Key Concepts to Correct Trading Behavior - by FibStalker

Thanks P,
this is why I called my Blog ELITE5 (with reference to the 5% of those who make it), before renaming it after Fibonacci Stalking, which is a timing technique I have derived (and my contribution to technical analysis).
Please check my blog, there is a lot of information there: http://elitefive.wordpress.com

Here is a little guide for you (in case you are interested):

1. Watch my Interviews with Dale Pinkert to understand how I look at the markets (you can access the room here)
2. What is "Fibonacci Stalking"
3. My Trading Method
4. My Story
5. Give a look at my research papers
6. Download the free "Key Concepts to Correct Trading Behaviour" eBook
7. Study the video analysis in the FOREX, FUTURES and STOCKS & ETFs pages

I also have a free weekly Newsletter you can subscribe and, of course, download the free eBook which inspired this thread.

Enjoy.

Some really interesting stuff you have there

How did you come up with these Fibonacci sequences? Is this actually how those algos/programs (whatever you want to call it) are programmed to ,for example, take profit?

So, did you find this "phenomenon" just by recognizing patterns on your chart, or do you know people in the HFT business that told you that many programms are suppossed to work this way?

Regards

Hello P,
I have been working with other traders who have observed these sequences since 2008, recognizing these patterns on all timeframes. Some of them have connections and asked why that happens, the answer was program trading.
In the recent years program trading has been more active on big markets like S&P500, Euro and Gold, the higher the volume the better they work.
Programs tend to enter at areas depending on where the market has been before and yes, take partial profits at specific relative prices.

There is a lot of algorithmic trading (AT) on the markets these days, up to 80% of the volume. Program Trading is not HFT.

I will be writing a new eBook to explain how HFT affects daytrading and in that context will explain the difference.

Hope this helps.
Cheers
G.

Helps a lot

Have been observing that price reserves at price pivots pretty often (sometimes really on the pip), and now, brought together with your observations and knowledge of the market, it makes more sense to me WHY it happens.

Yes, that is an explanation.
Keep observing it. Participation at widely known levels and areas of support or resistance like pivots, or important SMA/EMAs or known TA patterns and tools (e.g. trendlines) can affect a sequence on the smaller timeframes which can trigger countertrends in that timeframes which, sometimes, transmits to higher timeframes (if the sequences on the higher timeframes are interrupted, too).

The majority will say that the technical pattern or SMA or pivot level is the reason, but do not think programs and large traders based their decisions on the presence of a pivot level or other TA tool. Trends are always decided on daily and weekly charts.

Have a great eve.
Cheers
G.

Dear all,

for those of you who read the first story published here: http://www.forexfactory.com/showthre...79#post6853779, tonight I am going to continue with the second story.

I personally know people who played the US stock markets in 1999 and 2000. One of them did not have a method but would simply buy highs in a reactionary way. He ended up losing money, the equivalent of “a small car”, as he once confessed, a loss estimated at around €12,000 (or $15,000) in just a few weeks.

The second story relates to the bad but widespread behavior of buying highs after big green or white candles, and selling lows after big red or black candles. This happens in all timeframes. For instance, when people see a 15min green bar they assume “the market is going higher” and they buy highs. The market typically reverses and suddenly their position is in the red. As they have no plan for this unanticipated behavior, because that was a reactionary trade, i.e. simply a reaction to a green bar without any understanding of price structure, they end up selling in pain.

This type of action shows psychological weakness that prompts the trader to jump onto the bandwagon at the worst possible time. When professionals see a green bar they are either taking (partial) profits or not doing anything in anticipation of even higher prices, if price is not in a profit taking area. Their actions are planned in advance and in detail. Professional traders wait for their price with limit orders and have well defined profit targets, so they do not act out of fear of losing a move or based on the shape and color of a price candle.

Let me know what you think about the two stories.

Have a good night

Hello Traders,

I want to inform you that tomorrow Tuesday August 6th I will be interviewed again by Dale Pinkert.

Dale is a great trader and analyst. With almost 40 years of experience, Dale got his start in the trading business as a runner on the floor of the CME in 1975.
The interview is scheduled for 15.15PM to 16PM GMT.

During the interview I will also review live the EUR/JPY and the GBP/JPY.

If you are interested find more information on my blog: http://elitefive.wordpress.com/2013/...gust-6th-2013/

Good night.

Hello Traders,

if you are interested you can find a video analysis and forecast for the forex pairs USD/JPY, EUR/JPY and GBP/JPY on my blog.

Find it here: http://elitefive.wordpress.com/2013/...gust-5th-2013/

~FibStalker

Hello Traders,

you can find the recording of the interview with Dale Pinkert I had today August 6th on my blog:

http://elitefive.wordpress.com/2013/...gust-6th-2013/

In the interview I talked about the FibStalker method, explained the color code I use in my charts and examined in detail the EUR/USD weekly and daily chart and how the USD/JPY could be moving in the near future.

Please let me know what you think about in and the analysis.

Thank you
Have a good night

~fibstalker

Hello all,
it is some time now I do not post a market review. In the following posts I will post a few of them.

I like to blend the content of this thread, that was initiated to reflect around the Key Concepts for successful trading, with actual analysis that I share with friends and followers.

For an overview of the meaning of the blue, red and green lines, please read the FibStalker 1 pager on my blog: http://elitefive.files.wordpress.com...er-leaflet.pdf

Enjoy the following analysis.

~FibStalker

Hello all,
this is my weekly update for the USD/JPY:

As explained in the last interview with Dale Pinkert in the Live Analysis Room on Tuesday August 6th 2013, when I reviewed this pair on the daily and weekly timeframe, if USD/JPY were to lose the 96.71 level we would see a move southwards.

Yesterday that 96.71 level was pierced by price (see below picture).... {do not know why the upload from URL does not work tonight}

http://elitefive.wordpress.com/2013/...lish-language/

Let me know what you think.

Cheers
~fibstalker

Hello all,
this is my quick update on S&P500 emini:

I provide updates as often as I can. Notice that price projections in my method are not from/to random levels and do not follow Elliot Wave, DiNapoli levels or other methods, but rather a proprietary method based on modeling effects of Program and Algorithmic Trading on price.

While a lot of commentators are calling for a reversal of the S&P500, our model of Program Trading activity shows that the indices is still on track for its move higher.

The market found support at the 1673 area that has the 1724 area of target above, well into to that first target area coming from the analysis of the weekly timeframe coming at 1,720/30.

As indicated in the last analysis once and if price hits that 1724 area we could witness a small retrace into the 1707 area (scenario 1), but price of the equity index could just continue higher into the next weekly target area at 1,800 to 1,820.

Let me know what you think.

Cheers
~fibstalker

Hello all,
a quick review for GOLD:

Several scenarios are still open in GOLD futures and today it looks like the future is following scenario 1 (see below picture).

Price found support at the 1,270 area while my model of Program Trading was anticipating slighly lower levels of support starting at 1,265.

Price could now just continue higher into the next resistance area starting at 1,380 (scenario 1). However we could also see a further correction into the support area between 1,245 and 1,265.

Chart and rest of the comment on my blog: http://elitefive.wordpress.com/2013/...lish-language/

Let me know your thoughts

Cheers

Hello Traders,
a quick review for the AUD/USD forex pair:

The AUD/USD pair is in a counter trend trade driven mostly by Dollar weakness.

While technically our model of Program Trading is looking for the 0.85 area of target, we could see price of AUD moving higher relatively to USD.

Two are the weekly areas of resistance to watch: the 0.9210 area and the 0.9480 area (see below picture).

Chart and rest of the comment on my blog: http://elitefive.wordpress.com/2013/...lish-language/

Let me know your thoughts

Cheers

Hello traders,
a quick review for the USD/CAD forex pair:

In the morning I have prepared a chart (please see it on the blog link below) but have not have the time to share it.

After moving higher into the all the way half way back at 1.0420 area price reversed and it offered the hint for the two scenarios in the below picture...

Chart and rest of the comment on my blog: http://elitefive.wordpress.com/2013/...lish-language/

Let me know your thoughts

Cheers

Hello Traders,
a quick review of the GBP/USD forex pair:

The GBP/USD pair is now back in track and mimicking the EUR/USD pair. I think this pair is going to trade higher along with the Euro/Dollar, but this is only my opinion.

My model of Program Trading shows a first target in the 1.5575 area (which was hit yesterday as the high was 1.5573). Two potential scenarios open up for the Pound (see picture on blog link below)...

Chart and rest of the comment on my blog: http://elitefive.wordpress.com/2013/...lish-language/

Let me know your thoughts

Cheers

.... and finally, a quick review of the EUR/USD:

The EUR/USD pair is continuing in the scenario identified when it bounced from the support area at the 1.2990 on July 15th, 2013. This pair is now moving towards the second target of that setup. That target is at 1.3470.

Seen the typical behavior of the Euro, that likes to trade in extensions, I do not anticipate a move lower at least until the 1.3470 area has been touched. There we could see two potential scenarios, with the 1st scenario being the most probable (see below picture):

http://elitefive.wordpress.com/2013/...lish-language/

Thank you
I am always interested in your thoughts, suggestions and ideas

Good night

Hello all,
a quick update in a couple of forex pairs USD/JPY and USD/CAD

USD/JPY

Update on the daily timeframe. Picture can be found here: http://screencast.com/t/hlGeNa2Hh The 97.80 and 98.60 are the two resistance levels to watch. Targets are well below in the 94.5-94.85 area and is defined by the resistance areas.


USD/CAD

Update on the daily timeframe. The levels to watch are: 1) the current price level at 1.0300-05 and 2) the 1.0350 resistance area. Target at 1.0160 were already defined when price reacted to the 1.0420 area of http://screencast.com/t/ZUwYAnWhaohk

Let me know what you think.
Cheers
G.

Hello Fibs,

I've got 0.81096 as a nice slot for going short on reversal NZDUSD in my radar atm.

I'm looking for a spike to reverse.

Would you please mind sharing your thoughts about this pair when you have a few time?

Many thanks budy
Great job, please keep on!

Hello Delta1One,
sorry for coming back to you only now. I have been moving from Italy to Canada in June and now still settling down.
I will slowly start posting again on Forex Factory (at least daily) and will resume the content of the thread, along with my market analysis, setups and other info.

Again, please accept my apologies.

Chat to you soon.
Cheers
~FibStalker