Pullback Setups

I'd like to share with you a kind of setup that I use on my day-to-day basis. This type of setup happens almost every single day.

Even in low liquidity days like today, one is able to squeeze a few pips here and there.

I will demonstrate two setups (GBPUSD & GBPJPY) that I actually took today. Both of these fell into the optimal conditions state that is to be satisfied by trend, average daily range size, stop loss proximity and timing.

There was a potential third trade I chose not to take because it violated one of these optimal conditions requirements: timing. In order to take the GBPCHF trade, I would have to open a position after or right after or at London close. Therefore, it violated my own set of rules eventhough it would be a profitable trade after all.

Here are the trades:

Pound Dollar - the vertical line breaks the market into daily sessions.

Pound Yen - Much alike the previous day, all conditions were present.

GBPCHF - The pattern repeated itself once again. However, timing was an issue.

I usually take profit at around 80-84% of the average daily range of the particular instrument or a few minute prior to the end of the trading session (NY close). However, it's not necessary for a trade to reach TP every single time in order for a trader to be profitable. As mentioned before, this pattern occurs ina a day-to-day basis. The combination of small profitable trades like these, will surely add-up in ones monthly statement. A mechanical/systematic approach will also provide a very stress-free way of trading.

All the best to you all.

Types of Traders - Some Parody

During my rather short trading career, I have come across all types of traders.

Some come around as newbies wanting to learn and focusing on a single strategy. Others have diverted to all kinds of books and other nuances to a point where there is no way that trader will follow a single line of thought as to identify or deploy and effective trading method.

I have come across the successful trader. The one that is indeed profitable and has no need to boast his ideas. I have come across the scammer who is able to sell his product without the convincing numbers. I have come across the professional trader who is proud of what he does and actually try to help people.

I have come across the fundamental trader. I have come across the technical trader. I have come across the artistic trader, whose trend lines are real pieces of work!

But the trader that probably 'bothers' me the most is the "dummy account/technical/forex thread bully trader". This trader profile is simply surreal.

Lets see a few of the characteristics of such a player:

1) Most-likely hides behind a broker dummy account and trades money that he doesn't have. A second option, is that he/she has funded a real account but FAILS to pull the trigger even when the most perfect setup shows up;
2) Is able to predict the future;
3) Doesn't like to be criticized;
4) Has the most beautiful drawings and explanations about those drawings. And based on that, is able to anticipate setups. But... chickens out when it comes to execution time.
5) Has a thread of his/her own and posts the most perfect drawings and setups but in reality never took one of those setups;
6) Through the thread he/she tries to promote a GOD_LIKE aura of him/herself;
7) The results of the drawings or the drawings itself are posted AFTER the fact. Never before.
8) This trader profile has another interesting characteristic: He bullies around those who criticize his drawings, methods or results.
9) Usually, one has no idea of the real results of such a 'GREAT' trader. Most-likely, he will never come up with numbers;
10) Last but not least: This type of player claims to have tons of experience. However, he/she has failed to pulled the trigger even once. Statistics and backtesting is far from his/her reality. As a matter of fact, his/her self proclaimed art/experience is way more valuable than numbers/statistics/backtesting.

With such an extensive profile list, it shouldn't be hard to identify such a trader next time you come across one of these...

;-)

USDx and Majors

It seems to me that the USD has a short-term bearish outlook.

The USDx is consolidating inside a potential diamond formation that has 77.82 as the next supportive level. Price  will most-likely bounce up from this key-level thus completing the formation. It shall than drop towards the 76.50 level before it resume its uptrend. There is also a MACD bear divergence pointing towards 76.50.

Likewise, the pound has a bullish divergence pointing towards the 1.5931 minimum target level. Therefore a correction for the pound is also guaranteed.

The Euro also has a few MACD bull divergences pointing towards 1.3644 at first and the other one towards the 1.3867. Both are confirmed minimum targets.

Therefore,expect a short-term bearish buck for the next few days.

Cheers.