Building an equity millipede

pipEASY has been gone for a long while and it doesn't look very likely for him to answer your questions. Thus I'm taking the liberty of answering you in his stead.
It is quite simple really. Mark the open price of the current daily candle. Whenever the current price is above the marked level, look for buys. Whenever it is below, look for sells. That's it. Please note that the advice applies to intraday traders. Also, in my opinion, it is meant to provide a guideline to make learning easier. As pipEASY mentioned over and over again, he does not like to predefine his actions and if you look at his live-trade examples, he's very happy to take a bargain trade at the tip of the daily wick as long as he perceives it as a low-risk opportunity.

Best regards,
Barbossa

Thanks pal but all died at be

Today attempts on euro usd


Usd Jpy

and they will keep on dying if you don't know the reasons why price came back to your BE levels? There is always a key reason why they all died (I know but it is important to let you figure that out). Keep at it and expect many more of these stacking episodes to die if you are stacking on M15 ... just saying from my experience

Hi Vee,
Sure i have a view of the market and here it is.Please correct me if i am wrong or tell me if you see something else.

I wasn't hoping for a response but here it is... My question was "WHY" not how you view the market before taking the trades or your reasons for taking those trade setups. It has nothing to do with S/R or supply/demand zones. It has everything to do with the foundational reason why and how FX market 'behaves'... something which happens EVERY single day on EVERY single instrument.

Thanks for your response Vee.

My trading is fully technical. Any idea where to start with foundational? I don't have any idea how to trade foundational and how it works

Tim

Tim

I'm not 100% sure but I think the point Vee is alluding to is this -

Markets like to F**k with the majority. So they setup all nice, get many traders in and feeling good, then WHAM, they stop everyone out (people tend to put stops, especially b/e stops around the same place, before making the move without everyone onboard.

But this also works in reverse because if people say 'ok, I understand that, I'm not going to take the first trade, I'll assume I took it, then wait for them to run the unchanged stops, THEN I'll enter'. But guess what, that time they won't run the stops, and you should hve bought the first trade because the position is now 300 ticks onside.

So what I've learnt is YOU NEVER KNOW. With hindsight, sometimes it's better to not take the first trade bcause the stops will be run so you take the second trade and all is well. Other times the first trade is the one to take. YOU CAN NEVER KNOW UNTIL AFTER THE FACT which is of course too late. So why not realise this - you're dealing with something like the weather, far too many variables that sometimes follow the rules and other times seems to make new rules up. I don't know but I'd think that even computers in 100 years time still won't be able to predict the weather with any accuracy more than a week out.

So if you don't know, take every trade, risk small amounts and take big profits.

Here's a good exercise for people to do.

1. Pick a few markets, some FX, some stock indexes, a few commodities and a couple of bond markets like the 30 year and the German bund.

2. Look at the 5min, 60min, 240m, day, week, and month.

3. Look for the big moves, up and down.

4. Go to the beginning of the moves and study the price action (no indicators, Fib etc). In many cases you'll see the boys playing with everyone, making it hard for people to get on board. Sometimes you'll see them run the stops, or bring it back to take out the b/e stops but other times you'll see them crater price into a V bottom (or inverted V for tops), a V bottom/top also makes it hard for people to get on board.

If you do this exercise you'll start to see how price works in that it's not so much what price is doing, rather how price is moving and in turn those movements making it hard for people to either trade or stay on board the trade they entered.

If it makes sense to you, you can use this type of analysis to build trading strategies around.

Or to sum up this post -

1. They don't want you onboard initially
2. But they do want you onboard AFTER the real move has started, a) to add petrol to the move, and b) so there are buyers (assume upmove) to cover their profits later on in the move.

Folks, in the markets we're dealing with very skilled adversities. They know how YOU think and act - do you know how THEY think and act.

PS. If you know how THEY think and act, you're dangerous to THEM

What's the best feeling in trading?

Well, I know the best way to conduct your trading business is to remain non-plussed at all time. A (mental) wry look when you you get a good winner or loser. But even if that's you, it's still hard to not have at least a little heart-flutter when you're long and the market goes screaming higher.

So for many, the best feeling in trading is just that - you go long and BAM price takes off on the upside with thrust.

But as ever this business always involves ying & yang.

Conversely, the worst feeling is probably the opposite.

You go long and BOOM, price thrusts lower over a few bars (or more).

Think about these two possible outcomes, they create emotion one way or the other don't they. They also stand out on a chart. If I sent you a chart with one of those moves and said 'point out what you think is interesting' you'd more than likely point to that sort of move (assume the rest of the chart was just normal trading, no real thrust either way).

The other interesting point about a quick burst of price energy (up or down) is that it can change the emotions and potential forecast of those watching who DON'T have a position. Take Gold (daily chart) as an example right now.

1. Before they started smashing it (first 3 months of the year) nobody was that bearish towards it.

2. Then, as soon as they started smashing many casual followers became interested and the hot story suddenly became - Gold is finished, it's only going one way - DOWN!.

3. Note, let's leave the Gold bugs out of this, they're always bullish. Instead, I'm referring to the average media reporter and investor/commentator.

4. Gold continues to be smashed into the summer and the bearish news flows continues as well. There are very few bullish reports (remember, forget about the Goldbugs).

5. Prices bottomed at about $1180, started to climb back up, drifted lower for a few weeks in late July early Aug and then it put in an excellent rally to $1384.

I don't know about you, but I don't see that many bearish stories now. So no -

'The mining community is going broke!'

'Goldbugs are enternal fools!'

'Sell while the metal is still 4 figures unless you like to lose money!'

And who would have thought it, most of the commentaries over the last week have been bullish!

'The low is in! Gold now looks like a good deal'


'Price could test $1500'


'Investors urged to look again at the shiny metal'


So good moves one way or the other have a habit of not only effecting our emotions but also are view on the next move - higher prices seem to naturally turn us into bulls, and lower prices naturally turn us in bears. High begets high - Low begets low.

THE BOYS KNOW THIS!

They KNOW how the majority think, not all the time, but some of the time like the type of situations discussed above.

So what better way to sow the seeds of a good bull move than to SLAM price, not only to -

1. Force some of the longs out
2. Get some shorts in, and
3. Mould the minds of many market participants to be bearish, expecting only lower prices

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So here's a good exercise for those interested -

1. See my post above for the other exercise, pick the same markets and time periods
2. Look for times where the market is gernerally flowing higher over a good many bars (if daily chart, 1-3 months etc)
3. Look for times where there's sudden downside thrust
4. See if they're good buying opportunities
5. Repeat for the same markets for the short side

U/J Stacking....
Chart speaks better

Nice!
Have you also been stacking on other JPY pairs?

No missed them,especially eur jpy was moving nice too

Talk here in Tokyo is all about another 'leg up' in the Yen pairs next week-specifically the USD/JPY hitting 101 next week... hopefully you haven't closed all your USD/JPY longs!?

No, i haven't.See why and my thoughts on 1h chart below
Tim

usd-jpy may be still range or down, if capped by 99.25.
But, e-j, g-j, chf-j are in ready for jump.
On fundy, cad-jpy will be a star as oil pop up in medium-term,due to Iran oil ban,mid-east chaos. my favour scenario, target 101, that is 700 pips stack pile.
e-j, 138.7, 153.50, 170. g-j,163,192. chf-j,108.7,115.7
if u-j is abv 99.25, then, tp: 101.50, 110.7 - past H&S nickline, 115.85-116 - past H&S nickline which BoJ made.

Jack,we don't know.Only time,pa and charts will tell.
Have a great weekend
Tim

thx, Tim.
Good weekend.

Vee, you're right. The probability of anything to happen is 50%. It will either do or not.We are all at the mercy of the market.Anything can happen at anytime. I am taking this little risk.
The positions that are not at be are very small in size compared to the other positions.If price drops below 1h resistance,i will close at loss,if not i will watch PA and then decide what to do.

Tim

Vee, I know that price may open below my resistance line or below my be position. Has happened to me in the past but since I am long term trader I am taking this risk. Is something that ,we,the long term traders have to consider as risk. In the past happened a lot to me,some time in my favor ,some time against me,as Greame has stated many times,some times market will be with you,some times against you. I remember one particular example,i think it was Feb of 2012 if I am not wrong,when there was the big buzz about Cyprus bailout,price (eur-usd ) opened 100+ pips gap but it was in my favor for 8 positions. But sometimes against me,so we come in again in the conclusion that is a 50-50% game,we must learn to control our risk and maximize our winners (low risk entries - growth ).

Regarding the broker,i have done my best to find the best broker according to my needs. Is based in UK and is one of few real brokers. However, nobody can be sure 100%.

As per self discipline,i understand your example and I have done that (playing with lot size). Now , after burning few k's I am more more disciplined and I am improving day by day taking trades with the highest probability. I have found something that works for me and I am trying to implement that with Greame's approach. Only time will show how far I can go.

Thank you for your input and please keep them coming.

Best regards

Tim

Timos,
I couldn't agree with your attitude more--- no-one knows what will happen next week in the forex markets but you're well postioned to take full advantage of one very possible outcome.
If this one doesn't work out then the next one will!