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Mastering the Art of Trading

  • #861
  • Edited 2:39am Sep 28, 2013 2:16am | Edited 2:39am
Hi Ghous and all orderflow guys,

I recently took a trade in CHFNOK

1. Fakeybar had formed at key resistance level on the daily chart. Also, triple top with divergence. Deep swing high and plenty of space. Confluence.

2. The fakey bar on the daily did not close below brn 6.6. So the next day, I went short when price closed below brn 6.6 on 4 hour. Stop loss was placed behind the high of the bar.

3. The next day my stop loss was taken out.

Hmmm. Perhaps my stop loss was too tight. But even if I had placed my stop loss behind the hhr or the fakeybar high, I would have been taken out. So what is happening?

Could this be because there is no consensus among pros. i.e. pros A1, A2 ..An, who had a short bias came in with huge sell orders and the fakey bar was formed. But then pros B1, B2...Bn who have a long bias start coming with huge buy orders which completely absorbs the previous huge sell orders. As a result of the tug war between the two set of pros, one set wins. So it is not that just the novice traders are loosing, one set of pros also looses.

Please comment.

Thanks,

Neytiri
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  • #862
  • Sep 28, 2013 4:04am Sep 28, 2013 4:04am
Quoting ghous
{quote} Here's my response. In video form to stress on the point of "working out the overall story behind a trade setup" http://www.youtube.com/watch?v=7NiL9...73Yn690lkEpwTM g.
Again, thank you for your videos! I will get myself comfortable and go through your channel over the weekend.

Cheers!
Price is what you pay. Value is what you get.
  • #863
  • Sep 28, 2013 8:15am Sep 28, 2013 8:15am
Quoting Neytiri
Deep swing high and plenty of space. Confluence.
Just my take.

Again, I don't have that pair, but judging from your image it doesn't seem that theres much room there at all. If you took you're entry at the close of the fakey bar (not a very deep fake out either) there are multiple fta zones immediately below your order. Your entry bar traveled into that traffic to the left and reversed. Pretty much what you would expect. That fake out bar just wasnt deep enough or long enough to gather enough sellers to overcome the buy orders sitting at that congestion area.
  • #864
  • Sep 28, 2013 8:16am Sep 28, 2013 8:16am
Quoting spyderman
{quote} I too have read darkstar's book and taken Grkfx's course. It's nice to be on a thread where some of that thinking is being put into practical application.
I don't agree with darkstar and Grkfx that order flow trading is something new different from price action analysis and fundamantal analysis.
I think they say this because of marketing purposes but there's no need to reinvent the wheel. There are still 4 ways of trading: technical analysis based on indicators, technical analysis based on price action, fundamental analysis based on news and a combination of these analysis. If order flow can be read from a naked chart this is still a price action method (I consider price action everything that has to do with a naked chart). If you include news then it's a combination between price action and fundamentals. Order flow should be included when you make a price action analysis so it's not really a different method.
  • #865
  • Sep 28, 2013 8:27am Sep 28, 2013 8:27am
Quoting str8
{quote} I don't agree with darkstar and Grkfx that order flow trading is something new different from price action analysis and fundamantal analysis. I think they say this because of marketing purposes but there's no need to reinvent the wheel. There are still 4 ways of trading: technical analysis based on indicators, technical analysis based on price action, fundamental analysis based on news and a combination of these analysis. If order flow can be read from a naked chart this is still a price action method (I consider price action everything...

I tend to agree with you and thought the same thing as I went through Grkfx's material. They may downplay tech and PA, but orderflow is what creates those patterns and actions. It's kinda like the 'chicken and the egg'...does a wedge breakout create the orderflow as others jump on board or does the orderflow create the wedge breakout. I would suggest that it's a combo. Maker causes an initial push knowing that the herd will follow as they observe the price action.
I do think darkstar and grkfx's work help understand what goes on after and because of a price movement.
  • #866
  • Sep 28, 2013 9:31am Sep 28, 2013 9:31am
Quoting Neytiri
Hi Ghous and all orderflow guys, I recently took a trade in CHFNOK 1. Fakeybar had formed at key resistance level on the daily chart. Also, triple top with divergence. Deep swing high and plenty of space. Confluence. 2. The fakey bar on the daily did not close below brn 6.6. So the next day, I went short when price closed below brn 6.6 on 4 hour. Stop loss was placed behind the high of the bar. 3. The next day my stop loss was taken out. Hmmm. Perhaps my stop loss was too tight. But even if I had placed my stop loss behind the hhr or...
hey Neytiri,

which broker offers that pair?

Although Spyderman summed it up really well for you, I could try and add something if I could look around that setup a bit, specially the 4H where you said you took the trade off.

g.
I believe . . .
  • #867
  • Sep 28, 2013 9:53am Sep 28, 2013 9:53am
Quoting Neytiri
{quote} Hi Lamertrader, I am wondering how order flow trading might be helping you with respect to trading based on Ghous' fakey setups. Are you trying to build a system of your own? Neytiri
Hi!

For me Darkstar's OF trading provided another aspect of Trading. Now if I were asked to define how to trade good my simple answer would be - trade with the pros - with the big guys. Then you ask yourself how these guys trade and that's where things get complicated. What is our job? To see the market through their eyes.

As a complete newb I was all over the charts... (Ghous can prove this, by uploading my lamy charts that I sent him in February. I still got them though. It's just weird to look at them LOL) I just wanted to trade, cause I thought the only way I can get better is taking trades on a daily basis. Well, I was kind of wrong here... But then I read Mike's (mbqb11) favorite book "Trading the Zone". It was a damn tough book - it took a few weeks, but it gave me the first push - I realized that with reading I can widen my "line of sight". I realized that it's much more efficient to spend 500-1k hours with reading and then doing something, than just starting to develop some random system of yours from scratch.

So I started reading - threads, posts, books etc. What these books & posts & videos give you is just another point of view. If you think that you like the given way of thinking then you might go deeper in it. Guess what - there is no HOLLY GRAIL system either.
One of the guys said I might want to check out the Sam Seiden videos on FxStreet. I said fine - i checked them out. Some videos were amazing cause, they lined up with another trader's (Tom Dante - the_wizzard) way of thinking. (Note: Maybe not the video as a whole - but some tiny hidden ideas were the sparkle to my "AHHA" moment that I love so much).
Meanwhile another trader said that the whole Sam Seiden thing is bullshit and I should check out Volume Spread Analysis trading, because it's much more close to the Order Flow mindset. What now? I checked out both. And guess what - at the end it all comes down to one thing - which one YOU find better. Both of them is an interpretation of the market, with their underlying reasons. The question is which reason / argument do you favor - aka. which is closer to your mindset / personality.

IMHO at some point it's unavoidable to build an own system. And yes - answering your question I'm building my own system. Reading reading, testing - picking up the gold nuggets etc.

I think Ghous built a very good system here.
But don't forget that it is only his interpretation of the market. He has got his own goals / objectives! - (i.e. building a system which is based on Daily/4H timeframe - so it doesn't requires much time etc.) Due to this reason he might disregards some aspects of the market that You or I might find important. (Sentiment, Major News etc.)
This thread (actually the former thread "HCR-LCS & SFP Research" ) gave me the first push to climb outside of the box.

Answering your second question: (If OF book gave me something about Ghous' system)
Just as other great books it gave me extra insights.For example if you would bring his system down to 1H or 30m without any changes - you will realise that the same thing is going on there. If you got a strong consolidation in which price is bouncing all the retail traders will put their StopLoss under the resistance of the consolidation. (Stop accumulation) Now price goes down, takes out the stops, thus providing liquidity for the big guys + Breakout traders enter (just as Ghous says in the first post) - also providing liquidity, big guys go long and at the end what you see is the same - a nice pinbar that took out the former low. Although I would definitely not recommend bringing down this system to 15m as it is, because on lower TF many other factors come into play.

I hope all this makes some sense
Cheers,
Stephen
It's all psychology...
  • #868
  • Sep 28, 2013 10:06am Sep 28, 2013 10:06am
Quoting str8
{quote} I don't agree with darkstar and Grkfx that order flow trading is something new different from price action analysis and fundamantal analysis. I think they say this because of marketing purposes but there's no need to reinvent the wheel. There are still 4 ways of trading: technical analysis based on indicators, technical analysis based on price action, fundamental analysis based on news and a combination of these analysis. If order flow can be read from a naked chart this is still a price action method (I consider price action everything...
Order flow knowledge is definitely not something beyond the umbrella of price action trading, but since it reaches to the depth and the real core of why price moves the way it does it looks at price action trading through a more detailed viewpoint that is refreshing and not something that you see regular price action systems achieve.

The idea, that all price action systems do have order flow dynamics working behind in the backdrop is absolutely correct. So trading chart patterns, typical candles/bars, and trading S/R all work because of order flow dynamics. In the end all that one requires is a simple proven edge and for that a good price action "system" that utilizes a small part of order flow dynamics should suffice which is essentially why you don't need to bring home all order flow concepts and the massive knowledge to be able to successfully trade price action. All the commonly traded chart patterns and the trading systems you see developed on trading S/R in some way are just systematized versions of order flow concepts. Without having to go into the science of order flow, they create a superficial (and generalized) model that is easier on the eye and the mind and easier to follow.

I am trading order flow all the time with the J16 material and never even thought about it until I actually started reading Darkstar's posts and realized what a pin bar really signfies. It was interesting to see that a pin bar was actually printing stop hunting efforts and that the wick was reaching into thin air to grab on to the opposite orders which was reversing price, but if I didn't know this, and thought that "a good pin bar at a decent location reverses a trend" then am I wrong? Am I in the dark? Most importantly will that have an effect on my profitability? I don't think so. Its actually pretty cool to be able to trade order flow without even knowing it.

I really do believe, that these "order flow versus price action" debates are pointless. What you must understand is that price action (the way its understood, taught and implemented) represents a more superficial means of trading the market whereas order flow explores further depths. It might sound cool to want to go in depth but it doesn't necessarily point towards more profitability or higher likelihood of grasping the holy grail. It increases your research work and effort, takes time to get a good hold of, and takes you into regions unknown to you and questions that you will need to answer for yourself over several hours of chart time, practice and observation. To many the simple approach of following a proven price action system that relies on order flow only indirectly without explicitly requiring you to know much about order flow works really well. I can vouch for that too.

For me reading about order flow was lustful. It was so amazing, I could sit around for hours reading order flow threads and despite the fact that they seemed to be talking a different language I would read and re-read the material, go back to charts and dig my head into them. Importantly I was doing this simply for my love for expanding my knowledge in this business. I never thought that I was actually searching for that holy grail. In fact it was obvious that I was moving away from the sure-footed price action stuff and moving towards more ambiguous more anonymous territory. I was moving away from a "systems approach" to a "methodical approach". Of course over time I just latched on to the fake out phenomena and systematized it, but it sure was a more lengthy more complex and clearly a more uneasy path to take but one that fit perfectly with my goals and objectives.

Fact is, most people just want a winning system and they couldn't care less if I refer to a sharp up move as a "tall man standing" or a "liquidity disequilibrium/vacuum" or a "spike" or whatever. Most just want to know where to enter and where to exit, AND THAT'S FINE. It really goes down to your own personal objectives and demands.

g.
I believe . . .
  • #869
  • Sep 28, 2013 10:17am Sep 28, 2013 10:17am
Quoting LamerTrader
{quote} Hi! For me Darkstar's OF trading provided another aspect of Trading. Now if I were asked to define how to trade good my simple answer would be - trade with the pros - with the big guys. Then you ask yourself how these guys trade and that's where things get complicated. What is our job? To see the market through their eyes. As a complete newb I was all over the charts... (Ghous can prove this, by uploading my lamy charts that I sent him in February. I still got them though. It's just weird to look at them LOL) I just wanted to trade, cause...
Nice post.

Couldn't agree with you more.

g.
I believe . . .
  • #870
  • Sep 28, 2013 10:31am Sep 28, 2013 10:31am
Quoting ghous
{quote} hey Neytiri, which broker offers that pair? Although Spyderman summed it up really well for you, I could try and add something if I could look around that setup a bit, specially the 4H where you said you took the trade off. g.
Please download MT4 from lqdmarkets.com. You will find it listed there.

Neytiri
  • #871
  • Sep 28, 2013 9:01pm Sep 28, 2013 9:01pm
Neytiri nothing works all of the time, if it did it would be the holy grail. It could quite simpily been profit taking leading to more profit taking from a good rise at the start of the week, followed by buyers returning to the lower price maybe due to fundamentals?. Personaly i'd look for a break above the last bar, or a pullback below the previous red bar then reassess
Enter Signature
  • #872
  • Sep 29, 2013 3:01am Sep 29, 2013 3:01am
Quoting Neytiri
{quote} Hi Lamertrader, I am wondering how order flow trading might be helping you with respect to trading based on Ghous' fakey setups. Are you trying to build a system of your own? Neytiri
PS:
OF gave me something extra to the plain james16 setups.
Honestly I don't know if james16 is aware of this order flow thing at all. But dont forget that he spent 20 years with trading. During this 20 years his eyes "got used" to the good setups - so i think at a subconscious level his mind recognises order flow. And that is his edge. I don't have this experience, and I obviously wanted to trade every single shitty pinbar just to make some profit.
With OF I understood why are those pinbars meaningless and I can consciously look for the best james16 setups.
I just see a james16 setups, i combine it with OF and I know if it is an A+ or just an ordinary pinbar...

However don't misunderstand me - the james16 group gave me a LOT. When a newb asks me where to start I just can't tell them all this stuff as the first step... I always direct them towards the james16 thread

Cheers
Stephen
It's all psychology...
  • #873
  • Sep 29, 2013 3:45am Sep 29, 2013 3:45am
Quoting ghous
{quote} Order flow knowledge is definitely not something beyond the umbrella of price action trading, but since it reaches to the depth and the real core of why price moves the way it does it looks ....... g.
This is one of the best posts on FF I have read in 2013.

Very helpful and intelligent.

Thank you !

Mike
Be like water.
  • #874
  • Sep 29, 2013 5:07am Sep 29, 2013 5:07am
Found two...
None of them is super A+...
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It's all psychology...
  • #875
  • Sep 29, 2013 8:15am Sep 29, 2013 8:15am
Quoting ghous
{quote} hey Neytiri, which broker offers that pair? Although Spyderman summed it up really well for you, I could try and add something if I could look around that setup a bit, specially the 4H where you said you took the trade off. g.
Hey Ghous, Spyderman,

I have marked FTA on the chart. I took the trade after price closed below 6.6. The stop loss was placed above the high of the bar that closed below 6.6 on 4 H chart.

Neytiri
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  • #876
  • Sep 29, 2013 10:08am Sep 29, 2013 10:08am
Quoting LamerTrader
{quote} PS: OF gave me something extra to the plain james16 setups. Honestly I don't know if james16 is aware of this order flow thing at all. But dont forget that he spent 20 years with trading. During this 20 years his eyes "got used" to the good setups - so i think at a subconscious level his mind recognises order flow. And that is his edge. I don't have this experience, and I obviously wanted to trade every single shitty pinbar just to make some profit. With OF I understood why are those pinbars meaningless and I can consciously look for the...
That is exactly the reason why I thought that I should know order flow.

Neytiri
  • #877
  • Sep 29, 2013 1:01pm Sep 29, 2013 1:01pm
"I really do believe, that these "order flow versus price action" debates are pointless."
80% effort, 20% luck
  • #878
  • Sep 29, 2013 1:53pm Sep 29, 2013 1:53pm
Quoting Neytiri
{quote} Hey Ghous, Spyderman, I have marked FTA on the chart. I took the trade after price closed below 6.6. The stop loss was placed above the high of the bar that closed below 6.6 on 4 H chart. Neytiri {image}
By the looks of it, you probably missed the consolidation box on the left which is an uneasy thought for me because given that you actually took the trade on the 4H the consolidation box was crystal clear on that TF. In fact price did exactly what it was supposed to do.

I am glad that you waited for the close below the 6.6 RN, but I think you missed the fact that the trade was still headed into a lot of traffic. These aren't untradable but very very tricky where you've got to baby sit the trade as it wanders into tight trouble areas.

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The trade I took on the AUD/CHF is a great example of a "tricky" situation. Now my anticipation was, that breaking out of that very tight consolidation box and heading back below the obvious HHR region, price should really be willing to blow past the initial trouble area. It did do that eventually but I needed to be extremely conservative in managing this trade. After 4 days of no interest from the sellers I had to kill the trade despite being confident on the overall story because the information available then made it logical for me to do that. Its easy to look at this in hindsight now and feel tough about having to exit the trade when it was good for more, but then again dealing with these tight situations in real time can get tricky precisely because it can expose the weaker you by allowing the indecision to creep in followed by a flurry of emotions stemming from nervous jittery actions. It becomes easy once you start being logical but it still doesn't take away the "tricky" feature of such trades.

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Now I am not sure if you were actually able to spot that 4H consolidation box to the left on CHF/NOK, but even if you did you probably thought this was good enough to push through it. This is what I personally would not recommend new people to step up to, because there are more no-brainer A+ setups available to milk and profit from.

g.
I believe . . .
  • #879
  • Sep 30, 2013 12:10am Sep 30, 2013 12:10am
Hello all... I knw I dnt have to bring this here bt I just need an advise.... I have an account of 150dollars with instaforex, I want to make more deposit and I dnt knw how reliable they re... Pls need an advise on good broker tht accepts a deposits of 150-200 dollars if instaforex aint good enough... thanks Ghous and all.
  • #880
  • Sep 30, 2013 12:58am Sep 30, 2013 12:58am
Quoting ghous
{quote} By the looks of it, you probably missed the consolidation box on the left which is an uneasy thought for me because given that you actually took the trade on the 4H the consolidation box was crystal clear on that TF. In fact price did exactly what it was supposed to do. I am glad that you waited for the close below the 6.6 RN, but I think you missed the fact that the trade was still headed into a lot of traffic. These aren't untradable but very very tricky where you've got to baby sit the trade as it wanders into tight trouble areas. {image}...
My eyes were focused only on the S/R flip zone. Now that you showed me the box, I realize that I completely missed it. Got to be more alert next time.

Thanks,

Neytiri
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