TRANSCRIPT OF AUDIO FILE #4496 OF PHILLIP
Right, I am going to run through the
market motion one more time. I see a lot of people still doing counter trades,
counter-trend trades against the trend. Like the one we discuss on the daily
Wrapup about that Swissy coming back to the 21EMA.
This chart and this MP3, you got to have it in
your heart, not in your head, in your heart. If you look at the purple
rectangle on the chart, the price break through the 89SMA blue line. Point 1,
2, 3 and 4 are just there to let you know that you can establish your market
breathing or channel or whatever you want to call it so that you can know in
what or between which boundaries does the market moves.
But the main thing is to remember when the
price break through the 89 SMA, up or down, it doesn’t matter, as it will come
back to the 21 EMA which it did and then it went up to the red number 3 on the
trend line, then it came back to that red circle 21 EMA.
All those red circles are all high
probabilities trades. They are all of the 21 EMA because we are in an up-trend;
except for 4, 5 and 6. 4 is from the 89 SMA as well as the 365 EMA. It gave a
nice morning star there. It was highly oversold on the MACD, below the 45 line,
horizontal line and that was a high probability trade. So, the market moves
away from the 89 SMA, pull back to the 21 EMA, then it move away, pull back to
the 21 EMA, moves away, pull back to the 21 EMA.
The only time you do counter-trades,
counter-trend trades is when your Risk/Reward Ratio (R/R Ratio) down to the 21
EMA and your stop loss is 1 to 1. But remember, sometime, it only come back to
the 8 EMA. You need to keep that in mind as it is a high risk trade unless, if
you see just right of number red 3 on top, you will see a lot of bars finding
resistance there. If you do a trade somewhere around there, you will be
probably very safe to come down to the 21 EMA. That’s how you do it.
The blue circle on top is a counter-trend
trade. If you look at the 2nd blue one, you will see that the price come below the
21 EMA and the rule says that; at the end of a run, if it will push below the
21 EMA, it tend to pull back to it, sometime it goes a bit through it and then
it come down to the 89 SMA. It’s exactly what happens there.
If you look at the bottom window on the MACD,
the pink circles 1, 2 and 3, look at that noise there. You cannot trade the
MACD like that, you gone be killed, there is no way you can do it. You have to
stick with the motion of the market, around the 21 EMA, around your support and
resistance lines, that’s the way to do your deals and it is very important to
know that. You have to stick to that, there is no other way you are going to
survive by taking every signals.
I still hear people on skype and talking about
MACD being busy forming a round top and then there is still a 2 or 3 hours to
go. You cannot do that, I mean, you can do it but it is not the way your focus
should be. Your focus should be around the price movement, where it is in
relation to the moving averages, where it is in relation to your trend lines,
where is the movement in relation to your support and resistance lines. That is
the way your focus should be. That is: when the MACD gives the signal, all that
homework as been done already.
Also, another thing that I want to emphasize is
not to jump around between 10 currencies. Because you can get a wrong one at
currency number one, then you jump to currency number 3 and get another wrong
one and then you jump to currency number 8 and get another wrong one, where if
you stick at currency number 1, the next signal would have been a good one and
maybe the one after that as well. So, instead of having 3 wrong ones in 3
different currencies, you could have 1 wrong and 2 right in the same currency.
So be very careful no to jump around according
to MACD signals. You’ve got to look at each pace, motion in relation to the
moving averages and in relation to your support and resistance lines. Then,
look at market emotions as I said in that summary.
Number red 5, you will see there is a morning
star, if you look at 6, there is also a morning star. If you look at number 4
there is also a morning star. That is how you determine the emotions of the
market, there is emotions involved in those candles. They tell me that those
things have got high probabilities of moving in the right direction. That’s how
I do it.
Get your focus on the rules, write it down,
make yourself a little copy of this chart and write on it or next to it and try
to see and look where the market is satisfying this type of motion. That is
where your high probabilities trades are because, then, the Tsunami is over, it
means the playing ground is over, this thing got direction now, there is a
certain motion, there is a certain rhythm in it and you are going to flow in
that rhythm. When you go counter-trend trade, you know that you go against the
rhythm and you got to make it very sure that there is enough pips available to
do that in a Risk/Reward Ratio, it could be 1 to1 or better, then you take it
on.
You got to get this in your heart otherwise you
are not going to make it.
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