Its important in trading to figure out what lines actually matter when trying to figure out how to pull a little money out of this market .  While everyone can make their case for whatever they believe, one must first figure out in general what types of time frames they would like to work with as a starting point.  10 pip handles might be significant to some , while for others they are insignificant.  i ll attach a chart with an example of how to approach a market using a daily timeframe as a framework for trades.  The idea ( and i know its not new ) is to define the trend, then trade with it in the belief that the legs with trend hold more potential than the legs against the trend.

starting from left to right , and trying to visualize it in real time as it happened, we start with the market making a new high around 1.38. Trend was up .  A quick sell off gave no long opportunities, the market stalled and then continued down ( marked with a line to show potential trend change ).  No tradable moves down and the market actually whip sawed up. it stalled out at the previous consolidation point then gave a strong move down ( engulfing bar ) and signal short.  Traded this short on lower time frame and had a loss, basically a trap , that's life, the market moved up past the swing high indicating a trend change back to bull.  it then gave 2 nice tradable moves with that trend , the second one was quite nice, after which it stalled out at the major 1.38 level. it then gave a little double top , broke the swing low signalling a trend change to bear. It gave three nice tradable noves down , two of these i posted so don't think im just making this stuff up with hindsight bias, the fourth signal down failed with a small loss, the market reversed , broke the swing high for a trend change to the up side again.  We wait for a price action signal that we like long and we are into a the current trade.  being Friday, and being close to and aware of the major resistance at 1.38 i tighten the stop to break even.  i anticipate a break to the up side because the LL are rising within the the larger market structure , but i have no idea, this is just the better bet in my view. 

That's my rubber boots look at market structure , and how to interpret and trade it.  No fuss no muss approach. no magic. hope it helps.

Views: 88

Comment by Daologic on March 1, 2014 at 4:42am

Good read talisman. My benchmark is the daily Tf and then the 4H. I put my lins and levels on daily but the fine tunning I make it in 4 H.

Now, EURUSD has made a new Higher Low, and who said EURUSD is not trending?

This is how it looks in 4H:

Best regards talisman!

Comment by talisman on March 1, 2014 at 5:28am

thanx for the feed back dao, i usually hone down to the 1 hr myself for following trades.  i wanted to stay away from specifics in this post , and just provide a more generic framework to act as a bit of a guide. I would add that with my style of trading this pair has only offered about 8 tradable situations , of which 2 were losers, since November .  I usually watch 8 pairs and only trade maybe 10 to 12 times a month.  while i don't think theres anything wrong with trading much more than that , i mean whatever works for you really, its more about getting into something that has a positive expectancy. once you feel confident you have a positive expectancy, pip value is discretionary, so just up it until you get the number you want.

Comment by Daologic on March 1, 2014 at 5:42am
What I am going to say is off topic but please allow me to do it because I feel is important. Regarding EURUSD, lately (and mabe to late) I was thinking to incorporate sume fundamentals and to use technicals for entries and exits (measured moves, etc). Many here and even me, consider this pair to expensive already, even DB say is a bit to rich, but the fundamentals say another story: The Euro Zone has a big current account pozitive balance (surplus) and a high unemployment which means that the EZ manufacturers are highly profitable and the National Budgets are restructuring to be more efficient from a fiscal point of view. This makes euro a higly attractive currency for investors and also makes EZ attractive for investors.
Technicaly speaking EURUSD is at a reversal point but fundamentaly there is no reason to reverse the uptrend, as long as EZ has a comfortable pozitive trade balance (pozitive current account). From now on, a good strategy would be to find good supports to buy this pair. If in the EZ will happen some black swan event and the US numbers will start to look good, mabe the trend will change.
Comment by talisman on March 1, 2014 at 12:35pm

thats what the chart says, I just didn't know why

Comment by talisman on March 11, 2014 at 7:11pm

a bit of a follow up so I can demonstrate the realities of how this way of trading progresses.  in the original chart I show my thoughts and bias up to the trade I had on, I was nervous around the big level 138 and well aware of its significance.  I tightened my stop, and got stopped out with a small profit.  the market actually reacted with a week of inside days before decisevly breaking to the long side.  for me this an indication to continue to look for long trades again.  i have attached chart illustrating where we are now, and how i will move forward within the current market structure as i see it.  the 2 horizontal lines are the same as the last chart.  this entry would be negated if a move below todays bar occurs.  i  almost always enter a few pips ahead of the market in the direction i want it to go, its psychologically comforting for me to have the market moving my way when i enter.  i have no idea where this pair will go , feel free to comment or critisize

Comment

You need to be a member of Forex Social Network to add comments!

Join Forex Social Network

Members

© 2014   Created by FXStreet.

Badges  |  Report an Issue  |  Terms of Service

Offline

Live Video