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Strat's Long Term Stress Free Trading

  • #10,341
  • Mar 2, 2010 10:36am Mar 2, 2010 10:36am
Over the course of the first year of the thread, I have received many PMs and emails where students tell me that they have gone back and re-read the thread. Some have said they have read it several times and each one said they learned something new each time they read it.

I would suggest to anyone who has doubts with the PASR concept or has difficulty trading PASR, to read the thread again. The grey matter between our ears, especially when visited by the Little People, can only take in so much at a time. Re-reading the thread with the emphasis on UNDERSTANDING will open up the once closed doors.

Yes, it is now a long thread, but so is the learning to become any Professional.
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,342
  • Mar 2, 2010 10:52am Mar 2, 2010 10:52am
Quoting strat
PASR trading is about trading off the CONTROLLING PRICE ACTION bar. The 2nd hammer was NOT the CONTROLLING PRICE ACTION bar.

The 1st hammer of October 2009 is the CONTROLLING PRICE ACTION bar.

Any trade in the long direction should have been entered above this bar NOT the 2nd hammer. Anyone entering such a trade would NOT be triggered, sucked in and blown out in bubbles.
In looking at several of your past trades, I was going to ask about the necessity of entering a trade above the controlling bar but you've beat me to it.

I had thought it was just a 'preference' to enter a trade above the controlling bar rather than at the close of the bar. Preference or not, I'll be entering above the controlling bar from here on. Some of my recent trades were entered on daily closes and not above the controlling bar and I see now I've been lucky rather than good.

I also recall you saying you entered above the bar because that was an indication that momentum had taken hold.

-m
  • #10,343
  • Mar 2, 2010 11:06am Mar 2, 2010 11:06am
Quoting mstandifer
In looking at several of your past trades, I was going to ask about the necessity of entering a trade above the controlling bar but you've beat me to it....
For you guys on The Path, you MUST trade the CONTROLLING PRICE ACTION bar.

You MUST use the CONTROLLING PRICE ACTION bar as your SET UP bar. In other words, buy with a Stop order above, and sell with a Stop order below the CONTROLLING PRICE ACTION bar

Trading At The Market will "sometimes" gain (GREED) a few pips but over time, you will LOSE more than you gain.

You MUST control your Little People (GREED), and MUST excercise DISCIPLINE as part of the learning process in trading PASR.

You MUST learn basic PASR and PASR before refining/fine tuning your trading.

PASR is the foundation on which your trading is built.
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,344
  • Mar 2, 2010 11:48am Mar 2, 2010 11:48am
Quoting mstandifer
In looking at several of your past trades, I was going to ask about the necessity of entering a trade above the controlling bar but you've beat me to it....
I also recall you saying you entered above the bar because that was an indication that momentum had taken hold.

Yes (and no).

PRICE, and especially trend, cannot move without Momentum.

To move PRICE we need buyers and sellers. The more buyers and sellers we have, the more PRICE moves. This is Momentum. It is also Volume but since volume, through having no central forex exchange, is worthless in forex, we have to focus on Momentum.

No, this does not mean applying worthless Momentum indicators to your charts. It means learning to read Momentum by "Seeing Beyond The Candles".

Let's go back to our concrete ball but this time on perfectly flat ground. To move this heavy concrete ball takes a lot of energy. Think about when your car breaks down and you have to push it - it takes a lot of energy to get it rolling.

Once the ball (car) is rolling (Momentum), it takes LESS energy to keep it moving. Once rolling (Momentum), constant applied energy will keep the ball (car) moving at the same speed.

Add ADDITIONAL energy to the rolling ball (car) and it will move faster. Momentum will increase.

Take away (REMOVE) the energy and Momentum will slow down until eventually, the ball (car) comes to a halt.

Now apply this concept to the Market - any Market.

Let's say PRICE is flat, stationary, going nowhere. PRICE is said to be "in balance" or "in equilibrium". Either there are NO buyers or sellers OR buyers = sellers.

It will stay like that until there is an "out of balance" between the buyers and sellers. If there are more buyers than sellers then PRICE will go up. Vicky Vercky - did I ever tell you about a girl I knew called Victoria? Sorry, mind wandering again!

This "out of balance" is the energy of the buyers in this case.

They have started the ball (PRICE) rolling (Momentum). Now, with Momentum (PRICE moving higher), can the buyers sustain the Momentum? We need the same "out of balance" buyers to maintain this established Momentum. Will the sellers stand by and watch this or will additional buyers come in?

Watching Momentum tells us a "behind the scenes" of what is happening between the buyers and sellers.

I'd better stop now because I could devote a whole thread on just discussing Momentum!

Oh, the "No" part of the answer is when the Big Boys go on a stop run and thus all bets are off.
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,345
  • Mar 2, 2010 1:00pm Mar 2, 2010 1:00pm
Hello Strat,
I've noticed that the 2nd hammer on the Big Boss chart made a LL. It was with less than 100 pips, which is almost nothing on the Big Boss scale but is this a sign that the controlling bar... lost control?

There is a similar situation on the USDCAD Big Boss. This was discussed previously on the thread. The controlling candle is the one from October 2009. Its low has not been taken, price is still inside that controlling candle and the price stopped going down.
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  • #10,346
  • Mar 2, 2010 1:19pm Mar 2, 2010 1:19pm
Quoting hcristea
Hello Strat,
I've noticed that the 2nd hammer on the GBPAUD Big Boss chart made a LL. It was with less than 100 pips, which is almost nothing on the Big Boss scale but is this a sign that the controlling bar... lost control?

There is a similar situation on the USDCAD Big Boss. This was discussed previously on the thread. The controlling candle is the one from October 2009. Its low has not been taken, price is still inside that controlling candle and the price stopped going down.
I've noticed that the 2nd hammer on the GBPAUDBig Boss chart made a LL. It was with less than 100 pips, which is almost nothing on the Big Boss scale but is this a sign that the controlling bar... lost control?

In pure technical terms yes, but using trading common sense, no.

The LL was more than likely stop over runs plus it was another hammer.

More important is that PRICE did not CLOSE below the low of the previous hammer.

Accepting that the LL was stop over runs and that it was another hammer, the CONTROL stays with the biggest, tallest hammer - this is defining the range at which buyers will buy and sellers will sell.

When there are more than one hammer at support, it is always SAFEST to use the largest (tallest) as the set up bar. This goes against our Little People (GREED) who want us to get as many pips as we can.

There is a similar situation on the USDCAD Big Boss. This was discussed previously on the thread. The controlling candle is the one from October 2009. Its low has not been taken out, price is still inside that controlling candle and the price stopped going down.

The October 2009 hammer (same as for GBPAUD - coincidence?) is still IN CONTROL. PRICE will continue to meander within it's range until PRICE closes beyond its extremes.
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,347
  • Mar 2, 2010 2:17pm Mar 2, 2010 2:17pm
I won't have time this evening to write this up properly so I'll do it now.

Note: trade will not be executed if today's bar turns into a hammer. Fundamentals aside this is the picture perfect stress free trade if today's bar stays anywhere close to what it is now.

USDJPY Monthly trend is down. Still making LH and LL. 20 below the 50. Last month's inverted hammer is still in control saying caution on any short plays. Also the 61.8 fib is still holding.

USDJPY Weekly trend is down. Appears to be entering a range but last weeks BEEB control was broken today to the downside
. 20 below the 50. Price made a HH and has stopped going down for now but is not going up either.

USDJPY Daily trend is overall down but intermediate is sideways between 92 and 89. The MA's are shaking hands indicating it's range bound. Today price formed a picture perfect BEEB at 89.00 support. Price also broke DSRI.

Price may just be messing about and the monthly with it's 61.8 is cause for caution but the risk is worth the reward in my opinion. Big Boss, Boss and Worker all in alignment. PA at SR. 20 below the 50 with the 20 pulling away. Price made a LL 2 days ago.

Entering a sell stop at 5pm NY close for 10 pips below whatever today's low ends up being. Right now that's 88.45. TP next support at 86.29. Because this is a critical juncture for this pair my SL is going to be tight at 10 pips above yesterday's high (89.57) rather than the top of the range.
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  • #10,348
  • Edited 2:35pm Mar 2, 2010 2:24pm | Edited 2:35pm
I'm seeing the highlighted area as buyers taking control and pushing price up to resistance and running out of steam (a LH on the DSRI). Gravity and sellers then pushed it right back down to below where it started. Today, the buyers lost the tug of war and price entered a new SR area. This is my seeing beyond the candles.

-m
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  • #10,349
  • Mar 2, 2010 2:58pm Mar 2, 2010 2:58pm
Quoting mstandifer
I'm seeing the highlighted area as buyers taking control and pushing price up to resistance and running out of steam (a LH on the DSRI). Gravity and sellers then pushed it right back down to below where it started. Today, the buyers lost the tug of war and price entered a new SR area. This is my seeing beyond the candles.

-m
Do you see anything between 87.50 to 88.00?
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,350
  • Mar 2, 2010 3:05pm Mar 2, 2010 3:05pm
Quoting erikte279
Well I've been long aud/jpy, lets see how it holds up after tonight
Right or wrong, I TP at my wobble area 80.75 - jpy pairs seem erratic just now - need them to stabilise and get back in harmony.
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,351
  • Mar 2, 2010 3:14pm Mar 2, 2010 3:14pm
Quoting strat
What do you think I did wrong (if that's the case) or what I should have done better. Should I have waited for the price to go down first?

Did you look at the Boss and Big Boss?

While they are at resistance they have NOT stopped going up yet.

You were trading AGAINST the Boss and Big Boss - you want these on YOUR side not AGAINST you.
Its been a long time since i posted on FF but i couldn't help noticing strats comment. its amazing how much we want to trade counter, spot the reversal. I spent so long doing that trying to be clever and losing buckets of equity. From what i gathered reading this thread is that when strat refers to trading being simple he means just trade with the trend. The bounce off the 20ema is a
nice little entry to go long if anything.
Big boss is your friend.
  • #10,352
  • Mar 2, 2010 3:22pm Mar 2, 2010 3:22pm
Quoting strat
Do you see anything between 87.50 to 88.00?
I see the wobble area, which is the next area of problems for a downward move if they are going to occur.

Quoting strat
Right or wrong, I TP at my wobble area 80.75 - jpy pairs seem erratic just now - need them to stabilise and get back in harmony.
Being a JPY pair and being in an odd range at that, would partial TP be acceptable or is this an exception where the uncertainty overrides the 'let part of it ride'?

If the trade is in jeopardy from that area, then the RR is less than 1:1 and it isn't an A trade.

I'm here to learn. Do you pass on trades where wobbles make the RR less than 1:1 (meaning you don't do a partial TP on it)?
-m
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  • #10,353
  • Mar 2, 2010 3:23pm Mar 2, 2010 3:23pm
Quoting strat
Do you see anything between 87.50 to 88.00?
I see a minor support 0.88
  • #10,354
  • Mar 2, 2010 3:38pm Mar 2, 2010 3:38pm
Quoting mstandifer
I see the wobble area, which is the next area of problems for a downward move if they are going to occur.



Being a JPY pair and being in an odd range at that, would partial TP be acceptable or is this an exception where the uncertainty overrides the 'let part of it ride'?

If the trade is in jeopardy from that area, then the RR is less than 1:1 and it isn't an A trade.

I'm here to learn. Do you pass on trades where wobbles make the RR less than 1:1 (meaning you don't do a partial TP on it)?
-m
I just don’t feel good about it so for me, “If in doubt, Stay Out”

or,

“I’d much rather be out of a trade wishing I was in than being in a trade wishing I was out”.

All the funny mentalists have told us not to short the $US; we are approaching the November 2009 low but will it go there?

The more I look at this thing, the more I think it’s on the turn table.

It also doesn’t look good if you draw a TL from the Oct 26 09 high through the Dec 04 09 high.

I’m afraid this would cause my stress meter to head for the red zone so I’m out until I can tell what the Big Boys are doing.

Of course, I could be waaaaaaaaay wrong and it won’t be the first time! (But I won’t have lost anything).
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,355
  • Mar 2, 2010 3:46pm Mar 2, 2010 3:46pm
Big Boss: uptrend, and price is now at 61.8 fibo.

Boss: Last three weeks (not including current) formed doji's at SR, saying the sellers stopped, but buyers not showing enough power.

Daily: Formed triple bottom, and last two bars are hammers showing that buyers don't want to see the price lower.

Possible buy to 1.40, but there is a minor R at 1.3760.

thanks for my mistakes correction
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  • #10,356
  • Edited 5:48pm Mar 2, 2010 3:47pm | Edited 5:48pm
Quoting strat
The more I look at this thing, the more I think it’s on the turn table.

It also doesn’t look good if you draw a TL from the Oct 26 09 high through the Dec 04 09 high
I was going to save this one for Alexandra but I believe I have my confirmation:

S&P500 a perfect bearish gravestone doji. I hadn't looked at it today.

We know what the $ does when stocks go down.

Given that, it appears I'm going to have to renege on my USDJPY trade. I still have a lot to learn.
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  • #10,357
  • Mar 2, 2010 3:56pm Mar 2, 2010 3:56pm
Quoting BaliuxXx
Big Boss: uptrend, and price is now at 61.8 fibo.

Boss: Last three weeks (not including current) formed doji's at SR, saying the sellers stopped, but buyers not showing enough power.

Daily: Formed triple bottom, and last two bars are hammers showing that buyers don't want to see the price lower.

Possible buy to 1.40, but there is a minor R at 1.3760.

thanks for my mistakes correction
Has PRICE started going up yet?
15 YEARS OF PASR ON FOREX FACTORY!
  • #10,358
  • Mar 2, 2010 3:59pm Mar 2, 2010 3:59pm
Quoting strat
Has PRICE started going up yet?
no, we have to wait for HH and HL?
  • #10,359
  • Mar 2, 2010 4:13pm Mar 2, 2010 4:13pm
[quote=strat;3514183]I



I’m afraid this would cause my stress meter to head for the red zone so I’m out until I can tell what the Big Boys are doing.

quote]

Fridays NFP will probably be the catalyst. The biggies will be out in force.can't see much price 'honesty' till then.
  • #10,360
  • Mar 2, 2010 4:40pm Mar 2, 2010 4:40pm
More Momentum

USDCHF provides us with a nice example on Momentum

From Jan 11 2010 until Feb 04 2010, PRICE was making a nice “stair stepping trend” showing us the Momentum of the buyers.

From Feb 04 2010 to where we are now, Momentum has slowed as PRICE stalls around psycho 1.8000. The buyers are still there just not as many as earlier.

We can see the sellers but as of now, they have no Momentum. The buyers are just doing enough to stop the ball (PRICE) rolling down the hill BUT, if anymore buyers leave the party, we know what will happen.
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15 YEARS OF PASR ON FOREX FACTORY!
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