It was a nice quick trade, I grabbed my 50 on it easily.

If you took this trade leave a comment and lets us know how you went!

Have to do quick analysis this week. It’s 5 Day Blitz week so I am very busy preparing.

GBP/JPY

1. Long @ 160.50 – strong line (70 pip target)
This line formed a while ago and it is in fact a S+R lines with a two week old scalp line just below it. You can trade the scalp which stand at 160.40 but I thinks it’s much safer waiting for the S+R/psychological 160.50 line to break.
This looks like a good line!

2. Short @ 155.90 – strong line (50 pip target)
This is a scalp line with a S+R line above it at the 156.05 level. I like this scalp because it is a psych level, an S+R line and a scalp all in one. However, since I am mainly looking for a scalp break the target is 50 pips.

3. Short @ 154.00 – strong line (50 pip target)
Again, we have a scalp line, S+R line and a psych level in the same area. The scalp and psych level are the lowest sitting at 154.00. The S+R line is actually 30 pips higher at 154.30. Since the scalp is the lowest I will trade the scalp so the target is 50 pips.

GBP/USD

1. Long @ 1.6745 – strong line (50 pip target)
Scalp line that formed last week which is also the high for 2009. Should make for a good trade.

2. Short @ 1.6183– weak line (50 pip target)
This is not the perfect example of a scalp line, no clear big trend heading to the line and no clear big trend heading away. I will trade this line with extreme caution.

3. Short @ 1.5800 – strong line (50 pip target)
This line formed the a few weeks back and it seems very good. The moves to the line and away from it are both very strong. The problem is it has been around for a few weeks now. The only reason I am keeping on the chart is because its a very strong line and it is pn a psych level.

Anyway that left me with no time to do the analysis. However, it’s better late than never!

Ok so I am using S+R lines again, in the chart pic below you can see all my S+R lines for the GBP/JPY on the 4hr chart. Blue lines are S+R lines, orange lines are scalps.

1. Long @ 158.50 – average line (already triggered) +50 pips
This line formed last week it wasn’t a very strong line but it was a line and the trade worked.

2. Long @ 159.60 – strong line (already triggered) -15 pips and +70 on reversal
This line formed last week. This trade has already been triggered but the loss on it was minimal. The break candle closed as a reversal candle on the break line so that was a no excuses IMMEDIATE exit sign. It was also a sign to enter a reversal trade which ended up being worth +70 pips!

3. Long @ 160.50 – strong line (70 pip target)
This line formed a while ago and it is in fact a S+R lines with a two week old scalp line just below it. You can trade the scalp which stand at 160.40 but I thinks it’s much safer waiting for the S+R/psychological 160.50 line to break.

This looks like a good line!

4. Short @ 155.90 – strong line (50 pip target)
This is a scalp line with a S+R line above it at the 156.05 level. I like this scalp because it is a psych level, an S+R line and a scalp all in one. However, since I am mainly looking for a scalp break the target is 50 pips.

5. Short @ 154.00 – strong line (50 pip target)
Again, we have a scalp line, S+R line and a psych level in the same area. The scalp and psych level are the lowest sitting at 154.00. The S+R line is actually 30 pips higher at 154.30. Since the scalp is the lowest I will trade the scalp so the target is 50 pips.

I wll resume the GBP/USD analysis next week but we had a great trade on GBP/USD too!!!

Sorry for not putting up the analysis this week. You may have noticed forex4noobs.com is having some major changes done to it. This has left me very little time to add my analysis. I will add analysis to this post a some tiem in the next few hours.

Next week I will post the analysis on time!

Personally I fell asleep after 24 hours without sleep and I completely missed this trade. The break happened quite some time after I originally planned to trade it.

You will notice that all the candles were telling us the same thing. Despite the lower lows this  was a classic reversal set-up. I will try and write an extensive breakdown of this trade later this week.

Who took this reversal? How many pips did you make?

While I stand by my decision not to trade I can understand why most people would have entered. I think there comes a point when a trading method needs to be reassessed. When your win rate starts to fall significantly you need to take a step back and take a look at what’s wrong with your method.

Personally my win rate hasn’t dropped but I trade my method a little differently these days. At the moment I am happy to take a single trade every two or even three weeks. So I only target very high probability trades and avoid trades like the one we had today.

I realize though that most of you would have taken the trade, so officially I have to say that trade was a loss.

Anyway, I took a step back and took a logical look at my trading method. I tried to spot what was wrong. I realized a few things:

1) I am not properly trading my method. I am trading what is for the most part a variation of my method I crated to trade the erratic market conditions we had earlier this year.

2) I am not subjecting my scalp lines to as much scrutiny as I would usually do. I am leaving them on for longer than 3 weeks. Usually if a line doesn’t break within 3 weeks I remove it but I have lines on that are months old.

3) I am not trading S+R lines (only scalp lines) even though there are valid S+R lines on my chart at the moment.

To sum it up I am traded a mutated version of the NickB method that was created to trade the crazy market conditions we experienced in late 2008 to early 2009. The market has calmed down now so there is no reason to keep trading the way I was in crazy markets. What I need to do is take the NickB method back to its original form. I am starting by trading S+R lines again. Later today I will throw up a chart with all my S+R lines.

As we see many times a failed break line has given us the opportunity for a new trade. An LWP has formed on the failed break line and I am looking to enter on the break of the high of the LWP which is at 156.00. SO I am jumping in for a long at 156.00 and with London opening in a few horus if this breaks it should amek for a great trade.

Regards, Nick

My whole strategy is based on the idea of every trade being unique and using discretion when trading. Just because a line exists it doesn’t mean you have to trade it. Looking at this trade I said to myself logically:

1) GBP/JPY moves roughly 200-300 pips per day. In the past 24 hours it moved over 400 so it is very possible that its getting exhausted.
2) The Asian session is generally when GBP/JPY becomes more erratic.
3) It is approaching a scalp line (area of support) and an area that has show quite a bit of S+R in the past few months. Given the fact that its probably exhausted and we are in the Asian session this can be a very dangerous area.

To me that sounds like a dangerous trade. If GBP/JPY is tumbling down mid London session still within or only slightly out of its ADR I will enter. With this trade asking myself a few simple questions tole me I should not enter.

Before jumping into any trade I ask myself a few questions like these:

What possible problems could this trade have?
Is this a high or low probability trade and why?

My entering or not depends on the answers to those questions.

On a side note, I have already had 3 emails from people saying that I should just own the loss and not make excuses. Come on guys look back at my posts if its a loss I own it and I do so quickly without hesitation, when its not I explain why I would not have enter.

I just got a few emails about the break of the 154.80 line. I am not in this trade……..

GBP/JPY has moved far past its average daily range and we are in the Asian session. This si the point at which you would expect it to stop moving not keep moving.

My advice to anybody who jumped in wuld be to close this one out or trade it with a tight stop.

EDIT:

Sorry to get this post out after the actual break but I was in bed and thought I should come back and leave this message. Its around -15 pips from open at the moment. Rememebr lines are not magical barriers that you jump in when broken. My method is a discretionary method and when you see GBP/JPY ranging 400 pips (almost 2x its avearge daily range) in one day you do not get in at the end of that day mid way through the Asian session. This trade could still work out but I woul not take it.

EDIT:

Ok 20 min later it just had a complete reversal. Looks like a reversal pattern may form.

Here is this weeks analysis. Sorry it’s a little late I was very busy this weekend. GBP/JPY has been boring lately so I want to try something new. I am going to start trading GBP/USD on a trial basis. This means I will only be trading a small portion of my normal position. Since these pairs are on trial I do not want to risk as much as I would on GBP/JPY

Do not take any of these trades unless you have downloaded and read the free e-Book explaining my method.

These are all scalp lines therefore the target and stop for all of them is 50 pips. However, that is my target and while I suggest you aim for no more than 50 pips you could adopt some other strategies to maximize gains. For example you could close out half you position at 50 pips and move your stop to break even. This strategy is discussed in the free e-Book above.

I trade on a 4hr chart.

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GBP/JPY:

1. Long @ 162.59 – strong line

This line formed the week before. It is the new 2009 yearly high and it has had a decent reversal. Since this did not break last week I think that a break this week would work very well.

2. Long @ 160.39 –average line

This line formed last week. It seems like an average line. I will trade it but I must admit I am not overly confident with this line. I will be VERY careful with this one especially at the 160.50 psychological level.

3. Short @ 154.82 – strong line

This line formed the a few weeks back and it seems quite good. Lat week it had a second bounce making this line even stronger. This line looks like a great trade opportunity so be ready for it.

TRADING GBP/USD ON A TRIAL BASIS USING ONLY A PORTION OF MY NORMAL POSITION ON ANY GBP/USD TRADE!!

GBP/USD:
1. Long @ 1.6663 – very strong line

This line formed a few weeks back and it is the new 2009 yearly high. This line also formed on the 30th of October 2008  so its a very strong line. Remember though, strong lines can be dangerous as even after they’re broken they can retrace. I am definitely taking this trade but I am not going to jump in with blind confidence that it will be succesful. I will watch it closely like any other trade.

2. Short @ 1.6183 –average line

This line formed last week. It seems like an average line. I will trade it but I must admit I am not overly confident with this line. trade with caution!

3. Short @ 1.5800 – strong lineThis line formed the a few weeks back and it seems very good. The moves to the line and away from it are both very strong.