Following swiftly on from yesterday's post I got in long on EU again, with the pole formation I spoke about yesterday I considered there to be enough demand to push up and through the triple top formation.

Well, I was half right.

It got to the area I pointed out, the set up completed and I was taken in, then straight back down we went. It got within about 4 pips of stopping me out but then it gradually made it's way up over night and I woke up in profit. It has since dropped off again after penetrating the 1.3000 barrier on high volume.

EUR/USD 1hr PnF

EUR/USD 15min

One thing I didn't mention in my post yesterday was that I was aiming for 1.2870 on my PnF short. As you can see, it was just shy of reaching this, clocking 1.28801 as the low (which means the 2880 box wasn't filled)

As we hadn't had a 3 box reversal at any stage of the move I was a little unsure about where to put stops. I was gradually moving it down and locking in a bit of profit as we probed this 2880 - 2900 area for the better part of two to three hours. Eventually we got some big volume coming in at the lows and even bigger volume as we started to push up, for me this meant only one thing, that there was too much demand at this level and the high volume on up bars was absorption. So I decided to get out at around 1.2903 as it pushed back up. This turned out to be a good decision that i'm happy with. This trade including the small overnight fee covered the loss from Monday and a small profit. So I can't complain.

It's also worth noting that the down move stopped on the high of a 1hr volume zone that has been important for a while, not to mention a support area to the left.

One more thing I want to mention, this straight down and straight back up formation on PnF is known as a pole. I was reading about them in the PnF book the other day. It didn't even cross my mind yesterday but this is one type of formation the book mentions as not needing to fully develop as a set up. It can be a good idea to buy (or sell) as the reversal side of the pole hits the 50% mark. In this case, funnily enough, that would've meant a buy at around 1.2940, my original entry price!

EUR/USD 1hr PnF

Pres78, who has mentored me through this whole trigger / fib zone / volume zone process and is a member of the VSA forum i'm on put a nice chart together showing these S/R areas. I hope he doesn't mind me using his chart.

Pres78 EUR/USD 1hr S/R

I've marked five volume zones on the 15min chart below. The main area i've been talking about is the high volume zone at A and the inevitable high volume that appeared in the area of E. There is always the chance that it is going to push through this area. After all, these aren't concrete areas and turning points, merely areas to watch. With this in mind, it was never going to push through easily. As it turns out, it didn't find it easy at all and this turned into a reversal point.

EUR/USD 15min

Hope you followed all of that!

Cheers,

Liam

Haven't posted for a couple of days now so I thought i'd come on and enlighten you all!

As you can probably tell from my last few posts, i've largely been concentrating on point on figure as of late. It's always something that has been in the background so i'm making a concerted effort at long last to get to grips with it.

With that in mind, I've taken a further two PnF trades since Monday.

EUR/USD 1hr PnF

I entered long late on Monday night, I felt it may be a continuation of the move through last week. I should probably have been a little wiser to two things. The resistance at the high to the left at 1.3020 (which we didn't reach) and the fact that I was going long just below a big psych number.

Anyway, that got stopped on Tuesday morning around half nine or so, just below the three box reversal at around 1.2960. I had moved my stop up from the original place at 1.2940.

The sell set up at 1.2940 was a new set up for me and something I picked up from reading the PnF book over the weekend. It's essentially a break through support that had developed along 1.2950 (the two Os in the green target box.

It has taken a while to play out but whilst writing we've pushed down and filled the 1.2900 box. I'm sure there will be some sort of reaction to this round number.

So what about VSA you say? Well, to be honest, i've largely been looking at the point and figure charts. From what I can see on the bar/volume charts it's quite a hard read for me. So i'm going to have to sit down and study that. I'll probably talk about that in my next post. Maybe later today.

Cheers,

Liam

I'm happy to report that the PnF trade hit its target and then some. I finally closed out at around 1.2962 giving me a total of 127 pips. Probably one of the best trades i've had with regards to pip totals. I've only been risking the minimum possible so in money terms it doesn't total to much. The whole trade was about the process more than anything and I'm very happy with how it went. Trailing the stop as it moved upwards. To be honest if it wasn't the weekend I may have left it running. It'll be interesting to see where we go next week now that the target has hit. This can often mean a reversal.

EUR/USD 1hr PNF

Interestingly there wasn't a lot of volume analysis during the course of this trade. The initial entry was a buy on the break of a high volume zone as shown on the chart but apart from this there wasn't a lot else on the way up. I'm sure I would have been trying to short it given the opportunity. So that gives me a lot to think about. 

The PnF chart for Cable had some very similar set ups as well so that could be another chart to keep an eye on.

This is also the first profitable week i've had since the middle of July. Which is a great feeling. Before I get carried away I realise that this one trade does not a trader make. What it does tell me is that i'm well able to execute and manage a trade.

Now, my weekend is going to consist of the following; The Definitive Guide to Point and Figure Charting!

Hope you all have a good weekend,

Cheers,

Liam

I intended to write this post yesterday but I evidently didn't get around to doing it.

I started my last blog post with a 1hr PnF chart after an attempted long position. Despite my chatter in the last post, I took another long set up that appeared. This one has fared much better than the first.

EUR/USD 1hr PnF

My first attempt at a long was stopped out as the resistance at this price was too strong, we got another sell signal overnight but it interested me that this was immediately reversed (even more interesting was the fact it bounced off one the volume zone lows) and we returned to this area. Once the next buy signal printed I decided to try again. It took a while to trigger but I was taken into the trade on Wednesday night and I held it all through yesterday as well. I'm aiming for the vertical PnF box count target of 1.2950. 

It has been quite whippy this morning with the German news and return from holidays etc. I moved to break even before I went to bed last night and so far this morning I've locked in a small bit of profit just below the first 3 box reversal after the buy signal. It's only 15 pips so it would be a shame to get stopped here after being up 75 or so. But I guess that's all part of the game!

Hope everyone is well.