This is from an earlier post for any newcomers
DislikedHere are some thoughts and a direction I may head...as far as the trading style. I will make more comments in the analysis in future posts. Don't confuse this with what I have posted in the last few sessions....however these levels are derived through the same methodology I use. I think it "may" suit better. Just keep an eye on it. I will design a Trade Plan sheet for it that you can print out or save to your computer
The "catch" to trading this effectively is for you to understand that with each passing day new levels develop based on current price action. So a new level may appear that could change the plan or cause you to close or reverse a current position. These will only change once per day. I will post the changes around noon or so each day and add some commentary.
I will follow only the EURUSD, GBPUSD and USDJPY.
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DislikedPLEASE READ THIS AND ABSORB IT
I am going to work you through how I trade this method as time passes so please be patient with me. This method has its core in the same price distribution study that I have always discussed, however I think it will suit traders here better.
The core of the method has its root in study volume and value in the currency futures market. Since volume in the both the spot and futures market dwindles in Asia and the afternoon of the North American session I discount this very heavily. I use certain thresholds for determining supply and demand. So to a large degree, you have to ignore what happens in these low volume sessions. Of course there are times when the market moves greatly in these sessions like when the FOMC makes an announcement at 2:15 PM or the avian flu epidemic hits, etc. So you need to be aware and monitor to some degree, but you should not react unless it is an extreme move in these sessions. Frequently, price will return to value levels set in the high volume sessions of Europe and early North America.
This system is very easy to understand where and how to enter. If you haven’t already figured it out, the difficult part and the part that puts the money in your pocket is trade management. I want to give you an idea of how I handle this system, but you can certainly tailor the levels to meet your own needs and style. If you follow me on this, you will see that they are very powerful supply and demand levels.
Generally, by about noon and certainly by 3:00 PM in the NA session, my threshold levels for decision making are reached so I will generally get my new information out early in the afternoon. Almost every day the Positioning Level (Near Level) in the recent post will fluctuate. What I do is use this new level as a gauge for what to do the next day.
THIS IS VERY IMPORTANT – You should “expect” price to return to these positioning levels in the European or NA session the following day. Of course, this does not always happen and when it does not happen this is a sign of extreme supply and demand at the positioning level. This level is likely to drive directional flow for the next several sessions. If price runs up/down substantially in the afternoon in the US, I will frequently take the profit and wait to reposition at the new level the next day in the direction of your intended target. I am not saying you have to do it this way. There will be times when price will never give you a better entry so how you do it is up to you. What you should do is use the new positioning level as a guide for risk though and monitor it very carefully. Hopefully, you will get a feel for this as you watch this method. It really depends on your style and acceptable risk. I would like to point out that if a TARGET level is hit during the off sessions I will almost always take the money. I will leave orders in while I get some sleep for this.
For instance, today most of the positions are working in our favor, so if cable closes up strongly after being down so much today, I will likely take profit and look to reset in the European session tomorrow. Hopefully, you will get a feel for this as time goes on.
So with that said, here are tomorrow’s levels. They are only valid beginning at 3:00 AM in the European Session for me. Also, I will introduce additional levels beyond the current one’s as you get the hang of this.Ignored