Price is everything

see now , sl is the yellow line...this was my plan but it failed . i got in with 15 minute engulfing

Hi M

Here are some of my ideas on your trade.

Just a note

Demo until you're consistently profitable
Learn to trade in Weekly, Daily an H4 before you try any lower tf.
Post charts often to get feedback.

Best

If

1) Engulfing bar north into supply = bad sign for shorts, retrade occured as was expected, this was a bull flag,

2) Check the Pa within the circle that doji before the move up should have been your indicator for a move long,
also there was a 4hr engulfed demand zone right below it and price reacted above it, another indicator to move long
As soon as you see the harsh move up get out of your shorts immediately especially since at this point its already a confirmed flag

3) This is the supply zone you should be looking at as ifmyante already pointed out multiple times.

This was an easy setup, imo, i took the long on it on the flag, you went the riskier way and shorted a flag expecting to receive more pips.

Risk management 101....

well thanks but i look for engulfing on 15 minutes and entered ..If i mark s/d levels at h4 , i shd look engulfing at h4 only ?

I see what engulfing you mean but to be frank i dont know where you entered on the engulfing, also if you check 15m to the left there was an engulfed zone acting as demand, so your range of movement was rather limited.

Its best when starting to just really trade on 1 timeframe. And preferable not the smaller timezones since those require a bit more attention to detail and structural awareness.

The reason im saying this is because different timeframes will give you different stuff to look at, also larger timeframes require you to put larger stops if you don't pinpoint your entries on 5/15M, which once again requires a little bit more practice.

Id really recommend to you just to trade 15M in the beginning and not try to catch any large waves, take your profit out early or beginn averaging in or start averaging out of your trade once it runs profitable, maybe even move SL to BE +1/5 once the move established itself, this way you wont get totally fucked on your trades.

An Enfulgin on a 4hr chart will also show you engulfings on 15m chart within that zone, its up to you to decide which one offers the best RRR or has the best PA signal to enter.

For example mangalesh look at this chart, a trade i just took, should be self explanatory.



If you don't understand it feel free to ask questions, the funny thing you will notice though is that kenny, me , michael, if always have nearly the same entries, our exits differ but the entries are always the same, Please read through the past 800 pages of this thread.

My issue is that i personally dont understand where exactly your entry was, where your exit was supposed to be etc, so please take a 15 minute chart and i will dissect it for you.

Kind regards

EDIT: took out crude +20

That suply level was visit third time(so in this time not enough sellers) and on lower TF u could see momentum down just wasn't there.
So just don't wait hit your SL but flip and go with momentum.

i have few questions for you.

1. I mark s/d levels in h1 and h4 . I should look for engulfing candle on the same tf wer i market the s/d zone or i will need to look at lower tf for entry ?

2. I saw engulfing candle on ur chart , as i have read in some books engulfing candle means it shd be bigger than the previous candle and body shd be big of previous candle body,but in ur chart its on same equal type and u have mentioned it has closed above the supply zone ? So you just mean a candle closing above supply zone is a engulfing candle ?

Looking forward for your reply . Thanks

thx am getting you ....

Hi Orbital,
I have problems to understand why this is an easy or riskless long trade. You can't be sure that supply is consumed at this area. Maybe the probability is high that a long will suceed but the probability is higher when you take a long at a demand level.

tried to explain couple of things here.. see if any use:

http://www.forexfactory.com/showthre...21#post4652221

(the boxed part is the flag)
You are presuming that it wasnt at demand. It was though, and it reacted, not the cleanest reaction but good enough to go for it.

Also i don't understan the reasoning behind your sentance: "You can't be sure that supply is consumed..."

You can't be sure of anything, you're stacking odds in your favour by using Price action and Supply/demand zones as youre guide, while at the same time as magix correctly said minimizing your risk/exposure with proper use of SL levels.

I fully understand the pain and difficulty in realising which zones are worth taking and which arent. To me this was an easy as fuck setup because i know these setups, ive seen them 1000 times, im watching for them while at the same time using the tools in this thread to give me additional confirmation.

Trading like this isnt scalping where you need to be dead certain of what youre doing and reading PA like a Pro.
Yet you will still need to practice this.
If you didnt see on the chart why this was an easy setup what you need to do is look for more of these setups zoom into smaller timeframes and understand what happened.

Easy Setup DOES NOT MEAN LOL IM GONNA GET 130 PIPS ON THIS EVERY TIME.

Not it still means that you have a fixed risk in terms of pips/percentage and that the trade manages trading risk in a controllable and reasonable fashion.

Thanks for the answers guys.

@Kenny: I'll have a look

@Orbital: The reasons why you went long are clear to me. The problem is that you get a 15 min long set up in a 4 hr supply zone. You have a hint on the 4 hr chart that supply is removed because of that engulfing candle but never the less you are in an danger zone for a long. There are 3 possibilities where a set up can occur: at a demand zone, at a supply zone or on the way from one zone to another. For me a long set up in 1. a demand zone is the best, 2. a long set up when the price is rising from a demand to a supply zone is good but I'm struggeling with 3. long set ups in a supply zone (in this case a 15 min long in a 4 hr supply area). Wouldn't "minimizing your risk/exposure" mean look for another trade in zone 1. or 2.?

Hi All,

This chart is a EURUSD H1. I have several questions, please help.

1) is the orange bar circled in yellow a breakout?
2) is the blue rectangle a demand zone before? will it turn to a resistance zone?
3) can i say the red rectangle be the next demand zone inline if it happens to go down.


Also, just want to say thanks to all that contribute to this thread... as I learn most of what i know from here... although not much.

thanks!

1) Timeframes

This is what i was referencing earlier, if you start trading use only ONE maximum TWO timeframes, charts will start confusing the living shit out of you and you WILL inevitably start killing prostitutes on the weekend to vent your rage and confusion.

Heres a counter question: Would you enter a 20 pip profittarget trade based on a 4hr chart?
You most likely wouldnt right? If i enter on a 4hr chart i expect to hold it for at least a couple of hours.

If i enter a trade on a 15m or 5M timeframe im not really going to hold it for long since my desired reactions are going to come fast, and i know the limits of the trade.

Please believe me when i say that im not talking down to you, its just that understanding and getting a feeling for how certain timeframes work takes a bit of practice and especially routine, in essence its all about repetition.
I feel most comfortable trading a 2 minute chart, but its also the most stressfull and demanding mentally. But i can easily tear up any timeframe assuming i have the patience for it.
It is important to know whats happening on the larger timeframes, but just because a daily chart is showing bullish signals to me doesnt mean i wont short. If i see my signals i will go short despite what the chart is showing me.

This is something you will need to train yourself and get used to, if you see something on a 4hr supply, check the smaller timeframes if they really agree with you, yes it might go down for 50 maybe even 100 pips, doesnt mean that it wont surge up 30-50 pips first, which usually is more pips than i really need to take.

I took about 200 pips on a copper long today, it went up for 270 pips more lateron but i took the trade out early since my profit target was hit, copper is showing some inherent bearish strength right now due to the zone, doesnt mean that i wont take it for 70-100 pips

A trendchange or a change in direction only occurs once you have Price confirmation. A supply/demand zone is only as meaningful as the priceaction suggests it is. Price action and structural context (which means Price action relative to Position of zones and preceeding historical price action AND TIME)

Brian once cleverly remarked that once most traders miss out on is the Time factor, but thats a little bit more advanced at this point.
Anyways, a supply zone may be dangerous, but look at how prices ENTER a supply zone? Ever thought about that? It does make a huge difference on if prices are slowly approaching a zone or if they Crash with a hard bullish outside bar into it. One shows weakness the other shows strength.

2) You referred to three examples yes thats true, regarding the third (longing in a supply) this is really about breakout trading or what people refer to as breakout trading, when a supply major or minor breaks there is a bullish breakout, sometimes traders will see whats going on beforehand based on PA and take a risk, you usually see immediately where you have to place your stops, this is most visible in an energy building rectangle, or a wedge. Remember that flags can go all the way back into demand though, but nvm that just now.

About the other two zones, usually i will start my day trading conservatively and taking safe bets only, once i have a buffer built i can trade slightly more reckless.

Lets take your seocnd example, when prices already left a zone, isnt it smarter to wait for a W pattern setup? and rebuy on the second test? You can take a movement once it breaks out of a demand zone but you must be willing to widen your stops in order to do that. Sometimes you will get stopped out, sometimes you will not take the trade and miss the huge ride up. Sometimes you will catch the ride up immediately, its up to you and depending on lotsize and risk size if you wish to take this trade or not, that is everyones individual decision.

ABout the first example, taking price right at a level, heres an example though, what if you have 3 stacked 5 minute demand zones below you while price just hit a 15m supply? Which zone do you take? You have 2 options here.

a) Go blind on a level placing protective stops below the level and pray for a breakout. Doing this you decide that the risk reward is suitable for you... or you just take the zone where you feel that you will receive the greatest reward for placing your risk.

b) Wait for Early PA signals on the 5m such as a pin, or a bullish engulfing, a pin being engulfed, a doji, compression etc, and thus enhance your odds and practically reduce your stop.

So it all really is relative. Michael, Red, Ifmyante will all testify to you that i have taken some pretty fucking insane trades since ive started posting in this thread a couple of month ago.

I have had crude move against me 200-300 pips on a swingtrade that i considered to be worth the risk. Ive had 200 pip downside on Silver trades i took basically just risking the trades blindly.

Ive had copper trades moving 400 pips in one swing in my favour while i was heavy.

Ive had crude trades run against me with 4-5 lots for about 20 pips and then taken them out at +80, stuff like that.

The only difference within this is that i knew the risk and if a trade was worth my while or not. My win loss ratio for about 130 trades right now is 82%. My risk is fixed, once im up a certain percentage and met my target i can and will go ballistic on certain movements. I know im blabbering right now but if you pay close attention this is my point: You need to decide for yourself: What is the fixed amount of risk i can accept per trade? Which zones offer me the greatest risk/reward for my trading needs? How long am i willing to hold trades for? Where am i taking profit? How do i take profit? Do you move SL to BE+5 and let the swings run? Do I set trailing stops? Whats my monthly target? How many trades can i let run against me without causing to much harm to my account?

If you want to only take longs at demand and only shorts in supply thats fine, but then pick a timeframe where the zones are clearest. The best thing for you in this example would be to do 15M timeframe trading, most engulfed zones are very clean and the first and second test usually pan out pretty nicely. Because as i said... what happens if you have 3 demand zones stacked ontop of each other?

I think i had a chart somewhere about 3 crude 15M supply levels me and michael were looking at, i decided that the second (middle one) was rubbish for me, so i only took the first one, i missed the top one, but i took a breakout trade north today on crude on the second one because i saw it broken, i had a drawdown of maybe 10-15 pips? and took 30-40 on it, i was in heavy though.


Don't know if this was helpful to you or not, i may refer you to Kennys thread "Romancing the Price" its in my signature as a link, ill be glad to answer further questions in there, in the spirit of keeping this thread a chart trade-educational only thread with minimal chatter.

Im pretty much exhausted at this point, major trading day for me. Time for some sleep

Take care

I really enjoyed this post.

The idea of using one time frame is very helpful with SD/PA trading. When you start looking at too many time frames it can be very overwhelming because most of the time there will be conflicting info. For every attractive small TF level there's a conflicting larger TF level.

I'm not trying to say that multiple time frames are bad, but they can definitely cause you to miss some trades = " doesnt mean that it wont surge up 30-50 pips first, which usually is more pips than i really need to take"

Both levels can work and you don't have to be intimidated out of them.

Thanks for that great post! I mainly stick to the daily and weekly time frame since it is most suitable to me when I begin work/school (demo trading now but I may as well get used to what I will be doing). Occasionally I will go down to the H4 chart. One problem I am facing is proper placement of the stop-loss. Since I trade off the daily time frame most of the time, my stop loss is pretty huge compared to that of smaller TF. For example, if I trade at the break of a previous day BEOB, the general stop loss is placed at the top of the BEOB. Sometime it varies but it can be a good 100pips+ so drawdowns can be pretty huge trading on the daily time frame. Anyone know a way to minimize this risk?

EU M5 demand

Adjust your position size to meet your risk tolerance

'Twas a very good post.

Multiple timeframe analysis is still important, but keep it simple and stick to three timeframes. The bigger picture timeframe for trend, middle timeframe for marking off supply and demand zone and the lower timeframe for confirmation entries. Use the middle timeframe where you marked off the zones for trade management such as TPs (opposing demand and supply as your 1st target), SLs, etc. It is up to you which timeframes you choose! The middle timeframe is the timeframe you want to focus on whether that is d1, h1 or m15! Keep it simple!

Thing is... everyone is different... you have to find your own way, what you are comfortable with and what makes you successful. This takes time and won't happen overnight!

I found an iPhone app where I can look at my MT4 charts when I go outside for a cig break... If those fcukers think they can stop me looking at my charts when I am at work, they have another thing coming