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  • #581
  • Apr 2, 2023 6:22pm Apr 2, 2023 6:22pm
Quoting TheProtege
The problem with deciding your reward will just be double or triple your risk and setting and forgetting is it doesn't really fit the nature of the market. There's never a guarentee that if price goes in your direction, it must hit at least 3x what you had risked. when trading this way, it's very common to see price start going your way only to turn around and go back to your stop. And the worst part? You didn't catch any of that.
Set-and-forget seems to me to make sense especially for bets with a longer but not too long time horizon. If you trade very short term as we do here, you are sitting on it anyway. So why sit back and watch the development like someone operating a slot machine? It gets trickier with bets that last several hours. At the other extreme, bets that last weeks or even months, you will automatically follow a middle course by readjusting in between. By the way, it is precisely this possibility that distinguishes us traders from classic gamblers. While we both do bet, and you can see that I place emphasis on the fact that my decisions are also regarded as bets, whereby even corporate decisions almost always have a betting component. Airbus' decision to build the A380 in 2000, for example, was a failed bet that the concept of hubs (hub-and-spoke model) would win over direct connections in air travel. However, just like entrepreneurs, we traders can also intervene by reducing the possible loss (e.g. by actively reducing the SL) or by changing the position size through partial sales or additional purchases. Gamblers can't. They have to live with their initial decision and can at best cheer their favourite racehorse from the spectator's bench, may Fury please find his way swiftly to the finish line and not to the slaughterhouse ;-)

Quoting TheProtege
I don't necessarily calculate out R/R on my trade, but I can still eyeball out where my trade is, where the next S/R level is, and where the top or bottom of the S/R level I am trading is. But one thing I'm not totally clear on is how Jens decides a "likely minimum target".
Good to know. Are there any other conceptual ambiguities? I will try to explain them in the coming examples.
  • #582
  • Edited 9:32pm Apr 2, 2023 8:57pm | Edited 9:32pm
Quoting JensG
{quote} Set-and-forget seems to me to make sense especially for bets with a longer but not too long time horizon. If you trade very short term as we do here, you are sitting on it anyway. So why sit back and watch the development like someone operating a slot machine? It gets trickier with bets that last several hours. At the other extreme, bets that last weeks or even months, you will automatically follow a middle course by readjusting in between.
Yes! The longer intraday or swing timeframes make the most sense for set and forget strategies. Though i would still technically consider there being a tradeoff between the potential accuracy and time/attention. I used to trade the 15m or 1Hr time frame (can't remember) and no way would I be sitting there staring at the chart for every bar. But at one point i made use of price alerts on my phone that would indicate whether price was moving towards my target or not, similar to what you would see when staring at the PA on the 1m (w/o the momentum detail). This did required the flexibility to pull the chart up on my phone or computer whenever I felt some action or adjustment needed to be taken. And if I had held positions overnight I would probably quickly abandon this, at least while I'm asleep.

Quoting JensG
{quote} However, just like entrepreneurs, we traders can also intervene by reducing the possible loss (e.g. by actively reducing the SL) or by changing the position size through partial sales or additional purchases. Gamblers can't.
i've never thought about it that way. There really are a lot of similarities between trading and running a business.. I used to have one in the food industry SaaS space and decisions always had that risk/reward factor.

Quoting JensG
{quote} Good to know. Are there any other conceptual ambiguities? I will try to explain them in the coming examples.
Thanks for asking! There are two things on my mind, but I'm not sure if they would be appropriate for what you aim to show with your examples or whether it would be better to hold off until later.

 

  1. You previously mentioned you base as much on the last leg as possible. What are you looking at in the last leg and how are you using it? I have ideas based on what you've said (profit target based off some previous pics, distance of opposing candles against your bet as potential distance to give your manual trailing stop) Is there more to it than just that?
  2. I'm curious about what your thought pattern or "steps" in trading are. Is it first identify the major S/R levels near the current price, wait for price to approach and make a reversal pattern with confirmation before entering?

  • #583
  • May 6, 2023 6:07pm May 6, 2023 6:07pm
So, I had to write everything twice because I had some computer problems. So here I am again with a longer delay but at least before my annual break for rock and metal festivals.

Quoting TheProtege
You previously mentioned you base as much on the last leg as possible. What are you looking at in the last leg and how are you using it? I have ideas based on what you've said (profit target based off some previous pics, distance of opposing candles against your bet as potential distance to give your manual trailing stop) Is there more to it than just that?
Basically, it's about the observation that in range-based trading phases, really good successive legs often show a tendency to mirror each other. These are all things we have already discussed here based on symptoms: Microlevels, steep and clear and so on.
So what am I looking for? For disturbances or momentum in the rise or fall of the price, if you want to call it that. Disruptions can be opposing candles, stagnant stretches and so on. These signal uncertainty to me. A micro level, just like a support or resistance level, is nothing other than uncertainty. Once the level is broken, the uncertainty is gone, momentum comes up and we move to the next level, where bulls and bears have to regroup, i.e. profit-taking takes place or losses are capped (i.e. the opposite side is bought to close out) or new bets are made. From the knowledge of a limited mirror image, I can usually derive an estimate of the probabilities of my bet. If this does not work out, I at least gain the information that the market currently has a certain bias in one direction. Regardless of the current bet's outcome (win or loss), this knowledge is often even more useful for the next couple of bets than for the single one I had just taken.
  • #584
  • Edited May 7, 2023 3:48pm May 6, 2023 6:08pm | Edited May 7, 2023 3:48pm
Quoting TheProtege
I'm curious about what your thought pattern or "steps" in trading are. Is it first identify the major S/R levels near the current price, wait for price to approach and make a reversal pattern with confirmation before entering?
That is not all that easy to explain. We have all heard the saying: Those who can't do it, teach it. There is a kernel of truth in this, in that, conversely, people who can do something are not always able to formulate exactly what they are doing. For me, the way I became the trader I am today is somehow behind a wall of fog for some crucial aspects in the middle of that journey, and much of what I do today has become more of an instinctive driven, automatic action. So I would only say with a slight reservation: yes, that's roughly the order.
Essentially, the first thing I definitely do when I see a chart is to assess whether we are more range-based or trend-based. If I now see in a range-based market that the price is approaching one of the S/R ranges, I continue to work there very instinctively. First comes the assessment of whether it is worth betting here at all and where I would cap the bet if it goes wrong. These steps, however, are more than a rough profit-to-loss estimate, because, from an unclear position where the bet would no longer make sense, it usually follows quite automatically that this is not such a good starting position in the first place. Somewhere around here, the search for disturbances takes place, which then means the exact positioning of the entry and this again raises the question of whether the bet can pay off.
If the market is rather less range based, I ask myself if what I see fits into another pattern. For example, is it a possible beginning of a channel? In other words, the order is different here. I am waiting for reversals to emerge first.
I hope this attempt at an explanation helps.
  • #585
  • May 6, 2023 6:08pm May 6, 2023 6:08pm
Quoting TheProtege
But one thing I'm not totally clear on is how Jens decides a "likely minimum target".
As a likely minimum target, I consider a possible reversal point, which I do not necessarily see as the actual target of the bet, but which is at least an intermediate target with a higher probability. I call it likely because the price has a higher probability of reaching it than any subsequent target. There are certainly good examples of this every day, but paying attention to these intermediate targets has become so second nature to me that finding examples suffers greatly from the fact that the execution of my "strategy" is now increasingly intuitive after some 11 years.

I kinda like this example (even though it's not perfect):

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The second leg ends roughly where the first had its origin. But there is a level in between. It is not said that the price will bounce off there, in fact I have even bet against it. But it is a probable minimum target, in the sense that after a reversal pattern, it would have to be a miracle that this level is not at least reached.
In principle, the following scenarios arise for its exploitation:
1. the likely minimum target is identical to an inner S/R zone or microlevel and we use its breach as an entry. This is particularly useful if we actually expect a more distant target and the likely minimum target is too close and we are also rather risk-averse.
2. we can ignore it with an early entry and hope that it does not hold.
3. if we have chosen option 2, it may be a level where we want to pull the SL a little closer. This would then be the agnostic approach. This of course requires a certain distance between this entry and the likely minimum target in order to work.
Part of my bet was scenario 2 and I didn't use 3 because it was just still too close. If there had been more space between the actual target and the likely minimum target, I would have worsened my win-loss ratio somewhat by playing the market according to scenario 1, but I would also have reduced my chance of booking a loss.
  • #586
  • May 6, 2023 6:52pm May 6, 2023 6:52pm
Let's explain a few examples.

Example 1)

Attached Image (click to enlarge)
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We see a downward channel in which I traded the second and third leg before coming to the fourth bet, which I will explain here.
In the circled area (1) I lost a bet (which was bet number 3) and got out with a very small loss. I did not open a long bet directly because I am generally suspicious of breakouts out of channels to begin with. A good S/R zone to support a valid breakout theory was also not to be found. So wait and see ...
At about (2) the clear wick upwards of the candle that ended in red signals that a higher price seems to have been rejected. However, line 3 could be in the way as a very early likely minimum target. An example of the likely minimum target being identical to a microlevel which again roughly correlates with an internal S/R zone beforehand. I have positioned my sell-stop order on the downside breach of this area. So just below this line. After a short struggle with this line, as you can see from the lower wicks of the candles, the price then also broke and my order was triggered. As I interpreted this as an extension or renewed late confirmation of the downward channel, I was not particularly interested in the circled area around 1, which can now become a possible minimum target and thus a reversal point. If it had, however, I could have reacted to it by already significantly reducing my stop distance there.
What I found interesting was the small blue candle number 4, which coincides with a previous low of the channel. This was the area for me to pull my stop much closer and continue to follow the price closely from there. Even if this level was broken, which it was, at least the geometric shape of the channel suggested the natural end of this leg.

Example 2)

Attached Image (click to enlarge)
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Also a bet that contains some stuff that's worthy of an explanation to get some details of trade handling across. We have a rising leg with a small disruption, which correlates with an earlier S/R zone (line 1). My point of interest is the reversal and the question of where we can best enter here. We see again how the lower ends of the candles around the reversal point are dancing on this line. I always like to interpret that as a fight. If this line breaks, the price breaks through to the downside. At the same time, we already have a likely minimum target shortly after (line 3). We can therefore play the scenario in 2 ways again:
Early entry just below line 1 (better odds ratio, slightly worse probability).
Late entry around line 2 (worse odds ratio, higher probability).
I opted for the early entry because I felt it was unlikely that the bears would have the upper hand at barrier 1 and then fail at line 3. The chart's history simply did not support such a fickle underlying sentiment.
The emergence of the lower wicks towards the end of the downward leg signalled to me again that this movement was slowly losing pressure and that I should pull my stop closer in order to catch a good exit.

Example 3)

Attached Image (click to enlarge)
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Now let's take a look at this bet. Obviously, according to everything we have gathered here in this thread, a no-brainer. I find it interesting where the candles of the up leg are longer and where they are shorter. They always became shorter where there was more uncertainty based on the previous legs. No wonder, after all, all breakthroughs in such areas are also zones where more traders decide on a direction: Either by entering, or exiting an opposing position. If we get closer to such a zone, it is a good time to tighten the stop, especially if you need to protect a small profit. Once the zone has been overcome, you can leave more room (by following the price more slowly) and only tighten again when the next one begins or the leg approaches its presumed end.

More examples are coming in the next couple days.
  • #587
  • May 16, 2023 8:59pm May 16, 2023 8:59pm
Huge thanks Jens for taking all that time to provide all of this information/examples not once, but twice (sorry about the computer troubles!)

Lots of gold nuggets in your posts and i wanted to take the time to read through everything multiple times to really let it sink in before gathering my thoughts. Just wanted to let you know that there are eyes on your posts and it is really really appreciated! will get back to you soon with a more proper reply once I feel like I've fully understood everything and even put it to practice. Thanks again!
  • #588
  • May 17, 2023 3:53pm May 17, 2023 3:53pm
Example number 4

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It is the inconspicuous things that are sometimes so valuable.
What I would like to explain here:

  1. sentiment reading
  2. repetition tendency of the market
  3. early vs. late entry (again)
  4. why I use stop orders and don't manually click buy or sell.

This market (USD/CAD last Friday) has an apparently rather balanced up/down pattern. On closer inspection, we see that the bulls are slightly dominant and that the market often shows a brief pause for breath at the bottom of the waves.
I have drawn in:

  1. early entry
  2. late entry
  3. early interrupted bull leg
  4. interesting level

At 3 I just got out with a slight profit. So in the future, I would like to avoid such situations unless this requires a really late entry. Without the experience at 3, my entry would have been around level 1. Now I thought to myself, I won't just wait for 3 to finish, because we still have a slight dominance of the bulls, so something resembling an upward channel and not a range, plus that would have been too late/expensive for me. Instead, the market's brief "thinking minutes" at the bottom have come into my focus. If I sit out this period of uncertainty, it only costs me about 1 pip risk vs. reward, but increases my hit rate. The wick in the circled candle number 4 served as a signal for me. Another reason for this later entry is that it can be seen that while the bulls had a slight dominance in this period of market action, the bull legs always seemed a little less clear than the bears: They had slight setbacks or small pauses. All in all, by the way, a market in which one can also trade both sides without much stress.

And what does this have to do with buy-stop orders? Look at the long blue candle right at my entry. This is interesting in that others have probably chosen a similar entry level and (as a direct consequence) it also shows that you will almost always get a worse price manually if you don't want to enter earlier at a higher risk. By the way, you can learn a lot about this strategy by studying seemingly sudden momentum. It's basically reverse engineering of what other market participants do, and to some extent at least, it's what I originally did to get into this kind of trading.

  • #589
  • May 18, 2023 8:20am May 18, 2023 8:20am
I have never seen a chart like this
Are the lines I draw is correct?
Attached Image (click to enlarge)
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  • #590
  • May 18, 2023 4:30pm May 18, 2023 4:30pm
Read 20 Sites of this Thread wihout getting a Understanding for this Strategy.

Looks like a Hindsight Specialist to me...
  • #591
  • May 19, 2023 6:04am May 19, 2023 6:04am
Quoting Ethan1991
I have never seen a chart like this Are the lines I draw is correct? {image}
This is a nice example you have picked out. A bit extreme and generally more typical for far-advanced market cycles, but I don't have GBP/JPY on my screen. Note that this is not an exact science. Often it is amazingly accurate, sometimes rather imprecise, so that one could speak of zones rather than lines. But it always makes sense to draw the lines over longer distances, even if the precision is somewhat lost in the process because it is essentially about recurring market behaviour at support and resistance areas, which we then use to evaluate an emerging reversal pattern. So you don't even have to know *exactly* where to draw the line, just see: Aha, this is roughly where the price turned before. With this in mind, I have revised the chart for you.

Attached Image (click to enlarge)
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In general, it should be noted that such market cycles are difficult to trade. The more cluttered the chart is with such areas, the better it is to either just stay out or generally limit yourself to reversal patterns at the edges.
  • #592
  • Jul 8, 2023 9:47pm Jul 8, 2023 9:47pm
hey everyone, apologies for the delayed response. I was caught up in some other ventures. i did spend time trading using this methodology and experienced some surprisingly good success. While Im nowhere near the level of Jens and Veni, Im quickly realizing that with more practice and experience, this approach does prove to be an extremely viable way of trading. The more one observes the charts, the more you will notice recurring patterns and the tendency for price to do similar things in specific situations. Getting the hang of that, as well as developing strong trader psychology, can easily enable us to take high probability trades with favorable risk-to-reward ratios.

This is a discretionary strategy. It's not as simple as "copying" the same trades Jens and Veni are taking (because there is a lot of experience/intuition/gut feeling that affects how we feel about a potential trade). Its more like copying the methods they use as a basis for their trades, which may coincidentally lead to taking the same trades. By discretionary, I also mean there is still an element of guessing involved based on what you think might happen, which has already been touched on. A lot of traders wish to find an approach where "if A happens, then B must happen". The reality is the markets don't operate that way which explains why two traders can employ the same methods with different outcomes. By utilizing the methods outlined here, it's more like "if A happens, then B is much more likely to happen, how can I position myself effectively to capitalize on this scenario? How can I minimize losses from bad trades? How can milk good positions without exiting prematurely?". It's almost like there are a series of strategies/methods to manage each of these components.

I'm actually dealing with a component of my own right now, and maybe Jens has some insights. Trading after 3AM GMT (around the close of the London session) tends to be bad for my trading. it's not the time itself that ends up being bad, but the market losing momentum. When volatility decreases, potential price targets are no longer being reached and market enters a consolidating phase. Consequently, I either incur losses trying to make trades during this time which eat up previous profits, or prematurely move my stop to break even, resulting in minimal profit. Now I'm considering two options: 1) refrain from trading once the market has started dying down, or 2) allowing more room for price to move towards a target before adjusting my stop, even if it takes some time. Personally, I'd guess the former seems more reasonable unless I'm already in a trade.

A few other things on my mind:

Quoting JensG
Example 2)
Attached Image (click to enlarge)
https://www.forexfactory.com/attachm...l?d=1683416054


Also a bet that contains some stuff that's worthy of an explanation to get some details of trade handling across.
This trade makes a lot of sense and was executed flawlessly! To use this as an example, if you opted for the late entry option, how would you manage your initial stop then? Would you consider cutting a bad trade somewhere above line 1 (previous S/R level), as shown in the picture:

Attached Image (click to enlarge)
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Or would you wait for the breach of the last swing high? it's worth noting that with higher volatility pairs like USDJPY or GPBUSD, waiting for such a breach could be risky, as the stop required could be as large as 15-20 pips on high volatility days.

Quoting JensG
By the way, you can learn a lot about this strategy by studying seemingly sudden momentum. It's basically reverse engineering of what other market participants do, and to some extent at least, it's what I originally did to get into this kind of trading.
Interesting, this really puts into context how you developed the various methods for managing your trades.

Quoting JensG
This is a nice example you have picked out. A bit extreme and generally more typical for far-advanced market cycles, but I don't have GBP/JPY on my screen.
Quoting JensG
In general, it should be noted that such market cycles are difficult to trade. The more cluttered the chart is with such areas, the better it is to either just stay out or generally limit yourself to reversal patterns at the edges.
What exactly do you mean by the term market cycles? I want to make sure I'm understanding the way you are using it correctly. To me, it sounds like what you mean by market cycles is the up down action (lower highs, higher lows, etc.). And in that picture the up down action is extreme/erratic/choppy. This would make sense then to stay out or focus only on the reversal patterns at those significant levels at the edges.
  • #593
  • Edited Jul 13, 2023 3:20pm Jul 12, 2023 3:27pm | Edited Jul 13, 2023 3:20pm
Quoting TheProtege
While Im nowhere near the level of Jens and Veni, Im quickly realizing that with more practice and experience, this approach does prove to be an extremely viable way of trading. The more one observes the charts, the more you will notice recurring patterns and the tendency for price to do similar things in specific situations. Getting the hang of that, as well as developing strong trader psychology, can easily enable us to take high probability trades with favorable risk-to-reward ratios. This is a discretionary strategy. It's not as simple as "copying"...
A good summary. What I have always found interesting is that you can play the same trades differently while still adhering to the same set of principles. Some go in very early and ride individual bets much further than I do, but also sometimes cut losses much earlier. Such differences can also be found between Veni and me. Obviously, both can lead to success.

Quoting TheProtege
I'm actually dealing with a component of my own right now, and maybe Jens has some insights. Trading after 3AM GMT (around the close of the London session) tends to be bad for my trading. it's not the time itself that ends up being bad, but the market losing momentum. When volatility decreases, potential price targets are no longer being reached and market enters a consolidating phase. Consequently, I either incur losses trying to make trades during this time which eat up previous profits, or prematurely move my stop to break even, resulting in...
I know that such bets with a short time span can be a bit problematic for people trading from the American continent, depending on the time zone and working hours. If we use the London session as a base, I always find that there are two good time slots Monday through Thursday: Around the opening of the London Exchange, often about an hour earlier, and then again for a few hours when New York opens. For Europeans, this leaves the morning and midday to afternoon. In Southeast Asia, this shifts to noon and early night. Which by the way makes Georgia (the country), Turkey, UAE or Asia an interesting winter trading resort for Europeans tired of getting up in the dark but I digress. For the American East Coast, there is usually only the morning, because London Open is in the middle of the night. Now on the West Coast, you can work throughout the night and sleep during the day vampire style, at least if you share my assessment of lucrative times.
My guess is, this is probably due to the fact that New York is the most relevant international financial centre in the US while Japan, as an important financial centre in Asia, is more domestically oriented. In my experience, Fridays often behave differently though. Apart from the fact that I often find Fridays more lucrative anyway, the market seems to slow down less after London Close than on other days. I suspect this is because many people in New York also want to close out their exposure or move it into safe havens before the weekend. You just have to be careful to get out in time on Fridays. Late in the NY session, the spread can go through the roof.

Quoting TheProtege
A few other things on my mind: {quote} This trade makes a lot of sense and was executed flawlessly! To use this as an example, if you opted for the late entry option, how would you manage your initial stop then? Would you consider cutting a bad trade somewhere above line 1 (previous S/R level), as shown in the picture: {image} Or would you wait for the breach of the last swing high? it's worth noting that with higher volatility pairs like USDJPY or GPBUSD, waiting for such a breach could be risky, as the stop required could be as large as 15-20...
Yes. In general, a late entry makes the most sense when you can pull the ripcord at a less damaging price, too.
However, there is a train of thought that finds space in my mind in related situations: If the price doesn't behave the way I want it to for this bet, can I get back in at a better time in the context of this pattern? Practical example: I enter at 2 and the price does not fall but rises. Exiting just above 3 makes sense. Now the question: Can I find another opportunity to enter between 3 and the top if the price bounces back down again from a somewhat higher level? In scenarios like these, where one has specifically decided to enter later, this is of course always the case. The first targeted entry does not disappear. But it is a general question that you can ask yourself if you choose an exit that does not actually coincide with the total collapse of the big pattern. Another way of playing this could be to first halve the position, that means, if your platform allows you to do so.

Quoting TheProtege
What exactly do you mean by the term market cycles? I want to make sure I'm understanding the way you are using it correctly. To me, it sounds like what you mean by market cycles is the up down action (lower highs, higher lows, etc.). And in that picture the up down action is extreme/erratic/choppy. This would make sense then to stay out or focus only on the reversal patterns at those significant levels at the edges.
Good point. Perhaps I should have written: Phase in the market cycle. My guess/experience is always that we see such extremely erratic appearing stretches of price behaviour, especially in late market phases in which an enormous amount of support and resistance areas have been accumulated. The market is simply flooded with limit orders at every conceivable area, which is of course aided by the fact that the whole concept of S/R is always somewhat imprecise. It is not without reason that I prefer to speak of zones (or areas) rather than lines, even if we must of course decide on a line for entry (and perhaps also exit). But that's exactly why you always have to see the change in the price action before you assign it to a zone. Whatever you draw onto your chart can only be for the sense of guidance. It is a visual aid, not a road map.
  • #594
  • Jul 20, 2023 8:15pm Jul 20, 2023 8:15pm
Quoting JensG
{quote}I know that such bets with a short time span can be a bit problematic for people trading from the American continent, depending on the time zone and working hours...
I do agree with your assessment of the best times to trade, and yes friday's market behavior is very intriguing. it's interesting to think about why that happens, and it makes perfect sense that traders would want to reduce their exposure before the weekend.

Do you have any insights on trading during the Asian overlap session? Veni seems to have good luck with it. I'm curious if you've ever tried it, especially considering the lower volatility and the fact that you don't ride your bets as far as others do.

Quoting JensG
{quote}Yes. In general, a late entry makes the most sense when you can pull the ripcord at a less damaging price, too. However, there is a train of thought that finds space in my mind in related situations....
A few things stand out to me:

  1. Exiting just above 3: i see, so you prefer to exit even earlier than the point I marked in the image. Essentially, you would enter a trade when the inner support level is breached and set your stop loss somewhere above 2. The stop loss shouldn't be too tight to avoid getting faked out, but it should provide the room to acknowledge that your entry timing might have been off.. BUT,

  1. Possible re-entry: In the hypothetical scenario mentioned above, just because your stop was hit doesn't necessarily mean the pattern has collapsed. It could be a matter of bad timing. If the price goes up above 1 but then breaks back underneath 1 again, it could be a signal to consider re-entering the trade. This approach makes sense to really capitalize on market movements. I wonder if you would do the same if the price broke above 3, only to fake you out and then reversed lower again.

Quoting JensG
{quote}It is not without reason that I prefer to speak of zones (or areas) rather than lines, even if we must of course decide on a line for entry (and perhaps also exit). But that's exactly why you always have to see the change in the price action before you assign it to a zone. Whatever you draw onto your chart can only be for the sense of guidance. It is a visual aid, not a road map.
it's no surprise people often say trading is both an art and science.
  • #595
  • Jul 30, 2023 4:16pm Jul 30, 2023 4:16pm
Quoting TheProtege
{quote} I do agree with your assessment of the best times to trade, and yes friday's market behavior is very intriguing. it's interesting to think about why that happens, and it makes perfect sense that traders would want to reduce their exposure before the weekend.
While it is indeed interesting, it is ultimately just a hobby and potentially also not without danger. Ultimately, we make our money by trading what we see. I suppose it's a human trait to want to understand why something is happening, but that can also be a trap if you get too caught up in "storytelling". When people ask me why a stock crashed, I have two standard answers:

  1. Because more people sold than bought.
  2. I can't tell you either, I haven't been able to ask all market participants about their motivation for selling.

My point is: while it is somewhat useful to think about why something happens in order to understand the human component of the herd instinct that will continue to drive market activity even in times of increasing automated trading and overall corporate-like decisions like seeking safer havens for the weekend, it is better not to overdo it.

Quoting TheProtege
{quote}Do you have any insights on trading during the Asian overlap session? Veni seems to have good luck with it. I'm curious if you've ever tried it, especially considering the lower volatility and the fact that you don't ride your bets as far as others do.
If you mean the transition from Asia to Europe, yes, that is the beginning of my normal trading period, or at least it used to be more than it is today. The Asian session is often said to be more technical. I would tend to agree with that and I suspect one of the reasons is also why I used to like starting at that time at least: The "Western" (US, Europe) central banks are currently still the ones that largely set the tone in the currency market and they are still asleep at the time. Sleeping "currency guardians" are good "currency guardians", they can't surprise us traders so much ;-) Somewhat less jokingly: The amount of economically relevant information that is showered on market participants of various stripes throughout the day is overwhelming at times. The Asian session is pleasantly calm.
In the past, at least, I liked to play ping-pong within the low volatility until I could take the first breakout. By the way, the result was similar to the one that someone here in the thread tried to impute to Veni as unbelievable: many small winners, a few small losses and then one or two comparatively large winners. What I find interesting to this day is that it allows you to really trade with the market flow (for the lack of a better word), at least for a few hours.

Quoting TheProtege
{quote}BUT, Possible re-entry: In the hypothetical scenario mentioned above, just because your stop was hit doesn't necessarily mean the pattern has collapsed. It could be a matter of bad timing. If the price goes up above 1 but then breaks back underneath 1 again, it could be a signal to consider re-entering the trade. This approach makes sense to really capitalize on market movements. I wonder if you would do the same if the price broke above 3, only to fake you out and then reversed lower again.
I don't know. Sorry, but that becomes too hypothetical at some point. Real examples are great, I can explain what I see, explain sequences and rankings. Fictional examples are problematic for two reasons:
All those little nuances that I perceive, whether I can explain them or subsume them in the pool that makes trading partly a kind of art as you rightly pointed out, are missing there.
At the end of the day, I am only a human being. Even if I would like to be a robot in trading, Superman in the gym and James Hetfield at Wacken (at least once in my life), in trading that sometimes fails because of emotions. The new entry, i.e. the second bet on a pattern that did not materialise before, requires an enormous amount of discipline and objectivity, especially after a losing position, which I cannot muster every time.
  • #596
  • Jul 30, 2023 5:14pm Jul 30, 2023 5:14pm
Quoting venividivici
{image} Entries are the arrows after stops get taken out on each of those areas. Yes there will be losses, small ones if you trade on 1min. Opportunities? Countless everyday per pair. If you think this is hard to make money with, I dont know what to say to you. No technical analysis. No Fundamentals. No Indicators. Wake up in the morning and get your money.
To be fair. and not doubting you know what you are doing, but it is very easy in hindsight.
  • #597
  • Jul 30, 2023 10:57pm Jul 30, 2023 10:57pm
Quoting JensG
while it is somewhat useful to think about why something happens in order to understand the human component of the herd instinct that will continue to drive market activity even in times of increasing automated trading and overall corporate-like decisions like seeking safer havens for the weekend, it is better not to overdo it.
That is so true. Keep it at a curiosity level but otherwise stay focused on what you see. Markets are too complex to be able to know without any doubt what the participants are thinking.

Quoting JensG
In the past, at least, I liked to play ping-pong within the low volatility until I could take the first breakout. By the way, the result was similar to the one that someone here in the thread tried to impute to Veni as unbelievable: many small winners, a few small losses and then one or two comparatively large winners. What I find interesting to this day is that it allows you to really trade with the market flow (for the lack of a better word), at least for a few hours.
I meant the Sydney/Tokyo overlap btw, not when Tokyo and London overlap. Seems like a time where those on the US can still trade without a wonky schedule. I was curious about it because trading costs are higher and volatility is lower so one is more dependent on good trading calls to avoid tail risk of losses. But thinking about it, the way you describe your results makes a lot of sense during this time.

Btw is there a minimum range of movement you consider trade worthy, and anything under that not worth trading because levels are too tight not leaving enough room for profits? Like for example maybe you need a minimum of 5 pips for most legs in a range for you to trade the range. Anything like that?

Quoting JensG
The new entry, i.e. the second bet on a pattern that did not materialise before, requires an enormous amount of discipline and objectivity, especially after a losing position, which I cannot muster every time.
interesting that’s helpful. So each situation can be unique and can change how you would react. This approach definitely is much more discretionary vs mechanical rules to follow.

Are you able to touch more on adding to your positions? I know in an example a while back, you mentioned we can place additional entries after periods of stagnation. But sometimes price goes fast and then rebounds fast without the stagnation. Is this something you do in all your trades? And do you just keep adding multiple entries as the opportunity arises? How much does your position size change from the first to the second to the..?

Thanks for taking the time to respond Jens!
  • #598
  • Jul 30, 2023 11:16pm Jul 30, 2023 11:16pm
https://www.tradingview.com/x/qdrlfjgC
I like using the fib when doing this idea for mechanical entries.

the op truly is a genius.
Trading is gambling. So gamble responsibly.
  • #599
  • Jul 31, 2023 8:44pm Jul 31, 2023 8:44pm
Hi guys.. for me, being able to scalp is like the ideal scenario for trading.. it's like a dream come true .. open a trade.. grab 5 pips.. close.. maybe repeat .. day done in a few hours, sleep with no stress, no trades to manage and Make money!

However, may I ask, how are you guys dealing with spreads and commissions? In my experience the trading expenses are the equivalent of 2-3 pips, so you're always starting with a loss. Say you take a 5 pip loss, it's like taking a 8 pip one. At this point, I'm having a hard time scalping because of this, as I think unless you have a very high win rate, on the long term, it's loosing.

What's your average TP and win rate% if you are making money with this Style of trading? Just asking , in order to have an idea of where I must reach to Make It happen. Thanks guys!
  • #600
  • Aug 1, 2023 3:00am Aug 1, 2023 3:00am
Quoting averied
Hi guys.. for me, being able to scalp is like the ideal scenario for trading.. it's like a dream come true .. open a trade.. grab 5 pips.. close.. maybe repeat .. day done in a few hours, sleep with no stress, no trades to manage and Make money! However, may I ask, how are you guys dealing with spreads and commissions? In my experience the trading expenses are the equivalent of 2-3 pips, so you're always starting with a loss. Say you take a 5 pip loss, it's like taking a 8 pip one. At this point, I'm having a hard time scalping because of this,...
Exactly, this was one of the most important aspects I learnt whilst scalping, I could always see the spread on the chart and keep an eye on it live, I also always knew what the minimum amount of pips was to break even...and sometimes I wouldn't get into certain trades due to those factors. Do your own broker research and try them out, eventually you will find one with a platform where you feel isn't constantly trying to screw you over everyday.
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