The London Open - page 67

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FrattonPark:
Hi Dan Great to see you back and posting again. I'm new to this game (trading since June) and would like to know how you read Friday's market the way you did. At 6.30am I saw long-established Daily and 4hr $ strength trends ( vs £,CHF, € with a little flicker of retracement. My mindset was focussed on waiting for the very clear $-strength trend to resume. This was not productive! You posted early-on to highlight worthwhile $ weakness and hoovered pips left, right and centre. I want to do the thinking myself rather than just follow your steers so although I saw good entries (esp 1-2-3's) all day I was so gripped by the notion that they were longs and hence counter-trend I sat there just watching them. I'm delighted with my discipline but not with my game-plan. I guess my question may be about “market feel” and perhaps not easy to answer but if there are any specifics that flagged Friday as Retracement Day and not just a fleeting counter-trend wiggle, I'd be very interested to hear. Incidentally, in support of your earlier post regarding money management, I'm a newbie with a well-honed mean streak. I play for minimum stakes and can readily laugh at yesterday's debacle without grinding my teeth to stumps. Thanks

Good evening

Good to have you on board and great question.

Ahh new to trading. I remember the endless months of learning, learning and more learning in front of the screens hour after hour.

It is important to have at least 2 screens and probably the best investment any newbie could have into trading.

At present i am looking at short term trading eg 60min and 5min charts. The day and 4 hour charts are great for longer term trading and i will be placing some longer trades on soon for the run up to Christmas.

However for this purpose of trading 3 hours each am, the best setup i would advise is the 60min chart above the 5min chart. The 60min shows me the immediate trend (prob the best time frame to trade off) and the 5min gives me the specific entry i need.

On friday i saw the 60min 20ma cross the 50ma for a positive move north in EURUSD and CABLE for example. The 5min showing me the support off the pivot and the ma's heading north. My 1st target was R1 on most of my trades without getting greedy. So basically i am looking for crossovers of the 20ma on the various time frames and most importantly the cross over the 60min 80ma, which is the 4r 20ma. This is key for direction and support and resistance.

You will notice that i have longer term ma's on my short term charts. Something i have been working on for a while now.

Look on the 60min chart and how it crosses the thick red 80ma (4hr 20ma). The 5min shows this clearly and a perfect entry with a 123.

I only have pivots on my 5min charts btw for clear targets and always remember the golden rule...Never buy after lots of green and never sell after lots of red.

Hope that makes sense... Bit tired this evening.

Lets see what tomorrow brings.

D

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Hi Dan

I posted much earlier today, and then thought it was a dumb question so changed it and eventually took the post off.

I have since been private messaged asking why, and that they would like to know the answer to the question as well, so here goes again. (I presume it was the time-frame question and not the nose question but I will ask both...).

I note from earlier posts that you have had your nose reconstructed twice. I have studied your pic and it appears that last time they forgot to put it back on your face. Did you use Michael Jackson's surgeon by any chance?

I also note that all the charts you have posted are 5m time-frame. You have since answered above why you use the 5m along with the 60m. I prefer to use the 15m with the 60m and have never managed to get on with the 5m chart - too much "noise" and I get analysis paralysis.

So, should I persevere with trying to master the 5m chart, and is it just lack of experience which is proving the difficulty, or should I stick with the 15m chart which gives fewer entries but entries that I am more confident with and are easier for me to see, and just drop down the the 5m for immediate entry?

I don't want to feel "left out" when you are talking about trades and showing entries, but equally I guess I need to trade what I am comfortable with.

I (we) look forward to your advice and words of wisdom.

Thanks Dan

Scorpion

 
rollingstone:
Hi Dan I posted much earlier today, and then thought it was a dumb question so changed it and eventually took the post off. I have since been private messaged asking why, and that they would like to know the answer to the question as well, so here goes again. (I presume it was the time-frame question and not the nose question but I will ask both...). I note from earlier posts that you have had your nose reconstructed twice. I have studied your pic and it appears that last time they forgot to put it back on your face. Did you use Michael Jackson's surgeon by any chance? I also note that all the charts you have posted are 5m time-frame. You have since answered above why you use the 5m along with the 60m. I prefer to use the 15m with the 60m and have never managed to get on with the 5m chart - too much "noise" and I get analysis paralysis. So, should I persevere with trying to master the 5m chart, and is it just lack of experience which is proving the difficulty, or should I stick with the 15m chart which gives fewer entries but entries that I am more confident with and are easier for me to see, and just drop down the the 5m for immediate entry? I (we) look forward to your advice and words of wisdom. Thanks Dan Scorpion

Hi Rollingstone...

Indeed the picture was taken during my younger years and as u can see my nose has never really recovered!!!

We could discuss what time frame to trade off for many an hour. As a trader you need to determine a game plan, make your rules and stick to them. The 15min is excellent. The 30min chart is excellent. The 1 hour chart is excellent... Infact depending what your game plan is, it needs to reflect the time frame u work off.

I have played with many over the years Daily, 60, 30, 15, 5 and i hate to say it but 1min.

I have concluded that the 60min is my gem and captain and either the 15min or 5 min gets me in at the right time. My game plan is to trade for 3 hours per day and make 50 -100 pips a day depending on market conditions. Some days i make hundreds and others i can lose small but it averages itself out.

I have found that if i follow the 60min for the trend and get in with a 5min chart i tend to capitalise on the move at the right time. The 15min can lead to large stop losses and i want to keep these tight so the 5min offers me a better protection. Again this is very personal. This works for me and many others but if you do not like the 5min, quite simply do not use it. You will find on a 15min that your stops are 30 -40 pips..If u r only looking for 25 ish per trade, the risk doesnt work...

I know many traders who work off a 4 hour and nothing else... Nothing wrong with that if it works for u...

I always stick to my very strict trading plan... I only need 2/3/4/5 trades per day to make 50 - 100 pips. Some days i wont trade but as long as i am patient and dont get greedy i will get these. Get in and get out and this is working.

I always promote having 2 trading books as well.. This is my short term book and my longer term book works off the daily and 4 hour charts. I can place a trade and hold it for months. It wasn't long a go i said cable and EURUSD were going to drop dramtically (USD strength) and rather than trade this on a 5min chart each morning it only takes 2 trades on my longer term book.

I hope that is clear. Vvv tired and will be up early for the morning session.

See u tom.

D

 

Thanks Dan

That's brilliant.

RS

 

Morning all

Crude is still in free fall with a break below $100. This trend will continue lower until the 60min 20ma finds support (like eurusd on friday).

The 4hr 20ma is key here and 1 of my golden rules is always to trade with this. If my candles are below the 4hr 20ma then stay short, likewise if above then look for long trades. (Yes this can be broken with very short term plays on 5min against the trend but be careful).

Gold is finding resistance at the 4hr 50ma and could fall back to 60min 20ma. The 84 CCI has crossed positively so keep an eye here... Crude will pull this around so we need to be aware of this.

EURUSD and CABLE have retraced well with USD weakness but the Daily 20ma (480) will show a small amount of resistance here. I would like to see a pullback on both back to the Daily pivot or 4Hr 20ma.

USDJPY looks very weak on the Daily and market has pushed this lower overnight. Look for retracement 1st back to 4Hr 20ma. Remember 2nd golden rule.. Do not sell after lots of red and trade close to the 60min 20ma.

USDCHF in a similar state...

Ok so for USD weakness to really come into play we need to find support on the Crude. Be patient here as this is not showing at the mom. Gold found support but looks like it will pullback to 4hr 20ma. Be patient the direction of the USD will come...

Enjoy

D

 

Really want to see a small pullback on GOLD. The major resistance is the 4HR 50ma at 785.00. This will be teh break point!!

If we get the pullback, the USD will strengthen this am but i will be looking for GOLD to break this 785.00 level.

This is the box strategy. Eg let it retrace to the 4HR 20ma then move higher and break.

D

 

EURUSD and GOLD look weak.

 

Banked 50 pips on EURUSD..Still short GOLD

 

Good Morning Dan

Many thanks for your answer to my Q regarding Friday's trends. Clear as a bell.

Up to now I've had one screen showing 5m movements and a second showing 4hr. I'll try swapping the second to 1hr and see whether that's an improvement.

 

Crude just woke up and broke 5min 20ma... Closed Gold for 20 pips.

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