By posting my observations and analyses as I make them I hope to become disciplined in my approach.
Trying to hide the fact that I am relatively new to trading will not help me in the long run and blogging like this means I can't cover up my mistakes.
I am opening up to constructive criticism and feedback from the community before, during and after each trade so that we can all learn from my mistakes and successes so please -
don't hesitate to leave comments!
EUR/GBP Short; order in place
Posted 08-10-2009 at 03:59 PM by Dave_T
[Show Appreciation]
What's This?
Updated 08-12-2009 at 06:27 AM by Dave_T
Updated 08-12-2009 at 06:27 AM by Dave_T
I have enough signals in place on this pair to justify placing a short entry order below the bearish candlestick pattern and possible support that has appeared on the hourly chart.
Just to give some insight into my reasoning - I don't like breakouts unless I feel there is a greater force behind them which is going to give them a push to keep going. So although I am using the possibility of a breakout on the hourly chart to pinpoint an entry, what I am really trading is the likelihood of a reversal of a retracement in the daily downtrend, in the direction of the trend.
Just to give some insight into my reasoning - I don't like breakouts unless I feel there is a greater force behind them which is going to give them a push to keep going. So although I am using the possibility of a breakout on the hourly chart to pinpoint an entry, what I am really trading is the likelihood of a reversal of a retracement in the daily downtrend, in the direction of the trend.
Total Comments 9
Comments
(Must register to comment)-
Hi Dave,
Good luck with this one. It seems like a risky SHORT to me. It appears the market might be gaing some strength but is a little early to tell. Once again, I would have sat on my hands on this one.
EktraderPosted 08-10-2009 at 05:20 PM by Ektrader
[Show Appreciation]
What's This?
-
i like your style dave, when i was a bit more active in my trading i had a very similar approach. ultimately though i fare better dealing with slightly longer time frames and holding positions for a few weeks or even months. but i like your logic, and GBP seems bullish to me on a number of pairs.Posted 08-10-2009 at 05:28 PM by Simit Patel
[Show Appreciation]
What's This?
-
Not a good result on this one, although I was growing in confidence that it would go my way right up to the very end. It looked like price was starting to trend down but shot up instead taking me out for a loss within 10 minutes.
Posted 08-11-2009 at 04:38 AM by Dave_T 
Updated 08-12-2009 at 05:10 AM by Dave_T [Show Appreciation] What's This? -
Good call EK! Although like I said above I would have bet on a bigger drop all the way to the end so I'm obviously making some mistakes in my analysis.Quote:Originally Posted by Ektrader
Hi Dave,
Good luck with this one. It seems like a risky SHORT to me. It appears the market might be gaing some strength but is a little early to tell. Once again, I would have sat on my hands on this one.
EktraderPosted 08-11-2009 at 04:50 AM by Dave_T
[Show Appreciation]
What's This?
-
Quote:Originally Posted by Simit Patel
i like your style dave, when i was a bit more active in my trading i had a very similar approach. ultimately though i fare better dealing with slightly longer time frames and holding positions for a few weeks or even months. but i like your logic, and GBP seems bullish to me on a number of pairs.
Thanks Simit, that's good to know. You've certainly done alright on the USD/CAD lately with your current approach.
BTW thanks for the points!Posted 08-11-2009 at 05:02 AM by Dave_T
[Show Appreciation]
What's This?
-
Hi Dave,
You wrote:"I'm obviously making some mistakes in my analysis."
The trendline I drew on my charts showed the market breaking the down trend an moving upward(I couldnt post it here for some reason). I thought it was strange that you started your trendline in the middle of the move down
Anyway, there was no candle formation to signal a reversal was near at that time and the market appeared to be showing strength.
I know what you were thinking. You thought you were at a solid resistance line so you didn't want to wait for price confirmation and just go short. Also, you put too much trust in that stochasticthingamajiggy
You got greedy and wanted to catch the entire move instead of waiting for a solid reason to SHORT
. That's why you got tagged and bagged.
Good luck on the next one and happy trading
EktraderPosted 08-11-2009 at 07:06 AM by Ektrader
Updated 08-11-2009 at 07:10 AM by Ektrader [Show Appreciation] What's This? -
Hi EK,Quote:Originally Posted by Ektrader
Hi Dave,
You wrote:"I'm obviously making some mistakes in my analysis."
The trendline I drew on my charts showed the market breaking the down trend an moving upward(I couldnt post it here for some reason). I thought it was strange that you started your trendline in the middle of the move down Anyway, there was no candle formation to signal a reversal was near at that time and the market appeared to be showing strength.
I know what you were thinking. You thought you were at a solid resistance line so you didn't want to wait for price confirmation and just go short. Also, you put too much trust in that stochasticthingamajiggy You got greedy and wanted to catch the entire move instead of waiting for a solid reason to SHORT. That's why you got tagged and bagged.
Good luck on the next one and happy trading
Ektrader
Thanks for the feedback, I appreciate it. I'd be really interested to see your trendline. I've drawn two possible trendlines on the chart below. The green one is the one I drew yesterday that supported my decision to short. The orange one is showing a break to the upside as you described. I don't know where your line would be but lets say it's this orange one for the sake of argument. What I don't understand is why the orange line is more valid than the green one.
[IMG]
[/IMG]Posted 08-11-2009 at 01:58 PM by Dave_T
Updated 08-12-2009 at 05:08 AM by Dave_T [Show Appreciation] What's This? -
Hi Dave,
The one that starts at the top is the correct trendline. The market went above and beyond it which is the first sign that the down trend was losing steam. It doesn't mean it won't go lower, but it's a BIG caution signal. Also there are a few other signs on the chart that show temporary bullish tendencies.
EktraderPosted 08-11-2009 at 02:06 PM by Ektrader
Updated 08-11-2009 at 02:09 PM by Ektrader [Show Appreciation] What's This? -
yeah one thing I notice with hindsight is that the last low was not lower than the previous one - technically speaking I shouldn't be considering it a downtrend anymore and that should indicate which is the correct trendline.Quote:Originally Posted by Ektrader
Hi Dave,
The one that starts at the top is the correct trendline. The market went above and beyond it which is the first sign that the down trend was losing steam. It doesn't mean it won't go lower, but it's a BIG caution signal. Also there are a few other signs on the chart that show temporary bullish tendencies.
EktraderPosted 08-11-2009 at 03:43 PM by Dave_T
[Show Appreciation]
What's This?
