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B.S. Trading with Kenneth Lee

  • #5,281
  • Apr 7, 2013 11:43pm Apr 7, 2013 11:43pm
Quoting Borg
Hello TraderinSD: When you say sm active in your charts does that mean smart money active ? And some how by the PA and volume you can tell when smart money is active at a particular bar ? Also what does the letter B mean on the chart ? The letter D on the chart means demand I assume ? Thank You

When you say sm active in your charts does that mean smart money active ?

Yes

And some how by the PA and volume you can tell when smart money is active at a particular bar ?

Yes...In order to move price significantly ... Relative to the TF you are trading in ... The SM have to be involved.. They trade in all TF's...There is just not enough large retail traders to move price as they do. Look at the pattern we trade...You have consolidation..Then price expansion is some direction. This expansion creates our levels. We look for those large move up or down to determine a level.

Also what does the letter B mean on the chart ?

I was using A, B, etc as reference areas. Something I could reference I would be able to reference in my post.. Nothing more than a reference area.

The letter D on the chart means demand I assume ?

No... It is a discription of the Drop-Base-Drop pattern or DBD. ( D = Drop ) ..Just a discription for the pattern I am using to determine my level.



Hope this helps
TSD
  • #5,282
  • Apr 8, 2013 12:00am Apr 8, 2013 12:00am
Quoting Kanzler
I think this thread is now his personal blog, he never replies to anybody but keeps posting his trades.
Kanzler: I replied to your post #5188...As well as many others who have asked questions. If I have missed a few I do apologize.

I'm just not fast enough I guess... Maybe I should improve my typing skills .. Will make an asserted effort going forward.


TSD
  • #5,283
  • Apr 8, 2013 12:19am Apr 8, 2013 12:19am
Quoting TraderinSD
Kanzler: I replied to your post #5188...As well as many others who have asked questions. If I have missed a few I do apologize. I'm just not fast enough I guess... Maybe I should improve my typing skills .. Will make an asserted effort going forward. TSD
In which case I offer my most sincere apologies, I must have missed them in the fray.
  • #5,284
  • Apr 8, 2013 11:00am Apr 8, 2013 11:00am
Missed the CAD by 1.8..
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  • #5,285
  • Apr 8, 2013 11:09am Apr 8, 2013 11:09am
Waiting 4 cable..hope I haven't missed it..

When there are 3 areas/zones I look to enter on the middle...am I being to conservative?

Advice appreciated...
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  • #5,286
  • Apr 8, 2013 1:40pm Apr 8, 2013 1:40pm
Quoting ohenry
Waiting 4 cable..hope I haven't missed it.. When there are 3 areas/zones I look to enter on the middle...am I being to conservative? Advice appreciated... {image}
You should consider bundling them into one zone. If the take-profit isn't appropriate I'd just let it go though, there's no need to take setups you're not sure of or are high risk. Another strategy I sometimes employ for multiple tight (fresh) zones is to combine my risk into one trade. Say 1% of my account is $100, and there are two very close zones. I might just measure the risk from the extremes of each zone and risk 2% for the entire thing so I don't get screwed if price reverses in between the tiny area between zones.
  • #5,287
  • Apr 9, 2013 3:33am Apr 9, 2013 3:33am
Quoting Kanzler
You should consider bundling them into one zone. If the take-profit isn't appropriate I'd just let it go though, there's no need to take setups you're not sure of or are high risk. Another strategy I sometimes employ for multiple tight (fresh) zones is to combine my risk into one trade. Say 1% of my account is $100, and there are two very close zones. I might just measure the risk from the extremes of each zone and risk 2% for the entire thing so I don't get screwed if price reverses in between the tiny area between zones.
Thx Kanzler..makes sense..
Those that say do not know. Those that know do not say.
  • #5,288
  • Apr 9, 2013 6:07am Apr 9, 2013 6:07am
Made a good mess with this trade, used a PO at 1.3035 and got stopped out at 1.3010 (minus 25 pips)
My opinion of what went wrong:

  1. Didn't get the demand area right (looked as support/resistance and the large bar but demand was lower)
  2. Pending orders only to be used for very strong and clear areas, rather watch the price action on a shorter timeframe

Please let me have your thoughts.

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  • #5,289
  • Apr 9, 2013 6:32am Apr 9, 2013 6:32am
Quoting pasopvirpot
Made a good mess with this trade, used a PO at 1.3035 and got stopped out at 1.3010 (minus 25 pips) My opinion of what went wrong: Didn't get the demand area right (looked as support/resistance and the large bar but demand was lower) Pending orders only to be used for very strong and clear areas, rather watch the price action on a shorter timeframe Please let me have your thoughts. {image}
I think you did recognize your mistake, this is a good point. Demand was at the low of the reverse bar shown with the arrow. Awareness is the first step toward steps to modify our trading pattern.

It look intelligent, but I just heard that this morning in a psychological trading video. I wish I had been more aware yesterday after being hit and hit again and again. Commenting my trades like you have done may help me also.

Good luck and happy trading.

Martin
  • #5,290
  • Apr 9, 2013 7:00am Apr 9, 2013 7:00am
This one worked out a lot better for me :-)
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  • #5,291
  • Apr 9, 2013 5:29pm Apr 9, 2013 5:29pm
Quoting TraderinSD
When you say sm active in your charts does that mean smart money active ? Yes And some how by the PA and volume you can tell when smart money is active at a particular bar ? Yes...In order to move price significantly ... Relative to the TF you are trading in ... The SM have to be involved.. They trade in all TF's...There is just not enough large retail traders to move price as they do. Look at the pattern we trade...You have consolidation..Then price expansion is some direction. This expansion creates our levels. We look for those large move up...
Hello TraderinSD:

Yes it does help. Thanks for explaining that.

You're analysis of price action on your charts is appreciated.

I've been looking at some charts and trying to understand them in terms of s/d. And I keep seeing a type of pattern I can't quite make sense of in terms of s/d theory.

For example there will be a clear demand level. Later price will penetrate the level say to the down side. So now it should be a swap level. But it's not because price sails right through it going back up. But then price comes back down

and now the old invalidated demand level is valid again and price bounces off it or penetrates it slightly, price goes back up and comes back down to that same level and on the last bounce sails up, up and away.

So my question is, what is the explanation for this phenomenon of a certain price level becoming valid then invalid then valid again in terms of s/d theory.

See chart below showing the April 4, 2013, 22:40 Low level becoming valid then invalid then valid again.

Thanks
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May the Forex be with you.
  • #5,292
  • Apr 9, 2013 5:52pm Apr 9, 2013 5:52pm
Quoting Borg
Hello TraderinSD: Yes it does help. Thanks for explaining that. You're analysis of price action on your charts is appreciated. I've been looking at some charts and trying to understand them in terms of s/d. And I keep seeing a type of pattern I can't quite make sense of in terms of s/d theory. For example there will be a clear demand level. Later price will penetrate the level say to the down side. So now it should be a swap level. But it's not because price sails right through it going back up. But then price comes back down and now the old invalidated...

I will need to get to another computer to give some examples. For right now the main difficulty is the TF = 5M and the amount of noise it can produce. It is not the easiest to learn due to the noise.

Longer TF's tend to give a more stable pattern. I would strongly suggest staying in the 30M or 15M only. ( in the begining )

I will give you a further update later today.

TSD
  • #5,293
  • Apr 9, 2013 8:05pm Apr 9, 2013 8:05pm
Quoting Borg
Hello TraderinSD: Yes it does help. Thanks for explaining that. You're analysis of price action on your charts is appreciated. I've been looking at some charts and trying to understand them in terms of s/d. And I keep seeing a type of pattern I can't quite make sense of in terms of s/d theory. For example there will be a clear demand level. Later price will penetrate the level say to the down side. So now it should be a swap level. But it's not because price sails right through it going back up. But then price comes back down and now the old invalidated...
Hello Borg

Notes and reflections.


1. - their is no guaranty that demand / supply level will be respected. Their is greater chance, but not 100%

2- Your chart does not show the previous price action that lead to the one depicted. How many time did this level was tested? We should look for the first
retest of the level. This afternoon, I had a level retested 4 time before being crossed vigorously. I took the first on, but not the other 3. For sure it would
had been nice trades, but not in the plan.

3- Smart money jobs is to get your money. They will do anything to trick you in a direction reverse to the one that they have planed. When we look at a level,
where price leave furiously we are expecting that their entire position was not acquired. Our game is to piggy back them and get in the market at the same
level of them.

Good luck

Martin
  • #5,294
  • Apr 9, 2013 8:41pm Apr 9, 2013 8:41pm
Quoting arjfca
Hello Borg Notes and reflections. 1. - their is no guaranty that demand / supply level will be respected. Their is greater chance, but not 100% 2- Your chart does not show the previous price action that lead to the one depicted. How many time did this level was tested? We should look for the first retest of the level. This afternoon, I had a level retested 4 time before being crossed vigorously. I took the first on, but not the other 3. For sure it would had been nice trades, but not in the plan. 3- Smart money jobs is to get your money. They...
Hello Martin:

That makes sense. Go for the most probable setups which are the ones with the first retest of a level. And yes they are tricky. It some times reminds of trying to grab a live worm. They are always twisting and turning and slimy. I was looking at the 5 sec tf chart yesterday - lol. Talk about tricky. I can't believe people actually trade off those charts. I'll stick with the higher tfs.

Thanks for the explanation.

Borg
May the Forex be with you.
  • #5,295
  • Apr 9, 2013 11:46pm Apr 9, 2013 11:46pm
Quoting Borg
Hello TraderinSD: Yes it does help. Thanks for explaining that. You're analysis of price action on your charts is appreciated. I've been looking at some charts and trying to understand them in terms of s/d. And I keep seeing a type of pattern I can't quite make sense of in terms of s/d theory. For example there will be a clear demand level. Later price will penetrate the level say to the down side. So now it should be a swap level. But it's not because price sails right through it going back up. But then price comes back down and now the old invalidated...
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Here is a 4HR TF. See how the trend was moving down then price flat.. Base.. Range. The price the moved north. Now step back and look at the larger Pattern. What we see is a Drop-Base-Rise pattern with price currently trading in the Rise of the DBR Pattern. This larger pattern ( IMHO ) helps you see where the pressure is... Wind at your back.. Your TF was a 5M so the 4HR TF is significant to trend in the smaller TF. We would say that longs/trading from Demand have the higher probability of success.

Now for the controversial part. See how the volume connects to the sharp declines in price on the 4HR. This is what I look for when trying to find S/D levels.. Yes, this is all after the fact but, if you look at some of my previous trades posted you will see this concept very clearly in different TF's. OR ...You could pick more levels if you wanted to.. or you can just eye ball them.

Now look at the base at the very bottom.. See how price came out of the Base moving into the Rise of the pattern. see where price stalled out breifly before moving on... This is your area on your 5M chart.

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This is the Rise from the Base on the 4HR


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So what I did here is recreate your chart. We see on the 5M that potential Demand level was well below in BLUE. The area you were referring to was the Base of a " potential " Rise-Base-Drop pattern.

Now lets go back to the 4HR Pattern = Drop-Base-Rise... It might be very difficult to trade counter with such pressure to the upside. So your idea to trade a Demand level was the better choice.

BUT ???....Trading inside a Base can have the effect that you are questioning. Choppy, Noisy.. Levels do not seem to hold.. Up 1 min, down the next . Especially if there is no clear Demand inside the Base. Look at the Base vs. the Demand Level below in BLUE..A Rise-Base-??? pattern. ( We would not know the last part of the pattern at the time we are trading ) So.. do you see any such movement that compares inside the Base? When looking for the Patterns we trade, we want to see an aggressive move away from a potential S/D level..( in my way of looking at this aggressive move I like to see High Volume, Large Spread Candles ) Then we want to see a solid Base to form from that move of High Volume, Large Spread Candles .

Now.... The longer price stays away the better potential for when price returns " the 1st time " we may get a high probability trade.. ( assuming other ODDS ENHANCERS are in play )

But remember as I had mentioned earlier.. Trading the smaller TF can be very difficult as the is a lot of noise to deal with. For those just starting out with the S/D Method I strongly suggest staying with the 15M and 30M TF.

There is still a lot more we can discuss.. but for now:
Follow KL's lead on this thread and you will learn a great deal. As KL's has stated, we will all trade a bit differently but it is the foundation of the S/D Method that will tie us all together... It's what will allow each of us to learn from one another.

Hope this helps

TSD
  • #5,296
  • Apr 10, 2013 3:07am Apr 10, 2013 3:07am
Quoting TraderinSD
{image} Here is a 4HR TF. See how the trend was moving down then price flat.. Base.. Range. The price the moved north. Now step back and look at the larger Pattern. What we see is a Drop-Base-Rise pattern with price currently trading in the Rise of the DBR Pattern. This larger pattern ( IMHO ) helps you see where the pressure is... Wind at your back.. Your TF was a 5M so the 4HR TF is significant to trend in the smaller TF. We would say that longs/trading from Demand have the higher probability of success. Now for the controversial part. See how...
Hello TraderinSD:

Thanks for the detailed reply with such excellent charts. You explain things very well. You must be a teacher in real life.

I understand better the kind of set up you are suppose to look for. I was trying to do s/d inside of a base with no clear demand on too low a tf. I need to start at a higher tf like the 4 hour and work down just to the 30 min and 15 min.

Is it possible to have large spread candles without high volume ? I thought that large spread candles were always were accompanied by high volume ?

Also are there some pairs that this s/d pa method works better on than others ?

I feel like going back in time and doing some serious studying of price histories with s/d. Any recommendations on a good pair or pairs to start with.

I would assume that the best time to trade is during the London, New York sessions. But what about the Asian session is it a no go for s/d ?

And again thanks a lot.

Borg
May the Forex be with you.
  • #5,297
  • Edited 10:02am Apr 10, 2013 9:50am | Edited 10:02am
Many were/are looking to short this pair..give the generic technical setup..one would be inclined to agree...however if one looks at how price has been wearing away at the supply level with higher lows...an upward thrust appears more evident...TWT
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Those that say do not know. Those that know do not say.
  • #5,298
  • Apr 10, 2013 10:21am Apr 10, 2013 10:21am
Good morning,

Long time lurker on the EUR/USD Form. I'm here to sharpen up my PA Trading ideas.
I've downloaded the PDF files and it looks like i got my homework cut out for me.
I would love to trade in a 30M to 15M. I tend to do well with an in and out attidude.

Hope all of you guys have a good day. Happy Trading!
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  • #5,299
  • Apr 10, 2013 10:43am Apr 10, 2013 10:43am
Quoting thestarting
Good morning, Long time lurker on the EUR/USD Form. I'm here to sharpen up my PA Trading ideas. I've downloaded the PDF files and it looks like i got my homework cut out for me. I would love to trade in a 30M to 15M. I tend to do well with an in and out attidude. Hope all of you guys have a good day. Happy Trading! {image}
Good luck

Keep the faith
Real money on the bat does not triggered the same stress. This is the hardest part to learn for me.

Martin
  • #5,300
  • Apr 10, 2013 10:58am Apr 10, 2013 10:58am
Quoting ohenry
Many were/are looking to short this pair..give the generic technical setup..one would be inclined to agree...however if one looks at how price has been wearing away at the supply level with higher lows...an upward thrust appears more evident...TWT {image}
Looking @ the DIXI... there is strong correlation...for short???...so sitting on my hands till clear direction is given..
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