Nico.Muselle

USDJPY - Potential bullish cypher pattern

FX:USDJPY   U.S. Dollar/Japanese Yen
864 21 8
Depending on how the market will continue the reaction of Friday's news events, we might see the completion of this bullish cypher pattern or not.
Personally I will not enter with a limit order as there is no structure at the pattern completion, there is however some 10 pips lower (orange dotted line). If price reaches this point I will look for confirmation for a reversal as this increases our Risk/Reward ratio.

Let me know if you have any questions
I got the same idea published on Friday. Do you use an ATR based stop? It seems to me that your risk is slightly more then the first target.
+1 Reply
Nico.Muselle MOD Alexander_Nikitin
2 years ago
Hi, thanks for your reaction. The stop loss is 10 pips below previous lows. I did not measure exactly as we'll first have to see whether it will reverse at pattern completion or a bit lower @ structure, which would make it approximately a 1.3/1 RR for the first target
Reply
Alexander_Nikitin Nico.Muselle
2 years ago
Point X is structure itself. You're risking to miss a winning opportunity rather then avoid a loosing one.
-1 Reply
Nico.Muselle MOD Alexander_Nikitin
2 years ago
X is the structure that is the nearest, I agree, however this does not mean that it should go that far down. Determining the exact entry point is always a balance between risking not to enter a trade and how much you accept to risk when the trade does not go your way. Personally I am experimenting with a scale-in method at this moment, meaning that there are multiple entry points for me for this trade.
+1 Reply
Alexander_Nikitin Nico.Muselle
2 years ago
You're right, of course. It's your way of trading. I just wanted you to keep in mind that changing the ROE you change the set of variables that consist your edge. Sometimes this changes may lead to wins, sometimes to losses. To know the probability of these two outcomes of your changes, you must do a backtesting of them. Without backtesting, the changes you suggest will lead to random results.
Reply
Nico.Muselle MOD Alexander_Nikitin
2 years ago
My ROE say that I don't enter a trade with a 1/1 or lower RR ratio. If however I get an entry at a another point which does not invalidate the pattern I trade it. :)
Reply
Alexander_Nikitin Nico.Muselle
2 years ago
Why don't you just modify your cypher and place limit orders at 88.6? This will give you a very nice r/r)). The only answer I have is that you didn't tested the changes I suggested. You don't know the probabilistic outcome of these changes. If you don't like the r/r of cypher, then don't trade it. Trade only bats))
-1 Reply
Nico.Muselle MOD Alexander_Nikitin
2 years ago
I appreciate your help, I am in progress building my trading plan and RoE, and instead of backtesting I am forward testing. Anyway, as far as I know, it is not written anywhere that you HAVE TO enter exactly at the 0.786 retracement in order to be profitable. If my tests show that I have a better edge using my entries, that is what I will do.
I do not want to critize your approach and I appreciate you trying to help, but every trader has got to find the edge, the risk & reward that he/she is comfortable with, that is why the RoE and trading plan are different for every trader that takes it seriously.
By the way, scaling in and out is an often used technique to reduce risk and/or optimize profits. :)
Reply
Alexander_Nikitin Nico.Muselle
2 years ago
If you do backtesting, you will build your ROE much faster. Backtesting gives you years of experience within several days. If you do only forward testing, one unpleasant thing may happen. You may loose your depo BEFORE you have built you ROEs.
-1 Reply
Nico.Muselle MOD Alexander_Nikitin
2 years ago
See my friend, I've got that all covered as I'm still trading demo but taking everything very seriously.
Reply
Alexander_Nikitin Nico.Muselle
2 years ago
I am convinced that demo is useless. Real account trading needs different skills.
-1 Reply
Nico.Muselle MOD Alexander_Nikitin
2 years ago
Good that you have your own conviction and stick to your own plan, I will do the same ;)
If you don't mind, this discussion is over as I don't deem it to be very helpful, nor positive. Appreciate your consideration and understanding :)
+1 Reply
JasperForex MOD Alexander_Nikitin
2 years ago
I am convinced that demo trading can be an important step in the development of a trader, before trading a real account. Not the only step nor the final step. But an important step nonetheless. Agee to disagree with the statement of Alexander.
+2 Reply
JasperForex MOD Alexander_Nikitin
2 years ago
I agree backtesting has its value, but also its limitations. Trading live data can provide different results from the backtesting done on static, already known data even if you backtest against a huge dataset.
+2 Reply
Alexander_Nikitin JasperForex
2 years ago
By backtesting we aquire trading skills. And we master them by real trading)
-1 Reply
Nico.Muselle MOD Alexander_Nikitin
2 years ago
And of course with forward testing you don't :)
Reply
JasperForex MOD Alexander_Nikitin
2 years ago
You are way too black and white and forget that what might work for you does not necesarrily have to hold for everybody because you are not "the norm". I know several traders who demo traded for a while and did acquire relevant insights and skills before taking the next step.
+1 Reply
Nico.Muselle MOD Alexander_Nikitin
2 years ago
By backtesting you learn to recognize patterns and you can determine the profitability of trading them with certain RoE (which by the way can also be done with forwardtesting), but trading is much more than that. These skills can be learned while trading demo. If you didn't need that ... good for you. I practice all my skills in my demo account and will continue to do so till I'm completely confident in my trading plan and my skills. :)
Reply
Nico.Muselle MOD JasperForex
2 years ago
Couldn't agree more, and if you take demo trading seriously, you experience the same "thrills" as if you would be trading on a live account.
Reply
JasperForex MOD Nico.Muselle
2 years ago
In any case it is futile to even suggest there would be only "one way" to develop as a trader. Everybody has to find their own path as long as its based on sound principles and ongoing skill development. Demo trading can play an important role in that path. Nothing wrong with that imho.
+1 Reply
*UPDATE* This pattern has been invalidated by price actions in the early hours of the Asia Monday session. As the 1.414 extension has been exceeded for C, this is no longer a valid Cypher pattern.
PA might still retrace downwards but Cypher pattern rules no longer apply.

=> Erase & rewind, looking for new opportunities :)
Reply
Ideas Scripts Chart
United States
United Kingdom
India
España
Italia
Brasil
Россия
Türkiye
日本
한국
Home Stock Screener Economic Calendar How It Works Chart Features House Rules Moderators For the WEB Widgets Stock Charting Library Priority Support Feature Request Blog & News FAQ Help & Wiki Twitter
Private Messages Chat Ideas Published Followers Following Priority Support Public Profile Profile Settings Billing Sign Out