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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 Seneca pilot
For those of us who trade from the US, daylight savings time is coming up this weekend. Europe and London don't go to summer time for a couple of weeks so we will need to make the appropriate adjustments in the opens and closes. British and European clocks don't change until March 31. For those two weeks our London open will be at 04:00 and My market open will be 01:00 instead of 00.00. You should adjust your times accordingly.
Thanks for this. How does it affect someone trading from the western coast?
Quoting square1
Thanks for this. How does it affect someone trading from the western coast?
All parts of the US that observe daylight savings time will move forward one hour. Does your country have a time change? If not you don't have to worry until the European and British changes on March 31.
BW Diamond said:

" I recall you mentioning the GU in reference to London close, but GY sounds promising as well. Thank You."

Worked out pretty well today.
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Quoting Seneca pilot
All parts of the US that observe daylight savings time will move forward one hour. Does your country have a time change? If not you don't have to worry until the European and British changes on March 31.
I plan to relocate and i hear parts of the western coast don't observe DST.
Quoting Seneca pilot
BW Diamond said:

" I recall you mentioning the GU in reference to London close, but GY sounds promising as well. Thank You."

Worked out pretty well today.
Quoting square1
I plan to relocate and i hear parts of the western coast don't observe DST.
Only Arizona as far as I know.
Quoting Seneca pilot
BW Diamond said:

" I recall you mentioning the GU in reference to London close, but GY sounds promising as well. Thank You."

Worked out pretty well today.
++++++++++++++++++++++++++++++++

GY this week, and even last week, showed some promise. However the further back I went, the less similarities I found. This, by all means, does not mean alot since I just did a cursory eyeballing going back about 6 months. Anything spotted by anyone else please post here, meanwhile I go over this in more detail in the days to come.
Quoting Seneca pilot
For those of us who trade from the US, daylight savings time is coming up this weekend. Europe and London don't go to summer time for a couple of weeks so we will need to make the appropriate adjustments in the opens and closes. British and European clocks don't change until March 31. For those two weeks our London open will be at 04:00 and My market open will be 01:00 instead of 00.00. You should adjust your times accordingly.
++++++++++++++++++++++++++++++++

A few years ago, after being frustrated by never remembering DST time change in US, I came up with this mnemonic;

1 11 2 3 which represents, 1(first Sunday) 11(November) & 2(second Sunday) 3(March)

Now if someone would provide the fall time change for UK, Europe, I'd be All knowing...
Thanks,
D
While everybody was focused on EU, UJ was doing its thing since morning open and went up to nice RR.

It tends to trend quite nicely. Stop 20% of 6 day ADR.


PS: Round numbers are respected as orders are placed by people and people tend to round numbers....
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Wait-Execute-Manage (:waiting: - the longest part)
Quoting diamonddbw
++++++++++++++++++++++++++++++++

GY this week, and even last week, showed some promise. However the further back I went, the less similarities I found. This, by all means, does not mean alot since I just did a cursory eyeballing going back about 6 months. Anything spotted by anyone else please post here, meanwhile I go over this in more detail in the days to come.
The accuracy is somewhat variable. You need about three years of data to really get a signifigant sample to work with. If you do this with a hour chart and just move that close line to each new day you will start to see some patterns. How are Mondays? When price hugs the London close price tightly with little separation how does it work out? When price goes far away and the comes back later how does that usually work out? If price hits before Tokyo gets going or after London closes do we want to take the trade? Of the loser trades how many would you have skipped due to price hitting another key level first?

The manual testing is more about seeing how the pair moves and the patterns that repeat and are reliable. Writing code and testing with an EA won't show you what you need to know. Time with charts is key. Even testing a bad method can be very beneficial to learning the nuances of a currency pair.

We are having the conversation but this is for the benefit of everyone. Please don't take it personally if the information I am giving here is too basic for your knowledge level. I am speaking to all the readers of the thread. Some will need the lesson some won't. I don't know everyone's experience level so I tend to maybe go into more detail than some might need.
Quoting snail69
While everybody was focused on EU, UJ was doing its thing since morning open and went up to nice RR.

It tends to trend quite nicely. Stop 20% of 6 day ADR.


PS: Round numbers are respected as orders are placed by people and people tend to round numbers....
I don't have the best history with UJ. I do trade it and I do occasionally make a little money off it but it slaps me around more often than I care to admit. I seem to zig when I should zag every time with UJ.
http://www.forexmarkethours.com/
Wait-Execute-Manage (:waiting: - the longest part)
Quoting snail69
PS: Round numbers are respected as orders are placed by people and people tend to round numbers....
This statement is correct, partly. Round numbers aren't necessarily respected in the term that I think you mean. First, they aren't respected, but they are more often violated because people think they are respected, or they are playing it completely wrong.

There are orders there and typically it's not just because it's a round number. The round number doesn't CAUSE the mover's to place orders there. Uninformed traders place orders there, but informed traders orders go to informed traders equity. It's like saying any S/R line on a chart is valid. It's valid until proven to be S/R or not and that is a crap shoot s lot of the time.

It has to do with barriers, trapping weaker hands and protecting positions. On your chart you posted, there were barriers established at 95.00, 95.25, 95.50 and 96.00 if I remember correctly. I don't have my data with me to verify, but I would guess there may have been one at 96.50 just by looking at your chart. I didn't look to trade U/J yesterday so I didn't look into the significance of these levels and don't know if any were important other than vanilla, but I know that some of the vanilla's had larger positions. The things you don't know (at least I don't) is how they will be played with any degree of certainty until it's exposed. Even after expiry those orders will get filled later as well.

There is also a cognitive bias traders create by delineating there charts in incremental pieces such as .0000, .0020, .0040 and so on and you will create an illusion that price is respecting certain areas simply because they make sense to you in a logical way. Cognitive bias that we create can have a significant negative affect on trading, but if used correctly can help a trader. I personally struggle with cognitive bias when looking at charts at times because my mind likes to trick me. It's why many suggest cleaning your charts. As an example in this thread there have been numerous levels or areas spoken of that are utilized as areas of orders and potential orders. If you were to plot them all on your chart your brain will start playing tricks on you. That's why you need to be mentally aware of certain levels, but focus on the important ones, or have rules such as those that been given here. This is all relative to the trader because some can wade through visual data better than others.

The truth here is that at any level you need to know why it's significant and to whom it is significant for. At any given day E/U 1.3000 may be very significant while other days it's just another price point. You need more knowledge than the actual number before you know it's significance. You don't know if 1.3000 is going to be attacked hard or defended with any significance unless the level is in play and shows it's hand.

I welcome anyone to give me a different perspective on round numbers, because I fully admit I don't know what I don't know. If it sounds like I speak in absolutes it's really only my opinion or current understanding of this market.

EDIT: I just want to clarify that SP has touched on this early on and he may disagree with parts of my thinking. I may be stating the same thing that has already been covered over a couple of different posts early on here.
Seneca, how do you personally set your stop when trading news events like NFP or ECB with the breakout method?
Quoting TantumVerum
This statement is correct, partly. Round numbers aren't necessarily respected in the term that I think you mean. First, they aren't respected, but they are more often violated because people think they are respected, or they are playing it completely wrong.

There are orders there and typically it's not just because it's a round number. The round number doesn't CAUSE the mover's to place orders there. Uninformed traders place orders there, but informed traders orders go to informed traders equity. It's like saying any S/R line on a chart is valid....
I have a similar view of round numbers. Big players know that inexperienced and weaker traders will place stops there or try fading the level. Many weaker hands will get trapped and hurt trying to fade the round numbers. An objective look at a lot of data will show you that its a coin flip. Sometimes the level holds and sometimes not. You need better than random reactions at a given level to build a trading method.
Quoting Olarion1975
Seneca, how do you personally set your stop when trading news events like NFP or ECB with the breakout method?
When you get the inside bar its easy. Stop goes on the opposite end of the breakout. On a day like yesterday when the news bar is so big it is a little tough. I will use a disaster stop around half the bar length but I won't let the loss get that big. We only had around forty pips to work with to the previous week low so I wouldn't have let a loss go much past twenty five pips. Yesterday the draw down never really got worse than ten pips. Its really a feel thing, that's why I didn't specify. The price moves so quickly after a surprise number that you really have to have a disaster stop but keep your finger close to the button to exit if you think the price action is going against you.

Take a look at as many of these as you can and you can get a feel for the type of drawdown you can expect. Of course you need to always know how far it is to the next major level. Never let your stop size exceed the distance to your minimum expected target.
Quoting Seneca pilot
When you get the inside bar its easy. Stop goes on the opposite end of the breakout. On a day like yesterday when the news bar is so big it is a little tough. I will use a disaster stop around half the bar length but I won't let the loss get that big. We only had around forty pips to work with to the previous week low so I wouldn't have let a loss go much past twenty five pips. Yesterday the draw down never really got worse than ten pips. Its really a feel thing, that's why I didn't specify. The price moves so quickly after a surprise number that...
Thank you for the explanation and have a nice weekend.
Just looked outside the window and we just got a few inches fresh snow this evening here in North Germany...
[quote=TantumVerum;6503360]This statement is correct, partly. Round numbers aren't necessarily respected in the term that I think you mean. First, they aren't respected, but they are more often violated because people think they are respected, or they are playing it completely wrong.

There are orders there and typically it's not just because it's a round number. The round number doesn't CAUSE the mover's to place orders there. Uninformed traders place orders there, but informed traders orders go to informed traders equity. It's like saying any S/R line on a chart is valid. It's valid until proven to be S/R or not and that is a crap shoot s lot of the time. ] quote


Personally I use round numbers to find S/D areas and exploit them.
Wait-Execute-Manage (:waiting: - the longest part)
Quoting Olarion1975
Seneca, how do you personally set your stop when trading news events like NFP or ECB with the breakout method?
i trade spikes in oil which is not quite the same as a news spike but i will have several triggers at example 100-200-300-400 and as each one is hit (only happened once) i get out and i then manually trade the retrace. as for stops i keep it to a minimum because it is spike trading. Trading the news sounds like a good bonus idea and i have been checking it out as i think it looks like stops do have to be used as this is wbere it differs from oil spikes
A UNICORN IS FOR LIFE NOT UNTIL IT GIVES A BAD TRADE
Here is another thread like SP's http://www.forexfactory.com/showthread.php?t=215432. Although he allowed haters stopped him. That thread is worth treasures but because people hate truth and want to get quick rich without labor, so to them it is crappy. To me, that thread and this are the most valuable on FF but SP rocks for divulging part of his method so far. Hope you will drop all and let individual traders think outside the box too (verification).
Just read it and no need quoting me so as not to derail this thread unecessarily.
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