break out Tag

Finally after 2 Years of consolidation FTSE has made new highs with the prospect of a new bull run to follow. Its always difficult to ascertain whether a break-out is a fake out or genuine and sometimes the only way to deal with this is to enter the position against the probability that most break-outs are successful. The more difficult aspect is stop loss positioning.

You may recall my recent choice to take a risky trade in AUD:NZD whilst waiting for a EUR:GBP set-up to fully play out. Obviously I could have entered both trades but on the basis that the EUR:GBP set-up didn't look quite ready for entry, and the AUD:NZD despite being far riskier did, I just went with the latter. Unfortunately for me, the EUR:GBP short would have been an instant winner, whilst the AUD:NZD one is yet to show a profit of any kind! In fact I widened the stop slightly on the AUD:NZD long on the basis that my original stop placement didn't leave enough breathing space. At present the AUD:NZD position is showing a loss of approximately 140 pips whilst the EUR:GBP trade, had I taken it, would now be showing +180 pips!

Following my 3 Week break I feel I'm trading at quite a comfortable and relaxed pace continuing to hold the DAX and GBP:CAD swing long positions. DAX as with other indices seems to be going through a correction at present but its quite clear DAX remains one of the strongest Indices. As you know, my system shorted FTSE back in May on the basis a medium to long term top may be in place. Bearing this in mind it could turn out the DAX Monthly break-out candle is little more than a fake-out and I am concerned that the huge profits seen on that trade will turn to dust, but I'm quite determined to stick to the plan on this one unless I see a real break-down in the technicals.

Just a quick post to say following on from previous GBP:CAD analysis I've entered a swing long position with stop loss set on a Daily close below this Week's low. I don't normally buy break-outs like this generally preferring to buy a back test of the break-out level but I miss so many trades with that strategy that I've just bit the bullet and entered long. After all, price has just broken out to 3 Year highs and it would be incredibly unfortunate if I've bought the top!

Following on from this post where probability suggested the small rising channel seen on the 4 Hourly DOW chart would likely break to the downside, we've actually seen the opposite occur. The short position I held at that time was stopped out at break-even and I now hold a long position with stops at break-even. The following charts should just be viewed as information only because they're based only around a short term view, whilst momentum and sentiment can change very quickly. Over the last fortnight my day trading system hasn't really triggered any new long positions, with the last one being at 14,386 on 18th March. However, it has been signalling a number of potential short set-ups but none have actually triggered an entry. This could imply that large players have begun positioning ready for a correction, but until a short signal actually triggers, the best position is to stay flat, or remain long with the trend if you are already positioned long.

Only the one swing trade taken this Week, and exited 24 hours later. That was the EUR:USD long, the analysis behind which can be found in this post. It rallied almost straight away after entering and 24 hours later price was rejected from quite strong resistance at the top of the recent range, which happened to coincide with the triangle I'd marked out in the previous analysis.

As the heading suggests, I've taken a few new trades this Week, but have struggled or am struggling with all of them. It's one of those Weeks where I'm left wondering if Markets are just completely random and only a look at previous trading results remind me that TA must play a major part! I came into the Week with one open trade, an AUD:CAD short, but on Monday my Day Trading system gave a long signal on the 5 minute time frame, so I decided to

The following analysis was intended to be a continuation of that detailed last Week in this post. Having entered a long position (1.6171)  today primarily based on that previous analysis I decided to run the ruler over Cable again, but this time findings are a little more mixed. By the end of this post it's possible I'll begin to have doubts about the probability of my long position delivering the result initially envisaged. Running through almost all time frames, I'll start with the smallest and work through.