Please see attached daily chart. I would like to have your opinion regarding a long trade. The light pink line is a major trend, while the 2 yellow lines are the channel within which price has been moving. The white line is 200SMA and today's close is just above that. Today's candle was not convincingly bullish and there seems to be some (minor) resistance at 1.5910. However I see a good long term trade if price moves up. With a stop at 1.58165 and initial target 1.60200, it looks to me a good reason to go long. Current price is 1.58810. 

There are so many good and experienced traders here at forexstreet and I request you all to give me your thoughts - whether from technical/fundamental/price action or mathematical perspective. I am sure there are so others like me who will learn from your expertise.

Thanks

Views: 961

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 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 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 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.
Comment by Oasis on November 17, 2012 at 11:54pm
According to Steve Nison's candlestick book, the daily charts show that the bullish candle of 15 Nov constitutes a bullish piercing pattern indicating a possible trend reversal. Stochastic (5,3,3) also indicate an oversold state.
Comment by Honest Sarjono on November 18, 2012 at 9:27am

++ GBP/USD

Hi Oasis, 

I will share more here and I do not need to create a new topic on my blog, because I think it's pretty united with your post. As usual, I can not explain with words. But trading-plan in the picture so it can say a lot. But this time I also use Fibonacci calculations in order to feel more commonly used by the others. My point is I am still looking for a new resistance to Sell until trend is over, and Buy-Stop in the red circle. And I need not mention where the target and stops, since all would have understood the meaning of my pictures :)

And always remember this:

High Risk Warning
Behind high rewards you can get it, realize that foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

Regards,

Honest.

Comment by Pavel Georgiev on November 18, 2012 at 11:34am

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