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Domino's Price and order flow trading

  • #1,001
  • Sep 21, 2010 11:22am Sep 21, 2010 11:22am
Quoting frankkn
Good morning traders.

I'm not used to trading like this and would love some feedback on this experimental trade. Oanda sure is great for flexible position sizing.

I'm posting 4 charts: weekly, daily, 4h, and 15m
I entered early in the NY session, price ranged until FOMC which was today at 2:15. I was stopped out by a nasty 90 pip (5m) candle.

Good thing my position was tiny
  • #1,002
  • Sep 21, 2010 11:25am Sep 21, 2010 11:25am
Quoting frankkn
Good morning traders.

I'm not used to trading like this and would love some feedback on this experimental trade. Oanda sure is great for flexible position sizing.

I'm posting 4 charts: weekly, daily, 4h, and 15m
.. couple of things the rate difference on eur/usd is low.. no real reason to trade it and it doesnt give us a real direction.. our trades are made up of two parts.. the IRD and the setup with trend..

so right off the bat the EUR/USD doesnt meet criteria..

but for analysis.. here are two options the short and the long setups around current resistance..

3250 is RZ6D.. which means to mean my minimum chart criteria it needs to build more pending short orderflow.

or

swap and change to SZ7E after breaking highs test the breakout or create failure to the short side and rebreak long on confirmation giving us a long entry...
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  • #1,003
  • Sep 21, 2010 11:34am Sep 21, 2010 11:34am
Quoting domino
gbp/aud breaking nicely... break of 16218 gives us a nice long term hold in this pair.. RZ7B swapped clean break into lows. Position is enhanced by monthly trigger.
looking here for heavy breakdown into lows for those tracking this around 6200 is monthly heavy triggers.
  • #1,004
  • Sep 21, 2010 11:38am Sep 21, 2010 11:38am
Quoting domino
aussy failing at support ... long exited on break
was a good trade stoked about that one.

usdmxn still open short.. great break
+1700p on usdmxn now.. we are looking for continuing failure here into lower resistance and watching the price action for swaps.
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  • #1,005
  • Sep 21, 2010 11:55am Sep 21, 2010 11:55am
Quoting domino
.. couple of things the rate difference on eur/usd is low.. no real reason to trade it and it doesnt give us a real direction.. our trades are made up of two parts.. the IRD and the setup with trend..

so right off the bat the EUR/USD doesnt meet criteria..

but for analysis.. here are two options the short and the long setups around current resistance..

3250 is RZ6D.. which means to mean my minimum chart criteria it needs to build more pending short orderflow.

or

swap and change to SZ7E after breaking highs test the breakout or create...
Thanks for the response D.

I have been reading your thread, about 2/3 done, so I apologize if this is covered in the part I haven't gotten to yet.

So we should be looking at aud/usd ?
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  • #1,006
  • Edited 12:27pm Sep 21, 2010 12:12pm | Edited 12:27pm
Quoting frankkn
Thanks for the response D.

I have been reading your thread, about 2/3 done, so I apologize if this is covered in the part I haven't gotten to yet.

So we should be looking at aud/usd ?
note that the china rate on that chart is old and was rate was hiked recently...

but yes we should be watching aud/usd.. if you look back a couple of pages youll see the aud/usd that we just exited from making about 1000 pips and drawing close to 4% increase in the account from interest payments over that time..

interest rate dynamics has alot to do with how the market moves.. when they are contracting money flocks out of the carry and as it widens money flocks into the carry... banks trade with interest rate dynamics in mind.. they understand the flow of money.. banks basically have an unlimited amount of money to throw at us.. so its wise to trade with the banks and flow of the markets.. the increase or decrease in price due to these interest rate dynamics are sometime refered to as "the international fisher effect".

edit: zar was bad example eh.. but what I mean is as then trend in opposite direction than interest rate differential spreading it creates opportunity when things sync again.. or divergence and divergence leads to profits.. and i dont mean macd divergence..
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  • #1,007
  • Sep 21, 2010 12:20pm Sep 21, 2010 12:20pm
Quoting domino
note that the china rate on that chart is old and was rate was hiked recently...

but yes we should be watching aud/usd.. if you look back a couple of pages youll see the aud/usd that we just exited from making about 1000 pips and drawing close to 4% increase in the account from interest payments over that time..

interest rate dynamics has alot to do with how the market moves.. when they are contracting money flocks out of the carry and as it widens money flocks into the carry... banks trade with interest rate dynamics in mind.. they understand...

since there aren't interest rates in stocks, do you mainly trade equities that are paying dividends?
  • #1,008
  • Sep 21, 2010 12:34pm Sep 21, 2010 12:34pm
Quoting rogerdoger
since there aren't interest rates in stocks, do you mainly trade equities that are paying dividends?
Yes I will buy equities where the wealth is distributed and transfered to the investors side the more payments yearly the better for this reason I like trusts.. I do this globally so I dont really worry about not finding things that dont pay.. I also buy indexes and I really like to focus on emerging markets..
  • #1,009
  • Sep 22, 2010 6:22am Sep 22, 2010 6:22am
Quote
but yes we should be watching aud/usd.. if you look back a couple of pages youll see the aud/usd that we just exited from making about 1000 pips and drawing close to 4% increase in the account from interest payments over that time..

Nice one dude. I feel like I missed the party. So we should have a nice correction before looking for more longs? 1000 pips is nuts.

Quote
interest rate dynamics has alot to do with how the market moves.. when they are contracting money flocks out of the carry and as it widens money flocks into the carry... banks trade with interest rate dynamics in mind.. they understand the flow of money.. banks basically have an unlimited amount of money to throw at us.. so its wise to trade with the banks and flow of the markets.. the increase or decrease in price due to these interest rate dynamics are sometime refered to as "the international fisher effect".

I actually made a thread in this section of the forum about the fisher effect to see if traders really looked at it and didn't get much reply. We talked about it in school but my professor didn't seem to have a firm grasp on the topic it was very black and white, "this is how it is don't ask me about it" type of prof.

Quote
but what I mean is as then trend in opposite direction than interest rate differential spreading it creates opportunity when things sync again.. or divergence and divergence leads to profits.. and i dont mean macd divergence..

LOL macd.

So with aud, will you wait for the correction before more longs or will you take shorts on the way down?

Also, what other pairs stand out to you? Looking at the interest rate table (you mentioned it was out of date, where do you get your data?) it doesn't seem like there are many options for pairs to trade.
  • #1,010
  • Edited 12:17pm Sep 22, 2010 9:11am | Edited 12:17pm
Quoting domino
gbp/aud breaking nicely... break of 16218 gives us a nice long term hold in this pair.. RZ7B swapped clean break into lows. Position is enhanced by monthly trigger.
Domino have been reading through the thread , currently 1/3 of the way there. I have one question which has been nagging me (It might be the one repeatedly asked the other 2/3rd of the thread ..so excuse me if already dealt with. )

Here's a chart of GBP/AU on my broker. Entry at break of support, retest and continuation.
http://img822.imageshack.us/img822/7874/123gdb.png

RZ - Resistance Zone.support but once swapped changes to resistance
7 - 7 touches.. have circled 3. How to figure 7?
B - I figured number of waves to the support. Marked them with red and yellow.

RZ/SZ are zones/levels.
Touches define the strength of the a zone. Stronger the level, the more chances of hiding stops.
Waves define the order flow compression. By the looks of it, this example is more apt to this trade:
http://www.forexfactory.com/showpost...&postcount=401

as compared to this:

http://www.forexfactory.com/showpost...&postcount=400

Any more insights on the trade will be helpful.
  • #1,011
  • Edited 12:01pm Sep 22, 2010 9:32am | Edited 12:01pm
Quoting domino
interest rate dynamics has alot to do with how the market moves.. when they are contracting money flocks out of the carry and as it widens money flocks into the carry... banks trade with interest rate dynamics in mind.. they understand the flow of money.. banks basically have an unlimited amount of money to throw at us.. so its wise to trade with the banks and flow of the markets.. the increase or decrease in price due to these interest rate dynamics are sometime refered to as "the international fisher effect".

edit: zar was bad example eh.....
Fisher effect works for forex movements in the medium term. Though adjusted inflation eats into the differential. but the effect breaks down quite frequently. Check this chart of USD/INR:

http://in.finance.yahoo.com/q/bc?s=USDINR=X

The recent move has been due to the reverse repo rate announcement.

t
  • #1,012
  • Sep 22, 2010 2:05pm Sep 22, 2010 2:05pm
Quoting frankkn
Nice one dude. I feel like I missed the party. So we should have a nice correction before looking for more longs? 1000 pips is nuts.



I actually made a thread in this section of the forum about the fisher effect to see if traders really looked at it and didn't get much reply. We talked about it in school but my professor didn't seem to have a firm grasp on the topic it was very black and white, "this is how it is don't ask me about it" type of prof.
i would have liked that thread but i never saw it .. most profs are like that hardheaded .. narrow minded.. esp in finance.. I went to penn state and the profs there were the same.. traders seem to have this problem with finance profs.. what they teach and what is reality.. is different.


Quote
LOL macd.

So with aud, will you wait for the correction before more longs or will you take shorts on the way down?

Also, what other pairs stand out to you? Looking at the interest rate table (you mentioned it was out of date, where do you get your data?) it doesn't seem like there are many options for pairs to trade.

I will not short the aussy on the way down as the differential is so wide.. but I will short a narrow one if there is a correlated pullback.. for example eur/usd... I will short euro/usd but will not short the aussy/usd.
  • #1,013
  • Sep 22, 2010 2:21pm Sep 22, 2010 2:21pm
Quoting vicky_ag
Domino have been reading through the thread , currently 1/3 of the way there. I have one question which has been nagging me (It might be the one repeatedly asked the other 2/3rd of the thread ..so excuse me if already dealt with. )

Here's a chart of GBP/AU on my broker. Entry at break of support, retest and continuation.
http://img822.imageshack.us/img822/7874/123gdb.png

RZ - Resistance Zone.support but once swapped changes to resistance
7 - 7 touches.. have circled 3. How to figure 7?
B - I figured number of...
here is a chart with the line touches and swaps.. 7 touches.. 2 low points.. break into lows.. RZ..

you are correct on the type of gapped OF being built.. but this is also into lows and that is common itll retrace a bit before plowing through usually.
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  • #1,014
  • Sep 22, 2010 5:20pm Sep 22, 2010 5:20pm
Quote
traders seem to have this problem with finance profs.. what they teach and what is reality.. is different.

It's good to hear someone say that lol, I'm learning to just type their notes so I can regurgitate during the test, too bad I'm nearly done.

Quote
I will not short the aussy on the way down as the differential is so wide.. but I will short a narrow one if there is a correlated pullback.. for example eur/usd... I will short euro/usd but will not short the aussy/usd.

Makes perfect sense, I appreciate your taking the time to go over this stuff, it's actually pretty simple.

What route did you take when you graduated? I have plans with a financial planning firm when I graduate, and I'm not even sure if they'll let me trade with another broker.
  • #1,015
  • Edited 6:14am Sep 23, 2010 12:45am | Edited 6:14am
Quoting domino
here is a chart with the line touches and swaps.. 7 touches.. 2 low points.. break into lows.. RZ..

you are correct on the type of gapped OF being built.. but this is also into lows and that is common itll retrace a bit before plowing through usually.
That was not 16218, more like the high 16725.

So it means there are stops/orders at that high ?

How to figure the B-Wave in there? I just see an A.

Edit: Zoomed in a bit. Got the B - Wave too. Though it raises another question, we are already at the downside and near historic low ..how does that play out? And we ignore gapped flows while deep into highs/lows ?? One more question, which TF you normally refer to for the resistance and touches?

So far and forth on the naming convention , still to figure out how this ties into order flow.

I am learning to trade fundamentally but my entries suck, so thinking of improving them using order flow. Here's my chance
  • #1,016
  • Sep 23, 2010 5:21am Sep 23, 2010 5:21am
Quoting vicky_ag
my entries suck
http://www.tradingeducators.com/trad...ok_vsjul07.pdf

http://www.earnforex.com/forex-e-boo...rick_Entry.pdf

Entries are the easy part, check these documents out for some simple entry criteria (in addition to the thread of course)
  • #1,017
  • Sep 23, 2010 5:25am Sep 23, 2010 5:25am
Quoting domino
I will short euro/usd
I had 2 shorts from yesterday get stopped at BE. One was a VSA entry on no demand, the other was a 123 entry, both off of smaller TFs.

Here is a 3h 123 pattern
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  • #1,018
  • Sep 23, 2010 6:13am Sep 23, 2010 6:13am
Quoting frankkn

Entries are the easy part, check these documents out for some simple entry criteria (in addition to the thread of course)
Frank , thanks for the pdf's. I have already read those. The famous 1-2-3 pattern. The major issue is identifying the direction and applying 1-2-3. I am trying to improve on it.

If you look at my GBP/AUD chart, it has an indi to point out the Highs and lows I need to check for my 1-2-3. Got it from Hornet/Michael who was using the same.

Though many say entry is the easy part and exists are difficult, I find that entering at the wrong moment gives the whole difficult exits path.
  • #1,019
  • Edited 8:03am Sep 23, 2010 6:58am | Edited 8:03am
Quoting vicky_ag
The major issue is identifying the direction and applying 1-2-3. I am trying to improve on it.
I don't normally trade 1m but it was the first example I saw.

Here is a 30m showing direction, next a 1m showing 123 setup, then 1/2 off at 1:1 and SL to BE
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  • #1,020
  • Sep 23, 2010 9:25am Sep 23, 2010 9:25am
Quoting frankkn
I don't normally trade 1m but it was the first example I saw.

Here is a 30m showing direction, next a 1m showing 123 setup, then 1/2 off at 1:1 and SL to BE
Frank, looks like you are using true 1-2-3 and not the TTE. Cause with TTE it comes out like this too. Red line 1-2, yellow 2-3 and the lower break of 2 will triger TTE. http://img842.imageshack.us/img842/8478/s23es.jpg

I am looking to trade it on 4hr charts. 30 mins is unfeasible for me.

Not to question domino but what I have read in the thread seems to be break of S/R, retrace to the line and then taking trades on the high/low break ie trend, retrace and continuation. Order flow mindset has still not set i.
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