The Equilibrium, a key to success!

Hello Techanalyst,

Welcome to our block and thank you for your question.
Deriving a POC from the monthly chart is a small challenge, as you'll soon see.

Attached Image (click to enlarge)

Your POC 1 should be a bit lower, in the 4 H chart that would be better to see, unfortunately I have not downloaded the data from me, so I can not accurately identify the POC. The POC 2 would not be correct for me. I would have identified the range of POC 3 differently here.

If I only had this chart image available, that would look like this.

Attached Image (click to enlarge)

The POC 1 would be smaller, the POC 2 is not quite as strong, and the POC 3
should be noted. The POC 4 is difficult to identify, as is the POC 5 because the unit of time is too large. The POC 6 is again an important line.
At the end of the POC line 2, a balance has been re-established, so that the POC could be extended into the future.

I do not want to claim to always be right. Often, a POC can also be derived by multiple equilibrium.

I recommend using the Momentum Indicator to work in smaller time units, which is clearer and easier. A regular workout is crucial, you'll make it.

best regards

hello bionik,
why is it necessary to search the POC so far in the past?
The markets are changing constantly and I can also find the POC, for example in the last 3 - 4 months? I have not quite understood that yet.
Thank you for your enlightening words

Hello Skipper13,

Thanks for the question. In order to identify a POC, a strong equilibrium must have occurred in the past. This means that the market in this zone was uncertain where it is going next. If then a strong change of direction takes place, this POC has a high priority. POC over 1.25 in EURUSD is currently only available from Dec 2014.
If you can not find a strong POC you just have to go back a bit further into the past. My favorite is the POC which are fresh, which means the POC has not yet served as a resistance. There you can find the biggest reactions. However, this is a pure training thing that you will also master over time.

best regards

Hallo Bionik,
Another attempt to find a PC and determine the price course

The hard unvarnished truth



Hello Skipper13,

Here is an example I posted here in the forum in January 2018



Determining the POC in the monthly chart is very difficult due to the candles. Although these are very accurate candles but look at what happens within a month so everything.

Attached Image (click to enlarge)

If you want to discover this POC secret, work through the entire blog from scratch. I know it's a lot of work, maybe you'll spend some time on the weekend. That's where you learn the basics. Then you have to get a feel for it in the daily training. After 3 years I had that pretty well. However, I did not have one who gave me any help. There is little information about it on the net. That's why you can do it a little faster than me.


The stock market is a big shark tank, what goes on here you can hardly tell anyone. If you knew which legal strategies the big players use, you would not trade here. If you are unfamiliar, you are losing your money faster than you can blink. You're traveling against the best traders in the world, they have the fastest computers, the fastest connectivity, the best programmers and a lot of money. If they hit the button, you're in luck if your stop does not trigger much later. Let's remember: On 15.01.2015 there was the franc shock. Within seconds, the price fell by 2,200 pip. Even brokers went bankrupt.

To know who we are dealing with, watch these videos.

Inserted Video

I do not want to scare you, but I want to keep in mind who we are dealing with. Therefore, you have to prepare yourself to have a chance in this market.

On the Internet it is said that about 95% of private traders are not successful. That means they lose more than they win. To be among the 5% who are profitable requires a lot of practice, diligence, strategy, empathy and courage.

These are things I can not teach you, but maybe I can help you assess the market a bit better in the future.

best regards

Hallo Bionik
Thank you very much, I will heed your advice and continue to learn and practice

Hello Trader,

This morning at 08:44 CET I posted in EURUSD Chat.

If the course is going back this day, please pay attention to the following POC.



At the moment it looks like this.



Kind regards

Trades without any Candle

Many years ago I once dared to do a very interesting experiment.

Every time I went in the market, the course immediately went in the opposite direction and I was stopped out.
I looked at my quotas and found that I had correctly foreseen the course in 30%. In 70% of the cases, I was wrong. That could not be right.
I turned the tables. If you're 70% wrong, I thought, you just have to change your system. If you act the opposite of where you think it should go, it should work.

So I acted up, if I thought the price would fall and go down when I thought the price was going up. In fact, my profit ratio changed. However, I was now 60% correct. Well, that was an increase of 100%.

Then I came up with the crazy idea to act without a chart image, but only through indicators.



I loaded the currency strength of two currencies as an indicator on the screen as well as the CFP indicator. I marked myself with green and red lines when the price had risen and fallen. Then I switched off the chart image and tried it.

Curiously, this worked, not always, but better than when I saw the chart.
That was because the indicator left me with little information where to go. Of course I have traded mini-contracts in extreme cases not so much to lose.
These days I do not act that way and I do not want to recommend it to anyone. But it has shown me that we have to process far too much information as a trader.

Less is more and from that day on, I've cleared most of the indicators off my screen and focused on the essentials.
That was the breakthrough for profitable trading for me.

A little tip on the edge: I have every 3 months my screens photographed and collected the pictures. So I could gradually see my development and my progress.

best regards

Curiously, this worked, not always, but better than when I saw the chart.

That was because the indicator left me with little information where to go.

That is the key point !

With the smaller timeframe to the POC


Dear Traders,

Enclosed I would like to show you once a textbook example, as it often happens in reality. Of course it is always easy to explain from the past why the price fell or rose at that point. Thank God I have often had the right nose for future movements through my post POC.

Attached Image (click to enlarge)

Let's look at the example. In the EURUSD uptrend we see two equilibria that are easy to draw. After the course went up, he came back, but not to our drawn POC. This POC was still active as a resistance and was touched later.

If the falling price on our blue arrow has been rejected, the question mark in the chart must have a POC. You can not see them at first glance though.

Attached Image (click to enlarge)

When we switch to the 30M chart we already see a little balance. However, our resistance line that we draw is still too big. Since the stop would have to be drawn too far back if we want to go in with a buy limit order.

So we switch to the 15 M chart.



We can now reduce our resistance and thus shorten our stop.

Attached Image (click to enlarge)

Back in the 1H chart, you can see how the course has responded to the POC. We were able to reduce the stop from 17 pip to 4 pip and have achieved a high chance risk ratio. 4 pip risk and possible 120 pip gain are a rare opportunity. For a beginner, it would have been safer to wait for the price to return to the top and then trade down to a sell limit.

That's why it pays off to search POC.


I wish you success

GANN Diagonal Long Term POC's ?

Hello Parisboy,

The chart picture looks interesting, but I would not be able to cope with it. I once knew a trader who was trading the Rainbow indicator profitably.



There are many theories on the market, none has proven itself in the long run, otherwise the stock market would not exist today. Both of us trade according to the price chart with small indicators as an aid. That's the best way to be profitable.



The long-term path for me is bullish, but that's just my opinion. Others see it completely different. But that's their right too.



This year, I have defined a range for me, whether that happens is in the stars.
For me, the smaller time units are of greater importance, as I pay attention to the POC. I would not have a POC calculated by a computer because there are too many types of POC that you could never program all. Therefore, a POC indicator for me is always unreliable.

I trade between 06:00 and 20:00 CET and never bet on a long-term trade. No overnight and weekend positions. I am a kind of Swingscalper who acts from POC to POC. When I quit, I can calm down to do other things and do not have to look at my phone at all times to see what the market is doing.
So I either go to bed with loss or profit or into the weekend, but in the end, the total profit counts. And I achieve that after so many attempts with all sorts of trading systems best with the POC.

If you know a pro trader from Goldman Sachs who also trades a bit privately, ask him what he recommends. You'll be surprised what he reports about the point of control.

The way through the price chart is for us the only one to trade profitably.

We stick to it and see if the other traders want to use for themselves.

best regards

Another kind of Diagonals

sorry I have no data prior 1999 (Yahoo)

the difference between the 2 charts show :

- the relativeness of a chart within its parameters

- the importance of Long term data series

best regards

Hello Parisboy,

The crazy thing in our lives is the fact that man tries to make everything comprehensible. That's why there are all forms of lines. The stock market can not be summarized in lines, although I try it now and then.

If there was a computer that meant all POCs of all time units, which means times like 10.45 minutes, and put them together in a predefined ratio, you could deduce something from that.

However, since such a computer will not exist for the next 20 years, I'm not worried about the future of the stock market.

Imagine there would be an indicator or a system that would predict the prices. The moment everybody works with it, that system will not work anymore.

Therefore, my recommendation is: focus on the essentials.

best regards

Result of the day and criticism


Dear Traders,


I dropped off this post this morning at 08:44 CET.

If the course is going back this day, please pay attention to the following POC



We will take a closer look at the result



Positive: Just under 100 pip is a good result

Self-criticism: The resistance and support lines have worked. Unfortunately, the price did not go to the last resistance. I had plotted the POC in the 15 M chart and assumed that the drawn POC is stronger than the POC with the white circle. The reason, I had not looked in the 5 minute chart, because then I would have noticed.
Such mistakes happen, that's human. On the plus side, I'm learning to get better.

Conclusion: A successful day is coming to an end and I wish you all a wonderful weekend

Michael

You can never see the market ahead, but you can still try.


Hello Techanalyst,

I am very glad that you have accepted the challenge and by the approach you are on the right path. You have correctly identified some Equilibrium.



With 3-4 equilibria found I could agree, although you make it very difficult. Color your main candles dark gray and use the Momentum Candles indicator (setting for 15 minutes candle pipvalue 7-9 and hilow pipvalue 7-9 at your own discretion). Then you will see the equilibrium more clearly. The indicator can be found here in the blog.



Here you see the same time frame, with the POC I identified. Although these are some POC, this is also a range of 140 pip.

For me as Swingscalper, that's not too much POC, since I usually sell more trades and with the help of the POC love to act against the trend. That means I do not always take the whole upward movement with me, but also like to trade the corrections.

For example, if you are trading up as a day trader, these POCs are a good tool. Watch how the course behaves when it comes to this POC. That often gives you a hint. If you are experienced and have correctly drawn your POC, there are only 3 ways the course can behave there.

1. It forms a new equilibrium.
2. He walks through the POC
3. He turns off at the POC

If the POC is crucial, the course will be slowed down there. If you train this often and your POC are correct, you can do a precise and very profitable swing trading.

However, that is also a formality. There are days, I trade exactly with the zigzag up or down, and sometimes I manage nothing. Then I just stay out and wait for the next chance.

A big advantage of this POC is the range trading. The EURUSD often shows that the price is within a certain range. This is easy to recognize with the POC and can therefore lead to interesting profits on such days.

Of course you can not make an accurate prediction with the POC, but over time you get a good feel for the price. Whether the course is up or down, something happens at my marked POC.

It is often interesting to trade the counter-trend when the price has risen sharply. By your POC you can guess when the return comes, and you can quickly take 20 Pip. If you work here with a 4 pip stop the chance risk ratio is top.

I'm not a fan of working with 0.5 contracts and a 100 pip stop. With the help of my POC, I often feel like anticipating the market for a brief moment. The longer I am in the market, the less control I have.

The course rarely runs straight through, usually in a zig zag course up, down or to the side. If you take the price up, for example, you can do 100 pip, the zig zag price upwards is about 300 pip.

Of course you can never really hit the zig zag course, but I've often been lucky enough to have corrected in the uptrend and been in the middle of a strong downtrend.

The following situation that often happens at the moment:

The price is in a strong uptrend and is facing strong resistance. He bounces off it and tries it again a few times. I then try to move up from the underlying POC. If the price does not manage to break the strong resistance, I have no loss and can immediately go into the downtrend. If he breaks through the resistance, there are often large buy orders right there that push the price up quickly.

So that you sometimes see that I'm not perfect, I'll show you a POC that I did on Friday under stress because I had appointments. At the yellow circle around 09:00 am I have the POC quickly in the 15 M drawn without paying attention to the M5. Although I took the downtrend well, the POC could have been more accurate. Usually I do it in the morning in peace and with time. You see how important preparation is.



So the POC are a kind of stopover on the way up or down. You can be very good at it, if you deal with it long enough. I also make enough mistakes in identifying the POC, so keep training, success will prove you right.

I wish you a lot of success.

Have a nice Weekend

Consumer protection in Europe is becoming ever more dramatic


As many European traders have already learned, ESMA is considering a series of proposals for retail investors designed to raise standards of behavior in the industry. This could affect European investors as follows.

Here are the leverage restrictions proposed by ESMA:

30: 1 leverage for major currency pair = 3.33% margin
20: 1 leverage for the major indexes = 5% margin
10: 1 leverage for commodities (gold not included) = 10% margin
5: 1 equity leverage = 20% margin

What impact do these suggestions have on traders?

These proposals would result in greatly increased margin requirements:

CFD

Market-------------- Size----------------Current Margin--------------- Proposed Margin (ESMA)
EUR / USD------- 1 contract----------------- $ 611----------------------------- $ 4,073
DAX ---------------1 contract--------------- € 1,650---------------------------- € 16,500
Oil -----------------1 contract--------------- $ 1,035----------------------------- $ 6,900
Apple----------- 1,000 shares------------- $ 8,950----------------------------- $ 35,800


For example, suppose you have $ 20,000 in your account and you open a DAX position with a required margin of $ 1,000 margin. If this position has a loss of € 500 (leaving € 500 as margin), the broker will be forced to close the position, regardless of the cash in the account and regardless of any winnings on other positions.

These proposals could result in traders being forced to act less or resort to the use of unregulated offshore brokers.

The proposed close-out rule appears counterproductive and prevents meaningful trading strategies. A meaningful protection for the investor is not recognizable. As it stands, CFD's are therefore only suitable for extremely short-term trading, as larger market fluctuations could lead to an unwanted liquidation too quickly. One becomes too easily the victim of short-term market manipulation. It should be enough if a position is sufficiently secured by an available account. It seems nonsensical to liquidate a position if holding the position could be realized by simultaneous sale / purchase of CFD (which would then lead to the initial margin being created).

We will see where that leads, should these regulations really become reality, there are enough possibilities for a way out.
Until then we will continue as before.

best regards

I agree, without a balance it's so hard to make the right decision and in the end you can lose everything. That's why in trading you always have to start with yourself.

Hi Bionics

Thank you for your time and effort to bring to our attention importance of equilibrium.