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Trade Anatomy - ramblings of an old-timer

  • #81
  • Edited Jun 3, 2010 12:46am Jun 2, 2010 6:24pm | Edited Jun 3, 2010 12:46am
what i can see you have the large bullish volume and large bearish bar its the bears making a last gasp to push it down and running out of puff. now the volume after is bearish. but price is about at the same level wich means price has stalled. and we could be seeing a correction or reversal. my guess correction

am i close???


regards damien
i pull the trigger when others are fearful---me
  • #82
  • Jun 3, 2010 4:47am Jun 3, 2010 4:47am
Hi OND

What you think of this might whe are close to that ressistance got 2 scenarios. Waiting for it with patience and will see what price will do there.

15Min

http://i47.tinypic.com/339ke3r.jpg



1H

http://i48.tinypic.com/xpswhw.jpg
  • #83
  • Jun 3, 2010 5:56pm Jun 3, 2010 5:56pm
Hi Damien

Can you please explain what you mean by bearish volume?

We should never assume that, because a bar finishes down, the volume is bearish but perhaps you are referring to something else.

Kind regards.

O N D

Quoting damosdmf
what i can see you have the large bullish volume and large bearish bar its the bears making a last gasp to push it down and running out of puff. now the volume after is bearish. but price is about at the same level wich means price has stalled. and we could be seeing a correction or reversal. my guess correction

am i close???


regards damien
  • #84
  • Jun 3, 2010 6:00pm Jun 3, 2010 6:00pm
Patience is good

Also, make sure you are thinking in terms of what you will do in response tovarious scenarios. And try to have enough scenarios in mind to retain a flexible outlook.

As I'm sure you've heard before, being right is irrelevant. Being profitable is everything

Kind regards,

O N D

Quoting ingmarforex
Hi OND

What you think of this might whe are close to that ressistance got 2 scenarios. Waiting for it with patience and will see what price will do there.

15Min

http://i47.tinypic.com/339ke3r.jpg



1H

http://i48.tinypic.com/xpswhw.jpg
  • #85
  • Jun 3, 2010 6:03pm Jun 3, 2010 6:03pm
Thanks for reply O.N.D
  • #86
  • Edited 8:44pm Jun 3, 2010 6:44pm | Edited 8:44pm
bearish compared to the last volume i was referring to or its dropping off. in jesse livermores book they say to watch for large volume on large spikes in price it is a red flag that something isnt quiet right and most of the time was the exhaustion of a push either way.

regards damien
i pull the trigger when others are fearful---me
  • #87
  • Jun 3, 2010 9:43pm Jun 3, 2010 9:43pm
Hi O N D,

I have a follow-up question to your post #6 on the EUR/USD analysis. Please refer to the attached daily chart.

1. Euro just made a new low on June 1.
2. The next day was an inside bar, then yesterday it's a bearish engulfing candle.

My question is, would you have moved your stop loss further based on the above price action? I'm guessing it would be above the swing high on May 28 at around 1.2480-1.2500?

Thanks.
Attached Image (click to enlarge)
Click to Enlarge Name: eur20100604.jpg Size: 65 KB
  • #88
  • Jun 4, 2010 6:13pm Jun 4, 2010 6:13pm
Hello

Here's what I've done.

Stop moved on Monday (31st) to 2710.

Having the stop above the 28th May high is perfectly acceptable trading strategy and it does appear to be a significant recent high but the nature, and length, of my trade means I'm being quite liberal about moving my stop down as nothing has yet told me the party is over and I want to stay in place as long as I am able to.

Hope that answers the question

Kind regards.

O N D

Quoting fthingf
Hi O N D,

I have a follow-up question to your post #6 on the EUR/USD analysis. Please refer to the attached daily chart.

1. Euro just made a new low on June 1.
2. The next day was an inside bar, then yesterday it's a bearish engulfing candle.

My question is, would you have moved your stop loss further based on the above price action? I'm guessing it would be above the swing high on May 28 at around 1.2480-1.2500?

Thanks.
  • #89
  • Jun 4, 2010 6:28pm Jun 4, 2010 6:28pm
hi OND this is what i see for the eur/usd what do you think?

regards damien
Attached Image (click to enlarge)
Click to Enlarge Name: eur_usd_daily.jpg Size: 95 KB
i pull the trigger when others are fearful---me
  • #90
  • Jun 4, 2010 6:46pm Jun 4, 2010 6:46pm
Hi Damien,

Excuse my confusion (I can blame old age!) but are you telling me you are long or want to get long or neither?

As i've said, my short is remaining open and my stop is still allowing plenty of wiggle room as I haven't YET seen a signal to suggest the pros want to take it higher.

I can't really add a lot more than that on this pair at the moment as nothing of significance has happened today, other than a weak support area being breached. I guess there is a chance the psychological level of 1.20 could end up being significant in terms of a bottom being made but neither price not volume action have shown that yet, in my view.

Kind regards,

O N D

Quoting damosdmf
hi OND this is what i see for the eur/usd what do you think?

regards damien
  • #91
  • Jun 4, 2010 6:57pm Jun 4, 2010 6:57pm
no i'm short just saying i think it will stall at 1.200 before going lower. also intermarket correlations are all pointing to the downside. just for further conformation except gold.

regards damien
i pull the trigger when others are fearful---me
  • #92
  • Jun 4, 2010 7:10pm Jun 4, 2010 7:10pm
Forgive me if I'm wrong damo, ond, but I believe that OND is developing a strategy based not on knowing what will happen to EU because of intermarket correlations, over-extension or reaching a particular S&R level.

Unless I'm reading it wrong, OND's strategy seems to be based on awareness of those levels but then watching price and volume develop at them to tell him/us what the drivers in the market are doing and where they seem to be taking price - thus providing a good probability of a winning trade.

OND, what do you think of Wycoff? I always found that VSA tried to get too much information from too little but have found Wycoff's work a good basis for sound thinking about what is happening and how to get on side with the market's driving forces.

I note in passing that the AU has demonstrated once again that the trend is our friend and that the daily and weekly charts give good guidance of where we should be looking for hourly opportunities.
  • #93
  • Jun 4, 2010 7:21pm Jun 4, 2010 7:21pm
yes but he asked us to contribute to this thread and i contributed what i thought was going. i also mentioned a psychological level and volume picking up a little on that level. is this not what im supposed to do if im wrong im sure OND will correct me im just saying what im seeing. and hoping for constructive criticism. and intermarket correlations is what the big dogs are also doing.

regards damien
i pull the trigger when others are fearful---me
  • #94
  • Jun 4, 2010 7:59pm Jun 4, 2010 7:59pm
Being mindful of psychological levels certainly is not a waste of time. Just try to remain flexible and react to what happens rather than being seduced by what 'should' happen.

Look back at what happened recently at 1.30 for example.

Kind regards,

O N D

Quoting damosdmf
no i'm short just saying i think it will stall at 1.200 before going lower. also intermarket correlations are all pointing to the downside. just for further conformation except gold.

regards damien
  • #95
  • Jun 4, 2010 8:30pm Jun 4, 2010 8:30pm
I think this sums up the overall strategy well Kiwi Trader. I no longer have the inside view of what the big money is up to but I don't believe I need it and what I'm trying to show via this thread is that none of us really need it if we can learn to effectively read a chart.

As for correlations, again they are not something I'd dismiss as nonsense but they are not something I rely on for trading. Things are correlated until they aren't. That sentence tells me enough to know not to marry myself to such things.

I am, unsurprisingly, a great admirer of Richard Wyckoff. His three principal laws (supply/demand, effort/results, cause/effect) are fundamentally sound. However, they are also easy to misinterpret. I have seen more snake oil salesmen trying to profit from bastardised versions of Wyckoff's thinking than I care to recall.

Wyckoff, quite rightly, determined that the one aim we should have in trading is to be aware of what the 'smart money' is doing. It is helpful to greatly simplify this concept by considering the smart money to be a single entity rather than the complex collection of professionals that make up such a grouping.

VSA is like anything else, it should be approached with an open mind alongside a healthy dose of skepticism and an inquiring mindset. I do believe that traders who learn the concepts behind Wyckoff's teachings and those of Tom Williams/VSA will have a supreme advantage over traders who react purely based upon bar/candle structure or breakouts etc.

Our journey of trading education never ends. Take it from someone who is closer to the grave than the cradle! What we pick up isn't always obvious but most of us have a very efficient filter that allows us to incorporate little parts of theories unconsciously and to add to our overall structural understanding of the markets. The fact remains that most traders start out by gaining a faulty understanding of what drives the markets. Supply and demand is NOT the whole picture by any means.

I think the key with VSA is to be selective about the parts that are meaningful and also to be mindful of it being an alert rather than a trading system. I see others who use VSA and add all types of bells and whistles as confirmation. Personally, I don't see them as being necessary and that is why I happily direct readers to absorb HiddenGap's wisdom. However, I'm happy for people to find their own styles if they work out as profitable.

My thinking now is the same as it was some years ago - learn what drives the markets, learn to interpret price action, learn to interpret which market players are buying and selling.... all sounds simple really but achieving all 3 will provide a lifetime career and financial security.

Kind regards,

O N D

Quoting kiwi_trader
Forgive me if I'm wrong damo, ond, but I believe that OND is developing a strategy based not on knowing what will happen to EU because of intermarket correlations, over-extension or reaching a particular S&R level.

Unless I'm reading it wrong, OND's strategy seems to be based on awareness of those levels but then watching price and volume develop at them to tell him/us what the drivers in the market are doing and where they seem to be taking price - thus providing a good probability of a winning trade.

OND, [color=Blue][b]what do you think of...
  • #96
  • Jun 4, 2010 11:05pm Jun 4, 2010 11:05pm
Quoting Old_Not_Dead
My thinking now is the same as it was some years ago - learn what drives the markets, learn to interpret price action, learn to interpret which market players are buying and selling.... all sounds simple really but achieving all 3 will provide a lifetime career and financial security.

Kind regards,

O N D
i know the first 2 can be done #3 is a little more difficult i hope this is what the main part of the thread will be about i read many topics on this and all dried up to nothing in a matter of days of ppl starting the thread? im guessing this is where volumes come in. i always thought to myself even if the volume is broker specific you can still see the big money players in your broker volumes and they all work together to achieve the same goal i think.

regards damien
i pull the trigger when others are fearful---me
  • #97
  • Jun 5, 2010 12:46am Jun 5, 2010 12:46am
Thanks for the feedback!

Another 200 pips drop on Friday. Trend trading with price action can be really profitable...

Quoting Old_Not_Dead
Hello

Here's what I've done.

Stop moved on Monday (31st) to 2710.

Having the stop above the 28th May high is perfectly acceptable trading strategy and it does appear to be a significant recent high but the nature, and length, of my trade means I'm being quite liberal about moving my stop down as nothing has yet told me the party is over and I want to stay in place as long as I am able to.

Hope that answers the question

Kind regards.

O N D
  • #98
  • Jun 6, 2010 7:05pm Jun 6, 2010 7:05pm
Based upon what has been revealed in this thread so far, who can now spot trade opportunities? Whomever is brave enough, go ahead and post them and I'll add some comments. I'll also post some of my own once I've seen how solid the understanding is

Kind regards,

O N D
  • #99
  • Jun 6, 2010 7:11pm Jun 6, 2010 7:11pm
Not really O.N.D would be nice if you could explain the volume a bit better how to look at it.

I readed a book sometime ago martin pring on technical analysis it was i think.

He was talking about when price is comming close to support and ressistance and volume is rising,It mostly is gonna bounce is that right?

Or am i intpreted it totaly wrong hope you could help a bit more with this

Thanks O.N.D
  • #100
  • Jun 6, 2010 7:20pm Jun 6, 2010 7:20pm
Don't worry, we will definitely be going into more detail. Just want to check who already thinks they have grasped basic elements of the concept

In the meantime, please refer back again to the chart I posted (post #66) and begin to apply similar thinking to other charts you see. Eyeballing charts with a different mindset will do you a lot of good. Also, if you have the time and focus to do some reading, begin to collect the original materials produced by Richard Wyckoff as that will give you a head start on many.

Kind regards,

O N D

Quoting ingmarforex
Not really O.N.D would be nice if you could explain the volume a bit better how to look at it.

I readed a book sometime ago martin pring on technical analysis it was i think.

He was talking about when price is comming close to support and ressistance and volume is rising,It mostly is gonna bounce is that right?

Or am i intpreted it totaly wrong hope you could help a bit more with this

Thanks O.N.D
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