The following screen shot is the Euro/gbp this morning , 15 minute chart. I posted the following on twitter at the London open;
“morning . euro/gbp very interesting right now. broke emas up & just making new hi’s for the day. 88.50 is also a fib. if can break here, up.”
Euro/Gbp Asian high and lows marked in yellow
I have had a lot of questions asking me what is a “confirmed” break of a range or channel. For me it is a candle that CLOSES above or below the channel. If you look at arrow 1 in the diagram, price pierces the asian high & the fib & the 0.8850, but it doesn’t close above it. Thus it is not a confirmed break.
The 2nd candle is a confirmed break for me. The candle has broken & closed below the asian low and the next candle carries on in the same direction. I shorted here. Again on twitter i posted;
“euro gbp never confirmed break up at 8850 upside. but just confirmed break of downside 8820, that has held for last 24 hours”.
Because it was a break of a 4 hour support line that had held 4 times, I got in here with 1 lot. The aim was to take a 2nd lot if it pulled back or carried on going down. Unfortunately it pulled back and took me out -25 pips. I then took a 2nd lot at arrow 3.
This is the pull-back that I should have waited for in the 1st place ! It moved down. I moved my stop to entry, so no loss and it came back and took me out again. The reason I got in straight away is the this pair only moves 100 pips a day on average and doesn’t always give pullbacks.
I did make 20 pips on a gbp/$ trade that was a carbon copy of 4th mays trade. I got up a bit late, so missed the initial bounce off the 200 ema. I waited then for price to break the 34/55emas which it did. The bollinger bands closed in on this candle so i waited for a pullback to the 5 and 55emas. Textbook entry.
Same as monday. Bounce off 200ema, break of 34 & 55 emas
I took 20 pips off the 1st trade, but then had to go out. I moved the stop on my 2nd lot to break even to let it run. Unfortunately by the time I got back it pulled back and took me out at zero.
I then had a losing trade on 2 lots aud – 20 pips x 2 = -40. I Then took another long at a bounce of the 200ema/ break of 34/55emas on the aud as you can see in the following diagram.
The green dotted lines are my entries. The black line above the highest arrow was a 78.6% fib of yesterday. The dotted red top line is 1st profit target. Bottom red line is stop.
This was a good entry for lots of reasons;
- it was 7400 psychological level
- price rejected at the 200 ema
- 2nd entry was a break back above 78.6 fib
- 30 minute and 1 hour emas in same area
- was a trend line on 4 hour chart
- Trend for aud is up.
I have been playing around with trades on metatrader for the last few days to get ready for the $1.000.000 challenge. If you see dotted lines they are just entries (green) and stops or targets (red).
I then “bent” my own rules. I do not normally trade just before the news, but the gbp AGAIN bounced off the 200ema and the usd/chf again bounced back below the DAILY 200ema. I was going to take the trades anyway but it was 20 minutes before the news. I entered and then 5 minutes before the news moved the stops close to price.
Then the madness that is forex kicked in. The U.S. employent news was much better than expected, therefore the value of the $ goes up, right ? WRONG. The dollar fell sharply against the gbp, euro, aud, and chf. Why ? I have no idea !
However it worked in my favour as my 2nd lot aud shot up 30 pips in 15 minutes. My gbp went up 50 pips in less than 15 minutes and my chf dropped 40 pips.
Chf break on 15 minute fx chart. The red line is my stop which was also my entry.
This was 2nd entry gb/$ off 200 ema bounce today. Stop moved close for news
The gbp did the exact same thing again approx 3pm bst (2 hours after New York opened). Do not rely on the 200 ema on its own. Also, the more times price is rejected here, the more likely it is to break it the next time.
I had a lot of trades today. My net gain was 118 pips which was helped a great deal by my luck with the news going in my favour
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hi marc
yeah i was there when i took the yen after the news, many times technical conflict fundamental and technical won, think there is no one who use only fun to trade and be successful? but there are many ones i see use tech only and took many pips…. btw i used your system and entry aud/usd at 0.7370
David
Hey Marc, I have been enjoying your insight and wanted to know why you put the levels that you do on your MACD..Im assuming that it acts as a way to to tell the trend and also over bought and over sold areas. Is this correct?
Hi khalif. I have tinkered with macd so much that I hardly use it anymore ! I only really use it for divergence. I need to look at changing the settings. Marc
Hi Marc,
Correct me if I’m wrong, but in order to achieve the $1 million in 2 years, wouldn’t you need to be trading 25+ lots towards the end of the challenge? In this sense we would be talking insane amounts of money at stake in the neighborhood of $250+ per pip.
For example, if you are at say $900,000 in your account and you risk 3%, that is $27,000 (27 lots). This amounts to $270 per pip. With your goal of 75 pips per week, that would amount to an unbelievable $20,250 gain in a single week. Is that really feasible to be trading 20+ lots at a time? Many people would be happy to earn $1,000 a week and you would be looking at doing over 20x that amount. Maybe I’m just thinking small scale but that seems like a lot of money to have on the line!
Just curious… Thank you!
hi, thanks for the post. You are correct the amounts needed near the end would be huge, BUT, mathematically it is correct. Take the emotion out of forex (ie in this case fear of losing) and logic says it would work. In reality as the account gets bigger I would simply reduce the % of the stake. For example to kick start the challenge I will risk 5% of my account. Once it gets over $10.000 I would reduce that figure to 3%. At $100k 1.5% etc. Yes it will take longer to reach the goal, but if it takes 6 months longer I’ll settle for that ! Another point on this is that I found when I started trading forex that initially I felt uncomfortable risking $250 per trade. Then $500. A $1000 was horrendous the 1st time I did it, then $1500 & $2000 were equally daunting. The truth is as your account grows you do get used to it. Imagine working for a bank and pulling the trigger for a $million risk !
Finally on the subject of large amounts per pip: I received another email this week about yet another “awesome forex robot- earn $60.000 in 2 months”. On closer inspection this was $150 per pip. They were scalping for 3 to 10 pip gains and had NO STOP ! The secret to forex success is to build your account slowly and methodically. Good luck with your trading, marc