We see price kicking back off the overall level nicely but bouncing at the first trouble area (FTA). Once we break cleanly through this, price will continue on down nicely.

Gaps

There wasn't much for gaps this afternoon. The charts below show what the gaps look like and while I'm confident they'll close within the next 12-24 hours, these are small peanuts, not something I look for. That being said, here are the pre-close charts and I'll be sure to follow-up with post-close charts in the next day or so. Typically, the gaps will close during the Monday London-NYC session. London opens in another 8.5hrs.

The EJ gap closed, still awaiting ecad, the gold short was closed and looks ready to drop lower.

I put together a PDF a couple of months month back, pulling my favourite charts together (pre & post trade) from a solid thread over at forexfactory. These charts are essentially my ideal setups, day in/day out. After running bad, busy, become disillusioned, etc...it's really nice to run through these charts and confirm what quality of setups I should be striving for.

I've uploaded the PDF (see below)...holler if the quality is not acceptable & I'll try and find a better means.

http://www.scribd.com/doc/95828881/Quality-Setups-1-100

Who are you on forexfactory?

Also, is that forum any good?

Same SN.

I think the FB thread is OK. FF as a whole I'm not a fan of.

Ecad gap closed over night -



My gold trade was also closed. Still expecting a larger move down.

A couple of good looking setups lining up on egbp & gchf.

Could you mark your entry price and bar of entry?

What is your favorite currency pair to trade?

Also, i would love to hear your philosophy concerning setting stops and take profits if you use them

Edit: What time do you do you do the majority of your trading?

Cwar, I try and provide a screenshot of my broker platform (black background with the arrows) that show my entry points. For example, if you reference the gold trade I posted previously (see screenshot below)...the gold down arrow shows my short entry & the blue up arrow shows my corresponding short cover ie trade close (via manual close).



TP hits are demonstrated by a green circle & stopouts are demonstrated by a red circle. We'll undoubtedly see examples of both as this thread continues, the idea being that we see less of the latter.

If you're asking for specific entry numbers so you can follow along, I'll do my best to provide those. That being said, if anyone is following along with the chart, zones, etc...I would hope a quick glance at my chart would reveal obvious entries.

I should press that I look at these levels as zones. A lot of people get completely stuck on to-the-point entries. I take an opposite approach & concentrate on higher quality setups...trades that I want to be in and don't mind entering a little early or even a little late.

If you see a horizontal line (or I sometimes use a blue area marker or red rectangle), I'm looking to enter generally within 5p of that zone for 1hr charts, 10p for 4hr charts and strong daily levels I don't mind getting in even earlier <20p.

This flows into the next questions...

SL & TP...yes, I always use these. Going back to my selection of levels, I want to stick to prime, higher quality setups. I want to trust the setup enough to have good sized stops to avoid spikeouts but also be able to close the trade down manually (at a loss) if I believe the level has been invalidated.

TP & SL are just like trading in general...there are thousands of different ways to trade profitably but finding one that suits your personality, risk tolerance, etc is key. I prefer less stopouts, lower overall risk per trade (I average 1.5-2% per trade and will scale this up to 5% depending on my confidence). Of course, personal goals & account size also come into play. A trader that I've traded with daily for a couple of years now prefers closer stops and pin pointing entries. It works for him. I do the opposite...wider stops, wider entry range. Works for me.

Re: trading times, London is my preferred trading time. For me on PST, it's midnight to 9am.

Re: fav pairs, nothing in particular. I have a thing for eur/jpy but I know that's simply an emotional attachment as the biggest scores of my career have always been with EJ. That being said, catch this pair off a strong S&R level you'll likely be rewarded well. Catch this pair off a strong level in the direction of the trend, you can take the rest of the month off.

Like in poker, your favorite hand preflop may give you the warm and fuzzy and that confidence it generates is certainly important...but equally important is to remain unattached and understand that your favorite hand (or forex pair) doesn't mean squat post flop/once the trade is on.

But still it's very important to an observer in seeing the logic in practice I think and seeing how you are managing risk.

I'm looking at that chart and I'm very unsure what bar was entered on. Is it short on the second green bar of the group at 1625.00 and covered for a profit between 1620.00 and 1615.00?

We have an excellent USD/CHF setup in the making. Would like to see the current bounce continue up a little further before coming down and busting this level.

I think the below chart shows clearly how I put together these levels. Going from left to right, you can see level was a previous resistance, then broke (with a perfect retest) before making new highs. Price has now come down to test support (it's currently bouncing as we can see. I want this to bounce a little further as to sort of validate this support. Ultimately, I want this support to bust, retrace & then continue lower (as indicated by the red zig-zag arrow).

Also note the clean Sunday gap close.

Absolutely.

I cannot pull up my broker platform at this time but will later this evening and snap a screenshot, clearly identifying the entry & exit.

I mean this is just my personal opinion but all these charts don't have a lot of meaning without structure and entry/exit. Look at what mrbaseball did that's a lot more clear. Even better I think would be what I did this in paint (totally fake setup).



I would be interested in the details like what rules you have in place, what constitutes breaking below, what levels seem correct but you do not trade, how big does the gap have to be etc.

That will come as more setups come. I'd like to post real time setups from here on out and I'll describe my entry as well as field any further questions in regards to why, my stop, my target, etc.

In addition, I posted a PDF that I spent some time putting together that shows what I look for in a setup. I feel this should outline what I look for in a setup as far as pattern/S&R formation.

As for charts not providing a lot of meaning without structure and entry/exit, I'm not sure I follow...I've provided charts and explained what sort of S&R I look for (what constitutes a setup for me). I've provided levels on said charts that I will trade (providing an entry area). With the one live chart example we've had thus far, I provided a screen shot of my entry & then another showing that same entry and corresponding close. I will continue to do this with other live trades where I can...I believe this is what you're looking for?

"I would be interested in the details like what rules you have in place"

I'll work on expanding on this further.

"what constitutes breaking below, what levels seem correct but you do not trade, how big does the gap have to be etc" - again, I believe I've touched on this but will work to expand later.

I'll take a shot at addressing your above points tonight and upon your concurrence, I'll have you edit my original post & drop that info in. I think it would be beneficial to have that info in the first post and upon creation of this thread, I incorrectly assumed I would be able to modify the first post at will.

Thanks for the feedback Cwar, we'll get this squared away shortly.

And that totally fake setup looks like something I would take! Nice chart.

what are your commissions like? seems like they would be brutal scalping like this

Sam I wish you traded stocks bro. Nice job w the thread.

Yeah, just timing right now...I'm most available for the London session (12am market open for PST).

That being said, please post up anything you see, I had a lot of fun going through a couple of your setups in the monthly trading thread, something different for me. While I can't back it up from personal back testing, I know of a few euro traders that rock US stocks with similar S&R setups and it appears viable.

Anything with technical substance that you're watching this week? I'll run through the June trading thread later tonight, need to get caught up on those posts.

USD/CHF just busted for anyone following along. I want to see at least a solid 1hr close below the level to mark this as a valid breakout once that's complete, wait for a retrace to the level for a short.

**edit, looks like we have had a 1hr close below this level. see chart**



Taking some of Cwar's suggestions to heart, I'll post up a more detailed trade plan and see if we can post this in real time later tonight as it plays out. In a perfect world, we would see a good clean 1hr close below this level, then watch price range around for a few hours until London Open (LO) and as LO volatility comes into place, see price retrace to previous support where we would go short.

My order is in for USD/CHF short .9594, stops above .954, targeting upper .94

Will update with specifics & accompanying screenshot shortly.

EUR/USD & USD/CHF generally have an inverse correlation. The kind of line up we're seeing, with EU & UCHF breakout out with excellent, strong S&R setups to bounce off of is a dream setup.

The EUR/USD long setup below is gold...I may end up trading EU instead of UCHF...EU = more volatility ie faster moves ie best for the impatient traders like myself. This is a trade I'll happily put 2.5% risk on.

I have cancelled my UCHF order and replaced it with an EU order.

1.2514 is my entry, stops below 1.2575, targeting 1.26

**If I didn't mention already, on the Oanda platform, blue squares are limit longs, gold squares are limit shorts**

Well of course EURUSD and USDCHF have an inverse relationship. With it hanging at 1.2000 (EURCHF), if EURUSD goes down, USDCHF has to go up and vice versa

I've found that stating the seemingly obvious in this thread helps clear things up ahead of time, especially for the newer guys.