B.S. Trading with Kenneth Lee

Hi Acetrader,

Thanks for your views.

I have been at S&D trading a fair while now, in the past I wasn't too concerned about the trend, I just used to look for the strength of the level (time away, how fast price moved, untouched etc), and it would tend to work or at least give some pips. However now I'm seeing that following the trend is more important than anything, as price will often blast straight through these levels.

I think due to catching some very big counter trend trades in the past, I'm always trying to catch them, and as we know, they don't often work. So now I will trade only with the m15/m30 trend.

Cheers

Hi everybody, can Iask to explain more in depth level penetration by PA.And to make it like more rule based, thank you for great posts

Hi Springger

I am assuming that the blue box is your zone. If this is the case it could be bit large, about 200 pips. The trade worked out well for you anyway. Couple things for you.

1. Maybe step down a time frame or two to attempt to narrow up your zone. The chart I posted is a 1 hour chart showing the swap/gap area you were working with. This is still a bit large for my liking. I put my stop under the zone by 7-10 pips.

2. I like to stay away from trailing stops as much as possible however at times this will be the best option. You can try trailing it with more of a technical nature. Like maybe 5-7 pips under swing lows on a 15m chart.


I trust that this will be of some help.

Showing what I mean about trailing stops technically

There are no rules I know of regarding penetration of the levels. The only thought I have is that maybe off a longer time frame chart, A level found on a faster chart maybe better.

There are three different entries associated with this trading style.

The touch or just shy touch of a level. This is the safest trade. it is used normally by PO ( limit order) but is only used for a fresh level never been hit before. I tend to get into trades a bit to soon as my level choices are pretty good and many will turn before actually hitting them.

the second entry is just a manual entry for trades where price is entering a level for the second or more times. I would wait for price to enter the level which usually happens then once it turns and starts heading back try and enter as far into it as I can . This allows less risk as your entering as close to your stop as you can. The stop is the same the entry is closer.

the third is a confirmation entry same as above but wait until price as actually left the level and is heading in your trades direction. this trade has a large stop and i don't use it much. but it is suppose to be a sign that price has confirmed the move.

There is one more the breakout entry , which is the same as a Po entry but taken manually . the problem with this is there are two different times you can take a breakout entry . One is when pric first breaks your level , price will most times make a quick test of that exit you can enter then . or better is let price move away and set a PO to enter when it returns.


If this isn't what your asking please re phrase and ask again . ken

Ultimatus,

You are most welcome & I hope it helped. The counter trend trades have always been a lure for me, but most go on to lose, or make very few pips. There have been several that were really hugh winners & I guess that keeps me interested but, I never allow them to turn into hugh losers.

Ken lastest post #1325 sums it up nicely & that is about how I trade the S&D levels, but I rarely use PO's as I trade fulltime & am able to do screen time. Severals yrs ago a trader that I met at a trading conference in Florida tried to explain trading S&D, but I just could not get my mind around it, so I kept trading my way. Then along comes Ken & Sam, now the rest is history. For me this is the most simplistic way of trading & I intend to keep learning & building my skills.

Know the trend direction & it seems you know what to do then. Keep counter trend trades to a minimum & trade the 30M or 15M. I like the ones touch then quickly move away. Ken's charts have a wealth of information without him even having to explain, but his explantions just makes it easier too understand what he is doing.

This is just what I do & it is working for me, if I just leave counter trends alone. Not advice, but just what I am doing. Enough for now, but after first of the yr I will try & post some charts. Have good weekend.
_____________________________

Trading management :

 

1. 1. 1. Money Management
      2. Risk Management
      3. Trade Management

There are three different components to managing your trading account. They are different in their functions and should be thought of separately not grouped together as each has completely different functions and goals. But they in the same sense are all designed to help you grow your equity while also allowing you some protection against losses . From trading itself and from emotional factors created by our own devices.


The goal of most novice traders and pro's alike is to become as independent from the governing world of bosses and the corporate world and finding our own way of funding our own lifestyles. The difference in trading management has a lot to do with our differences in lifestyles and perceptions. A person that needs less money to have a higher standard of living in their geographic location than another will have different views of how much money is needed to achieve their goals. The one needing the least will tend to be more conservative and unwilling to risk much.


The other side to that is the person that because of locale needs more to just pay the rent and basic necessities. A person living in north Louisiana verses say someone living in Key West, Florida. Which I know something about as I have lived in both and still live in one.


I could live for ½ or less in Louisiana than Key West, So my need to make more and those risk more would be greatly reduced. In my years of trading I have found that in the overall scheme of trading that when you actually trade a bit more conservatively you tend to do better as the choices that need to be made are less difficult to make when your not betting the house. But on the other hand and also what I have personally found that if we don't risk enough we also can find ourselves with a cavalier attitude and let it do what it will, Which in the long term builds bad habits and destroys confidence.


We all will have to find our own level of risk to trade properly and that will allow use the gains we feel are within our goals. That we can mange correctly to build long term solid and responsible managing ethics. One issue at hand is the inability of most to even try and manage trading at all. But keep this in mind to become a professional in anything requires record keeping. We can become the best traders in the world but if we can't operate within the world's guidelines it will not be long before the government shuts you down for tax issues or other trouble and we find ourselves in worse shape than if we never tried to trade. Any gains will require a donation to our country of choice. But if we don't manage trading as a bussiness we can find ourselves at the end of a year oweing more than we have available.


I am not going to cover any of those issues but just trying to drive home the fact. That if you think there is no management required you will find yourself in deep trouble. You can make a million one year spend a truck load then have a massive loss first of year and find yourself completely upside down. I would advise that every withdrawal be accompanied with a amount for the tax man either actually paid as you go or kept in a account with limited access for that purpose.


So we now know that each persons view and actual needs will be a factor in how they perceive and will manage their accounts. So it is hard to set a fast and solid set of rules regarding managing ones money. The difference between a investor and a speculator also comes into play. A investor looking for modest but steady growth to either maintain or gradually grow a account will have differing views than a person looking to become dependent on his trading gains as their only source of income. So I would suggest that we acknowledge this and not be so fast to judge a persons reasons for their personal choices in risk appetite.


I will just try and give a overall idea or base , from my own experiences. But ultimately the choices are our own because we are the ones that will have to live with them.

 

1. 1. 1. Money Management

This is how we manage our complete account not a single trade . It should have a plan for protecting our equity as well as a plan for when to be able to withdraw. The amount a person decides to start with is more based on availability than a set amount though some brokers have a min set opening balance.
I think most are trying to trade with a small beginning balance.
You hear a lot from some that trying to even attempt trading without a good size account is unrealistic. I am not of that view I think we have a opportunity even from modest beginnings.
Before you trade have a idea of what your initial goals are yes we all want to be the next spectacular trader rolling in dough, but if we are starting with modest beginnings I think that will take some time to achieve. Many may start trading mini lots under a dollar a pip. So maybe your goal is to get to 2 dollars a pip. Or to a full lot ,10.00 a pip. But on that journey trying and siphon some money away on good runs to allow yourself to keep going if (when) you have a bad spell. I like using Oanda and think they are good for beginning traders. There maybe more out there but they are very versatile in the size of lots and easy to manage your account. I personally use a sub-account to park funds from my regular account as a kind of holding area. Just in case of a major melt down.


Try and remove your initial investment as soon as possible maybe removing ½ your gains on good weeks. This way you can always continue. It is also important to remember to increase your trade size as you go along I do this weekly, but If your progressing rapidly you may want to do this even daily. Another feature of Oanda is the ability to set a percentage to trade on every order this way it automatically increases taking that out of your hands and mind. The less to think about the better. But also it will reduce your trades as well a point many don't want to do. They feel they can't make it back quick enough. But if they don't do this they will find themselves over risking and in a bad spot emotionally. But you need to set rules for this.

 

1. 1. 1. When to increase
      2. When to decrease, I like a 1 to .5, I increase say at a 100 move if it moves back 50% I decrease back. This way I am not waiting to long and digging a deeper hole.
      3. When to withdraw any funds , The first just protect my investment and allow myself to trade another day.
      4. When do we need to start collecting taxes, if you start making a monthly withdraw you need to start saving for this I set aside 20% for this purpose. If I make a large withdrawal I will send a check to the IRS as a prepayment. If you should trade badly and not need it you will get it back as a refund. But you never want to be on the wrong side of the tax man.
      5. There are am sure other items some will want to consider but many are personal. One is that you can start a tax free account like a 401k and use it to trade and only pay taxes on your withdrawals. Because remember you will owe taxes on the equity in your account as well if it isn't tax differed.

Anyway this is money management and is what you need to due to run a successful trading career in trading. It isn't a lot but needs to be done. Trading brokerage houses have departments to keep their traders in line. We have to do this for ourselves. Taking losses is part of trading even large losses but if you go into it prepared you can survive and trade again. If you take to cavalier a attitude towards it you may find yourself never reaching any point of success.


Next Risk Management.

The above post looks funny as it was made for the pdf and will be added once all three are covered.

Ken,

Can't miss it........no glasses needed.

Hi guys,

First thx to acetrader, Rufus, Fxfigher, Keneth and everybody that try to help each other.

Ive got two questions,

Q1.
I was looking at Rufus chart of GBP/CHF and have a doubt, on this chart we have a clear uptrend on the daily and 4hrs, so we´ll look only for longs on the 1hr or lower.

Here is a screenshot of the 1hr chart, Ive marked the two areas I see, both are R-B-R, my question.. would one would you go for ? We´ve got one 50 pips away from the other.

- First area, we had a bounce but only for a 1:1 ratio, then we continued down again.
- Second area, we had a 1.7-1.8:1 ratio, then came back again and shoot up, if u had a trailing stop ull be out before getting the move on the second touch.

I would clearly had gone for the first one, which one would you go for and why ??

Q2.
I see that sometimes we have an uptrend on the daily, 4hrs but a downtrend on 1hr and 30mins, ull go for long trades ?? Ull give more power to the higher tfs in this case ?

Thx guys !!

I see that sometimes we have an uptrend on the daily, 4hrs but a downtrend on 1hr and 30mins, ull go for long trades ?? Ull give more power to the higher tfs in this case ?

Yes you can take the trades opposite but you need to always be aware of the higher time frame levels.if not you can run into a big problem losing all your gains. But as you have seen price trades between levels if price is moving Counter trend up to a supply level on a 4 hr or higher chart and it is say 50 pips away . if you can get a entry off a fast chart then you will look to TP near that supply level.

EASY TO READ VERSION

Trading management :
Money Management
Risk Management
Trade Management

There are three different components to managing your trading account. They are different in their functions and should be thought of separately not grouped together as each has completely different functions and goals. But they in the same sense are all designed to help you grow your equity while also allowing you some protection against losses . From trading itself and from emotional factors created by our own devices.

The goal of most novice traders and pro's alike is to become as independent from the governing world of bosses and the corporate world and finding our own way of funding our own lifestyles. The difference in trading management has a lot to do with our differences in lifestyles and perceptions. A person that needs less money to have a higher standard of living in their geographic location than another will have different views of how much money is needed to achieve their goals. The one needing the least will tend to be more conservative and unwilling to risk much.

The other side to that is the person that because of locale needs more to just pay the rent and basic necessities. A person living in north Louisiana verses say someone living in Key West, Florida. Which I know something about as I have lived in both and still live in one.

I could live for ½ or less in Louisiana than Key West, So my need to make more and those risk more would be greatly reduced. In my years of trading I have found that in the overall scheme of trading that when you actually trade a bit more conservatively you tend to do better as the choices that need to be made are less difficult to make when your not betting the house. But on the other hand and also what I have personally found that if we don't risk enough we also can find ourselves with a cavalier attitude and let it do what it will, Which in the long term builds bad habits and destroys confidence.

We all will have to find our own level of risk to trade properly and that will allow use the gains we feel are within our goals. That we can mange correctly to build long term solid and responsible managing ethics. One issue at hand is the inability of most to even try and manage trading at all. But keep this in mind to become a professional in anything requires record keeping. We can become the best traders in the world but if we can't operate within the world's guidelines it will not be long before the government shuts you down for tax issues or other trouble and we find ourselves in worse shape than if we never tried to trade. Any gains will require a donation to our country of choice. But if we don't manage trading as a bussiness we can find ourselves at the end of a year oweing more than we have available.

I am not going to cover any of those issues but just trying to drive home the fact. That if you think there is no management required you will find yourself in deep trouble. You can make a million one year spend a truck load then have a massive loss first of year and find yourself completely upside down. I would advise that every withdrawal be accompanied with a amount for the tax man either actually paid as you go or kept in a account with limited access for that purpose.

So we now know that each persons view and actual needs will be a factor in how they perceive and will manage their accounts. So it is hard to set a fast and solid set of rules regarding managing ones money. The difference between a investor and a speculator also comes into play. A investor looking for modest but steady growth to either maintain or gradually grow a account will have differing views than a person looking to become dependent on his trading gains as their only source of income. So I would suggest that we acknowledge this and not be so fast to judge a persons reasons for their personal choices in risk appetite.

I will just try and give a overall idea or base , from my own experiences. But ultimately the choices are our own because we are the ones that will have to live with them.


Money Management

This is how we manage our complete account not a single trade . It should have a plan for protecting our equity as well as a plan for when to be able to withdraw. The amount a person decides to start with is more based on availability than a set amount though some brokers have a min set opening balance.
I think most are trying to trade with a small beginning balance.
You hear a lot from some that trying to even attempt trading without a good size account is unrealistic. I am not of that view I think we have a opportunity even from modest beginnings.
Before you trade have a idea of what your initial goals are yes we all want to be the next spectacular trader rolling in dough, but if we are starting with modest beginnings I think that will take some time to achieve. Many may start trading mini lots under a dollar a pip. So maybe your goal is to get to 2 dollars a pip. Or to a full lot ,10.00 a pip. But on that journey trying and siphon some money away on good runs to allow yourself to keep going if (when) you have a bad spell. I like using Oanda and think they are good for beginning traders. There maybe more out there but they are very versatile in the size of lots and easy to manage your account. I personally use a sub-account to park funds from my regular account as a kind of holding area. Just in case of a major melt down.

Try and remove your initial investment as soon as possible maybe removing ½ your gains on good weeks. This way you can always continue. It is also important to remember to increase your trade size as you go along I do this weekly, but If your progressing rapidly you may want to do this even daily. Another feature of Oanda is the ability to set a percentage to trade on every order this way it automatically increases taking that out of your hands and mind. The less to think about the better. But also it will reduce your trades as well a point many don't want to do. They feel they can't make it back quick enough. But if they don't do this they will find themselves over risking and in a bad spot emotionally. But you need to set rules for this.

When to increase
When to decrease, I like a 1 to .5, I increase say at a 100 move if it moves back 50% I decrease back. This way I am not waiting to long and digging a deeper hole.
When to withdraw any funds , The first just protect my investment and allow myself to trade another day.
When do we need to start collecting taxes, if you start making a monthly withdraw you need to start saving for this I set aside 20% for this purpose. If I make a large withdrawal I will send a check to the IRS as a prepayment. If you should trade badly and not need it you will get it back as a refund. But you never want to be on the wrong side of the tax man.
There are am sure other items some will want to consider but many are personal. One is that you can start a tax free account like a 401k and use it to trade and only pay taxes on your withdrawals. Because remember you will owe taxes on the equity in your account as well if it isn't tax differed.

Anyway this is money management and is what you need to due to run a successful trading career in trading. It isn't a lot but needs to be done. Trading brokerage houses have departments to keep their traders in line. We have to do this for ourselves. Taking losses is part of trading even large losses but if you go into it prepared you can survive and trade again. If you take to cavalier a attitude towards it you may find yourself never reaching any point of success.


Next Risk Management.

Hi Kenneth,

The level is void now as price has passed over it, but when it first camed down it produced a bounce of 1:1, would you have taken that level 1 ? (added chart for better explanation)

Also, would you take that level (the one around 1.4305) on a Sunday (when market opens, low liquidity) ??

Thanks !!

Thanks I guess I was getting lazy towards the end.

To be honest I don't like those bases . Not tight enough. I have found i like to look for my levels on the 30 min . but they should be the same . I look for small bodies with wicks this is showing the changing of hands of orders. Until the price breaks which shows the exact point where the imbalance happened. On longer charts I will look for maybe just one candle that has those characteristics. A spinning top or doji. Because if your lower the time on the chart to say 30 or 15 min. it will show the base I am talking about.

I will probably not be to quick to jump on anything Sunday , Plus i am at work then . The level on that pair is between 1.4332 to 1.4307 bit wide for me plus it may test 00 first. a less risky entry would be right below the 00 level and stop at 250. if it didn't make it I would pass the level on 30 min is a mess. plus on the larger charts we have a lower high which could be a sign of a turn .


I don't trade swizz pairs much .

Hi Kenneth,

Are you saying the tighter the price at a zone the better? By that you are meaning smaller candles including the wicks?

Had that been seen on the chart Osman posted what would your action have been?

When you see S&D Zones on the higher tf's & they can be located on your preferred tf of say 15M or 30M is that what you are looking for..........a confirmation of what the higher tf's are showing? That is what I try to do. Is that correct?

What about the amount of candle consolidation @ the Zones? Less candles are better & then a quick move away. Is that correct?

Sunday trading.........No trading for me until several hours into the evening at which time the liquidity settles in. Is that your view?

Just trying to confirm if my views are correct & learn what is working for you & others here. Have read many of Sam's writings, but am getting a better understanding from you & several others that are posting here. Thank you for your time & knowledge you share.


All others, please share what you find works for you.

___________________________

Hello. First post by me. Really great thread!

A bit about myself.

Have been learning supply and demand for a year or so. First 4-5 months of just watching ALL the Sam's recording, making notes, reading articles and just trying to find zones myself. I didn't take even demo trades. Just marking zones and targets. At first I was horrible at picking the correct zones. Later I improved and started to see them without thinking too much about them.

Next 4 months did "serious" demo trading. Tried to make it as real as possible. Was pretty at breakeven or a little bit better.

Then moved to live trading. Have been doing better each month. Currently not losing money and even making some.

What works for me?

Multiple timeframes. I use one big chart (weekly) and one bigger intraday chart (4h or 1h). If needed I also go one timeframe down to see what's really behind candles. (if level is on 4h, then i check 1h. if level is on 1h, then i check 30m.)

Follow trend. I identify trend on my intraday chart and take only trades in the direction. Bigger timeframe should not give negative signal. If 4h trend is down, then price should not be in the weekly demand or very close to it.


Risk-Reward. I want to see on the chart at least 3:1. Then I'm taking my profits early at 2:1. Keeping this 3:1 rule has really helped me to ignore a lot of crappy levels and trades.

Levels themselves.

Small number of candles. I would say that 3-6 has been optimal. I actually don't count them, just eyeball them. If less than three, then it's a pivot high/low and I usually ignore them.

Wicks. I don't like when supply has one or two clearly higher wicks on the upper side. Lower wicks for demand. Sam has also talked about it. This rule really helps me.

Rally from the level. Should be strong. I just eyeball it.

Levels should be fresh.

There are other things that are helpful. Like when you have two levels just on each other, then take the safest one (lower one if demand, higher if supply). Sam has talked about all of it.

In general I would say that trading with the trend and having a strict risk-reward rules have been the most helpful. Using bollinger bands for conformation might also help to pick better levels. Picking only rally-base-drop levels should also increase result. And one more thing. I have noticed that bigger timeframes work better, at least for me. I never go below 30m.

I don't have time to search for it now. But I will say I just flipped through a bunch of the charts I have posted on this thread , over 180 of them to date, not including the pdf. And if folks can't see my preferred levels. I just don't know. how much clearer I can make it.

Just cycling through them of course the favorite time is 30 min.. I would say on average they are 2 and 3 candles . I don't judge wicks to much but because of the stop I don't like a wild wick to the wrong side . and at times will run the time on it and see if it is just a emotional candle based on rumors (news).

I hate to say some things as people take them the wrong way. Like I mentioned 5 min once or twice then all we saw posted was 5 min charts. I like the 30 min as it on one screen shows a few days history so the current trend can be judged. the levels of a few candles and the corresponding drop or rise seem to be bullet proof in my eyes.

On the higher time frames I look for mainly the turning levels and swaps , but still try to find the entry levels on a 30 min , Sometimes it isn't possible because the chart doesn't scroll back far enough.

I guess a lot comes from just watching charts so long . that I have a preference to places i know price reacts and look for levels in those spots.

I also tend to see things some don't even on a 30 in chart or higher just by watching price and the way it is acting and keeping a eye on a clock you can see in your minds eye what a 5 10 or 15 min candle would look like and that will let you know if your on a good track for a decent trade.

There are to many levels on a 5 min and then we tend to tp to soon as well. I use it only if price is running fast and I want to try and join the trend a quick pullback to a level on that faster charts in times of high momentum maybe all you get.

In the same frame of that . i see a lot disregarding the first levels in favor for those further away. A if price is making fresh ground , a shallow retrace to a level is sometimes the best. They will be at the swap levels normally.

I am saying this regrettably as i know some will take it the wrong way. But if you watch a fast chart at your levels even a 1 min you can actually see the trading of orders taking place in real time. Then also when those orders are exhausted and price moves away.

it is this reason that our stop is a few past a level because when the orders are gone and price moves it moves a good bit in a hurry and the stop saves you $$$

Another point on wicks if price is heading towards a level pretty fast it can at times spike beyond because I don't think a lot of bigger players have limit orders in place and it takes a moment to react and start filling the orders. I am not sure on this but how I view it . Also why at times the profit can be had with the first drive , You see loads of time when your going man I should have tp'd back then . it was the first move and it went further and if it even gets retested can take a good while if at all.

look back at the charts if you want to see what i am looking for it is all there. Cheers Ken

Supernaut,

Good first post & tks for sharing.

Kenneth,

Tks for your response. I am currently reviewing your many charts & that is helping me. More chart time & I think it will start to come more natural for me. This is something you have to develope a feel for as time goes on.

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