W.Y.K.I.P.I trading methodology

I have not been trading really actively for past few weeks but i have been thinking along these line's to sketch a trading methodology. I know its nothing new but i just wanted put thing together to work on them and have some other people's view/suggestions and criticism.

What You Know Is Priced In

Thats the tagline that is in my head these days and this is foundation from where i start my drawings.

All the information that is available to all the market participants is "priced in" to the extent of :-

1- Number of people that the information is available to

2- Amount of information that is available

3- Time passed since the information came out (information does not come out to every one at the same time, some will know it about it as its came to being, some will in hours, some will in weeks and some will never know it. lol)

So if we start building up from that principle than next step is to find the information that is not priced in yet. That could be :-

1- Information that is available out there but market has not turned it's attention to it cause :-

a: Market is pricing in some information that is counter to it and of course has a bigger impact on Eco and people's emotions and expectations so everyone is paying more attention to it

b: Is too far from current time (>week or so) so no one is betting on it yet

2- Information like Eco Data Announcements that are unpredictable in most cases (except when a row of better/worse data starts coming out contrasting the current expectations, prior to some days before its announcement so Market than have to adjust (price in) its position to it) so there is not much activity in marts prior to it

So the next step would be to pick the right information that is tradable and put the other pieces of the puzzle together like:-

1:- What is market chewing at moment, how much is it left to make market to move on and look out for some new information

2:- Technically, what is the trend, how strong is it, Where are major SR areas

3:- What could market do to cause the max damage to the weak participants/ General public/ Herd or whoever it is that deserves it.

4:- Intraday orderflow information like Bids/Offers/Stops and Option Barrier info along with Technical info to pick out the top's and bottom's and tune our entries

Now all of it sounds right and the method that will be build, ok well there will be no method just one time scenarios that will be traded/practiced and perfected but whatever it will be I envision it as an environment where i should never loose and to have the total control over what happens around (given if have done my analysis right).

At the moment it's all in my head as a theory and that above it just a rough sketch. Though i have seen time/trades that i could never have lost but as i said i have't been actively trading for some time so cant proof anything (nor i want to). So i do expect some skepticism.

Anyways fire off and wish me luck.
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I will not focus too much on immediate data release impact, coz so many traders already used that method, it is so common that we can not predict "logical" impact of it in short term. Trapping the news methods already became history. Of course some exceptions when the price near large stops or large exotics options / barrier.

It's better to analyse economics background, easier by thinking of investor's "risk-on" & "risk-off" mindset. How price inefficiently passing "fair value" caused by vicious loop (Soros called it reflexifity) and wait the trend unsustainable anymore and finally crumble. Yet this is the hardest part.

Tracking the big money's print when something shocking happened, they can not escape the pain immediately, they will likely to "fading the pain" and getting out step by step another time so that makes them not bleeding too bad. Sometimes we miss the first big move because the lack of insider info, but we can entering again for the second surge, when the price looks calming down and some forecaster start to talk BS about double top or double bottom technical reversal, lol.

Yeah, it's not focused on short term Plays like bracketing the news or anything. I may use them but they are't certainly the main theme.
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I think Eu has left a little for the upside, the current rally is built upon the hopes of leveraging the EFSF. Greece vote is passed, Polish voting will also result in a positive outcome (11GMT) and than we are only left with German vote on Thursday.

After that market will turn its attention to a rate cut by ECB and QE2 from BoE (6-Oct).

So next week may prove to be a Red one hope to get a nice short on Thur-Fri.
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Really looking forward to this

Was looking for more upside to short until the vote pass in Germany today.

But last night "short selling ban" news came out and risk aversion jumped in. When the dust settled down i looked forward and the next thing was German voting so i went long at the bottom near 540 and closed it at 650 just after the results came out.

Now am short Eu, Au, Nu and Ej as the original plan.
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That went well.

Closed 75% of positions, rest trailing behind SR, also had a cj short too.

A lot of stuff will be happening this week, i was gonna trade for a rate cut by ECB but now price has fallen so much on one side and Inflation data also came at a above forcasted number which makes me suspicions about the cut itself.

Cable been strong at month end flows and SNB talk. Will be looking forward to QE2 decision.
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Closed all positions with something like 800 pips profit.

After the positive PMI's from China,US and Britton today I am starting to think that chances are maybe the data coming in next two days may keep up this new little wave of positive data i have seen it happen few times before too (July).

Dont have a play for Eu atm (other than buying after the rate cut)

but i am going too build some longs in Cable. Cable does not have such problems that EU have atm and if Services and Construction PMI's continue to impress than i am certain that GU will start rallying as Market will start pricing in a NO to QE2.

Just threw a long at 469 and will trying get more if it comes down again. I went long at 520 but was stopped out earlier.
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