Key Concepts to Correct Trading Behavior - by FibStalker

Hello All,
please accept my apologies for my long absence. Some stuff to do, including moving to another Country!

From June to now I have made only few posts on my blog which you can find here: www.elitefive.wordpress.com

Some very good news, though, also on the trading side of things on which I will bore you later in this thread.

This post officially reopens the thread and I will continue the work started, according to the objectives stated in the very first pages of the thread.
Hope you are still there and still interested.

I have not posted on Forex Factory in the last few months neither I have on FXStreet.com for which I am a contributor. What better occasion to remind what I do as a trader and analyst and what is my edge?

New readers, who do not know my work, please be advised that 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. Such effects observed and studied in years of full time trading, allow me to spot the algorithmic trading footprints on price. This offers a huge advantage. I have also designed a timing technique called FibStalking (short for Fibonacci Stalking), based on the presence of Program Trading on the smaller timeframes (4 hour, 15min, 5min, 1min and TICK) that allows to procedurally test levels of support and resistance, increasing reliability of entries to 80% or over.

The rules I use to trace the entry, related stop levels, and 1st and 2nd targets provide an analysis relatively easy to follow that has been providing exceptional results. The color code I use in my charts is briefly explained in this one pager (can find it on my blog).
Just a quick reminder of my background for those who do not know me: B.Comp.S. Eng and a M.Fin, CTA (certified technical analyst) and aligned to SIAT/IFTA (International Federation of Technical Analyst). I am a part time trader and active researcher of trading methods and published a few research papers with SIAT/IFTA in 2012 and 2013.

I have just published on my blog at: http://elitefive.wordpress.com/2013/...glish-language the video of a Past S&P 500 emini futures Update published on June 6th, 2013.

It contains a great example of how the entry and exit levels are respected by the S&P500 emini and how Program Trading acts on price both on the daily and the weekly timeframes. Program Trading on the major markets (major forex pairs, equity indices futures, commodities futures, high volume stocks) is a powerful force that, in absence of external “disturbances” like Central Banks decisions, major economic hits or economy up/down turns, planned news announcements and HFT (High Frequency Trading), controls the market.

Thankfully these “disturbances” are present and affect the markets only few days every month. Moreover, some of these external forces only affect the lower timeframes, from 4 hours (or 240 mins) downwards. Thus I avoid trading on these timeframes during specific days or just trade out of larger timeframes and I am better off.

This leaves me and you with a very effective, little known edge that can be used at our advantage.

Check my blog for the video: http://elitefive.wordpress.com/2013/...glish-language

Till the next post.
Have a great eve.
Regards,,,

~FibStalker

Tonight TwitterFest with updates for:

$EURUSD Moving into that level of first support 1.3720. Below 1.3692, larger retracement. Not anticipated at the moment

$ES No surprises on $es_f $SPY, moving into that 1,738 in March 2014 contract. Same trace from May 22nd high

$USDJPY towards first target at 108.35. Long way to go.

$EURJPY price close to 143.10 target, known since June 2013 and reiterated multiple times in last weeks & months

$AUDUSD moved right into that 0.8925 mentioned yesterday, continued move into 0.8820 possible from here

$USDCAD reaction higher driven by 15min program trading. Shorts at 1.0665, as soon as DX weakens again. Into 1.0510

Find it here to: http://elitefive.wordpress.com/2013/...est20131212eng

Good night
~FibStalker

Hello Traders,

I am publishing a video update for the following markets: EUR/USD, S&P500, USD/CAD, Gold, GBP/USD, EUR/JPY & AUD/USD.

In yesterday's TwitterFest (see previous post above) I provided the levels to watch and to act upon on EUR/USD and USD/CAD that triggered today, with stops.

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

Let me know what you think.
Have a great weekend

~FibStalker

Hi Fibs,

No worries and all the best in Canada. There is another good chap on this forum living there as well, Pips Trapper. If you come across he may give you some good advice about his country.

Anyway, I'm still hanging around with this kiwi, watching it very closely and trying to spot the very good time to sell it hard. It is currently floating in its very historical high area for the time being, just waiting a nice catalyst news to loose ground and go down the hill for a nice 700 to 800 pips, largely covering cost of any swap fees on shorts carried on overnight. D1 time frame shows a potential 1000 pips range over a 60 days. I'm after a 700 to 800 pips in a range of time of around 40 to 50 days.

Have best of luck in your new life and all the best with your relocation!

Hello Delta,
thanks a lot for your kindness. Yes I know Pip and we have been in contact for a few months at the beginning of the year. He is very good, doing the reall stuff, too.
I will review the Kiwi tonight in my newsletter video and publish that video here as well (those videos are only shared with my free newsletter subscribers but will be an exception here), for you to review.
But from a quick glance, I do not see a short in this market, which is supported by program trading on both the weekly and daily in the long direction.
I will be able to tell you more in the video I am going to publish later on.

Hope this helps, chat to you soon.
Giuseppe, ~the FibStalker

Hello Delta,
as promised here is my video. In the video I review the GBP/USD, AUD/USD, USD/CAD and Kiwi.
Let me know what you think. The video is on YouTube and is part of my free weekly Newsletter.

Here is the link to the Forex Majors Review video (December 15th, 2013).

Hope you enjoy it.
Have a great week.

Best Regards,,
~FibStalker

Dear readers,

tonigh I would like to resume my comments towards the objectives of this thread, with the presentation and discussion of the second part of our journey.

The first part was completed by the last post made on August 6h, 2013. The first part dealt with the so called "Bandwagon Theory". The theory (first presented in “Tools and Tactics for the Master Day Trader”, by Oliver Velez and Greg Capra – Mc Graw Hill, pag. 29) provides an insight into the inner workings of the market and how the average trader is "manipulated" to generate profits.

Although manipulation is clearly there, represented by open market operations, the existence of algorithmic trading, program trading, high frequency trading, etc., it would be more honest to mention self-manipulation, as the most important aspect of it all. In fact, consistent and professional traders, as well as, those ‘in the know’ cannot directly cause others to lose money.

They can only do this indirectly, by exploiting the ingrained psychological mechanisms of the average trader, who does not have access to the same information to successfully position in the markets.

Grasping the hidden wisdom embedded in the allegory of the Bandwagon Theory I am sure can improve the level of understanding of the markets and trading mastery of anyone. I also definitely believe that trading is a learnable skills, whatever skewed are your beliefs about trading and your psychology. As you now know, the theory tells the story of how Wall Street manipulates the markets for profits. The purpose of my thread is also to contribute to make that transition from the group of novice, inexperienced, uninformed or average traders into the much smaller group of consistently profitable traders.

An to this end, to help the reader to understand and internalize the hidden message of the Bandwagon I though it would be helpful to illustrate it on the daily price of the Euro-Dollar forex cross. So, let us start from the first part of our "contemporary fiction":

“Imagine a bandwagon that is rolling forward at a quickened pace. Music that is very pleasing to the ear is being played from speakers on each side of this bandwagon, and a few people currently on the back of the wagon are partying, having the time of their lives. The music, loud and clear, starts to attract many other onlookers that happen to be idly standing on the sidelines. These onlookers, unable to resist the sweet sounds being played, run to join the party that seems to be going on. Progressively, more and more onlookers jump on the back of this bandwagon, and those few who were initially enjoying the first phase of the party begin to leave.”

In the next post I will show the chart that illustrates the first part of the Bandwagon Theory.


Till the next post
Have a great eve
Giuseppe, ~the FibStalker

In yesterday s video on Kiwi, I have covered the pair too quickly (I wanted to keep the video below 15mins).

In the video I have just published on the blog, I am providing a longer and more detailed description of where I see the pair trading in the near future.
Both the targets, on the weekly and the daily timeframes, are above current prices

According to my method this pair is not a short at this stage and, in the video I provide the targets levels, as well as, the failure levels of the bullish scenarios in the two timeframes.
The video also covers an update for the EUR/USD and the S&P500:

http://elitefive.wordpress.com/2013/...ber-16th-2013/

Please let me know what you think.

Thank you.
Best Regards,,,
Giuseppe, ~the FibStalker

Dear traders,

I was delighted to learn that today Dale Pinkert of Live Analysis Room on FXStreet.com, mentioned me during its review and even showed last Wednesday s video where I timed the current entry for the Euro/Dollar at around 1.3620 with targets above.

Here is my tweet where I thanked him, with the link to the video in case you are interested: https://twitter.com/fibstalker/statu...86454637068288

Have a great evening.

G.

Am enjoying your thread. My one cent is that the trading skills required to generate consistent profits from the markets are quite simple. However achieving the level of simplicity to pull in the pips regularly is the difficult part of learning to trade. If a new trader is lucky to find a successful mentor ready to teach him the simple skills for successful trading, he would avoid years of tears and doubts. So give us the simple skills. The steps, what setup to look for, how to condition the mind and the body etc. In short give us a snapshot of the life of a successful fores trader. Its gonna be much more beneficial. Give a man fish, and he comes back hungry for more. but teach a man to fish and you would have fed a whole nation. Cheer!!!

Hello Posi,
thanks for your support.

Well put, trading is easy but not simple. As you have already realized, as you touch on it so deeply, the main problem is the education we go through, or we are obliged to go through, and the lack of mentors.
Finding a good mentor is not only a matter of luck, but also putting efforts into it and researching the internet wide and large, ask people, buy monthly services, etc.

Then there are the skills: 1) the trading method, 2) the money/risk management; 3) psychology.
I rate them as follows, in terms of importance:
1) 10/15%
2) 10%
3) 75/80%

1) There are a different methods available: traditional technical analysis (?), price action (?), there–is–an–other–in–the–universe (cycles, Elliot), band trading (?), strategy trading, sentiment trading, program trading ().

You have been there and, maybe, tried different options, but do they really provide an edge? It is 50/50%, so people who make money with the majority of these methods do it because of superior MM and psychology and because they stick to the winners when they have good trades. Low reliability, high expectancy also due to large occasional R/R with a small, controlled risk. This is the secret for low reliability methods, you know it already.
If you know a bit my work you also know that I am a proponent of observing program trading (a powerful class of algorithmic trading) and guarding against HFT (especially in entries on 15min and lower). I have got into it before joining IFTA and studied and researched it for a long period of time.
If you have time and are interested, watch a few videos on my blog, and you will get an idea of what I am talking about: http://elitefive.wordpress.com
The method only works on high volume instruments: forex majors, indices and commodities and high volume stocks.
It is a brand new approach that attempts to spot Algorithmic Trading footprints and incorporates the traders group psychology, so it makes it easier to trade with the market (which means is more difficult to trade, and it has been for me, because we come from another mindset). That is the way to go for me, it gives very good results and, as a matter of fact, is receiving a lot of coverage on FXStreet.com that also awarded it .

2) If you have good money/risk management in place you can can do well, provided you are disciplined, but if you want to do very well you have to have a good method too. Generally MM is not an issue. There are two aspects of it:
1) having it right for the market you trade and in relation to the type entry you use (I have 4 classes of entries, on different timeframes, with variations that take into account all the cases that can actually materialize);
2) having a MM in place that allows you to grow your profits faster. I have studied this second aspect deeply in one of my research paper, which is available for free on my blog: http://elitefive.wordpress.com/ebooks-papers
While the research paper focuses on the links between MM and trading goals, it shows in the process two important things:
a) a rigorous methodology on how to study and simulate your system with different MM techniques
b) a showcase on using the market money technique to boost profits. Nothing complicated, which demonstrate that part 2 of MM is not a big deal, but part 1 must be in place and done rightly, which requires a way to firmly frame price dynamics.

3) Psychology is the cat to skin. This is the real deal. We are wired to not perform correctly in the markets as we only want to get involved when we are sure about it, while we should get involved when the risk is minimal. This requires acting when the fear is highest and confidence is lowest. Risk acceptance is key. Some people even propose to trade without a stop, in which case I do not understand how they do define their unit of risk, which is also fundamental to calculate the method's expectancy . More power to them if it works for them: it does not work for me.

Then we need to accept the principles and truths of the market (well explained in "Trading in the Zone"), but not just read the book, but think about it, relate it to trading, take notes, this is the way I used to internalize it. I did this exercise, also studying other material for more than 2 years.
This, and a lot of other work, must be done to undo and build the right psychology (e.g. study Van Tharp`s "Peak Performance Course"), but I still believe that the majority of it is related to just building confidence in a method and learn to stick to it. Much of the psychology work we nee is related to "undoing" or "unwiring" our trading from what we would naturally do. Do you want the proof?
Give a newbie a method that works and rules to trade it and manage risk properly and he will do exceptionally! That will be the only way she knows to trade as she won't have in her mind no non–useful beliefs. She will be among the elite 5% traders in the world. I wish I had this benefit when I started.

As per the mentors, here are a few you can research and I have hooked with in the past:
* Toni Hansen
* Ivica Juracic
* Van Tharp
* DR Barton
* Eugenio Sartorelli
* Andrea Unger

It is difficult to find good mentors, but it is not impossible!
Finally, just study as much as possible in my blog. There are almost 400 videos with reviews and method explanation.

Hope this answers your question (or starts doing it).
Have a great day

Giuseppe, ~the FibStalker

Thanks Fibstalker. Tis a lot of work for a start but I'll start anyway. Thanks.

Posi2go, trading is not for everybody. 95% of traders fail. One of the reason is that they never commit, decide to make it and do not put efforts into it.
Make a disciplined and well tought effort, and you will eventually reap the results.
Also do not make this a get–quick–rich–scheme. It does not work like that.

Take your time and learn
I wish you good luck, I am on your side.

~FibStalker

It looks like this bandwagon is too slow
Too many people on it...
wait let me see...



Yes, really a lot of people here. Okay no worries in the next post I am going to share the chart that illlustrates the first part of the Bandwagon Theory.

Before I do that, here below there is another interpretation of the Bandwagon Theory, or how the markets are manipulated for profits.
The results is always the same, when strong hands are selling, weak hands are buying and vice versa.



And I am afraid the same process is going on, right now, on the S&P500 emini...

let us wait and see.

Meet me in the next post where I share the first illustration... and, most importantly, let me know what YOU think....

Thank you.

~FibStalker

I confess, I like to go ”off path” and I did that willingly to answer to posi2go post. I hope you enjoyed that post, anyway

Now is time to continue with the explanation of the Bandwagon theory. Hereunder is the illustration of of the first part quoted above (at the beginning of this post):



Figure 1 above – Late players (former victims) jump on the Bandwagon

So what is the explanation? During this phase (Figure 1 above) the trend has been already established. Slowly late players, and former victims, are jumping on the bandwagon. The most convenient positions were established when it was more difficult to do so, but also when risk was very low. Only less than 5% of traders trade like that. (hint: studying and observing Program Trading footprints on price, allows you to buy when the smart money is buying)
But is already late and we know that for late players it is going to be a very troublesome trip. However, by entering at prices pointed by the arrows, is it still possible to book profits, but players must know where to exit (and typically they don t).

At this stage price moves smoothly and easily. The smart money (read modern Program Trading) has all the interest and the shooting power (the pockets) to keep pushing price higher, but late comer do the job and it is an easy lifting.

Till the next post
~Giuseppe, the FibStalker

As far as I can tell, you're not posting anything that hasn't been posted a few hundred
times before in some way.

Difference is, most of the others didn't advertise their web address
and so forth and so on

You have no credibility because of that ?
If so, why do you have MORE credibility than others who've posted
the same basic things but without advertising their web address ??

If you have something credible to say, why do you need to advertise
your site ??

Just wondering.

Hello Slim Buffet,
thanks for the challenging comment.
To be fully compliant to FF rules I removed the link from the image. In my understsanding is not against the rules posting links to blogs and non commercial material. Thank you for letting me notice that.
The Bandwagon and all the rest may not be new material, but what I try to do is to put it in the context of what I do, i.e. studying the effectx of Program Trading on price and reinterpret the whole price structure in that light. Program Trading does not seem a very popular topic on FF and some people do not even know what is it. Please point me to traders on FF who do observations on program trading and I will be happy to talk about the topic.
As per my need to link back to my blog, there is no need for it, but the need to copy and import the images here. If I write a new article, like the one I have just completed and I want to share it because I think it could be useful, why do not do it?
My credibility does come from publishing this material and a lot of other analysis and resarch I do. On FF I have published hundreds of charts in EURUSD and forecast on EUR and other pairs and my charts are appreciated (please go and read my FF profile page). I feel I want to talk about the key concepts because a lot of people start in a way that I do not believe is the correct one.
Some people are enjoying this thread, maybe you are not because you already know the concepts. Look back and see what I have shared previously, also gave name of mentors.
I link back to my blog when I find something useful to share to not lose time in reposting again. In other cases I develop concepts directly in this thread.
It is not about my credibility, that depends also on how I am perceived by people. And we all know very well that the level of development in FF is very different. It is about if what I write can be of use to someone or not.
Without arguments I do not think I am offending anyone if I share something from my blog, including the analysis. I would rather develop something new discussing here than copy things that are already on my blog.

Hope this clarifies your doubts.
Chat to you soon

G.

Hello all,
I hope you all are spending paceful and relaxing Xmas holidays.

Tonight I would like to continue with the illustration of the Bandwagon Theory and introduce the following section, part of the original Bandwagon allegory:

"Now that the bandwagon is at a complete standstill, more people jump on. And why not? At this point, joining the fun is easy. Absolutely no work is required, for individuals wanting to join the crowd no longer have to run to jump on board. But the nature of the bandwagon is to move forward. Its motionless state is unnatural, and therefore cannot last. It tries to move forward again, but can’t.
The crowd, piled on back, is much too large. It must free itself of the heavy burden. And it does. It quickly shifts into reverse, and jolts backward, knocking a few of the party animals off the back.
The music stops. Puzzled faces from the crowd begin to emerge. Before anyone figures out what’s going on, another backward jerk takes place, only this one is more violent. Another large group of people gets thrown off the back.”

Hereunder is the illustration:



I will provide you with the explanation in the next post.

Chat to you soon.

~FibStalker

Hello all,

I want to wish you all and all your loved ones a great new year 2014.



All the best

Regards,,,
Giuseppe

Hello traders,
hope you all had a great Christmas Holiday time and started the 2014 on a positive note.

I am going to resume the posts in this thread along with my market analysis videos, which you can find on my blog.

This is the review for EUR/USD and S&P500 emini based on my method and the key concepts I am presenting in this thread:

http://elitefive.wordpress.com/2014/...uary-2nd-2014/

Tomorrow I will be interviewed again by Dale Pinkert at the Live Analysis Room and will elaborate even more on where I see the Euro and the potential for a 700 plus pips trade on the downside.

You can find more details in my blog.

Be back soon!

All the best

~FibStalker