Forex Weekly Wrap-Up, GBP/JPY Trades (Wk Srt 16/03/08)

Posted by Nick 4

Hey Guys,

This week we had three trades (by my count) and all of them were profitable. I only ended up mentioning one trade in the weekly analysis. This is because the first trade happened before I released the analysis and the second I didn’t mention because I rushed through the analysis. I rushed through the analysis because the trade I did mention was very close to being triggered while I was shooting the analysis. I had to rush through so i could get it out before the trade triggered. I think I got it out about an hour before the trade crossed the line so I am sure a few people got it. If you made some pips on that break of 196.71 line leave a comment!

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Victor

Hi Nick,

Very interesting week, thanks for this useful lesson and telling us how you traded.

Nick I have a question, on 19th and 20th there were two possible trades using scalp lines that turned out to be losers, I’d like to ask you why you wouldn’t have taken those. (as I imagine you wouldn’t have)

Namely, there was first a long wick candle touching 195.81. That went only to as low as 195.40 before reversing. And then also if one had entered on the break of the 1945.40, it broke down to only about 35 pips before reversing.

Were those possible scalp trades? Thanks!
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Victor »

Hey Victor,

Ok I am not 100% sure if I am looking at it right but I think I know what you are referring to the last 4hr candle on the 19th (GMT time). The candle was bearish but as far as I am concerned it did not break a scalp line. That long wick down three candles prior to the one I believe you are referring to does not form a scalp line. My definition of a scalp line is an area from which the price has reversed significantly. There is no actual significant reversal (barley a minor one) one candle revered but it continued to move down pretty much immediately in the next three candles. So as far as I am concerned there was no trade there.

The other trade I believe you are referring to is the reversal of the first 4hr candle on the 20th and the subsequent break of that low 4 candles later. We saw a weak reversal, it could have been a scalp line but it would have been a risky trade. I always say that there are both conservative and aggressive traders. The aggressive traders take risky trades and the conservative traders do not, at the end of the day it all evens out. Anyway you are right about the second low, it is feasibly a scalp line but it is a very risky one and not one I would likely have used. This is especially true in a week in which I have had several good trades. There is no reason to take risks when you have already made pips.

Good scalp lines are more like the 201.78 line formed on the 18th. That was a very strong reversal, not all scalp lines have to be that strong but very weak ones are not usually used (not by me at least).
JeffNLisa

Hi Nick-

Two things:

One in the past I’ve seen where when someone asks a question in the comments you refer them to ask it in the forum. In this case (perhaps because the question pertained only and specifically to something on this week’s chart?) you took time to give a well described answer right there to the question. That for ME was very helpful, and I appreciate it.

The other is, you said in here that you did not take this trade, because you already had hit your target, which I sort of understand. OK, you don’t NEED more than the target, so when you hit it, stop trading. But then you went to the trouble of taking it in a demo account so you could accurately report how it went and what you did. This is what makes no sense to me. Why waste a perfectly good trade on a demo account, if you’re going thru the trade anyway, when you could just as easily bank real money? Is there some psychological reason for NOT taking another profitable trade just because you’ve hit your target? That’s the part that seems totally crazy to me.

I am not trying to challenge you, please do not misunderstand! I’m just trying to understand your mental state here. You see, I’ve watched you long enough to know that you have a good way of thinking; and so the mindset to stay out of this one on the real account must be the better mindset in the long run. In fact, if it were anyone but you who said that, I would just dismiss it as crazy, but something tells me I am not quite getting something that is very important. That is why I ask.

Jeff
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JeffNLisa »

Hey Jeff,

I moved your post and I replied to it in the comments section of the latest post. I also replied to it in the forum since I think it is a question a lot of people would want to know the answer to.