(binned per thread starter's request) Market bottom rotation trad

" "......Hi Jan, nice work you are doing here....i will like to be part of the bolded...Thank you.
".....

Sure, keep reading ,learn and study and contribute and dont be afraid to post mistakes or wierd questions.

" "..Thank you....

Otto von Bismarck : "Only a fool learns from his own mistakes. The wise man learns from mistakes of others. "

Mistakes are going to be made everywhere by anyone on a daily basis, this is part of whole evolutionary process and something that cannot be avoided. A trader will go trough journey of making significant amount of mistakes, most likely far higher amount than most people in other proffessions, simply due to reason that trading is a process that you engage in from day 1, but from the get go that trader will have limited knowledge on subject. It is important to acknowledge that and realize ahead that mistakes will be made, and that is impossible to remove them, even after being consistently profitable it will still happen, all one can do is learn from mistakes and try to not repeat them in future as much as possible.
The worst thing that trader or investor can do is to not admit the mistake, because by default that will ensure that that mistake will be repeated over and over again.
There is a saying that goes around that you should publicly expose your worst mistakes as much as possible, because that embarasment will force you to respect that mistake and learn from it. Hiding the mistakes is the worst for performance ratio. Nobody likes to do that nor is born with view like that (unless one likes the pain) but its very useful to practice it due to how it impacts mistake learning process.

Mistakes are part of whole evolutionary process of animals, every cell, every organ or being is constantly making mistakes, and trying to adopt to those mistakes, then the lessons are passed trough genetic material code forward. Those mistakes have to be limited in size however in order for that cell or being to learn from it, if mistake is too dire then lesson will not likely be passed. That applies very well to trading as trader that will risk whole capital on single play that has not been properly research could just as much be making fatal mistake that will force him to quit participating in markets.



There are two types of reflective thinking that help one to learn from mistakes, one is learning from your own and the other is to learn from other people. Whole reason to learn from mistake in first place is to prevent repeating that mistake, and actually other people can often make same mistake that you would make in future if you had not have a lesson from it. Learning only from your own mistakes is limiting becouse there is only so much mistakes that you can physically do by yourself there are only that much processes that you can engage on daily basis, while if you follow 1000s of other people you can observe a lot more mistakes and get lessons faster. Historically that was difficult, becouse in past you actually needed physical connection to most people in order to learn from mistake in first place, but technology gave us great tool called internet. Now with internet you can actually observe and follow milions of opinions and increase mistake learning process by thousand times larger factor. Markets will serve as reality check mechanism while people will provide the thought process to check it.
Over my journey as trader i observed countless such opinions and always fact checked them by markets, and also historically checked them if there is consistency toward that kind of opinion. Once you observe and learn from many mistakes you begin to discover what is the process to have a methodology of what i call either a "bullshit detector" or a "wrong opinion". And both of those are objective method, not my subjective opinion on subject but i can actually empirically prove that it is objective towards certain persons opinion or expectation.
Those two methods can only be obtained once you had decent knowledge on subject and you have seen thousands of mistakes and proven them wrong, its not something you can straight on read from book and learn to use. Just keep practicing it is the way to go.

One of main reasons why i was interested in trading high frequency TFs like M1 is becouse i wanted markets to prove me if i have correct expectation on subject as fast as possible, by mathematical default trading low frequency TFs will make less repetitions and take many more years to get the lessons.
Observing economists on TV, youtubers with market channels, promoters, geopolitics and agendas, reading subjective opinion based books or articles all that which is result of certain person with specific opinion is great way to learn from other people mistakes, there literally is the right or wrong way of thinking. It might sound strange but there are actually the right and wrong strategic approaches on thinking when it comes to market.
Being objective and neutral minded is great way to approach markets, thinking that you might always be wrong and always seeking weak spots in your thesis is the way to go. Never hold 100% certainity over any pattern no matter how good it is. I have seen over 1000s of people who had 100% thinking mentality and got burned hard. Never fight the market (unless you are hedge fund or CB) and never hold your opinion as golden.

There is interesting pattern that happens in markets which i call "stealing the event". It is result of person having certain opinion of price direction due to specific factors, then the price actually goes somewhat in their direction, but the actual reality behind the curtain is that the move had nothing to do with reasons of that person, there were totally different factors that contributed to it, so that person will perhaps not know that and steal the event ("i was right"), or some public persons actually know that event didnt happen for their own reasons but will still steal it just to get more public attention. This happens again and again and again....
So you have person with agenda intentionally stealing event to promote themselves, or you have person who doesnt really understand underlying mechanics well enough. Which of those are it doesnt matter, for you as observer trying to learn from them the correct decision is to stop learning from them.
Now the key to find that out of fcoruse is to do extensive research on subject that that person had opinion on and that could be very time costly, but in the long run it could save you a lot preventing you to make a mistake.
In 2008 there was financial crisis, and certain austrian economist (or a group of them) were calling for USD to drop, they had such opinion for years, in 2008 dollar really did drop, but if you closely follow their reasoning and you did extensive research on 2008 crisis and MBS shortfall you could easily tell that whole market move had nothing to do with their initial thinking. It was just by chance that that event happened in the time when they had specific market opinion on price move. Thats it. So that was first time i discovered how that works and then also how important it is to check if markets consistently reflect in right way the thinking of that person, if they dont that person has some fault logic or bad knowledge, or simply....an agenda to drive his/her own business.
Once you get that lesson you get why and what was your methodology to find that out, and you can start applying that everywhere (on the subjects that you have decent knowledge on). You can basically stress and back test other opinions and see what kind of thinking is not a good thinking to have to avoid making same mistakes.

This will then leave a massive amount of wrong opinions and thinking approaches if you engage with a lot of research on other people. This is true for any sector or science but its especially true for markets trading / investing, becouse there is no proper education system, its inovative sector for the most of it and also most people learn from other people, not a strictly objective technology.

That means most of opinions can actually be proven to be right or wrong based on the context if you can stress test that opinion. There is no such thing as subjective opinion in markets, the only key question is if you have methodology to confirm and stress test that opinion to be right or wrong or if you dont, for many opinions it will be impossible to stress test them due to way they are phrased, but for many it will be.

There is nothing wrong with having wrong opinion , the only wrong thing is to stick to hypothesis with both hands as soon as its formed. No shame in making mistake, only shame not admiting it, and in order to do that one has to be skeptical of his/her own opinions. Use a tactic devils advocate as much as possible.
Its a tactic where you form your view or opinion on subject but emidently start to seek weak spots in it by trying to approach it from different perspective.
One of best examples since i started trading on that was collapse of Russian rubble in 2014, where my initial opinion that there will be likely large drop was correct, but the thinking process to get to it was carefully structured step by step by stress testing every opinion i had step by step forward until i couldnt find any info that disproved my initial thoughs. The result was cascading events that followed each by each that seemed random, but were exactly the result of initial play that started in 2013 (Oil price drop, Ukraine war, Syrian war, sanctions on Russia, diplomatic expelling going on now, further sanctions, gas pipeline sabotage, new arms race, new cold war, pressure on Iran, etc etc) all seemengly random events all actual part of process that was initiated from the actions of 2011-2013.
The point is that becouse my thesis was out of the world (very extreme and didnt fit with current presence) it looked out of the world, but with using of devils advocate tactic actually every point was proven correct step by step thus, it was just likely that markets have yet started to price in reality change. And as those events further began expanding in future rubble started to drop from 10-20-50- hitting high over 80 RUB per USD.
The key lesson here was that it was very complex macro event that required me to study years of geopolitics, history, markets, economics, inflation and i used that to try to see what the agenda is, but the key tactic that made me on right side was devils advocate. If you use knowledge and you hold for your opinion straight on with both hands, the reality is that in many cases youll be very wrong. So the key is to keep stress testing your opinion.

Tactics that you use in your thinking towards markets are going to leave huge impact on your trading account. Trader aimed towards success should always be interested why certain things happen, what are the reasons behind. Dont accept the reality that just happened, research backwards what got it to where it is. Understanding the mechanics is all it is to figure directions of markets.

A simple rules when it comes to learn from other people is:
-be wary of people who are certain to be right
-be wary of peoples opinions that are extremely out of the sync with current present but are backed with very little informations or knowledge
-be wary of people who have been proven to be wrong much more than they are right and they have no risk control on their approach
-be wary of people who always think "market is wrong". That kind of thinking always prevent this person to admit a mistake. Guaranteed. 1000s of peoples, always the same outcome.
-be wary of very pesimistic or optimistic persons, those are more likely to be wrong due to their informational pre-bias.

-be more inclined towards those who have been historically been proved more right than wrong over long run
-be more inclined towards those who have neutral initial opinion on anything and have lack of opinions on non researched subjects
-be more inclined towards those who admit their mistakes and show them
-be more inclined towards those who dont react on first ball, but rather wait and keep rationalizing situation.

If you apply the above rules to any subject, sector or science by default one will increase chances of following better knowledge than poor performing knowledge.

Generally internet is used in wrong way by many participants. Data should be used in a way that one is trying to find out the thinking process and the outcome to learn from that, but mostly internet is just used as exchanges of different opinions and to fight the oponents opinion, thus no lessons come from that. Data mining is relatively new process used by many companies, and while yes it could be used as agenda negatively against participants, however it is a way to go forward to improve the thinking process and also business performance. The holy grail of trading is to use data mining and form a strategy around it, thats it. Having no historical knowledge on informational pattern will yield negative performance in strategy.

The more complex the subject is, the more likely many people will make mistake and have wrong opinion on it, and it can be very good to figure out what kind of steps in thinking process get those individuals there, because the lesson you learn from there will prevent you from making the same mistake in future. Usually the larger you move on macro scale of a market, the more bad opinions will be exchanged becouse the more complex the subject becomes. So it starts with people thinking that short term trading is impossible due to algos that Wall street uses, to people who think there is no edge to gain on price action trading of M5 because broker will hunt your SL, to individuals who think that investing in good low key companies doesnt work becouse its all already priced in, to those who think that macro trading 2-3 years on currencies doesnt work becouse all events in economy or geopolitics are just random. Therefore you get a scale from 0 to 100 of wrong opinions and the closer it is to 100 (macro scale) the more wrong opinions youll get.
One quickly learns being ignorant on subject and having strong opinion on it, just doesnt give good performance. At every point of beginner one needs strong opinion on subject even while having limited knowledge because that is needed to get engaged with that process, no way to get around that. But important is to not press too much so that you cannot learn from mistakes. Be a defensive player when having little knowledge on subject as much as possible and offensive when having decent knowledge. No shame in being defense, only a shame in pushing it.

If you track consistently profitable traders, one can observe interesting thing that even profitable traders in their own sectors still can have wrong opinions on subjects in regards to trading. It clearly points that you should always have a knowledge and experiance on subject before having strong opinion on it. Youll have profitable traders in equities saying "its impossible to gain edge in forex", or forex traders saying "equities are just full of algos avoid them", or equity trader saying "digital options are just pure gambling", if you research and get engaged in all those markets you can clearly tell that there is wrong opinion mindset which is caused by lack of activity or research on subject. Once you learn those lessons from other peoples opinions its important that you apply that for yourself on any subject that you get asked or active on in future, having strong opinion on unresearched topic could cause self sabotage or just bad performance overall.
And that doesnt apply to just trading, it applies to anything.

One saying thats very useful in trading used by US residents is "nobody likes to go trough a closet full of skeletons". In trading if one has bad performance or just loss on account overall, nobody likes to go trough those trades, its natural to just bury them and move forward. But if trader doesnt study why there was bad performance to discover if strategy is bad or just traders execution is bad then you never learn from mistakes. You have to be willing to go trough bad executed trades and research what could be done to improve execution, in trading history should always be embraced not discarded.
Mistakes will be made, embrace them and learn from them. Make your worst trades public and best trades secret, it will deflate your ego. Yes its very hard to do, by no means will i put myself towards being a case of study but if you can do it it will make you better trader.

Another lesson that learning from others people mistakes give you, is that having large public interest in your opinion is not by default confirming that such person has valid and true realistic expectations. This might be one of the hardest lessons for beginner to learn, and so many people fall for it. Just becouse a person on TV has milions of views every time he/she shows up it doesnt not mean that opinions or views of that person have connection to reality in consistent way.
Public views and interest will be a vast array of many different agendas why certain people will be interested in that public persons opinion, could be entertainment, profits, happiness, anger, etc etc. Therefore never should one assume that large public float equals to realistic expectations. From my lessons i could name 100 people on large public float and 100 people on low public float, where the latter 100s will significantly outperform the ones with large public exposure, becouse the real agendas of people that form the actual float are very different and not 100% information quality minded.
To put it in very simple words, i can listen to great comedian talking shit all day, while for market knowledge i actually only listen to rational opinions. Many people will share same view, and many of them will not.




"Therefore, a victorious army first obtains conditions for victory, then seeks to do battle. A defeated army first seeks to do battle, then obtains conditions for victory." Sun Tzu's Art of War

One of great quotes of Sun Tzu is how one rationalizes the process that is willing to be engaged on. Conditions for victory are research based, either historical or current research based, after that its rationalized if its worth engaging a process, if its not one should not do it, as performance of history proves that it leaves you with dire results. A history will remember Leonidas the Spartan king as a true patriot for standing against the much larger force of Persian empire, but the reality of that situation was that it lead to destruction and massive loss, that is the fact. Fighting a battle just for sake of morals can be devastating if you dont have edge to it. There arent just economists or traders that fight the market and lose all accounts, there are also hedge fund managers and somethimes even central banks that do it, and the result is always the same, fighting against the force you cannot win especially if its becouse that force outnumbers you significiantly can be bad battle to fight for. As a retail trader you really need to understand that you are nothing, less than a fly on back of elephant and never should have strong opinion on situation and willing to go all in as the price goes against you. A good retail trader is defensive player and only occasional offensive player, especially when adding to position when price goes in your favour exactly as you wanted it to. Trader should be patient and not picking every single setup just because he/she doesnt want time to be wasted, that is a rule of downfall, be picky the good thing about trading is that as long you are decently capitalized on account, nobody is forcing you to pick a side, unlike geopolitics. Leonidas had to made a bad or worse decision, there was no good decision to be made there since it was forced by outside force, but as trader you will always have a good, bad and worse decision to make.



"One who knows when he can fight, and when he cannot fight, will be victorious." Sun Tzu's Art of War

Fight with edge, never fight just for sake of it. Have an edge of pattern in trading and then engage in it with correct strategy, never trade on something that happened for first time that you saw it. It will always remain in my mind, the article from economist who wrote : "Whole EUR system is going to collapse very soon, becouse we have never seen before 0% interest rates in any monetary system, thus its 100% chance that it will collapse fully".
This is basically a confirmation of fighting without an edge, no prior historical repetion of such event, means you cannot do proper statistical analysis also have no proper edge adjusting, its all just a guess basically. Any science that exists is based on empirical evidence, and that means it needs to repeat again and again and again to seek the consistency in it. Anything else is just a guess.

"An army does not have constant force or have constant formation. Those who are able to adapt and change in accord with the enemy and achieve victory are called divine." Sun Tzu's Art of War

A trader will have pre set mindset once the pattern is printed on what to expect from price. But the reality is that price will change based on current order flow, in some cases it will follow expectations and in some it wont, trader should always be flexible to adopt initial expectation to what market is responding to.
If pattern requires certain order flow to respond the way it does and the price behaviour is just not there, then trader should be defensive and start to cut position in chunks. Good traders trade like cowards and bad ones trade like heroes. Reality will bury you quickly if you are on wrong side.

Alright so some free time putted in writing this, none of opinions above are my subjective opinions, its mostly objective facts where the subjective opinions were stress and back tested over the history. Reality check.

Thank you very much for your work here jan, you are doing a great job. I appreciate that! Very useful information! Keep it up!

I second that, Great Thread, thanks for all those Gems.

Just got alerted of this thread and giving it my all, very in-love with the 1 minute chart though i couldn't manage reversals or trend ends. Hope to master the methods and be able to change my performance. The negative figure is a sign of my inability to detect market direction reversals.

is this right

was this a right setup too. missed it because i forgot to set alert

what do you think of this as a continuation of downtrens if price breaks again under 0.76750

final price movements

My first trade, took 20pips, but am still not sure if am doing it right

2nd trade of the day ,

Make sure you read trough thread more, basic rules have been explained well enough to be able to clear things up on your charts.
Basically you are making mistake of trading supply takeout while being in up trend, supply takeout is primarily traded with having down trend in front of structure. Plenty of previous examples to point to that. Read trough the previous pages where the rules are explained.

It is all about sophisticated hints here and there (all described on previous pages what those hints are) that structure leaves in order for that structure to be valid play.
You still have plenty to learn so make sure you grasp the rules first before taking head on trading.

is this right ?

Thank you for the help, i am trying to practice 1 or two methods first and master them. if i may ask which methods work on downtrends and which one works on uptrends?

Supply and demand takeouts should be first thing to learn. Focus on clean symmetric structures where highs (in case of supply takeout) follow clean symmetriy being positioned on same price level. That will get you a better discipline and precision on positioning.
Supply takeout pattern needs a downtrend ahead of it:

SLS looking for a fade on short play. Likely to repeat previous news behaviour. 5,48 key one to watch for micro demand.

Tracking AAPL for potential long play.

GPS if it completes LL HH rotation on current leg potential long.