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Cypher Pattern, NZD/JPY, 30min Here i see a Cypher Pattern on the NZD/JPY chart. And what i noticed, if you zoom out; on the daily chart there appears to be a crab pattern that has rallied as if it going to complete as suggested, but this Cypher pattern has me thinking that the market will more likely continue in downtrend and break the structure of the crab pattern therefore ruining that trade. Now the cypher is still a safe trade if ,and only if, the market completes the Cypher then immediately reverses upon completion. But in short, I've decided to short the Cypher trade for a lot less return, but its safer. My entry is at the peak of the cypher pattern with stop around the highest high of the pattern, my limit can be debated, if we assume the market is going to continue in downtrend after breaking the structure of the crab pattern, you could move you limit to the next structure support level, but i always believe in consistency, so i have placed my limit at the 1.618 extension of the BC leg. Please , if you agree, like comment and even follow ! As always good trading !
Short
by Kylan_Laymance
Stop Losses, Love Them Or Hate ThemStop losses aim to end a trade when the market goes so far in the opposite direction, that the trade idea no longer makes sense. It’s the point of invalidation . Ideally, they get hit on bad trades only and not on good trades. The area between entry point and stop loss is a zone where the trade is at a loss, but can still recover. This is not an invalidation of the trade. It’s a balancing act : place the stop orders far enough beyond your entry point to give the trade room to breathe and allow the price to rebound in the profitable direction, yet close enough to it to protect your account against a big loss in case of an invalid setup. When you put on a trade, you take a risk. Acknowledging this means accepting this risk and quantifying it before you enter a trade. Not using a stop loss, to me signals not accepting the risk and thereby increasing it because if you don’t use a stop loss your account becomes one . I see not cutting losses early as a fear based trading error. I always try to trade another day and stops give me piece of mind. Automatic stops are even disconnection and hardware problem proof. Everything in trading is a trade off, so there are disadvantages: when it is hit and price reverses, or if its placed wrongly. My philosophy when managing a trade is that either I am right, or I should be out. So what is the ideal place for stop losses? Trying to answer this is like searching for Columbus´ egg . And I haven’t found it yet. It’s a personal decision and I have no overarching rule. For each play in my playbook, I describe where to put the stop loss. I don’t use a fixed amount of pips; in stead I let the trade setup conditions dictate its position. With 5-point retracement structures like the Bat pattern this would be beyond the X-point (because if price moves across this level, then it was not a retracement structure and if I am not right, I should be out). For 2618 plays this would be beyond the tops / bottoms, for channel trades beyond the trend lines and for other plays I use support and resistance levels. I always put the stop losses at a certain distance of these invalidation points, as price may pierce through them before reversing. How far they are placed from my entry point varies, depending on the timeframe and the size and configuration of the pattern I am trading. I always adjust my position size so that in each case the amount of pips from the entry point to the stop loss represents my maximum trade risk (as a fixed % of my trading capital). As a consequence the position sizes I use vary from trade to trade but my risk does not. So, for any winning trade, how much profit I make per pip is proportional to the distance between entry point and stop loss. The placement of a stop loss also influences both the win rate and reward / risk ratio and therefore the expectancy. So its placement is absolutely key. When I am in a winning trade, I roll the stop loss in the profitable direction to lock in part of the profit, thus ensuring the winning trade does not turn into a loser. The stop loss has now become a profit protection point and the trade has become a management of profit. As a rule, I must have hit my first profit target, before I can do this manual trailing. These risk free trades, essentially trading with the markets money, are awesome. Rolling the stops in the opposite direction is a no-go: stops can only be tightened, never widened . I can´t talk about stop losses without mentioning "stop loss hunting” . This refers to situations when the market quickly spikes and hits your stop loss so you are out with a loss, only to reverse and continue in the direction you predicted. I will not get into whether it’s the broker, the banks or institutional traders that are behind this (looking for liquidity to fill their positions), but this price behaviour does happen and taking it into account pays off.
Education
by JazzForex
66
ONE TO WATCH - AAPL Bullish BreakoutA very simple and quick analysis of AAPL stock. As usual there is not much reason to be bearish on AAPL (Apple) stock, with the release of its new products and a game changing new watch, there are no major fundamental signs or technical indications of a fall in price. After the usual post announcement pull-back and consolidation that seems to affect Apple, we seem to be nearing the limits of this symmetrical triangle that has been forming since the days leading up to the announcement back in the beginning of March. 3 bounces on the 50ema have proven it to be acting as dynamic support, matching the bottom trend of the triangle. The most recent bounce closed as a minor hammer/doji reversal candlestick signalling the end of the recent down trend and most likely a long move for the bullish continuation. Just like we have seen in the past with this stock. To top it all off we can see there is support at the 122.50 level, most likely a result of the 0.382 Fibonacci retracement zone. A good entry order for this stock would be 126.5, giving price enough room to breath through the upper trend line and reverse or take the breakout. A great stop-loss here seems a no brainer. 121.50, well below the 50ema and 0.382 retracement and also below the last swing low bounce on to the 50. Please like and share your thoughts and for more market analysis, visit - www.forexvader.com
NASDAQ:AAPLLong
by ForexVader
Stable Oil Prices Sets Up Well For Halliburton Near-TermThe stabilization in energy prices lately has meant relief in some oil & gas stocks. Halliburton shares have been one of them, putting in a series of higher lows since mid-January. The pullback in the previous two weeks sets up for a low risk buying opportunity (stop loss under $41.90). HAL is now poised to fill the gap from November ($46.70-$47.50 range) in the coming months with near-term resistance at $45. Options Trade Idea : Sell the Mar 20 $41/$42 bull put spread for a $0.23 credit or better (still using the $41.90 level as a stop loss reference to minimize risks). Look to take profits at $0.05 credit and/or a move to $45 in the stock.
NYSE:HALLong
by MitchellKWarren
USDCHF Bear Bat Follow UpFollowing up on an idea that I posted last week. The USDCHF is now at a point where traders who are aggressive with their risk management can look to roll and trails tops with structure (on the 4hr TF) One of the most important lessons that I've learned over the years from my personal trading and from my time as a money manger, is that how you manage a trade once you're in it, is almost as important as finding the right entry. The key to success is CONSERVATION OF CAPITAL. We are going to be wrong in this industry and wrong alot. The key is to learn to tell when we are wrong and cut our losses before they get us in trouble.
Short
by Akil_Stokes
6