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B.S. Trading with Kenneth Lee

  • #5,041
  • Feb 9, 2013 7:52am Feb 9, 2013 7:52am
Quoting TraderinSD

Hints: 1) Do not complicate this. 2) Trading is based on probabilities. 3) What is it that you SEE? 4) Think of Patterns w/in Patterns.


TSD

Great post. Thank you.


I hope there will be a sequel, or more of the same sort of stuff.
  • #5,042
  • Feb 9, 2013 8:32am Feb 9, 2013 8:32am
Quoting TraderinSD
Attachment

These next set of charts will hopefully show you that maintaining a structural understanding of The Power of Trend .. Hopefully this will help define your trades and direction with more confidence. Notice this is a monthly chart. We clearly have a level where price has approached very aggressively. I assume we all have been watching the Yen climb over the last few months. The upward move has been extremely strong. Based on what we see, we have a clear Supply Level and where price has come into this level very aggressively!

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Now...
take shorts!
  • #5,043
  • Feb 10, 2013 7:25pm Feb 10, 2013 7:25pm
Hi all, currently in a usdjpy trade, already have half a position off letting the other run to the final target and moved stop to a new supply just formed.
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  • #5,044
  • Feb 11, 2013 8:48am Feb 11, 2013 8:48am
Shorting usdjpy from new 5min. supply lvl that formed near 1 hour supply lvl. took half of already letting rest run to final target.
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: usd jpy 30 min sell.jpg Size: 68 KB
  • #5,045
  • Feb 11, 2013 10:42pm Feb 11, 2013 10:42pm
Quoting Starry
take shorts!

The Power of Trend still favors longs. Why?? ..Price has not taken out any previous swing lows on the longer TF that has this strong of an uptrend. KL speaks to this previously in the thread. So this trend favors longs. As previously stated the trade I took was a counter trend trade.... and ... it did not work out that well...

Price will need to make a significant move out of the area short... and ... take out a previous swing lows to consider taking shorts...That is where the higher probability trades would most likely happen.

It really helps see where price may be moving to by looking for Patterns w/in Patterns...or to say it another way... What is the higher TF pattern doing in relationship to the TF I'm trading...?

For example: If you have a weekly pattern that is a Drop-Base-Rise and price is currently trading within the Rise of that pattern... Do you think the odds favor taking trades short? The Power of Trend (the Rise) is against you.

Traders tend to always want to pick tops and bottoms. We do it almost unconsciously... Yet ... When we step back and look at the larger Pattern (THAT rise-base-drop or drop-base-rise PATTERN THAT WE TRADE BY THE WAY!!) its telling us were potentially the highest probability trades are.

Be willing to look well above you trading TF to see the larger Pattern w/in the Pattern…It can help define your trade.. Both trend and counter trend...Just pick your trades carefully if you are trading counter trend.


TSD
  • #5,046
  • Edited 5:09pm Feb 12, 2013 2:31pm | Edited 5:09pm
Hi, interesting thread.. Enjoying it.

Although could I get some clarification on why exactly unfilled Institutional orders are expected to be in a zone upon a return back. The market is dynamic and not static, perceptions of price are forever changing and driven by sentiment and info outside the charts. Eg macro etc. Why would there be unfilled institutional orders still on the books at these levels.

Or is the premise based on large orders form commercials hedging their risk , so they will wait to get complete fills over a specific period of time at a static price? without worrying about where the market is going (hence first time back trades etc)

Also, how do we know large moves away from a base are not caused by liquidity being withdrawn as opposed to large orders. Say at time of a news release or other event that changes ones appetite for risk.


Cheers,

C
Bye Bye FF
  • #5,047
  • Feb 13, 2013 9:19am Feb 13, 2013 9:19am
Quoting Chica
Hi, interesting thread.. Enjoying it.

Although could I get some clarification on why exactly unfilled Institutional orders are expected to be in a zone upon a return back. The market is dynamic and not static, perceptions of price are forever changing and driven by sentiment and info outside the charts. Eg macro etc. Why would there be unfilled institutional orders still on the books at these levels.

Or is the premise based on large orders form commercials hedging their risk , so they will wait to get complete fills over a specific period of...
I personally know none of the above and think even the big boys don't , All though they probably know ahead of times about big transfers of funds for whatever reason. But trying to digest the movement of currencies around the globe for whatever reason and there are to many to count . Countries devalue their currencies to make exports look better , A large project could require payment in a different currency. Inflation changes , Interest rate changes . Employment . any and all the above .

So in my own trading I have looked for what I see on a chart . Then I looked for the most basic idea for those formations. The areas price moves away aggressively from make sense to me . Price no longer has a counter offer at that price and so it has to move away.

Now when it comes back is there orders left ? That is the million dollar question the answer is in the PA ( price Action when it left. If it just flew thru more than likely there is interest to make that level the current fair value for the currency and that is what we are really looking for what a currency is worth at the moment . That moment can change in a heartbeat by some type of news or fundamental change. Some I guess can digest information good enough to trade off information . I am not one of those people. That is the main reason i never have trade equities they scare the hell out of me. Any small change in climate, leadership , raw materials or any one of thousands of points can send your investment into the toilet.

I like forex for the simpleness of it . Plus I can be in and out quick if i want to be, and get protected quickly so risk is less .

The odd enhancers Sam talks about will give you a good method for finding the best levels for the least amount of risk , Then with time trading this way your own abilities will improve as you see the same type of movement happen time and again . it is the repetitive nature of the way the charts flow that makes one a good trader . the trade management is what can make you a great one.


Cheers Ken
Good Trading To All ; Ken Lee
  • #5,048
  • Feb 13, 2013 9:47am Feb 13, 2013 9:47am
Or is the premise based on large orders form commercials hedging their risk , so they will wait to get complete fills over a specific period of time at a static price? without worrying about where the market is going (hence first time back trades etc

This is the idea behind a double top or bottom. A large order might be to big and push price to far to quickly making the combined entry not as close to the desired price . Think of a trading floor with a guy trying to sell a massive amount of currency within a parameter set by his client or boss. As the guys sells the price changes untill he can't sell anymore . But this move has set off a sell move because others think this maybe the start of a major move, but the late bloomers aren't getting that great of a price but are sending price lower. As Long as price doesn't break the trend or first swing . The counter offers will kick in and push price back up to that starting point a LEVEL. and the guy with massive order will add to his original one. Now when price approaches the previous swing there is a better change it will fail and a good move can be in hand.

This why I look for flips where price moves away and then comes back pretty quick. This is also where drilling down into a fast chart may show you the best entry .
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Good Trading To All ; Ken Lee
  • #5,049
  • Feb 13, 2013 9:48am Feb 13, 2013 9:48am
If you want to learn more about the above . You might read Ed Ponsi's book trading and probabilities. He goes over that in greater detail.
Good Trading To All ; Ken Lee
  • #5,050
  • Edited 9:55am Feb 13, 2013 9:53am | Edited 9:55am
Quoting Kenneth Lee
I personally know none of the above and think even the big boys don't , All though they probably know ahead of times about big transfers of funds for whatever reason. But trying to digest the movement of currencies around the globe for whatever reason and there are to many to count . Countries devalue their currencies to make exports look better , A large project could require payment in a different currency. Inflation changes , Interest rate changes . Employment . any and all the above .

So in my own trading I have looked for what I see on a...

These two statements are excellent (Golden Nuggets) on what one should look for when determining levels potentially to trade from.

1) The areas price moves away aggressively frommake sense to me. Price no longer has a counter offer at that price and so ithas to move away.

2) If it just flew thru more than likely there is interest to make that level the current fair value for the currency and that is what we are really looking for what acurrency is worth at the moment.


That is themain reason I never have trade equities they scare the hell out of me. .. Ken I had to laugh at this one.. I have said that very same thing to people who have asked me about trading stocks.

TSD
  • #5,051
  • Feb 13, 2013 10:00am Feb 13, 2013 10:00am
I don't mean to ignore people's inquires but if we get into the grading of levels that is all we will do.And it is really what we all need to learn on our own to develop the trust required to take the trades. Just drop lines on your charts and then come back to them and see how price reacted at them do this over and over and it will not take long for you to see the good from the bad. The good will start to jump off the screen at you.

Plus my trading is a compilation of everything i have studied over the years and the Supply and Demand is the icing on the cake as far as nice tight entries. Plus we all have different styles of trading . Most know that I basiclly only need a 100 pips a week for my personal gains risking what i do. Trading this way takes very little effort as you can see taking trades of 20 to 40 pips is pretty easy not requiring a break of the previous trend most times . Where most would rather put a trade on like a investment and maybe close it at the end of the summer.

So bear with me I am not as active as I should be but there are some great folks on the thread giving advice as well . Because it our thread not really mine.

Cheers Ken
Good Trading To All ; Ken Lee
  • #5,052
  • Feb 13, 2013 10:30am Feb 13, 2013 10:30am
Quoting Kenneth Lee
Or is the premise based on large orders form commercials hedging their risk , so they will wait to get complete fills over a specific period of time at a static price? without worrying about where the market is going (hence first time back trades etc

[color=Blue][color=Black]This is the idea behind a double top or bottom. A large order might be to big and push price to far to quickly making the combined entry not as close to the desired price . Think of a trading floor with a guy trying to sell a massive amount...
Great posts Ken, thanks.
  • #5,053
  • Feb 13, 2013 1:37pm Feb 13, 2013 1:37pm
It's very kind of you to take the time to reply, thanks I will look at things differently.

Cheers,
Bye Bye FF
  • #5,054
  • Feb 13, 2013 10:46pm Feb 13, 2013 10:46pm
Hi guys. My first post here. Sorry fo my english.


I'm interested do you have any monthly goals in trading by SD-levels in % to your capital?


I mean how much can you increase your capital monthly if your risk is 2% per 1 trade?

Kenneth i saw you told about your goals and it was 20% weekly. I think its too huge for me, it will be ok if i have 20% a month.
  • #5,055
  • Feb 14, 2013 8:14am Feb 14, 2013 8:14am
Quoting wskeal
Hi guys. My first post here. Sorry fo my english.


I'm interested do you have any monthly goals in trading by SD-levels in % to your capital?


I mean how much can you increase your capital monthly if your risk is 2% per 1 trade?

Kenneth i saw you told about your goals and it was 20% weekly. I think its too huge for me, it will be ok if i have 20% a month.

It doesn't matter what a persons goals are , if you hit your goal are you not going to take the next perfect setup? Just concentrate on your risk per trade never exceeding that and then take all the trades that you like. Staying fixated on a goal could be a bad thing making you take riskier trades if your not gaining
Good Trading To All ; Ken Lee
  • #5,056
  • Feb 15, 2013 12:16am Feb 15, 2013 12:16am
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We got long 2 lots on the second revisit to the demand area. The candle moving into the level stalled out at the end of its period right at the top of the demand area. Made the decision to get long.

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Appears that was the right move as PA making a reasonably aggressive move away from our demand area/entry.

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PA moving nicely in our favor.

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PA touch the first resistance level and began to stall out. My target was a bit higher than this. Waited for a while to see if we could get a solid push through. Not looking to get greedy so we exited the position. R/R was 1.55: 1..Happy with this as we are trading a 2 lot.

Some will say you should have stayed in..My position size allows me to take a solid profit at this level..If price continues on .. Oh well..They will always be another opportunity.

Total pipage 66

Good trading to all

TSD
  • #5,057
  • Feb 15, 2013 3:31am Feb 15, 2013 3:31am
Here is my EURUSD ihour trade
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  • #5,058
  • Feb 15, 2013 3:45am Feb 15, 2013 3:45am
Hello TSD,

You trust your demandzone. But why not, to be more sure, have your stop under the first pivot?( 9 candles earlier ) This demandzone was already touched once.
Of course your risk amount becomes bigger, but your probability to stay in the trade also. What do you think?
  • #5,059
  • Feb 15, 2013 6:15am Feb 15, 2013 6:15am
See we all saw similar things but trade them a bit different. Different time frames with same targets but all laying at bit different place. If I had held for my target , it would have missed by a pip or two then I could have woke up negative. or I could have moved it down a bit to further my chances of a hit . But would I have taken the short or set a PO ?

These are the personal question we each must ask ourselves and that I or anyone else can't make for you . A day or two like this and a 100 pip week is easey peasey. You can see the previous loss, we all have them just move along and take the next better trade, As a rule (Not written in granite though) The next level is always a better entry so if you get shaken by a loss and don't take it you will find yourselves more annoyed and any emotional response in trading is a bad thing.



BE THE MACHINE. Analysis, Then Plan Then profit.. Ken
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Good Trading To All ; Ken Lee
  • #5,060
  • Feb 15, 2013 6:33am Feb 15, 2013 6:33am
Nicely done TSD. Do you use volume by any chance? As i read FX volume is not accurate and different based on your broker..

What's your trading rules.. Do you want for PA once price in demand/supply or just put buy/sell orders?
Quoting TraderinSD
Attachment

We got long 2 lots on the second revisit to the demand area. The candle moving into the level stalled out at the end of its period right at the top of the demand area. Made the decision to get long.

Attachment

Appears that was the right move as PA making a reasonably aggressive move away from our demand area/entry.

Attachment

PA moving nicely in our favor.

Attachment

PA touch the first resistance level and began to stall out. My target was a bit higher than...
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