DislikedEU London Open Retest Question:
In this M5 chart (Red Line is LO) price breaks short 1st then long 2 candles later.
From my understanding no trade is triggered short because of too little time from open to retest.
If that is correct, then is there a scenario in which a reverse trade can be triggered?
p.s.: this is from Friday London which I would not have traded due to nfp, but for future reference I was curious about this look.Ignored
- #1,322
- Mar 12, 2013 2:06am Mar 12, 2013 2:06am
- Joined Dec 2010 | Status: Trader | 1,152 Posts
What is any ocean but a multitude of drops?
- #1,323
- Mar 12, 2013 2:30am Mar 12, 2013 2:30am
- Joined May 2011 | Status: Trader | 1,797 Posts
Don't usually trade Asia, but decided to get in here. Flat heading into London.
- #1,325
- Mar 12, 2013 3:40am Mar 12, 2013 3:40am
- Joined Feb 2009 | Status: Trader | 25,867 Posts
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
- #1,328
- Mar 12, 2013 3:54am Mar 12, 2013 3:54am
- | Commercial User | Joined Feb 2012 | 3,770 Posts
tradewith60
- #1,330
- Mar 12, 2013 5:16am Mar 12, 2013 5:16am
- Joined Mar 2007 | Status: Trader | 8,618 Posts
Hi, I recommend to stick to "proven" pairs like EJ, EU, GJ, GU and UJ.
Definitely on my proven list. But what the f do I know? Let's see what happens next?
Gone to a better place
SL hit..
If I may use your trade example for a different perspective as I viewed it (hindsight).
ADDITIONAL NOTES TO CHART: I look at these zones/areas in terms of size in relation to each other and how close they are to potential trade entry's. Looking at the chart this way, imagine that the trade was the other way around, or entered as a short from the top. You would be entering into a the "safe" zone with the risk of reversal much closer to your target.
BW, or anyone please comment on your thoughts...
[quote=be water;6508618]
Specifically I didn't in the chart, but used it as an example with the information you provided only because I didn't look into the pair very much. Generally, I/we never know for certain on any chart we look at, but my analysis includes looking for areas of potential orders or areas that have proven to have orders that may not have been completely filled. The areas that have been discussed in this thread are areas that most likely hold the orders. It is not all inclusive we never truly know all of the information, but we can gain an edge knowing where they most likely are. This is where understanding the market your trading in is the base for making your trading philosophy and plan.
All we need to have is enough information to make our trade with the least amount of risk. When I am wrong I adjust during an executed trade (why I used your trade as an example of adjusting). When I am wrong and my SL is hit it many times it may mean I have missed something in analysis, or the market just exposed information that will help me in the next trade.
The entire basis of SP's thread as I view it is levels or areas of orders. How you use these areas is up to the trader. As an example SP is a touch trader by his own definition. This isn't the only way to trade, which again he has stated and what I think he would like to get across to others here in the thread. I prefer confirmation prior to entering, so SP looks to get in before I do from what I can see anyways, but he may leave a trade go at that point. Mentally, it's difficult for me to to trade that way, so I look for these gaps in potential order areas before entering and also continue my analysis while in the trade in case anything changes. Of course you have to be able to have discipline in this respect as well because you can create a bias that is false and talk yourself into changing stoploss and target levels that aren't warranted.
To each his own, and that once you feel comfortable with your philosophy and plan on sound principles you are way ahead in my opinion.
I hope that helps and makes sense. As always other perspectives and comments on my thoughts are encouraged...
PS: If I can I will post an example of a trade yesterday where I saw a gap and entered I will. Also, my R/R is based on these gaps and have to be worth it to me to enter.
If I may use your trade example for a different perspective as I viewed it (hindsight).
quote]
Thank you for your analysis..i have one question : how do you know there were no orders in the "safe zone" ?
Specifically I didn't in the chart, but used it as an example with the information you provided only because I didn't look into the pair very much. Generally, I/we never know for certain on any chart we look at, but my analysis includes looking for areas of potential orders or areas that have proven to have orders that may not have been completely filled. The areas that have been discussed in this thread are areas that most likely hold the orders. It is not all inclusive we never truly know all of the information, but we can gain an edge knowing where they most likely are. This is where understanding the market your trading in is the base for making your trading philosophy and plan.
All we need to have is enough information to make our trade with the least amount of risk. When I am wrong I adjust during an executed trade (why I used your trade as an example of adjusting). When I am wrong and my SL is hit it many times it may mean I have missed something in analysis, or the market just exposed information that will help me in the next trade.
The entire basis of SP's thread as I view it is levels or areas of orders. How you use these areas is up to the trader. As an example SP is a touch trader by his own definition. This isn't the only way to trade, which again he has stated and what I think he would like to get across to others here in the thread. I prefer confirmation prior to entering, so SP looks to get in before I do from what I can see anyways, but he may leave a trade go at that point. Mentally, it's difficult for me to to trade that way, so I look for these gaps in potential order areas before entering and also continue my analysis while in the trade in case anything changes. Of course you have to be able to have discipline in this respect as well because you can create a bias that is false and talk yourself into changing stoploss and target levels that aren't warranted.
To each his own, and that once you feel comfortable with your philosophy and plan on sound principles you are way ahead in my opinion.
I hope that helps and makes sense. As always other perspectives and comments on my thoughts are encouraged...
PS: If I can I will post an example of a trade yesterday where I saw a gap and entered I will. Also, my R/R is based on these gaps and have to be worth it to me to enter.
In regards to my post to BW and my example of how I view(ed) the market...
What you will see in this image are the levels where I see orders have been placed or are potentially placed. They are all levels that have been spoken of in this thread by SP. I included them in my chart example for illustration only and I may not visually have them on my chart at all times. By the way, the colors and line types all have meaning that is consistent across any chart or pair, so that if they are on my chart, I know exactly what they mean by this color/type coding. They can be rather confusing at times if they were all displayed on the chart at once and some may mean nothing at certain points of the day.
The previous daily low doesn't show up on the chart, but was utilized in my analysis on entering the trade.
Price was a in a ridiculous range this is where I felt the market was ready to move. Any liquidity that there was, was consumed in this range and at some point the market needs to move to find more. When price went above LO and the weekly open without coming back down like it did earlier and formed a tight range above I saw a potential opportunity for a long entry. At that point I looked for the area of least resistance (gap) between the areas of orders. My analysis told me the following:
Price had been trading around areas of key order filling (London, NY, Asia, previous daily high, weekly open and a presumed large vanilla option expiry). There was a gap between those areas and the previous daily low, but it was not as large as the gap above. The gap above was the monthly open, but it had to get past the previous month low before proceeding to this this area. My perception was then that I had numerous support below me coupled with the fact that price would have to get through this mess to get to the previous daily low. This was my safety net. My immediate risk of moving into profit was the previous month low, which was very close to entry, but the potential reward was ~50 pips with initial stop viewed in the area between NY and weekly open at roughly 12-13 pips.
Once price moved away from my entry and into the safe zone my SL was moved to BE and my next area of potential resistance was 1.3050 where another option expiry was sitting that expired earlier in the day (I had no idea the significance of this area, but I thought it may be weak). Once it made it to this level I continued my analysis of what price was doing and it appeared there were enough orders to potentially stop this move from reaching my target. Once it retraced down and started moving up a little I moved my stop to this point do the orders that were being executed here. I was profitable and wanted to protect my trade. We were also late in the day and I got the feeling that if it broke this low where I moved my stop the move was completed. Had this been earlier in the day my stop probably would have been lower and ended the trade in profit, but at a couple of pips less at the next low.
I like 5 min charts for execution, but utilize others too. There are a few other points that I undertake within this process, but those mentioned were the key ones. It may come across as confusing and a lot of data, but it happens very quickly when you're organized and and trust yourself. I like being flexible and my rules keep me focused and help with discipline when you have to make some subjective decisions.
My perspective and critique and question as you see fit...
What you will see in this image are the levels where I see orders have been placed or are potentially placed. They are all levels that have been spoken of in this thread by SP. I included them in my chart example for illustration only and I may not visually have them on my chart at all times. By the way, the colors and line types all have meaning that is consistent across any chart or pair, so that if they are on my chart, I know exactly what they mean by this color/type coding. They can be rather confusing at times if they were all displayed on the chart at once and some may mean nothing at certain points of the day.
The previous daily low doesn't show up on the chart, but was utilized in my analysis on entering the trade.
Price was a in a ridiculous range this is where I felt the market was ready to move. Any liquidity that there was, was consumed in this range and at some point the market needs to move to find more. When price went above LO and the weekly open without coming back down like it did earlier and formed a tight range above I saw a potential opportunity for a long entry. At that point I looked for the area of least resistance (gap) between the areas of orders. My analysis told me the following:
Price had been trading around areas of key order filling (London, NY, Asia, previous daily high, weekly open and a presumed large vanilla option expiry). There was a gap between those areas and the previous daily low, but it was not as large as the gap above. The gap above was the monthly open, but it had to get past the previous month low before proceeding to this this area. My perception was then that I had numerous support below me coupled with the fact that price would have to get through this mess to get to the previous daily low. This was my safety net. My immediate risk of moving into profit was the previous month low, which was very close to entry, but the potential reward was ~50 pips with initial stop viewed in the area between NY and weekly open at roughly 12-13 pips.
Once price moved away from my entry and into the safe zone my SL was moved to BE and my next area of potential resistance was 1.3050 where another option expiry was sitting that expired earlier in the day (I had no idea the significance of this area, but I thought it may be weak). Once it made it to this level I continued my analysis of what price was doing and it appeared there were enough orders to potentially stop this move from reaching my target. Once it retraced down and started moving up a little I moved my stop to this point do the orders that were being executed here. I was profitable and wanted to protect my trade. We were also late in the day and I got the feeling that if it broke this low where I moved my stop the move was completed. Had this been earlier in the day my stop probably would have been lower and ended the trade in profit, but at a couple of pips less at the next low.
I like 5 min charts for execution, but utilize others too. There are a few other points that I undertake within this process, but those mentioned were the key ones. It may come across as confusing and a lot of data, but it happens very quickly when you're organized and and trust yourself. I like being flexible and my rules keep me focused and help with discipline when you have to make some subjective decisions.
My perspective and critique and question as you see fit...