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The Market Explained by candle sticks and price action

  • #81
  • Apr 5, 2010 1:20am Apr 5, 2010 1:20am
Quoting Xtrader
Hey Fuzz...
just curious how long you've been trading live,and how many contracts/what leverage you use.

Thx

X
Trading forex for about two years, US stocks since 2003.
I trade the standard 100:1 leverage.

Why do you ask?
  • #82
  • Apr 5, 2010 8:35pm Apr 5, 2010 8:35pm
Quoting Xtrader
....just mildly curious.

Like I said before, I'm a retired FX trader (extremely active) and hung out here on occasion.

It infuriated me then (and is likely the same situation now) that most posters who gave out advice/opinions/'systems" etc did not actually trade live.
And most of those didn't even demo trade either.

Congrats for being someone who does.

X
lol thanks, Why did you retire from trading Fx?

I dont think ill ever stop i have invested too many hours and dollars, in learning to be disciplined and it just slowly became a part of my life. I started out trading stocks because my father did and did pretty well. (back in the bull US markets). So i took a stab at it made a little bit of money (by luck) then lost some. Eventually i got frustrated with "systems" and "indicators". I dove deeper into market mechanics and institutional trading, how money is made by market makers etc. Read some really great books on market dynamics, trading psychology, price action.

And here i am doing what i like and making extra money in my spare time.
I dont think i will ever rely on trading for all of my income though. I make money, i invest what i can afford to lose. It takes the edge off trading too. When your worried about profit from a trade to pay bills it clouds your ability to think clearly. Maybe one day but not today.
  • #83
  • Apr 5, 2010 9:49pm Apr 5, 2010 9:49pm
Hi Fuzzy, looking at the EUR/USD 5-min chart yesterday (April 5) I think there was a failed low at 1.3460 level (line A in below chart). So I assume we should then look for a long play.

My question is, where is a proper entry? I'm guessing one possibility is to wait for the trendline break (line B) and re-test? Not sure if there is another lower risk entry.
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  • #84
  • Apr 6, 2010 9:05am Apr 6, 2010 9:05am
Quoting fthingf
Hi Fuzzy, looking at the EUR/USD 5-min chart yesterday (April 5) I think there was a failed low at 1.3460 level (line A in below chart). So I assume we should then look for a long play.

My question is, where is a proper entry? I'm guessing one possibility is to wait for the trendline break (line B) and re-test? Not sure if there is another lower risk entry.
Ok lol not gonna lie yesterday was kinda confusing until near the close of the day and it made a lot more sense. I only got the watch the euro till 9:30am i had to run out to this house were renovating.

fthing every thing your saying sound good to me, but today was kinda tricky and it showed in the close of the daily Which was a range bar you know like a doji. The market participants were confused. As they should be.

Okay excuse the shit storm of trend and channel lines. Ill try to decode them for you as easily as possible.

Three things that turned me off about going long yesterday morning.

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1. Channel line break line A. one of the same reasons i explained earlier why the beginning of this bull trend started the trend had overshot its old momentum.

2. Trend line B WHERE ARE THE BULLS? A channel line break does not always mean reversal but after a channel line break and another failed low (or attempt at a low) you should see some type of bull fight there was NONE!!!
Trend line B was broken with some heavy strength. Thats a kinda scary realization that sentiment has changed.


3. Now Trend line C which is now a Bear trend line scary stuff for the bulls who are still holding long term. Trend line C is one of the main reasons i was skeptical of going long yesterday. The looming fear of a bull trap which did happen.

4. Trend line D we were under trend line D which was the line draw all the way from the beginning of this trend. Trend line D failed and then was tested by the 6am to noon session.

We are still in a down trend for the daily so it is kinda expected not guaranteed that this bull rally probably would have failed.

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Bulls and bears existed on the chart there was a failed low, Which lead to a rally up until it hit trend line C. At the break of C we have a massive sell off.
When the sell off never found a new low bulls entered at the failed second low. To once again me squashed with sell orders.


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So the big picture of today was bulls and bears were equally (give of take) represented today.

As you can see yesterday evening was a massive sell off. Now that the major trend line for the last week or so bull rally has been broken the dynamic is just switched we now wait for bear trend lines to be broken and then fail.

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Thats my 2 cents for yesterday. If you have any questions feel free to ask.
  • #85
  • Apr 6, 2010 12:50pm Apr 6, 2010 12:50pm
Great description...riveting!
  • #86
  • Apr 6, 2010 5:46pm Apr 6, 2010 5:46pm
Quoting fthingf
My question is, where is a proper entry? I'm guessing one possibility is to wait for the trendline break (line B) and re-test? Not sure if there is another lower risk entry.
Oh im sorry after looking back at what you wrote i realized you were waiting for a test of an old bear line you B line was broken.

Trend lines show who is in control. if B line was broken we delete it. and start drawing a new line the new line when that was broken. was this.


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but a significant pull back never happened to test the new trend line but that inside bar failure and the inverted hammer were your best bets along the way. If you look at the 1 min on this move there were a bunch of failed lows.
  • #87
  • Apr 6, 2010 6:47pm Apr 6, 2010 6:47pm
Very nice thread any newbie popping there head into this thread and in fact any other to do with price action and candle or bar reading take note this is how its done. Forget your moving average crosses and crap. and forget the newly invented strategy that say 50 ppl are using. do you think the big boys are watching your obscure strategy that only a few are using NO. they wont be. skip the years of pain and torment of not getting it and read up all u can on price action.

regards damien
i pull the trigger when others are fearful---me
  • #88
  • Apr 6, 2010 8:45pm Apr 6, 2010 8:45pm
Quoting damosdmf
Very nice thread any newbie popping there head into this thread and in fact any other to do with price action and candle or bar reading take note this is how its done. Forget your moving average crosses and crap. and forget the newly invented strategy that say 50 ppl are using. do you think the big boys are watching your obscure strategy that only a few are using NO. they wont be. skip the years of pain and torment of not getting it and read up all u can on price action.

regards damien
Thanks damien, Good to know there are more True price action believers.
  • #89
  • Apr 6, 2010 9:36pm Apr 6, 2010 9:36pm
no worries i just wish more beginners would start with price action than spending years on indicators then deciding in the end that the only way as p.a which they nearly all do. the only indicator that is of use is macd or any other such indicator to spot divergence why? cause evry man and his dog is using it.


regards damien
i pull the trigger when others are fearful---me
  • #90
  • Apr 6, 2010 10:57pm Apr 6, 2010 10:57pm
Quoting Fuzzyzc
but a significant pull back never happened to test the new trend line but that inside bar failure and the inverted hammer were your best bets along the way. If you look at the 1 min on this move there were a bunch of failed lows.
So basically you're looking for a candlestick failure as your entry? Interesting... Would you also enter based on "normal" candlestick signal (e.g. go long after a hammer testing a previous support level)?

By the way the analysis in your post #88 was a very good read, thanks for the detailed explaination!
  • #91
  • Apr 7, 2010 6:58am Apr 7, 2010 6:58am
Quoting fthingf
So basically you're looking for a candlestick failure as your entry? Interesting... Would you also enter based on "normal" candlestick signal (e.g. go long after a hammer testing a previous support level)?

By the way the analysis in your post #88 was a very good read, thanks for the detailed explaination!
Yeah you could enter on normal candle stick entries BUT lol they are more risky in my opinion. I dont know if you read my first post but the truth is signals can fail.

The premise is wait till somebody gets trapped and wait for evidence of support in the direction of where people are getting squeezed out.

In the case of the 5th people were trapped short by the failed low. and those inside bars and inverted hammer failure were people trying to go short thinking that a reversal was coming and when it didnt happen they had to cover (buy) driving the market higher. Also some traders knew this and they also bought. so the market keeps flowing up as countertrend traders (expecting reversals) and trend traders kept adding to their positions.
  • #92
  • Apr 8, 2010 1:24am Apr 8, 2010 1:24am
Quoting Fuzzyzc
The premise is wait till somebody gets trapped and wait for evidence of support in the direction of where people are getting squeezed out.
Got it. I think this summarized the essence of your approach nicely.

Can't wait to see more of your analysis!
  • #93
  • Apr 10, 2010 10:05am Apr 10, 2010 10:05am
Figures on the first post cannot be displayed? Find it uneasy to fully understand the first post without those figures.
  • #94
  • Apr 10, 2010 10:50am Apr 10, 2010 10:50am
Quoting kk007
Figures on the first post cannot be displayed? Find it uneasy to fully understand the first post without those figures.

Huh some one else said that too. IDK.
  • #95
  • Apr 10, 2010 10:58am Apr 10, 2010 10:58am
Quoting Fuzzyzc
Huh some one else said that too. IDK.
Yeah i really have to Simplify the first thread. it might not be as objective as i want it to be. Its a little unclear too. Plus i need to write the report for 7th 8th and 9th of april i got a lot of work to do. Probably have it done sunday.

Maybe i will just put up a website devoted to price action. i can have complete control of data, text, pictures format, etc.
  • #96
  • Apr 10, 2010 11:02am Apr 10, 2010 11:02am
hey fuzy
can u post some charts with some more explanation.
how u enter and why?
what is ur stop loss level and target?
will appericiate that
  • #97
  • Apr 10, 2010 11:04am Apr 10, 2010 11:04am
one more question.
do u trade smaller time frames?
Thanks
  • #98
  • Apr 10, 2010 11:54am Apr 10, 2010 11:54am
Quoting jolany
one more question.
do u trade smaller time frames?
Thanks
i place trades on the 5 mins but i view higher(1hr,4hr, daily) to get a better perspective.

IMO 1 min is too fast to read and to deceiving it not enough data to actually be valid. More data/time is better for a candle. Time is kinda a filter. People can move price very rapidly in one min but to control a bar over 4hrs or a daily its very difficult.

I will have a report for 7,8,9th of april probably monday night. Sorry i cant really get to it now. ITS SATURDAY!!! Im handling some things i couldnt over the week. Dentist getting a filling, hair cut, taxes. You get the picture.
  • #99
  • Apr 10, 2010 6:42pm Apr 10, 2010 6:42pm
Quoting Fuzzyzc
i place trades on the 5 mins but i view higher(1hr,4hr, daily) to get a better perspective.

IMO 1 min is too fast to read and to deceiving it not enough data to actually be valid. More data/time is better for a candle. Time is kinda a filter. People can move price very rapidly in one min but to control a bar over 4hrs or a daily its very difficult....
thanks fuzy.i am looking forward for that.
  • #100
  • Apr 12, 2010 10:06pm Apr 12, 2010 10:06pm
4/07 Kind of a standard day. Nothing fancy. Really i have the Main Trend line of importance of the day up

The smaller picture is Hr bars. We are in a down trend so we wait for Bear trend line breaks and then bull traps. The bull Trend line up is broken We have trapped bulls on a new high plus we have counter trend traders (bulls who will take profit once the bull line is broken) So sentiment IS SELL!!! and fast !!!

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Three types of people in this crowd today.

 

  1. Short Term bulls buying the bull trend line bounces
  2. Bears shorting every new high
  3. Pigs getting greedy buying at the new highs in a down trend.

Bulls and bears make money pigs get slaughtered. Know the Trend and Stalk the with trend entries.

When the bull line was broken. Short term bull took profit. Bears went net short. Pigs exited at a loss.

Entering on the Inverted hammer on the hourly was the best signal.

And exiting when you felt comfortable or on the break of the new bear trend line. Shown later.

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