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Islander and Medici trade the European open

  • #2,841
  • Edited 10:48am Sep 6, 2010 5:04am | Edited 10:48am
Quoting Sim

Here's the thing with these levels,


1) how do you know order flow is actually reversing there i.e. it is not just the support/resistance having it's effect
Well, you don't know and can't know. But the point is that you don't "know" any more because price moves a few pips off the support. Such "knowing" is an example of confirmation bias.

You have planned your trade and see order activity at the level that indicates that buyers are stronger than sellers. You won't get more confirmation than that.

Look at the bounces on the way down in cable. Were those "confirmations"? Why not? Why were they not, but the same patterns when the trade goes your way would be?

Quote

2) once orderflow is 'confirmed' to reverse, how the hell do you get filled at the top/bottom!

If you trade such size that getting filled is difficult, then you scale in obviously, and you may start selling when you see others do so, i.e. before the level. Normally not a problem though unless you trade really big size. I didn't have any problems getting filled at 5488.

In addition to that, you may be missing the point slightly, which was (1) that reading tick flow adds significantly to your trading, and (2) that looking for confirmation is always biased and subjective, be it on tick flow or anything else, so you might as well stick to what's objective. For example, reading order activity at a level, which isn't a confirmation of anything, but can be part of a trading plan that has better R:R than most "confirmation" based such.
  • #2,842
  • Sep 6, 2010 5:05am Sep 6, 2010 5:05am
Quoting TC East
Ok thank you, makes sense. I think I was losing the forest for the trees and getting tunnel vision; need to work on that. Thanks again
I do that all the time...current #1 thing to work on.
  • #2,843
  • Sep 6, 2010 5:19am Sep 6, 2010 5:19am
Quoting TC East
Hi Medici...when you get a chance, can you comment on attached chart?...
If its any consolation I took the ride down on both those initial shorts on G/U and then went long at the same area but having listened to Medici's explanation it makes sense that G/U was still heading south
  • #2,844
  • Sep 6, 2010 5:38am Sep 6, 2010 5:38am
Quoting Eamonn
If its any consolation I took the ride down on both those initial shorts on G/U and then went long at the same area but having listened to Medici's explanation it makes sense that G/U was still heading south
Thanks. I do still see reasons to have gone long there actually, but am starting to see the reasons not to have taken it a bit better now. In looking back at it, GU did have some hefty momentum down, and also just the character of Cable to frequently go on a run a lot longer and harder than other pairs, maybe I should have shifted my long bias/mindset sooner.

But here to learn and keep practicing as we all are of course
  • #2,845
  • Sep 6, 2010 6:14am Sep 6, 2010 6:14am
Quoting TC East
....can you comment on attached chart? The circled area is a place I thought would be really good for a long....
Quoting medici
A long there would have been a case of catching a falling knife..
Sir medici made a good post!
if i may chime in a bit...
the short reply for this chart would be: standing in front of a roaring train (catching a falling knife as medici said).
the immediate trend was down, that circled bar has supply in it (as shown by the bar's close near the open; no demand as shown by the bar's small size).

divergence, pivots, fibs, etc often wont work/will get blown away in these (trending) situations.
  • #2,846
  • Sep 6, 2010 6:17am Sep 6, 2010 6:17am
Hi Medici and all this is what I was seeing today along with Divergences and BBs ect.

5min chart.
No.1 there had been a TL break earlier at 07.40 BST so to me showing weakness the H1 had closed under 15476 giving me more reasons to look for shorts so soon as I see a failed test of the extreme at 15489 I'm looking to short and my signal came at the doublt top. Also at a good time 08.30 BST LO has had its fake.

No.2 target for trade No.1 H1 support and DP.

No.3 price comes back up to 15406 (H1 S/R) and TL with a LH so worth taking for a test of the extreme at 15381 obviously watching PA around that level incase it breaks through like it did.

15min
No.1 div on 15min when taking 1st short.

H1
No.1 the close under 15476 gave me more confidence in shorts targeting next H1 support 15438 there was a support at 15462 but it was going to have a bounce there as it was FOs low so was happy to sit through that and wait for 15438.

Cheers.

Reflex.
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  • #2,847
  • Sep 7, 2010 1:28am Sep 7, 2010 1:28am
morning chaps,
Well take a look at this one, thought I would post it as a good reminder to everyone that you shouldn't be too greedy, Lady Forex will leave red marks on your bottom!!. openend trade - no draw down, went to +11.5 within 3 mins, 15mins roaming about, 5mins heading south!!.

Reason for trade :- Regular divergence indicating a change in direction, price outside B bands.

P.s. And true to FF posting law -while writing this post price has come all the way back again and would now be profit again. hey ho.

on to the next

doc.
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  • #2,848
  • Sep 7, 2010 7:54am Sep 7, 2010 7:54am
We missed the 2b sell below 5425 level on the 7RB chart. The multi bottom earlier 5355 with CII divergence buy was a little early for us. Nice set up though.

We took this lh and just waited for DO 5392 to clear.

Exit +24 when 5360 held a few times.
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  • #2,849
  • Sep 7, 2010 8:19am Sep 7, 2010 8:19am
Hi Medici,

m5 is proving a little to hectic for me, I love trading H1 reversals and catching the odd m5 with divergence if possible but this AU m15 divergence trade was too good to pass by.

What a mover. Thanks for all your hard work.
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  • #2,850
  • Sep 7, 2010 12:27pm Sep 7, 2010 12:27pm
Hi All

I see it's a quiet posting day today, so thought I would attempt to contribute.

I've been very hit and miss trying to time divergence on the smaller timeframes, usually the 5 min, it seems I enter a tad to early and keep getting stopped out just as the market turns, so usually it looks like I'm reading it ok, just need to time my entries better.

With comments about the longer timeframes being better from Med and V I thought I would look at the longer timeframes.

I remember Med saying seeing divergence across 2 timeframes is a strong signal, so I started looking at the 1 hour, and saw divergence, then I went back to the 15 min, then the 5 min, and saw divergence on each chart, I went to the 1 minute to time my entry and saw divergence there too.

Which makes me think, am I seeing something because I want to see it. It's like the move Number 23 I have such an obsesion on divergence now I start seeing it in every chart!

Anyway, my timing is still a bit off, every time I entered it would go up a little and pull back, I broke even most trades or made a couple of pips, then eventually the big move happened and I was lucky to have a trade in.

Did I read this correctly, or am I seeing things and got lucky with the move?
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  • #2,851
  • Sep 7, 2010 12:42pm Sep 7, 2010 12:42pm
Quoting furble
Hi All

I see it's a quiet posting day today, so thought I would attempt to contribute.

I've been very hit and miss trying to time divergence on the smaller timeframes, usually the 5 min, it seems I enter a tad to early and keep getting stopped out just as the market turns, so usually it looks like I'm reading it ok, just need to time my entries better.

With comments about the longer timeframes being better from Med and V I thought I would look at the longer timeframes.

I remember Med saying seeing divergence across 2 timeframes is...
Thanks furbie, for bringing up an important point

No, you are not seeing things or were lucky. Multiple timeframe divergence is what happens at major turning points. Check Euro's August top at 1.3334. Divergence from D1 down, and outside of the BBs on all timeframes. High probability and high potential opportunities.

I took the same trade from MS2=1.5297 but didn't have your patience to hold on, as I wanted to call it a day...Need to work on that
  • #2,852
  • Edited 1:18pm Sep 7, 2010 12:56pm | Edited 1:18pm
Quoting Dr.Scalpall
morning chaps,
Well take a look at this one, thought I would post it as a good reminder to everyone that you shouldn't be too greedy, Lady Forex will leave red marks on your bottom!!. openend trade - no draw down, went to +11.5 within 3 mins, 15mins roaming about, 5mins heading south!!.

Reason for trade :- Regular divergence indicating a change in direction, price outside B bands.

P.s. And true to FF posting law -while writing this post price has come all the way back again and would now be profit again. hey ho.

on to the next

doc....
Welcome to the world of kinky Mistress Whiplash!

I took the same trade second time around, i.e. around 7am, and had 20 pips in the bag which were all taken away in a matter of a couple of minutes. Stopped out at BE.

But here's the thing. The first trade I thought too early and stayed away. The second, around 7am, was at a time when good opportunities are often served, so a no-brainer...that turned into dust.


BUT..in cable things, i.e. reversals or good entries, often happen around 7.30am, which gave me confidence to enter again.

So you may want to keep that in mind next time around.
  • #2,853
  • Sep 7, 2010 1:08pm Sep 7, 2010 1:08pm
Quoting jag1966
Hi Medici,

m5 is proving a little to hectic for me, I love trading H1 reversals and catching the odd m5 with divergence if possible but this AU m15 divergence trade was too good to pass by.

What a mover. Thanks for all your hard work.
That was a good one. I was there myself

Good point about M15 upwards. The best opportunities for both the account and the nerves. Since Islander tempted me to stare at M1 charts life hasn't been the same Maybe I should sign up for rehab at the H1 clinic...

Then again, I agree with our local femme fatale:

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  • #2,854
  • Sep 7, 2010 1:09pm Sep 7, 2010 1:09pm
Ok this is wht i saw today.
EU: Frankfurt gave me nothing to wht i explaind, but at london open bearish divergence took place and set off a nce trade for sell, then after new york open, hidden bearish divergence took place, then also after new york opend it pushd price right down to round number and formd bull divergence, didnt take it though as it was late already and scared of consilidation.
GU: haha got quite a few on medici's mistress.
At franky open it formd double bottoms again while CI also formd double bottom(ok not completly hidden divergence) but eu was at round number and gu also had good support, set up rather nice.
London opend gave me good bearish divergence, it lookd rather rangy so i took the buy right after NY opend didnt give much, and this one still in, it lookd alittle better than EU's long setup.

Enjoy your day.
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  • #2,855
  • Sep 7, 2010 1:21pm Sep 7, 2010 1:21pm
Quoting CoffeeDrinke
Ok this is wht i saw today.
EU: Frankfurt gave me nothing to wht i explaind, but at london open bearish divergence took place and set off a nce trade for sell, then after new york open, hidden bearish divergence took place, then also after new york opend it pushd price right down to round number and formd bull divergence, didnt take it though as it was late already and scared of consilidation.
GU: haha got quite a few on medici's mistress.
At franky open it formd double bottoms again while CI also formd double bottom(ok not completly hidden divergence)...
Thanks. Excellent trading, and more evidence for the hypothesis that M15 serves the best opportunities intraday.
  • #2,856
  • Sep 7, 2010 1:22pm Sep 7, 2010 1:22pm

Hey Medici or anyone tht can help, i was fooling around while not doing much so i ploted pivots on my screan and saw the price of gu found resistance and support on it today, so i know the theory behind it, but in your personal opinion is it more just trading myth tht it works or is it really effective support or resistance??
Not tht i will use it, i am just intrested.

  • #2,857
  • Sep 7, 2010 1:28pm Sep 7, 2010 1:28pm
Quoting medici
Thanks. Excellent trading, and more evidence for the hypothesis that M15 serves the best opportunities intraday.
Well i think 5min you get more trades which if you trade it correct will obv yield more profit but the 5min burns my consentration, 15min is not so in your face haha, almost feel like a swing trader
  • #2,858
  • Sep 7, 2010 1:29pm Sep 7, 2010 1:29pm
Quoting CoffeeDrinke

Hey Medici or anyone tht can help, i was fooling around while not doing much so i ploted pivots on my screan and saw the price of gu found resistance and support on it today, so i know the theory behind it, but in your personal opinion is it more just trading myth tht it works or is it really effective support or resistance??



They're always on my mind/chart as they provide opportunities.

Quote

Not tht i will use it, i am just intrested.


Listen to Elvis


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  • #2,859
  • Sep 7, 2010 3:01pm Sep 7, 2010 3:01pm
Quoting CoffeeDrinke

Hey Medici or anyone tht can help, i was fooling around while not doing much so i ploted pivots on my screan and saw the price of gu found resistance and support on it today, so i know the theory behind it, but in your personal opinion is it more just trading myth tht it works or is it really effective support or resistance??



Not tht i will use it, i am just intrested.


Remember that pivots have been around for many years. Long before computers were used, they were the one set of calculations that the floor / pit traders carried with them for their day of open out-cry trading.

The Dove Alliance taught me a lot about their use in the Forex markets, and calculated off the 5pm NY close IMO they are invaluable.

I just started looking at AUDUSD and was not surprised to find it too respecting its daily pivot levels.
Trading Levels with WRBs
  • #2,860
  • Sep 7, 2010 4:13pm Sep 7, 2010 4:13pm
Ok so i take it tht pivots might very well have some credibility, but i still dont intend on plotting them because i do not want to clutter my screan, and i also firmly believe tht trading the way advocated on this thread even though it is important to look at S&R and Fibs as in the case of medici, usually when you spot a good setup forming it will mostlikly be driven to the support or resistance very seldom you will get one forming in no mans land.
So it is basically prob the same with the pivots??

But thanks for rpl.
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