LJ Forex Group

Another call from twitter...(the gold chart is posted further up)

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i posted this live on twitter,
1394.TP hit @ 1390.5
its friday,so i thought i shld take some quick profit and wrap up quickly.

As I said previously I agree with this point - have elaborated further with an annotated chart.

another example from a discussion in the Trading Room earlier today.

Apologies for the late response. Educational duties called.

For me, I like to enter at source, that being 83.65 in this instance, not 90 pips down the road. If I enter now, and price retraces, I'd be paying up for my entry.

I am of course a novice so I'm happy to hear your side Looking forward to Sunday!

Sorry I mis-read your post, I just looked at your chart and thought you were asking if the recent strong move down would be a reason not to be selling on a retrace to 83.65...

With regards selling @ 82.75, I posted some charts yesterday in the Trading Room as we were discussing the technical confluence @ 82.15 area.

My thoughts were:

1. The HTF S/R + 50% fib is where I would have preferred to see demand rather than the LTF S/R + 61% fib.

2. By buying at the technical confluence you are buying straight back into a former demand zone which we now expect to be a supply zone - i.e. there is a lack of space.

3. If wanting to short from the former demand turned supply zone then you are shorting into a former demand zone which has technical confluence - you can of course argue that the supply zone is HTF based and thus we could reason that it should be stronger than the LTF demand zone and of course the trend down has been strong...but the higher probability trade would be to wait for supply to exceed demand at this area and then enter on the FTB retrace.

If we now look at an updated chart we can see that there is clearly a battle happening between demand and supply at this area hence why it's a best to wait for the outcome of this battle and look for the retrace entry.

Where did price react - not at the technical confluence but higher up where I suggested it would.

1st target hit.

Notice the difference between the professionals entry and the amateurs...

Professional enters @ 1394, SL @ 1398 - exit @ 1384 for a +2.25R win (note I quote %R and not pips when talking about results because pips are completely meaningless %R is the only performance metric that matters).

Amateur (if the decide to enter because they have varying degrees of subjective reasoning to go through to decide whether to take a trade in the first place) enters @ 1388, SL @ 1395.50 - exit @ 1384 for a +0.53R win.

Amateur's struggle to make consistent monetary returns and struggle to grow an account - a trade comparison like this shows one reason why this is the case - amateur's are convinced you need 'confirmation' before entering a trade, because they don't understand supply / demand and orderflow dynamics.

It's because professionals have this knowledge and understanding they are always looking to enter at source and they know waiting for confirmation is merely getting into a move at a much worse price i.e. it is not a higher probability trade entering based on confirmation, but amateurs convince themselves it is.

If you think about everyday life, you always want to buy low and sell high - when buying a car you want to get the best deal you can, you don't buy a car for higher than the asking price do you...so why do so many amateur price action traders do exactly this...

To paraphrase a quote I heard from someone else which sums it up nicely...

...it comes down to their lack of knowledge and the fact when they start trading they don't have a clue...what do some do, they seek education, where do they do this...they look at the most popular textbooks which will be the ones written by authors who have written multiple books - they are learning from people who know how to write and sell books rather than people who know how to trade.

This is why there are so many scams and cr*appy services out there...I read an article on one site a while ago which said the best method to grow an account via price action trading is to be ultra picky, take 1 trade per week and risk 10% on it - anyone with any sense can understand this is complete BS - the problem is many are naive and will follow the majority rather than thinking for themselves, one of the main reasons why it is the few that succeed in this business and not the many.

This is why I run a Trading Room - because it is essential to be able to learn and apply methods under live trading conditions which is very different to just reading a book or text on a forum and discussing trades after the event. The only way you truly learn is to watch someone trade and make decisions during the course of the trading day - which is why there are so few trading rooms out there!

I know it is still only the few that will get it despite me laying all the foundations on here, most will still trade the amateurs way and continue to struggle to make good consistent returns - it's the nature of trading and the mindset most people have.

Lesson 2: Supply / Demand - Part 2 will follow before tomorrow's webinar.

Tomorrow's webinar is a one-off event in which I will essentially discuss Lessons 3-6 (which include 3 trading strategies):

Lesson 3: Turning S/D knowledge into a Trading Strategy.
Lesson 4: A Closer Look at Order-Flow Dynamics at S/D zones.
Lesson 5: Trading Pure Breakouts like a Professional.
Lesson 6: Trade Management - the amateurs weakness and the professionals edge.

Participation will include access to a recording of the webinar and my power-point slide summaries.

This is the only time I will be discussing these concepts outside of my Trading Room - why, because most just won't get it, so it's wasted on many that don't have the mindset required (hence the small fee!) and two, others don't like people coming along and questioning conventional 'wisdom'.

Consider this - why do the few % succeed in trading - because they think differently to the rest - if the popular methods taught in textbooks and across the internet were so good then it would be the majority that succeeded and not the few!

Some trade setups from today which we discussed in the Trading Room (and highlight the principles outlined in my previous video).

1. CADJPY - Price coming back to the former cause of a supply / demand imbalance - notice the strong breakout or significant imbalance.

2. NZDUSD - Same setup as in CADJPY.

3. GBPJPY - This time a S/D zone rather than an S/R level.

4. EURUSD - Again an S/D zone, this time with double TL confluence to pick point the most likely entry price.

Notice with all of these that the supply / demand imbalance was very significant i.e. the breakout was very strong.

This one didn't work out - a return to the former range highs.

However a loss could have been avoided (it was by me and others in the Trading Room) if you had awareness of news - Bernanke speaking is notoriously associated with USD moves and when he came out with some Dovish comments that got the market excited about the potential for QE3 which of course leads to a much weaker USD.

Hence I pulled my order because it was clear a whole new wave of sellers would come into the market based on this news which would likely override any remaining demand exceeding supply at that area - at the very least it just puts a lot more doubt into the setup.

The typical statement you'll see by the retail crowd is that 'news is presented in price' - this statement is pretty lame - yes of course news is presented in price - but after the event!

The market positions itself in terms of the expected future news, but when we get either unexpected news or data releases significantly different to the expected then this will of course cause a change in sentiment and a movement in price...if you wait until after a news event you will see the affect of Price Action due to the news after the event which of course is of no use if you are in a trade or about to take a trade - knowledge of news is both useful and important in price action trading - so why do the retail crowd often dismiss the importance of news...for the same reason they dismiss pure price action trading as aggressive trading - a lack of knowledge and understanding.

Hi Mark

Would you consider this to be the making of a FTB entry at 1.0500 area?

Based on your webinar, looks like there was a potential PB entry after sucking in the pure break out players. Something I missed.

Tomek

I missed it too, it was textbook - has the exact characteristics we want at the right location we want as described on the webinar and remember the type of bar doesn't matter.

We also had the false break of the other side, but this one was borderline IMO and you could easily argue that there was a lot of price pressure building up that would suggest a break.

It certainly looks a good S/R level to be looking for an FTB setup IMO.

Those on the webinar will also be familiar with this type of setup - look at the price action that occurred after the breakout - exactly what we expect isn't it...

Some of today's potential trades...

...

GU

EU

EJ