Category Archives: Trades

Sep 19: GBPUSD Analysis

Monthly outlook

At the end of August, thoughts going through my mind at the time were:

  1. Have we made the MACD divergence yet? Not a convincing low yet (especially as my 2017 low was the GBPUSD flash crash)
  2. If we are rallying from here – should I hold for the TL or the usual d50.

Thinking for now is we are still bottoming for now.

GBPUSD Monthly Chart – Aug 2019

Weekly outlook

Weekly no divergence in play, so expecting any rallies to be short lived. Short term target of 1.248 if we do rally. Most likely path would be for fresh lows. 

 

Daily outlook

Looking for fresh lows. Was thinking very bearish here. Had 1985 lows in mind at 1.056! But ultimately looking for a MACD divergence to set up. I think I was wayyyyy to keen for a collapse in the market.

02 Sep 19 – GBPUSD 1h SFP Short (+1.48R)

Took a 1h short SFP short from this trendline and S/R level. I really liked the set up. Had a TL kiss goodbye, a prior level that had been washed but then briefly retested. Candle was a pinbar short.

Here’s my journal notes during the trade:

8am – OK with the set up, saw it straight-away, trying not to be greedy will set alerts for TP, SL and T1 to see if we swing fail. If we do I’ll close out.
9am – Trade as closed below the first possible FTA at 1.21395 so holding to next level at 1.2117
9.10am – Trade over, wish all trades were that quick!

 

On reflection, I can’t believe I got this trade. At the time I was trading a trendline kiss goodbye and prior S/R level. But the TL position was a bit meh. Excluded two recent prior swing lows.

On review – I wonder if TL should be tuned to the RHS like S/R levels… I think this was a better level to take a short from. Price SFP’d the TL and closed through the S/R level – which had previously been chopped.

 

If it was, I think I could’ve got in at a better level. 1H SFP off the 1.2206 level which also SFP’ed the TL. The next level down had already been washed so was not likely to obstruct price.

4H GBPUSD Chart
1h GBPUSD Chart

Given this became a 4H SFP When the 1H 1.21885 level broke, it was a clear hold for roughly where my target was at 1.2117. I could’ve held for a bit more but what’s the point when we’re so close to a safe target anyway.

So the entry could’ve been better happy with the exit. The 1h T1 FTA @ 1.21389 was fine to keep in mind. I’ve been burnt way too many times trying to run SFP trades! 

04 Sep 19, 14:30 – GBPUSD 1h SFP Short (-0.54R)

This was a total mis-read of the market. My trendline was in the wrong place so I was trying to short the market from a 2nd TL failure !?

I also held the view that new daily lows were still on the cards. Totally missed/ignored the daily divergence long which should’ve had a target at 1.23. So this short was also against a strong trend. I was also aiming for 1.21109 quite a big move. I remember struggling to draw the 4h level so I guess that should’ve told me if there was a level to trade it wasn’t on the 4h chart.

The short was there but only on the 1h timeframe and so the target should’ve been on the 1h timeframe too. Here’s what the trade should’ve been. Target at 1.2165 at the last spike pre-break of the level.

Trade set up – level might’ve been a bit lower at 1.2214
Trade worked out very neatly – not a big move given the trend.

Should’ve been a 1:1 winner.

Trade Plan – wc. 17 Dec 18

Last updated 10:00, 17 Dec 18

Review

Two trades last week, nothing too exciting. A FTSE short and a USDJPY short. 

FTSE 15M Short @ 6876.3, risk 0.75%, result -£56.10

Strayed off plan, was at home and saw the FTSE running up to a key level of prior support. Took a 15min divergence at that level. Looks like I took the trade early we moved up another level before ultimately rolling over. 

I was tempted to hit the set up again but didn’t because I don’t trade 15min timeframes. I shouldn’t have taken the trade, would’ve been micromanaging, didn’t have a clear exit. 

We’re just shy of a key weekly level 6640. So looking for a retest lower. 

USDJPY 1H Short @ 113.321, risk 0.85% result £28.32

Short took ages to breakdown, but did break to target. Ran it slightly longer than DST target, spotted a nice prior swing point a little lower down. Ultimately wanted to run this much lower but didn’t see any downside targets that would’ve made it worthwhile. 

Outlook

EXY

Same as last two weeks, looks bullish in the long-term, will need to watch for buy set ups from support. I think a 111 test is on the cards. This is getting long in the tooth now, so it better set up soon or I’ll need another divergence long. 

Monthly – Looks like it’ll want to head higher to the TL, pebble on a pond
Weekly – Still looking for the 111s
Daily – Double divergence in play. Any moves down to the 111s would be a solid buy if the divergence is intact. 

DXY

Looking bearish to me, lower TL tested many times diverging at the highs. The 100s don’t look likely until mid to late next year. Double daily divergence in play, hence why I’ve reduced my target on USDJPY. Any tests of the 97.5s would be shorts for sure.

Monthly – Looking for DXY to hit 100 – prior resistance and TL touch (could take months/years)
Weekly – Similar pattern – forming a head and shoulders at around 100
Daily – We have a double divergence in play, any moves to the 97.5s are shorts. 
4h – Upside looks to be short lived right now. Low 97s would be a result. 

JXY

Right now expecting Yen to either diverge at the lows and move higher or continue down. This needs monitoring. Longer term lower (much lower – 84s), still look for shorts in to the 90s, longs into divergence @ 87s

Monthly – Looks bearish. Retesting the m50 but rallies have been limited and price is struggling to move higher. Any move to the 90s would be shortable (other side of the trendline). 
Weekly – Have retested the lower trendline but could see some MA ping pong and another retest into the 90s. 
Daily – Looks like we’re heading lower. Might diverge at the 87s and then retest the highs at 89. Expect this to ultimately roll over. 

BXY

BXY has broken the double divergence, it now looks bearish and set up for my downside to 124s for a small bounce and the a retest of the 121 Brexit lows. Look to short set ups.

Monthly – Prior TL that will probably get tested at some point in 2019-2020. If May loses the vote look for 121s otherwise a move to test the TL. 
Weekly – Broke the 127s now looks likely for a test of the 121s. 
Daily – 124s for a bounce, then a retest of the 121s. DXY looks bearish to me so would need an alternate pair for this trade. 

CXY

CXY looks bearish to me, broken the TL and looks like we’re set for more downside.  

Monthly – Hand-railing the m50 would expect it to clear and head to 82 – 86s
Weekly – Checking the TL this looks bearish to me. There’s a couple of closes below, no divergence in sight.
Daily – Looks bearish, I’d favour sticking with the dollar for now at least that is holding pattern.

AXY

Might get a bounce this week, don’t get too excited about it.

Monthly – Looks bearish for now. I think it could set up a decent divergence long at some point. Look at 69s and 63s. 
Weekly – Look out belowwwwww! Maybe a bounce at the 69s. 
Daily – MIght get a bounce to 72s, look for a short set up from there.

ZXY

Looking for a bounce on the kiwi

Monthly – 
Weekly – 
Daily – 


Trade Plan – wc. 10 Dec 18

Last updated 10:00, 10 Dec 18

Review

Two trades last week, nothing too exciting. An AUDNZD long and a USDJPY long. 

AUDNZD 4H Long @ 1.06094, risk 0.85%, result -£54.48 

Took this long based on the divergence on the 1H timeframe, into a weekly trendline and prior support on the daily timeframe. Looking for a decent run up. The mistake here was not focussing on the case against, given it was the obvious trade to take. There were two factors against this trade. 

  1. The weekly trendline was being tested for the 6th time! Pebble on a pond! Didn’t notice this. 
  2. The divergences I was looking at were probably not related. There was too much price action between them. 

AUDNZD Weekly Chart

AUDNZD Daily Chart

AUDNZD 4H Chart

AUDNZD 1H Chart

USDJPY 1H Long @ 112.468, risk 0.85%, partial closed 112.809

Took this long at the trendline and 1H SFP into prior support on the 4H chart. Closed part of the trade at the 1h50 according to plan but can see more upside so looking to hold the bulk until a retest of the prior highs. 

Overnight we’ve retested the lows and made a double 1H divergence and a slight 4H divergence, however there’s overhead MAs coming into play so I run up above 113 will probably be short lived. We’ve also tested the lower trendline 5 times now! Again didn’t notice this until just now! 

Was originally looking for 114.00 now revised down to 113.10 based on the current charts.

USDJPY Daily Chart

USDJPY 4H Chart

USDJPY 1H Chart

Other Trades …

AUDUSD 1H Short 

Missed this 1H set up, looking for too perfect an entry. This was a nice short into a long term (monthly) trendline, dating back to 2001! The d200 was coming into play but price action fell short, my daily resistance line was also drawn incorrectly. On the plus side I wouldn’t have run this far given the price action (but it ended up being a good runner)

AUDUSD Daily Chart

AUDUSD 1H Chart – Short

XAUUSD 4H Short

Trade didn’t materialise, price bunched up at the Daily swing point and broke out. Glad I missed out on this. Now looking to get long at pullbacks to 1241s for a run to 1261s. Might need to look at 1H or 15 min charts to get a retest with divergence. 

XAUUSD Daily Chart

Looking to play a long run up to the next swing point at 1260s. 

XAUUSD 4H Chart

Currently diverging now but there’s no significant prior support or resistance so won’t be trading it. 

UK100 Short into prior support (now resistance)

I really liked this trade but it didn’t set up for me. I was looking for divergence into a key level. I got the level test (slight over shoot) but the divergence was messy so I didn’t trade it. Good discipline but it worked out as I expected. In retrospect maybe it was worth testing but at a smaller size (speculative play like my gold trade from the other week?)

Still think there’s a much bigger move in play here. I have a theory that the Santa rally only really comes the week before Christmas and plays out to the new year. Just a theory though. I think people try to play it too early.  

Looking for a retest of the 6640s to get long. As we are so close it makes me think the Brexit vote will go May’s way. You know what they say the market makes the news not the other way around! It’s even a divergence on the weekly chart!

Anyway here was the retest of the prior support the divergence wasn’t there.

UK100 15min chart short to prior lows

Looks like the long will set up this week. 

Key events this week 

Tresemme has the big brexit vote on Tuesday. Then the usual GDP, PMI, Inflation figures. 

Outloook

This week, look for …

Long: CXY, BXY
Neutral: EXY, JXY
Short: DXY,  AXY

EXY

Same as last two weeks, looks bullish in the long-term, will need to watch for buy set ups from support. I think a 111 test is on the cards. This is getting long in the tooth now, so it better set up soon or I’ll need another divergence long. 

Monthly – Looks like it’ll want to head higher to the TL, pebble on a pond
Weekly – Still looking for the 111s
Daily – Double divergence in play. Any moves down to the 111s would be a solid buy if the divergence is intact. 

DXY

Starting to think this is long in the tooth for more upside. The 100s don’t look likely until mid to late next year. Double daily divergence in play, hence why I’ve reduced my target on USDJPY. Any tests of the 97.5s would be shorts for sure.

Monthly – Looking for DXY to hit 100 – prior resistance and TL touch (could take months/years)
Weekly – Similar pattern – forming a head and shoulders at around 100
Daily – We have a double divergence in play, any moves to the 97.5s are shorts. 
4h – Upside looks to be short lived right now. Low 97s would be a result. 

JXY

Right now expecting Yen to either diverge at the lows and move higher or continue down. This needs monitoring. Longer term lower (much lower – 84s), still look for shorts in to the 90s, longs into divergence @ 87s

Monthly – Looks bearish. Retesting the m50 but rallies have been limited and price is struggling to move higher. Any move to the 90s would be shortable (other side of the trendline). 
Weekly – Have retested the lower trendline but could see some MA ping pong and another retest into the 90s. 
Daily – Looks like we’re heading lower. Might diverge at the 87s and then retest the highs at 89. Expect this to ultimately roll over. 

BXY

BXY is double diverging on the daily, look for longs after a shake-out of week hands. Looks like the market expects May to win the vote after all.

Monthly – Prior TL that will probably get tested at some point in 2019-2020. If May loses the vote look for 121s otherwise a move to test the TL. 
Weekly – If we hold 127s this would be bullish, I expect a shakeout and move higher.
Daily – 126s for a long set up, double divergence in play. 

CXY

Look for the USDCAD short still, I think this could run nicely.

Monthly – Hand-railing the m50 would expect it to clear and head to 82 – 86s
Weekly – Two spinning tops on the TL and divergence, indicates heading higher. (although really not sure where the trendline should be drawn yet)
Daily – Got the 74.5s on the nose, looking for more upside. Can’t believe I didn’t get this short on the USDCAD!!! Short any set ups. 

AXY

Looks very bearish now. Short any set ups that we get.

Monthly – Looks bearish for now. I think it could set up a decent divergence long at some point. Look at 69s and 63s. 
Weekly – Look out belowwwwww! Maybe a small bounce at the 69s. 
Daily – Looks bearish if we move up to the 74s again it would be an area to short. 


AUDUSD Set up – 23 Feb

I really want to take this short trade but as it currently stands the entry is too close to a major resistance level for me to be comfortable.

It’s a really tough decision given the triple divergence but I just feel it would be stupid to put a 20 pip stop off the high to coincide with that exact level of resistance.

Here’s the set up on the four hourly.

A triple divergence in play BUT price hasn’t hit the upper trend line or the prior resistance level.

I would typically be looking to take 2x positions at the 100MA and the 200MA as targets.

To mitigate this nearby resistance level I considered putting on a 40 pip stop, to give me more breathing space, but that blows out the risk to reward (goes <1). It would also just feel stupid to risk more. In these early days of trading a new system I don’t think it would do my confidence any good to break the odd rule just yet.

Price has recently broken out of a monthly channel going back 4 years. So a trade down to retest the monthly upper channel (blue line) would be a great target – but I would only run the trade to that level once I’d booked some profits on the majority of my position.

So I’m standing aside for now. I will wait and see if price wants to come higher (whilst diverging) to enter the market. It might not, but I wouldn’t be happy to have a wider stop or place a stop right on the resistance line.

Here are the higher timeframe charts

Monthly

Long term trend line recently broken to the upside. Could a retest be on the cards?

Weekly

Price has been in a sideways channel for 18 months. There’s also a weekly divergence in the making.

Daily

A divergence might be setting up here too.

EURUSD DST Long – 12 Feb


Account Risk: 0.7%
Long: 1x @ 1.0635 & 1x @ 1.0631
Stop: 1.0586 (45 & 49 pips)
T1: 1x @ 1.0719 (85 pips, 1.7x RR). 4H 50MA.
T2: 1x @ 1.0756 (125 pips, 2.7x RR). Daily 100MA.
Mindset: 50/50, ok set up. My long term view is up, short-term view might be down. Lots of MAs to bounce around.

Update 1 – Something’s bugging me – 13 Feb 2017
Update 2 – Divergence didn’t materialise – 13 Feb 2017
Update 3 – Stopped out – 14 Feb 2017

Watched this chart into the close on Friday to see if price action would close inside the bands. It’s a divergence on the 4H but also a double divergence on the hourly chart. I’m really 50/50 on this trade, my instinct tells me that prices are going to go lower (not higher). But I’m about trading the divergences I see rather than my opinion so I’ve placed a trade.

I’ve slightly upped my position size to nearer 1%. I’ve got two targets in mind so I’ve opened two positions. My first target is the 50MA on the 4H chart. The other is the 100MA on the daily chart. Price has recently tested the daily 100MA, before coming down to the 50MA, so I’m looking for a retest.

4h Chart – Set up

4H EURUSD Chart – 12 Feb 17

Hourly Chart

Here’s the hourly chart that gave me more confidence to place the trade.

Hourly EURUSD Chart – 12 Feb 17

Daily Chart

Here’s the Daily chart showing the 100MA target I’m looking at.

Daily EURUSD Chart – 12 Feb 17

Update 1 – Something’s bugging me

I judge how well I’ve executed a trade by how often I check on price (e.g. how nervous I am). Usually I just let it do it’s thing, but something was bugging me and I kept checking on the price action during the day. I think it was the way I set up my targets, I am happy with the 4H target, but I have no real justification for the Daily target (there’s no divergence setting up on the Daily chart).

I’m also not happy about the number of bigger MAs in the way of my targets. I don’t have a great feel for their significance yet.

So I’ve gone back over my charts to recheck what’s going on.

Quarterly Chart

Quarterly EURUSD Chart – 13 Feb 2017

We’re on the lower trendline of a major trend channel going back to the 80s. I think it’s more likely to assume we’ll continue in this trend until proven otherwise (for me that would be a number of quarterly closes below the trend line) and the monthly chart pointing towards more downside.

Monthly Chart

The monthly chart kind of looks bullish to me. We’ve got an almost formed divergence.

Monthly EURUSD Chart – 13 Feb 2017

Weekly Chart

This looks to me like we may come lower to test the lower band. So perhaps more downside on the cards before any move higher?

Weekly EURUSD Chart – 13 Feb 2017

Thoughts going forward

The Daily and 4H Charts haven’t really changed from above. I don’t think I have justification to aim for a daily 100MA target without a daily divergence. This morning the hourly timeframe hit the 50MA (21MA on the 4 hourly).

So I think I need to rethink my targets.

Looking again at the Hourly and 4H charts

On the four hourly chart we’ve tested the 21MA 3 times (the last time was this morning), we’re chopping around the 200MA but I’m ignoring it for now – from back-testing this happens quite a bit.

4H Chart – 13 Feb 2017

The 500MA looks like a fair target for a retest to me and the 50 is heading down so I can see price hitting both MAs at a similar level. So I’m happy to pick that as a target.

As I’ve been typing this the Euro has been heading lower, but it looks to me like a triple divergence might set up on the hourly chart (see my purple and grey lines)

Hourly Chart – 13 Feb 2017

If it does and sets up with the bands I’m currently thinking I’ll up my position to the full 1% and target the hourly 100MA. Something I wasn’t thinking I’d say when I set out to update this post.

The hourly 50 got tested this morning and the divergences are fairly clean (for now).

So – at the moment – the trade is:


Account Risk: 0.7%
Long: 1x @ 1.0635 & 1x @ 1.0631
Stop: 1.0586 (~47 pips)
Target: 1x @ 1.0684 (1x RR, 50 pips) 4H 500MA.
Mindset: Happier with the target but not the RR.

I will watch the hourly chart for the triple divergence set up.

Update 2 – Divergence didn’t materialise

I set some alarms and checked the 3, 4 & 5pm closes on the hourly chart and price didn’t make it back into the bands. The 4H divergence also didn’t materialise, price headed lower. So this looks like being a loser (not stopped out yet).

4H EURUSD Chart – 13 Feb 2017

Interestingly stops should really be set as points at which you’ve been proven wrong. I feel pretty satisfied that I’m not right on this trade. So maybe I should be reducing my stop margin?

Can’t say I don’t feel a little disappointed about this trade, the set up seemed pretty sweet at first. If the hourly chart had closed inside the bands this afternoon it would’ve been a text book set up too. Oh well, I heard a trader interview with someone called Michelle Koenig she made an interesting observation about trading emotions and taking loses.

To take the emotions out of trading you need a trading plan/strategy which tells you why you’re getting into those trades and how you’re going to manage those trades; but also time in the seat, so as time goes on, the big emotional roller-coaster becomes more like rolling hills which then becomes a washboard or driving down a bumpy road.

Update 3 – Stopped out

Just got stopped out of my trade, I thought it might turn around after a small dip overnight, but no such luck. The position closed at 1.0586. No great shakes.

4H Chart EURUSD – 14 Feb 17

Thinking about the trade execution:

  • I definitely could’ve picked better targets initially. I was happier with them in the end.
  • The entries were okay but for future I might look to lower timeframes to get confirmation and a better entry price and risk to reward
  • The risk to reward was verging on sub 1 (so not worth the risk). I need to be more careful of this scenario
  • I’m glad I was trading at a bigger size – I want to be moving on with my account
  • I think the trade was fine to take – even though the divergence didn’t work out

Question for Charlie: When trading off the hourly timeframe would he trade a divergence in the early evening (when price seems to drift sideways)?

Gold DST Short – 9 Feb 2017


Account Risk: 0.5%
Short:(1x & 2x) @ 1241.5
Stop: @ 1247.1
T1: 1x @ 1230 (2x RR)
T2: 2x @ 1217 (4x RR)
Mindset: 🙂 Doubt it’ll work out, but happy to pay for the opportunity.

Update 1 – T1 Hit – 8 Feb
Update 2 – Closed the trade – 9 Feb

I’ve been routinely checking the markets for potential set ups and saw this on the Daily chart which looked like a set up was potentially building to get short on Gold. It looked like price was also running into a cluster of resistance which meant that any trade could well not work out, moving higher and hitting a stop.

Daily Chart

Gold Daily Chart – 06 Feb. Divergence setting up?

Weekly Chart

Gold Weekly Chart – 6 Feb. Resistance levels above.

The Daily set up didn’t materialise – price went higher – but it did develop on the 4H chart.

Four Hour Chart

When I checked this chart (a couple of days later), price had already closed inside the bands and moved higher so I had a nice level to get short with a marginal divergence.

Gold 4H Chart – 9 Feb. A marginal divergence has set up.

I doubt this trade will work out given:

  • The four or five resistance levels slightly above price
  • Gold is spikey as hell and likes to test levels

For now, the trade is on. Short @ 1241.5. Two positions: one small, one medium. My plan is to run the small position to the trend line (near the 21MA) and the bigger position to the 55MA, which hasn’t been tested for a while. The idea with this is the first target will cover some of my risk if price doesn’t get down to the 55MA before moving higher.

Slight deviation from my normal approach but the trend channel is pretty clear and makes for a good target as it’s slightly further than the 21MA.

Update – T1 Hit – 9 Feb 2017

Price broke down almost straight after I placed the trade. Very lucky with the timing!

My first target got hit pretty quick. Now running the rest to the 55MA. 56 pips banked, albeit at a tiny position.

Update – T2 Hit – 10 Feb 2017

My second target was hit early this morning. BUT, I wasn’t up in time to move my limit order higher (to track the 55MA) so I didn’t get filled! Ops. As the market has already tested the MA I just closed my position when I got to work.

Final Gold 4H Chart – 9 Feb. Not the best execution but an OK trade.

Pretty poor mistake. Gave back 40 odd pips! Sloppy.

The good thing is, I didn’t get stressed and rush about to close my position. I kept it together 🙂 It’s another lesson learnt, set alerts ahead of your targets when you’re not going to be around. I wonder how I would’ve been following a string of losing trades? (Would probably need to upgrade that gif!)

Final RR was 2x and 2.9x (should’ve been 3.5x!!!) It’s good to be closing some 2x+ RR trades though.

What was good about this trade was the better entry allowed me to up the position size without risking more money. So I’m happy enough with the trade.

EURUSD DST Short – 1 Feb 2017


Acc Risk: 0.5%
Sell: 1x @ 1.0781
Stop: 1x @ 1.0832 (51 pips)
T1: 1x @ 1.0681 (100 pips, 2x R:R)
Mindset: 😐 Not too confident

Update 1 – Post NFP (Still in the trade) – 03 Feb
Update 2 – Moving my target 😐 (still in the trade) – 05 Feb
Update 3 – Target hit – 05 Feb

Spotted a pretty standard divergence the other night so took a position, I shorted on the open of the next 4 hourly bar @ 1.0781. Aiming at a 2x reward to risk. I was looking to add an additional position at the upper band but cancelled the order because I wasn’t comfortable with the full position size. I think this is mainly down to not having much trade history and building my confidence.

The support areas on the higher timeframes are moving averages which are pretty soft levels of support (I assume everyone has slightly different MA chart settings (e.g. exponential, simple, 20 or 21 etc etc). The trend is still up and hasn’t really shown any topping price action to me (spikes higher, collection of dojis or flattening of the trend).

For my target I’m aiming for the 100MA. It has already been tested but I’m only looking for a retest because I’m not feeling confident about the trade. I wonder if in hindsight I should’ve aimed for more.

Here’s the set up (red comments are points against)

4H Chart – The Set up

Daily Chart

Weekly Chart

Post NFP Update (still in the trade) – 03 Feb

Leading up to NFP the target was looking like a dead cert. The NFP was positive for the dollar but earnings and unemployment weren’t so the picture was mixed. The Euro has since rallied higher and price action is looking like bullish for now.

It made me go over the higher timeframes just to revalidate where I think we are (I didn’t do this properly before – broke my trade plan!)

Monthly Chart – 03 Feb

I redrew my trend line going back to 2000 and to me it looks like we’ve broken it and are doing the kiss goodbye. Trendlines are very flaky though, like elliot waves it is all down to interpretation. Someone could well have drawn that as support. However that’s how I see it. I can easily imagine a monthly roll-over and a bullish divergence setting up.

Weekly Chart – 03 Feb

More of the same just zoomed in. Green line is my current short @ 1.0781.

4H Chart – 03 Feb

Green line is my short @ 1.0781, red the stop @ 1.0840 and blue the target @ 1.07.

Price didn’t make it down to my target and for now looks bullish to me. We’ll see how next week works out. I can see a marginal new high on the cards with potentially a double divergence setting up. So might get stopped out and look to be shorting this again.

I’m glad to be trading a system with some stats behind it so I still take trades rather than talk myself out of positions. Even if I am wrong I will have got some experience out of it.

One thing that frustrates me about this trade is that using a moving average as a target murders the RR. Is there a point which I should just aim for a fixed RR? Perhaps as long as I average min 1x RR overall that is fine? One to ask Charlie.

Moving my target 😐 (still in the trade) – 05 Feb

Just a quick update, logged on to ETX this morning to tend to my limit orders, and noticed that I’m now moving my target to Friday’s prior low.

Getting frustrated moving my MA target to previous lows.

I know this is the system, but it’s frustrating to see. During back testing I did notice that often the exits weren’t great RR when targeting bigger MAs. Not always the case but I wonder if after a while the RR goes below 1 it’s just better to lock it in at 1 RR and wait for the target to be hit? Question for Charlie.

Target hit – 05 Feb

Not long after moaning about my target creeping up, it got hit. Over the weekend, I took some time to review the charts and I could see more upside easily following through, but this morning opened down and the target got hit around lunchtime. Here’s the final trade.

FInal trade, target hit at 1.0712.

I’ll take some time to digest how I felt during this trade, I wasn’t super confident about it to start with, so feel lucky that it worked out. Especially after the NFP results. It looks pretty textbook now – so I should be happy.

Looking again at the chart, I noticed the divergence goes back further. I didn’t spot when I placed the trade, and in hindsight it might’ve been better to take two positions and run the 2nd to the 200MA? We’ll see how this pans out.

Gold DST Short – 23 Jan 2017


Acc Risk: 0.5%
Sell: 2x @ 1212.6
Stop: 2x @ 1221.6 (90 pips)
T1: 1x @ 1206.3 (96 pips, 1x R:R)
T2: 1x @ 1187 (256 pips, 2.6x R:R)

Update – T1 hit – 25 Jan
Update – T2 hit – 25 Jan

Saw this set up on Gold doing some back-testing. I doubt it will work out given the MACD divergence is a step down and the Daily and Weekly charts both have moving average targets nearby @ 1230. However, I’m trading the set ups I see, trusting in the probabilities from back-testing. Will post an update once I see what’s happened.

4H Chart – The Set up

Daily Chart

Weekly Chart

Update #1 – 25 Jan

First target has been hit, second target still a way away but rising which is skewing the RR. The T1 ended up being a sub 1x RR. Something to test in future is whether it would be better to go for a static target such as the prior high/low?

One thing I have noticed is how the divergence is now setting up to go long. It’s a different kind of divergence to the pure DST divergences I’ve back-tested so I won’t trade it. But I suspect if we get a close back inside the bands there’s a reasonable chance the T2 won’t get hit.

DST Update – XAUUSD 4H Short – 25 Jan

Update #2 – 25 Jan

The candlestick didn’t close inside the bands and the second target got hit shortly after T1 was hit, with a nice move down. Ended up being a 196 pip move (2.1x RR trade). Not bad, I’m quite lucky really that price did move down to my target relatively quickly, given the MA was creeping up.

Gold DST Trade 25 Jan 2017. T2 hit nicely, order was just ahead of the 100 MA.

Trade Review

I spent most of the time thinking this wouldn’t really work out, so I’m glad I ignored my inner doubt 🙂 The trade was actually a pretty clean trade in the end. I think if the higher timeframes had been aligned I would’ve been happier to take the trade.

My position size was really small and I’m frustrated that it didn’t really win me much considering it was a few hundred pips. Next time I think I’ll up it to 1%.

Looking at the chart now, Gold found support at 1180 and it looks to me like it could set up for a retest with divergence to go long at 1170-1180, we’ll see. (That would coincide with the lower band on the weekly chart.)

Gold 4H Chart – 30 Jan. Looking for the next set up.