LJ Forex Group | Page 178 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

JPY Group - Best Group to Trade 60 replies

Your experience with Forex.com [GAIN Capital Group, LLC] 37 replies

Forex Techniques Development Group 24 replies

FOREX, Robert Gray, FXLQ, and Nfa/ctfc... PLEASE REPOST IN EVERY GROUP 0 replies

Attachments: LJ Forex Group
Exit Attachments

LJ Forex Group

  • #3,541
  • Sep 25, 2012 10:52am Sep 25, 2012 10:52am
Hello lj, can you please explain what are the differences between rejection and consumption from/of SD zone? How do you judge rejection from consumption because when price reject from a demand zone, demand is also being consumed? Refer to chart below.

Thanks a lot!

Quoting lovejoy80

Essentially all I'm looking for is:

1. Rejections from supply and demand
2. Consumption of supply and demand

That is all price action boils down too - interpreting whether price is being rejected from supply or demand or whether it is consuming it.
Attached Image (click to enlarge)
Click to Enlarge Name: eur.jpg Size: 153 KB
  • #3,542
  • Sep 25, 2012 11:14am Sep 25, 2012 11:14am
Compression into RBD, Supply, Decision Point, and entered off the Lower High
Attached Image(s) (click to enlarge)
Click to Enlarge Name: nzdusd30m.jpg Size: 71 KB
Click to Enlarge Name: nzdusd30ma.jpg Size: 53 KB
DM if you have any questions
  • #3,543
  • Sep 25, 2012 12:37pm Sep 25, 2012 12:37pm
Quoting FX.Sniffer
you're absolutely right, i dont know what happened i think i marked the wrong levels when i was preparing the chart, but there is a QM in there.

There..I've edited the chart and can be clearly viewed on the M5 TF.

Thanks for correcting me.
Ah can see it now, cool. Don't tend to watch Silver too closely myself on VLTF relative to Gold. Did you get into the short setup?

I had a QM PA trade long on ECAD today. H1 and 5min charts below. Price was in H1 demand and had hit a obvious DP - it was the first reaction on M5 of that DP at the double bottom that got my interest - that bar and subsequent breakout of the supply just above looked like 'Pro Money' buying to me. +2.25R on this trade.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: ecad h1.jpg Size: 127 KB
Click to Enlarge Name: ECAD M5.jpg Size: 113 KB
Click to Enlarge Name: ECAD 5min 2.jpg Size: 104 KB
  • #3,544
  • Sep 25, 2012 12:50pm Sep 25, 2012 12:50pm
Quoting lovejoy80
Ah can see it now, cool. Don't tend to watch Silver too closely myself on VLTF relative to Gold. Did you get into the short setup?

I had a QM PA trade long on ECAD today. H1 and 5min charts below. Price was in H1 demand and had hit a obvious DP - it was the first reaction on M5 of that DP at the double bottom that got my interest - that bar and subsequent breakout of the supply just above looked like 'Pro Money' buying to me. +2.25R on this trade.
Yup here goes a couple of charts not up to date but price has already touched that demand zone at the base of CP. Still aiming to lower TP for now.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: s003.jpg Size: 124 KB
Click to Enlarge Name: s004.jpg Size: 134 KB
Sniffing Snake's Tracks...
  • #3,545
  • Sep 25, 2012 12:53pm Sep 25, 2012 12:53pm
Another trade for today was a long entry on EURGBP.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eg001.jpg Size: 124 KB
Click to Enlarge Name: eg002.jpg Size: 75 KB
Click to Enlarge Name: eg003.jpg Size: 123 KB
Click to Enlarge Name: eg004.jpg Size: 133 KB
Sniffing Snake's Tracks...
  • #3,546
  • Sep 25, 2012 12:54pm Sep 25, 2012 12:54pm
Quoting matk
Hi LJ

Would the attatched count as a bear trap eur jpy chart
It doesn't look that clear to me and your chart looks very different to mine.

There were two great examples today and I missed them both annoyingly - will upload them in a bit.
Attached Image (click to enlarge)
Click to Enlarge Name: ej h4.gif Size: 20 KB
  • #3,547
  • Sep 25, 2012 12:56pm Sep 25, 2012 12:56pm
Quoting FX.Sniffer
Another trade for today was a long entry on EURGBP.
Nice charts and analysis on EG and Silver.

I think I was the only one that passed on EG today...really don't like that pair.
  • #3,548
  • Sep 25, 2012 1:00pm Sep 25, 2012 1:00pm
Quoting kenkoo
Hello lj, can you please explain what are the differences between rejection and consumption from/of SD zone? How do you judge rejection from consumption because when price reject from a demand zone, demand is also being consumed? Refer to chart below.

Thanks a lot!
This chart looks familiar but can't pinpoint which pair and TF it is...

In this case this is rejection from demand because that bearish bar was reversed...

In fact this looks like a classic bear trap setup to me from looking at your chart...liquidity spike (which is the bear trap) which is instantly reversed.

Leave this with me (consumption and rejection) as I do get emails on this topic fairly frequently so it's on my list of things to talk / write about - I'll move it up the list.
  • #3,549
  • Sep 25, 2012 1:04pm Sep 25, 2012 1:04pm
Quoting jkrick33
Compression into RBD, Supply, Decision Point, and entered off the Lower High
Nice one.

This area was on my radar and in fact I had a short from the rejection off the lower M15 DBD and small bull trap of the channel which I scratched for BE as it didn't display the momentum follow through I expected (Normally I'd take the touch on a setup like that but missed it). Was too busy with other things when price hit the higher SR + DBD.
Attached Image (click to enlarge)
Click to Enlarge Name: nu m15.gif Size: 25 KB
  • #3,550
  • Sep 25, 2012 1:05pm Sep 25, 2012 1:05pm
Quoting lovejoy80
It doesn't look that clear to me and your chart looks very different to mine.

There were two great examples today and I missed them both annoyingly - will upload them in a bit.

On my chart there is a 20 pip gap between the swing high where I
think the stops are and the DBD just above
Constant and never ending improvement
  • #3,551
  • Sep 25, 2012 1:08pm Sep 25, 2012 1:08pm
Quoting lovejoy80
Nice charts and analysis on EG and Silver.

I think I was the only one that passed on EG today...really don't like that pair.
Thanks mate. I dont like EG too but i found it a good opportunity not to skip.
Sniffing Snake's Tracks...
  • #3,552
  • Sep 25, 2012 1:13pm Sep 25, 2012 1:13pm
Quoting lovejoy80
An example of a bear trap and how the setup could have been foreseen and why.

This type of trading setup is what I'm looking for every day - bull and bear traps are easy setups to find and result in some very high probability setups.

This all results from a fundamental knowledge of market participants and order-flow dynamics together with a logical objective mindset.

Unfortunately it is this type of knowledge, understanding and mindset that is missing from the retail PA space. Everyone wants to follow rule based methods that don't achieve...
Another very similar example - something I missed at the time which I'm definitely not happy about as this is a very high probability setup.

This is AJ H1.

1. Price hit a clear DP within the DBR demand zone.

2. By moving into this area price was also breaking below the clear SR at the upper edge of the zone.

3. Price closed back above the SR - notice that the move down into the DP was instantly reversed - i.e. this is a liquidity spike as explained in the previous post / chart.

Price closing above the SR again 'is' the bear trap setup i.e. we now expect price to move with good momentum upwards (due to the order-flow dynamics that we know is likely present).

The two obvious targets marked.

Where do you place your stop on a setup like this - just below the DP that was hit at the very maximum - price will not move down below here if this is a bear trap setup...we know this because of the order-flow dynamics.
Attached Image (click to enlarge)
Click to Enlarge Name: aj h1.gif Size: 25 KB
  • #3,553
  • Sep 25, 2012 1:23pm Sep 25, 2012 1:23pm
Quoting lovejoy80
Another very similar example - something I missed at the time which I'm definitely not happy about as this is a very high probability setup.

This is AJ H1.

1. Price hit a clear DP within the DBR demand zone.

2. By moving into this area price was also breaking below the clear SR at the upper edge of the zone.

3. Price closed back above the SR - notice that the move down into the DP was instantly reversed - i.e. this is a liquidity spike as explained in the previous post / chart.

Price closing above the SR again 'is' the bear trap...
Another example - Dow (Oanda feed) - bull trap.

M15 and H1 TF charts attached.

This time the liquidity spike i.e spike + instant reversal is seen much more clearly on H1 TF. But we can see on M15 the clear SR and the clear DBD just above and how price moved when it closed back below the SR.

There was also (although not as clear) a bear trap this morning from the lower demand and SR just above marked.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: dow m15.gif Size: 37 KB
Click to Enlarge Name: dow h1.gif Size: 39 KB
  • #3,554
  • Sep 25, 2012 1:29pm Sep 25, 2012 1:29pm
Whilst I'm talking about missed trades here is a H1 FTB on GNZD.

I did take some trades today honest...6 in fact (NU + ECAD already discussed - will go over the others later).
Attached Image (click to enlarge)
Click to Enlarge Name: gnzd h1.gif Size: 28 KB
  • #3,555
  • Sep 25, 2012 1:31pm Sep 25, 2012 1:31pm
Quoting matk
On my chart there is a 20 pip gap between the swing high where I
think the stops are and the DBD just above
It is a place where stops might be accumulated and where novice traders might be enticed to go long on the break - but it's not the most obvious of examples - if this was a major swing high then this would be a more obvious place for stops and breakout traders etc.

I prefer to focus on clear SR's in ranging markets like those on CADJPY, Dow and AJ that I've shared.
  • #3,556
  • Sep 25, 2012 3:30pm Sep 25, 2012 3:30pm
Quoting lovejoy80
Nicely explained TJ.

I would also add that (in regards to the first pattern) this is essentially 'distribution' - can you see that each new high is very quickly rejected - this is a sign of buyers starting to 'distribute' (unwind their long positions which of course is the same as shorting) their long positions.

To understand accumulation and distribution you need to understand the mechanics of how large players build positions and unwind positions. It's beyond what I want to get into here in a huge amount of detail, but to give a quick summary:

1....
This trade demonstrates accumulation / distribution in action on M1.

UCAD short based on a return to a very clear M30 TF SR. As usual I zoom into M5 and M1 to look for PA...multiple PA to base a short on as per charts below.

4 pip SL on this trade - only possible with an ECN broker and one you 'trust' not to increase spreads materially at US news - this trade was taken before US data release so it wasn't without risk off a liquidity spike.

I missed the 2nd target so had to watch and close manually when it came close again, +2.95R.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: ucad m30.gif Size: 20 KB
Click to Enlarge Name: UCAD M5 1.jpg Size: 118 KB
Click to Enlarge Name: UCAD M1 1.jpg Size: 89 KB
Click to Enlarge Name: UCAD M1 2.png Size: 26 KB
  • #3,557
  • Sep 25, 2012 3:37pm Sep 25, 2012 3:37pm
UJ FTB hit today, pretty straight forward stuff, took full profit at FLR, not the best %R but a very high probability setup, +0.79R. Stop loss was @ 55's - check the 5min and you'll find the initial source of demand that the SL was based on.

As usual, before (from the TR) and after etc.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: UJ H1 1.png Size: 34 KB
Click to Enlarge Name: UJ H1 2.png Size: 23 KB
  • #3,558
  • Sep 25, 2012 3:43pm Sep 25, 2012 3:43pm
GNZD H1 bear trap (or so I thought!). Definitely not as obvious as the previous examples I've been uploading but this SR still has some nice history to it and I know setups like this produce a positive expectancy over the long run - but with a lower win rate - hence the obvious thing to do is to take them but with lower risk. Scaled out of half a position when momentum wasn't present (of course we expect decent momentum following a 'trap'). -0.80R
Attached Image (click to enlarge)
Click to Enlarge Name: GNZD H1.jpg Size: 92 KB
  • #3,559
  • Sep 25, 2012 3:51pm Sep 25, 2012 3:51pm
Lastly, NU short...based on bear trap of the channel and more importantly the clear SR after price hit supply (clear former demand). Scaled out 75% at the FLS and scratched the rest near entry. +1.08R

Note the tight SL used - no need for large stops on trades like this as we know how price should move following the trap having been completed - wider stops are for people with mindset issues. Maximising R whilst retaining a materially similar win rate is what produces big net gains - as this is what maximises your expectancy.

6 trades today, 4 wins, 1 scratched at BE and 1 loser, net +6.27R.

Hopefully people are starting to see how logical, mulit-TF trading can produces some serious gains...and I didn't take EG setup, wasn't watching Silver which was a great PA trade (as per FX Sniffer's post) and missed AJ + Dow setups. It really isn't that hard if you free your mind away from rule based and/or subjective trading methods.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: NU 15min.jpg Size: 77 KB
Click to Enlarge Name: NU M5.jpg Size: 85 KB
  • #3,560
  • Sep 26, 2012 6:12am Sep 26, 2012 6:12am
Quoting lovejoy80
GNZD H1 bear trap (or so I thought!). Definitely not as obvious as the previous examples I've been uploading but this SR still has some nice history to it and I know setups like this produce a positive expectancy over the long run - but with a lower win rate - hence the obvious thing to do is to take them but with lower risk. Scaled out of half a position when momentum wasn't present (of course we expect decent momentum following a 'trap'). -0.80R
Hi LJ

Am I to understand correctly that on ther bull/bear trap set ups you WAIT
for a liquidity spike into supply/ demand and THEN enter in the case of the GNZD there was a one hr pb spiking into the supply DBD on the left
.9790/ .9770 did you the take a limit retracement entry45%- 50% of pb and stop above or a market order entery at the base.
Constant and never ending improvement
4 traders viewing now