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Mastering the Art of Trading

  • #241
  • Sep 2, 2013 2:02am Sep 2, 2013 2:02am
Quoting KOS-fx
{quote} Thanks for your quick reply... Of course I am talking about Spread because yesterday I went through all pairs my broker offer. some pairs seems to be very high in spread (more than 50). I think that kind of pairs not traderble. I know that your watching more than 80 pairs. I am not going to do that at initial stage at least trying to watch 20 pairs. Thanks Kos

It depends on the time frame.
50 pips spread on a 5 min. chart, to earn a 10 pip move?
But on a D or Week chart it might work. Spread will eat a percentage of your gain...in pips, which translates into $.
Spread is like rent cost on a shopkeeper.
If you are paying monthly rent to work only every morning for 30 minutes it will be unaffordable...but if you work all month...
EURUSD has usually the cheapest "rent", so you can go on lower time frames....and it will eat a smaller percentage of your potentiall gains..
My 5 cents worth.
  • #242
  • Sep 2, 2013 2:17am Sep 2, 2013 2:17am
Quoting str8
{quote} Thanks for your answer. I was thinking about historical swing points that you can't see if you don't zoom your chart. For example a pair is in a strong up trend at 1.4800 and a historical high from a couple of years ago is at 1.5000. Do you look for shorts at that level? A short would mean a position against a very strong trend but if a fake out occurs at it and you have space would you trade it?
Magnificent question! I am thrilled!

If its too far off to the left It simply indicates to me that to trade it I need to move to a higher time frame to find it closer to the current action. There is nothing to be obsessed about taking swing points nearer to the current action, but its imperative for me more so, because if its too far off, then the swing point is a longer term play and hence calls for a fake out on a time frame higher than the current one.

For instance an adjacent swing point on the weekly, could be way off to the left on say the 15 min. So if you mark it out and go for a 15 min fake out off it then you're basically taking on more risk in the sense that you're expecting the level to hold straight away with an accuracy that shows off all the way down to the m15. Put another way, you could still get a very valid weekly fake out off that weekly swing point with many 15 min bar closes beyond the swing point and perhaps some minor instances of price holding up a bit when it pulls back to the HHR/LLS. This is simply because for a weekly swing point, you need the information spread across at least a week to be confident about your bias.

Here is an example showing a good decent daily swing point with a neat daily fake out comprising of some rough 1H action.

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Attached Image (click to enlarge)
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The take away from this, shouldn't be to avoid major swing points, but to simply not look for swing points way far off to the left, unless you want to trade them off a higher Time frame.

hope this is clear.

g.
I believe . . .
  • #243
  • Sep 2, 2013 2:20am Sep 2, 2013 2:20am
brb...workout time.
I believe . . .
  • #244
  • Sep 2, 2013 2:57am Sep 2, 2013 2:57am
Quoting Pinbar
{quote} I think you already put the answer on the chart. WIPG is about the FTA.
Yeah... It was a bit late... Maybe I shouldnt do charts at midnight lol
It's all psychology...
  • #245
  • Sep 2, 2013 5:18am Sep 2, 2013 5:18am
Quoting LamerTrader
Where will price go / where did price go? PS: habeeb is here reading the thread Cheers, Stephen {image}
He was?! Wow. I am humbled.

Anyways I'd really appreciate if we can put the "where is price going" exercise on hold for a bit. I need to make sure all the bits and pieces of info I need delivered get's done within the initial pages so later on new people can just be advised to read the initial part of the thread.

g.
I believe . . .
  • #246
  • Sep 2, 2013 5:20am Sep 2, 2013 5:20am
My watch list

Edit: USD/MXN is a bit iffy, the consolidation box now forming, is close.
That said, there is 70 odd pips to the top of that box from the SP.
Kind of all depends on the close of the Fake out bar, if we get one.
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  • #247
  • Sep 2, 2013 5:20am Sep 2, 2013 5:20am
Quoting Pinbar
{quote} I take it that, the larger TF sideways market also counts? {image}
For sure it does.

g.
I believe . . .
  • #248
  • Sep 2, 2013 5:30am Sep 2, 2013 5:30am
Quoting giggles
I entered long gbpcad at few pips above high of the pinbar. This was based on the fact that previous resistance had turned support. There is a fakey bar which hit 1.65 and shot back below. In hindsight, if I had read this forum before I took the current trade, I would have entered at the close of fakey. Now I think price (hello pinbar ) is going to retest 1.65. Perhaps at that retest, entering short will be a good idea and take profit at previous support (~1.62). Please opine. {image}
That's ok as long as you understand that you're going to require the fake out setup to work out twice for you. The market is generous enough some times but it really isn't a pet dog. lol

If we're looking at that pin bar as a fake out setup, then it has already hit its trouble areas and done exactly what one would have expected. I know it didn't quite pull back to the HHR first, but a pull back to it now is in a totally different context.

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I like to wait with a pending order near HHR/LLS for setups that have done a bit too much via the fake out bar, only up to the point where price hasn't quite hit the first trouble area. As soon as price hits the FTA the pending order is off and I move on with the hunt. There is little merit to wanting a second shot at the exact same action that price is coming out of.

g.
I believe . . .
  • #249
  • Edited 6:00am Sep 2, 2013 5:49am | Edited 6:00am
I got a real smart question from a trader via Pm (not sure why given the validity of the question) and keeping the anonymity that I guess he wanted, here's the content part so we can all learn:

Question:

Ghous,

I read somewhere if too many people follow the same system, the system fails. I don't know how that happens, but I assume that the pros will adapt to whatever change in methodology that the novices are up to.

Currently the thinking is that novice breakout traders enter on the break of resistance and soon get trapped by order flow from the pros. Now all the novice traders know that this is what the pros are doing. The novice trader then hears that this is what results in the pinbar formation. So now all novice traders start to enter at the low of the pinbar and places stop loss at the high of the pinbar. The pros realize that this is what the novices are doing and they then engineer a move to knock out the stop loss at the high of the pinbar. So basically speaking the pinbar setup would no longer work.

My response:


hey ________. Its not that simple and grim. Actually to be with the pros really means to be selling when the price is hiking? Can you do that? Does the method (this or James16 or any other) require you to sell hard when price is shooting off? Well of course no.

There is a difference between walking with someone, and simply following the footsteps. What we are doing, is following in the foot prints. The fake out and for that matter your pin bars and outside bars work as the foot prints of the order flow coming from the pros. We are just like all other retail traders - reacting to a bar.

There is a difference between creating a fake out and a pin bar and simply trading when one forms. Do you see how we are still a step behind the pros?

The only way the pros would get worried, is if I start teaching people to not do anything until price moves above a swing high and then simply sell. This would only make sense if I and all my students were market makers with those bundles of 100-500 std lot orders or if we could anticipate with great accuracy, what the pros will be doing exactly at the point that they are taking action (as in without any evidence/support from your chart) . Then the market would turn on its head and you'll have more pros than retail traders. More sharks than smaller fish. That's just never going to happen.

If anything, the more number of people following the system the better it gets.

We are just creating the order flow that follows in after the action of the pros.

g.
I believe . . .
  • #250
  • Sep 2, 2013 5:57am Sep 2, 2013 5:57am
Here's one I am keenly watching beyond the EUR/USD trade that I am in:

Look at that nice accelerated progression into the HHR. We have a fake out but notice the strong close on the fake out bar itself. It managed to close under the HHR but we have very limited information with respect to the actual stop hunting efforts of the pros.

I will be looking forward to a second or perhaps even a third confirmation of price finding some real resistance at the HHR to consider a short based off the 4H here.

Attached Image (click to enlarge)
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g.
I believe . . .
  • #251
  • Sep 2, 2013 6:00am Sep 2, 2013 6:00am
Quoting ghous
{quote} For sure it does. g.

Thanks Ghous
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  • #252
  • Sep 2, 2013 6:02am Sep 2, 2013 6:02am
Quoting jegas
I Entered the Long On 28/8/2013 USD/JPY @ 97.15 with my CustomIndiactor ,still the trade is going on ,After finding the D in my other system template ,then only close the trade. During this time ,im also Recheck the Previous Resistance & Support level & Double Top Formation in various Time Frames & Chart Pattern Also . {image} {image}
Oh well. Nice colorful butterfly bro, but we're trading order flow here and not butterflies and moths.

g.
I believe . . .
  • #253
  • Sep 2, 2013 6:10am Sep 2, 2013 6:10am
Quoting anthm
Hello All,Ghous thanks for your time and also Pinbar thank you.I was wondering if one or both of you could help me identify the FTA on this chart?I am thinking if the current bar closes above the red support line we may have a nice Fake out set up of the EUR/GBP Daily.We have the confluence of the 150 EMA that seems nice.Just waiting on the close of the daily bar to see what eventuates.Please if you could give me your take on the FTA that would be great.Kind RegardsAnthm {image}
hey Anthm,

For the sake of your learning its always better to try and come up with your own thoughts on the matter at hand and require its verification and further guidance as opposed to just putting the question out there.

I have no problem answering, but through the way I just suggested you get to learn more as well as provide me with some information about where you stand.

Anyways here's a chart with my thoughts on it.

Attached Image (click to enlarge)
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g.
I believe . . .
  • #254
  • Sep 2, 2013 6:16am Sep 2, 2013 6:16am
Quoting ghous
Here's one I am keenly watching beyond the EUR/USD trade that I am in: Look at that nice accelerated progression into the HHR. We have a fake out but notice the strong close on the fake out bar itself. It managed to close under the HHR but we have very limited information with respect to the actual stop hunting efforts of the pros. I will be looking forward to a second or perhaps even a third confirmation of price finding some real resistance at the HHR to consider a short based off the 4H here. {image} g.

I am ALL EARS on this H4 analysis of what is going on here.
Attached Image (click to enlarge)
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  • #255
  • Sep 2, 2013 6:22am Sep 2, 2013 6:22am
Quoting KOS-fx
{quote} Thanks for your quick reply... Of course I am talking about Spread because yesterday I went through all pairs my broker offer. some pairs seems to be very high in spread (more than 50). I think that kind of pairs not traderble. I know that your watching more than 80 pairs. I am not going to do that at initial stage at least trying to watch 20 pairs. Thanks Kos
hey KOS,

First of all, never measure spreads in absolute terms. 50 pips could be a lot of movement for one pair and perhaps 1/10th of the amount of movement you see in some other exotic pair. This is so because different pairs have different trading ranges. Most of us use mt4 and mt4 charts operate through a linear scale as opposed to a log scale. So 3 inches of vertical movement in pips on one daily chart doesn't equal another. Interestingly, as pairs evolve into bigger or smaller trading ranges over time you don't even get the same pips across those vertical 3 inches on the same chart and same time frame scrolling from left to right. You can visually see this, when you see that scrolling left and right tends to sometimes contract and expand your bar/candle sizes.

That said, I agree with the fact that some pairs do of course come with untradable spreads but there is still no harm in just watching how setups unfold on these for educational purposes.

g.
I believe . . .
  • #256
  • Sep 2, 2013 6:26am Sep 2, 2013 6:26am
Quoting cuchuflito
{quote} It depends on the time frame. 50 pips spread on a 5 min. chart, to earn a 10 pip move? But on a D or Week chart it might work. Spread will eat a percentage of your gain...in pips, which translates into $. Spread is like rent cost on a shopkeeper. If you are paying monthly rent to work only every morning for 30 minutes it will be unaffordable...but if you work all month... EURUSD has usually the cheapest "rent", so you can go on lower time frames....and it will eat a smaller percentage of your potentiall gains.. My 5 cents worth.
Yes good point.

For intra day trading on the very low time frames of course you wouldn't want to go beyond maybe just a couple or so of the most liquid and traded pairs with the best spreads whereas for higher time frames larger spreads can still be negotiated.

g.
I believe . . .
  • #257
  • Sep 2, 2013 6:34am Sep 2, 2013 6:34am
Hello Ghous and Everyone.

Thank you again for helping us.

I took short trade on Gbp/Jpy..

But where should be my first target ?
My stop being just above the fake bar.

Is this correct ?
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  • #258
  • Sep 2, 2013 6:57am Sep 2, 2013 6:57am
watching AUD/JPY
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  • #259
  • Sep 2, 2013 6:58am Sep 2, 2013 6:58am
Here is a quick question for new people to this method.
Experienced people don't need to answer it, to give the new people a chance.


If you would take this trade or even would not take this trade, supply the reasons for either.
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  • #260
  • Sep 2, 2013 7:15am Sep 2, 2013 7:15am
no, need to wait for next bar
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