What would be the the appropriate steps to catch a move like the one I am about to mention. My knowledge in the
FX arena is minimal and as of next week I will be doing the currency course with Abe from LearnFX which I am very much looking fwd to
It feels like a jigsaw puzzle at the moment where one can see the pieces scattered across the floor but is unable to fit them togethor to achieve the whole picture.
This price movement has already begun and as usual I have just picked up on it.
Stalking the trade -
currency pair - GBP/JPY H4
from the peak 19251 to trough 18504 we plot the fibbonaci line
and take notes of all the possible points a reverdsal may occur
( 23.6%18680) (38.2%18679) (50%18879)
For the sake of this excercise lets assume the price move is just beginning to twitch up from the trough at 18504
what do you do now - do we programme these numbers into an alarm setting and if so how much lattitude do we allow for fluctuations - eg: if we set the alarm at (50%18859) this is 20 points before the exact 50% point which will allow us a window of time action to prepare for what may occur at the 50% lv and begin to look for signals or patterns - instead of waiting for the price action to hit 50% and trigger as price may move so quickly at this point one may be ill prepared to take advantage of the move. Is this correct and how do others go about this ?
Back to the chart - the price continues to press ahead via the three white soldiers block , the first clue that the trend may be weakening is delivered just above the 38% retracement lv courtesy a dark cloud cover - this is where it becomes somewhat awkward for me (or lack of understanding ) using multiple time frames in unison in order to cut my risk lv down - lets run an example that doesnt sit comfortably with me from a risk perspective but I will learn from this.
trigger shrt @ 18805 DC
stop @ 18861
$Risk 56 points (560.00AUD)
%Risk 2.8
20K Bank
exit - very bloody soon
the proceeding rickshaw man would scare the life out of me , although it may add further evidence to suggest a top was being set the upper fluctuations (shadow) would blow my risk exposure right out and I wouldnt feel comfortable with that.
GBP/JPY H1 - the Bearish Engulfing coinciding with the 50% zone would add further validity to our H4 observation but the risk is even more!!
trigger shrt @18813
stop 18891
$Risk 78 points - too much
GBP/JPY M30 - Bearish Engulfing
shrt trigger @ 18849
stop @ 18891
%Risk 42 points - on a 20K account still too much
these observations lead me on to a few others questions which are candle related - will post them later
Regards Gazelle
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