Hello everyone,
Today I am one happy trader for two reasons:
1) I took a good entry
2) I took an even better exit
I spotted a clear London Open Breakout type of setup this morning on GBPUSD, which triggered within the first two hours of the London session. The key level for today to keep track of was the very obvious 2.0100 - yesterday’s double top. That’s the level I was waiting to give way before zooming into the shorter time frames searching for an opportunity to jump long on Cable. The entry came in the shape of my beloved breakout-pullback-continuation pattern and therefore I clicked on the “BUY” button. It was a good setup, a valid entry, so I took it.
Now it’s the exit what’s being really crucial today: I was sitting at +40 pips in profit ten minutes before the Unemployment Claims announcement coming from US was scheduled and I decided to manually pull out of my position. My final target was 20 pips away so I was basically risking 40 pips (my current profit at that time) in order to bank 20 more… not worth the risk to hold the trade through the news. So I closed it out and few minutes later, as the news bullet hit the wires, the GBP/USD dropped almost 40 pips within minutes!
Trading relies more on money management, in-trade management and common sense than anything else, and I believe this trade is actually a good proof of it. You can watch it all live here below:
By the way, I am still in the trade I took yesterday on CADCHF which is currently sitting at +60 pips as I type these lines. Seems like we’re forming some sort of double bottom at 0.9700. That’s going to be the key level to watch in the following hours, we’ll see how it goes.
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27 March, 11:50 pm
Hector,
I hate to correct you, however, the forms you call double top and double bottom are not such price patterns. It is simpel resistence and support level.
All in all, nice trade.
28 March, 11:07 am
You’re probably correct FxPanther, I have never cared about academic definitions. What’s the difference between a double bottom and a support line?
-HECTOR-
28 March, 4:05 pm
EVEN HAPPIER FOREX TRADER!
Finally, I gotten rid of all those other indicators and now just focusing on price action and its a whole lot better thanks to your course Hector.
I have simpler charts and I actually understand what I am looking for, it was not completely clear to me before.
Thanks again Hector….
————-
FxPanther, I agree with Hector, who cares what its called as long as its an easily recognizable pattern;
However, some of you might want to read up a little…
Here is a good link and some nice explanations of chart patterns.
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:double_bottom
28 March, 7:44 pm
Glad to hear you are benefitting from what you learnt on the course Nisiwi. Makes me happy!
-HECTOR-
29 March, 12:45 pm
Hi all,
My comment was, or intended to be, on the constructive side of criticism. So please dont take it to your heart. I like what Hector has been doing, and many trader can learn from his work. Based on his approach on MAs, I managed to improve my own scalping technique, even though it has been very profitable for long time. Yet, one has to distiguensh significant levels from price patterns. Why? Because it takes a whole different approach, and strategy trading a price pattern or bounce back/break out of significant levels.
For example, trading a price pattern is a strategy of its own, which has its optimal entry point, and exit levels such as optimal profit taking level, and stop loss level.
All in all, I congratulate to Hector for his site and for his effort to help others with trading ideas.
Fxpanther
29 March, 7:24 pm
FxPanther - I actually meant my question: what is the difference between a support line that’s hold price twice, and a double bottom? I do want to hear your feedback mate.
PS: glad to hear you’re successfully applying my MAs approach to scalping!
Cheers,
-HECTOR-
30 March, 7:38 pm
Let me try to asnwer to your question Hector,
“what is the difference between a support line that’s hold price twice, and a double bottom?”
1, double bottom is a trend changing price formation, thus it reguires a prior trend. By a trend, I mean, a directional and sustanable move and not just some random move. If you dont see trend there easily, there is not a trend, most likely. Furthermore, no doble bottom, “techinaclly”.
2, a double top or bottom forms when price action breaks the neckline level of the price formation, not sooner, nor later. As a result, while it might look similar, we cant call simple bounce back of a supportlevel to a double bottom. “techincally”.
These are the minimum requirements to call a price formation to double top, or double bottom.
Why is this subtle difference could be important to you?
Many instituions and many people trade simple price formation thus trading price formation gives you better edge.
30 March, 9:33 pm
Alright I undestands your point FxPanther. I appreciate the explanation, thanks :)
-HECTOR-