{quote} Also that is a very important point that you bring up that many people struggle with. In this business - we get paid to wait. Without a catalyst, price rarely goes from A to B as quickly as we would like.
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Sentifx, we have been discussing this at ff for a while and came to the conclusion the liquidity algorithm takes time to bait everyone,form liquidity pools, fill liquidity pools. What works best is being slow. Make sense if many are on the lower time frames and have no patience. An automated process AI driven.
{quote} Sentifx, we have been discussing this at ff for a while and came to the conclusion the liquidity algorithm takes time to bait everyone,form liquidity pools, fill liquidity pools. What works best is being slow. Make sense if many are on the lower time frames and have no patience. An automated process AI driven.
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I concur. I have written predatory algorithms myself.
Using the prior Sentiment Chart (USDJPY has been a strong BUY) and understanding Order Flow and Market Structure - you could have taken this simple trade with much higher leverage because it was very high probability.
Swing traders who took advantage of the Gap Fill against the herd made out well.
Scalpers could have sold each and every red line without hesitation - expecting the reaction and grabbing 5-20 pips. Same goes for this red line sell.
Using the prior Sentiment Chart (USDJPY has been a strong BUY) and understanding Order Flow and Market Structure - you could have taken this simple trade with much higher leverage because it was very high probability. Swing traders who took advantage of the Gap Fill against the herd made out well. Scalpers could have sold each and every red line without hesitation - expecting the reaction and grabbing 5-20 pips. Same goes for this red line sell. The trade is over now. Gap has been filled.
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But sentiment is still saying UJ strong buy.
Why now no more buy trades (H1&H4 are still in uptrend)?
Just for pure entertainment value only and illustration purposes - I went ahead and took a very low leverage trade here.
My normal trading style is to use limit orders at key inflection points.
By using a MARKET ORDER in this instance to show an example - I lost 5.4 pips right from the jump. This is exactly why I do not wait for any confirmation. Smart money (that don't have Level 2 type access) knows exactly where inflection points are and where reactions are most likely to occur.
If price blew through the level there then I would have said, well that was wrong - and moved on to the next trade.
I believe this trade will work out - it has repeated 2 times in the recent history (for more than 20 pips). It is a repeatable scalp pattern that I use.
Will this one succeed as well? We will see. Again - it's probabilities but we are trading against the flow - and with the sheep in this one.
Scalping has to be based on some valid reason. Otherwise it's just degenerate gambling. We have a reason here (trapped long traders were a magnet at that point) and when the exit their positions - price moves opposite.
{quote} But sentiment is still saying UJ strong buy. Why now no more buy trades (H1&H4 are still in uptrend)?
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Because the trade I have been talking about for a week and a half has been about filling the gap and that has been done 100%.
Sure stops above the prior structure are likely to get taken here - but that is more risk at this point when someone could have been targeting the gap fill a long time ago and traded the swings. Buying every stop on the way up and exiting portions at inflection zones waiting to reload at a better fill.
Just for pure entertainment value only and illustration purposes - I went ahead and took a very low leverage trade here. My normal trading style is to use limit orders at key inflection points. By using a MARKET ORDER in this instance to show an example - I lost 5.4 pips right from the jump. This is exactly why I do not wait for any confirmation. Smart money (that don't have Level 2 type access) knows exactly where inflection points are and where reactions are most likely to occur. If price blew through the level there then I would have said, well...
{quote} Same also, so because this is still heavily retail short, would we still be looking for longs on UJ?
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I would have to check sentiment but there arent any trades left for me with UJ for now. Gap is fully filled long... and we scalped short the last reaction to the fill. All done.
Hi SentiFX and other members of this thread, I am not a forex trader because of limitations in my country but trade futures market and I have been trying to understand the concepts you guys have been discussing. I guess same approach is applied to every markets that are traded but I have yet to arrive at a point of clarity. Kindly correct me if I am wrong and guide me for a better understanding.
So, we arrive at our biasness of market direction through sentiment analysis and place our trades on the basis of market structure and orderflow.
How is sentiment analysed? Is it through how market participants are positioned and the fundamental data released?
Placing the trades based on market structure seems logically right but how do we define the best structure for entry and exit and how do we know that the structure has failed so that we exit before the trade turns very sour?
Well, Orderflow is sufficent for its name and I guess it is the changes in positioning of the market participants. I am still not clear on how to determine the current orderflow and for the type of type of trading style?
I would like to request to include Gold sentiment analysis as well if possible so that I could relate as well. Thanks a lot.
Stop Hunting using Sentiment and Market Structure
