Trading as I know it...

You should teach, what not to do in trading. Might give you a break but also help you learn more about yourself and others

Yes Rag2Riches, I see you doing some self promotion lol.

For sure ..

Quitting now is absolutely NOT an option. You'd be twice the fool if you quit now, compared to the fool you were when you blew out that last account. You obviously have enough market experience to make steady gains. At it's most basic level, successful trading boils down to learning how to take small losses. The only way to achieve that is by risking small amounts of capital and honoring your stops. You're not doing that, and that's why you're here - again. I say quit the bullshit, and make the necessary adjustments. It's entirely up to you to decide how long you want this nonsense to continue.

Trade like a professional for fuck's sake.

Amen

Well "what not to do"

chapter one (or two)..

1. Don't wisten to anyone named Slim Buffet.
2. Don't try and out trade yourself.
3. Don't take a 3 week mindset and try and apply it to intra day.
4. Don't take an intra day mind set and try and apply it to 3 week movement.
5. Don't worry about failing, it's an essential ingredient of success, but beware; it is also an essential ingredient of failure
6. Don't try and be too clever, but don't be a dumb ass - find the middle ground.
7. Don't replace natural highs with manufactured highs
8. Don't wisten to me

Scary Monsters and Nice Sprite

So to expand further on the basic support and resistance set ups posted earlier. I want to take a closer look at behind the chart possibilities.

Have you ever noticed how big market moves a lot of the time happen obviously after important fundamental data releases or announcements, but also from important S/R points.

The technical analyst will of course point to their chart and say “fundamentals don’t mean squat. Look at how perfectly the market bounced from this Trendline, Last weeks open, yesterdays close, Cluster Volume, Support/ resistance”…

The Fundamental traders will argue “Well actually Billy Ray, if you were paying any attention to the news you will notice the GBP/USD market moved 100 pips long because the Bank of England voted for a decrease in their asset purchases, when the majority were expecting nothing to change”.

So who is right?

I would argue that both may be correct or perhaps half correct. If you recall the liquidity lesson earlier in this thread you should note that at an important news event, certain market participants will need the option to liquidate their position in the event of a shock news event.

Maybe participants were expecting to a degree of 70% that the asset purchases in the above example would remain in place. But that doesn’t mean that it will turn out that way. And anyone familiar with the markets knows that the unexpected can and will happen.

…So… Leading up to this potential sentiment changing announcement where does the market want to be on the news drop? … If you answered at the Support/ Trendline/ Stop level area then you get a Gold star and your ass in the front row. The answer is Liquidity.

If that 30% chance comes to fruition, then at this level the V.I.P market participants will at least be able to dump their positioning and re adjust without as much damage then they would take if the market on the news drop were caught in the “illiquid” price areas. It would kind of like be a 8 man 3 women kind of island… Scary shizzle

Savvy?

It’s actually the market makers covering their ass, but to keep it simple, just think about the orders that will demanded in each case scenario. Which of course the market makers will have to execute. People are predictable, the future is not so much.

I’m in the sticks at the moment so cannot post a chart, in a perfect world I would like to expand on this with many examples. It’s really very cool.

Information…

à Market opens at 100

à New information enters the market and pushes it to 150

à Next day, no new/significant has entered the market but for some reason we are back at 100

Food for thought.

Another example

A little while ago now I was up to speed on the market at the time. On this particular day there was some very significant data releases coming out for the GBP as well as the USD.

I assessed the data trend in terms of expectations for the GBP release and worked out a figure or result which I believed would result in movement for the GBP in multi directions. The USD release was a Ben Bernake speech which I had to play by ear as it was to do with the tapering. I knew that the market was looking for clarification as to when this would happen.

So... London opens and soon enough the GBP release occurred, just as I expected my bullish scenario happened (which was a very bullish scenario btw) and low and behold the GBP rallied very hard 50-60 pips before I even got the number...

But interestingly the movement which should have been more like 100-200 pips stalled after hitting resistance and slowly came back leading up to the MORE IMPORTANT USD release.

No one wanted to be caught on the wrong side of the tapering decision and so the GBP /USD fell back on this risk aversion all the way up to the USD session.

As Ben Bernake spoke of course the market got erratic... After some time it was clear that no defined result came out of it. No clarification on the tapering decision was made and so nothing had actually CHANGED.

In all this confusion by the time I realized (only by way of a news reporting service) that the USD announcement was neutral, the GBP/USD and actually the GBP cross pairs were sitting BELOW their daily open prices...! It was as though everyone had forgotten about the GBP release in all the focus on the Ben Bernake speech.

So to put this simply let's look at the facts in a simple form .

ASIA : GBP/USD opens at 100
LONDON: GBP news release +4/5 (scale of impact)
US: USD news 0/5 (neutral)

Market is at 90!

From about this very point the GBP rallied from these daily lows on a multiday move from memory over 300 pips.

Could I take this and repeat it the next day? Of course not, it was a unique set of circumstances. Every day presents a unique set of circumstances. It was because I was tapped into the current happenings at the time that I noticed this.

Why do I not trade this way anymore? Well I find it exhausting to be honest, particularly coming from Australia to stay up to date with a 24/5 market when the London session starts around my dinner time is simply exhausting.

I don't have a team of analysts to report and summarize simple facts to me, I like to take days or nights off, but doing so means Im left in the dark. I find I can only trade this way when Im actually interested in the current economic situation, I find myself on and off in this regard, So when it becomes a chore is when it is no longer fun and inturn no longer effective...

Can I come back after a holiday and just sit down at the London open and trade this way? Hell no, it requires work, lots of reading, forward planning, preparation and concentration. Continuous effort... Sometimes it's easy for me other times not so much, the only goal is to get into the head of the market and get a feel for what it's thinking. Kind of like a conversation rather than a picture.

When Im reading a central bank statement and all I'm concerned about is how I can use it to make money... That's when I know it's not going to work out for me.. You really need to be actually interested in what you're reading and researching otherwise you will likely just interpret things the way you would like to and look for short cuts.

Anyway now I write this I would next like to talk about data trends and real expectations.

Mechanics…

à Market opens at 100

à No major news releases this day so market makers and other participants spend the day stop hunting, this pushes the market price to 150

à Yesterdays USsession opened at 150 before a news release pushed it to 100.

Food For Thought.

A Technical Approach



Good trading week... Will get to the data trends and expectation interpretation at some point in the future

cool set up mate. Thanks for sharing

You know all you need to do is take one of these, work out your r/r and just trade that as a system to be consistently profitable. With your knowledge and experience you've probably got quite a few reliable set ups like this

good topic, sorry my english is not good.
I is traders price action., I know forex one year, five months. Until now, I have answered all five questions below,
1 / how to know the price can break S / R.
2 / identification in the short-term trend changes and what is the long term? when ending.
3 / zone reversal, time, strength (the bear or bull), prices should move fast or slow.
4 / have or should not have to adjust? ( use fib recement )
5 / risk / reward.

You can share questions and comments to my question here, thank you.

Thanks Doug, the diagram is quite funny but its all there. I could draw a bunch of psychological chart patterns they work well in structured liquid markets.

Lots of fun things to talk about there, ill have a think about it and get back to you.
Anyone else want to have a go at it feel freely.

My English is not that great either after a few beers

My English can cause difficulties in the interpretation...
do not agree with the way this movement, this model can only be applied on histograms history. Apply it very difficult to move prices

Here is a simple example of how I define trends. Identify trends and opportunities to find the command .. The command is all that matters, I associated with it: harnonicc, HH / HL / LH / LH, S / R, fibnacci.
- My method of importance to the commercial application from C >> D.

each person has different ways to apply his system, I share with you, you can comment with my method. thank you.

Fair enough, but since when did Bulls become Cows? lmao!

I was just trying to show the gap created between the SMB line and the LMB Stops... The diagram is pretty bad. I ran out of room.

oh no, you can see the blue swing up poor (and many times larger adjustment) and the Bears took advantage of it. When prices go down, the poor cow regaining market (integration of commercial orders) and the Bears quickly took control.

if it meets my requirements, I can sell at 50% fib recement

it is a commercial risk / reward 1/3