Romancing the Price

Guess I'm cranking some charts out, guess my violent neighborhood has me on my toes today.

Here is gbp/usd, on the left is H4 and on the right is H1. All I'm trying to show here is climactic volume into demand. You can see the volume surge on the H1 as price plowed into the next (unmarked) H4 demand level.

Provided the background is sound and everything else is in place, tests (and ND/NS) give the fastest profits of any entry. This is purely from my experience, and may vary from trader to trader, but these entries usually pop 10 to 20 pips immediately, enough to get SL to BE in most cases.

Problem with them is that I'm normally already in 2/3 of my position by the time they come around.

They are also great for exiting, which I think is what got me started on this whole volume tirade.

On behalf of his majesty let me write something in here before this thread gets derailed into a pointless VSA exercise and fibbinarchies private chatterbox....



There is a very simple truth: Institutional orders dictate market movements, and usually when institutions decide on a direction there is rarely anything to stop them. Institutions will not bet against eachother in the longterm. And since theyre not really doing heavy trading on m15 and m5 like most of the retailers do they have to distribute their equity in one solid trend or instrument cycle. Banks and funds collaborate to fuck the markets and retailers in the most efficient way.

So if institutions were buying they wouldnt give a flying fuck about exiting there. I imagine if this was a 4hr chart perhaps but as were talking inst orderflow this is more likely to represent a daily and weekly chart than it is to represent the lower timeframes.

What you are refering to as institutional demand is what we see as 4hr and daily engulfings, this is a fact and since most of their orders dont get filled (imagine 100s and 100s of lots) this is why we ride the waves up and usually buy or sell in large h4 supply and demand zones. Simply because we are jumping on their backs on the retests and riding the wave up with them.

That supply on the top really is irrelevant, if you have 100s of lots in the market you can take out 20 lots just for profittaking and risk management reasons on the first supply zone you mentioned up there, retailers usually jump on this one aswell as outlined, drive it down a little, then retailers get trapped at the bottom and are forced to sell as the wave goes up again, this causes additional buying pressure since covering your short is essentially buying the underlying(base) instrument back and thus pushing the price up higher even more. The issue of traps and how to see them in structure is a more complex topic we have discussed a couple of times in PIE but ill try bringing that issue back here sometime soon.

Anyways, once price hits that bottom again some more orders get filled and prices ralley up again and as i said if this was TRULY institutional demand then you can expect a break of the range to go much much north. over 60% of the profittaking really takes place up there.

Now in some cases you wont even have the retest because so many banks and funds are buying at once... prices just LIFT off there never to be seen again or at least until a couple of months pass. In rare cases one bank or fund will disagree and start selling at that supply, but odds of that happening are low and chances of one bank standing against 6 others are pretty slim to none.

So the discussion of what institutions are going to do is a pretty moot point.


In regard to the metric shitton of volume discussion thats suddenly going on, i guess we can have a reasonable debate on whether VSA or whatever the fuck you call volume and tapereading these days can add something sensible to the core principles of PIE and ROMTP.
I'm going to agree on the fact that volume sometimes is able to give you decent exit points and clues for exits. But if youre an experienced trader such as ken for example you are able to see if prices are going to stop moving and reverse by the way PA is developing in the moment and where it is structurally. I have yet to see somebody actually illustrate something using VSA that i cannot see just reading the PA and the structure of an instrument. Then again im willing to be taught otherwise. I just feel like adding VSA analysis into here is certainly the wrong direction to be heading right now seeing as how many people in here still have not grasped the basic concepts and might only be fucking confused by reading volume.

I mean no disrespect to you franknn obviously, you know that i have nothing but mad love for you but lets be honest with eachother:

We both know that Volume means FUCK-ALL when you can hide it. Its called darkpools and iceberg orders(to some extent). Some investors dump 100-200 million into the markets at once, in order not to manipulate natural orderflow this volume can be hidden from the market and can be made to affect natural market orderflow as minimally as possible. A lot of banks and institutions use this for a variety of reasons which is why i mentioned earlier that traps can be seen structurally if you know what to anticipate. This is something volume cannot help you with on basing your decisions to enter. PA etc can though, although you can still get fucked mightily.

There are a metric shitton of other examples which affect the markets such as interbank swaps and refinancing operations etc which also will not show up in volume but make the market switch momentum instantly, even if your volume analysis indicates otherwise.

Anyways like Ifmyante already stated so nicely, i also agree that there is a spot for volume analysis in ROMTP assuming its done sensibly as a collboration tool with PA or S/D or whatever but not as a standalone investment tool (which as i mentioned earlier i find ridiculous).

Just like ifmyante i also think its nice that you guys are having a nice chat in here, but honest to god there was no fuckign reason to fill up 2 fucking pages full of talk, the chatroom thread is suited enough for that and ken wants to keep this thread moderately clean, since just like PIE shit is starting to get out of control with cuntfaces dropping into here asking really simple questions.

Treat this thread like a textbook, if you want to chat exchange IM's or go into the chatroom thread. This is directed to fibbinarchie more than it is to you franknn but im sure you get the point aswell.

Kind regards

Small edit:

quote from Fibbinarchie:
The reason we have made this thread 10v+ is to ensure that we do not get a lot of idiots posting vaguely inappropriate irrelevant bullshit and turning this into the cumstain that can only be described as the last 300 pages of the PIE thread. Respect the owner of the thread, Ken is being very cavalier and very nice about everything that went on in here but at a certain point he WILL snap. Anyways precautions such as enabling only people on the buddylist to post in here can easily be made, we want in many regards this thread to be TREATED AS A TEXTBOOK so that people do not have to siphon through dozens of pages full of shit like a twilight novel (yes ive read the books, id rather have a full grown cactus anally inserted than read them again).

Theres no point to ask questions which have been answered on the first page, in the pdf or the 30 pages that followed them. If you havent done the effort to look for an answer in there you do not deserve to post in here and you most certainly do not deserve an answer. It has been stated OFTEN enough that when in doubt you can always PM a "senior" member of PIE or this thread and ask your questions directly if you are really unsure and the available reading material hasnt provided an adequate response.

What it feels like often enough in here is like... people reading a book about aeroplan engineering and then without reading the entire book coming along and asking: Why does an airplane need wings? If this was university your professor would probably smack you in the head.
So please dont mention things like: "please say if it has been asked before" ; if the nice guys (emene, ken, brian, ifmyante etc) have asked often enough to keep this place clean. Well there you have it, precautions have been taken.

Personally i dont give a shit if you have no respect for me or call me a cunt, i probably deserve those comments. But have respect for the nice guys who offer their free time in helping other traders and who are TRYING(!!) to have more advanced discussions about trading and price structure etc for the FREE(!!) benefit of perhaps everyone who is interested in this style of trading.

Enjoy

Quick live trading exercise:

How should this trade be managed?

Answers in chat, best will be brought over here.

Hee hee, reminds me of other threads: 'I'm in a trade, what the hell should I do now??????'

Trade example illustrating planning beforehand, analysis of structure and PA, making decisions for a swingtrade by analysing structure on alternating timeframes. Illustrating how i suspected that the first H1 zone is not going to hold and some more details, Have fun, remaining questions can be posted into chatroom thread.

Quick Edit: Switches to the smaller timeframes and alternating are ordered CHRONOLOGICALLY

Orb posted a great example above.. it clearly demonstrates what this thread suppose to be about..

i hope other TRADERS will spare some time to post their trades too.. let us see your trades and trading wisdom.. i'm sure we'll learn from your charts, including myself...

Thanks Kenny !

I am going through all xxx/chf pairs from day to day, watching if they gain further following usdchf.

Educational part ( why I post this ) :

I went through Kenny´s charts and what is especially amazing to see is how EARLY a good PA entry is taken after a major drop. So whether on 5min or on higher TF I would go through all charts and see how price behaves and moves away once a low has been established. What is a typical late entry ? Is it sufficient to enter just based on 1 candle ( e.g. Pinbar ) ? How do supply and demand levels form after a drop, when price gradually or sharply rises again ?

GBPCHF is below 1.3100, but I`m watching it as 1 possible xxx/chf candidate.

Good trading to all.



____________
michael

I decided to make a little video showing the easy way to zoom in on an area in a LTF using the autoscroll button.

It then also turned into a way to look for a possible price turning point.

Then it accidentally turned into demonstration of how accurately you can predict a price turning point.

I hope it's helpful to some of you

some follow up dow trades..

Here is a big part of the very basis of our trading. The Quasi.

When you see it forming, be happy, and be prepared.

Here's one the market made this morning

couple of nfp trades that i could capture..

nfp and fomc news trading have always been rewarding for me.. these are the two events i follow and trade.. i follow ecb releases but most often don't trade it.. the reason is that i found nfp and fomc is much more rewarding within my trading style..

word of caution:
if you are new in trading business and/or under capitalized it's best to stay away from news trading...

beside other aspects such as risk management, trading psychology etc, one of the main killer in trading business is that under capitalization.. in order to have some chance of success in this business at least 50k + capital needed IMHO... and ofcourse never ever over expose your capital.. watch your margin like a hawk.. if you ever get a margin call you should seriously consider giving up trading..

when trading with supply and demand PA which is the best..

1. do you take the trade when price hits / in the zone..

2. or do you wait for confirmation..

some traders use option 1, some option 2 and some both like myself..

being scalper, i mainly trade in M5.. therefore PA is always watched with almost all entries.. sure i check higher time frames but that happens only when price moves out of the current range.

for instance take recent gbpusd chart if you were option 1 trader ..




i took some trades while gu was in demand zone.. trades are taken on M5 with the help of PA.. currently they look OK but nothing is sure in markets..



i put targets for just reference purposes.. i don't have them on my trading charts.. when i feel the time is come, i exit without a second thought.. no rigid rules for me on entries and exits..



i still kept scalping gu in M5 while my lower trades were running..

Here's an exercise:

What trading opportunities were there on this chart? Give entries, stops and tg's

What PA and patterns are there to help you decide?

couple of whoppers.. it would have been 3 but i scalped usdchf way too early..




and couple of less significance ones...

OK guys, this one is important.

And make sure to suscribe to the weekly newsletter if not already done.

Real simple gold trade.

This basically had to happen

couple of gold trades amongst many from yesterday..






and oz...

Yeah i can play the gold game aswell...





Should have left the the 2 lower (2 lots each) positions open until today but whatever =/

some slv trades from friday...







and couple more..




market gave me 279 slv pips last friday, which is equals to 1395 eurusd pips..

when winning, silver is very rewarding but when loosing it provides ample punishment.. i wouldn't recommend trading slv to beginners at all..

edit:
some may have question as such: "You wrote that slv is not good for beginners traders, in your opinion, on which pairs should I focus ?"

main point of my recommendation was that 1 std silver pip value much higher than say for instance eurusd st lot value.. tried to highlight this fact above by equating slv pips to eurusd pips.. if you were to trade 1 std lot on eu and loose 20 pips this would be $200 lost in terms of money.. on the other hand if you loose same 20 pips on slv you'd loose $1000..

other than above consideration any pair can be traded.. on any time-frames as long as it moves.. supply and demand pa is not specific to any one pair.

additionally, depending on your trading style, you may have to give priority to certain pairs, markets and market hours.. for instance, if you are a scalper you wouldn't be trying to scalp a pair with 40 pips spread.. you wouldn't try to scalp slow moving pair or on quite times of the day..

see the following post.. i mainly scalp but i took gbpzar trade not for scalping as it had quite a big spread.. both trades gave me 290 pips in total when i closed them..

tried bit of exotic pair trading last friday.. gbpzar [British Pound South African Rand]... my first trade on this pair