GBPAUD Trade – How long to wait for a trade and how to get 170 pips in less than 12 hours?
I like to go through my thoughts on the trade on GBPAUD.
The results: 170 pips in 12 hours and I am still holding bulk of my trade. I have exited partial base on the tweet that I said
$gbpaud as some S at 16960-70 16820-30. Currently this trade doing great! RE https://t.co/ECvojgaUQe
— TerraSeeds FX Tflow® (@terraseeds) October 4, 2013
What’s my chain of thoughts on this trade?
Steps to formulating and find this trade:
1. Saw Head and Shoulder pattern
2. There must be a reason why market formed Head and Shoulder here. So I went to find resistance in next higher timeframe (week or month chart)
3. Now it is about find a trigger in lower timeframe
#gbpaud monthly chart shows resistance. it's about going to lower timeframe to see a trigger http://t.co/GuAsJsvmVY
— TerraSeeds FX Tflow® (@terraseeds) October 4, 2013
Let me share where I triggered the trade, and also where you might have triggered the trade
Should short close of candle at red arrow, but missed it. instead short at black arrow at 1pm. another chance presents at yellow arrow at 5pm
My questions to you:
1. How many of you took the trade? Seems not many because I only received 2 responses from twitter
2. Maybe you don’t know how to use big picture planning, so this post will explain how to use big picture planning
3. Such big picture planning is to transfer experiences to you so that you could find such trades in future. There is unfortunately no overwhelming responses because no specific prices are given. Is that true?
4. I tweeted big picture planning around 10.30am. Till the last possible triggered candle, there was a duration of 7 hours!
Next trade please….
Update on 8 Oct 4.57pm
As I said in all Tflow® preview sessions, the objective of myself sharing these analysis/trades is to impart the years of experience that I accumulated. If you were to go through these yourself, you probably going spend some time to get these experiences. Time spent = opportunity cost. Sometimes I thought I could just keep what I know to myself…*big smile* but what’s the point.
The above chart is what I see when I was analysing GBPAUD. I saw a symmetrical head and shoulder. Remember, Tflow® looks at the head as a flow and the right shoulder as 1234. But what is interesting in this pattern is that the right shoulder is symmetrical to left shoulder.
Then I drew a blue line on the left shoulder, switch to monthly chart. The blue line shows a resistance level in monthly chart. Isn’t it magical? The market led us to find resistance that we didn’t even suspected or saw.
Risk of this trade
I have to admit that the potential risk of this trade is high.
But I have to say that I took the trade, because to me, risk is judged base on how much you can potentially lose in monetary value, but in pips.
The assumed risk in pips is 280 pips, but if one is to trade 25% of the usual position size, then the monetary risk will be much lesser. Assuming usual size is 1 mini, then one could trade 0.25 mini. Thus monetary risk will still be the same on a 70 pips stop loss.
When I took this trade, I just wanted to print this pattern into my brain. It’s positive reinforcement.
Update on 14 Oct 4.35pm
Said in Tflow course psychology session that it is very difficult to teach psychology. One way to work on a trader’s psychology is to generate positive reinforcement – to show you probably many times of best practices and let yourself be convinced.
Here is the trade on GBPAUD which I gave lots of positive reinforcement to those who were in 4M class last week.
Again, if you ask me how I make these pips, then it’s nothing random – the answer is clear.
Hi Binni,
If I were to analyse the H4 charts, I would see it as a BM and and a continuation of the upflow based on the last two H4 boxes. Do we always have to refer to the higher timeframe before we take a trade? Appreciate your advice.
i’m trading failure of this BM, it became a wrmb
1 of the reason why i didnt take the trade is because the stop loss is more than 100 pips away.
see my justification
Binni if your trade idea came from the potential forming of the H&S, are you expecting that the price may reverse at 1.6875 to form the right shoulder?
16875 is a support zone, but not sure if there could be a IHS, got to wait and see
I have been watching this trade and I saw it when it was forming. I have analyzed that the price would retrace to certain levels and come back down giving a trigger.
I am happy that I analyzed correctly and what I expected is exactly what happened. I could never have done this without the Tflow course and much much practice.
One negative issue is that I did not take that trade due to Pt 3 being lower than Pt 1. I knew it was not a normal 1234 pattern by price action, but it was a true 1234 pattern by spirit.
I am still happy that I analyzed correctly and price moved to exactly the places analyzed.
pt 3 not lower than 1. we need a close below pt1 to confirm being lower. it just exceeds pt 1 by around 5 pips. that’s fine