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Stop Hunting using Sentiment and Market Structure

  • #241
  • Sep 12, 2019 6:43pm Sep 12, 2019 6:43pm
Current Sentiment Snapshot.

Notice UJ is still a strong BUY. Gap Fill trade has taken all week to play out - but it is still playing out.

I have a small portion on the table - exiting a little before the full fill (at around 108.38). Full Fill is at 108.42.
Attached Image (click to enlarge)
Click to Enlarge Name: Sentiment.PNG Size: 104 KB
  • #242
  • Sep 12, 2019 7:26pm Sep 12, 2019 7:26pm
Very interesting thread - nice stuff sentifx!

Subscribed
  • #243
  • Sep 12, 2019 7:28pm Sep 12, 2019 7:28pm
Quoting Mtinifx
Very interesting thread - nice stuff sentifx! Subscribed
Thank you Mtinifx, great to have you here!
  • #244
  • Sep 12, 2019 7:52pm Sep 12, 2019 7:52pm
Would anyone be interested if I did a blog post about the Gap Fill trade? It's come up quite a few times now and very important to know.

Gap Fill:

  1. What is it?
  2. How it works
  3. Sentiment & the Gap Fill
  4. Gap Fill Psychology
  5. Gap Fill Market Structure


Let me know by liking this post and I can put one together.

  • #245
  • Edited Sep 13, 2019 10:00am Sep 12, 2019 8:20pm | Edited Sep 13, 2019 10:00am
Do Forex sentiments work? Well google it and it say it does. But the reality is Sentiments are painted all over the charts
in your face, and so many traders just fail to see them!

Sentiments are data that we "Have no control" of. And adding this predictive variable to your trading system simply creates chaos.
Will the majority be always wrong? It depends. Market makers can whip all they want like in EURUSD.

Focus on building your trading system with less discretionary elements, it's all you need to do to gain consistent
profitability. Don't chase the unicorn or some "magic" indis. If you still side with sentiment analysis, its okay, prove me
wrong with verified results using sentiment analysis Trade safe guys
  • #246
  • Sep 12, 2019 9:30pm Sep 12, 2019 9:30pm
Quoting TradeMinim
Do Forex sentiments work? Well google it and it say it does. But the reality is Sentiments are paint all over the charts in your face, and so many traders just fail to see them! Sentiments are data that we "Have no control" of. And adding this predictive variable to your trading system simply creates chaos. Will the majority be always wrong? It depends. Market makers can whip all they want like in EURUSD. In the end you still side sentiment analysis, well prove me wrong with verified results using sentiment analysis Focus on building...

uuuuhhhh.....WAT?
  • #247
  • Sep 13, 2019 9:59am Sep 13, 2019 9:59am
Price is really struggling to finish the Liquidity Gap Fill.

We will see what happens by the end of the day.

There was some interest to put together something explaining this particular play so I'll put together something for you.
Attached Image (click to enlarge)
Click to Enlarge Name: gap_fill.JPG Size: 105 KB
  • #248
  • Sep 13, 2019 10:38am Sep 13, 2019 10:38am
Quoting SentiFX
Price is really struggling to finish the Liquidity Gap Fill. We will see what happens by the end of the day. There was some interest to put together something explaining this particular play so I'll put together something for you. {image}
Price is straggling at the moment because there is this H1 supply zone yet to be broken.
It looks like it will be removed as price is accumulating for a final push up but this probably will happen next week.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot_20190913_163307.jpg Size: 241 KB
  • #249
  • Sep 13, 2019 10:50am Sep 13, 2019 10:50am
Quoting SentiFX
Price is really struggling to finish the Liquidity Gap Fill. We will see what happens by the end of the day. There was some interest to put together something explaining this particular play so I'll put together something for you. {image}
Is the gap manually deduced and how?
Know News/time; WAIT for Edge Entries, MPLC Normalization, Exits & TP's..
  • #250
  • Sep 13, 2019 10:59am Sep 13, 2019 10:59am
Quoting Merka
{quote} Price is straggling at the moment because there is this H1 supply zone yet to be broken. It looks like it will be removed as price is accumulating for a final push up but this probably will happen next week. {image}
Be careful with language like "Supply" or "Demand" zone. They are really areas of interest that you're looking for a reaction from.

By saying Supply - there is an assumption that there are LOTS of Sell Limit orders there currently and they will likely absorb any buyers when price reaches that level.

We DO NOT know that in FX.

We do not have a level 2 type access to see limit orders so we do not know how much money is trying to sell there.

All we know based on a chart is that price aggressively sold off from that area (aggressive market sell orders), that's it.

Is it an area of interest going forward? Yes. Why? Because there are trapped traders.

But it doesn't mean it will be a Supply Zone going forward. No one may be interested in aggressively selling from there again

There are many reasons why price could just plow through that zone.

All I am getting at is that when you say certain words - you mentally create a bias and that will affect your discretionary judgement. Does that make sense?

This is also why a long time ago I removed colors from my candles and just have them black and white. When I saw a huge red candle it created a bias. If I was long - it may have caused me to panic sell out...all I saw was blood in the streets. Many times I will just use line charts (they are better because closes between brokers is very consistent from the studies I've done), and I also have made candles just white (buy or sell) with black outlines.

We want to remove as much of our personal bias as we can when trading because that is a huge obstacle that gets in the way of us seeing what is actually happening.

I'm not picking on you my friend, just taking the opportunity to share my thoughts on these ideas of Supply/Demand or Support/Resistance. Take it for what it's worth to you.
  • #251
  • Sep 13, 2019 11:29am Sep 13, 2019 11:29am
Quoting princefred
{quote} Is the gap manually deduced and how?
I will explain it soon - in detail
  • #252
  • Sep 13, 2019 11:36am Sep 13, 2019 11:36am
Quoting SentiFX
{quote} I will explain it soon - in detail
Alright.
Know News/time; WAIT for Edge Entries, MPLC Normalization, Exits & TP's..
  • #253
  • Sep 13, 2019 12:40pm Sep 13, 2019 12:40pm
Quoting SentiFX
{quote} Be careful with language like "Supply" or "Demand" zone. They are really areas of interest that you're looking for a reaction from. By saying Supply - there is an assumption that there are LOTS of Sell Limit orders there currently and they will likely absorb any buyers when price reaches that level. We DO NOT know that in FX. We do not have a level 2 type access to see limit orders so we do not know how much money is trying to sell there. All we know based on a chart is that price aggressively sold off from that area (aggressive market sell...
No problems
  • #254
  • Sep 14, 2019 8:35pm Sep 14, 2019 8:35pm
Quoting SentiFX
Would anyone be interested if I did a blog post about the Gap Fill trade? It's come up quite a few times now and very important to know. Gap Fill: What is it? How it works Sentiment & the Gap Fill Gap Fill Psychology Gap Fill Market Structure Let me know by liking this post and I can put one together.
I will be working on the Gap Fill blog post tomorrow. In the meantime - I have some questions.

There are no right or wrong answers - I just want you to think about them and respond.

1. What do you think a Liquidity Gap is?

2. Why do you think a Liquidity Gap should be filled?

3. How do you know if a Liquidity Gap will cause a continuation or reversal?

4. How does sentiment play a role in the Liquidity Gap Trade?

Those who participate will get rewarded with a link to my thorough analysis and explanation of the trade as soon as it is complete. My time is valuable and I value your time. Lurkers and Leeches will not be rewarded.
  • #255
  • Sep 14, 2019 10:14pm Sep 14, 2019 10:14pm
Quoting SentiFX
{quote} I will be working on the Gap Fill blog post tomorrow. In the meantime - I have some questions. There are no right or wrong answers - I just want you to think about them and respond. 1. What do you think a Liquidity Gap is? 2. Why do you think a Liquidity Gap should be filled? 3. How do you know if a Liquidity Gap will cause a continuation or reversal? 4. How does sentiment play a role in the Liquidity Gap Trade? Those who participate will get rewarded with a link to my thorough analysis and explanation of the trade as soon as it is complete....
Liquidity gaps should be interesting.
  • #256
  • Sep 15, 2019 12:41am Sep 15, 2019 12:41am
1. What do you think a Liquidity Gap is > Its shown on the chart with very long candles - something to do with taking out all the orders

2. Why do you think a Liquidity Gap should be filled > Would there be remaining orders which need to be filled so the price would move up/down to pick those orders

3. How do you know if a Liquidity Gap will cause a continuation or reversal > Depends on the client sentiment and general trend ?

4. How does sentiment play a role in the Liquidity Gap Trade > the client sentiment would be rising (opposite to the gap)

Im not sure on these answers and trying to fill in the gap in my knowledge ..
  • #257
  • Sep 15, 2019 3:29am Sep 15, 2019 3:29am
Quoting SentiFX
{quote} I will be working on the Gap Fill blog post tomorrow. In the meantime - I have some questions. There are no right or wrong answers - I just want you to think about them and respond. 1. What do you think a Liquidity Gap is? 2. Why do you think a Liquidity Gap should be filled? 3. How do you know if a Liquidity Gap will cause a continuation or reversal? 4. How does sentiment play a role in the Liquidity Gap Trade? Those who participate will get rewarded with a link to my thorough analysis and explanation of the trade as soon as it is complete....
1. My view of what a liquidity gap is that when huge buy stops, or sell stops gets filled the price goes in the direction of the orders that filled. The most of the times the retail money that is placed in the opposite direction is not enough to sustain a bounce and we have a break of an important level.

2. I don't think that a gap will be filled neccesary, but when it gets filled I think it is because there isn't more interest on the trade and because the big money takes profits.

3. I don't know what will happen after a gap fill, but my experience tells me that some traders will take profits and this will cause a drop (big, or small) in the price and if the traders doesn't get their profit there the market will continue its trip further until it hits all its targets which will contain many buy/sell orders and stop losses - fuel for the smart money.

4. When the price is in an opposite direction from what retail traders are doing, then there is a fundamental reason in the markets that smart money (strong hands) knows how to handle which overcomes the weak retail money - usually new traders that doesn't have the understanding of how the market is working yet.

Have a great week ahead.
Looking for profitable short term trades ...|
  • #258
  • Sep 15, 2019 3:36am Sep 15, 2019 3:36am
Hi Sentifx,

1. What do you think a Liquidity Gap is? It is the place where trader try to sell where price go up.

2. Why do you think a Liquidity Gap should be filled? Sentimental still high and more seller are coming, the bubble still big.

3. How do you know if a Liquidity Gap will cause a continuation or reversal? Depend on client sentiment swift once the gap fill.

4. How does sentiment play a role in the Liquidity Gap Trade? Price will move against client sentiment, the more seller coming the faster the gap is fill.

  • #259
  • Sep 15, 2019 6:21am Sep 15, 2019 6:21am
1. What do you think a Liquidity Gap is? Where there is a considerable distance between different liquidity pools.

2. Why do you think a Liquidity Gap should be filled? The traders trapped at the wrong end of the gap can recover some of the loss and provide liquidity for the price to be moved in the direction the smart money wanted to take it.

3. How do you know if a Liquidity Gap will cause a continuation or reversal? Depends which direction and distance the next liquidity pool is found.

4. How does sentiment play a role in the Liquidity Gap Trade? it will move in the opposite direction of sentiment to go back and pick up their stops
  • #260
  • Sep 15, 2019 7:24am Sep 15, 2019 7:24am
IMHO we don't need to get too complicated with this concept. It is just a normal function of the forex market and happens daily somewhere or other. It can very fast because the boys don't want the players they are targeting to have enough time to close their orders thus robbing the sharks of their full meal!

Remembering it takes huge amounts of money to drive the price in a certain direction so eventually the boys are going to be searching for liquidity.

I have posted a typical example below. XAUUSD the price reached 1485 and no smart money was available to push it further. Interestingly they tried a few times to drive it down but could find no takers (circled area). Thus Liquidity hunt No. 1 - again they tried - no takers, thus Liquidity hunt No. 2. It will probably go down further now IF they have acquired the necessary liquidity. We don't know if they have because we are not privy to their order book unfortunately.

What is very interesting is how different sessions will work together - providing liquidity for the next session. Probably Citibank Hong Kong working in tandem with Citibank Frankfurt (and so on)!

In my view, it's futile to try to fight these LH's - like fighting against the wind! One simply needs to EXPECT them, ANTICIPATE them and go with the flow!!
Attached Image (click to enlarge)
Click to Enlarge Name: XAUUSDH1.png Size: 42 KB
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