Synthesizing Tharp and Alexander

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EURJPY did not complete the process of pulling the universal trend line upward and is now on the verge of falling south of the hourly trend line, so a significant trip south could very well still be on the horizon.

I don't know how significant the trip will actually turn out to be, but I at least cashed in on the first part of the journey.

If your thesis is valid, shorting the pair as soon as the hourly trend turns south (price is currently at 121.06) should lead to a significantly profitable trade. Let's see if this turns out to be true.

This trade did appear to lend a bit of support to my thesis, though getting out at ten pips makes the trade more sufficient than significant.

EURAUD has now fallen into this same category of being on the "wrong" side of the universal trend lines. So let's see if it falls from 1.5940.

 

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EURAUD has now fallen into this same category of being on the "wrong" side of the universal trend lines. So let's see if it falls from 1.5940.

This is enough prognosticating for the time being...

The purpose for this is to judge whether how I am synthesizing the observations of Elder, Tharp, Brooks and the like is actually bearing fruit or is leading down unproductive pathways. I've seen enough for the night to conclude that I should probably keep going in the same direction I'm presently headed.

 

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The purpose for this is to judge whether how I am synthesizing the observations of Elder, Tharp, Brooks and the like is actually bearing fruit or is leading down unproductive pathways.

Whereas entering positions just before retiring for the night previously led to your getting bitten by assets turning against you more often than not, last night this was not the case—yet another indication that continuing down this road might not be a bad idea.

Moreover, you were stopped out by GBPUSD by only a couple of pips at 1.2457 just before the pair reversed direction and climbed to hit your take-profit target...

Had you been awake to reenter the trade when you saw the market trying to cheat you out of a win, you would have recouped your -$2.24 loss and then some, with a subsequent $4.00 to $5.00 gain similar to that provided by GBPJPY.

Moreover, rather than make only $1.07 from EURGBP when you exited the position after waking up to find it had turned against you, you could have exited much earlier at the start of the pullback, which would have doubled or even tripled the return on this trade. (Actually, your GBPUSD stop loss was more like 1.2458).

Al Brooks offers a great deal of information to digest, so start collecting as much of it as you can over the next ten days, and you can probably spend the entirety of the next twelve months incorporating (synthesizing and applying) that which you find useful into your own system.

 

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Elite Trader has provided a convenient platform for me to record my market analyses. But now that the format is established along with a protocol for interpreting the final configurations of my setups, in the future I plan to do this privately using my own laptop and Microsoft Word.

Typing a written market analysis using my laptop, Microsoft Word, or any other platform is no longer necessary in that everything I need to analyze can be accessed quickly simply by glancing at my charts. However, maintaining a line of thought by clicking a tab on my browser is still much more convenient than opening a series of files on my desktop, not to mention accessing all of my activity since August 2017.

Consequently, this synthesizing Elder and Tharp thread is still the best place for me to collect my thoughts. That said, CADJPY is in a great situation structurally for entering a long position. The only problem is, the pair is day-to-day bearish. If it were bullish, I would buy it in a heartbeat, as soon as the hourly trend line hooks north.

A number of pairs look like they might be on the brink of a wholesale reversal north. They include EURAUD, EURGBP and USDJPY. Keep an eye on them. Also, monitor GBPJPY, GBPUSD and AUDUSD to assess whether they are initiating full-fledged reversals south.

 

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Monday, July 22, 2019 / 6:15 p.m. PST - Synthesis and Application:

USDCHF will have enacted a wholesale reversal if it remains above 0.9824.
AUDJPY shall be deemed full on bearish as long as it remains below 75.96, and AUDUSD likewise so long as it remains below 0.7050.
EURAUD remains bullish above 1.5927. However, EURGBP must first climb above 0.8987. (USDJPY already accomplished this feat yesterday.)

 

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Though decidedly bearish, the numbers support NZDJPY turning north from 72.78 at least on a temporary basis.

I was just able to make up over half the loss handed to me by CADJPY yesterday, which seems to have some type of fundamental influence/factor continuing to push it higher, beyond what one might typically expect based on historical data.

 

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Though decidedly bearish, the numbers support NZDJPY turning north from 72.78 at least on a temporary basis.

 

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I didn't see any big moves set up tonight...

Going to bed now.

 

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Synthesizing Brooks...

I don't have much time right at the moment to read the books written by Al Brooks, but in preparing to do so in the future, I noticed that the first paragraph in the section on Day Trading in his Trading Price Action Reversals publication states that...

If you are not yet consistently profitable, you should not be looking at one- or two-point scalps in the Emini or 10 to 20 cent scalps in stocks as the cornerstone of your trading. In fact, you should avoid scalps until you are an experienced trader, because you need a very high winning percentage to be profitable, and that is difficult for even experienced traders to achieve.

When I traded stocks back in 2008 to 2010, I wasn't necessarily looking for 10 to 20 cent scalps. In general, I think a 20¢ move might have been about the minimum in which I would have been seriously interested. Nonetheless, I'm glad I didn't take this advice when I began trading Forex.

I've been able to scalp the Forex market successfully ever since November of 2015. On the other hand, try as I might, year after year, I never could make money going at it using a longer time frame. It wasn't until I finally figured out how to expand what I was doing as a day trader up to pseudo swing trading that I was able to begin shooting for 10- to 30-pip trades as opposed to 4- to 10-pip trades—and this probably did not happen until relatively recently, perhaps the second half of last year (2018). Learning to day trade profitably, learning to scalp the Forex market, was much, much, much, much easier in my case!

And even still, now that my system is more or less complete, as a retail trader, the idea of straight up swing trading, or worse yet, position trading, at least in the Forex market, would be absolutely crazy from my point of view. Exchange rates skip around WAY too much to be shooting for more than 10 to 30 pips at a time from what I observe. I don't have the capital to weather the large-sized draw downs this would entail, and the substantial losses that might be incurred.

The only exception would be to remain in trades that are running, but this would have to be accomplished by managing positions in the moment, not by setting take-profit targets in advance. So again, for me personally, this would actually encourage me to approach the market from more of a scalping type mindset, and is also the very reason why my percentage of successful trades is so high.

I do realize however that trading foreign currency pairs removes the enormous impediment to scalping stocks profitably that one is going to encounter in the equity market in the form of ridiculously-sized commissions and transaction fees, though.

 

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Thoughts...

USDCAD has been falling from the 1.3520 handle since the end of May. It was rejected when it tried to climb above 1.3131 at the beginning of this month. It was rejected a second time when it made another attempt on July 9th. So is it being rejected yet a third time today? I guess I will find out, for I am presently short the pair.

This area was a region of resistance in 2018, and became a zone of support in January and February of this year. So is it turning into an area of resistance once again? Time will tell.