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Islander and Medici trade the European open

  • #121
  • Jan 11, 2010 3:27am Jan 11, 2010 3:27am
Quoting medici
For those interested in evidence in support of the basis of this thread, attached you can find an academic research paper by Carol Olser and collaborator on the reasons for the extreme moves in the fx market.

In brief, the finding is that there is clustering of sometimes very large orders at certain times and certain price levels, and that the execution of those orders often lead to strong trends.

More specifically, the London morning is singled out as the prime time for these clusterings to happen. And what we are looking for is to identify...
Welcome to all newcomers to the thread!

For the benefit of those new to this stuff, to summarise this morning it was about watching price action around 7am and 8am. Plenty of buying at around 6070 before 7am triggered a buy that half an hour later paid ~60 pips, and then at 8am price action together with Euro support confluence triggered a buy for another ~30 pips.

And the most beautiful thing is that these entries can be done with tight stops, 15 pips or so, making them quite profitable opportunities.
  • #122
  • Jan 11, 2010 3:29am Jan 11, 2010 3:29am
Sold as the 6135 level held again, making a head & shoulders on this TF

Euro held at 4534 again for another equal high.

Both show bearish divergence momentumwise....
Trading Levels with WRBs
  • #123
  • Jan 11, 2010 3:36am Jan 11, 2010 3:36am
Quoting Islander
Sold as the 6135 level held again, making a head & shoulders on this TF

Euro held at 4534 again for another equal high.

Both show bearish divergence momentumwise....

Closed at Fridays high for ~20 pips - again small size as against 5 m 30 ema, which is now at 6118 and just turning negative....
Trading Levels with WRBs
  • #124
  • Jan 11, 2010 3:36am Jan 11, 2010 3:36am
Quoting Islander
Sold as the 6135 level held again, making a head & shoulders on this TF

Euro held at 4534 again for another equal high.

Both show bearish divergence momentumwise....
Good! There are many ways to skin a cat. Hope you get your daily pip dose.

I'd expect 6110 to put up some support though...
  • #125
  • Jan 11, 2010 3:38am Jan 11, 2010 3:38am
Quoting medici
Welcome to all newcomers to the thread!

For the benefit of those new to this stuff, to summarise this morning it was about watching price action around 7am and 8am. Plenty of buying at around 6070 before 7am triggered a buy that half an hour later paid ~60 pips, and then at 8am price action together with Euro support confluence triggered a buy for another ~30 pips.

And the most beautiful thing is that these entries can be done with tight stops, 15 pips or so, making them quite profitable opportunities.
Very interesting thread and thank you for the pdf and " fact based evidence collection "....I`m subscribed.
Be like water.
  • #126
  • Jan 11, 2010 3:43am Jan 11, 2010 3:43am
Quoting Islander
Sold as the 6135 level held again, making a head & shoulders on this TF

Euro held at 4534 again for another equal high.

Both show bearish divergence momentumwise....
I am Awaiting another good position for entry long.
  • #127
  • Jan 11, 2010 3:44am Jan 11, 2010 3:44am
Quoting msmarple
Very interesting thread and thank you for the pdf and " fact based evidence collection "....I`m subscribed.
You're welcome. We're all here to learn and develop, so contributions, questions, and comments appreciated.
  • #128
  • Jan 11, 2010 3:56am Jan 11, 2010 3:56am
My take on the action so far, I'm also showing the 60m 10ema - here the 600 ema - as a reminder of the longer term trend - relative to this TF.

Remember that the MAs are my way of high-lighting the short term trends and act as dynamic (thanks M) S&R levels around which trading rules may be constructed.

Pure Price Action, as so well exploited by Medici, leads the way...
Attached Image (click to enlarge)
Click to Enlarge Name: jan 11 cable 1 min 0945 gmt.gif Size: 23 KB
Trading Levels with WRBs
  • #129
  • Jan 11, 2010 3:59am Jan 11, 2010 3:59am
Quoting TipTop
I am Awaiting another good position for entry long.
That's the way to go, with the main trend
Trading Levels with WRBs
  • #130
  • Jan 11, 2010 4:04am Jan 11, 2010 4:04am
Quoting Islander
That's the way to go, with the main trend

and I did, after the 1m 150ema reversed back to positive and held as support......now to see IF it can break-out.....TWT
Trading Levels with WRBs
  • #131
  • Jan 11, 2010 4:07am Jan 11, 2010 4:07am
Quoting Islander
and I did, after the 1m 150ema reversed back to positive and held as support......now to see IF it can break-out.....TWT

New high at the 6150 level....BUT € has a LH......so I now have a tight trailing stop.....
Trading Levels with WRBs
  • #132
  • Jan 11, 2010 4:09am Jan 11, 2010 4:09am
Quoting Islander
New high at the 6150 level....BUT € has a LH......so I now have a tight trailing stop.....


I also see we now have a 5 min high volume doji.....indecision......
Trading Levels with WRBs
  • #133
  • Jan 11, 2010 4:12am Jan 11, 2010 4:12am
Quoting Islander
and I did, after the 1m 150ema reversed back to positive and held as support......now to see IF it can break-out.....TWT
Next sell order hit at 6153. But if it breaks 6165 there might be some nice buy stops there taking things up to 6235. TWT
  • #134
  • Jan 11, 2010 4:17am Jan 11, 2010 4:17am
Quoting Islander
I also see we now have a 5 min high volume doji.....indecision......

The 6150 level was the Jan 5 high and so with this lethagic action, late in the European morning I've closed and banked my pips.....
Trading Levels with WRBs
  • #135
  • Jan 11, 2010 4:21am Jan 11, 2010 4:21am
Quoting Islander
The 6150 level was the Jan 5 high and so with this lethagic action, late in the European morning I've closed and banked my pips.....
Yep, the theme is post NFP consolidation all across the board. Only cable showing weak signs of life.

Still, congratulations on good pips!
  • #136
  • Jan 11, 2010 4:37am Jan 11, 2010 4:37am
Quoting medici
Yep, the theme is post NFP consolidation all across the board. Only cable showing weak signs of life.

Still, congratulations on good pips!


Thanks.

Looking at Market Profiles, there is quite a difference showing up between cable and euro. For the same short look back periods, € has its high vol pivot based around the top this mornings action at 4516, whist cable's is relatively much lower around its earlier action at 6086.

I'm wondering IF we are seeing distribution starting in €. Remember that € has not yet reached its 38% retrace on its hourly chart, where as cable is now at its 78% level....
Trading Levels with WRBs
  • #137
  • Jan 11, 2010 4:46am Jan 11, 2010 4:46am
Quoting medici

If you want to post your trades we'd like you to have some kind of method to your trading that is consistently profitable - a method that you document by a post to the thread.
In terms of Medici's comment in the first post, my method of trading

1) Bread and butter trades are from higher lows and lower highs from 5 min chart.

Often there will be a solid indication from an hourly close, ie its purely trend following, using a pullback in the market as the entry. Or there will be very good indications from 15 candles/VSA. NB I'm not a VSA genius by any means.

15 min chart. The attached example shows a higher vol hammer, price moves up, falls again and vol picks up on the doji. Not too hard to tell that a move up is likely. 5 min chart has a nice higher low close just below 1.5950.

2) 1 min chart. Trading the reaction to levels. I generally like to trade the trend, so if trend is up pullbacks to key levels and bounces up.

3) If GU has moved 125+ I will consider selling key levels like weekly or monthly pivots. These are not frequent trades for me though.

On 5 min and 1 min charts I have a LWMA set at 8 and would want price to cross and close this MA. Entries after the close of the candle. Stops 15-20 pips.

As I trade 1 lot per $10000 every 10 pip move = 1% return for the day. I find this much more effective than using a massive stop but much lower lot size.
Attached Image(s) (click to enlarge)
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  • #138
  • Jan 11, 2010 4:47am Jan 11, 2010 4:47am
Quoting Islander
Thanks.

Looking at Market Profiles, there is quite a difference showing up between cable and euro. For the same short look back periods, € has its high vol pivot based around the top this mornings action at 4516, whist cable's is relatively much lower around its earlier action at 6086.

I'm wondering IF we are seeing distribution starting in €. Remember that € has not yet reached its 38% retrace on its hourly chart, where as cable is now at its 78% level....
Hmm, I think that's because the Euro moved almost a hundred pips before consolidating around said level whereas the Austral-Asians forgot about cable, which consolidated before the move up this morning.. So consolidation and then next move up, I think.
  • #139
  • Jan 11, 2010 5:08am Jan 11, 2010 5:08am
Quoting medici
Hmm, I think that's because the Euro moved almost a hundred pips before consolidating around said level whereas the Austral-Asians forgot about cable, which consolidated before the move up this morning.. So consolidation and then next move up, I think.
Of course, this is in agreement with all of the 5m MAs, so LOL, repeat after me....."the trend is your friend...." AND remember what happens to top and bottom pickers.....
Trading Levels with WRBs
  • #140
  • Jan 11, 2010 5:40am Jan 11, 2010 5:40am
Quoting Vantage
In terms of Medici's comment in the first post, my method of trading

1) Bread and butter trades are from higher lows and lower highs from 5 min chart.

Often there will be a solid indication from an hourly close, ie its purely trend following, using a pullback in the market as the entry. Or there will be very good indications from 15 candles/VSA. NB I'm not a VSA genius by any means.

15 min chart. The attached example shows a higher vol hammer, price moves up, falls again and vol picks up on the doji. Not too hard to tell that a move...
Thanks, that's very helpful. Just like you I think that ~15 pip stops for 1-5% of margin the way to go.

I don't understand the people on the G/U G/J U/J thread shorting cable now with a 100+ pip stop when the trend is up. The only thing that could motivate that, in my limited understanding, is that your account is too large to day-trade, i.e. many $Ms. And even then I would build my positions differently.
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