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

GBPAUD 170 pips at the moment

What’s my chain of thoughts on this trade?

Steps to formulating and find this trade:

1. Saw Head and Shoulder pattern

Daily chart shows head and shoulder

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)

Gbpaud at resistance shown in monthly 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

Where to trigger base on my big picture planning

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.

Symmetrical head and shoulder

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.

Gbpaud at resistance shown in monthly chart

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.

GBPAUD reward to risk ratio

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.

Trading is about conviction and belief

Again, if you ask me how I make these pips, then it’s nothing random – the answer is clear.

GBPAUD support resistance and round number

Binni Ong