DislikedThe second one, I THINK we have compression into the supply level. Should this make us more likely to hold past the FTA?
AttachmentIgnored
EDIT: I didn't see your post, LJ.
Attached Image (click to enlarge)
What you said above is exactly right, but in the example you gave this is not occurring.
We have to remember that CP is just the squeezing of price, often in a converging wedge. The only question we need to be asking ourselves is whether (in this case) all clear demand within the wedge has been fully tested - this implies that is is more likely to have been consumed - paving the way for the quick momentum move through it.
Look at the chart below and you can see the demand zones I've marked in purple - none of these have been tested so this is...
Edit: And Balhana
I don't need easy. I just need possible.
- #4,063
- Nov 17, 2012 7:57am Nov 17, 2012 7:57am
- | Commercial User | Joined Feb 2008 | 4,633 Posts
When prices are spiking south in a rising wedge, it is compression. When prices are dipping slightly towards demand like a bull flag, then it is bullish. The second one on your picture is barely compressed.
EDIT: I didn't see your post, LJ.
Good to see we said the same thing though lol.
As always thanks for your input.
- #4,064
- Nov 17, 2012 8:08am Nov 17, 2012 8:08am
- Joined Mar 2010 | Status: Trader | 1,635 Posts
I beat you to it!
Good to see we said the same thing though lol.
As always thanks for your input.
At least much better than me. - #4,065
- Edited 1:25pm Nov 17, 2012 12:52pm | Edited 1:25pm
- | Joined Sep 2011 | Status: Hybrid | 413 Posts
So what about this? ( I know its a bit stretched )
- A Compression as a RisingWedge, Demand gets consumed
- FB of a clear swing high ( trap the BO traders + Short SL-es hit => Liquidity for sellers)
)- A Compression as a RisingWedge, Demand gets consumed
- FB of a clear swing high ( trap the BO traders + Short SL-es hit => Liquidity for sellers)
I don't need easy. I just need possible.
- #4,067
- Edited Nov 18, 2012 11:05am Nov 17, 2012 9:12pm | Edited Nov 18, 2012 11:05am
- | Joined Sep 2011 | Status: Hybrid | 413 Posts
One more and that's it (at least for today 
) , I promise.
From what i understand, we use the edge of the SD zone (Decision Point) for our entries/pendings .
Is the Source of the SD zone the place of our SL, or a place to watch carefully to see if it is breached and get out for a smaller loss (manual close for a % of initial stop)? Or it depends on the traders style?
Edit: I got another DP and Source example , to see if i am getting this right
) , I promise. From what i understand, we use the edge of the SD zone (Decision Point) for our entries/pendings .
Is the Source of the SD zone the place of our SL, or a place to watch carefully to see if it is breached and get out for a smaller loss (manual close for a % of initial stop)? Or it depends on the traders style?
Edit: I got another DP and Source example , to see if i am getting this right
I don't need easy. I just need possible.
- #4,068
- Nov 18, 2012 5:49am Nov 18, 2012 5:49am
- | Commercial User | Joined Feb 2008 | 4,633 Posts
So what about this? ( I know its a bit stretched
- A Compression as a RisingWedge, Demand gets consumed
- FB of a clear swing high ( trap the BO traders + Short SL-es hit => Liquidity for sellers)
Attachment
Here is an example of a trade I took Friday on EU which is a good example of compression (made 1.95R on this) - don't worry about the M1 PA comments - this is just from my PF - the CP is what I'm trying to get across - no clear untested supply within that channel with price hitting clear H1 demand.
Sniffing Snake's Tracks...
An example of consumption where price was pressuring against demand till it formed a new supply right above the demand and price sliced through the consumed zone.
I don't really get what you mean by this setup/idea. This doesn't resemble to what we discussed in previous posts , but maybe i am missing something.
I don't need easy. I just need possible.
- #4,073
- Edited 3:02pm Nov 18, 2012 2:34pm | Edited 3:02pm
- Joined Jun 2008 | Status: Stay Ahead | 315 Posts
Hey. What i see is a Demand Area which I wouldn't have taken even on the FTB because of the premature bounce, which gives a close FTA and a low RR opportunity , let alone a 2nd time back after it consumed some demand on the FTB.
I don't really get what you mean by this setup/idea. This doesn't resemble to what we discussed in previous posts , but maybe i am missing something.
Attachment
Edit: attached additional chart for a similar scenario.
Sniffing Snake's Tracks...
- #4,074
- Edited 3:58pm Nov 18, 2012 3:26pm | Edited 3:58pm
- | Commercial User | Joined Feb 2008 | 4,633 Posts
One more and that's it (at least for today
From what i understand, we use the edge of the SD zone (Decision Point) for our entries/pendings .
Is the Source of the SD zone the place of our SL, or a place to watch carefully to see if it is breached and get out for a smaller loss (manual close for a % of initial stop)? Or it depends on the traders style?
Attachment
Attachment
Edit: I got another DP and Source example , to see if i am getting this right
Attachment
Attachment ...
In terms of SL it of course should go beyond the source as price moving beyond here invalidates the setup as the reasoning for our trade has now gone.
There are however times when there are multiple DP's within a zone. This will be especially true on zones on higher TF's i.e. a zone on M5 is more likely to have a DP as the edge and a source and no DP's in between, whereas a zone on H4 is more likely to have both of these and DP's in between - thus SL placement can be placed tighter on what appears stronger DP's before the source.
Lastly, you also have to bear in mind volatility and use some common sense. A 5 pip SL on a H4 zone on AUDJPY for example would not be prudent.
Below is an example of a daily SD zone on NCAD (M15 TF on the inset) which has 3 potential areas for SL placement - above the source, above the higher DBD and above the DBD at the zone edge. Given the volatility and relative illiquidity of this pair my SL would always go above the 2nd DBD rather than the lower one, but note that it would not go above the source as I know from my own research that most of the time price should not hit the source on a wide zone like this on the FTB. Of course above the source is the 'safest' option, but good traders trader according to maximising long term expectancy and not win rate.
DGB, in my post I was quoting Mark "Supply / demand consumption can exist without price being squeezed within a wedge or channel" so I attached a recent price behavior of demand consumption, now if its not related to what Mark was describing then my apologies for the interference. Anyhow, you've commented on my chart with an excellent analysis but how about the below chart, a rejection wick "premature bounce" deep into the supply zone consuming supply then a second time back...what do you think happened next?
Attachment
Edit:...
I understand now what your example was about.
You were referring to the cases when a SD is tested multiple times until it gets consumed, and eventually you will have a break of that zone. Or else called a SD flip.
I was referring to the specific setup of consuming S/D while going into a fresh SD zone which would reverse the price violently , since we have no SD along the way back. Glad we cleared it up
I don't need easy. I just need possible.