The first and probably most complicated (at least the way i'm internalising it) trade was a position that I originally set on Tuesday and which triggered early on Wednesday morning.
USD/CHF 1hr PnF
USD/CHF 1hr Zones
A. At this period in time we had a series of columns, three up, three down and so on. The market could print a triple top buy or a triple bottom sell. I set a long order based on the triple top formation and the fact that we were above the highest volume zone and I didn't want to sell into this.
C. I've not labelled these in order and can't be bothered changing now. What happened here is I wasn't taken into the trade at A and the sell signal actually completed first. We pushed down slightly and stopped on the high of the volume zone, exactly why I didn't want to sell at this point.
B. We pushed up again and with my order still in place I got taken in on a quadruple top buy. It makes little difference to me really, it could be a nonuple top for all I care.
Happy days I hear you say, the low at C wasn't broken and we pushed up over 100 pips today. You'd be absolutely right in saying that, but here's the issue. When I originally set the buy order I had my stop at what would have been the next sell price. Which was activated at C. So I was taken into the buy, with my stop in the old position, I should have moved it below the low at C but decided not to as I was risking too much. We came back down and I got stopped out - to the box!
Never mind, I had a NZD/USD sell going at the same time so I could turn my attention to this.
NZD/USD 1hr PnF
NZD/USD 1hr Zones
Not as much to talk about on this one, like the Swissy charts above i've posted a PnF and a 1hr HLC chart to show the zones that I carried across. Interestingly, when I opened the position I only had the upper zone on the chart. It wasn't until afterwards that I added in the other two zones to look for areas that could act as support.
Had I had the middle zone on the chart, I'm not sure I would have entered the trade, seeing as it was selling right into the high. As you can see, we did get a reaction to this high but the up column of X immediately after the sell column is largely exaggerated by some NZD news that came out at the time. This trap up move type bar can be seen on the HLC chart, I should've marked it, but it's hard to miss. Up until this point we hadn't even broken the low of the upper zone so I wasn't worried the trade would go against me.
Once the target area was hit I started trailing the stop down as the day went. Eventually the market couldn't break the low of the lowest zone and we bounced back up and hit my stop which was placed right at the initial target area. Win win! This covered the Swissy loss, over night charges and a little extra. So i'm finishing the week positive.
Now, onto EUR/USD. It wouldn't be a blog update if I didn't at least mention it!
Ok, well, a little more than a mention.
This time around, the HLC chart comes first. Highlighting the zones in question. I've also annotated some other bits and pieces on the chart with regards to where showed support and so on.
EUR/USD 1hr Zones
EUR/USD 1hr PnF
Volume zone C isn't the reason that I didn't take this short. As I pointed out on the HLC chart, this was a lower volume zone than the ones above it. So I didn't feel this was a problem. It was zone A, the bounce off the high and the quadruple top at the congestion zone that stopped me taking it. Sure, I could have perhaps taken the trade and got out at this high but then I would have had an 80 pip stop for a 30 pip gain, which I wasn't too keen on doing.
It's also worth mentioning that the volume on the upper zones far outweighed that of the lower zones, not to mention the huge daily volume we had at the high.
I can't remember if I blogged about it or whether i've just spoken to forum members about it but I was considering a small change to my strategy considering entries at, in and around the 50% mark. There are a couple i've decided not to take that have now come good. It's something I need to consider with a bit of back testing I think.
Phew, that was a long one, hope you managed to keep up!
Cheers,
Liam
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