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Closed up our UJ short just now. Because we opened a second position late last night we did pretty well overall. Took 47.7 and 5.6 pips on our two positions.
Patience pays with this system.
Our next play looks like a NU short with a TP around .7435.....
It held the negative divergence I spoke of. In not, I would have just bailed.
I just updated my TP to just above the current support level on the H1 chart of 117.40. Raised my SL all the way up to 119.00 but I hope I can exit as soon as this position turns green overall. But I have the feeling I'm going to bed before I see the results!
Did you notice how the TDI held it's water on the M5 chart? It's the only reason I stayed on so far.....
But it was difficult not to bail earlier....
I took my second position when I was -45 pips. Now I'm trying to get out myself but I'm pretty sure that over the next 24 hours this will be a winner.
It's so hard to hold your water when every fiber in your being screams to get out and take your small loss......
I just added to my position guys. It feels so wrong!
It figures that the first play I show you guys goes through a whole lot of pain!
In the case of UJ, I'm staying the course for now.
Has anyone run the Tech Tool since my first post? Notice anything?
USD/JPY has disappeared from the list! This happens a lot and I'm not sure why. It may be that recent developments has changed the probability to below 60% but I'm not certain of this.
In any case, now we are left to our own devices. Don't panic and just ask yourself if thing still look technically correct. If you answer yes, stay the course.
If not, look for a graceful exit point....
If you look at the current UJ M15 chart we see the same thing for the TDI.
I know it's hard but ignore the price and focus on the TDI folks. It's more important than the price at this point and why patience s so critical.
Negative Divergence of the TDI
Here's a prime example of the negative divergence I yearn for!
1.) The Orange circles set the Price and TDI.
2.) Notice how the Price goes up but the TDI sets a lower high! This is the chart screaming at us to take notice. Look at the pink circles.
3.) The green arrow is the 3rd time we should test the TDI trendline. In most cases this is the exhaustive move. We should see things fall apart at the trendline or just below the trendline if not sooner....
This is part of the KISS method that I loved so much and why I incorporate it into my "system"
That's why this system is so nice. It sets up the stops and target for us. But following the rules was never a strong point of mine! LOL
Current support at 117.70 needs to break and then we we go to 117.40 for support. Then our target of 117.20
Looky Looky!
The tunnel on the M15 chart just spit in the face of UJ and knocked it on the top of it's head. LOL
Patience..........
You and me both brother!!!!
The other day I took a pretty stiff loss on an AUD/USD short. Then the damn thing went the way I thought it would and I should have have a 50 pip gainer just 24 hours later.
I still don't follow my own rules and I pay for it!!!! LOL
It's the hard part. I can't tell ya how many times while I was developing this system I would exit here and take the small loss. Then 12 to 24 hours later the damn thing went the way I thought it would and should be taking profit instead of feeling upset about my own impatience!
Now if you drill down to the M5 chart, look at the TDI.
What do you see?
We have some negative divergence setting up. The price is going up but the TDI has a lower high in the works. Something doesn't jive. Either the TDI is wrong or the Price is over extended. Stay tuned as the current TDI has not confirmed yet and remember what we already know from the higher levels.
Look at how the M15 chart had a twist in the tunnel. It went from bullish to bearish. The M30 chart is in the middle of the same twist. These are all good signs technically speaking, yet I down about 25 pips.
This is the rough part folks!
I was really thinking about that when I first dreamed up this "system." The beauty part of it is I think it should work well with anyone's schedule. We have lots of folks that work all day and can't sit in front of the computer like me so this needs to be flexible.
But listen, most of my trades are done after 4PM but before 8PM Eastern Time. That because there is a lull after our markets close and the Asian markets close. I try to just peek at the Technical Tool at the top of the hour.
Once you get a good grasp of the 5 steps, you can quickly pick or disregard the choices they give us. This process is meant to be a quick way to get entry opportunities bu is in no way the only way. I only give you guys a very broad way to look at these choices.
But hey, if you use the "KISS" method brought to us by Pennies2007 or the "FIB BOXES" method described by Simplegreen, you can really get a very good analysis for any pair. The trick is to trust it and be patient.
Many of my trades look absolutely ugly at times and I have to sleep on it. Then when I awake and log into my account I find that the trade was closed and it turned into a winner.
Case in point right now is the UJ trade I used as an example. It just went the other way on me and as of this writing I'm down about 20 pips. Just take a deep breath, close your eyes trust it.
This UJ entry might have been taken just too early. If you look at my H4 chart it shows a triangle that UJ has been trading within. So technically, it's still acceptable. So maybe it goes up to my top trendline and then bumps it's head and dies. Look for another entry at that level if you can. Make it a huge winner or just sit on your hands and see what happens.
Patience is the key
These are very general rules and I'm more than willing to discuss them more if you guys like.
"The System"
Ok All, here is what I've been doing. It's basically a 5 step process that I will lay out with pictures. So be sure to scroll down to read this entire post. This system is bit and pieces of many things we have discussed over the past. All I have done is try to put it all into a mixing bowl and come up with something that is fairly simple as well as effective. This system is NOT a 100% full proof idea that you will only see gains. There are losses but they are usually manageable and overall you should see a portfolio trend in a positive direction.
First some general rules for entry tickets. I try to only trade one pair at a time. I take a fairly aggressive stance with my first entry as I use 25% of my portfolio size for the number of units traded. I sometimes will double up if a trade instantly goes against me. But for this to happen, my first position has to be at least 25 pips or better in the red AND I still feel strongly that eventually the trade will go in my direction and my target price can be achieved.
So here we go!
Step #1
I open my Oanda web platform and instantly click the Technical Analysis icon located on the top left side of the screen. See the next picture for a look:
Step #2
This will pull up a tab in your browser. The first thing I do is change the "Set minimum % probability" to 70%. The default is 60% but we want plays that gives us just great chance of success. We could raise the # even higher but it starts to give us less and less pairs as we raise the % upwards.
After we set it to 70%, I look for regular pairs to plays. Regular pairs is subjective to each individual so I'll leave that up to you. But try to stay away from that Zimbabwe Dollar that Simplegreen loves so much. I haven't had as much success as he has with that position.
In today's example I choose USD/JPY as my pair mostly because of the 78% probability of us getting a successful trade. Notice how it gives us a target of 117.14. That's the best we could expect so don't try for more! This system gives lots of opportunities so there is no need to get greedy. Just take what is available and move on.
See the next picture:
Step #3
Next we click the "Volatility Analysis" tab. We enter our pair of USDJPY and then turn to the daily bar. These are the prices that we can expect the pair to trade between over the next 24 hours. We use these projections as our ultimate target and stop prices. Notice how step #2 gave us a lower target price. WE USE THE LESSER OF THE TARGET PRICES TO SET OUR TP. We only want to get a quick gainer and move on. Remember that we get lots of set ups so there is no need to get greedy. Fight the urge to go for broke.
See the next picture:
Step #4
We then turn to our MT4 platform. Look at the H4 chart. In our example we are looking to go short. Is the current price below the tunnel? The tunnel is the charting method described by Simplegreen on many occasions so if you are not sure review the method before you use this system. In our case the answer is yes so we can go onto the final step. If the answer is no then find another play.
So if you are going short, the price needs to be below the tunnel. And vice versa if you are going long.
See the next picture:
Step #5
Now we drill down to the M15 and M5 charts for our entry. Basically what we want is an overextended TDI. See the next picture and then continue to scroll down for more info:
Step #5 is the trickiest part. We don't always have time to sit around and wait for the perfect entry like our chart shows. You can still enter but know that your greatest gains are seen if you are patient.
I find this system works extremely well for overnight type of trades. For an extra option you can look to see if your pair will have any critical news coming out in the next 24 hours. If it does I would highly suggest just sitting on your hands. We saw what happened with that Swiss incident. No need to be a cowboy. The patient will always get the best results.
Many times I take a trade in the early evening and have to wait until the next morning before we see get our results. I'm ok with that. I hope this helps you.
Good Luck!!
I might have to reinvent the wheel again to set up my MT4 with Oanda.
Grrrrrr. Can't find many of my notes and such.....
Sup Ya'll. I haven't forgot about trying to explain my "system". I am waiting to call Oanada in the morning to get my new MT4 platform up and running. We are having a few minor issues right now.
Then I'll probably put out a 2 or 3 part video series to explain how everything ties in.
Hope everyone has a great night!
PS, I'm looking for one more dive here on AU.....
Looks like the NFA is forcing Oanda to have a little stricter margin rules. We might need to pony up a few more greenbacks just to play the game. It figures, sock it to the little guy after the Swissie conspiracy!
Let me get the Oanada MT4 platform set up again. Then I will put up pics or a video describing the system.
Hope you guys are well. Been strictly using the "system" I laid out a few weeks ago. We are doing quite well except for that little Swissie mishap. Closed another big winner on an AUD/USD short this morning bringing our monthly total to a +77% so far.
The last few trades were done without the benefit of the MT4 platform because Alpari (my platform of choice) has been down since the 19th. I will be just going over to Oanda for their MT4 platform. It's something I should have done long ago.
Have a great weekend guys and gals!
Ahhhh ok, thanx
Anyone else having issues with Alpari MT4 platform? It seems to be stuck on 1/19/15.
Funny thing is, I just had a 90 pip gainer on a NZD/USD short to get me back on track. But I am also looking at that bullish position very soon. The quandry for me is that I still expect the USD to show strength. Not because it's the almighty dollar but more as how folks seem to look at it for safety right now. UJ might be a better long....
Well it took some work but we are back on track for the year. Just looking for 7% per week but that Swiss mishap threw a hard slider when we were looking for a fat fastball. Water under the bridge at this point.
This method I described really works well as long as we don't get huge surprises. The only thing that helps those situations is to be an holder of inside information.....
Of course they did. It's never going to be a level field when trying to invest as a little guy
I awoke from being up about 50% to being down about 25%. I had to make a few trades just to get me back to where I am right now. I suspect the USD might show more strength just because no one can figure anything else out for now. We may need at least another week or so just to be able to trade with some degree of confidence again.
Just total BS......
Well, I was able to stay alive after the whole Swiss mess. Wow, is all I can say. What a way to get this year started. I was sitting at 50%+ in gains and at this writing I am at -6% for the year. I should be able to get back positive soon but it sure does shake your confidence just a lot!
Seeing an inverted head-n-shoulders starting to form on EU H1 chart. I am in already but wish I would have waited a bit for this thing to develop a bit more.
What are you guys seeing?
Just checking in with you boys. Everyone still alive?
Patience.... Patience......Patience....
Had to know that UJ would fall apart right after I took a loss. Grrrrrr
Lucky for me I grabbed a NU long just before I went to bed and scored another winner! Weeeeeeeeeeeeeeeeeeeee
Back up to 24% for the week/year! Have a great weekend guys
OK, we pulled the plug and took a good hit but still kept us at 8% for the week. Still on track
Been thinking about that as well. If I sell now I'm still above my weekly goal but not sure I want to go long on UJ either. I might just move on.....
Both position are still a little red but I'll just sit on them and see how things unfold over the next few days.
Could see one more gasp for air on the TDI of the M5 chart. Draw that trendline on the highs of the recent TDI to see what I mean...