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.

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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 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


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