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Trade Anatomy - ramblings of an old-timer 147 replies

Need forex writers to write UNIQUE Daily forex technical analysis and forex news 2 replies

Ramblings of a Forex Junkie

Quoting Kanzler
I hope I'm not being dense here, and I don't want to be lazy. I've taken a look for "market structure" and the best I came up with was a subsection on market highs and lows on this page. Looking at the times for closes doesn't seem to help either, as neither line seems to be based off of a London close at 11 EST.

From 9/14 to 9/17 it acted as a supply level on the first chart, and actually it did react as expected on the next touch, although it was a short lived bear rally. The new chart, I see another...
Marked a chart. Remember I don't trade S&R I trade prices. Specific prices predetermined at specific times.

Also London closes at 12 eastern.

Search order flow on this site and you can find some good papers to study if google doesn't turn up much. This is hard to find as it is gold and not easily given up.
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Quoting Seneca pilot
Marked a chart. Remember I don't trade S&R I trade prices. Specific prices predetermined at specific times.

Also London closes at 12 eastern.

Search order flow on this site and you can find some good papers to study if google doesn't turn up much. This is hard to find as it is gold and not easily given up.
Looks like the weekly close. Why would that be significant though? Isn't that determined by your broker?
Conventional wisdom leads to conventional results.
Quoting Kanzler
Looks like the weekly close. Why would that be significant though? Isn't that determined by your broker?
As far as I know all retail brokers will have a similar price for the weekly close as they all stop trading at 1700 Eastern. NY is the last market to close on Fridays. Not an expert on brokers but every one I have used has closed at 1700 on Friday. I will try to find some of the papers to study and link them here also google market micro structure as there is more to read with the more specific search.
Quoting Seneca pilot
As far as I know all retail brokers will have a similar price for the weekly close as they all stop trading at 1700 Eastern. NY is the last market to close on Fridays. Not an expert on brokers but every one I have used has closed at 1700 on Friday. I will try to find some of the papers to study and link them here also google market micro structure as there is more to read with the more specific search.
I look forward to reading them whenever you get the chance. Thanks for your effort, I know you don't get anything out of this.
Conventional wisdom leads to conventional results.
Please forgive me for not going any deeper than I am but I really don't want this to become a "systems" thread. I am purposely not giving out the rules I trade by. If I did give out all the criteria and specific rules I trade by most people would still loose money trying to follow them. Everyone has to find their own way and their own methods to trade. I have given enough here to put someone on the right path with some study. There are many ways to trade and I really didn't start this thread to try and sway anyone to my way. I believe it is the correct way but many reading this may think I am full of BS. That's ok I am really wanting to just get the truths floating in my head out in a way that I can try to expand on them and cement them into my memory.

I love questions and debate so Please everyone ask away but please understand if I decline to go too deep into some specifics. Some day I may post a thread in the systems section, but You can be assured when I give away all my trade ideas I will be retired and no longer care who knows what I am doing. I don't think Peter Crowns was still using the IB method he posted. It certainly doesn't have the power it once had and I really think it had played out by the time he had posted it and he was on to something else. Maybe it will be the same with me.
Quoting Kanzler
I look forward to reading them whenever you get the chance. Thanks for your effort, I know you don't get anything out of this.
The bible is Trading and Exchanges by Larry Harris. Not a cheap book but worth the read.

Also Foreign Exchange Market Microstructure - Georgetown University

And A Guided Tour of the Market Micro Structure Approach to Exchange ...

And Market Microstructure Theory: Maureen O'Hara: 9780631207610 ...

Enjoy:
Quoting Seneca pilot

. I don't think Peter Crowns was still using the IB method he posted. It certainly doesn't have the power it once had and I really think it had played out by the time he had posted it and he was on to something else. Maybe it will be the same with me.
greetings seneca, ib trading is one of the most simplest money making ways in the universe. and getting back to the thread theme of not speaking about trading methods, fundamentally it doesnt matter what happens or who says what if you have the trigger set it will happen (hopefully). Obviously if a major news announcement happens and things go against what is expected even more can be made.It is all about keeping it simple. Take care
A UNICORN IS FOR LIFE NOT UNTIL IT GIVES A BAD TRADE
Quoting Seneca pilot
You have raised some valid and interesting questions.

Lots of time staring at charts and testing to find levels that hold show me the levels I want to rely on. This is something that is going to be personal to each trader, I am simply trying with this thread to help people to learn to make these choices.
Many thanks for the reply. So if I can just follow that up. In comparison to what you referred to earlier, that being the complex systems that need 9 diff indis to line up before a trade is made, it looks like your decision making process leading up to price returning to a particular watched level is very simple? You are thinking 'price will either respect this level and bounce or it will not respect this level'. That's a simplification on my part but essentially do you have a simple decision to make - you back up the level or you don't back it up? Fully respect you not wanting to impart every last detail here, anyone with a successful system would be mad to share it's precise details, but can you say more about what you are thinking and doing before you pull the trigger? Could you say for example the day before 'If price rises to there tomorrow I will sell immediately with a stop there' or are you watching pa all the way up and making the decision to enter as price reacts to the level. Perhaps a bit of both.

Also do you take any note of ascending or descending trends or is everything you note on the flat? And what about fundamentals and correlations? Do you rate them?! Thanks again.
Quoting stevexyg
Many thanks for the reply. So if I can just follow that up. In comparison to what you referred to earlier, that being the complex systems that need 9 diff indis to line up before a trade is made, it looks like your decision making process leading up to price returning to a particular watched level is very simple? You are thinking 'price will either respect this level and bounce or it will not respect this level'. That's a simplification on my part but essentially do you have a simple decision to make - you back up the level or you don't back it...
I am a touch trader.There is basically no decision to be made once i place a line on the chart I will take the trade whatever the speed of the market. In fact I am more afraid of a slow grind into my level than a quicker move with a larger bar. I pick a level and go with it. I trade daily, weekly, and monthly levels but rely mostly on daily. I typically have three or four lines on the pairs I am watching and once I take a trade I generally target another line for taking profit. Sometimes a trend will stop and reverse on some of the longer term key levels. As I said before I am not a long term trader. I have not learned to hold trades for huge gains. I am trying to learn it now in my tiny experimentation account. I would love to make two or three trades a week and watch them run but for now I don't have the attention span. I am a day trader and my profit horizon is typically thirty to eighty pips.

The only thing with fundamentals would be Big and or Unexpected news events. Last week for example it was widely expected that Draghi would cut rates until the data began to get better, clearly about wed night things changed. I was long Thursday off a level but I would never have shorted that market no matter the type of level.

I hope this answers your question.
FTI, who I think was a bank trader gave a good explaination of what happens in one way markets like last Thurday in his thread. He described how banks pass off risk to each other and why there is no selling.
Ok my confession:

This is how I really trade.

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Yes thanks, keep this thread going it is a really good read.
Quoting Seneca pilot
Ok my confession:

This is how I really trade.

Only truth I know of in forex is the current price. Think about it, it might change your way of looking at the market.
It works till it doesn't
Quoting Seneca pilot
Ok my confession:

This is how I really trade.

one of your lower inside yellow ribbon lines has yet to cross above. you would be crazy to buy just yet. always wait for the signal!
Quoting stevexyg
one of your lower inside yellow ribbon lines has yet to cross above. you would be crazy to buy just yet. always wait for the signal!
Nope, only buy when price breaks out of the whole mess. Guarrantees never a loss.
[quote=Seneca pilot;6361383]Ok my confession:

This is how I really trade.

is this chart for real?????
A UNICORN IS FOR LIFE NOT UNTIL IT GIVES A BAD TRADE
Quoting billytt
greetings seneca, ib trading is one of the most simplest money making ways in the universe. and getting back to the thread theme of not speaking about trading methods, fundamentally it doesnt matter what happens or who says what if you have the trigger set it will happen (hopefully). Obviously if a major news announcement happens and things go against what is expected even more can be made.It is all about keeping it simple. Take care
I am sorry Billy I missed your post.

I completely agree, IB's are definately a simple and good way to trade. Point I was making is that the markets have changed over time and we don't seem to get the trends that move thousands of pips and pay out huge gains without retracements. Forex isn't the same market it was in the late nineties.

I don't trade price action any longer but IB's were some of my favorite entries when I did.
[quote=billytt;6361402]
Quoting Seneca pilot
Ok my confession:

This is how I really trade.

is this chart for real?????
Joke.
[quote=Seneca pilot;6361410]I am sorry Billy I missed your post.

I completely agree, IB's are definately a simple and good way to trade.

as Bob Dylan sang Times are a changing. Due to computors and the fastness of it all plus other countries getting hold of other countries without war like russia and china are doing to england, It is a global game but it can be played by us. i do not trade long term, 10 mins to several hours will do but like i said ib is a good starting point. Also,most systems will work if money management is used plus using your head . take care
A UNICORN IS FOR LIFE NOT UNTIL IT GIVES A BAD TRADE
  • Post# 80
  • Quote
  • Jan 13, 2013 10:51pm | Edited Jan 14, 2013 12:43am – corretion
Ok back to the thread.

A common strategy is to bracket a range of prices and then trade a breakout of the area. Big ben, Big dog, Asia channel, and opening range are a few of the popular variations on the theme. The problem with these strategies is that price often breaks out and then quickly retreats back into the range and goes to the other side. Most of the strategies for these methods call of a stop and reverse when the other boundary is broken. It is very common to have multiple losses on rangy days. Most of the threads you will find discussing these strategies usually have as an answer to this problem to simply set your take profit at ten or twenty pips. Meanwhile the stop is back on the other side of the range forty or fifty pips away. The win rate has to be way too high to overcome the inevitable losses.

Here is a simple answer to the problem. Wait for a real breakout. Here is a tested and profitable strategy using levels with closes and retests.

EUR/USD chart one hour

Put a line on the high and low between the hours of midnight and three AM Eastern. You are bracketing three hours leading up to London open. Now you are going to trade the breakout but lets define our breakout. We need a close of a one hour bar outside our range. Once we have the hour close outside we place a pending order back at our line. Target is minimum 1 to 1. A good strategy is also to target a larger gain by splitting your entry into two units, take one unit off at 1 to 1 and use a larger target for the second unit with a BE stop.

From May 2011 thru Dec 2012 this strategy had 105 trades. Sixty six were winners, thirty nine losses. 63% win rate with 60% gain on equity.

The Truth:

If you are going to trade breakouts Only trade CONFIRMED breakouts.

A chart example
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