My Trade Ideas and Observations

Knowng when to diversify to other instrument

When one market is having accumulation/distribution phase, it is better to leave its chart and look outside for opportunities.
Eg EURUSD is currently having accumulation/distribution phase, but NZDJPY is having a strong bearish trend.

See my posts here:
EURUSD: (A/D phase) https://www.forexfactory.com/showthr...6#post10764716
NZDJPY: (Bearish) https://www.forexfactory.com/showthr...3#post10764683

My observation is that we tend to stick to our safe zone, and ignore all other markets that can be more profitable.
It is normal human social behaviour.
I see a couple of traders keep fighting the A/D phase for about 3 days on EURUSD, losing what they have gained in the trend phase.
They could have gone to other instrument to trade.

One may use a Currency Meter to identify the strong currency to trade first.
However do note on my post here: https://www.forexfactory.com/showthr...7#post10765757 on its key disadvantage.

EURUSD is more widely traded because of its low spread, but it has more news that cause the price fluctuations.
NZDJPY is less traded because of its higher spread, but it is more trendy.

Someone told me, EURJPY has a better profitability as compared to EURUSD. Think about it for a second.

I believe a trader may get higher overall trading performance trading a currency that has more trend phases than A/D phases.
If the chart has more support/resistances on the same chart, it may be harder to trade.

How to trade a falling market
https://www.forexfactory.com/showthr...85#post8701285

I am not here to push commercial content, but wish to do some summary based on what is written on this forum thread.

"So while price is plummeting in the yellow area, a growing number of clients are holding long positions? Crazy stuff!"

I believe it is due to martingale buys as price keeps falling.

For every new sell, there will be increasing number of buys.

In some commercial courses, they call the huge volume the "Smart Money", but I think the huge volume is all due to martingale traders loading buys on drawdown. I doubt the money is truly smart if it is all consisting of martingale traders from institutions. Even though this will eventually turn out positive, but the traders will have to endure huge drawdowns. They can go busted if they are not careful.

The huge volume incidentally becomes the "Demand" zone in these commercial courses.

But that doesn't mean we have to immediately buy at this demand zone when we spot one.
Having market buys or buy limits is like catching the falling knife.


Proposed solution:
Draw the yellow column as done by hanover, and trade breakout stop orders right from the bottom.
It might be better to skip all those volume surges and trade breakout stop orders only when market is calmer.

But as Soros pointed out,
"i disagree, this is only valid for people who scalp, not every trader scalps, some traders trade higher TF with higher targets and stops, so those traders dont care about this."

People who scalp at probably lower time frames tend to add in to more volume per minute price move, when they see an adverse market reaction.
Best to trade at higher time frames like H1-H4 onwards.

Periods with A/D phases

Monday (Early Bell)
Friday (Late into the night after news release)
Asian Session

These are the best time to sleep or go shopping.
Even though you can earn just by trading successfully within the high and low of biggest intraday candle, if you do not cater for the spread, it may bury you in.

You will never know when the next market spike will be and which direction.
And it is human social behaviour to guess the market direction even though it is directionless.
Human has this inner voice that tells us what to do. We dream even during the day.
The EA will find a direction even when it should be none, as long as it finds a tradeable momentum.

It is better to practise stillness and just patiently wait for direction confirmation.
I will trade the next day.

Prolonged Choppiness

It will happen when the market remains indecisive for long period of time as now happening to EURUSD market.
Any EA that relies on grid hedge will fail once it turns from positive hedging to negative hedging slowly materialising losses, due to maximum number of hedges that it can do.

It is better to find a stronger currency pair to hedge instead.
Manual traders should wait out.

Using Wyckoff Method to trade A/D phase
http://stockcharts.com/school/doku.p...wyckoff_method

I will only wait for Phase E.
Phase A,B,C,D can be repeatable for long period of time.

EURUSD market has spoken: It is bullish

EURUSD has gone into Phase E. It is clear that it is now bullish.

Knowing the Market Makers & Signal Providers

https://www.forexfactory.com/showthr...6#post10774476

A comment of my own:
Actually everyone gives signals, not just the market makers or signal providers too. I do too.
If you are a scalper and the early follower, you will normally get a small profit.
But if you are the late comer, you more likely will be caught in a bullish/bearish trap.

The direction of the signal is still valid, but you will need to trade at safer zones above strong resistances or below support levels, while still following the trend.

The trend normally breaks at the A/D zone. And you need to know its new direction before trading again.

Profit potential

There is only profit potential when there is huge imbalance in supply and demand.
At the A/D zone, and price is becoming less moving near to later stage, the profit potential will be too low to take a risk.
Better to watch for phase E.

Is this long scalp worth taking as profit potential is not that great?
The TP is now alittle to the downside.

Update: Profit
Remarks: Profit leg is not strong enough to gather more strength to the upside at this current moment.

Trying new strategies or testing new ideas?

Use a small size lot. No one get it right the first time.

Stop-Hunting

Interesting video which I have found in ForexFactory.
Just a repost for my bookmarking

25-Delta risk reversals

Found someone uses this in forexfactory.

Just want to bookmark it for others here.
https://www.tradingfloor.com/tools/2...risk-reversals

As of now, I do not know how to use this yet. Will add in new information later.

NZDJPY Market: Bullish

The market has spoken. It is now bullish.
Phase E has been reached.

Remarks: It seems to be phase D, but the price jerks up 2 times.

When to use hedging?

I will use hedging when the trade is in prolonged A/D phase (Phase A-Phase D). A stronger currency will be used. But its direction needs to be certain to hold for a longer period of time maybe 2 time frames above my current time frame.

But I will definitely cut loss if I find myself to be in bullish/bearish trap or I know the price has already gone into Phase E, opposite to my trade direction.
I always respect my cut loss. Early cut is better than cut later.

If you are a logical person

You should look at this when putting your next trade.

I have no comment on whether you should trade following the trend or counter-trend.

Trading rising wedges

Documented these 2 posts today:
https://www.forexfactory.com/showthr...2#post10936222
https://www.forexfactory.com/showthr...7#post10936267

Trend is inherently bullish.
Regardless of the type (reversal or continuation), rising wedges are bearish (reference).
It is impossible for rising wedges to last forever. It will eventually lose momentum and becomes bearish.
Best place to short will be below the bottom of the channel while near to higher resistances.

Similar Price Pattern: Bearish Bat Pattern

(Warning: If you trade this rising wedge too early, you may end up in a loss. Worse if you do martingale short too early.)

This article proves that smart people are not always the best investors. Have a good read.

http://www.todayonline.com/singapore...best-investors

Disclaimer: I have no affiliation with GYC. They seems to like index funds very much.

What happens when the market begins to do heavy shorting on a bullish looking currency pair?
Does the price really go down immediately?

No, it will more likely equalize into equilibrium and go into distribution zone for a long period.
So even though you would short at this point, maybe you should wait till there is a price spike down out of the distribution zone, before you trade it down on a bullish pullback.

This is actually what I would expect for the NJ market.
https://www.forexfactory.com/showthr...8#post10953818

Fade a move
https://www.dailyfx.com/forex/educat...ng_a_Move.html
Knowing where exactly to short, is not an exact science.

One should avoid turning it into another martingale short trade.

A few strategies can go about this:
Know what is the top price that you will short more.
In this documented case, the top price is 80.3. Bottom price is 79.294.
So you plan the trades in between, maybe fibonacci trades, like, 1,1,2,3,5,8, but spread out the trades further along the length of prices from 79.294 to 80.3.
You can even do like this, 1,1,2,1,1,3,1,1,5,1,1,8, or 0,0,1,0,0,1,0,0,2,0,0,3,0,0,5,... and so fore.

Got it?

Thank you for the information

Calculated Probabilities

Read a good book today: Chancing IT by Robert Matthews

Do not take calculated probabilities as they are. There are blind sides to everything.