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B.S. Trading with Kenneth Lee

  • #2,261
  • Jan 28, 2012 11:25pm Jan 28, 2012 11:25pm
Hi Guys I've been reading this thread the last couple of weeks and it really is great. Thanks Kenneth and everyone else. I was reading a S & D thread over at Baby Pips where the person who started the thread pencils in his S & D zones for the week and then highlights the area between the 38 and 50 fib and designates this area a 'no trade zone' as he considers the area above and below this zone as overbought and underbought, thus increasing the probability of the trade being successful. Please see the chart (mine is a 1 hour chart but you get the picture)

He also finds a pivot point (the higher TF the better) within these tradeable zones to pin point his entry. This seems to make sense to me. Would be interested in hearing others opinions about these 2 modifications or added odd enhancers.

Cheers
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  • #2,262
  • Jan 29, 2012 6:54am Jan 29, 2012 6:54am
Quoting forexben
Hi Guys I've been reading this thread the last couple of weeks and it really is great. Thanks Kenneth and everyone else. I was reading a S & D thread over at Baby Pips where the person who started the thread pencils in his S & D zones for the week and then highlights the area between the 38 and 50 fib and designates this area a 'no trade zone' as he considers the area above and below this zone as overbought and underbought, thus increasing the probability of the trade being successful. Please see the chart (mine is a 1 hour chart but you get the...
The reason for trading Supply and Demand levels is the simplistic nature of it. The question is are you trading fib levels. pivot points or supply and demand? Then you have to decide which idea carries the most weight in your mind. I was a big fan of fib levels . But it was always a toss up, as it could turn at any of the fib levels and be considered a great entry.

A person can and they do combine many things to trade and who am I to say what is right or wrong. I just think that trading in itself is very simple and WE make it more complex than need be, To the point of making it impossible. Try and keep it as simple as you can . Sure if your a expert at other ideas you will always have those in the back of your mind, But you should start to see that where these stacks of orders are waiting to be filled is the entry levels and the other ideas are the secondary things.

Hope everyone has a great week. Ken
Good Trading To All ; Ken Lee
  • #2,263
  • Jan 29, 2012 9:46am Jan 29, 2012 9:46am
I would add one more thing. What if there is a killer supply zone in this no trade area. Are you going to skip a trade with an excellent setup and great r/r because it just happens to be 40% of a prior move. I can tell you that the people with the orders resting at that supply could care less what the fib number is. Remember that traders (people) and their actions move markets, not fibs or pivots.

If I were to use any filter other than the quality of the zone it would probably be pivots because they are based somewhat on previous orderflow. The problem is which set of pivots to use. There are many different ways to calculate them. IMHO fibs are pretty much useless. I don't know of any big trader who bases their trading off fibs. Read both Market wizards books and not one mention of fibs as trade triggers in either. Please remember the biggest traders in the interbank market are businesses who need to make payrolls and pay for products in the proper currency and governments. Neither of these entities care what the fib is when they need to do their business.

Trade where the orders are its easy.
  • #2,264
  • Jan 29, 2012 9:32pm Jan 29, 2012 9:32pm
Is that USD/CAD supply zone on the 1hr (1.0042-1.0047) still valid? No orders have been placed INSIDE the actual zone but you can see from Thursday/Friday's trading period, sell orders were set just below the zone (1-5 pips) and that happened for a couple of hours. I remember reading that this will happen as banks/traders want to get in on such an obvious trading zone so they over-bid/under-offer in these zones, but since it actually never hit the zone, does this affect the probability factors laid out by Sam in the pdf?

thanks

and here a chart in case you guys don't know what i'm talking about

http://i37.photobucket.com/albums/e8...usdcad1-26.gif
  • #2,265
  • Edited 1:20am Jan 30, 2012 1:09am | Edited 1:20am
Going to give this one a try if it gets there. If this one fails probably will go with the one at the top also. Exiting longs before the summit seems to be the sentiment so far. If that changes I will cancel orders and wait until tomorrow for clearer setups. Mondays can always be a bit of a gamble.

Target 3110
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  • #2,266
  • Jan 30, 2012 1:10am Jan 30, 2012 1:10am
Quoting low_key321
Is that USD/CAD supply zone on the 1hr (1.0042-1.0047) still valid? No orders have been placed INSIDE the actual zone but you can see from Thursday/Friday's trading period, sell orders were set just below the zone (1-5 pips) and that happened for a couple of hours. I remember reading that this will happen as banks/traders want to get in on such an obvious trading zone so they over-bid/under-offer in these zones, but since it actually never hit the zone, does this affect the probability factors laid out by Sam in the pdf?

thanks

and...
Yes it definitely does effect the zone.

If your trading strategy allows you to get in at the same point and direction most of the money is getting in then when you have a situation where a lot of money has been pushing the price down right before your level, by the time it gets to your level who but you and a few others will be in that trade?
Will that be enough to push back price to a profitable area?
Then what happens when the same place right before your area has now swapped? It has now ruined your profit target.
The only time i'll take a trade like that is if it happens once. When it happens i want to see that price shot away a good distance. If price sort of lingers in the area then i'm not looking at that zone anymore.
There are enough setups every week to get you too at least +10% with 1% risk per trade on the Eur/Usd. Skipping the questionable ones helps us not give it back.

Hope that helps.
  • #2,267
  • Jan 30, 2012 2:59am Jan 30, 2012 2:59am
Morning all. Bit of a slow start to the London session right across the board preceeded by a near vertical drop for a couple of currencies during the Asian session. Don't really see much. Still, looking at the AU. Daily could have topped out, 4Hr has put in a Lower High. Looking for a move up to 1.0600 level to take the short off Supply Zone. Would actually prefer a short from the higher Supply level at 1.0633 but it may not get there. May look for a more intermediate Demand level on lower time frame
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  • #2,268
  • Jan 30, 2012 3:05am Jan 30, 2012 3:05am
Quoting Kenneth Lee
The reason for trading Supply and Demand levels is the simplistic nature of it.

I would disagree on that statement that. We are trying to read the flow of smart money from identifying S/D levels. It is indeed very difficult to identify the smart money, as the professional are good at creating S/D levels and profit from it. We are trying to do the same except we don't participate in creation of these levels.

Also guys, please just think for a second, all the fibs/Gann/Patterns and all other forms of TA cannot identify the smart money on charts, thats why they don't work.

Identifying smart money movement on charts is a skill and it takes time understand it.

I know many not agree. But hey this is trading. Everyone is right and wrong.
  • #2,269
  • Jan 30, 2012 3:32am Jan 30, 2012 3:32am
E/U coming down into an area of demand from last week. I am looking in the 3105 area for a bounce up to the area for shorts I highlighted earlier this morning. Price is currently trying to bounce from 3130 area. My entry if price gets there will be about 3108 looking for a target of 3185. Stop will be around 3090.
Working off 30 min chart currently. This is also a 4 hr level on my feed, but four hr levels vary depending on your broker time zone.
  • #2,270
  • Jan 30, 2012 3:34am Jan 30, 2012 3:34am
Quoting zamfir
I would disagree on that statement that. We are trying to read the flow of smart money from identifying S/D levels.
Heya Zamfir. I kinda see what you're saying and think you and Ken may actually be saying the same thing. I guess I may have said it as: "The reason for trading Supply and Demand levels is that it works." The simplicity is its attraction. But yeah, we are definitely trying to id the flow of smart money and this is the best mthodology I've come across.

As for fibs, pivot points and other inds, I'm a little less harsh on them. Why? because while price knows nothing about them, traders do. And since so many traders use them at times it may contribute to them becoming something of a self-fulfilling prophecy. If enough traders are looking at the 38% level and selling there then price may move at that point for no other reason. I don't trade at all off fibs/pivots etc but will on occassion look to see if they coincide with a S/D level
  • #2,271
  • Jan 30, 2012 3:47am Jan 30, 2012 3:47am
Quoting Seneca pilot
Price is currently trying to bounce from 3130 area.
Yes I have those levels marked on my charts. On the 15min there's a fairly strong Demand zone at 1.3110/1.3121. If it gets there it will be a first touch and is a general area where it might try to bounce. I'll keep my eye on it.
  • #2,272
  • Jan 30, 2012 3:54am Jan 30, 2012 3:54am
Quoting kvhutch
Yes I have those levels marked on my charts. On the 15min there's a fairly strong Demand zone at 1.3110/1.3121. If it gets there it will be a first touch and is a general area where it might try to bounce. I'll keep my eye on it.
Yes I see that area, worried about r/r though just formed supply at 3155 may just wait for a pullback to that area during NY and short it there. Down seems to be the direction of the day.
  • #2,273
  • Jan 30, 2012 3:56am Jan 30, 2012 3:56am
Quoting kvhutch
Heya Zamfir. I kinda see what you're saying and think you and Ken may actually be saying the same thing. I guess I may have said it as: "The reason for trading Supply and Demand levels is that it works." The simplicity is its attraction. But yeah, we are definitely trying to id the flow of smart money and this is the best mthodology I've come across.

As for fibs, pivot points and other inds, I'm a little less harsh on them. Why? because while price knows nothing about them, traders do. And since so many traders use them at times...

But do you think that the professionals use fibs and other TA stuff to create these levels? I m not really sure. All they care about is making money by manipulating the price and create these levels.

Funny thing is once they create these levels, the price ALWAYS goes in to these levels and reacts. This is the only truth i see on charts. the fibs or any other TA cannot tell anything about this. The price could react any of the fib levels , and we convince ourselves that fibs work. In reality they don't. ofcourse the fib fans will disagree with me , but thats ok.

I just wish there was a indicator that will tell me exactly which levels would react. Now that would be something really interesting. But enough day dreaming...hehhe
  • #2,274
  • Jan 30, 2012 4:02am Jan 30, 2012 4:02am
Looking at this potential short on AY caused by new swap zone. waiting for retouch.
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  • #2,275
  • Jan 30, 2012 4:08am Jan 30, 2012 4:08am
Trying to bounce from that 3121 area but REALLY strugling. If it gets up to that 3155 area I am pretty confident in that trade short.
  • #2,276
  • Jan 30, 2012 4:15am Jan 30, 2012 4:15am
Quoting zamfir
I just wish there was a indicator that will tell me exactly which levels would react. Now that would be something really interesting. But enough day dreaming...hehhe
if only ... lol!
  • #2,277
  • Jan 30, 2012 5:24am Jan 30, 2012 5:24am
Hey Guys

I like to see a nice big CCI dip , which right now on eurusd there isnt.
Watching thread with interest
Paul
  • #2,278
  • Jan 30, 2012 5:43am Jan 30, 2012 5:43am
Well any buyers that may have been at the 3105 E/U level are probably pretty much gone now so I'll short at 3155 if price make it there otherwise no trades today for me. NY usually likes to make the low or high for the day so if price can make it to a good supply area before the NY open or just after the odds are pretty good we test the lows. That will give a good r/r.
  • #2,279
  • Jan 30, 2012 6:52am Jan 30, 2012 6:52am
Quoting paulr
I like to see a nice big CCI dip , which right now on eurusd there isnt.
Watching thread with interest
Paul
Please for give my ignorance - what's a CCI dip?
  • #2,280
  • Edited 8:03am Jan 30, 2012 6:54am | Edited 8:03am
My PO on this countertrend trade is still sitting there at 3097. No much hope that will get filled.

Edit:Filled and stop loss.
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