Hello, sorry if I'm not supposed to revive old threads but I was lurking from Google and stumbled across this. I'm hoping that people are still answering questions.
Earlier in the thread, Vogon asked this question (https://www.forexfactory.com/showthr...30#post7492630) and Skenobi replied with this answer (https://www.forexfactory.com/showthr...rs#post7501705). When he said that he "loves those pinbars", was he being sarcastic and making a comment on how pinbars near S/R levels don't really work? That as a former IT, it's his "clue" to where to run stops, etc.? Or did he mean it as in it works pretty well? The reason for my question is because a few pages earlier, there was some talk about running stops, how jr traders are stupid with all their technicals and philosophies, etc. So I wasn't sure where the context led. Was hoping someone could clarify!
I am having difficulty deciding where to place my stop losses and when to decide that my trade was the wrong trade idea. I'm trying to figure out how Skenobi (and other IT) handled their exits. From what I gathered, Skenobi has a hard stop at least one S/R away from his entry but he relies more on his mental stop and is usually out before price reaches his mental stop. But he never explained how (and no one ever asked) he determines where to place the mental stop. I guess I'm trying to get a bit of understanding into how he and others "know" when a trade idea isn't going to work. Is it because his mental stop is really far away from the entry so by the time the price gets there, he "knows" because it's now almost impossible to recover from the loss? Or is it really close to the entry point and it's just "intuition" from years of tape reading? Or is it somewhere in between - rules that he had to follow when he worked as an IT and it sort of got trained into him to get out right away when he sees a certain pattern/movement?
As a summary from what I gleaned after reading 58 pages:
- simple candlestick charts, none of the fancy schmancy indicators and the like
- draw your S/R lines using a line chart based on obvious highs and lows. Then can switch back to candlestick and adjust where necessary. Order clusters are around these S/R lines that you draw.
- S/R lines are not true lines but view them as "areas". They are different from person to person so the line itself is not gospel.
- the market has "memory"
- S/R lines with repeatable history are more reliable
- understanding behaviour around S/Rs (order clusters) is one solid key to profitability (comes from screentime)
- use all timeframes - don't discount any of it. Whatever brings in the money.
- don't trade against the trend
- the old adage of buy low, sell high is really how it all works in the end. Many retail traders do the opposite despite best intentions.
- don't wait for confirmation of breakout. Trade and then if it breaks out, great. If not, have the discipline to get out.
- candlesticks help but are not be all and end all. It's understanding the price action around S/R that's more important. Can use candlesticks on higher timeframes to "summarize" what's going on in the lower timeframes.
- most retail traders trade far too large sizes - trade smaller to control losses
- cannot control upside and therefore, while risk-reward ratio is in the back of the mind, it is not really that important. Rather, you can only control when you cut losses so that is much more important to focus on.
- ignore all the "strategies" that various people have - develop your own based on your own comfort levels with risk.
- keep it simple. If it seems "complex" then it's probably wrong.
- don't worry about the "why's" of whether something works - if it works, use it.
- news is mostly useless and clutters your analysis
- the rest is price action reading which can only be learned from screentime and paying "market tuition"
- IT don't trade that much more differently from retail traders. Retail trading volumes aren't even a "blip" on anyone's radar. The markets are what they are and whether they are rigged or not is irrelevant. This is the playing field - you only need to figure out how to play to make money.
- a true "edge" is something that is pretty much guaranteed to work. Otherwise, it's not an edge.
A good insight into what ITs mean whey they say "understand price action" starting from this post: https://www.forexfactory.com/showthr...10#post8614910
Earlier in the thread, Vogon asked this question (https://www.forexfactory.com/showthr...30#post7492630) and Skenobi replied with this answer (https://www.forexfactory.com/showthr...rs#post7501705). When he said that he "loves those pinbars", was he being sarcastic and making a comment on how pinbars near S/R levels don't really work? That as a former IT, it's his "clue" to where to run stops, etc.? Or did he mean it as in it works pretty well? The reason for my question is because a few pages earlier, there was some talk about running stops, how jr traders are stupid with all their technicals and philosophies, etc. So I wasn't sure where the context led. Was hoping someone could clarify!
I am having difficulty deciding where to place my stop losses and when to decide that my trade was the wrong trade idea. I'm trying to figure out how Skenobi (and other IT) handled their exits. From what I gathered, Skenobi has a hard stop at least one S/R away from his entry but he relies more on his mental stop and is usually out before price reaches his mental stop. But he never explained how (and no one ever asked) he determines where to place the mental stop. I guess I'm trying to get a bit of understanding into how he and others "know" when a trade idea isn't going to work. Is it because his mental stop is really far away from the entry so by the time the price gets there, he "knows" because it's now almost impossible to recover from the loss? Or is it really close to the entry point and it's just "intuition" from years of tape reading? Or is it somewhere in between - rules that he had to follow when he worked as an IT and it sort of got trained into him to get out right away when he sees a certain pattern/movement?
As a summary from what I gleaned after reading 58 pages:
- simple candlestick charts, none of the fancy schmancy indicators and the like
- draw your S/R lines using a line chart based on obvious highs and lows. Then can switch back to candlestick and adjust where necessary. Order clusters are around these S/R lines that you draw.
- S/R lines are not true lines but view them as "areas". They are different from person to person so the line itself is not gospel.
- the market has "memory"
- S/R lines with repeatable history are more reliable
- understanding behaviour around S/Rs (order clusters) is one solid key to profitability (comes from screentime)
- use all timeframes - don't discount any of it. Whatever brings in the money.
- don't trade against the trend
- the old adage of buy low, sell high is really how it all works in the end. Many retail traders do the opposite despite best intentions.
- don't wait for confirmation of breakout. Trade and then if it breaks out, great. If not, have the discipline to get out.
- candlesticks help but are not be all and end all. It's understanding the price action around S/R that's more important. Can use candlesticks on higher timeframes to "summarize" what's going on in the lower timeframes.
- most retail traders trade far too large sizes - trade smaller to control losses
- cannot control upside and therefore, while risk-reward ratio is in the back of the mind, it is not really that important. Rather, you can only control when you cut losses so that is much more important to focus on.
- ignore all the "strategies" that various people have - develop your own based on your own comfort levels with risk.
- keep it simple. If it seems "complex" then it's probably wrong.
- don't worry about the "why's" of whether something works - if it works, use it.
- news is mostly useless and clutters your analysis
- the rest is price action reading which can only be learned from screentime and paying "market tuition"
- IT don't trade that much more differently from retail traders. Retail trading volumes aren't even a "blip" on anyone's radar. The markets are what they are and whether they are rigged or not is irrelevant. This is the playing field - you only need to figure out how to play to make money.
- a true "edge" is something that is pretty much guaranteed to work. Otherwise, it's not an edge.
A good insight into what ITs mean whey they say "understand price action" starting from this post: https://www.forexfactory.com/showthr...10#post8614910
3
Though it would be nice to make more!
