Price Action in Day Trading by Dadas

My most recent developments have lead me to create the Dadas_Trading_Indi(!).mq4.
I have written about it a page or two back, but I have been looking for clear indications.
Thus, during my brainstorms I got to my new equation as seen in the footer.

What the Dadas_Trading_Indi(!).mq4 does is search for the Big Guys Candle (Yellow Bomb).
I have come to the conclusion, that it is much wiser to first search where the Big Fish are, before attempting to catch some.
So, the Indi finds the bombastic candle, then plots the S/R Zone upon a 3 Candle Pattern.
Then, by clicking on the Zone I get my Pivot and the Target Levels.

So, my role now is to observe Price Action in the Zone and around the Pivot.
My SL levels are very clear, too.


I have been trying out various trend indicators, but in the end they are useless for me.

Now, I will be studying the VIX (Volatility Index), especially the VDAX-NEW.
Unfortunately there are no reliable MT4 VIX indicators.
Thus, I will be studying the online services.

Free Your Mind of "protocols".

escape from the Forex matrix ..

thanks for the great tread

I've had a thought about "consistency" in trading the financial markets.
This word, "consistency", is very often used by traders and everyone seems to view this as a goal.
But, let's think about what "consistency" means.

1. Consistent behaviour or treatment:
In this sense we can train ourselves to perform certain procedures in a regular fashion.
Stick to defined rules of Chart Analysis.
Stick to defined rules of Entry and Exit.
Stick to defined rules of Risk Management.
Stick to defined rules of Money Management.

As far as the Market is concerned, it never behaves in a consistent manner.
Otherwise, the only consistent thing about the Market is its inconsistency (Price Change).
Moreover, the inconsistency in itself fluctuates, or changes in amplitude.

1.1. The quality of achieving a level of performance which does not vary greatly in quality over time:
What do we need in order to achieve this quality, provided we have achieved consistent behaviour?
We would need to practise our behavioural consistency on consistent Market Conditions.
This implies, that if we want to Risk only 10 Pips per trade, we must only trade in such
Market Conditions, when Volatility is relatively small, or IOW Price does not retest more than 10 Pips.
This also means, that in such Market Conditions, we will have to wait for 20 Pips Reward much longer.

Another problem is how to recognise specific Market Conditions?
Though there are some specific periods when Volatility becomes literally wild,
and there are times when Market practically goes flat, all the other times are really hard to predict.

There is only one conclusion:
If we want to achieve a consistent performance level, we must find consistent trading conditions.

Thus, a 10 Pip SL rule cannot apply to all Market Conditions.
It will work at periods of small volatility, and fail completely on large volatility periods.

This is why we need a tool to see both the potential TP and SL levels for a given Candlestick Pattern.
This is why traders must lose their money until they have figured out how to see both ends of the story.

Yes agreed, discipline and consistency is very important in forex. There's no easy money in forex but I think you can earn a decent living if you work at forex for a consistent period with strict MM, a sound strategy and always being on the watch for changes in the market. Same with professional poker, the best players that make big bucks work at it like a full time job and some have degrees in other disciplines. One thing about forex which trumps poker is the fact that you are always playing the same opponent whereas in poker your opponent changes everyday. One problem I have with forex is that when I go on win streaks, I have degenerate gambling syndrome and decide to enter on a whim. These adventures often prove to be costly and even though I manage to salvage the damage I caused, I am now even more disciplined than before.

Every currency pair has a different personality and they get moody during different times of the day. A fixed SL is never going to work as volatility changes during the day. The same thing is true with TP. The higher the fluctuations the higher the TP although I get out on 75% - 85% profits if I get minimal market exposure, that is if the market goes my way instantly. I don't want to wait another 15-30 candlesticks for pullbacks before the price comes to my 100% TP zone. In a very slow market, the longer you stay in the market the more chances of a market maker coming along to shift the price in unpredictable ways will occur.

There's something called depth of market which allows you to see the pending buy/sell limit orders of large traders which is available for some brokers but not on most.

*One last thing I have to add. There's a huge psychological difference between trading demo and live. One thing is that the quotes are slightly different. The main element is fear. When you are trading live, you are too scared to enter when you should be entering, hence being late makes you miss the train and get runover. Conversely, you will also be scared if you wait for 4-6 hours and no trade pops up and you are afraid that you won't make a profit for the day. Then you jump in a trade with not the perfect entry price. You are eager to make profits, the market is up to something devious ...and we have the perfect storm.
Fear also makes you to be scared to let profits run where you would have just left the computer when trading demo. Lastly, when you trade demo you just don't feel the consequences of your actions, hence you develop a loose trading habit which is not good for trading in the long run.

As far as I am aware, market depth is now standard on MT4.
RMC on the Market Watch and you will see it in the menu list.

There is a simple solution to all your problems, you know.
Stop gambling!
Risk only what your wallet will not feel as a loss.

Don't see Forex as a fast way to get rich.
Rather see it as the fast way to lose all your money.

Wake up, man, wake up!

Most of the times we lose on SL, we are dealing with the following:


We can't win with those, there is no way.
The only way is to think like they do.

"Your game was predicting"

Dear Dadas,

How to put a pending order and don't play predicting game?
Do you have real examples of such "pending without predicting" trading?

After all, we don't know how price will moving... only speculate and analyze historical info and latest news, ie always predicting, always playing. Or...

ioms

We can never know for certain if the price will go in the direction,
even when the price is in a strong one-direction trend.
But, the same way, we can never be 100% certain that when we get up from bed
the floor will be there where it was when we went to bed.
We can never be 100% certain of anything in our lives.

Yes, placing pending orders against the trend based on potential reversal levels is predicting and gambling.
That is why I don't practise this kind of trading-gambling.

If one does not have time to trade, this person should not trade at all.
If one sees trading as an easy and quick way to get rich, this person should not be trading at all.

If a person is addicted to gambling adrenaline, well, I can't help it, this person is a gambler.

What you do is your choice.
Obviously, you don't have a lot of time for trading, thus you should create a medium-term strategy based on H4 and H1.
You should be trading basic Break Outs, not predicting potential reversals.
You should be using strict Risk & Money Management rules, and that's all.

Using the simplest of tools, SMA(50)C & SMA(200)C, all you do is then identify the Tops and Bots.
You never trade inside the SMA's.
You only trade in the direction of the SMA-related trends.

To identify the Top Resistance and Bot Support, you can use the Shadow or PTECZ or combined.
The SL must be above the Top Resistance or below the Bot Support.


And, it is only as F_cking Easy as this!

However, ioms, you will never know, until you know.

All brilliant is easy, if you have knowledges... (dry sound crossed out)

All brilliant is easy for genius...! :nerd:

Boundless thanks Dadas!


ioms

All brilliant is simple.
Perhaps genius lies in simplicity?

Use it well!

on first BO the sma are not short?

do you mean they should be both angling downward?

thank you again

On the first BO SMA200(C) is below SMA(50)C.
Plus, they are rather flat.
You can also add some color by angle.

I have given you the simplest of the ideas.
Instead of SMA(200)C, I use TrendEnvelopes_v5 set to MA_Period 200.

My chart looks like this - all by indicator.

Current day looks like this:

Hi!

I can´t believe there´s so few people showing interest for this thread, technique and Dadas dedication! I´ve been trying to learn forex for about 2 years, without much success, but the information Dada is giving me has seriously improved my trading! I´ve been trying to get a grasp of this style but I still feel I´ve not managed to fully understand it. I´ve been reading from the beginning of the thread and I´m still only on page 50, so I´ll just keep reading before asking any questions. I just really really would like to thank you Dada for all the effort you´re putting in to this, all this knowledge is really valuable for me! Thank you, please keep this thread going!

I´m currently not using MT, just a naked chart from Oanda. Is it possible to do this technique without the indicators or should I just go ahead and start using MT? The answer is probably in the thread somewhere, sorry if it´s already been answered. I´m a slow learner....

Hi alekol!

You can use this knowledge and technics on any chart, of course.
I am trading on the MT4 platform, so I have learned this platform and
I have created many useful tools for this specific platform.

You can trade Oanda on MT4, too.

I think algorithmic trading can be milked for profits when it does the wrong things. Just take a look at the price fluctuations that rubber-band back in milliseconds but I think it is still risky despite the fact you can profit 90% of the time because you have no idea where to place SL. Imagine if you are trading a H1 breakout and the algorithmic trader spikes your SL by 50 pips in one second . This can often be a problem if you use SL (unless you do a scripted hedge trade). Personally I don't think algorithmic trading is too powerful at the moment (just stay away from news hour), otherwise there would be no volatility in the market as the computer will eat up the profits of all buyers and sellers. Most of the times you can't even trade forex these days because the spread is like 50% of the price range on a smaller time frame due to traders getting smarter by the day.