Simit Patel

I wanted to post the charts that led to me to place my most recent trade on September 5, which I am still in.

Below is a weekly chart I used to help identify a strong support level. The area highlighted is a 38.2 Fibonacci level.



I look to the daily chart to confirm that support level, and to wait for the moving averages to align downward as confirmation that the market is trending downward.



I enter on a break of support at 4321. One thing I forgot to include in the chart is the RSI indicator, which I used to check if there was RSI divergence on the break of support. There was no divergence, so I entered.

I'll exit portions of the position once the market begins to retrace and the moving averages begin to reverse.

Thoughts? Comments?

Jerry

Good trade Simit.... I see you have 4 moving averages there...can you let us know how many period moving average you use ?? (can quite read that small)...Thanks Jerry

David Waring

Hey Simit,

Glad to hear from you and thanks for posting the charts for our review this is exactly the type of thing that I think everyone benefits from discussing.

I like the concept of using the moving averages in conjunction with major breaks of discretionary support. For the exit are their any other rules here than waiting for the moving average to cross back? For instance is there a discretionary stop in case the market trades big against you on a short enough timeframe that it would not cause the moving average to cross back?

Best Regards,
Dave

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Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.

Simit Patel

hey jerry,

to enter, i used the 10, 20, 50, and 100 EMA.

on the exit, i plan on cutting half my position when the 4 EMA crosses above the 7 EMA, and the remaining half when the 5 EMA crosses the 10 EMA. i'll look at the daily chart for those EMAs on the exit.

hey david,

yes a big move is definitely a concern of mine as it is a weakness of my trading strategy. however i have not seen that occur in the eurusd since the inception of the euro. i don't like stops out of a concern that market makers hunt them, as well as a general dislike of letting market makers have all the best info. pretty much i don't like market makers.

as i continue to refine my trading strategy i probably will identify a "mental" stop loss order -- meaning i won't actually place it but will have it in my mind as my exit point. the 2% rule, trailing stop loss based on previous candles, and parabolic SAR are all options. i've used them before but never got comfortable with it, though i should probably experiment a bit more with them.

of course any community members with thoughts on that or any other thoughts on how i can make more money are encouraged to share.

Jerry

I see...ok...you plan seems to work...but you did however spark a question...Are you using an ECN broker because of stop hunting?...I at one point had posted a question about stop hunting...and when I was with my original broker, I was either a terrible trader, or they had some really good stop hunters....being they are market makers...I guess I ll never know...Jerry

Simit Patel

hey jerry,

no i have accounts with a few market makers, never tried an ECN. i checked a few out, though the ones i saw were a bit complicated -- i like simple stuff. the customer service was also less than desirable.

though i haven't looked too deeply at ECNs at the retail forex level in a few years, so i'm probably not the most informed on the topic.

if i were a market maker, and if i were fine with stop hunting, i would

1. try to look at things at an aggregate level -- i.e. where are there a bunch of stops accumulated, and thus where can i make the most money by spiking the market to take stops out (probably around some support/resistance levels) without causing too many people to notice
2. if there was a short-term trader (like intraday) that was making a ton of money, i might follow them around and try to move the market against them

that is just my opinion, trying to think like an evil market maker. of course not all market makers operate that way, i would argue many if not most do not. active traders are becoming more sophisticated and the internet lets information spread too quickly, so there are checks in place that act as a regulatory function of sorts.

Jerry

Thanks Simit... BTW...looks like eur/usd just broke below...1.4050......I jumped in with you...I see next support around 1.3850........
didnt mean to get side tracked with ECN's and all...(dont know if we are mentioning companies by name)... but with the ECN that I use..was VERY difficult to get used to the format...and the demo acct was absolutely horrible...but the live is ok...once you get used to it...but I have a feeling (although may be unfounded) that they are not out to get me..anyway..I guess that is a topic all in itself...Jerry

David Waring

no restrictions on naming companies if you guys want. Jerry I happen to know the guys who run the shop where you trade personally and while I agree with Simit that their platform is a little complicated I also agree with you that they seem like good people trying to put out an honest product.

Best Regards
Dave

__________________
My Free Courses: Forex Course - Stock Course - Futures Course - Basics of Trading - Subprime Crisis - Prorealtime Charts

Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.

Jerry

Great..CUDO's to MB Trading, El Segundo California.. makes me feel good..Jerry

Tekmnd

Just wanted to say that I am really enjoying looking at the charts/trades that people have posted recently. I find them extremely educational. It's nice to look at well thought out trades as they occur like this.