TC Trading Hints

This page contains TC trading hints designed to support members of my TC Trading Trial. I will add to this page throughout the 8-week TC Trial period.

  • Stop too big: so don’t take the trade! Here is an example of a valid TC signal from Mon 5th June on the GBP/AUD 15 min chart BUT, with a Stop needed of over 90, then this would be one I would skip:

GA15

  • Watching for the bounce off support: I’d noted the 1.80 support level on the GBP/NZD in my w/e write up and see on Monday that price was respecting this level:

GN4hr

Looking to the 15 min chart though revealed it was going to take a while to get up through the Cloud:

GN15min

It’s times like these when drilling down to the 5 min chart can help though. In this situation there was a new TC signal and the Risk needed was only 15 pips. This may have been considered a reasonable Risk to take to capture some possible bounce move up from this support level. In this case, there has been a move through Asia already of 50 pips which is 3 x the Risk needed or 3R. Traders need to assess the Risk to potential Reward before considering each trade.

GN5min

  • Price Action that I don’t like! I’ve previously discussed that traders need to look for consolidation-style price action to potentially yield the best momentum breakout moves. I’ve also mentioned that if such price action bears large candles, with erratic movement and/or those with lots of shadows then that type of FX pair, despite the breakout pattern, is one best left. The 15 minute chart of the GBP/USD is an example of that for me today. This is not a chart that I would be keen to take ANY new TC signal from due to the erratic recent history, large candles and lots of shadows:

GU15

Now, compare this to the price action in the lead up to last Friday’s trend line breakout on the NZD/USD 15 min chart. The candles in the lead up to the breakout on the Friday were rather small, activity war rather ordered in a sideways fashion and the candle did not have many long shadows. This chart is the type of price action that would give encouragement to me with my TC system:
Kiwi15min

  • EMA ‘Touch’ versus ‘Cross’: There have been examples of people mis-reading TC signals as they think there has been a new EMA ‘cross’ giving a TC Continuation signal. However, these are not actually EMA ‘Cross’ situations rather than EMA ‘Touch’ situations and they therefore DO NOT constitute a new TC signal. A recent example is below with the GBP/NZD 15 min chart. A vertical line is drawn through what is thought to be a valid new TC signal as it came within 5 candles of what was thought to be a new EMA cross. 

GN15min

When you magnify the chart, though, it is clear that this is not a new EMA ‘Cross’ but rather an EMA ‘Touch’. The 5 candle count from the proper EMA cross, when the candle first closed below the 3 EMA, is shown:

GN15min2