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Following the big money

  • #21
  • May 29, 2011 12:47am May 29, 2011 12:47am
Quoting Sutts
Great thread srmfx, thanks for taking the trouble to help.

I've had my head in the sand for too long, focusing on every move on the 5 min charts without much more than a glance at the bigger picture....
Hi Sutts,
I draw my support and resistance lines in charts of 1H to daily, watch the PA on 15M and 5M, and my entries are based on 1M and tape reading. In a $4 trillion per day market if you don't follow the big money you are doomed. My spread is below 1 pip for EU and UJ and 1.2-5 for GU and I also pay 0.1p of the base currency per side commission.
I see that you found out the most important part of ttrading - posion and money management are more important than entry. Most of the traders focus on the best strategy for opening a position and they eventually fail. There is now Holy grail in th eposition management. You have to choose for yourself, but in order to satisfy your greed and fear the best is to close the position in two or three parts. This is what the best traders do and what my experience shows me that is right. Also a time stop or limit will save you a lot of pips. If my position is not moving for 5 minutes I prefer to close all or part of it. For bigger time frames this period should be different.
  • #22
  • May 29, 2011 4:59am May 29, 2011 4:59am
Quoting srmfx
Hi Sutts,
I draw my support and resistance lines in charts of 1H to daily, watch the PA on 15M and 5M, and my entries are based on 1M and tape reading. In a $4 trillion per day market if you don't follow the big money you are doomed. My spread is below 1 pip for EU and UJ and 1.2-5 for GU and I also pay 0.1p of the base currency per side commission.
I see that you found out the most important part of ttrading - posion and money management are more important than entry. Most of the traders focus on the best strategy for opening a position and they...

Thanks srmfx, that's helpful. I think I need to find a better broker too!
  • #23
  • May 29, 2011 5:10am May 29, 2011 5:10am
I think you're right that following the big money is a must, but I stopped reading here in post #1:

Entries are identified at 1 minute charts and the quotes are used as a filter.

Now I know I'm the rookie here but I doubt that the big money really cares about 1m charts. That's just pure noise.
  • #24
  • May 29, 2011 5:18am May 29, 2011 5:18am
Quoting knitter
I think you're right that following the big money is a must, but I stopped reading here in post #1:

Entries are identified at 1 minute charts and the quotes are used as a filter.

Now I know I'm the rookie here but I doubt that the big money really cares about 1m charts. That's just pure noise.
You are right, that is why I watch for support and resistance levels from 1H to daily charts. Tape reading and 1M charts are to fine tune the entries. You can't be sure that a big fund will begin to build a long position at 1.4120 for example. But if I try to join the party a few times with 20 or 30 pips stops my account will be gone.
  • #25
  • May 29, 2011 6:32pm May 29, 2011 6:32pm
James16 chart thread here on forex factory is J16.
Searching for a cure...:nerd:
  • #26
  • May 30, 2011 12:28am May 30, 2011 12:28am
Quoting funlovinj
James16 chart thread here on forex factory is J16.
Impressive thread. His chart reading reminds me of that of Larry Williams. He also is using 2-3 bars set ups.
  • #27
  • May 30, 2011 1:06am May 30, 2011 1:06am
Quoting knitter
I think you're right that following the big money is a must, but I stopped reading here in post #1:

Entries are identified at 1 minute charts and the quotes are used as a filter.

Now I know I'm the rookie here but I doubt that the big money really cares about 1m charts. That's just pure noise.
I would like to explain more about the 1M charts and price action. The big money don't enter the forex market in one big order. The slippage for large amounts is huge. The last few years the volume of the forex market increased 3 times and the Asian sovereigns are playing much bigger role. When they open longer term positions they probably base their decision on daily charts. But the actual buying or selling should be implemented in an intraday basis and the decisions are made on lower time frames. Usually if they want to establish a long position they start to buy form a support level and then add more at every retracement lower. I'll show you a few examples later.
  • #28
  • May 30, 2011 6:27am May 30, 2011 6:27am
Quoting knitter
I think you're right that following the big money is a must, but I stopped reading here in post #1:

Entries are identified at 1 minute charts and the quotes are used as a filter.

Now I know I'm the rookie here but I doubt that the big money really cares about 1m charts. That's just pure noise.

Focusing on 1M PA alone would be crazy and is something I admit to doing in the past. However, using 1M PA to take low risk entries in key higher T/F zones is a great technique IMO.
  • #29
  • May 30, 2011 6:36am May 30, 2011 6:36am
Quoting Sutts
Focusing on 1M PA alone would be crazy and is something I admit to doing in the past. However, using 1M PA to take low risk entries in key higher T/F zones is a great technique IMO.
That's what I'm talking about. By fine tuning the entries on 1M chart and tape reading, with proper position management, you can have great trades with very small risk.
  • #30
  • May 30, 2011 7:03am May 30, 2011 7:03am
Gread thread! This reminds me to Sam Seiden and supply and demand (following the big money) trading. I will follow!
  • #31
  • May 30, 2011 3:25pm May 30, 2011 3:25pm
srmfx,hi,

i often trade a very similar way to this,although of late i havnt had the mindset to scalp to such a detailed level,this way of scalping always produced my best results,like yourself i would use key levels on higher time frames,generally 15 mins 1 hour,but have and still use daily and weakly,i then also trade of 1 min chart and focus on bid ask price which gives me a pattern,although entry can run away from you if i miss the price.

it does require maxi-min concentration and one must be in tune or as i like to say feel the rhythm,dump trades when price tells us.are you using level 2 for your final decision of entry

very good thread

thanks
william
  • #32
  • May 30, 2011 4:30pm May 30, 2011 4:30pm
Would love to hear how you use correlation srmfx. It's a major weakness of mine and something I'd like to address.

How close do you watch the correlation action? - is it a matter of seeing stocks and gold are green on the hourlys so look to take EU longs with more confidence when the next setup comes along? Or are you using correlation to time your entries by observing 1M PA on the correlated instruments?

Thanks!
  • #33
  • May 30, 2011 5:01pm May 30, 2011 5:01pm
Quoting srmfx
That's what I'm talking about. By fine tuning the entries on 1M chart and tape reading, with proper position management, you can have great trades with very small risk.
What does it mean: "tape reading"?
  • #34
  • May 30, 2011 5:03pm May 30, 2011 5:03pm
its essentially the order book
Searching for a cure...:nerd:
  • #35
  • Edited 5:10pm May 30, 2011 5:07pm | Edited 5:10pm
hi sutts,

please excuse me for my thoughts on entries regarding correlated instruments,i believe they give a bias on direction ,but with regard to scalping at such intensity a bias only,having said that ,there are some opportunities that are so clear .especially whilst watching the whole movement of buying or selling,when the currencies are all in sync and the general markets ie,ft,dax ect.and cable has stalled ,all are in high + % values whilst cable is _ % value its a very high % long combine that with s/r level and bingo.but speed is the essence,you have to be really fast to act,

im sure the op will answer your initial question but i just wanted to add the edge in watching value change on or should i say correlated instruments when they are in sync.

regards
william
  • #36
  • May 30, 2011 7:24pm May 30, 2011 7:24pm
Quoting funlovinj
its essentially the order book
Which broker gives access to the FOREX order book?
  • #37
  • May 31, 2011 12:08am May 31, 2011 12:08am
Quoting diceman555
srmfx,hi,

i often trade a very similar way to this,although of late i havnt had the mindset to scalp to such a detailed level,this way of scalping always produced my best results,like yourself i would use key levels on higher time frames,generally 15 mins 1 hour,but have and still use daily and weakly,i then also trade of 1 min chart and focus on bid ask price which gives me a pattern,although entry can run away from you if i miss the price.

it does require maxi-min concentration and one must be in tune or as i like to say feel the rhythm,dump...
diceman555,
I also say "to feel the rhythm of the market". If learn to do this toy can trade almost every price swing.
  • #38
  • May 31, 2011 12:23am May 31, 2011 12:23am
Quoting Sutts
Would love to hear how you use correlation srmfx. It's a major weakness of mine and something I'd like to address.

How close do you watch the correlation action? - is it a matter of seeing stocks and gold are green on the hourlys so look to take EU longs with more confidence when the next setup comes along? Or are you using correlation to time your entries by observing 1M PA on the correlated instruments?

Thanks!
The correlation is one of my best filters for entry. I trade mostly EUR/USD and watch GBP/USD and one stock index (FTSE). Stock indices are highly correlated and I use FTSE because I trade mostly during the European session. Yes, I use to correlation to time my entries. I use convergence or divergence between the price move of the currency pairs and the stock index to confirm an entry. Sometimes the index and GBP/USD begin their move up or down before the EUR/USD. This is a very good filter.
Some days the big guys are trading crosses and the correlation can't be used.
This is how my screen is arranged.
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  • #39
  • May 31, 2011 12:28am May 31, 2011 12:28am
By tape reading I mean actually reading the quotes. As you can see I watch the quotes from 3 different brokers. I can't explain how exactly how I do this. It's just a lot of screen time and experience, but when the quotes stops at a support or resistance level, this tape reading often allows my to by on the top or sell at the bottom.
  • #40
  • May 31, 2011 1:38am May 31, 2011 1:38am
Short GBP/USd @ 200 EMA. Initial stop is 5 pips. I closed 2/3 of th eposition after 5+ minutes waiting for small profits. If the pair breaks below 20 and 50 EMA I'll move the stop to BE.
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