Failed G/Y Short @ 141.85 – Or Was It?

Posted by Nick 16

Hi Guys,

If you followed this weeks analysis you would have noticed that we had a bad trade! Was the trade really a loss? Yes of course it was, you can’t win them all. However, when trading constant and scalp line you can sometimes offset your losses. In this video I explain how I offset my losses on the 141.85 short and turned -60 pips into -20 pips.

Sorry, this video is broken. Please email support if you want us to fix it.

Art

Nick, there was also a trend line that followed the two candles at 13 & 14 GMT Time on the 1 hr chart (I don’t think I can post a graph in the comment). I didn’t personally didn’t take the trade because of the 1 hr candle formation at 13 GMT Time. & also since I’ve already made 100 pips this week I’m extra picky…

I tend to read short entries better than long entries…is that normal? hahaha
Frank

Hm, lets do the math.In the first trade you sold GBP/JPY at 141.70(bid) you exit was 142.38 (bid ) plus spread ( i assume 3 Pips ) = – 71 Pips
second Trade entry 142.41 ( ask) exit 142.76 (bid ) = + 35 Pips

-71 Pips + 35 Pips = -36 Pips
So you lost 36 Pips not 20 as you said in your video

NickB

@Frank:

Right…… but I didn’t enter at 141.70 the entry was on the break of 141.85 so the entry was at about 141.80 with the retrace and the exit was taken at about 142.30 or a so on the retrace.

Peter

Nick, your on fire at the moment. I am getting so much value out of your posts as they augment the e-book beautifully. If you need any incentive to keep it up then let me say this. My trading experience is limited (a year or so) but your education is by far the most valuable I have come across and that includes a lot of different material both “freely available” and bought. Thanks again. Peter.
JL Trader

Nick, I guess that those reversals after false breaks of S/R lines do not always work, and if they don’t, you don’t offset your loss but you enlarge it. Instead of losing 60 pips, you may lose 100 or more. The real question is how many reversals like that do work and how many don’t. Do you have statistics about it?

NickB

@JL Trader:

JL as I said there are two parts to the video. I discuss limitations in part 2 at the end.

To answer your question though, if you trade them properly they work the vast majority of the time. This however requires you to have a firm grasp of price action analysis and reversal trading.

purple eagle

Thanks again for a valuable insight Nick. I would also be interested in stats in regards to JL TRaders comments, as I too have tried to trade reversals after a constant line didn’t break, but got burnt both ways.

Good reminder of the significant high within the reversal trade. I’ll attempt to use this tip more often if I have a constant line break reverse.

Cheers

NickB

@purple eagle:

Did you sue a significant high/low when you got burned. That tends to be the single most important factor in reversal trading.

Also as I said above I will discuss limitations on part 2 of the video.

Gerardy

Thanks Nick. I like the way you explain. At least, I can know how to read candle more.
six gun

Am I being a nob rather than a noob – but you mention two vids.

I am guessing you have yet to post the second.

I mentioned forex4noobs.com on a betting forum I belong.
http://uk-betting-tips.co.uk/

Interestingly this is how I got here after the site was mentioned.
So the message is slowly spreading.
http://www.forexstrategiesnew.com Forex strategies

Hi Nick,

The reversal trade would not always work but the success chances are more than 50%. Got good insight.

Thanks
Ashok
Ed

Hey Nick; It’s funny you did a video on multiple time frame trading because I mentioned that on Gus trading journal either Tuesday or Wednesday. I’m happy because after looking at the video it confirms I’m right! Multiple time trading can save you a lot of losses. Keep up the good work!
Anthony

Hi Nick,

Great video.

Part 2 of the video…has that come out yet? I think I might have missed it.
London

Nick, great vid thx
Pingback: Failed G/Y Short – Part 2
tofu

Hey Nick, I know this post is almost 3 weeks old but I have a question regarding this trade. It’d be great if you read this and answered.

In the video you said that you entered the breakout trade on the 4h chart. Did you also take a look at the 1h chart at this point? The reason I’m asking is the one indecision candle before the entry candle. I’m very new to FX and just stumbled upon your site a few days ago. So I pretty much know next to nothing but in my book this was a first sign for a possible reversal. Would that candle have changed your decision or would you have taken the trade anyway?

Thanks!

- tofu