LJ Forex Group

Two other trades on Dax and GU - left too much on the table on both of these, but still +1.5R and +1.25R on these.

GU was breakout of the M15 wedge which was in a daily supply zone with entry based on pullback and rejection of wedge + SR.

Dax was false breakout after reaction of a DBD following a wedge breakout.

Excellent explanation thank you.

Hello LJ, for NU, if you were to put a limit order, where will the stop loss most likely to be? If the whole zone is taken for SL, won't this reduce R/R substantially? Thank you!

I would rarely put a SL below a zone that wide unless there was a good reason too.

What I would do is zoom in and find the major decision points / areas within that overall zone. This would likely result in the zone being split into smaller sub zones which allow for more accurate entry areas and tighter stops.

Whether I place a limit order depends on the setup. If I don't then I'll watch the lower TF's for price action like I did on the GCAD trade today - this again allows for accurate entries and tighter stops than a blanket enter at one edge of the zone with the SL the other side of the zone.

A Pro trader is always looking to have a tighter overall SL as possible (without materially affecting the potential result of the trade) via more accurate entries and/or tighter SL as of course this increases the %R - many novice traders I see don't do this because they either trade mechanically or trade scared.

I don't have time at the moment to go through and analyse NU, but hopefully the above will help in the meantime.

Thought someone might find this MT4 eBook of use, I certainly did. Its full of helpful hints and tips .....

NTW

Hi

I was looking at that one earlier today was tempted because of move away and the trade would have been with the main trend.

Decided not to take it as the level was imho at the the same level as
another level that made it not a FTB trade rather a 2nd revisit.

Had it been a matter of levels upon levels then certainly I would not hesitate.

What are your thoughts

Two trades, one out of boredom (profitable) the other cut short (below). Must really learn to let these trades run.

Can you show this on a chart so I can see what you mean.

If it's an FTB then I'm looking for limit orders, if it's not an FTB then I'm looking for PA - this was a PA trade.

LJ , when its not FTB , what kind of PA do you look for ? I mean usually people refer PA to as Bar patterns but I guess that is not what you look for initially because that makes us enter late ... So what do you look for ??? Traps and ?

I can't explain it all in one post as it's an entire subject matter in it's own right. But to give you a background flavour...

When I talk about looking for PA I'm essentially saying I'm looking for signs of professional buying / selling. This can take many forms in any given situation...but I'm looking for signs of 'rejection' from a specific area and for any supply / demand (demand if we are shorting) in the near vicinity to have been 'consumed' (as per my Price Action 1 video).

There are certain patterns that can highlights the latter - compression, flags etc. Whereas the former we can look for bar patterns like pins and BUOB's etc but really I'm just looking for rejection signs, the bar is irrelevant - rejection bars stand out.

However, it's not always as straightforward as looking for a big rejection bar, Pro's like to hide their moves where possible and like to steadily 'accumulate' positions, this is where traps, liquidity spikes, accumulation/distribution, H&S, QM patterns come into play...it's all based around how large players can enter orders into the market by causing a ripple rather than a wave (large players want the best price possible and thus just entering orders all at once will often result in what we would call slippage - lack of liquidity essentially - thus large players need to be creative in order to find the liquidity they need).

In terms of timeframes you can spot all of this on the lower TF's, hence why I look at higher TF areas on a lower TF - to find the best discounted entry and SL to maximise my %R.

The big problem with the retail crowd is that they are obsessed with a) price action = bar patterns approach and b) rule based trading.

This leads to trading with a mechanical mindset - so rather than approaching an area with the view I'm looking for signs of rejection and consumption of supply/demand below and all the time looking for signs of the big money they have the approach I need a certain bar formation (i.e. one of a very small array of bars must form) on a higher TF which must form with a certain size, close in a certain way below a certain level and if everything is aligned I'll enter few pips below (as if waiting for a bar break actually means something) and my stop will go x pips above the higher (without thinking logically and objectively whether this is appropriate - i.e. mechanical trading).

It amazes me that retail seem to believe that Pro traders in banks, funds prop firms are sitting at their screens looking for bar formations...I can tell you now no-one trades like that in the real world and no-one can trade full-time and earn a living trading like that unless you have some serious dosh stacked away - in any case it's a wholly inefficient approach and doesn't represent professional price action trading.

I've only touched on this subject in this post, price action trading is not simple, you don't learn it all over night and then go and apply it - it's not some system, but it is the real way the Pro's make money in the market.

There is a lot more to come around this subject in the near future via articles and vids on my website.

yes this was a pretty setup..

but the price (nearing the 1.30 level) was conciding with yesterday's FOMC statement which made me change my decision to watch the sentiment today post-FOMC instead of blindly taking a TT..

Same here... I was hoping for some dissapointing news @ FOMC but that did not happen. I see a lot of guys picking tops all the way from 1.3 becouse that move is ridiculous....

UJ trade I took last night. Based on:

1. Daily false breakout of the daily demand area.
2. Lack of downside reaction to QE3 - meaning it was all priced in and likely to bounce now.
3. Price has likely spiked and cleared that supply just above within the FOMC moves.

I actually looked at this area as very key for UJ - if it breaks then we're likely heading down to past 'intervention' levels.

So with the above in mind I thought this was worth some risk exposure - entered at market (77.43) with SL just below the demand @ 77.27 as price shouldn't come back again if the daily FB is to play out.

Scaled out after price reacted at the 78.17 area (which was an FTB short setup in it's own right) which was my first target.

Overall made +4.03R

My Gold FTB triggered earlier today, it hit FLS then didn't do much so cut it as it's getting late in the day for me to be trading.

Wasn't massive value to the FLS in this, just about good enough, but was worth it to see if it could break the FLS as there was plenty of space to the downside. +0.55R on this one.

Couple more FTB setups from today...

On GCHF - a lesson in finding decision points - why was a SL @ 1.4957 area logical over placing the SL below the entire zone.

As well as yesterdays GCAD trade here are some other examples of how I look for PA on VLTF's.

ECAD was analysed yesterday as price came close, but it hit today. I didn't take either of these myself (Friday is wind down day + admin day for me most of the time) but some peeps in my room did for some quick pips.

AU - PA on M5 at daily supply, resistance and previous swing high area.

Quick follow up since I made that last AU post...

Another before and after chart of an FTB that hit today - it's certainly been the day and week for FTB's this week ... 12 setups that I've uploaded to the Trading Room (before the event) triggered this week, 11 of which were winners. That takes the running total to 17 in September with 15 winners.

Is it because of this area of D mid 5m RBR? Price is unlikely to break this zone if there are enough buyers to push price higher?