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My AUDUSD did another very short breakout overnight is now back in the box, the box getting very old now.
Another one to watch for today.

EURUSD also shows a nice box today. Remember the negative correlation between EURUSD & USDCHF...
In the case at hand, both boxes have nice dimensions.

(I used to draw the boxes by hand, I still mainly use my eye but have the indi on my chart as a support only...my apologies, it was the EMA settings indeed....I adjusted these now and repeated my setting calibration)

As an exercise, I looked for CZs manually on a daily chart.
While one can spot clear consolidations also on higher time frames, the strong point of the SSBO is to have specific dimensions as a point of orientation. Secondly, to have the small & large artifact.... Also, it is based on price action and rather than time. There are some breakout systems which focus on time, but if you take a close look, these often capture nice CZs...otherwise the time boxes tend to be rather fat than slim....
During CZs, market makers are happy, they make their spread and the level does not change....
But at some point, big orders kick in......that is when we want to be in front of our screens!

I knew you'd work it out. You just needed a little push...

You spend a lot of time thinking about why the consolidations are happening. Positive or negative correlations... high impact news... etc., etc.

But why worry about such things at all?

Does keeping track of news or correlations change how the CZ will look? No.

Does it change how you will react to the breakout? No.

Does it strengthen your SSBO techniques in any way at all to keep track of this data? No.

So then, why keep doing it? I say, it's because people need to maintain the illusion of control in order to feel secure in their trading. I say, it's VERY difficult to completely let go of all emotion and intellectual premise and simply trade what you see with absolutely no thought given as to why.

The day you conquer this "Why" demon is the day you become a professional trader. Earning money doesn't make you a professional, it makes you profitable. Which is good enough for most people. But then a year later their equity is gone. I say, it's because they never learned to stop asking "Why". When someone asks me how the markets are looking, about the news coming out tomorrow, or a likely correlation -- I would answer, "I don't know, and I don't care. I just trade what I see when I see it."

Wei Wu Wei -- To Do Without Doing. So easy it's hard.

Hi FXHard,

your comment is very interesting, well, allow me to explain my philosophy.

In trading fx, there are almost no factors which you know in advance, however, there are a few exceptions. One is news. You do know when there will be which announcements, and what I observed over the years, is that the market tends to literally wait for these to be published before making any news.
When I started using SSBO, that became even more apparent, because the price often is trapped within a CZ and the breakout comes with announcements or the anticipation thereof. Not always, but quite often (I will post examples of today soon).
I would not trade news as such, but from the SBBO perspective, it makes absolutely sense to consider these, I think.
Because there are also other issues. For example, on "news days" (like the one tomorrow), the market waits for the significant news to be published (I am not talking about Chilenean rice prices or sth. ;-)) and then often does a quick jump out.
Yes, you could just sit and wait for a CZ break, but then you have no point of orientation in terms of time and you do not know when you should be more alert.
News definitely move the markets on an intraday level, nobody can deny that. So why not try to understand what the market is expecting, waiting for and reacting to on top of having a technical framework? That really gives me the control you need in order to place trades in the right moment.
Another issue: quite often, the price breaks out (and would normally continue), however, a news announcements is just around the corner and completely destroys the trade. I prefer to avoid that.

I would be thankful & interested on additional thoughts on that FXHard.
Thx in advance, FF

My trades today:

AUDCAD went nice after the bad CAD data was out at 14:30....I got out a bit early but otherwise fine.

same for USDCAD...

AUDUSD I tried to trade a long breakout but went out soon after, when I realized that there was not enough power behind the move. Only a few pips lost, so absolutely fine.

I took a small loss in USDJPY, well, the box was not really slim....could have exited earlier maybe.

But overall, good session that was.

Tomorrow I will stay tuned for US unemployment at 14:30.........

Of course, I also only trade things I see, so breakouts, I do not try to pre-guess anything.

However, all the waiting time which comes with trading that system properly, I invest into doing my homework; knowing, when the market could do what etc.
For example, it is absolutely obvious that the EURUSD is dominating most markets most of the time.
That means, if a market does a move, but EURUSD does sharply go the other way (let's say USDCHF "wants" to go up technically but EURUSD suddenly, for whatever reason decreases), it could destroy the trade. The reason for this phenomenon is obvious; more than 70% of the volume is traded by algos. And these also arbitrage. A move in the bigger market will naturally affect other markets because of flow diverting there.

But yes, FXHard, you are right in a way, as a trader you should limit yourself to trading what the FACT is, not what the FICTION is.
So as long as your actions respect that rule and you do not trade your FICTION, you will be fine I think....

Different minds, different philosophies ;-)

It's indeed a matter of perspective:

You say, high impact news is coming so I should maybe expect a CZ soon.

I say, I see a nice CZ forming, so somewhere in the world high impact news might be forthcoming.

Both tactics see the same CZ forming. BUT... only one of these tactics completely eliminates wasted time and the need to feel intellectually involved. And it is the involvement which can lead to second-guessing and doubt. So for me the choice is easy: In order to eliminate all doubt and second-guessing, and to then simply follow price where ever it leads, I must first teach myself to care NOTHING for so-called market fundamentals and the illusions they create.

Of course, it helps to have a system that you can trust more than the illusions you are discarding. IMHO, SSBO is that system, or else I wouldn't be using it all this time.

Hi FXHard,

I see,
so when you are trading more with that 'reactive' mindset only,
do you do other things (i.e. work) during the day and just look at the charts now and then?

Further, do you undertake any efforts to figure out whether the break could be 30p or 50p long, so whether you should close or move the stop instead?

That would interest me. Thx in advance.

PS: I feel that the intellectual involvement protects me from some bad trades, so is worth it if done properly.

Yes, I know you feel that. Every single trader in the history of trading can say the same thing. But can you prove it?

I don't think you can.

I know I can't.

Keep you out of trades, both good AND bad? Yes, absolutely.

Keep you out of just bad trades? No, you can not prove that. That is one of your self-made illusions.

I already use a strategy very similar to this. In fact, the return is incredible. I will use your state, to have sound for faciliar signs at entrances. It would be great if it had an EA also available.

FXHard,

let me give you an example from today.
In fact, I realize that I would not trade without that kind of thinking:

GBPJPY.

The box was nice. The price breaks to the upside. However, I know that the GBP data is published soon (unemployment etc.)
What happens next?
The breakout is destroyed and the price goes to the other side.
Was that predictable? No.
But did I know that STH like that could happen? Yes.
So this way of thinking kept me out of that loser.
Would you have really traded the breakout "blindly" without considering tha tthe GBP news could turn the market all around?

A lot of things could happen. But thinking like this requires speculation. Speculation is just another word for guessing. And guessing eventually leads to second-guessing. Which leads to self-doubt and eventually a blown account. The solution? Completely eliminate all thinking and simply follow where price leads.

Analysis like this is only valid if you can make a definitive conclusion BEFORE the news comes out. Otherwise, you are simply curve fitting. Performing the analysis this way will always give 100% results in your favor.

Here is my proof: Did you know (not guess, not speculate, not surmise, not feel) which way the GBP news would point before it was released?

"No" is the only honest answer. You did not know which way the news would point before it was released. If you did, then you could literally be a billionaire within a year. So then, what good was all those hours of study and speculation beforehand? What did your hours of (wasted) time get you that it did not give to me? Nothing. You got nothing from all of your work, that I did not get from doing none of it. It gave you no actionable advantage whatsoever. It made you feel good; it made you feel in control, even if just a little bit; it made you feel like you were involved in the final outcome of the scenario -- but aside from your feelings, it gave you nothing tangible.

More proof: Show me every instance of a GBP news release over the last 2 years, and I will show you enough opposing scenarios (scenarios that go opposite your normal expectations) to make you finally realize how faulty this type of analysis really is. It has to be this way, otherwise there wouldn't be enough money in the world to cover all of your wins, eventually.

Remember: Trading SSBO as outlined in this thread, I am NOT worried about long term price movements. I do NOT think 100p ahead. I am NOT concerned with MA100 or some such thing. I am taking short term breakout positions ONLY, usually for movements of less that 50p. And for that, absolutely NONE of your tactics will help. In fact, they will only hinder.

I continue to find this thread to be a font of wisdom. It has been excellent to read these last two pages of interaction. FxH has very clearly laid out his method once again in the last two pages. I must admit, I am a victim of my own analysis and subsequent fear & doubt.

Thanks for the reminder to follow the price, not try to lead it FxH.

T

Hi guys,

yes, that exchange is interesting.

Well, I think I was not able to explain what I am doing though.
Of course, I do not know whether the price will go up or down because of the announcement, or whether the price continues to go sideways.
Nobody knows that (even the fact that I saw several investment bank trading floors from the inside does not help here ;-)).
However, I do know that something could happen and that could go against me. Yes, that could go in my favor, but I do not want to speculate on that.

Remember that I use a rather complex approach which categorizes each session into one of the three types, "news day", "consolidation day" and "trend day".
Each comes with own restrictions.

It is not that I skip all announcements, for example, on a consolidation day, I might trade a breakoput just before the news.
However, I would not do so on a "news day". Exactly because of the reason you named FXH, I do not know whether it will go in my favor or not.
So do I want to get stopped out with a massive spread and slippage? No.
For example tomorrow before 14:30, one should play it defensive and not take a breakout just before the US unemployment unless you are happy to possibly suffer from the costs mentioned.

So I am not speculating here, rather the opposite. I play it defensive. This means that I try to avoid situations which are obvious and possibly dangerous.
However, I do so according to certain criteria and according to the session type.