“Hello everyone !
While the French election was exactly as anyone could have expected: boring! I enjoyed the EUR/USD move up (I was speculating on a ‘relief’ after the ‘fear’ of last week). And did nothing this week except short the hell of of AUD/JPY, worked on various business and kept my eye on Gulden.
If I talk about Forex with Gulden it is because their are some remarquable similarities between a H4 AUD/JPY charts and Gulden D1 charts. Even though, there is no correlation. Please check it out, you shall see a down move, follow by a range, a false breakout of that range and a move up.
That being said and contrary to most beliefs, in the majority of the time there is NOTHING to do. And that is the hardest part of trading, which is fairly new to many crypto-lovers. So if you’r in doubt: just sit on your hands and do nothing (well keep breathing 😉 ).
Note: I don’t advise anyone to do anything, make your own decissions, I write these articles only for entertainment and educational purposes!
Important days and candles.
It depends on your Time Frame (TF). Remember prices are fractal, NDLR are RARE, that’s what makes them important in the first place !
Something I love to trade is ‘pins’ or ‘tails’ after some extensive move (generally after at least 3 days in row of pushes in one direction), especially when they happen to be ‘stophunts’.
Now let’s have a look at some great full body bull candles from March to this day.
They have been taken out by a ‘stophunt’ or a false counter-trend breakout right before going back in trend just to never see that ‘stophunt’ level for a very long time. These are great reversal patterns because they are actually continuation patterns on a larger scale.
In pink you have « nice » bull candle (did I mention beauty is super important in trading ?) and their bottoms (openings) got just ‘falsely’ broken by a ‘pin’. All this gave you a GREAT timing for your entries.
I doesn’t matter and it’s even very dangerous to try to catch top and bottom, but once you see this unfold you KNOW something important (rare) just happened. These 5 or 6 times in March were the only really interesting ‘things’ in the Gulden market for the last 2 months…
Now if you look at the next chart, the yellow line is also a wedge, follow by a 2 legged down move and a HUGE tail. This tail is made by aggressive bullish traders (early buyers, like myself and trader who cover their short positions).
What to do now ?
Well the best thing to do is to WAIT for a down trendline ‘significative’ breakout and buy the pullback (second entry).
In general these are the best trades because at that point you know where to put your stop-loss, you have a good entry and you are in a continuation pattern. I expect this move to happen during the week-end (please remember we are talking about probabilities not certainties) and it should form a ‘W’ pattern (double price rejection). Market HATES to fail twice.
Before closing this article, a little word on money management. While risk management is important the money management part is absolutely **necessary**. Everyone has a personal preference for it. But the important part is: you MUST have one. And ALWAYS control your exposure.
Two techniques are the most commonly used: fixed fractional and fixed ratio trading. I use a mix of both that suits me well.
My latest Trade
On slack I have given an example on my latest trade:
Entry at 2700, SL (stop-loss) at 2220 and TP at 7500. (that’s a 10:1 ratio !!!). I have now taken a partial profit of half the position and tighten the SL.
My risk on that trade is now ZERO (well +1% of my equity in worst case scenario to be exact) and I have a ‘free’ trade that can win 5%. Best of all I can sleep tight as it’s already out of my mind 😉 I doesn’t get any better than that !
That’s all. All the best to you all and enjoy the long week-end !
Ced (aka iseecure) from newly formed Tatch Capital Limited.
If you learned something, feel free share, comment, upvote or buy me (Ced) a beer, I’ll drink it in your honor (mention your name in the wire) or just give some money to a charity of your choice.
I believe that this is something super important in trading and in live in generally , it’s like a tax for everything to be alright and maintain goodwill in humanity ! God knows we need it !”
Also many thanks to “Cold Stone” for his support.