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Stop Hunting using Sentiment and Market Structure

  • #301
  • Sep 16, 2019 7:21pm Sep 16, 2019 7:21pm
This one is Tricky thought because Structurally on a LARGE scale, a New High has been made. But I go opposite the sheep and the sheep are long.

Sometimes the Shepard gets run over too. This could be one of those cases. Again the Retail heavily loaded on one side and the recent sell off order flow is guiding my trading decision to be a seller here at key structural inflection zones.
  • #302
  • Sep 16, 2019 7:26pm Sep 16, 2019 7:26pm
Also some additional Edge is seeing that EUR as a whole is WEAKER than USD on the hourly and 4H time-frames.

So is shorting EURUSD currently the higher probability trade? I believe so.

Find your entry - exit - target (stops in this case). Set your risk. Embrace the variance.
Attached Image (click to enlarge)
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  • #303
  • Sep 16, 2019 7:40pm Sep 16, 2019 7:40pm
Quoting SentiFX
This one is Tricky thought because Structurally on a LARGE scale, a New High has been made. But I go opposite the sheep and the sheep are long. Sometimes the Shepard gets run over too. This could be one of those cases. Again the Retail heavily loaded on one side and the recent sell off order flow is guiding my trading decision to be a seller here at key structural inflection zones.
The new high on larger scale looks like a bigger stop hunt on higher TF.
  • #304
  • Sep 16, 2019 10:34pm Sep 16, 2019 10:34pm
Hi SentiFX

On your chart isnt the liquidity gap already filling (From where you typed Liquidity there was a huge surge in orders and then it dramtically falls)

I did read the blog post about it - very interesting

Thanks
  • #305
  • Sep 17, 2019 1:05am Sep 17, 2019 1:05am
And UP eurusd goes - back to 1.1050 probably by this afternoon!
Unfortunately sentiment changes from day to day even from hour to hour. The market will go where it wants to go I'm afraid!
  • #306
  • Sep 17, 2019 1:58am Sep 17, 2019 1:58am
Nzdusd gap fill
Attached Image (click to enlarge)
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  • #307
  • Sep 17, 2019 3:04am Sep 17, 2019 3:04am
Quoting SentiFX
{quote} These are the types of scenarios that I envision playing out. Direct sell off - or a bounce to structure to get longs reeled in more then dive to liquidity pool. EURUSD low went to the tick of prior stops without removing that pool. Retail usually sees double bottom. Our indicator bubble is showing a HUGE strong sell for EURUSD and the recent Order Flow downward has created a sell side bias. I have short entry orders at the bounce. Let's see what happens. {image}
I surprised yesterday by the fall of EURUSD, it was fast and steady and covered a portion of the LG from the upside move, but 1.10000 is strong and The ZEW sentiment came better than expected today, so it is taking a rest now until later after the US open.

Now I like your style of trading and the EURUSD is bearish, but I think that if, it tries to reach the upper resistance to take longs then the sentiment will change to neutral with some bullishness, so it is dangerous to use a limit order and better see what happens and after a confirmation of a downtrend sell until the next liquidity pool. Also many sellers will join an upmove, so it needs caution.
Looking for profitable short term trades ...|
  • #308
  • Sep 17, 2019 3:37am Sep 17, 2019 3:37am
I have done extreme personal studies on candlestick, price movements, order of price movement in different sessions, etc. And I have same conclusion about liquidity gaps, especially when price moves too fast like EURUSD moving too fast from 1.0927 to 1.1109 in mostly a single candlestick. I noted in a different thread that it was going to correct that move almost 100%. SentiFX does an excellent job of putting into words and charts what I learnt by just watching charts for hours and hours without anybody teaching me. Imagine being opposite the retail herd, being at the tip of a very fast move and then having liquidity gaps to fill. That's almost a guaranteed trade.

Good job here, SentiFX.
  • #309
  • Sep 17, 2019 4:54am Sep 17, 2019 4:54am
Quoting Pervaz
Hi SentiFX On your chart isnt the liquidity gap already filling (From where you typed Liquidity there was a huge surge in orders and then it dramtically falls) I did read the blog post about it - very interesting Thanks
You're very welcome Pervaz. Glad you enjoyed it!
  • #310
  • Sep 17, 2019 4:56am Sep 17, 2019 4:56am
Quoting Pip-Miner
Nzdusd gap fill {image}
Also check the previous currency strength guages - NZD is weakest basket and GBP/USD are top two strongest.

Great trade! Hope you are making lots of pips.
  • #311
  • Sep 17, 2019 5:07am Sep 17, 2019 5:07am
Quoting Js3mwtRc
{quote} I surprised yesterday by the fall of EURUSD, it was fast and steady and covered a portion of the LG from the upside move, but 1.10000 is strong and The ZEW sentiment came better than expected today, so it is taking a rest now until later after the US open. Now I like your style of trading and the EURUSD is bearish, but I think that if, it tries to reach the upper resistance to take longs then the sentiment will change to neutral with some bullishness, so it is dangerous to use a limit order and better see what happens and after a confirmation...
Js3, I only like to use limit orders when discretionary trading. I don't believe in confirmation "signal" to enter because by the time price action shows confirmation, I've missed a lot of the move (at least the way I trade).

Limit orders allow me to be in control of my trading. I know where the key entry points are and I can control my risk.

Market Orders - to me - are more impulsive because I may have thought I have seen something or had FOMO. So, I don't typically use them. If I ever feel like I need to use Market Orders and do.... the market reminds me why I should use limit orders.

The Question is: Am I in control of my trading or out of control?

If I know where I want to enter, and WHY (aka sentiment, market structure, order flow, retail stops) and where I want to exit (retail stops or at trapped traders)... then I should have no problem embracing trading my way - with my risk - under my terms.

Professional Futures Day Traders also use limit orders even though they are just scalping for a few ticks. Why?

1. They are in control and know where they want to get in (based on order flow - seeing resting and aggressive orders) and the let the market take them out by either quickly seeing they are wrong or by placing their trailing stop below areas where absorption is happening.
2. When you are trading size and only aim for a few ticks - 1 tick makes a huge difference in your bottom line. A market order may get filled a few ticks past where you wanted to enter.

No one knows 100% if a trade is going to work out with Market Orders or Limit Orders. We are trading probabilities and positive expectancy over the long term.

The only information we need is understanding how to trade Sentiment, Market Structure, Order flow - and Hunting those Stops!
  • #312
  • Sep 17, 2019 5:08am Sep 17, 2019 5:08am
Current Sentiment Snapshot.
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  • #313
  • Sep 17, 2019 6:49am Sep 17, 2019 6:49am
Quoting SentiFX
Current Sentiment Snapshot. {image}
Nice on Senti, please what does the drift in USDCAD mean? I observe its drifting right out of the lower left Strong Buy

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D labour of a fool wearieth him cos he doesn't know how to enta d city
  • #314
  • Sep 17, 2019 7:44am Sep 17, 2019 7:44am
USDJPY playing out like a script.

Gap is Filling just like the blog post showed.
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  • #315
  • Sep 17, 2019 7:44am Sep 17, 2019 7:44am
EURUSD Gap is also filling, just like my previous red-lined drawing showed (move to structure then likely move down).
Attached Image (click to enlarge)
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  • #316
  • Sep 17, 2019 7:48am Sep 17, 2019 7:48am
Quoting lordgbengs
{quote} Nice on Senti, please what does the drift in USDCAD mean? I observe its drifting right out of the lower left Strong Buy
It usually means that Retail Sentiment is Shifting (in this case from Strong Buy - retail heavily selling - to retail starting to Buy more then they are selling).

So, you could either leave it alone until it crosses the x axis OR... take on a little more risk looking for setups to sell.
  • #317
  • Sep 17, 2019 8:03am Sep 17, 2019 8:03am
Quoting SentiFX
EURUSD Gap is also filling, just like my previous red-lined drawing showed (move to structure then likely move down). {image}
Some of you may be thinking - But SentiFX, couldn't we have traded the Gap Fill long and made lots of pips on EURUSD?

Absolutely. Just do so with much lower lever and save your leveraging up on higher probability setups.

Why?

Because Sentiment was showing Strong Sell at the time and Strength also showed Sell. Also Order Flow was to the down side.

This is one of the many games played by professionals/MMs/algos and once you start looking for them - you will see these games regularly played.

As soon as MM's feel they have enough sheep on board long - they will likely take price down. This can happen before the LG fills.

So there is more risk trading these types of games. But - they are definitely tradeable opportunities. I have done it successfully plenty of times.

And friendly reminder: News ALWAYS trumps charts, sentiment, etc because it can cause a repricing of value (that I spoke of in the blog post).
  • #318
  • Sep 17, 2019 8:56am Sep 17, 2019 8:56am
Quoting SentiFX
{quote} Js3, I only like to use limit orders when discretionary trading. I don't believe in confirmation "signal" to enter because by the time price action shows confirmation, I've missed a lot of the move (at least the way I trade). Limit orders allow me to be in control of my trading. I know where the key entry points are and I can control my risk. Market Orders - to me - are more impulsive because I may have thought I have seen something or had FOMO. So, I don't typically use them. If I ever feel like I need to use Market Orders and do.... the...
EURUSD just moved to 1.1065 at time of writing and closed the gap. Excellent move, stalled first near resting orders (I suppose) near 1.1055 and took many sell orders. Tomorrow is the FED, I don't think it will move down yet and it may turn bullish again.

It would be great to have data of where proffessional orders rest, but in forex we can only watch the structure for guessing where they are placed.

Thanks for the answer!
Looking for profitable short term trades ...|
  • #319
  • Sep 17, 2019 9:16am Sep 17, 2019 9:16am
Quoting SentiFX
EURUSD Gap is also filling, just like my previous red-lined drawing showed (move to structure then likely move down). {image}
EURUSD short just got triggered at 1.106.
Let's see how it will end up.
  • #320
  • Sep 17, 2019 9:40am Sep 17, 2019 9:40am
Quoting adefame
sentiment remains the decider of market
Looks like very useful tool.. however I have different way of using it... eagerly waiting to get the source details ,,, more accurate retails positioning can make you unbeatable in this 100% manipulated fake market....
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