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Using Balance and Unbalance to your advantage

  • #161
  • Sep 17, 2015 3:13pm Sep 17, 2015 3:13pm
Quoting gspajon
Yet another Kiwi update!! This market is moving fast and the players are very active on both sides. We got the "whoosh" after the FED announcement, but it appears like profit takers are now active at the end of the day, pushing prices back into the balance zone...for any of you considering a long...this is what it looks like. My position was up as much as 120 pips but has now fallen back to 55. I have moved my stop to BE+10 pips. I did not anticipate the sellers to come in as quickly as they have. {image}
why you buy ?
The week candle close under the balanced area.
Attached Image (click to enlarge)
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  • #162
  • Sep 17, 2015 3:48pm Sep 17, 2015 3:48pm
Quoting 81raffae
why you buy ? The week candle close under the balanced area.
I bought for the reasons I explained here in this post.

However I will state them again...

  1. weekly chart is balanced...yes that balance area is below the last balance area...but it is balanced none the less.
  2. Daily chart shows a bottoming formation - many refer to it as a "double bottom"
  3. intraday chart balanced, broke above the balance area, and at the time of entry...
  4. retested the balance area and moved sharply away

My opinion on this market is still bullish, but as I said before the speed at which sellers were transacting did take me aback. If you look at the intraday charts now, price has returned to the latest balance area and is currently testing...it now all depends on whether we see any new buying. That remains to be seen and it is the end of the day, so Asia has yet to react to the news announcement.

I have moved my stop up to at least a "scratch" trade to prevent a loss, but had no idea that the retest would be this deep.

  • #163
  • Sep 17, 2015 4:16pm Sep 17, 2015 4:16pm
Yes, i see on your 8h.
coul you see something about the speed of the move ? Is there a way to understand if a move is a stop hunting
Quoting gspajon
{quote} I bought for the reasons I explained here in this post. However I will state them again... weekly chart is balanced...yes that balance area is below the last balance area...but it is balanced none the less. Daily chart shows a bottoming formation - many refer to it as a "double bottom" intraday chart balanced, broke above the balance area, and at the time of entry... retested the balance area and moved sharply away My opinion on this market is still bullish, but...
  • #164
  • Sep 17, 2015 5:46pm Sep 17, 2015 5:46pm
Quoting 81raffae
Yes, i see on your 8h. coul you see something about the speed of the move ? Is there a way to understand if a move is a stop hunting
Again, I may get criticized by what I am about to say but here goes...I find that how we say things eventually reflects on how we think...perhaps it is the reverse...how we think is reflected in what we say.

"Stop hunt"...what does that mean, really? The term implies some malevolent entity that is forcing price one way or the other for the express purpose of finding your stop and taking your money. REALLY? To those who think this way, ask yourself...what interest does a 2 trillion dollar a day market have in your tiny mini lot? 2 TRILLION dollars a day and they want your $50 stop loss? If you use that kind of terminology you begin to surrender to the idea that some one is out there "hunting" your position. The result is a large shift in the way you think, and therefore the way you trade. I would discourage that way of looking or thinking about the markets.

Now as to why we think price did what it did, that is simple. Price rose because there was more buying volume than selling volume, and as was clear the market became unbalanced when all those buy orders hit. What was not so clear is where the sell orders were resting. However, they were obviously there. There was a large onslaught of sell orders that came in and quickly neutralized the buying imbalance and pushed prices lower again.

The end result was that YES, some shorts were stopped out when prices rose...that was obvious...but what was not so obvious was the selling levels and how quickly the sellers dominated the market. But the truth is that orders came in and were filled. The cumulative effect was a rise up and fall back to just about the same place. My mentor, Jason Alan Jankovski calls this "time compression", because pretty much EVERYONE in the market (buyers AND sellers) were transacting all at the same time.

(If you want to read an excellent book on this subject I highly recommend his book, "Time Compression Trading" by Jason Alan Jankovsky.)

The idea that the market was "Hunting' the stops on the short side, is paranoid. I would like to encourage you to think of price movement as the result of order flow and not some malevolent action. Just doing this will improve how you interact with the market and make you more successful.
  • #165
  • Sep 18, 2015 7:48am Sep 18, 2015 7:48am
Hello all, Good Morning from the US!

Here is an update on the trades I am holding:

Kiwi: To my great surprise and content this market did find buyers just ahead of my stop. Honestly it looked like I was going to stop out but more buyers stepped in and have sent price right back into the next level. I do anticipate more selling here...hopefully it won't happen quite as fast. My stop is as placed yesterday and I will hold this over the week end.
Attached Image (click to enlarge)
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Oil: A return back into the balance zone has triggered one of my positions, and is looking like the 2nd position may trigger later today, given the current move. As this is a longer term trade I will leave the stops as placed for now, and review this trade later next week.
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  • #166
  • Sep 18, 2015 2:53pm Sep 18, 2015 2:53pm
Thanks.
Quoting gspajon
{quote} Again, I may get criticized by what I am about to say but here goes...I find that how we say things eventually reflects on how we think...perhaps it is the reverse...how we think is reflected in what we say. "Stop hunt"...what does that mean, really? The term implies some malevolent entity that is forcing price one way or the other for the express purpose of finding your stop and taking your money. REALLY? To those who think this way, ask yourself...what interest does a 2 trillion dollar a day market have in your tiny mini lot? 2 TRILLION...
  • #167
  • Sep 20, 2015 6:40pm Sep 20, 2015 6:40pm
Hello everyone, I have good news and better news!! Due to the popularity of this thread and those who have privately requested that I start a new format, I have begun a new forum. It is open to all who would like to read and participate just as this forum is open. As I will be directing most of my energy to this new endeavor, I will not be posting here as often. For those trades that are still open that I have posted here, I will continue updating them until they are finished. I am happy to answer questions and listen to comments posted here as well.

I would also like to invite you to come to the new forum and have a look around. As it is brand new, it won't even compare to forex factory, but for those of you who follow my comments and trades, I will be posting all in the new forum. I would like to extend a hearty welcome should you decide to join us there and look forward to hearing and seeing your comments.

You may find the new forum here: http://bvtclass.freeforums.net/ If you just want to "lurk" you can do that, but if you create a user ID you will be able to leave comments, ask questions, and/or post trades that you feel are of significance. I look will enjoy seeing you participate.
  • #168
  • Sep 21, 2015 7:24am Sep 21, 2015 7:24am
Hello All...good morning from the US
Here is an update on the trade I still have outstanding:

Kiwi: Price is moving back and forth between an ever narrowing range. This kind of chaotic movement (on the lower time frames) always alerts me to a larger balance zone forming. As can be seen here the daily chart has now balanced, and that balance has no extended all the way out to the weekly chart. So...nothing to do but hold. Stop has me in a "scratch" trade so at least there is no loser here.
Attached Image (click to enlarge)
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Oil: This market has come down and filled my entries and appears to be moving my direction leaving the trade slightly positive at this point. I am wanting to carry this trade into the weekly chart and see what happens around the 58-59 area. But there will be some push back between here and 50, then more push back (I anticipate) between 51-53.5....Patience.
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  • #169
  • Sep 21, 2015 8:50am Sep 21, 2015 8:50am
stopped out on Kiwi...with a scratch trade
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  • #170
  • Sep 23, 2015 8:00am Sep 23, 2015 8:00am
Hello Everyone...here is an update on Oil.

After rising above the latest daily balance zone, price came down to retest it and has again risen above , but in so doing has failed to follow through, and is now producing yet another balance zone. The combination of these two daily balance zones have now extended the balance zone out to the weekly chart, and (if price stays in this area) also the monthly chart.

It would seem the next few days will be "do or die" for my long trade.
Attached Image (click to enlarge)
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I am seeing that USD across the board is behaving largely like I would expect during the months of July and August, but not in September. I am confident that is because of the FED announcement and this has left everyone scratching their heads wondering what to do next. As a result we have a low volume environment, and the traders are lining up on either side.
  • #171
  • Sep 25, 2015 8:37am Sep 25, 2015 8:37am
For any of you who might be interested in my stats from the day trading side...I have posted them here: http://bvtclass.freeforums.net/threa...-trading-stats
  • #172
  • Sep 25, 2015 1:18pm Sep 25, 2015 1:18pm
Quoting gspajon
For any of you who might be interested in my stats from the day trading side...I have posted them here: http://bvtclass.freeforums.net/threa...-trading-stats
Hi gdpajob.You could use also twitter account to show your operativity
  • #173
  • Sep 25, 2015 5:20pm Sep 25, 2015 5:20pm
Quoting 81raffae
Hi gdpajob.You could use also twitter account to show your operativity
yeah...I'm not a big fan of the "social media" scene. To be quite honest, this forum and of course my own are my first venture into drawing attention to my trading. I am a bit uncomfortable as I am not seeking "fame". I just want to let people know that most of what is preached on these forums is really not valuable information. I want to help you (and anyone else who listens) that there is a better alternative and is is far easier than drawing lines or complicated math fórmulas. It is simple and elegant and all right there in front of you on the chart.
  • #174
  • Sep 27, 2015 2:41pm Sep 27, 2015 2:41pm
Hi gspajon;

I've been looking at some of Jason Alan Jankovsky's videos again and I like what he's doing but find it hard to get my head completely around the concept.

But once you start to look at the Market in terms of whos Winning and who's Losing and being aware that you are Trading in a Zero Sum Market it starts to make sense.

It's going to take a lot of practice to make this work but I think it's going to be worth it.

If you could take a look at the chart, below, this is how I'm interpreting the Zero Sum market.
Attached Image (click to enlarge)
Click to Enlarge Name: 27th Sept 15 EUR:CAD W1 Chart.png Size: 137 KB
  • #175
  • Sep 27, 2015 8:01pm Sep 27, 2015 8:01pm
Quoting stevepatt
Hi gspajon; I've been looking at some of Jason Alan Jankovsky's videos again and I like what he's doing but find it hard to get my head completely around the concept. But once you start to look at the Market in terms of whos Winning and who's Losing and being aware that you are Trading in a Zero Sum Market it starts to make sense. It's going to take a lot of practice to make this work but I think it's going to be worth it. If you could take a look at the chart, below, this is how I'm interpreting the Zero Sum market.
You are absolutely right about how the zero sum market works...Jason Alan Jankovsky is my mentor and an excellent one at that. He is the kind of mentor that gives you the facts and lets you come to your own conclusions as to how you will utilize those facts to your advantage. If you don't have any of his books, I recommend the latest one..."Time Compression Trading". Also he is very generous with his time and a phone call to him will yield more information (for free) than you know what to do with.

On your chart...both on the way up and on the way down...look at where each of those long (strong) candles occurs...look to the left and observe that each of those candles occurs in a logical area where the opposing side would've had their stops...that is what I call the "whoosh" candle. It starts at the very beginning of each move, and continues stopping out the other side, until there is no one left...then starts going the other day.

Many here say "aggression" drives the market...and that may be...but I say (and JAJ agrees with me on this) that Liquidation drives the market.

You are on your way...your eyes are opening...don't stop...continue...this is the right path...soon you will actually be able to "see" the order flow as each candle forms...it isn't easy or over night but continuing to look at the markets along this line of thought will lead to this conclusion...then you will be unstoppable.
  • #176
  • Sep 28, 2015 1:18pm Sep 28, 2015 1:18pm
hello.
Flow in action.....
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  • #177
  • Sep 28, 2015 2:30pm Sep 28, 2015 2:30pm
Quoting 81raffae
hello. Flow in action..... {image}
WHOOSH!! Anyone who' was long inside your red box is being stopped out.
  • #178
  • Sep 28, 2015 3:12pm Sep 28, 2015 3:12pm
Quoting gspajon
{quote} You are absolutely right about how the zero sum market works...Jason Alan Jankovsky is my mentor and an excellent one at that. He is the kind of mentor that gives you the facts and lets you come to your own conclusions as to how you will utilize those facts to your advantage. If you don't have any of his books, I recommend the latest one..."Time Compression Trading". Also he is very generous with his time and a phone call to him will yield more information (for free) than you know what to do with. On your chart...both on the way up and on...
Hi gspajon;

Thanks for your response I've just ordered JAJ's book "Time Compression Trading" I'm sure it will be a great help.

I hope the chart below is along the right lines of "thought process"
Attached Image (click to enlarge)
Click to Enlarge Name: 28th Sept 15 AUD:USD W1 Chart.png Size: 158 KB
  • #179
  • Sep 28, 2015 6:06pm Sep 28, 2015 6:06pm
Quoting stevepatt
{quote} Hi gspajon; Thanks for your response I've just ordered JAJ's book "Time Compression Trading" I'm sure it will be a great help. I hope the chart below is along the right lines of "thought process" {image}
Hey Stevepatt...you have an extremely good grasp of the order flow and are interpreting price action from that flow of orders. I would venture to say that all you have left to do now is devise an entry and exit strategy to exploit your observations and run some numbers on your performance. "Seeing" it in the static charts allow you to anticipate it on the right hand edge. All you need to do is find out how YOU relate to that and that will help you devise your strategy.

Well done friend!!
  • #180
  • Sep 29, 2015 1:21am Sep 29, 2015 1:21am
Quoting gspajon
{quote} WHOOSH!! Anyone who' was long inside your red box is being stopped out.
Now we know the position of the losers.
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