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  • #5,441
  • Nov 9, 2008 7:09pm Nov 9, 2008 7:09pm
Quoting Tori
My charts have only been open 2 hrs and every monday morning there is usually a gap. Is everyone else the same, I have read that trading is open on weekends and if this is so, then there really would not be a gap, and only happens because of where my charts open. I was going to ask how I should trade such a gap until I realised it might only be a visual hole in my chart, and not an actual one.
This is a real gap in price.Price usually always comes back to fill it.
  • #5,442
  • Nov 9, 2008 7:14pm Nov 9, 2008 7:14pm
thanks Jlmac27, for the reply.
  • #5,443
  • Nov 9, 2008 7:16pm Nov 9, 2008 7:16pm
Quoting Tori
thanks Jlmac27, for the reply.
Here check this out,it will help you understand what's behind gaps

http://www.investopedia.com/articles...layinggaps.asp
  • #5,444
  • Edited 7:41pm Nov 9, 2008 7:25pm | Edited 7:41pm
Quoting Guerrillawar
Dear BRV,

My question is how do you determine fundamentals? Will you pass on a trade if the fundamentals don't agree if the market is in a two way market condition? How seriously do you take inter-market spreads? How much time to you spend keeping yourself abreast with the fundamentals?

Here's my opinion regarding fundamentals. I come from the supply demand paradigm of the markets. For example we are currently in a two way market which indicates to me that both supply and demand will be hitting the market. Thats means that I can be both long and short. This is clearly shown on a chart by short term (Hourly) support and resistance. Both are clearly evident on a chart. For example a few weeks...
Hi Guerillawar,

My take in terms of fundamentals are as in line with my style of trading as anything else. #1 I'm a short term trader (positions open for only 1 hour - 1 or 2 days) so all I really care about is what's driving price over this particular period of time. When I tie myself to “fundamentals” what I’m really talking about is market hype, and forecasting whether supply or demand will take precedence over the period of time I intend on trading.

I can honestly say I am oftentimes frustrated with various interpretations made on this method, when in fact the basic mechanics are so easy. As we know it there are two major ways of trading: systematic and discretionary. As Tom DeMark stated in one of his books, most traders are a combination of both of these, as I am.

I act on a discretionary basis in terms of entering trades or deciding to close them at any given point in time, but I act systematically in terms of measured risk/reward and demanding a certain payout or limit on losses incurred. Eg, I won’t enter a trade if I don’t think there is at minimum 50 pips waiting for me, but if I know full well that its not going to work out, I’ll close it prematurely for a loss perhaps.

Most of my efforts throughout this process have focused on getting other traders to act on behalf of themselves and I continuously encourage it by asking others to post trades, examples, etc, in order to help others just see the basic mechanics of how the market responds under many different conditions. The trade examples posted here are to prove what we do works and nothing else. In terms of all of the other work that goes into determining profit versus failure, it is a function of a trader’s desire to master what is in front of them and understanding all of the clues involved and acting quickly in order to lead them to the most profits.

But that’s just it. I have seen many traders come through this thread and the website; some area ‘silent’ and will seem to get it right away and others will pry into all nitty gritty details and never fully understand it, become frustrated, and leave.

I think the second type of trader is merely a function of a common misconception about trading: you find one ironclad system, implement it completely and systematically and it will lead you to profits all of the time. It’s a misconception because there are simply far too many dynamics that go into supply and demand to make this work 100%, and it is naïve to think it could be true. But a lot of advertising out there about trading systems available, etc, will tell you otherwise. Abandoning that mentality is, in my opinion, one of the keys to becoming consistently profitable, and the answer to what you stated above (‘I think this explains the failure rate. Its the preoccupation and anxiety one encounters when ever the markets are involved’)

Don’t get me wrong; being systematic is good to a certain extent, but understanding market dynamics and in the case of dealing with it ‘mentally’ its just something you have to get used to. Most traders fail in terms of the psychological aspects because they’re simply not comfortable with gain and loss, and letting 50 pips go because you’re holding out for 150 pips and not 100. This happened to me on that EUR trade the other day. I was up +110 pips, went down to +60, and then it shot up again. A less experienced trader might have closed the trade at 100 pips, or worse yet, only 60, whereas I’m holding out for +150.

Now in terms of your question about fundamentals, this can ring true as well. For example, if I was stuck on the notion that because USD carries a lower interest rate that other currencies, and it is likely to remain much weaker this year based on those differentials, I probably would have lost a lot of money this year – plain in simple, there are far too many dynamics integrated into spot prices in order for this to ring 100% true, and is impractical for me to trade this way. A completely systematic method based on this notion would have performed poorly, but integrating discretion is the key difference here. Fundamental or technical, this concept remains the same. Interpretation through experience and judgment is the difference.

In order for me to integrate any fundamental knowledge into my daily trading all I do is simply look to market participants and hype. In other words, what is it that is taking precedence over the period of time I am looking to trade (that particular day, etc) and how is it going to affect price of whatever it is I am trading. This is why I am so bent on reading the daily news. In a volatile market like this, one piece of news can spike the market like crazy, and I want to be on the right side of that trade. In this market, we are heavily tied to risk. Pairs that track world indices, (JPY pairs, etc) have been ruling over a lot of what has been happening on an intraday basis even on base pairs (EUR/USD, etc). So I’m running technical and basic ‘fundamental’ daily analysis based not on the long term implications but more so on what traders will do on any particular day.

For Friday’s trade on EUR, the market just underwent another nasty selloff (equities and ccy), and I was looking for an upward revision after interest rate rumors exhausted themselves and this equity selling, as well. It’s just a natural occurrence, something which I’ve become familiar with over time. I knew full well, however, to get out of the trade before the news hit, because my chances of any of this sticking around the time of the actual release was slim. Supply and demand, in this market, is oftentimes difficult to guage, but correlations have been sticking like glue, and if I can predict activity in one market, and combine it with what I am trading, I have a very good chance of being correct for that day. This is through endless screentime on my behalf, however, and knowing what kind of ‘fluff’ moves price around.

Many of these moves are purely technical in nature, as well. A 50 pip bounce countertrend on GBP isn’t uncommon; price needs to rest for a moment and I’m just catching it at the right level. No fundamentals driving anything there, just bank flows – people taking profit or doing the same thing I am doing; trying to make some money off of a heavy technical level…..basics.

In terms of intermarket spreads, I don’t watch them too furiously; I’ve found in the past that a lot of clues I get from them can be misleading even though sometimes, they do work. There are literally thousands of portfolio managers who arbitrage these differences for profit, but that's just centralizing this one method. As a spot trader, what I can say is that I check movement around key areas. I’ll look at interbank bids and offers when an area is getting hit and you can usually see large positions coming on through deviations in spreads (spreads will jump around fast and far within seconds) – this kind of jolty price action, which I’ve mentioned in the past, can sometimes help me in seeing if large positions are being put on in the direction I’m looking to trade, or against it.

My biggest ingredient in looking at fundamentals, though, is that daily hype. For instance, when the S&P dropped 20 points in one day last Wednesday, chances of it turning around then and there were slim. A selloff like that is likely to continue and currency markets will typically follow suit. It’s a simple way of looking at things which I’ve found to work practically for me; and this is just one example.

At the end of the day the market is going to react as it will; we are its servant, so to speak, and the best we can do is use what tools we have to gauge this behavior and be prepared for when our attempts to forecast correctly fail. I’ve found that traders who adapt their own methodologies for forecasting that they find to be working consistently profit the best. Simply taking one particular trader’s way of doing things 100% and applying won’t work many times because no one can fully absorb themselves into the thought processes of that trader. It’s a learning curve where traders simply need to adapt themselves to a particular means of interpretation that works for them.

I realize I’ve gone above and beyond here, but I’m also getting some things off my chest I’ve been meaning to write for a little while here also….I hope this helps (and I hope I even answered the original content here). Starting to write a novel here….will end now J.
  • #5,445
  • Nov 9, 2008 7:44pm Nov 9, 2008 7:44pm
Quoting jlmac27
Here check this out,it will help you understand what's behind gaps

http://www.investopedia.com/articles...layinggaps.asp
thanks for the info. have read it through and saved to re read while I watch examples in real time. appreciated.
  • #5,446
  • Nov 9, 2008 7:49pm Nov 9, 2008 7:49pm
Quoting BillyRayValentine
Hi Guerillawar,

My take in terms of fundamentals are as in line with my style of trading as anything else. #1 I'm a short term trader (positions open for only 1 hour - 1 or 2 days) so all I really care about is what's driving price over this particular period of time. When I tie myself to “fundamentals” what I’m really talking about is market hype, and forecasting whether supply or demand will take precedence over the period of time I intend on trading.

[color=black]I can honestly say I am oftentimes frustrated with various interpretations made on this method, when in fact the basic mechanics are so easy. As we know it there are two major ways of...
I myself enjoy reading your novels,Thanks again for another insightful post!Have a good trading week my friend.
  • #5,447
  • Nov 9, 2008 8:00pm Nov 9, 2008 8:00pm
Quoting BillyRayValentine
At the end of the day the market is going to react as it will; we are its servant, so to speak, and the best we can do is use what tools we have to gauge this behavior and be prepared for when our attempts to forecast correctly fail. I’ve found that traders who adapt their own methodologies for forecasting that they find to be working consistently profit the best. Simply taking one particular trader’s way of doing things 100% and applying won’t work many times because no one can fully absorb themselves into the thought processes of that trader. It’s a learning curve where traders simply need to adapt themselves to a particular means of interpretation that works for them. ...
Good post BRV. Quoted this because I think it's the most important paragraph in there. There's probably hundreds of different profitable systems, but the 'holy grail' is truly understanding yourself and the system you are trading.
  • #5,448
  • Nov 9, 2008 10:00pm Nov 9, 2008 10:00pm
hey guyz what do u think of this one?
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  • #5,449
  • Nov 9, 2008 10:54pm Nov 9, 2008 10:54pm
Quoting Tori
My charts have only been open 2 hrs and every monday morning there is usually a gap. Is everyone else the same, I have read that trading is open on weekends and if this is so, then there really would not be a gap, and only happens because of where my charts open. I was going to ask how I should trade such a gap until I realised it might only be a visual hole in my chart, and not an actual one.
Tori, I think it is your charting package. Metatrader gaps. But as you say trading is open on weekends. I have found this site to show price over the weekend. http://forex.tradingcharts.com/quotes/

Lou
  • #5,450
  • Nov 9, 2008 10:55pm Nov 9, 2008 10:55pm
Quoting ezz
hey guyz what do u think of this one?
I think that would have been a good buy at ,860 but I would not think it would go obrt 900 so would not be looking for a big run of pips because the nikkei has dropped a little and might finish day lower than where it started which would mean eurjpy heading down a little and eurusd doing same. If it continues up I will be looking at 955 for a sell which is another line of resistence. I will say, this is all just my thoughts as I am in no way knowledgable, but I am willing to look like a goose and print what I see.
  • #5,451
  • Nov 9, 2008 11:14pm Nov 9, 2008 11:14pm
Quoting Lou
Tori, I think it is your charting package. Metatrader gaps. But as you say trading is open on weekends. I have found this site to show price over the weekend. http://forex.tradingcharts.com/quotes/

Lou
Thanks for that. have saved it to my favorites. had some great help today from people toodles
  • #5,452
  • Nov 10, 2008 1:01am Nov 10, 2008 1:01am
I have been watching eurjpy for ages and wonder if I am correct in suggesting that stops would have been building under 126.91 as there is both support and resistance on this line. expecting that if it should break that level it could move quickly to fill the gap created this morning. It has been hitting here over many hours with less and less momentum to the topside. still fiddling with printing chart so apologise again.
  • #5,453
  • Nov 10, 2008 1:13am Nov 10, 2008 1:13am
Quoting Tori
I have been watching eurjpy for ages and wonder if I am correct in suggesting that stops would have been building under 126.91 as there is both support and resistance on this line. expecting that if it should break that level it could move quickly to fill the gap created this morning. It has been hitting here over many hours with less and less momentum to the topside. still fiddling with printing chart so apologise again.
Tori, I will help you. Here is the chart.
126.89 is there also for me but.... I am not sure where the pair will move.
look at the clear fibo from 141.79 to lowest 113.66. It rides the 61.8% and 50%
Waiting for buildup of clear setups.
Have a great pips week
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  • #5,454
  • Nov 10, 2008 1:16am Nov 10, 2008 1:16am
Quoting Tori
I have been watching eurjpy for ages and wonder if I am correct in suggesting that stops would have been building under 126.91 as there is both support and resistance on this line. expecting that if it should break that level it could move quickly to fill the gap created this morning. It has been hitting here over many hours with less and less momentum to the topside. still fiddling with printing chart so apologise again.
This level seemed to be respected in the past pretty well.We'll see what happens
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  • #5,455
  • Nov 10, 2008 2:01am Nov 10, 2008 2:01am
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I would be looking at a sell at 1.1801 on usdchf. if it reaches this level it will be the fourth time up there so I will sell a fail. I would look at target of 1.686. I have attatched the chart. As I have not been successful at this task I hope it prints out and not something different. please bare with me till I get it right.
  • #5,456
  • Nov 10, 2008 2:15am Nov 10, 2008 2:15am
I have waited the whole day for this eurjpy to break through my line and my first target is 125.91, then 124.75. We will see. I hope you dont mind the posts because I wish to be accountable to myself by being brave enough to name my entry and target. This makes me learn patience and better assessment. Plus I am sure my mistakes will help others be more vigilant also.
  • #5,457
  • Nov 10, 2008 3:30am Nov 10, 2008 3:30am
Dear Thread,

Since people have been speaking about fundamentals recently, may I ask if people look at market microstructure and how they use it and how it helps them? ---I myself
do not know nor understand market microstructure,
but I keep reading about traders who profit from it.

Lenoxer.
  • #5,458
  • Nov 10, 2008 4:18am Nov 10, 2008 4:18am
Anyone have some nobrainer trades coming up this morning?
  • #5,459
  • Nov 10, 2008 5:24am Nov 10, 2008 5:24am
Hi,

I found the thread this weekend and have enjoyed reading through (almost got to the end). Nice job to BRV and all who have contibuted. BRV, the blog you have put together is very good. Great layout and excellent content. The videos are great.

I thought i would post some charts i have marked up with some S/R lines that would indicate possible trade setup's.

Any comments on the price levels i have identified would be greatly appreciated

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  • #5,460
  • Nov 10, 2008 5:38am Nov 10, 2008 5:38am
This is looking promising - about 20 pips up so far
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