Metalhawk’s Blog

First, since I am done for the week, I am not going to trade this one. However, I wanted to point it out for those that may be interested. The candle that formed at 16:00 GMT on January 6th is the master candle followed by 18 candles so far. There has been a few approaches at both limits, but it couldn’t break through.

Just pointing it out for those interested.

On GBP/JPY, the 139.22 line break was closed for a 44 pips profit, and on USD/CAD, the 1.1818 line break was closed for 25 pips profit.

So for this week, that +113 pips. My goal of approximately 100 pips per week was reached and so I take the rest of the week off. I hope you all caught the same pips I did.

I hope you guys went long with me when the 134.65 line was broken. This is a nice +44 pips gain.

It’s time to get back to work after 2 weeks of unhealthy eating and drinking.

First, when I started to talk about USD/CAD, I said that if the results were satisfactory, I would start trading it seriously. It has given me 6 positive trades and 1 negative one. So I think the results are good enough, even though the sample may be a little small. If I see that it degenerates over the next few months, I may review my position, but for now, it’s a go.

GBP/JPY

(Click on the image for a better view. It will open in a new window. Depending on your browser, you may want to click the image in the new window to expand it to its full size, otherwise the quality may look diminished, like the preview above.)

1. Long @ 140.89
The actual line may look like it’s 140.72, but because of the high at 140.89 the week before, I use that as the scalp line instead. Must be vigilant, if the trade can be monitored, of the 141.00 psychological level.

2. Long @ 139.22
I really like the near-hits that followed the bounce off this line. This looks like a strong scalp line to me.

3. No trade
I don’t think this is a good level. There was no real trend leading to that spike.

4. No trade
Again, not a level I like. It may be a little better than #3 above, so people who have a higher tolerance to risk may want to take it, but to me, it just doesn’t look right.

5. Long @ 134.65
A slow climb to the line, 2 different candles attempting to break, an eventual 500 pips drop, and it’s been away from the line for about 3 weeks. HOWEVER, I am worried about the gap that may occur over the weekend and the general unpredictability of the first couple candles of the week. So if it breaks before the London opening Monday, I won’t trade it.

6. Short @ 129.82
This is a very, VERY important level. The all-time low for GBP/JPY is 129.32, back in April 1995. So a short of this scalp line needs to be monitored closely because it could get weird if it approaches the all-time low.

Also, I don’t have a line for it on the chart, but I will go short on the break of the all-time low. There’s a good chance of a strong knee-jerk reaction at that level, so watch out for slippage on the entry. This one could be a dud, but I feel that if it goes down, it may drop a hundred or two. Just a hunch.

7. Possible Long @ 133.92
This one is also completely dependent on the gap at the opening of the week. If it goes down for a few candles, then this line will be activated.

8. Short @ 131.35
Picture perfect setup. Long enough wick and a strong reversal.

USD/CAD

(Click on the image for a better view. It will open in a new window. Depending on your browser, you may want to click the image in the new window to expand it to its full size, otherwise the quality may look diminished, like the preview above.)

1. Long @ 1.3013
The actual high in this instance is 1.3005, but it’s so close to the 1.3013 level reached 2 months ago that I still prefer to use that level, even if it’s technically an expired scalp line.

2. Long @ 1.2743
Not the best looking setup, but there was enough of a bullish push prior to the reversal to make it count. But that’s about as risky of a trade as I’m willing to take.

3. Long @ 1.2511
A nice triple-bounce makes this a very nice scalp line.

4. No trade
Another case of a simple spike up with no meaning.

5. Short @ 1.1818
Great bearish move stopped twice followed by a quick and strong bullish move. Very promising line.

6. Long @ 1.2400
The actual line is 1.2393, but that’s too close to the psychological level. 5 bullish candles in a row followed by a long wick. Another promising one.

7. No trade
I changed my opinion of this line from the last analysis. This was just a news-caused spike that is not an indication of any resistance.

8. No trade
Might be a valid trade most of the time, but the proximity to the 1.2400 line gives precedence to the other line.

9. Would-be trade Short @ 1.2062
When this snapshot was taken, this one was going to be a possible trade if price went up some more. But the weekend gap canceled that possibility.

That’s it for this week. Let’s hope for a great start to the year. Happy pipping and comment away.

Or next week for that matter. I mentioned it with the analysis last week, but I am not taking a single trade until the new year, and won’t look at the charts often. Once a day or so just to have an idea of where the market is going, but it’s a break for now.

Merry Christmas everyone (or Happy whichever Holiday you celebrate, if any).

Because the week is almost over, my trading is done. But with price having bounced off the low line of 132.44, I am worried that the gap this weekend will ruin it. In any case, this wasn’t a bad week.

Sometimes, you just realize you missed a line. Just before going to bed, I realized that there should have been a line to go short at the break of 136.80. So I quickly set it and went to sleep. This turned out to be a positive trade for +45 pips.

Sorry about the lack of warning on this one, but I was on my way to bed and no longer completely coherent.

I should have posted this one earlier today, but I will be going long on the break of the 139.22 line that formed on the 15th at 12:00 GMT.

The 1.2155 and the 1.2093 lines were wasted by the US rates announcement this afternoon. You can’t trade lines during such announcements (for obvious reasons), and so those two lines had to be discarded without being used. Damn.

For the past many months, here on Forex4noobs, Furious Angel has been talking about master candles. 2 or 3 times at least I considered adding it to my trading, but for whatever reason (I’m not even sure myself), I never did. Looking at it, it seemed like a pretty good method, but I kept forgetting about it.

NickB recently came out and fully endorsed those candles, and so I decided once and for all to do something about it. So, here we are. For the next few trading weeks (this week and a few in January), I will start to incorporate them in my trading. I can’t say I will catch them all, because on the 1h chart, it’s easy for me to miss the formation and the subsequent break while I’m sleeping or at work. I will however keep an eye as often as possible.

So I also took the one Nick mentioned in his blog earlier (a great setup with 15 candles within the Master one) and closed the trade for 53 pips profit. It got a little hairy at some point, but it all worked out fine.

So, master candles: 1/1, +53 pips so far.

This was one of those trades where depending on who your broker is, and if you use take profit only or not, the outcome can be different. Price reached (on my regular charts) 54 pips over the scalp line. That should be enough for many, but the spread may have screwed some people. Me, I was sleeping at the time of the trade and price/spread missed my profit by 2 pips. So I woke up, and closed with 3 pips profit. Oh well.

This is the last analysis of the year. Like last year, I will not be trading the last 2 weeks of December. There’s not enough volume in the markets to trade safely (well, as safe as trading can ever be ).

GBP/JPY

(Click on the image for a better view. It will open in a new window.)

1. Long @ 140.58 - same as the last few weeks. A drop of over 1000 pips after the high established there.

2. Long @ 141.00 - same as last week. As mentioned before, the line is actually at 140.90, but the proximity of the 141.00 psyche level makes it safer to wait a few extra pips.

3. Long @ 138.72. Some candle patterns traders would trade this as a ‘double-top’, so it may increase the possible effectiveness of this line a little. It’s still a nice (even if not perfect looking) setup. There was also a nice bounce the other way nearby back on November 13. So I like this line quite a bit.

4. Short @ 132.44. Again, this is me being a little more open when trading. This was the new long-time low, and like last week, I will take it.

I was looking for non-trades and developing trades to add to this analysis, but there’s nothing that I see worth mentioning. No worries, I’m not getting lazy or anything.

USD/CAD

(Click on the image for a better view. It will open in a new window.)

1. Long @ 1.3013. The high a few weeks ago was a 4-year high, so that counts for something.
2. Long @ 1.2744
3. Short @ 1.2155
4. Long @ 1.2511 if price goes down some more first

Edit: I forgot:
5. Short @ 1.2093 (not on the chart above, just behind the cut off point). This is the last week for this line.

That’s it for this week. As usual, feel free to speak your mind in the comments section. Have a great trading week.

Wow, 2 quick trades and it wraps up my week. 135.44 short and 133.27 short, each for 44 pips profit for a total of 88 pips in less than an hour.

What’s perplexing though is that there’s no news-related reason whatsoever for this slide. GBP/JPY dropped 450 pips in less than an hour.

In any case, that’s 3 trades on USD/CAD for 75 pips (even though it doesn’t count towards my stats yet) and 2 those trades on GBP/JPY. Not a bad week all in all.

EDIT: Maybe the slide had to do with the automobile bailout in the US that failed earlier.

2 lines from the analysis were closed with 25 pips profit each earlier today: 1.2445 and 1.2300. This makes 3 positive trades on USD/CAD this week.

I will go short should the 135.44 scalp line be broken.