EURUSD possible Gartley sell pattern

Heads up. So far a pretty nice setup. This is a 60 min chart. May want to dial down for an entry. Don't forget the fib levels. I didn't put them on here so you can see where the pivots are.

News Trading

I just finished a chat with someone about why I cancel my trades ahead of big economic data announcements. Since we have one coming up in the morning (the CPI) she suggested it would be a good blog subject, so here you go.

First, the economic data that I consider to be BIG and cancel my trades ahead of are: Monthly - CPI, Non-Farm payroll, Trade Balance and quarterly the US GDP. There's certainly other data out of the US and other countries that can cause unpredictable spikes in the market, these just happen to be the ones that I like to not trade. Someone else might have a different opinion of big news, this is just mine.

I do still trade the night before and leading up to the data release. I just have a few rules I follow.

If an order has triggered and has reached my first full target, which is usually 40 to 50 pips, I will leave that order in and move my stop into profit, usually just beyond my entry and into the profit area. If it spikes against me I have a bit of a cushion and it could always spike in my favor.

If the order has not triggered or has triggered and is holding but has not reached my first full target then I close it out and wait for the data.

For me and my risk tolerance this is the safest move I can make. For me.

Now, since I am a major advocate of using stop-limit orders the question came back to me - "Aren't you protected from spikes in the market and the amount of slippage you can handle by using stop-limit orders? Yes, absolutely and provided you're using a Broker and platform that allows this type of order. Most that I know of do not. When using stop-limit orders I can pre-determine the amount of slippage I am willing to accept. After all, isn't this the big risk everyone talks about with news trading, getting a bad fill that could be 20 to 30 pips or more beyond your initial entry? By using stop-limit orders your protected that way. You limit some of your risk because with this type of order you will prevent yourself from too much slippage; you control the slippage. However, news trading is still the highest risk form of trading Forex. And where your not protected though is if the currency comes back suddenly from a spike which in many cases it does. At that point your order would be immediately executed then stopped for a loss and if it's moving fast, as it usually is, it could be a big loss.

I should note here that I am trading with an ECN Broker that has a platform that allows for stop-limit orders. I have not seen a deal desk that will allow this and I know for sure that the Metatrader platforms do not (MB Trading is working on that). If you are a news trader I cannot stress enough how valuable trading with a Broker and a platform that allows stop-limit orders is. Again, this is just my humble opinion.

So you have a huge problem caused by the spkes. But that aint all folks. Also the spreads can swing around and widen tremendously than cause your order to trigger then get stopped out immediatly for a loss. Not good.

Ok, let's see here. You first have the issue of slippage and as much 30+ pips which I've experienced. I've heard of over 50 pips of slippage. How would you like that? Second, the spike back could and most likely will trigger your order and stop you out for a loss. And third, the widening and reverseal of the spreads taking you out for a loss. Just seems to me that only one of these reasons is reason enough not to trade the news. That's just me though.

So how long after the data do you wait to get back into the market? She asks. Well basically, once the market has settled down. This could be a couple of minutes or maybe a little longer. If your watching the charts and the spreads you'll know. I like to keep an eye on the spreads. When they're back to normal things have usually calmed down. Now I start looking for entry levels.

Of course all this is just my opinion. But it's my opinion based on my experiences trading during the news. Hell who knows, maybe I'm just a crapy trader during these big data annoucments.

Predicting the futue....

Here's something for you all to try. I've been picking up some pretty good profits using this Ensign Map. If you happen to have Ensign Software you might think about giving it a try. Without getting too deep into stuff I will probably never understand, it's based on the concept that markets can be predicted using Neural Networks. If you want to learn more about how it came about and just exactly how it works I would suggest going to the Ensign website and doing a search for Ensign Map. You'll get the whole skinny and it is worth reading. Here is the direct link if you don't want to search. http://www.ensignsoftware.com/tips/tradingtips48.htm

This tool needs massive amounts of data to work. You will need to open your chart properties and click the Data tab. Three quarters down on the left side of the window you'll see "Maximum Bars" and a box to the left of that. I set mine to 10000. This tool also works best on time frames from 2 min to 5 min. I would also suggest using a demo account until you get comfortable with it. Good luck and let us know how it goes.

GBPUSD possible buy pattern

Notice the daily primary pivot and .236 fib level. I'll be going short below this level with targets at each of the fib levels to .618. I'll be watching for the buy signals.

EURUSD 15min Butterfly sell pattern

Need more proof that patterns work. NOte the stale right at the first s1 midpoint.

Butterfly sell pattern

GBPUSD 15min Butterfly sell pattern. these are great patterns to trade guys. These patterns are worth learning. As of this posting...this move is worth 200pips. Not bad even if trading $1000 contracts. I'm moving my stop to just above the daily primary pivot (1.4224) and heading for bed. Good luck.

FYI: notice how it was channeling between the daily primary pivot and the first midpoint earlier in the day? Think you could fade that for some early pips? I don't know, just saying. Love it when folks tell me these patterns and pivots don't work and its just all luck.

GBPJPY

Daily and 240 - Trending down. Bearish pennant but trading just above the monthly primary pivot. Stoch shows some positive divergence. Still watching the CD leg of a possible Gartley.

60 and 15 - $ looks to be filling Sundays gap. Macd bias looks bullish.

I have a bullish bias to 132.00 and 132.50. If 132.50 happens this could complete a possible AB=CD. To the downside im looking for 131.20 and 130.70.

GBPUSD

Daily and 240 - Trend is down but seems to me to be getting weak. Stoch is showing some positive divergence. Bearish pennant. Price just below the primary monthly pivot. Possible head and shoulders as well.

60 and 15 - At a supply line in a bearish pennant. $ just above the daily primary pivot. Watch for the Butterfly sell pattern.

Bias is long to 1.4300 and 1.4375 (this would fill Sunday's gap). To the downside i'll be watching 1.4140 and 1.4085.

EURUSD

Daily and 240 charts the trend seems to be to the downside and is still going short from the completed Gartley sell pattern. $ has dropped through a Demark demand line and both Stoch and Macd seem to have a downside bias. A descending triangle gives a downside bias as well. The 60 and 15 charts sh0wing me $ moving up.

I have a bias to the upside with target at 1.2560 (this would make a double bottom) and 1.2530 (a weekly pivot).
To the upside im watching the 1.2640 daily pivot and 1.2680.

Gartley sell pattern....it worked this time :)

Well it triggered and worked. Got up this morning and moved stop to just below break even. First and second targets hit. Still have two orders working. Will possibly take third order out and move stop lower then let the forth and last order stay in for the week end. Remember, I don't like leaving orders in over the weekend.

This is a good one to end the week on.

Gartley Sell Pattern

This is for you Jon and Kim. I will start posting these trades and answers to your questions here from now on. Hope this helps and remember you can skype me anytime and we can talk about it. It helps me become a better trading when I can discuss the trade with someone as well.

Entered the gbpusd at 1.44655 with a 4 staggered limit orders and all 4 got stopped out at 1.45150. Re-entered at 1.45655 with 4 new staggered limit orders and a SL at 1.4615. Taking profits at 1.272 fib=1.4472, 1.00 fib=1.4400 and .786 fib=1.4342. Lower SL at each target completion. Let the last 1/4 of trade ride. Second attempt should turn into a prtetty nice trade getting back the first loses. Also note that the MACD and Stoch are showing a downside bias. Good luck.