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Exceptional day, will it continue ?

  • #261
  • Aug 25, 2009 5:41pm Aug 25, 2009 5:41pm
Quoting StoragePro
I appreciate the answer. So - the *break* is what we trade?? Do we wait for appropriate PA and then the break?
As the break carries the most momentum of price, the break should be taken, but only once qualified by a hammer.


Quote
How much room (stop loss) is appropriate?

Typically, SL is the last swing high/low + spread or as I occasionally do it, just below the hammer. However, in my experience, this is totally determined by pair. Cable for example has high volatility at various times of the day and therefore needs to be given a little more leeway due to market noise. Euro tends to be a little better at sticking to the swings, even on lower time frames.

Quote
How much Break of the wall?

I don't understand this question. If you mean how many pips after the wall, the trade should be taken on the immediate break once properly qualified. However, myself and a couple of others here like to see a retest of the break before deciding to enter.
  • #262
  • Aug 25, 2009 6:12pm Aug 25, 2009 6:12pm
Quoting StoragePro
I appreciate the answer. So - the *break* is what we trade?? Do we wait for appropriate PA and then the break?

How much room (stop loss) is appropriate? How much Break of the wall?

Almost to the point where I can actually do something to learn it.

These are excerpts from Mike's previous forum. You will be able to see more detailed info from his new websites with examples. My suggestion is if you empty your mind a little bit about all other discussed trading ideas or systems and try to understand what he means by the "walls".
Hopefully this can help!

Walls

Part I - Intro
And finally we get to the first part we can actually use on a chart namely the Walls. If you are my age and love music like I do then the first thing that comes to mind when somebody starts speaking about walls is Pink Floyd’s album The Wall. Where are the days when this album was still banned in our country. Funny, everybody had a copy even though it was banned.

How is irony for you, my Walls have also been banned…lol…enough, let’s get going.

I know there are some people on this forum that are very new to trading so I’m going to spend sometime on the concept of the H&W even though it is extremely simple. If you are completely new to price action (PA) trading I will recommend that you stop here and first do some homework. One of our members, Limstylz, has uploaded a document which will give you some valuable information on Supply and Demand. Please go through this as it is vital that you understand it to some extent.

Next step will be to get onto the net and Google 123 formations as well as support and resistance. H&W is basically the same thing. It will be good if you can read through a couple of sources and then come back here as it would make things easier to understand.

Lastly, the explanation I give here is in very simple terms, no need to get to technical yet. It is however important that you go beyond this forum and lookup more information in order to broaden your scope of knowledge. I will go into more detail further down the road as we start to bring in the other factors of this strategy.

With the concept of trading and our MM strategy in place we can now move on to our charts. On our charts there are three basic tools we will be using in our trading. The first of these are Walls. They are called many things by different traders and we will discuss some of these concepts as we go through this section.

The concept of a wall comes from the saying “He ran into a wall” meaning that the person was doing something but experienced some form of block or situation which forced him to stop doing what he was doing. There are many analogies we can use to describe it more. Think of a person writing a book. He types away until he experience what is called writers block i.e. he ran into a wall or more accurately he ran out of words. When this happens he needs to sit back and think what he wants to write about, find some more inspiration and ideas and then resume his writing with renewed energy.

On a price chart we experience the same. Price moves in a certain direction but due to underlying circumstances come to a stand still and reverse. It ran into a wall and lost momentum resulting in either a pause in its movement, a slight reversal or a complete reversal of direction. In trading terms we speak of support and resistance. If price was trending down and ‘run into a wall’ we say that it has found support i.e. a level where it stopped its downward move. In an uptrend we call this point resistance because it encountered resistance and could not move further up.

When price reaches a support or resistance point it will either break right through it or bounce back from it. If it bounces back from this level it can either continue in its new direction (trend reversal) or it can turn back and head towards the level again. This process can be repeated more than once until the level either breaks or price moves away in the new direction.

Trading from support and resistance levels offer very good entry points for a trader as the trader is usually able to enter the market with little or no drawdown. This means that the trader can enter his/her position with a smaller stop and thus a smaller risk.

Can it be this easy? Yes and no. The problem with trading from these levels is that a trader never knows beforehand whether price will break through or whether it will respect the level and bounce from it. Another problem with support and resistance levels is that they cannot be defined right down to the pip (Fibonacci levels maybe yes). The support and resistance levels are usually expressed as an area i.e. the 500 level. Example: Price falls down to the 500 level. We expect the 500 ‘area’ to offer good support as price has bounced there many time before. This does not mean that price will stop dead on 500, it can continue up to maybe 480 before it bounces back. It might also stop and turn at 520 already.

Remember that support and resistance levels, like most other forms of levels i.e. pivots, work in this way. Just because you have a line on your chart does not mean price will stop on the line.

So are Walls just support and resistance? Once again yes and no. The basic principle applies yet we use it a bit differently. In the next section we will look at how we define a wall and how to find them on your charts.

In summary for this section. Support and resistance levels are levels where price encounter some form of opposing force that leads to it losing momentum. The loss in momentum may lead to either a reversal in direction or a small move in the opposite direction (correction / retrace) before it continues again back in the direction it was travelling.

Part II - Identifying walls

In the previous section we have seen that support and resistance are areas on a chart where price experienced some form of apposing force which resulted in it being unable to move further. This happens on all charts, all time frames and during all hours of the day. They happen in both up and down trending as well as in consolidating markets.

Before we go hunting for walls it is important that we first define them. A wall is an area where price has encountered some form of resistance which has resulted in price stopping and turning in the opposite direction.

It is important that price must turn away from the wall and move into the opposite direction. If it does not then price only paused and no wall is formed. There are only two basic steps to follow to identify a wall. They are (I refer to candles as I use a candlestick chart – same applies for bars):

a) When price stops at a level it has to turn around i.e. stop and move in the opposite direction. If this happens step 1 is in place,

b) The reversal candle must be on ‘relatively’ the same level as the preceding candle. With relative level we mean that if you look at the chart you should be able to spot a horizontal level, either between their wicks and or bodies. We do not specify this in x number pips. The candle where price stalled/stopped and the reversal candle need to have highs or lows that are relative level or the open / close levels need to be relative level. We want some form of horizontal level.

As with most price and candle formations this formation can also consist of more than one reversal candle. You will get situations where price will stop and hang around at the same level for a candle or two, or more, before it starts reversing. This is all good and well, as long as we are able to spot an area where we will be able to draw a horizontal line.

To keep it simple we only use these two basic rules to identify our walls. We will however look at other factors that you will add to these two steps in order to ensure that you only take trades from the A+ wall formations. We will deal with all these factors in the next section.

Following are some charts where the walls have been marked. At this stage you should not look at them as entry points for trades. Just look at the areas where the lines have been drawn and come back to the above two steps and see how they have been applied. Also, do not be too concerned if it looks difficult to spot, once we are through all the information you will be able to pick them on any chart.

Study the following charts and then go to your own platform and take some random currency pairs and time frames and do the same. You are welcome to post your charts in the discussion area. Before you do so, please use a graphics program like LViewPro or Gimp to resize you’re the images of your charts and try to keep the size of the image in the region of 800 x 600. Save the images as either png or jpg’s.

Space is not the problem; I’m thinking of people who want to view them online. Large images can sometime take ages to open. The smaller they are the faster one can view them.


Part III – Conclusion

So we have had our first look at walls. From the posted charts you could see that there are usually quite a number of walls on a chart. This holds true for all currency pairs and time frames. No matter what chart you open, they will be there in one form or another.

Before we go on, let’s just look at the two rules quickly for walls.

a) Price must stop and turn back, not pause and stay in one place, we want it to pullback.
b) The open/close or highs/lows of the candle before the pullback and the candle starting the pullback need to be on a relatively the same level.

We now know what a wall is but what does a wall tell us. When we see a wall being formed on a chart we know that a possible trading opportunity is on the way. A wall thus serves as our early warning.

If price is for example in an upward trend and it hits a wall we know that it will either:

a) Pause and continue resulting in no trade, or
b) Pullback and attack the wall again, in which case we are provided with an opportunity to join the ride to the top, or
c) Pullback into a trend reversal and continue downwards which will also result in no trade.

So when we see a possible wall being formed on our charts we sit up and take note.

This basically concludes the walls section. There is lots of additional information that could be added in here i.e. using the walls on their own as a strategy, identifying the best wall setups etc…For this explanation of the H&W however I will stick to the simple basics until we are through the whole section. Your aim at this stage should only be to grasp the basic concept. Do not worry about how the entries might look like on a chart now. You will see the strategy taking shape as we start adding to it.

Once we are through this initial H&W thread I will open another for advance H&W trading. In there we will cover more advanced topics like how to know whether a wall have potential even before it is finished being formed…what I refer to as the halfway mark, how to determine areas where walls might form before price even gets there etc…

So just hang in there, there is still lots of ground to cover.

If you have any question please feel free to ask them in the discussion area. You do not have to wait until we have covered all the material.

Next, the hammers…
  • #263
  • Aug 25, 2009 6:41pm Aug 25, 2009 6:41pm
Quoting mike_85
GBP/USD
Sell 1.6388 – closed at 1.6354 – 34 pips Wasn't a wall, but rather a support level. Also trade retraced about 18 pips before finally going thru.
Buy 1.6385 – closed at 1.6419 – 34 pips No downside rejection hammer..
Missed the drop after this, had no signal and was not to sure about direction so did not enter new trades.

GBP/JPY
Sell 154.09 – closed at 153.87 – 22 pips Again no hammer on hourly TF.
Buy 154.27 – stopped at 154.57 – 30 pips...
Mike I am real confused. I am checking your trades you posted and find that either I am missing something or you did not follow the proper procedures you outlined in your personal website forum before entering the trade. I am looking at hourly timeframes because that's what you said you used, did you use lower TF's in this case..?

I've put my comments next to your trades, please elaborate whenever you can, thanks.
  • #264
  • Aug 25, 2009 6:50pm Aug 25, 2009 6:50pm
Quoting Pipologist99
Mike I am real confused. I am checking your trades you posted and find that either I am missing something or you did not follow the proper procedures you outlined in your personal website forum before entering the trade. I am looking at hourly timeframes because that's what you said you used, did you use lower TF's in this case..?

I've put my comments next to your trades, please elaborate whenever you can, thanks.
From Mikes site, he uses a combination of timeframes from 15 min upwards. Please check M15 as from what he posted the trades look quite correct. If you cannot find a wall on your current time frame switch time frames. Consider switching to a lower time frame once your wall has been spotted as this may give you better risk and possible earlier entry if a candle with a long tail (i.e. not necessarily the correct definition of a pin bar) occurs.
  • #265
  • Aug 25, 2009 7:00pm Aug 25, 2009 7:00pm
Guys,

Please hold off on posting any more of mikes previous site as he might not want to post that information here (at least not in that format). Had Mike wanted to do that, I'm sure he would have done so already.
  • #266
  • Aug 25, 2009 7:04pm Aug 25, 2009 7:04pm
Quoting Pipologist99
.... or you did not follow the proper procedures....
Those were by the book. See attached image.

I only trade the hourly nowadays.

You do not need a hammer to take a trade. I have always said that it is nice to have one as it gives confirmation, it is not essential to taking the trade. Also I see there is a lot of discusssions about entries i.e. when wall is broken. That is the basic entry. On around 60% of the trades you can manage to enter far earlier with advanced entries. The wall break is a basic entry and it is the easiest one to use. If you however want to maximise then you need to enter earlier. The added advantage is that you almost never get a negative trade as you can usually get your stop to BE even before you break the wall.

You mention the 18 pip pullback, not sure where....Yes drawdowns are as part of this game as losses. Most trades will enter you and run with you but you will also get into trades that just do not go anywhere. I cannot remember when, was in the last three or so days, I sat with a trade for close on 4 hours and only managed to bank 20 pips even though I had a drawdown of 40 on it.

Your drawdown will depend on where you place your stop and your stop will be determined by your goal..ie. are you out to scalp, in for the day, or in for the month. The longer the wider the stop.

Off to bed now. The website is up if anybody was wondering.
Attached Image (click to enlarge)
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  • #267
  • Edited 7:21pm Aug 25, 2009 7:10pm | Edited 7:21pm
Hey Mike,

Just tried to log in. My username/password combo not working. Can you take a look please?

Edit: actually, I realise that you have rewritten the site and previous user accounts may have been deleted. On the site itself it still says down for maintenance.
  • #268
  • Aug 25, 2009 7:20pm Aug 25, 2009 7:20pm
Quoting Limstylz
Hey Mike,

Just tried to log in. My username/password combo not working. Can you take a look please?

Limstylz, u'll need to reregister. Also, the main forum and stuff is not up yet, I'm sure Mike is workin on it.
  • #269
  • Aug 25, 2009 7:24pm Aug 25, 2009 7:24pm
Thanks Mike, I'll look it over.
  • #270
  • Aug 25, 2009 7:36pm Aug 25, 2009 7:36pm
Quoting Pipologist99
Limstylz, u'll need to reregister. Also, the main forum and stuff is not up yet, I'm sure Mike is workin on it.
Yes, I realised that in my previous post.
  • #271
  • Aug 26, 2009 7:15am Aug 26, 2009 7:15am
Markets are a bit slow today but here are my trades so far:

GU – S – 1.6308 – Stop @ 1.6283 (+25) – Currently + 29
EU – S – 1.4309 – Stop @ 1.4280 (+29) – Currently + 44
GJ – S – 153.35 – Stop @ 153.53 (-18) – Currently + 30
EJ – S – 134.67 – Stop @ 134.59 (+8) – Currently +32

Come on over and give your opinion
  • #272
  • Aug 26, 2009 7:19am Aug 26, 2009 7:19am
Here are my trades on Nymex today.

Opening PA suggested a sell but index found support dead on $72 and I bought on second HL $72.29/10.33 chart time and monitored up to PP $72.73 but it failed to get there and I sold $72.58 for 29 pips.

Trade 2 presented a SELL when idex showed LH ($72.55) at 12.07 chart time. I sold at $72.49 and t/p on limit order for plus 80 ($71.78) which gave me my 100 pips for the day.

As you can see index retraced and failed $72.00 reaching $71.93, and is now approaching $71.00

Cheers

ST
Attached Image (click to enlarge)
Click to Enlarge Name: oil260809v1.jpg Size: 169 KB
" Dont wait for your boat to come in ..... swim out and meet it"
  • #273
  • Aug 26, 2009 7:21am Aug 26, 2009 7:21am
Quoting mike_85
Markets are a bit slow today but here are my trades so far:

GU – S – 1.6308 – Stop @ 1.6283 (+25) – Currently + 29
EU – S – 1.4309 – Stop @ 1.4280 (+29) – Currently + 44
GJ – S – 153.35 – Stop @ 153.53 (-18) – Currently + 30
EJ – S – 134.67 – Stop @ 134.59 (+8) – Currently +32

Come on over and give your opinion
Charts would be very helpful on how you are picking entries showing the time frame you are doing this.

Now I shall channel my kid - "But you said you would post charts..."

I hope I don't start channeling anyone else...
I'm pretty much done with all this ...
  • #274
  • Aug 26, 2009 10:35pm Aug 26, 2009 10:35pm
Can Mike come out to play? Patiently waiting...
I'm pretty much done with all this ...
  • #275
  • Aug 27, 2009 2:26pm Aug 27, 2009 2:26pm
I suppose this is what problem people have with this thread. I came back to it hoping my initial impressions were wrong.

"Hey, I'm making oodles of pips - you can too", without any indication as to how, is outside of the spirit and purpose that made Forex Factory what it was.

I am very amenable to anyone opening a thread up to share freely his methodology. Be it good or bad, share away. Good threads last and last. Bad ones, die away.

But to use an educational forum to merely promote a service is out of bounds.

In every business endeavor I have ever been involved with, there was a trade of one thing of value for another thing of value. Unbalanced equations always starve BOTH sides of the market because one dies first, then the other has no host.

Here on the FF payment for the privileged of letting others know that there is more out there for pay is to teach people the method basics here first. And to support it going forward.

My recommendation to the forum owners is simple.

If threads like these arise, delete them permanently and enforce a permanent ban. In no way should anyone every take advantage of FF like this. To get, one must give. That is free enterprise. Economics 101.

The other alternative you can do is to purchase a banner ad if the management wishes to sell it.

I hope Twee fixes this. A large number of the best and brightest here are about to jettison. And what was FF will die.

I wish Mike well. And I hope you actually have something people can benefit from.
I'm pretty much done with all this ...
  • #276
  • Aug 27, 2009 2:36pm Aug 27, 2009 2:36pm
StoragePro,

Just because you don't get an answer straight away, does not mean that the thread author (or the rest of us for that matter) are not paying attention.

If Mike trades anything the way I do and has the same commitments I do, he will only respond to pressing matters and your post IMO is not pressing!

True, maybe he was a little overzealous in starting this thread and possibly a little overwhelmed at the attention that this thread has received, but as far as being genuine, I have experienced nothing other than sincerity.

I think you may still have a little bit of that kid you had in you the other day...
  • #277
  • Aug 27, 2009 7:30pm Aug 27, 2009 7:30pm
Quoting Limstylz
StoragePro,

Just because you don't get an answer straight away, does not mean that the thread author (or the rest of us for that matter) are not paying attention.

If Mike trades anything the way I do and has the same commitments I do, he will only respond to pressing matters and your post IMO is not pressing!

True, maybe he was a little overzealous in starting this thread and possibly a little overwhelmed at the attention that this thread has received, but as far as being genuine, I have experienced nothing other than sincerity.

I think...

Is a few charts that difficult?People post hundreds of them a day here on FF....huh...
  • #278
  • Aug 27, 2009 7:38pm Aug 27, 2009 7:38pm
Impatient buggers arent u ....

I remember reading somewhere that patience and timing are key strengths to have when considering trading.

The market will be there tomorrow is another one.

Just an obersvation

Regards

ST
" Dont wait for your boat to come in ..... swim out and meet it"
  • #279
  • Aug 27, 2009 8:43pm Aug 27, 2009 8:43pm
Quoting StoragePro
I suppose this is what problem people have with this thread. I came back to it hoping my initial impressions were wrong.

"Hey, I'm making oodles of pips - you can too", without any indication as to how, is outside of the spirit and purpose that made Forex Factory what it was.

I am very amenable to anyone opening a thread up to share freely his methodology. Be it good or bad, share away. Good threads last and last. Bad ones, die away.

But to use an educational forum to merely promote a service is out of bounds.

In every...
I am sorry guys, but i totally agree with this poster. I have read the whole thread and all i have seen is "I made a boatload of pips today !!!!" and nothing else. No proof to substantiate anything. No charts , no system nothing at all. "The site will be ready today" ... i have read that a million times already. Never seen it happen. If there is a commercial interest in this , the OP should make it very clear to set the expectations right. There is no harm in promoting it as a commercial product, the people who are interested will shovel up the dough and get the system if so be it (including me if it passes my due diligence). But to entice to no end and to use an FF thread for free advertising with zero proof of legitimacy ... you people can decide for yourselves.


I and every naysayer on this thread would like to get shut up. And shut up for good. The only way to to do that is for the OP to prove he is the real deal and has something legitimate to share here or elsewhere. Else, the next time we hear "I made a boatload of pips again today" will be met with LOL and LMAO and HAHAHA.
  • #280
  • Aug 28, 2009 3:41am Aug 28, 2009 3:41am
SoragePro,

I’m so glad about your outburst as it only shows that I was right about you from the start. You think that just because you have a high post count and some vouches and because you drop the odd bit of information here and there, that you are entitled to everything. Do yourself a favour and go read your posts. I have. You do not have much to share either do you. Also just lurking in the dark trying to take what you can lay your hand on.

You refer to me as the reason why this great forum is going down hill, what about yourself. You know why so many people come here planning to share and then just leaving? Because they meet a lot of nice and decent people with whom they are willing to share. The people like yourself come along and change everything for everyone. I am passionate about my trading strategy and yes it does make oodles of pips on a consistent basis BUT I just will not let somebody like you lay your hands on it without paying a price that will change your attitude.

It is for that very reason that people end up not sharing.

You know if you were not so busy ranting and raving you would have seen that I was busy elsewhere but you are as usual totally ignorant.

Sorry for my outburst but StoragePro, you should also realise that I’m not here to serve you just like you are not here to serve me.

You know what this is just not worth it to get my knickers into knot. It is definitely not worth it.

TWEE, do me a favour….delete this thread, dump it off the highest cliff you can find, after which delete my account, ban my IP or while you are at it my whole IP range please….please do me this favour as it will force me never to return.

As they say….Elvis have left he building, bye Forex Factory and thanks for an interesting 3.5 years on this forum.
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