APRIL FOREX II

1Iron,

The EU.AUD pair, they went down like 1500 pips before they FINALLY reversed it, and that made me see for the first time that the RSI and DI lines arent fully legit at all, they can be overbought or sold for a VERY extended time and not show at all to the real extent of the move.

I wonder if there is an indicator that doesnt bottom or top out and really will keep falling and falling or rising and rising and show real info versus when it hits extremes it stops showing as it should.

Check the 4 hr chart on the EU.AUD and notice that even though the pair kept falling and falling and falling, the RSI never went much below 30 even though the pair went down 600 more pips than the bottom shown RSI and DI wise.

What I learned is that going against a strong counter currency requires a ton of patience and deep pockets, but buying into the drop DID end up paying off, I kind of wish I knew what the figure was though..lol

Sorry I havent been contributing much,  i have been kind of busy looking for a job,  and think i found one,  (we will see later this week)

goal is to go back live around my 2nd week of work. 

i had to pay my mortgage and car loan with most of my investment capital.  (lame)

i am on the playdough though. 

got up early this morning, and snagged up gbp/usd @ 1.4561

still trading roud that range no big suprises, but could see a breakout later tonight or tomorrow, 

rsi is climbing around 44

+dmi is around 12 but climbing,

-dmi is comming down through 28

but the adx is right around 43

it may be a little bit early,  (even earlier this morning) but i set my

stop @ 1.4500
limit @ 1.4760

gl to all of you today, i'll be in and out

1Iron,

Ive been playing the range on it going back a month plus, but the current trade isnt that high.

My most recent buy was at 1.855 and I nibbled all the way down to the low buy of 1.82, so my average is quite low relative to the first purchase.

I thought this acct was a 90 day acct but I guess not, and it is tough trades that teach you the most..and in this case it did teach me quite a bit.

I just did the manual math and at current price I would be up about 1000 pips on that trade, but at a point I was down pretty big.

Well it is relative to your account.

That 1500 pip drawdown is on a FULL contract, the ammt of risk and pain is up to the person trading.

For me I would trade mini accounts until I had enough to handle a big loss and not be wiped out.

I could have traded in and out of that several times but I am not watching close enough and that 1500 draw down was after I had a chance for a nice gain but didnt have a limit order in and the move was while I wasnt watching.

I think one should be able to handle a BIG loss if your long term strategy is meant to trade off the longer term horizons versus say a 1-5 minute chart. If you are hitting those short trades then using a stop is very crucial. In the times Ive traded, Ive taken big hits I think 2-3 times and on a percentage basis that is less than 10% more like 5% and I am ok with that personally.

Oh for sure..but the same dynamic I am discussing is true for his 4 hr DMI crosses..sometimes the cross happens and fails, plus if you look at a DMI chart for most pairs, sometimes a cross can happen with a false bottom, then it keeps getting hammered.

What I am figuring out is that technicals arent full proof, I think a FEEL for the trade is almost as valuable as using RSI or DMI cross etc..and that comes with time and experience and observation, which I still have plenty to learn.

Im going to tighten my stop, to
1.4641
then the worst I can do is gain only 80ish pips

if it rolls up to around 1.4720 ish area during us trading  i will probably set my limit a little bit higher, and of course tighten up the stop again.

not so sure if it is a good time for an entrance though.  i would wait to see it convincingly break that 1.4700 resistance it is hitting. 

ended trade @ 1.4661 for 100 pips.

I'll keep an eye on it

Thats why i started trying not to trade when the DMIs started crossing in lower[SELLS] or upper[BUYS] 1/3 of the charts...its hard though cause most of the pairs havent been able to get above the 40s in DMIs...I dont mind trading the up crosses when they are that low but the sell crosses are kinda fishy....dont want to sell when -DMI is already in the 20s...

Even that EUR/AUD trade coulda made $$....looking at the chart it moved in about a 400 pip range or so week by week...and starting on the 25th it went from 1.95 to 1.90 back to 1.95 by the 30th...it looks as though you coulda been able to average and at least limit your loss...you just have to have the powder and stick to a system you cant just average at random,have a plan

My last trade in CHF was a cross with the DMI at 38...still iffy....but i got what i wanted out of it and had i been around to average it would have take half the time....even if i had went with EUR pair instead one average down woulda paid off

 

 

 

 

That is exactly how I see it.

I think most traders that flame out do so because of either forcing trades or not being able or willing to ride out a loser.

So in the case of the EU.AUD, it was a bad trade for a long time, but if you averaged INTO the trade, it ended up just fine, plus if you keep limit orders in, they can hit and you might never know it.

I still since starting trading have only experienced ONE losing trade, and that trade was because I freaked and bailed, but I bet it didnt need to be a loser either.

Patience, averaging into and out of trades, not forcing bad trades too early, that seems to put the odds in your favor..the most important key is probably deep pockets.

that eur/gbp does look enticing, 

ill wait to see the -dmi perk up a bit