started at 1.61790. So that is one more reason for me to go long, but watch the 2 fib retracement levels.

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