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Day Trading vs. Swing Trading vs. Position Trading 86 replies

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B.S. Trading with Kenneth Lee

  • #1,421
  • Nov 30, 2011 2:14pm Nov 30, 2011 2:14pm
Quoting Rufus
I

I think Ken covers this in his PDF. Stop is placed onbthe opposite side of the zone. I shoot for 7 or 10 pips. So if the zone is 30 pips wide my stop will be about 40. But still take into consideration other factors. Are you close to 00 if so maybe place it past there. Or maybe there is another swing high or low near your stop, in which case maybe place it beyond there. The point is, your stop should be placed technically so if price crosses the stop yopu know that the zone is no longer valid.

Hope this is some help

Rufus
Also keep in mind that one of the factors involved in selecting a level is potential profitability. Let's say you are looking for trades with a risk/reward of at least 2:1. This means that your take profit will have to be at least twice your potential loss. And the potential loss includes the stop and spread.
  • #1,422
  • Nov 30, 2011 2:22pm Nov 30, 2011 2:22pm
Thanks guys!
  • #1,423
  • Nov 30, 2011 2:26pm Nov 30, 2011 2:26pm
a nice swap level on USD/CHF

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  • #1,424
  • Nov 30, 2011 5:37pm Nov 30, 2011 5:37pm
Hi everybody,
Will you guys take this trade? Is this a great level? This is 1 hour EUR/GBP chart. The zone width is only about 6 pips. I'll feel uncomfortable to take this trade because it have such a tight zone, not enough room for it to breath. Any advice for me? Appreciate for any comment.

Newbie here.
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  • #1,425
  • Nov 30, 2011 6:31pm Nov 30, 2011 6:31pm
Quoting anthony_tzw
Hi everybody,
Will you guys take this trade? Is this a great level? This is 1 hour EUR/GBP chart. The zone width is only about 6 pips. I'll feel uncomfortable to take this trade because it have such a tight zone, not enough room for it to breath. Any advice for me? Appreciate for any comment.

Newbie here.
Level doesn't look fresh enough. look to the left of the marked level. Lot of supply is absorbed from that level.
But there is a small rally , base and then a nice drop, which indicates that could be still good amount of supply level.

i suggest take it , but with less risk and less reward.

Good luck.
  • #1,426
  • Nov 30, 2011 7:19pm Nov 30, 2011 7:19pm
Quoting anthony_tzw
Hi everybody,
Will you guys take this trade? Is this a great level? This is 1 hour EUR/GBP chart. The zone width is only about 6 pips. I'll feel uncomfortable to take this trade because it have such a tight zone, not enough room for it to breath. Any advice for me? Appreciate for any comment.

Newbie here.
Be happy with tight zones mate.You don't need any extra room.Look at that from your risk management.
All the best.
  • #1,427
  • Nov 30, 2011 11:06pm Nov 30, 2011 11:06pm
Thanks Zamfir and kravmaga advice and comment
  • #1,428
  • Dec 1, 2011 3:22am Dec 1, 2011 3:22am
Does anyone use an order to reverse the position if a level is broken and the trade stopped out? Usually, when I get stopped out, price goes a long way after breaking the level, as long as another level is not close then I think it's a good idea?
  • #1,429
  • Dec 1, 2011 7:17am Dec 1, 2011 7:17am
Quoting Ultimatus
Does anyone use an order to reverse the position if a level is broken and the trade stopped out? Usually, when I get stopped out, price goes a long way after breaking the level, as long as another level is not close then I think it's a good idea?
I'd say about half my losses end up like that and half are times when price hits my stop, goes 5 or 6 pips and reverses back in the direction i assumed it would have gone.

Take a weekend and test it out if you have the time. Could prove to be lucrative. But i must say, just using the levels as they have been presented by Sir Kenneth has been working extremely well.

On another note Sam Seiden recently wrote an article about breakouts that sort of relates what your asking about.
  • #1,430
  • Dec 1, 2011 7:19am Dec 1, 2011 7:19am
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  • #1,431
  • Dec 1, 2011 7:23am Dec 1, 2011 7:23am
Markets are moving very slow this week.
  • #1,432
  • Dec 1, 2011 8:02am Dec 1, 2011 8:02am
I don't normally take 5 minute chart trades but since the 1 hour and 30 minute charts just looked like a bunch of clutter at this time of the day it usually means there are tradeable levels on the lower timeframe. I only take levels around 10 pips or more when doing this.

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  • #1,433
  • Dec 1, 2011 8:59am Dec 1, 2011 8:59am
Quoting Good Lookin
Attachment

Hi Good Lookin,

I have a few questions about the demand level you drawn in the #1430 post. I'm very confuse with the definition of base. Hope someone here will help me out.

What is the definition of a base for you guys?

 

  1. I saw somebody quantify a base when there's a small group of candles.
  2. Some will quantify a base when there's a "doji" or "spinning top".
  3. some will draw a base like Good Lookin (when a series of bullish candle after a gradually decline of price).

I feel comfortable to quantify a base when the 1st and 2nd scenario that I mentioned above happen, because these two scenario shows me the competition of the supply and demand. When come to the 3rd scenario. I don't quantify it as a base, I feel more likely it's a pullback to a level, therefore there's a series of bullish candles after a series of bearish candles.

This is my opinion about the base, may I know you guys view about the base? Newbie here, hope to get out of these confusion as soon as possible

Will be very appreciate you guys for any comment and advice.

  • #1,434
  • Dec 1, 2011 9:24am Dec 1, 2011 9:24am
Anthony,

Base is series of candles(>1). The pullbacks are not a base , this can be confirmed if you look to left , there will be a base. This mean price has hit a fresh S/D level and is no more fresh.

Also the base is good only if you are on the right side.
  • #1,435
  • Dec 1, 2011 9:29am Dec 1, 2011 9:29am
Some action on the chf pairs.

Anythony , see chart to clear your doubts regarding bases.
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  • #1,436
  • Dec 1, 2011 9:44am Dec 1, 2011 9:44am
Quoting anthony_tzw
Hi Good Lookin,

I have a few questions about the demand level you drawn in the #1430 post. I'm very confuse with the definition of base. Hope someone here will help me out.

What is the definition of a base for you guys?

 

  1. I saw somebody quantify a base when there's a small group of candles.
  2. Some will quantify a base when there's a "doji" or "spinning top".
  3. some will draw a base like Good Lookin (when a series of bullish candle after a gradually decline of price).

I feel comfortable to quantify a base when the 1st...

I think your trying to hard . you need to look for what you can SEE that is the key to anything. Most folks forget the best tool we have doing any kind of trading . The price action history.

Take a chart your preferred trading time frame chart. Then at the top of the wicks where YOU can SEE price has turned, in other words places you might have taken a entry. Draw a Horizontal line. look to the left to where that line hits the last swing , That run up or down. Now look for the base.

If you can't see one, then scroll up and down on time frames till it appears. You can take any great base and by scrolling around the charts time frames make them disappear. or get bigger. I have said this many times, I have settled on the 30 min but this is my preference maybe not yours.

If you like trading 4 hr or higher charts and are looking for PO entries. It is still good AFTER finding your 4 hr level to look at a faster chart when price is nearing your levels for a entry with a smaller stop thus making your risk lower . But always make sure your stop is still in the correct location based on your 4 hr chart or you may find yourself stopped on the faster but the long term held and then turned, a sad fate indeed.

Hope this helps . I am the one that said tight candles and dojis. But they are from different time frames . If I see a doji or spinning top . am looking at what that means as price action not any kind of trading signal. it is showing for that given time period weather it be a 2 hr or 4 hr candle. price was near equilibrium. That is why we have a wick in both directions and a small or almost no body.

If I see those on a chart near a place where a level broke (A Swap Level) I will zoom into a faster chart to find the exact point where price became unbalanced and broke the level. hence the name breakout.

Any of this should not be hard, if it is your trying way to hard . Just place some lines at your best guess and see how they work . if they are way off , Look at maybe a different time frame , if they are close exam what you thought you saw and see if there maybe a small option to make a change .

Sometimes just a widening of the level or moving towards the breakout. or sometimes price will turn near the extremes of the bases candles, the wicks end.

But the key remains the same . You have to learn to trust what you are doing not anyone else.

Hope this helps . Ken
Good Trading To All ; Ken Lee
  • #1,437
  • Dec 1, 2011 9:48am Dec 1, 2011 9:48am
Quoting zamfir
Some action on the chf pairs.

Anythony , see chart to clear your doubts regarding bases.
Thanks zamfir. Still a little bit confuse.
Is the level shows in the picture below is a correct base(drawn by Good Lookin at #1430 post)?

 

  1. There's no level at left (so it's for sure not a pullback).
  2. But it's a single shooting star, only one candle.



Thanks a lot for your help Zamfir

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  • #1,438
  • Dec 1, 2011 9:52am Dec 1, 2011 9:52am
Quoting anthony_tzw
Thanks zamfir. Still a little bit confuse.
Is the level shows in the picture below is a correct base(drawn by Good Lookin at #1430 post)?

 

  1. There's no level at left (so it's for sure not a pullback).
  2. But it's a single shooting star, only one candle.



Thanks a lot for your help Zamfir

like ken has said above, you will need to zoom into smaller TF to see a base.

It all depends on what TFs you use.
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  • #1,439
  • Dec 1, 2011 10:00am Dec 1, 2011 10:00am
Anthony ,

found another example. see charts.

Watch the blue line on both charts.
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  • #1,440
  • Edited 10:21am Dec 1, 2011 10:06am | Edited 10:21am
Quoting anthony_tzw
Hi Good Lookin,

I have a few questions about the demand level you drawn in the #1430 post. I'm very confuse with the definition of base. Hope someone here will help me out.

What is the definition of a base for you guys?

 

  1. I saw somebody quantify a base when there's a small group of candles.
  2. Some will quantify a base when there's a "doji" or "spinning top".
  3. some will draw a base like Good Lookin (when a series of bullish candle after a gradually decline of price).

I feel comfortable to quantify a base when the 1st...

I'll show you why i've chosen this as a base. This is what the chart looked like when i put in the PO.

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1. Candle wics are just as much of a movement of price as the body is so when looking at a base i always take them into account. Wic or body, someones order has been filled. It's just much better to use bodies because it keeps your profit targets in reach and thats partly why i used that brown body as my level top.

2. Price moved to 1.34682 and then shot up. 1.34682 was the origin of the move and since orders were filled at that level, when price returns it will most likely go deeper. Thats why i've choosen that as the top of the demand level. As i said earlier i like to keep my levels around 10 pips or more so my stop was 10 pips.

3. Lots of buying and selling here. Liquidity is drying up so if and when price leaves that level and heads towards my level not only will it most likely not be a strong move but when it returns to that area there most likely won't be enough there to stop it.

4. I saw this while writing this so this is just a bonus. The big circle to the left is the supply that created the drop on the 2 little circles. If you follow that level to the right you see how it falls onto my level after price pushed through it to create a swap.

I only considered 1 2 and 3 before i set the trade. I only saw 4 as i was writing this.

Edit: Also forgot to mention Higher lows and Higher Highs gave me an upside bias.
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