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A first time for everything

 
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hakchinoy

A first time for everything

I never thought I'd see the day when E/U would move more (290) pips in a day than G/J (115) or G/N (179).  Yet, that is exactly what happened.

Gotta thank Mr Draghi for that.  ;)

Thu, 06/14/2018 - 6:10pm
 
hakchinoy

Even E/G moved 90 pips!!

 
Rookie

Very cool Hak its been an amazing few days! Just think there are more to follow..:)

 
JayTea

Fun.

Embarrassing that I underestimated the news impact, but fun nonetheless.

Glad those were TP and not SL that got blown through. ;-)

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hakchinoy

I don't think anyone knew that several EUR pairs would tank as they did.

 
EPena

Yes, it was rough to see the price touching the daily 38 fibb retracements to then tank 300 pips, but like you said, I have never ever seen such daily bar of almost 300 pips

 
msdesouza1976

Yes, that was quite the move from E/U yesterday. I thought I was still sleeping when I woke up and saw that drop :-)

Too bad my overnight Sell Stops on E/U didn't get triggered. Did anyone else have this issue?

 
drdgn

It's very helpful to see how others are doing ... thanks for the comments.

 
hakchinoy

That was nearly a 3 ATR(D1) move. I was asleep when the initial move happened (resting from trading Asian and 1st part of London sessions). I woke up later and traded some of the aftershocks.

I'm studying the initial move to determine if there were a way to trade it profitably with my approach.

 
triguylm1

I was on the right side on this one , but still in Africa and WiFi was down, so it could have been so much better if at home in USA.

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j.awilliams40

unfortunately I was on the wrong side of this.I was asleep when this happened. woke up and my stop loss never triggered.and I had 10 pips long.2000 pip loss later. thankfully I am still Gold 2.hopefully I can still get too a funded account one day.Learnt a huge lesson from this.always beware of upcoming announcements.

 
ledabrown880

The EUR/USD pair moved over 200 pips following the ECB announcement on Thursday. There may be a potential counter trend
trade setting up for next week. Wait for the EUR/USD to retest the 1.1535 area and look for a bounce or a break. If it is a bounce, look to go long back to the 1.1725 area. If it breaks, look to trad it to the 1.1450 area with an overall target of 1.1320 area.

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hakchinoy

Right now, since it's early on "Setup Monday" (at least during the Asian session), I'm looking for the market to paint a few more candles to give me a hint where the MMs might want to take E/U this week.

 
JayTea

That was a large move this morning already as of 7 EST, made my pips for the day while I slept because I have other work to do. I should've went heavier but I still am cautious of these overnight trades in a (virtual) 1000 account.

Looks like today will be another great news day with news on both sides of the pond. What do you all think?

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bruced

Recent EUR/USD price action has given such a great lesson in how far and how fast the market can move. I hadn't seen such a move before as well. From what I've read, when the Fed lent credibility last week to an additional 2 hikes of interest rates this year, the market's immediate reaction didn't seem to get too excited about the dollar, but then, the following day, when the ECB announced they're going to taper their quantitative easing sooner than later, yet not raise interest rates until next year, the EUR tanked. So whether the ECB strategy stays that way, makes sense or not, who knows... It seems we can never be sure how things will go with major news announcements. It certainly reinforces the classic quote attributed to economist John Maynard Keynes: "The market can remain irrational longer than you can remain solvent."

 
hakchinoy

I spent time building a buffer during the Asian session--hoping to possibly catch that move (which I figured would trigger near the London open). My buffer enabled me to go heavier into that position; I closed out my position trade slightly before 7:00 EDT too. :)

"The market can remain irrational longer than you can remain solvent."

That's why solid money/risk/trade management is SO crucial.

"Looks like today will be another great news day with news on both sides of the pond. What do you all think?"

Regardless of the news, I'm looking for clues in the charts that will show us whether or not that W1 H&S pattern will reassert itself. My hypothesis is--since the MMs were forming the R shoulder of a W1 H&S (prior to both aforementioned news events)--that the MMs will work order flow to move price up again to resume forming that R shoulder, and they ultimately intend to move price lower intermediate-term via the H&S.

 
bruced

Interesting, Hak! And if the H&S forms on the EUR/USD, it sure does look like a strong right shoulder, with a potential move extended to the downside. Perhaps... And if China decides to sell a portion of their boatload of a bazillion US treasuries they hold, the dollar will soar. That flood of paper on the market could depress the price of those bonds, raising the yields, and would make the dollar soar, temporarily. But - that strong dollar could make the price of goods really expensive overseas and hurt sales of US products in other countries, thus hurt US growth. I think China might be sending a little message soon, if this trade war biz doesn't chill a bit...

 
Rookie

@bruced, did you come up with that very good analysis all by your self? I'm teasing of course but it is good and shows a great insight into how the cycle of if this and then that.

 
jbooze

Been there, done that! What I've learned is that you have to have a money management plan that protects you from jumping in front of pending news without a suitable stop loss to the up or down side. Because you never really know which way "Big Money" is going to go.

 
bruced

I'm just like anybody out there, trying to learn from a lot of sources and somehow make sense of all the wacky ways the markets move, and lately, there's lots of chatter in the news about how the trade war stuff may influence the dollar. Indeed, understanding how interest rates affect currencies seems to be the major driver of price. However, one of the things I find so counter-intuitive is understanding price action, given the current US policy of pissing off all our allies and our major trading partners with tariffs, and generally creating chaos on a regular basis, which leads to the sentiment of a "risk-off" environment. And this is actually positive for the dollar and the yen!?! I know these are the largest/strongest economies in the world, but in the long term, I can't help but think the dollar will fall in price. In the meantime, I just try to follow price action based on looking at longer time frames, then drill down to shorter time frames to see S/R while trading .01 lot sizes to move forward :)

 
Rookie

Bruced, just saying I think you did an excellent post about tieing the pieces together. Since WW1&2 the USA has been bailing out the world economy to rebuild and that carried over into what I'll call for lack of better terminology well fair countries that are underdeveloped for various reasons just like a percentage of the US population. Unfortunately, on the global scale out leaders let things go too far with trade off's especially with not clamping down of the steal it and copy countries. All Trump is doing is attempting to rectify some of that and restore some balance. But that just my nieve POV without protectionist reflection on things like the cold war or the Cuban missile crises etc,

 
hakchinoy

If only the current situation were that simple, . . . but it's not quite that simple.

Politicians on both sides of the isle have been shoving "globalism" down our throats whenever doing so was in their (and their donors') interests. They inked deals themselves and allowed various companies to ink deals that clearly didn't have the interests of most Americans in mind. They padded their pockets laughing all of the way to the bank, and their constituents still continued to drink their Kool-Aid while voting them back in.

What does all of that mean for E/U? That's a very good question for which I don't have a very good answer. All I know is that if I get a buy signal, then I'll buy. Similarly, if I get a sell signal, then I'll sell.

Regardless of the news, each market has 3 potential responses: 1) bullish response to the results, 2) bearish response to the results, 3) "don't care" or no response to the results. The beauty of being able to read market-structure and PA is that we don't even have to know or understand the actual results to trade off the response.

Knowing the fundamentals can be nice for longer-term trades, but it won't help much with extremely short-term trades (like scalps off M15, M5, or M1).

 
Rookie

Thx Hak, as always your perspective is right on.

 
bruced

I'm increasingly aware that there's always going to be a natural tendency to form opinions, though indeed, it has nothing to do with the actual trade. I've often appreciated Rex repeating a comment, something to the effect that he 'has no opinion' of the price action ... so I agree with that really important point to remember in trading: "Regardless of the news, each market has 3 potential responses: 1) bullish response to the results, 2) bearish response to the results, 3) "don't care" or no response to the results. The beauty of being able to read market-structure and PA is that we don't even have to know or understand the actual results to trade off the response." That said, I find it helpful to consider fundamentals, technicals, and sentiment to make sense of market structure and price action.

 
Rookie

Paul Tudor Jones is one of the best traders in the world. Paul stated there was no internet and the reliable macro news was often misleading at best so we learned to trade strictly price action and risk aversion. He Liked Richard Dennis and jumped into futures.
As communications improved he became famous for his macroeconomics trading and sell anything short that had a great upside with at least a 5:1 profit ratio. He fully understood what makes the world go around. His macroeconomic fund today is the Tudor Fund.

 
hakchinoy

Although I also respect the fundamentals, technicals, and sentiment, I defer to the technicals.

 
hakchinoy

"My hypothesis is--since the MMs were forming the R shoulder of a W1 H&S (prior to both aforementioned news events)--that the MMs will work order flow to move price up again to resume forming that R shoulder, and they ultimately intend to move price lower intermediate-term via the H&S."

Although we still have some more time remaining before the NY close today, it appears (right now)--assuming nothing catastrophic happens--that the current W1 candle will close bullish. Assuming that happens, my hypothesis will remain valid, and I'll proceed next week with the same hypothesis.

Price bursted through a few H4 and 1 monthly R zones earlier today; I'm curious whether price might reach the D1 R zone (near 1.16944 [which still would be within ATR(D1)]) sometime today.

 
hakchinoy

That W1 candle did close bullish, but price didn't reach that D1 R zone today.

 
hakchinoy

That was a nice spike, although I'm still unclear on what caused it. (I wonder if some EOM Asian session trading might have triggered this move.) I'm just glad I was in on the right side. :) Although I anticipated the move upward, I didn't anticipate that price would move upward so quickly--especially during the Asian session.

 
robunited

Hak, I always have forexlive.com on the side line to see any unexpected news outside of the financial calendar.

When this spike happened, 2-3 minutes later this news came out.

Not sure if this is the cause, but something to consider ... an unusual move indeed during the Asians

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hakchinoy

Now, that does make a lot of sense.

 
mario.gharib

yeah, that is true

 
bruced

Here's another good "latest news" feed:
https://www.fxstreet.com/news