TraderDesk GBP/JPY Trades

[TraderDesk]

2:58pm

Looking at GBP/JPY price action I can see the rally from Monday morning is slowing and could reverse. The 30 minute chart price action is right at the HA trendline.

I brought up my buy-limits to 154 level as well as 153.5 and 153.18 areas as well. I will be patient as I find comfortable levels to enter...

[TraderDesk]

7:20pm

GBP/JPY price action is showing the first sign of a pullback. Liquidity is going down so we will see if it is a serious pullback tonight.

As long as price stays now above 153 I will stay bullish bias for the week... This number changes each day for me...

[TraderDesk]

Sept. 5 2013:
11.18am

So far GBP/JPY is still showing strength from the beginning of the month. I am looking for weakness in the 4 hour chart to start to show from tomorrow even though I do not have visual aspect of it on the HA trend. There are some longer-term patterns that reflect a change in bias starting around the 6-7th of each month so I will factor that in my strategy...

Looking at the intraday if price action closes a few bars below 155.50 level I expect to see a bias change for next week to be bearish.... Let's see what today and tomorrow brings for the 4 hour TF.

As for my trading I had other more pressing priorities to take care of but I hope to settle down and get some trades out there.

[TraderDesk]

Sept. 6 2013:
8.21am local time

Good morning,

Taking my first look at the charts today and I see on the 30 TF that price action has reverted to a bearish bias around 6 hours ago. I would look at this bias to continue as long as price action stays below 156 level. About an hour ago the first attempt to break the 156 level had subsequently fail. So depending on what time-frames I am trading on I would use this info to either reverse or close out existing positions.

30 minute TF now shows a real bearish bias since Sept.2. Again it is key for 156 to hold as a resistance area for the bias to stay bearish.

4 hour TF is still bullish but I would look at 154.50 to be an area that if price action went below and close lower then I would be very hesitant to open any bullish positions. If I wanted to play a counter-trend position off of the daily TF then this is where I would look to start....

Now as I said yesterday there is a pattern on the weekly chart where GBP/JPY starts to introduce a bearish bias after the first week of the month so keep that in mind. It doesn't mean it will happen all the time but the probability of it happening is higher then what chaos would suggest. Why it happens is not the main story just that it does.

Well that is the snapshot for the moment...

[TraderDesk]

A little off topic but I need to say it.

I look at FX as a business and like any business there are many failures. If I traded just based on having a platform with some EA's and indicators I would never had succeeded.

I always like to use an analogy like having my own restaurant. What makes a restaurant successful? It sure is not by getting a storefront and buying some food from the supermarket, throwing up a menu that I saw someone else using , cooking it and serving it to people that might come by chance to eat.

You have to plan it, know the business inside and out, work very hard, make sure that you buy the best ingredients at the most reasonable price, know your market and believe in yourself.

If your going to invest in the retail FX you must do the same or along those lines. For example, I see potential traders looking for software that will trade for them using EA's. They want the EA's to do everything and when the software drains their account they go looking for another EA system expecting to find THE one.

Another problem I see are people trying to take a small amount of money and turn it into 10,000% profit within a very short time-frame. This is not trading but gambling so you should expect the same results.

Of course I see many people who try to copy/emulate another trader in their quest to become successful. The problem I see is that they don't learn about the underlying asset class in the market they are attempting to trade in. Does not matter who you copy if you do not know the market intimately that your trading in. I am all for learning from traders who are successful but first learn the basics and get a detail feel for your asset class. It's like watching a Masterchef then copying what they do without know the basics of being a chef.

Since I had wanted to live off of my trading I wrote a business plan. Just like any other business I wrote a plan that is dynamic but helps me focus on what I want to accomplish.

A few area's I had to look at are things like costs, tools, research, time, infrastructure etc.... For example, in my business spread is a cost to me, a big cost. Liquidity is another cost if I lack it. Place of business is another cost as one country can tax FX profits 50% while another 0%. These are all the things that a person doing a business would look at so why not a currency trader.

Now putting aside all the business plan stuff which anyone can get off of the internet I made sure that I learned the asset class that I would be trading in. For me that was the spot FX market.

Now I not only pick the spot market I picked a few specific currency pairs which as you noticed one of them is the GBP/JPY pair. I spent many countless hours just learning the nuances of this pair which includes what other pairs effect it, volatility in various time-frames, visual wave patterns etc... I knew for me to make money on this bronco I had to have an instinct or feel for what it wanted to do and that takes time to learn. Just like in any business the more experience you are in your market the higher the probability you will be successful.

I could write a book here but I will just sum it up to say for me being a successful trader took time learning as much as I could about a specific currency, not by using EA's or a bunch of indicators and incorporating all the elements of a real business including writing out a dynamic business plan.

These are my own thoughts and experience, other people will have their thoughts on how to be successful and I always like to hear those as I never stop learning.

[kwanann]

A little off topic but I need to say it...

Good!

[TraderDesk]

Here is a look at the 30 minute TF and bearish bias. As you can see PA tested 156 and was rejected which in this scenario you get a high probability of a further low which is now happening...

[TraderDesk]

Now price action has dropped to the HA trend. If we see a subsequent break below 154.50 with a 4 hour close then I would look for the next target at around 152 level...

[TraderDesk]

Sept. 8 2013:
5:30pm

Sunday late afternoon look at the market and potentially where price action could go on Monday.

Taking a look at the 4 hour TF I see that Friday's close still keeps us above the HA trendline plus I see my STO indicator is coming up from a low. Always when price is at the HA trend I will find it tricky to read where price action could go based on one time-frame.

08-Sep-13 5-18-31 PM.png

So I will drill down to 30 minute TF to give me a closer look. What I see is price action still in a bearish mode and as long as the 155.20-50 holds as a resistance level then I would look for a continuation of the the bear trend. Now if 155.20-50 level is broken through and a few bars close above this level then the probability of the resumption the the longer-term trend is higher.

08-Sep-13 5-24-01 PM.png

But let's look at the daily chart to give us another clue on potential moves. What I see is price action has been in a bull trend since the middle of Aug. with the last bar showing signs of a counter-trend developing.

08-Sep-13 5-44-04 PM.png

Now for Monday I will watch carefully the 30 minute TF and by early morning my time I will re-evaluate the picture I see before me now. If price action is still below the HA trend on the 30 minute TF I will look to start adding sell orders. If price action goes above then buy orders will start being placed.

08-Sep-13 5-24-01 PM.png

[TraderDesk]

Sept. 9 2013:
8:40am local

Waking up this morning I see a big bullish gap on the currency pair. This takes Sunday's 30 minute TF of a intra-day bear bias and reverts price action back into bull bias. But I do like to wait a little until the London market has opened to see where we start to go next before opening positions.

09-Sep-13 8-31-05 AM.png

On the 4 hour TF you can see that we are looking at a change as well to a bullish bias. STO is overbought so we have a higher probability of a pull-back sooner then later.

09-Sep-13 8-33-56 AM.png

My plan is to wait this morning to see what will develop as the picture can change again courtesy of the gap...