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My Dax Trading Journey Using 123, 2b and Market Structure 9 replies

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Stop Hunting using Sentiment and Market Structure

$1060 EURUSD MR trade
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Sentiment Snapshot going into the week. Also a look at USD weekly.

Basket analysis shows that USD is still a strong sell. It's getting harder and harder to pull the trigger to short but until we get a signal that something has changed, the probabilities are for USD short.

Looking at the weekly also makes it difficult to pull the trigger short. The risk of reversal is starting to stack. The challenge here is that there is still room for the USD to continue down to fill the Liquidity Gap.

A more healthy market behavior would be a pullback first then a continuation down to fill the gap....but price could just keep going down until that gap is filled.

So what do you do with this analysis? Well, for starters, sentiment is still showing a strong sell using USD basket analysis. Also the candle patterns on the weekly don't suggest a reversal yet. So your odds are for short USD trades..... just be nimble knowing that a reversal is looming.
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AU, grabbed those stops. As mentioned yesterday USD is still strong sell and as they say... Markets can remain irrational longer than we can stay solvent.

The key is to not "think" what should happen but instead look at the facts. What IS happening ... how and where can I participate?

Look at Sentiment Positioning... changes in that positioning... And market structure as a base.
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Context = King = $$$$. See below.
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Current Sentiment Snapshot
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EU, do you see stop liquidity? 90 pips is waiting
Your words are deeply meaningful as a result, it's really difficult to ignore. Thanks for sharing.
Snipers were waiting. EU, we had you in our sights all week.

Traders were locked and loaded. One guy in the group called the exact LG fill before the blastoff.

Soon I will post a blog about how I doubled a small account two months ago using the Monday Range strategy.
I was asked by some folks about how I use the MR to trade a Market Making style so I am uploading the Market Maker Strategy to the Monday Range course.

This is a precise, systematic style that you can use to trade the markets and have zero directional bias. Obviously, pairing the bias towards opposite of retail positioning is going to put you at an advantage - but it is not necessary.

Hope you have a great trading week.

Charles

  1. Regarding your long change and long change surplus and your short change and short change surplus signals in your relative sentiment indicator...what do they signify and what happens if the former(long/short change) is say at 50 and the later(long/short change surplus) is at 20(I've attached screenshots)?
  2. Do you allow the indicator, once purchased to be used on multiple accounts; if the person has multiple MT4 accounts with different Brokers?
  3. Also do you provide iCustom code for the relative sentiment indicator to be used by an EA, i.e. be able to read the long/short change or surplus change or the delta of the two?

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Quoting Battousaib
Regarding your long change and long change surplus and your short change and short change surplus signals in your relative sentiment indicator...what do they signify and what happens if the former(long/short change) is say at 50 and the later(long/short change surplus) is at 20(I've attached screenshots)? Do you allow the indicator, once purchased to be used on multiple accounts; if the person has multiple MT4 accounts with different Brokers? Also do you provide iCustom code for the relative sentiment indicator to be used by an EA, i.e. be able...
Battousaib, we answered via email a few days ago but just for people who are interested in relative sentiment.... the difference between relative sentiment and the other mt4 sentiment indicator is that relative sentiment will show you when retail is adding to or removing their positions.

This allows you to be confident in playing the current market structure trend if retail is adding more against it......

Relative sentiment also allows you to catch near tops and near bottoms when you see a shift in retail positioning AND a market structure change.

The regular sentiment indicator is used to trade 6 different signals.
Last week I added a video about Market Making to the MR course. I also have MM plays for EU that were not "predictive" and strictly followed the rules of the MM strategy. That strategy produced 210 PIPS last week.

People have been asking for more info about Sentiment trading. I will do some blog posts to explain the different sentiment tools and how you can use them to profit in the fx market like we do.
It's Magic - Sentiment Basket Analysis

We can see that doing basket analysis using the Sentiment Analysis Tool that the EUR pairs were a strong BUY. By Dec 1st, nearly all pairs were in the buy zone. You can see by part of the discussion in the slack channel that the aim was for EUR to move higher. This was a mixture of structural alignment as well as sentiment alignment.

Also - as you see on the attached chart, from Dec 1st, EU kept moving up.

As we are getting closer to the holidays - liquidity will start drying up so I will probably only be trading the next two weeks and will return after the new year.
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Hello,

I noticed your indicators are very powerful. What ones do you recommend for those who trade the 5 minute timeframe? My strategy works but looking for a bigger edge

Cheers
@coughz, if you use the Sentiment MT4 indicator ... You can set it to color the main chart blue for buy signal and red for sell signal. Whenever retail is positioned > 75% then you want to go opposite their flow.

So say the indicator is coloring the background of your pair blue (that means retail is heavily selling so you want to buy)... Now you just use your system for entry and exit on the 5 min chart Just make sure that your system signal aligns w the sentiment signal (i.e. to buy in this case)
What happened with this system, do you still trade with sentiment! The last Year was a good against the Dollar, we should see some continuation after this short correction. What are your thoughts from the sentiment system side?
Feels right this time!
Absolutely. I haven't stopped trading Sentiment / Market Structure. It's the strongest edge in FX.

Many traders in our community made the turn last year and had their first profitable year since they started trading. What did they do different? Focused on sentiment and market structure.

We are looking at possibly hosting some Sentiment and Market Structure Bootcamps this year

As far as my thoughts for the dollar or for the year... I honestly don't think that far out. I trade what I see. If retail are going long.. or getting to long extremes then I want to look for short opportunities. If retail are shifting to short and moving to short extremes then I want to look for long opportunities.

Using the Sentiment Analysis Tool, I can do basket analysis on the dollar to see how retail is positioned overall. This is one key factor for me as I almost always trade USD pairs.

How is your trading and everything going for you Js3mwtRc?

Many traders in our community made the turn last year and had their first profitable year since they started trading
Quoting SentiFX
Absolutely. I haven't stopped trading Sentiment / Market Structure. It's the strongest edge in FX. Many traders in our community made the turn last year and had their first profitable year since they started trading. What did they do different? Focused on sentiment and market structure. We are looking at possibly hosting some Sentiment and Market Structure Bootcamps this year As far as my thoughts for the dollar or for the year... I honestly don't think that far out. I trade what I see. If retail are going long.. or getting to long extremes then...

Thats fine glad to see all right with this system it is something (retail sentiment analysis) I use too. I was good this year. I combined options data in my trading along with sentiment analysis and I have grown my confidence more. I hope the rise of volatility is here to stay and that we can learn more so we can do better and help and other traders make money.

Happy New Year 2021!
Feels right this time!
That's great to hear Js3mwtRc!! I hope the volatility is here to stay as well. Easier to trade when instruments actually move. Happy New Year 2021!

Quoting Js3mwtRc
{quote} Thats fine glad to see all right with this system it is something (retail sentiment analysis) I use too. I was good this year. I combined options data in my trading along with sentiment analysis and I have grown my confidence more. I hope the rise of volatility is here to stay and that we can learn more so we can do better and help and other traders make money. Happy New Year 2021!
Quoting SentiFX
That's great to hear Js3mwtRc!! I hope the volatility is here to stay as well. Easier to trade when instruments actually move. Happy New Year 2021! {quote}
It's a wish, but actually it is above pre covid levels so I suppose so, it will!
Feels right this time!
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