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Roadmap - A Way To Read Markets

Quoting Zimbinga
Hi Laura In your journal thread section 8 you cover basic support & resistance and go on to say it is only scratching the surface of being aware of support and resistance. I've always thought of S&R as being fairly self evident when you mark up a chart in the way you suggest, but given your comment I couldn't help wondering if you had any further concepts on this you might be able to share which might have real impact on profitability? You've also covered the potential of the daily open and previous day's high & low in this regard, just wondered...
Good question - I'm surprised nobody has raised this yet actually.

Ah, where to start? I feel a journal post coming! I'll link to it here when it's done.
New journal post - Beyond Support & Resistance:

https://www.forexfactory.com/thread/...6#post14057446
Quoting LauraT
New journal post - Beyond Support & Resistance: https://www.forexfactory.com/thread/...6#post14057446
Thanks Laura that is an interesting overview. I think the question is whether there is a way of analysing these points in the market so we can avoid being fooled by false breakouts which I think is the scenario you set out below:

I've spoken about the relevance of market structure before but this is exactly why market structure has limitations and can actually mislead traders. People see a marginal new high and assume the market is bullish. But it might be the opposite. Once the liquidity at that high is cleared out, the market might have no interest in going higher as it knows liquidity is limited up there.

Naturally I appreciate though that you have drawn limits as to what information you are happy to present here publicly for the time being.
Quoting Zimbinga
{quote} Thanks Laura that is an interesting overview. I think the question is whether there is a way of analysing these points in the market so we can avoid being fooled by false breakouts which I think is the scenario you set out below: I've spoken about the relevance of market structure before but this is exactly why market structure has limitations and can actually mislead traders. People see a marginal new high and assume the market is bullish. But it might be the opposite. Once the liquidity at that high is cleared out, the market might have...
Let's use this Dow chart to illustrate the point. And let's pretend the market was only born at the start of the visible price action to temporarily discount past structure.

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We have, at point 1, what I consider to be a liquidity grab. Price then retreats for a while before reaching that high again at point 2. Is this another liquidity grab in process? With hindsight we know not. But, even live, we can make an educated guess that this breakout is going to be genuine and that the market will be entering price discovery mode. That is, seeking out new levels and making new structure for future use. Why? Well, because the liquidity there has already recently been cleared. There's probably no real reason for the market to go back up there unless it intends to go higher.

Points 3 and 4 are examples of upside and then downside liquidity grabs. Many times, a clearout of an upside liquidity pool will quickly lead to a search for downside liquidity pools.

So how do we use all this in practical trading terms? By thinking about everything in terms of where the liquidity is or is not.

If I had to simplify things further, I'd say that most breakouts will end up failing. Except we know that there has been no failure. There has been a successful clearout of liquidity. Job done.
[quote=LauraT;14058086]{quote} Let's use this Dow chart to illustrate the point. And let's pretend the market was only born at the start of the visible price action to temporarily discount past structure.

Hi Laura,
It's Ben here, from the land of Down under, nice to see again, glad you are in good health right now.

What an intricate subject you have entered into here.

I have some views to share with everyone on this particular interpretation of SUPPORT/RESISTANCE

Thank you for the chart just posted, can I ask you to redo it again and plot the volume under the same chart.

I have much longer time frame to share and I believe that volume may have a bearing on what and how we view any previous levels.

As you say above, without previous chart data we have little to work on, so by adding additional information can it help.

Ok its approaching midnite here, I will develop a Banana chart for you, based on a real chart to share some interesting observations--for a bit of fun on a very complex issue on ABOVE n BELOW -----followed by "LOOK LEFT" charts.

Have a lovely and enjoyable day.
Ben
Many thanks Laura again for presenting some interesting and informative concepts.

I think that liquidity is a very important market driver, and I’d be interested to hear how traders can use the concept practically. I understand you’re not comfortable debating on here, but I for one would be interested if you decide to go further than your latest blog post.

Thanks again!
A famous quote - "if you can't see the liquidity, you are the liquidity".
Quoting LauraT
{quote} Good question - I'm surprised nobody has raised this yet actually. Ah, where to start? I feel a journal post coming! I'll link to it here when it's done.
I called it " Looking Left" :-)
every Saint has a past. Every Sinner has a Future
Quoting turnip15
{quote} I called it " Looking Left" :-)
Hi Turnip,
A couple of examples where it paid to look left first.
Laura's chart indicated where Liquidity was available and Cleared Out when not available, just my way of that happening here.
I have included the volume as it plays a part in my game, others may disagree.
Bi 4 now

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Quoting cjm340
Many thanks Laura again for presenting some interesting and informative concepts. I think that liquidity is a very important market driver, and I’d be interested to hear how traders can use the concept practically. I understand you’re not comfortable debating on here, but I for one would be interested if you decide to go further than your latest blog post. Thanks again!
Hi,

Now that I've set out how I see the broad concept, I'd say the best way of getting expansion beyond an overview is for people to ask any specific questions they might have.

I may not want to write another essay on the topic (or start rambling about bananas again!) but always happy to answer queries.
To briefly expand on the journal post, let's look at today's NFP Friday action.

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I bought somewhere inside the blue box - the why should be obvious now - the liquidity sitting at the horizontal line from yesterday was waiting to be grabbed.

Look at what happens when price goes back down there again later though. Why did that take place? Partly liquidity, yes. But mainly to trap breakout traders. The driving forces worked the low (marginally exceeded it before pulling away), creating the perfect "suck 'em in and flip it around" scenario.

So, we now have three potential motives and two potential outcomes. It's either a liquidity grab (and price reverses) or it's a trap (and price reverses) or it's a genuine breakout (and price continues). Thinking in those terms might also be helpful in understanding why more breakouts 'fail' than succeed.
Quoting LauraT
To briefly expand on the journal post, let's look at today's NFP Friday action. {image} I bought somewhere inside the blue box - the why should be obvious now - the liquidity sitting at the horizontal line from yesterday was waiting to be grabbed. Look at what happens when price goes back down there again later though. Why did that take place? Partly liquidity, yes. But mainly to trap breakout traders. The driving forces worked the low (marginally exceeded it before pulling away), creating the perfect "suck 'em in and flip it around" scenario. So,...
Hi Laura

Hope all is well ! Always like popping in and catching up on your always informative posts.. Thanks !

Anyways heres my charts and what I saw from this mornings NY session on the US30.....
A beautiful line in the sand at BRN 31250 PreMarket US takes out UK low set earlier,,,,,
then US Equitys open at 1630 with a quick reversal back down cleaning out the stops grabbing the liquidity and running back up to
take out UKs daily high clearing stops grabbing more liquidity and quickly reversing back down

I am sure many Roadmap traders could benefit/enhance their roadmap trading by paying particular attention to time of day/sessions
BRNS..levels etc etc... really helps for establishing high probability targets and entries as well as nullifying certain entries etc...
I know it helps me

All the best to you,
Kevin

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The Best Loser Wins
Hi Laura and Roadmappers....

I adapted some of Lauras methodologies to my trading 2 years ago or so.... Since then I use it daily mostly on US indices.
I am a big believer in trading only at certain times of a day and session....Revolving around Equity opens. I find this gives the
most reliable setups along with other context and confluences. Basic Market structure and Market Mechanics... As alluded to by Laura
with the Liquidity bananas post in her journal.

Anyways heres some charts of Gold... Some without any moving averages/channels to give an idea of context/confluence.
Overlay your roadmap and you will see how you can increase your probabilites....at least for me it does

But this is some of what I use and thought id toss it up here in hopes it helps someone is all.

I must say the channel works great for showing momentum once in a fast moving trade and really helps pile up the pips points.
So many traders cut their winners too soon...As well i use it for adding to a winning trade...when you have a pullback into the channel
adding trades with a relatively close stop... It either continues or takes you out... Overtime the added winners really can add up on your
bottomline.

The charts with no MAs ...simply Session boxes for the most liquid times and where best trade setups occur. WIth the Gold trading in a range
these boxes and other market mechanics help TRADE THE OUTSIDE.... Remember 80% of Breakouts fail,,,,So how do we capitalize on that ?
By trading SMART from the outside....Toss up the Roadmap indis and take the trades with this added context

All the best to all,
Kevin


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The Best Loser Wins
Quoting bluesteele
Hi Laura and Roadmappers.... I adapted some of Lauras methodologies to my trading 2 years ago or so.... Since then I use it daily mostly on US indices. I am a big believer in trading only at certain times of a day and session....Revolving around Equity opens. I find this gives the most reliable setups along with other context and confluences. Basic Market structure and Market Mechanics... As alluded to by Laura with the Liquidity bananas post in her journal. Anyways heres some charts of Gold... Some without any moving averages/channels to give an...
Hi Kevin! Nice to hear from you and also hope you are well.

Spooky timing actually as I was just thinking about contacting you - will be in touch.
Hi Bluesteele. Thank you for your interesting charts. Please could I ask a question regarding your 4th chart. When the channel crossed above the 200, how did you know, in real time, that it was a false signal and that you should stay out. How would you differentiate this scenario from that of a valid bullish signal where you would want to go long Are there perhaps other indicators that you use.
New Journal Post - Liquidity Clearouts & Roadmap:

https://www.forexfactory.com/thread/...1#post14061151
Quoting pb41
Hi Bluesteele. Thank you for your interesting charts. Please could I ask a question regarding your 4th chart. When the channel crossed above the 200, how did you know, in real time, that it was a false signal and that you should stay out. How would you differentiate this scenario from that of a valid bullish signal where you would want to go long Are there perhaps other indicators that you use.
Hi PB...
Thanks for your question... Simple but alot to it
Im always looking at the market on multiple time levels... Where is the 200 on the 1 5 and 15 ? Where is price in conjuction to the 200 on those 3 TFs...are they all in agreement ? Do I have a reversal pattern ? Where is it in relation to the 200s...where is it in relation to BRNs PDH PDL ? What kind of candles are forming ? Engulfing...pins... Are they in confluence with the Double Top ?

Where can I put my stop? So my loss is minimal AND my thesis (at the moment) is disproven. In other words Im either right or wrong..
As Rande Howell would say I either land on the right side of probabilities or the wrong side.... And since each trade is like a flip of the coin...I have no idea when I pull the trigger will it be a winner or loser...So I take the highest probability setup with the minimal amount of risk.

I dont use any other indicators...I dont always use Moving averages either...but for the purpose of the Roadmap yes the 200 1M 5M and the 8 channel. thats all...

The rest is taking the trades when the market is in its mist favorable times to move,,,, All timed around Equity market opens. Of Asia London and NY.. I dont really trade London anymore...Mostly NY and some Asia.

My biggest thing is reversal patterns at key levels...and when they align with other context like the 1M 200 is below the 5M with seperation a clear reversal pattern at a KEY level....It screams Short...If I had to boil down to one thing for this trade its the Double top at the PDL....

I hope this helps and I cant stress enough how important prior days Highs lows closes...BRNs are...

Heres another chart of that trade with the 5m 200 i normally have on the 1m... There is more to it..But I think with what I have shared and with study of the charts and practice you will see.

All the best
Kevin

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The Best Loser Wins
Quoting LauraT
New Journal Post - Liquidity Clearouts & Roadmap: https://www.forexfactory.com/thread/...1#post14061151
Excellent summation Laura You have done an excellent job and I believe with the addition of some Liquidity theory it will really help Roadmappers evolve their trading to the next level.

Cheers !
Kevin
The Best Loser Wins
Thanks Bluesteele for the comprehensive and very informative reply. I now have a much better idea of the key factors that you take into account to identify potential higher probability trades.
Quoting bluesteele
{quote} Excellent summation Laura You have done an excellent job and I believe with the addition of some Liquidity theory it will really help Roadmappers evolve their trading to the next level. Cheers ! Kevin
Hi Kevin,
Is this along the lines of what you are talking about ?

OOPs : I left out the 900 level.
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every Saint has a past. Every Sinner has a Future
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