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Charlie won the trade off, here’s how…

Charlie runs through what happened during the trade off at the London Forex Show plus looks at a couple of currencies for analysis….

 

This is Charlie giving you Monday’s video, I hope you’re very well.

What I’ve got up here is the chart of the USD-CAD. The reason I’ve got that up is because this is what I was trading at that trade-off at the London Forex Show last week.

I know a lot of you have said, can you cover what you did on Friday? So that’s what I’m showing you here.

I was fortunate enough to win the trade-off.

We had an hour and a half to trade. There were a couple of hundred people in the audience.

An hour and a half is not a lot of time in the markets, and sometimes markets can go fairly slow. A lot of the currencies were, to be fair, a bit slow, but the one thing that we did have was the USD-CAD.

We had some Canadian news out, so I’ve just taken the screens back, and this is what happened when the news came out.

Obviously, I had to wait for the candle to lock in, wait for it to complete. This is a five minute chart here.

More importantly, all my indicators across my multiple timeframes were all firing upwards. So I knew that I had to look to take a long-trade on USD-CAD. Then it was just a case of trying to get an entry.

I waited about ten minutes, we were sat there with the audience, I told them in advance that this was what I’m going to be doing, and said what I’ll do is enter two units, out of four, when we hit the outer band here.

Quite often, a market can just hit the outer band and then go straight up. Bear in mind I had a target up at 12546, that was the prior day’s high.

So I knew there was a little bit of space there from where I was going to get in. I got in at 07, it doesn’t look like 07, but trust me, that was the level I got in.

I said if it does retrace a little bit more then I’ll add my next two units down at the lower band, so holding back some units, basically in case it did a slightly deeper retracement.

Then if I’d have got stopped out from there at the lower band, I had my stop initially at 12490 from my first entry. I knew by the time it comes down to the lower band, that second entry would have been up around 125.

Anyway, it just started sitting there and going sideways. So what happened was, the bands were just catching up. You could see that by the time we’d gone another 20 minutes or so into the future the lower band was higher than my original entry.

So I hit it right as it hit this lower band…

Obviously, we can’t see this in hindsight, but in front of the audience, literally as soon as I hit it with my first entry to get my second unit in, it bounced immediately about five pips. Literally, in the second that I hit the first entry – I couldn’t even get the second unit in.

So I only had one unit in, and by the time we got to here, as we can see, the price had gone up quite a lot without coming down to the bands, the bands had come up to meet it. So I wasn’t so keen, I said to the guys I’m just going to trade-manage this now because price is now that much higher.

Although eventually it did come down to hit that lower band, I opted not to take it, and I’d already told the audience that I was not going to add at that point, I was just going to manage this trade out.

By this stage, I’d moved my stop up a little bit, I think to 125. Once we then pivoted here, we’d made a pullback and then put this candle in, that’s when I moved my stop up to about 12512. We were locked in at that point as far as profits were concerned.

Then it was just a case of trying to run it, I put a limit order in to hit that 12546, and that happened automatically. That was the trade really.

It was just under 40 pips…

… It was a shame that I only got the one unit in; it was only about £200 on that one unit. It should have been just under £400, if I’d have got the two units in.

Nevertheless, I think it showed the audience what sort of things we look for.

I was fortunate that I’d actually banked about £2300 on Friday, so they could see my account from some of the other trades I’d been in anyway, but over the hour and a half that’s what I banked.

It was good, Ali was very good. Great to compete against Ali because we both have similar styles. He’s got a slightly different tweak on my style but we’re similar in a lot of our views anyway. He just got a bit unlucky; he traded a different market that he got stopped out on, so he took a loss.

Other than that, during that hour and a half the other markets were just going sideways. If I take this to the EUR-USD you’ll get an idea, it was just chopping sideways at that time, and I think Cable was similar.

They didn’t have any real direction at that point. So I was quite fortunate to have got in on that one on the back of that news. Ali wanted to trade the USD-CAD as well, but he was looking for something different, therefore it didn’t set up for him, so he opted to take a different trade.

It was a good competition overall, we had loads of good questions, overall  a good afternoon.

People were saying to me in the week leading up to the competition, what are you going to do? Are you going to do something different? How are you going to approach this?

I always say, I approach any sort of trading competition no different to any other trading. You just approach the markets with the same view that you always approach. Using the same systems and strategies that you always use. Then if a market is setting up, you trade it. It’s as simple as that.

If I hadn’t have had anything set up, it was always possible, unlikely, but possible that I could have not traded at all if the markets were that poor. Obviously, I don’t like having to do that when you’re there to do a trade off, so I probably would have found something. That’s all you do.

There’s no different approach, you just approach the markets like you do when you’re trading normally… Like any other day.

Sometimes it works out for you, and sometimes it doesn’t.

We’re not all profitable all of the time, but if we manage our risk and let our winners run….

So my initial risk-reward, I was in at 07 and my first stop was down at 87 originally. So it was a 20 pip stop initially, then I started tracking it up, but then we made 40 pips. So it was a nice 2:1 risk to reward on that, so I knew that the risk-reward was good.

Anyway, that was that.

Now, let’s have a look at these currencies.

This USD-CAD is holding up quite well. We could put a trend line across these highs and so it’s probably around that trend line at the moment. I think if it gets a strong close above that then we could well be seeing this USD-CAD back up into the 127s again.

Let’s have a look at the EUR-USD. A bit disappointing really, if you look at it. Since we made those lows around the 25th of January, it’s had a nice run up, it’s been from 111 to 115, but really since then it’s just been going sideways, and it’s still doing that now.

So we don’t know what it’s going to be doing, it’s getting very messy, for obvious reasons, with the lack of news out, there’s no real direction with Greece at the moment. We can see it’s weakened off this morning. Maybe we’re going to probe back down into here.

We haven’t probed back below these lows for a while. So it could well be that the Euro’s gearing up for a run down to take out any stops or whatever down here.

I wouldn’t be surprised to see this rolls over. It had its chance to break up, but I think it’s running out of time at the moment, it wouldn’t surprise me to see that roll over.

If it does roll down and break these lows, it’s how it then reacts. Do we get a reversal, or whatever? How we react from that will be the tell-tale signal. Otherwise it could then start to come down, probing back for these lows.

I shall leave it at that because the video’s getting long enough anyway.

Safe trading this week, have a good week.

Back on Friday.

8 Comments

  1. Sukbir Singh-Reply
    February 23, 2015 at 11:11 am

    Hi guys,
    Yet again a very informative and interesting insight to the markets. I know that you have your set practices in place but I was wondering if you could cover a short time looking at renko charts. I have found these to give a better view on what the markets are doing aswell as showing support and resistances levels clearly.

    If a video is not possible could you just reply via email.

    Thanks for your valuable time.

    • Charlie Burton-Reply
      February 23, 2015 at 1:00 pm

      Hi,

      Either Kym or I will do something on them. I’m personally not interested in them purely because I’m comfortable with normal charts but indeed we can do some analysis on their strengths and weaknesses…

      Charlie

  2. David Baker-Reply
    February 23, 2015 at 9:32 pm

    Hi Charlie, I’m very interested to know what additional charting packages you use. I watched you on the BBC documentary and you say your charts cost you around £200pcm. Are these charts showing you some form of live retail order flow so you know when to go against the trend of the retail traders?

    Thanks for sparing your time to read this reply!

    Regards, David

    • Charlie Burton-Reply
      February 23, 2015 at 10:54 pm

      Hi Dave and thanks for getting in touch. If only it were that simple! No the esignal charts simply have good functionality. They won’t turn you into a successful trader, they are just useful as a general charting tool. What makes you good at reading the trends is simply time, effort and experience.

      Hope that helps

      Charlie

  3. David Baker-Reply
    February 24, 2015 at 12:36 pm

    Thanks Charlie, i’m still learning the ropes with Forex.

    I’m currently using MT5 and have written my own EA that looks for extremes in overbought and oversold pairs using bollinger, RSI and stochastic indicators and emails me a screen shot of the chart when the conditions are met. I’m trying to learn how to spot which extremes are reversing as which aren’t and I guess that is the art of forex and its going to take a while until I can perfect that bit.

    I’ll let you know how I get on!

    PS it’s great to watch and listen to how you trade, it gives the rest of us retail traders hope!

    • Charlie Burton-Reply
      February 24, 2015 at 12:38 pm

      Good for you David. Here’s a tip. It’s not about trying to get your EA to be right all the time. Accept it will only be right a certain percentage of the time and ensure it has a positive risk outcome and then you will be fine. The indicators simply wont be right all the time so if you get some strict rules, provided the outcome is net positive then you are away…

      Charlie

  4. David Baker-Reply
    February 25, 2015 at 12:32 pm

    Thanks again for your advice.

    Out of interest do you have to declare any forex profits on hmrc self assessments? I view it as a form of gambling but I’m sure hmrc view it as taxable income if profit is consistent and is only form of income I guess?

    Cheers, David

    • Charlie Burton-Reply
      February 26, 2015 at 9:47 am

      if you are spread betting its tax free, otherwise yes its taxable

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