Strat's Long Term Stress Free Trading

As I said in my reply to your PM, register with Naws since rogueforex is no longer with us.

Strat is this the post that you are talking about? Posted by by Blackeagle regarding SR identification @ post #2593

http://www.forexfactory.com/showpost...postcount=2593

Nicole,

This is how I draw SR lines. I start with monthly and try to determine obvious SR lines. To do that, max. zoom out your chart and always switch between candle and line charts to see if high/low prices have any meanings relative to closes, if highs/lows are fakes or they are just price shootings/anomalies.

Then go down to weekly tf and do the same thing. SR lines that are not too obvious on monthly are clearer on weekly, therefore, normally my SR line drawing procedure is complete at this stage and I go down to daily tf to fine tune the ones drawn on weekly and monthly. Don't forget to switch between candle and line charts on weekly, too.

Re. daily charts, I either use them to fine tune SR lines drawn on monthly and weekly or if the price is in uncharted territory, I try to determine new SR lines.

You don't need to use open prices to draw SR lines because FX market is not like equities or commodities, since it is a 24hr market, open prices are normally just a few pips away from close prices except Sunday openings. For Sunday case, you can use Friday's close instead of Sunday opening, that's fine.

If you draw your SR lines correctly, then you don't need to amend your lines everyday or every week. They are valid for a long long time. Do you know that 0.7300 level on AUDUSD is coming from 1994? Only if you are in uncharted territory, then you can amend your recent lines depending on how the chart shapes up.

One last hint is that you should see these SR lines as a thick line, not a pinpoint and then watch PA around those lines. Because sometimes PA does not give us enough clue around SR lines or move through those levels without stopping due to news or strong momentum in which case we pass the trade. This is where patience and discipline play a vital role in trading, because if price gets away from recent SR line due to lack of PA, then you need to wait the price reach the next SR line.

Now, if you open your EURGBP chart and do the things I have tried to explaine above (because I believe EURGBP is the most clean chart to practice SR lines), and then switch to other pairs and do the same practice, I believe you'll have more confidence in drawing SR lines correctly.

Hope this helps.

Big boss, Boss and Worker all show continuing downtrend.
Price has crossed (but not closed) the critical 1.3000 support level.

The last time we closed under 1.3000, price ranged in that now obvious 500 pip range just mentioned.

Because this is strong downtrend and I am unsure of a retrace but am more confident of the continuing downtrend (as long as it's going down it will keep going down), I will enter a sell order for 3 USDCAD at close of NY session today if it closes under 1.3000. SL at 1.3025 which is above today's high.

TP1 at minor support 1.0050 and move stop to BE
TP2 at next support .9800 and move stop a few days behind to let the last one run for the final TP.

First chart shows now and second chart shows last time we entered this area.

Note: Credit where credit is due...I am referencing this area of congestion as such because previous posts pointed it out, not because I noticed it first. I do my best to emulate previously successful scenarios if my analysis agrees.

This is my first textbook trade here. Please lay into it with all the enthusiasm you can muster!

That is one of them. The one I was meaning was where he posted a chart with thick red horizontal lines on followed by his explanation.

I see a lot of new members posting here lately If you want to be registered on the path, please send me an email to [email protected] with your name and location.

Each candle has a tale to tell.

Dan, in your short time on here, you have progressed very well. Good lad!

<<<<<<<<<<<<<<<<<<<<<<<<<<<<>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

For those newer to the thread, Dan was where you are at almost 8 months ago and is now a very successful and accomplished trader.

What Dan is saying is that he has progressed from someone recognizing candles and candle patterns to READING THE MARKET.

When he gets chance, I would like him to post on here his transition and how it took place and how he did it.

If you haven’t realized it already, there is a progression in trading and it starts at the beginning of The Path of Learning. This is your foundation. Just like you can’t build a building without a foundation, you can’t progress as a trader without having the foundation learned from The Path of Learning.

You have to learn the basics until they are second nature to you. Until you can recognize, almost without looking, the basic candles we discuss on here, you cannot progress forward.

What you will then become is what I describe as a “mechanical trader”. Like the ex – Military guys who won or were highly placed in Futures trading competitions, you will just blindly follow the “rules”. They did not understand, nor cared, why they did what they did, they just KNEW to do it. Not a bad way to go but not REAL trading.

The next progression is, I find, difficult to teach because it depends so much on the individual’s mentality, perception, awareness and a host of all other “natural” things that make us who we are.

The one thing we need a MAJOR dose of is COMMON SENSE.

I don’t know what or why it is but I see so many traders do things which are just NOT common sense. Like the guy who posted that the Worker was in conflict with the BOSS and how should he trade it. This has nothing to do with trading. It has everything to do with common sense. Like the guy trying to paddle upstream in his canoe against a raging white water river flowing downstream. I could go on but the point is COMMON SENSE must come before trading.

Also, as you develop as a trader, you get a “gut instinct” – despite what the technicals tell you, your “gut instinct” tells you otherwise. Sometimes it gets it wrong but most times, its on your side.

On many of my posts I have told you to look at what the chart is telling you, look at what the trend is telling you, look at what the last week of candles is telling you, look at what the last candle is telling you.

You have to start learning to SEE BEYOND THE CANDLES.

Many times I have posted about the market leaving FOOTPRINTS – the market leaves behind SO MUCH INFORMATION if you are prepared to look for it, study it and understand it. Just because we have our foundation in place doesn’t mean that we don’t need to practice and study charts anymore. On the contrary, we need to STUDY and practice more to see and learn what these footprints are.

I haven’t looked at them for months now but when I looked at companion threads on PASR, I saw so many posts and replies on what constitutes a certain type of bar, how it must look, where it is, what its proportions must be, how many pips must be exceeded etc, etc. This is all well and good for our foundation, our basic building blocks but we have to get BEYOND this level and thinking if we are to become better traders.

When you SEE BEYOND THE CANDLES, you will not care whether it is a BUOB or BUEB or whether the BUOB exceeds the extreme of the previous bar by “x” number of pips etc.

You have to stop seeing candles and INSTEAD see BUYERS and SELLERS. Many, many times in my analyses, I have posted what the SELLERS and BUYERS were doing. Many times I have posted what was going on between SELLERS and BUYERS on “incorrectly” positioned and “incorrectly” shaped hammers and shooting star bars.

Many times I have described trades I have taken where there was “NO PASR” as subsequent posts were quick to point out. There was “NO PASR” as shown by specific candle recognition but there were FOOTPRINTS left behind.

How many of you picked up on my describing SELLERS and BUYERS rather than candles? Not many from the posts I read.

I have stated many times, this thread is ONLY THE BEGINNING, there is so much more to be KNOWN and LEARNED.

I think this is enough to whet your appetite and get you thinking more and moving away from being “mechanical traders”.

HOWEVER, you MUST know your basics and have your foundation firmly in place, to do this. Without this in place you will end up in confusion and that horrible place where 95% of traders are at.

Thanks for the notification Naws! Mail sent.

So far, soso good, soso!

This is luqmanz’ post from March 28, 2007

It is so in line with my thinking and what we are teaching on the thread that I had to post it.

I have “tarted” it up for emphasis.



Mar 28, 2007 8:58pm
luqmanz
Member

Member Since Nov 2006
513 Posts
Simplify your system
It has come to my attention that old time traders that I met tend to say "Keep it sweet and simple". How did they really make money by keeping their system simple?

The simplest answer that I can think of is this:

"Old time traders define when not to trade."

Many times I have seen threads that discuss trading systems that grow more complex as time passes by. It usually starts simple and then people lose money and they start introducing new rules. e.g. if market is like this, I will do this (repeat 100x and create new 100 rules).

To keep things simple, one should just define when not to trade. "Not to trade" is the hardest part for most newbies.

Everything is back to psychology.

Simplify your system. Define when not to trade at all.

If market is A .. long
If market is B .. short
Everything else (C,D,F,G,H....thru Z), DO NOTHING.

Just to share what I have learnt from the old guys that I have met.

Thank you Strat. I will try to keep this as brief as I can as I’m sure a lot of people will relate, and I just want to give the Cliff notes. Funnily enough, we’re approaching my one year anniversary of when I first considered trading and opened a spread bet account (27th October), so I suppose now’s as good a time as any for a recap.

On October 28th 2008 I started spreadbetting, punting on anything and everything with less than no clue. After about a month or so I discovered that I could play the currency market at night as they didn’t close like the stocks I had started with.

Needless to say, after six weeks I was no further forward so I stopped spreadbetting (I hadn’t lost a great deal – beer money only as we say in the UK) and opened a demo account on MT4. I cannot stress how little I knew at this point (and I would argue I still don’t, but accepting so is very very important).

I then spent the next few weeks actually watching the market, doing a bit of reading (Pring) and trying to get ‘clued up’. Around about the same time I was also experimenting with MA’s and happened to put the 20EMA on my charts one day and BINGO. I then found a group of ‘traders’ who also used the 20EMA and a lot of other cool-looking stuff trading the London open. Sounded too good to be true, so I signed up...one month later, I signed off.

At around this time I had also begun reading some posts by a crazy fella (Strat)who traded the Daily and Weekly charts and who was encouraged by Nicola (Elitejets) to start his own thread on his method so, on 27 February 2009, I suppose I actually began to understand.

Slowly but surely I began to appreciate more and more what I was looking at (It’s funny to think I actually found it quite daunting to post my first chart). Strat took the time to help me see for myself, there were no easy rides and we fell out once or twice, but to his eternal credit, he stuck with me. I traded demo as if it was real money, I kept a detailed log, and during this time, I don’t think I actively read anything else on the markets – I simply read MY charts each day and kept a clean mind.

So things were great, but we entered a period of consolidation (at least it was to my eyes then – I suspect Strat and others were trading quite profitably off the daily at the time, but my understanding was not there yet and frankly I am an impatient bugger – still!), so I ventured off into the world and found a few other traders who helped me further understand – particularly the fluidity of price and time, and trading truly naked.

Over the summer I began reading (and trading) much more feverishly (by this time I was also live). I learnt more and more and continued to succeed, however small, because Strat and others helped me set solid foundations based on price, support and resistance.

----------------------

All that’s past is prologue however, so perhaps to say a little about where I am now gives greater credence to where I’ve been. Please note, the following is not to denigrate from anything Strat is teaching on the thread – I can only trade the way I do now because of how I was taught. It’s to Strat’s credit, not detriment.

I trade bars only. I pay no attention to Fibs and I don’t find the need for MA’s. I don’t use stops. I pyramid into and out of positions and I DON’T WORRY.

I’ve gravitated back to daily bars for three reasons:

1. Time means nothing to me, only price. Price can be read perfectly well EOD so why spend time looking at them go up and down all day.

2. For want of a better descriptive, randomness. Price reacts to news. The reaction is not often indicative of the bigger (global) picture. The further away you stand, the more you can see.

3. Money. I’m more profitable taking the broader view.

I have established an attitude (through a lot of hard work and dedication and help from others) which is best summed up in a post I made here.

For anyone who is where I was this time last year, trading is dirt simple; establish a directional bias, and trade it. It’s only a two horse race. Strat is helping you identify that directional bias, and while that’s only part of the challenge we all face, its value cannot be underestimated.

I hope this hasn’t been a pointless ramble and as ever, the above is only my opinion, which frankly, is the only one that matters (I’m sure some of you will think I’m an arrogant barsteward for saying so, but I suspect some will also know exactly what I mean).

Happy trading all.

Dan

Thanks, Dan.

Just a few comments on Dan’s post

I trade bars only. I pay no attention to Fibs and I don’t find the need for MA’s. I don’t use stops. I pyramid into and out of positions and I DON’T WORRY.

This is now Dan’s personal style of trading evolved from his understanding of the basics.

Do NOT attempt this unless you are at the same level as Dan. You NEED candles, Fibs and MAs UNTIL you can read the market without them so keep using them.

I still personally use candles because I am more of a visual guy – a “looker” – bars don’t tell me a “visual” story. However, it's a personal choice as long as you are getting the information you need from them.

Trading is dirt simple; establish a directional bias, and trade it.

Read that again until it SINKS in to the porridge between your ears.

Trading is dirt simple; establish a directional bias, and trade it.

Go back and read my post on Dr. Joe.

Read that again until it SINKS in to the porridge between your ears.

Let me simplify it even more for you:

KEEP ON BUYING UNTIL IT STOPS GOING UP

WE KNOW WHEN IT STOPS GOING UP BECAUSE IT STARTS GOING DOWN

WE KNOW WHEN IT STARTS GOING DOWN BECAUSE PRICE IS BEING SOLD (SUPPLY).

KEEP ON SELLING UNTIL IT STOPS GOING DOWN

WE KNOW WHEN IT STOPS GOING DOWN BECAUSE IT STARTS GOING UP

WE KNOW WHEN IT STARTS GOING UP BECAUSE PRICE IS BEING BOUGHT (DEMAND).

No fancy indicators, black box, neural networks or complex algorithms needed

Just follow the LAWS OF SUPPLY & DEMAND

Since Nicola (elitejets) is also a very successful and accomplished trader, I am also asking her (when she gets chance from raising her 4 Lab puppies) to post on here her story of her trading evolution.

So, here is our pair of the moment – the Worker, BOSS and BIG BOSS

So what do you say now?

Who is IN CONTROL?

Has it stopped going up?

Here is a TIP:

Be very careful drawing your SR lines on your chart. They affect us as individuals in different ways – it all comes down to that 95% which we find so difficult to control.

To many people, me included, these lines are “burned in our sub – conscious” to the point that we subliminally think price MUST OBEY THEM.

I was forever calling “imaginary” tops and bottoms because of the damned things.

If you have that disposition where you are visually influenced, like me, be very careful and recognize your short comings.

Don’t laugh – it is true. Until I realized it was my mind and head games controlling me, I believed price HAD to obey my lines.

Even to this day, I still struggle with it and once I know where the SR levels are, I take them off my personal trading charts and just keep a mental note of them.

You must do whatever is needed to keep YOU in control

Good example today of why we need to wait for the close, we had a nice SS on this pair a few hours ago but now after NY close it looks like a normal green bar with no indication for short

Good, but don't just stop there.

What does it now tell you? Does it mean anything? Does it mean more to you than just a green candle? Where is that candle in relation to the others around it? Where is it relative to inter - day resistance?

Start stepping up your game, Arthur otherwise you are going to be stuck in a rut

It looks like they all agree that they want to keep going up. It doesn't look like it has stopped BUT I wouldn't trade it either way.

There is a resistance up ahead which very well could be broken, or price could just bounce off of it and head south.

I don't know the answer, but I wouldn't trade it. I would wait for PA to give us some direction.

They are already there Waltwitham put Blackeagle's posts there about a month ago

Thanks, Walt pointed that out to me.

For everyone:

A summary of Blackeagle's posts can be found under "Experts" in the Index.

One thing and one very important thing I missed pointing out on Dan’s post is that Dan has something no-one can teach – PERSEVERANCE & DETERMINATION

If you don’t have these two attributes, you may as well pack your forex bags now and leave the room.

I have been criticized many times (thank you, T*a****x and others) for my abrupt, harsh, disrespectful and many more adjectives style but it is all for a reason. If you have the mental toughness, perseverance and determination to put up with me in learning my method, then chances are high you will succeed. Those cry babies who need pampering, ass licking and can’t face the truth and reality, don’t last on my thread and I don’t want them either. I only want those who are prepared to push through the pain barrier.

None of you know it but you all go through, at some point in time, my “litmus” test to see how you react, some more than others (sorry Danny boy!).

As Dan points out in his post, I had a couple of “gos” at him and then turned the screws on him even more. He responded in a PM to me in such a manner that I knew he had the perseverance and determination to succeed at this. As a result of this, I knew it was worth spending my time and attention with him.

The same is true for Nicola – I have had many a “go” at her but she just takes it in and does it – she is determined to succeed at trading no matter what and keeps persevering until she gets it – which she has – BIG TIME!

In a very early post I wrote about Robert The Bruce in Scotland who was defeated six times by the English (called Sassenachs by the Scottish). After the sixth time, he retreated, a beaten man and ready to give up, back to his cave. While feeling sorry for himself, he saw a spider trying to spin her web to catch a fly. She tried and just kept on trying until eventually she caught the fly. This was all the motivation Robert The Bruce needed. He went out and defeated the English at his seventh attempt.

Abraham Lincoln was a born determined perseverer (I know, no such word but you know what I mean). He lost election after election but never gave up. He believed he could win and get elected and persevered with great determination until not only was he elected locally, but eventually as President of the USA.

So, only you know, truthfully, if you have the perseverance and determination to succeed at forex.

That's exactly what happens to me sometimes, an SR line can look like a solid brick wall in your head, especially when everyone starts yelling double top and reversal.

Of course that's not true and it has been difficult to get away from that mindset but just constantly reminding myself of that has helped.

Also try to not keep any preconceived mindset as to where price might go, this helps to keep the mind clear.

About AUDJPY, I don't know and I don't care whether its a double top or if it will break. All I know right now is why I should not trade it so I move on to other pairs until PA shows the way.