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B.S. Trading with Kenneth Lee

  • #5,821
  • Jul 1, 2013 3:43am Jul 1, 2013 3:43am
Quoting neziah
Kenneth Lee,Alfonso and co .you guys are all legends. Thank you for the great explanation and materials provided. so far I will say I have 80% understanding,I think I can pick level well . BUT,BUT,BUT I have a problem, can anyone please explain how to find the trend for the day or the right direction to trade? Do I just need to draw the D1/WK S/D levels and then trade the level? Some one please help. Many Thanks

Let me take the above trade. I would say OZ is in a overall downtrend. Look at any longer term chart. If it wasn't I would have held for a bigger gain. The charts constantly make swings up and down. With screen time you can learn to see when they MOST likely will happen and to where. I did not just jump on this long because of the demand level .

1. I was waiting for the spread to get reasonable .
2. I was watching Price Action. The price did not go lower for about 20 minutes once it hit that spot and just went sideways. A lot of times on Sunday
evening open the initial move is just a completion of the Friday close movement .
3. We had other security. A big number always acts as a turning point and if it is with your trade a bit of a security wall, price will have to break so we had
.9100 right below. Talking of

Talking about point 3 see where price turned back down .9200 Price is not a precise thing and as it takes a bit of time for orders to get filled price will find itself in and around a turning point , so a few beyond or short of your areas of interest is alright.

I am going to post a 5 min chart I personally never look at this time frame but it is the only way i can show the price action I was watching at the time I took the trade.



Boy the snip tool stinks but it is quicker than posting in and out of paint.

But for your main question I use the swing highs and lows for my trend. Lower highs mean down and Higher Lows mean up. Buy a low sell a high . Very simple really. In all of Sam's videos . He talks of picking levels off longer time frame charts then looking for entries of a faster chart. what he is looking for on the faster chart is the first change in swing direction.

Say price is going down , we have a demand level spotted on the 4 hr chart. So we watch a 30 min chart for the first higher low for a entry and this higher low should be at a new demand level. Not meaning fresh , but newly formed.

I really hate posting fast charts as it isn't the way I trade. But again we Know the level on the 30 min. oz trade. a entry could have been taken on the 5 min after the first new swing. But it isn't the best but it does show the point. I call this the flip entry as it is when price flips over at or within the longer charts demand or supply level.



sure this is all clear as mud...... Cheers ken
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Good Trading To All ; Ken Lee
  • #5,822
  • Edited 7:21am Jul 1, 2013 4:30am | Edited 7:21am
The way I look at trend direction is simple Neziah.

Decide which timeframe you are going to use for your trend direction. You could use D1 for intraday or WK for swing.

How do I define both an uptrend and an downtrend on any given timeframe? It's very "simple", but then we over-complicate it
An uptrend = demand levels are being respected and supply levels are being violated
An downtrend = supply levels are being respected and demand levels are being violated

Look at the D1 chart:
1. Are demand levels being respected? Then you have an uptrend
2. Are supply levels being respected? Then you have an downtrend
3. Has one level of Demand been broken? We might have a change in the market dynamics or for a while consolidate
4. Have two levels of demand been broken? I consider that a trend change and will no longer go in that direction

How and when do I plan set & forget trades with current trend?
1. Look for fresh levels near or at the D1 SD areas
2. Choose those levels on your entry timeframe. Use always the same timeframe for your entries: H1 for intraday. H4 for swing. Don't switch to other timeframes, that will be chasing the trade
3. If price is already bouncing off the D1 supply area (high in the curve) and your entry timeframe is making LL and HL (respecting supply and violating demand), look for supply levels on your entry timeframe with enough profit margin and nice departure, always with room to the opposing D1 demand area. Opposite for demand areas.

This is what I normally do, hope that helps!
Alfonso


Quoting neziah
Kenneth Lee,Alfonso and co .you guys are all legends. Thank you for the great explanation and materials provided. so far I will say I have 80% understanding,I think I can pick level well . BUT,BUT,BUT I have a problem, can anyone please explain how to find the trend for the day or the right direction to trade? Do I just need to draw the D1/WK S/D levels and then trade the level? Some one please help. Many Thanks
Set and Forget supply and demand trading community
  • #5,823
  • Jul 1, 2013 6:37am Jul 1, 2013 6:37am
Quoting keroro0o0o
{quote} Hi Neziah, the simplest answer that i can give you is "screen time". Unfortunately, it's simply impossible to teach one how to trade by typing few words, showing few charts to drill it into those that're learning. What you need to do, is to practice them by doing demo trades, over and over again. and with enough screen time, you'll start to develop a feel for the trend, and a feel of price. Then you'll be good to go. With time & practice, anyone can be profitable in trading. The question is, HOW BAD do you want it. Good luck....
Thanks Keroro0o0o ,This is true but it is also good to do this knowing what you are looking for.

I appreciate your points
  • #5,824
  • Jul 1, 2013 7:04am Jul 1, 2013 7:04am
Quoting Kenneth Lee
{quote} But for your main question I use the swing highs and lows for my trend. Lower highs mean down and Higher Lows mean up. Buy a low sell a high . Very simple really. In all of Sam's videos . He talks of picking levels off longer time frame charts then looking for entries of a faster chart. what he is looking for on the faster chart is the first change in swing direction. Say price is going down , we have a demand level spotted on the 4 hr chart. So we watch a 30 min chart for the first higher low for a entry and this higher low should be at...
Wow ...This is a light bulb moment for me ..thanks, this is getting clearer for me now,thank you ever so much Ken.
I think it would be a hit if you did a video for us Ken.

cheers

Quoting panoramia
The way I look at trend direction is simple Neziah. Decide which timeframe you are going to use for your trend direction. You could use D1 for intraday or WK for swing. How do I define both an uptrend and an downtrend on any given timframe? An uptrend = demand levels are being respected and supply levels are being violated An downtrend = supply levels are being respected and demand levels are being violated Look at the D1 chart: 1. Are demand levels being respected? Then you have an uptrend 2. Are supply levels being respected? Then you have an...

Great stuff alfonso....I think I have been looking at too many TF at the same.I will adopt this new technique.
  • #5,825
  • Jul 2, 2013 6:06am Jul 2, 2013 6:06am
Hi could anyone share with me why shorting at the swap level in the below charts would have failed? Hoping that someone can point out something that I missed

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  • #5,826
  • Jul 2, 2013 9:57am Jul 2, 2013 9:57am
Quoting Myst1z
Hi could anyone share with me why shorting at the swap level in the below charts would have failed? Hoping that someone can point out something that I missed {image} {image}

AUD 30M,

Draw your swap level in the area of 9221 top and 9197 bottom. You will then see where price entered around the 9205. Price then retraced short to 9154.

Drawing levels can be a little tricky but over time you will become familiar and see them almost second nature. Just remember its an area not a single line in the sand.

Hopes this helps

TSD
  • #5,827
  • Jul 2, 2013 10:33am Jul 2, 2013 10:33am
Quoting Myst1z
Hi could anyone share with me why shorting at the swap level in the below charts would have failed? Hoping that someone can point out something that I missed {image} {image}
Hey buddy,

My 2cents on the AUDUSD. basically, the Gold is telling the same thing. Profit margin not good enough.
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Knowing is not enough; we must apply. Willing is not enough; we must do.
  • #5,828
  • Jul 2, 2013 12:42pm Jul 2, 2013 12:42pm
Hi Guys!

Anyone looked at the instrument.
For me it was very interesting but I failed to trade. And after I saw last 4h candle, it sems I was right.
What is your opinion why one should not take a trade here?
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  • #5,829
  • Jul 2, 2013 1:53pm Jul 2, 2013 1:53pm
I will try to answer the question and test my own understanding at the same time. What I can see base on just the 4H chart is that...

For short
1)Price has entered a supply area that is not fresh.
2)The last test of the area was rather deep.
3)The stronger and fresh level quite a number of pips away.

Therefore there is higher chance of the pair going up and for a fair bit too before the odds are in favor of the price turning. Unless you have a lot of holding power..I'd say no trade

For long
1)Although price is in supply zone that is not fresh it is still in a supply zone and there is no telling what can happen
2)The other supply zone on top is fresh and strong so expect heavy resistance

Base on what the chart is saying at this point...I'd say no also. A clear breach of the 1st supply zone would make a more sensible long but if price does reach that level for entry, there is only so much "room" before it meets that strong and fresh supply zone so profit potential may be limited.

Sounds a bit contradictory but thats how I see it. I'd call it a no trade zone but its easy for me to say when I'm not trading.
I want more brain power!
  • #5,830
  • Jul 2, 2013 2:35pm Jul 2, 2013 2:35pm
Quoting cfdtaleong
I will try to answer the question and test my own understanding at the same time. What I can see base on just the 4H chart is that... For short 1)Price has entered a supply area that is not fresh. 2)The last test of the area was rather deep. .
Hi!


Thanks a lot for your comments.
Although at the moment it could be good profit . But rules are rules.


Yes, you are right, I also did not plan to enter long from the level.
From your message I understood, that last high which currently is tested by market is previous test of supply zone. Could you point at your point of view where located actual supply zone?


Also you mentioned that higher we have” other supply zone on top is fresh”. At which price level the zone is located at your point of view?
Regards.
  • #5,831
  • Edited 3:49pm Jul 2, 2013 3:26pm | Edited 3:49pm
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***I may be wrong but I believe should not be too far off so take it with a pinch of salt ***

1) The fresh zone in my opinion is as labeled.
2) Red circle A shows the penetration of the lower zone.
3) Blue box would be a possible and in my novice opinion...a better zone to mark out after the breach at A
4) Red circle B shows the second penetration and this is where my explanation gets a little messy sorry.
4a) If we disregarded the lower zone after the 1st breach and used the blue box...you get a case of history repeating itself. A deep test of a supply zone which according to rules lowers the chances of a short.
4b) Now assuming we stuck to using the lower zone after the first breach at red circle A, the price action at red circle B would be minor breach/touch and still the rules will say lower odds
I want more brain power!
  • #5,832
  • Jul 2, 2013 3:29pm Jul 2, 2013 3:29pm
Sorry about the coloring. I realized it is hard to see. The blue box I refer to would be the lowest one.
I want more brain power!
  • #5,833
  • Jul 3, 2013 5:05am Jul 3, 2013 5:05am
Quoting cfdtaleong
Sorry about the coloring. I realized it is hard to see. The blue box I refer to would be the lowest one.

Thanks for your message and explanations.
It is interesting question.
And if it exists, it seems that rules not cover enough the moment. Perhaps I am wrong.

But what do you think about the example which Kenneth brought to his PDF (third white circle, it would be our case at E/Y):
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  • #5,834
  • Jul 3, 2013 5:52am Jul 3, 2013 5:52am
I would say it is similar but exactly the same. I could try to explain how and why I see it as so but I think I'll end up confusing everyone. The key issue with S&D zones is that there is still a certain degree of subjectivity to it in the same way people relate to trend lines. Even if we all manage to draw the same zones, we would still make different decisions base on the same set of data and rules....the picture from Ken's PDF does show an important "feature"" in case you did not notice is that as the zones form directly one over the other the range get smaller and smaller until some kind of breakout happens which in my opinion can happen either way. At this point I will say it is pretty much depend on objective of your intended trade and risk appetite. Personally I would have taken only second white circle but that just me. I am afraid I am not qualified to provide advice but thank you enabling this discussion and I'm afraid this is about as much as I can bring to the table for now base on my understanding thus far Perhaps the seasoned S&D traders can provide more insight
I want more brain power!
  • #5,835
  • Jul 3, 2013 3:15pm Jul 3, 2013 3:15pm
Quoting cfdtaleong
I would say it is similar but exactly the same. I could try to explain how and why I see it as so but I think I'll end up confusing everyone. The key issue with S&D zones is that there is still a certain degree of subjectivity to it in the same way people relate to trend lines. Perhaps the seasoned S&D traders can provide more insight

Thanks for your message and point of view.
As for me the problem is next.
To find a valid SD zone we have to look to left. There we could find history…


Lets look to the EJ H4 chart which we mentioned before.
You did not want to consider yesterday test of the S zone as potential trade because at your point of view it was the second test after “X push” to Supply zone “A”.
But why you consider X push like the first test and A zone like actual supply zone?
If we will look to left we will find that the Supply zone “A” is also a test of previous supply zone “B” and so on…
Yes, it would be nice to hear seasoned S&D traders regarding this moment.
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  • #5,836
  • Jul 4, 2013 3:30am Jul 4, 2013 3:30am
Quoting Myst1z
Hi could anyone share with me why shorting at the swap level in the below charts would have failed? Hoping that someone can point out something that I missed
Hi, I also agree with above opinions.
The swap zone was nice tested after was created a candle with long tail.
In this moment you could change your order to BE and don't warry if market will rise again.
  • #5,837
  • Jul 4, 2013 6:09am Jul 4, 2013 6:09am
I have noticed a lot of discussion asking "Why did this trade fail"
1. Not all trades are going to win. Just because there is a beautiful even fresh zone doesn't mean that it wont fail. Or an old zone may get repeated successful trades. Our objective with S/D trading is simply to tip the odds in our favor. When odds are tipped and risk controlled, profit is ensured.

2. In my opinion swap levels are not as reliable. I still trade them though. Often times you can get away with a smaller stop also making your target closer if needed.

As for drawing zones, there is no wrong or right way. I would say the most important part of a zone is not so much your entry but your stop. This determines your target with R:R. and the likelihood of staying in the position. The entry is at times irrelevant. If you miss an entry by a few pips it is no big deal just move to the next zone.

There is nothing "Wrong" in trading if you are sticking to a trade plan. Even when trading old zones, which is nothing more then a ranging market. I think sometimes we get to technical with technical analysis. Maybe it should ne called "Simple Analysis" . All Kens charts are simple. If the profit is there he gets it. And I am willing to bet Ken doesn't fret over how a zone should be drawn, or if a position is going to work etc.

Also trends are usually the result of price moving from supply to demand and visa versa.

Here is an old zone trade that worked well for me. 120 pips

If I seem to be rambling...sorry. Got up way to freaking early to get people to the airport and some yahoo's were shooting off very large fireworks last night till 11:30
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Illegitimi non carborundum - Noli pati a scelestis opprimi.
  • #5,838
  • Jul 5, 2013 10:57pm Jul 5, 2013 10:57pm
In keeping with Rufus’s theme: Spot on!!
I would add………………

1)It is very much a decision of risk control as it relates to your trading equity. The down side of trading a demo is you “may” have an unrealistic amount of capital vs. your true equity. This can and will lead to a false confidence. This not stay, you have to start somewhere. Just please be aware, as you begin to get it right and are looking to step into real money, practice with the exact amount you have to trade. This will get you much closer to reality.

2)Here’s where I may disagree with Rufus although, the central point, is that Swap levels can be difficult as they take some time to get a feel for. I would suggest NOT trading this pattern until you're able to trade the basic S/D with proficiency.


3)This statement “There is nothing “Wrong” in trading if you are sticking to the trade plan”. We see here on FF the constant condemnation of methods. It is pervasive!!! It is the psychological factor that is the problem FIRST. Loosing and your ability to deal with it is the single biggest obstacle you will face. It manifests itself before you get in a trade, at the beginning of the trade, while you are in the trade and at the end of the trade. All other issues stem from this one single emotion. I'm not going to go into a lengthy discussion other than say, this is where “why did trade fail”, in part comes from... Don’t get me wrong, there are also structural issues that will come into play but, the underlying core is always the same. Sticking to a trading plan is the best way to help you overcome the fear factor. Executing the “Plan” through your fears is the ultimate goal.

4)Drawing zones. KL presents a very structured way (review PDF) to draw zone starting out. But in the end you may end up trading S/D a bit different. KL has spoken to this aspect very specifically. I would be a very good example of this as I trade S/D differently but the core structure is still the same and always will be.


5)“Not so much your entry but your stop”. Managing your risk based on your trading equity... re-read #1 please.

6)“If you miss the entry by a few pips it is no big deal”. Again, if the risk is still appropriate, the target still correct with good R/R, there is no reason why not to take the trade. You will notice many of the trades I have posted will have this issue. I believe we spend way too much time on getting the exact entry and, not enough time on controlling risk / Risk Reward and managing the trade.


7)“Trends are the result of price moving from Supply to Demand and vice versa”. You will see this within the same TF and in multiple TF’s. It happens over and over.

In closing, the more time you spend trading this method the better you will become. Read the entire thread. Read KL’s PDF. Watch Sam’s video. Start a trade log. (Write down what you think, feel, and see) Take screen shots of your trades.

Don’t let your own negativity get in your way, as this will surely cause you to lose more that your should.

Stay positive, give yourself time, and you will begin to see!



TSD
  • #5,839
  • Jul 6, 2013 12:37am Jul 6, 2013 12:37am
Ken,

With your account size, have you started running into liquidity issues and if so how are you handling your trades? Are you keeping the lot size to something the time of day can handle, are you averaging in or perhaps diversifying the instruments you trade? Thanks,

Kanzler
  • #5,840
  • Jul 7, 2013 12:21am Jul 7, 2013 12:21am
Quoting TraderinSD
In keeping with Rufus’s theme: Spot on!! I would add……………… 1)It is very much a decision of risk control as it relates to your trading equity. The down side of trading a demo is you “may” have an unrealistic amount of capital vs. your true equity. This can and will lead to a false confidence. This not stay, you have to start somewhere. Just please be aware, as you begin to get it right and are looking to step into real money, practice with the exact amount you have to trade. This will get you much closer to reality. 2)Here’s where I may disagree...
Illegitimi non carborundum - Noli pati a scelestis opprimi.
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