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Price Action in Day Trading by Dadas

  • #4,021
  • Sep 4, 2014 10:15am Sep 4, 2014 10:15am
Quoting ForexT1000
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...
As always, the truth is somewhere in the middle.
It is true that trading the news is risky and a spike can eat you up.
And, it is also true, that you can quickly get rich on the news,
as one of my friends has proven just today by making 100 Pips on EURUSD.
I must acknowledge that one of my scripts played a very important role in this trade.

However, there is a simple solution, as always, to minimize the risk.
It is all about when you Enter.
True, there was no spike on the news, today.

But, let's consider the EURUSD M5 chart as it was before the news, today:
Attached Image (click to enlarge)
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Let's assume we are simply trading without any checking of higher Tf's like D1 & H4.
From my point of view, I have the session Open Line and my candles.
I see a lot of Yellow Candles, which means that Price is fluctutaing around SMA(50)C.
So, the direction is not certain.

Assuming I would choose Long on the Dark Green Momentum Candle, because Price would have been
above both of the visible Lines (their color would have been Green) , I would have most probably
been taken out by SL on the Dark Red Momentum Candle. Nothing special, just trading.

This time I would have to place a Short order.
And, that's it.
If I hadn't closed early, which would be rather doubtful, because Price did not move a lot,
I would have most probably closed my 20 Pips normative.
That would still have been before the news.

I mean, I am very happy for my friend to have made a 100 Pips, today!
However, that is not what trading is about!!!

Trading is about having a strictly defined strategy, and realising this strategy like a machine.
Which also includes zero emotions, both positive and negative.

So, there was an unusually big move on the EURUSD and other pairs, so what?
If you happen to get lucky, because you were in the right direction at the right time,
and the Price made 93 Pips in 5 minutes, good for you! You get an extra bonus.
There is nothing to get excited about. It was just confirmation of the fact that you were doing the right things.

I wasn't even looking at the EURUSD, today.
I was doing my thing on DAX30.
I made over twice my daily norm.
Attached Image (click to enlarge)
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I was only doing my thing.
Trade the facts, not opinions.
  • #4,022
  • Sep 4, 2014 10:34am Sep 4, 2014 10:34am
Now, let's analyze the same situation on a plain M5 chart, without any indicators whatsoever.
What you do is find the latest Top and plot a line there.
Then, you find the following 2 significant reversal candles, find the Bottom and plot a line.
Attached Image (click to enlarge)
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That's all you need to trade Break Outs.
Attached Image (click to enlarge)
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Provided you have a sound Risk & Money Management system, it can't get any easier.
Trade the facts, not opinions.
  • #4,023
  • Sep 4, 2014 10:43am Sep 4, 2014 10:43am
Quoting ForexT1000
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.
As far as this "problem" is concerned, well, I don't know the law in your country.
From my point of view it is simple.
I find a broker who offers me what I can deal with.
If a broker makes trading virtually impossible, I don't go to this broker.

I trade the DAX30 - Index of 30 German companies.
I trade only within the hours when the spread drops to 1 Pip.
So, I don't trade in the early morning when the spread is 8 Pips.
And, I don't trade in the evening, when the spread is 8 Pips, again.
Anyway, when the spread is 8 Pips, there is hardly any volatility.

Don't concentrate on the problem!
Concentrate on the solution!
Trade the facts, not opinions.
  • #4,024
  • Sep 4, 2014 12:37pm Sep 4, 2014 12:37pm
Quoting ForexT1000
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.
I just saw you're from "Down Under".
Well, obviously the Sydney-Tokyo sessions suck most of the times.
You can't trade DAX30, ie., during those hours.
So, the only solution, you must trade London-New York sessions, whatever it takes to do this.
Trade the facts, not opinions.
  • #4,025
  • Sep 5, 2014 8:06am Sep 5, 2014 8:06am
I trade full time, and I only trade during London Hours. Not just London hours, but I wait for maximum volatility during London hours for trades. I don't quite agree with being just about right all the time with forex. For me, forex is just about making money. Sure it is interesting, but i'd rather be travelling around the world and meeting interesting people. Sure I do not just want to get lucky all the time as it might end in the future, but if I am coming out lucky 75% of the time by trading in crazy situations with a hard stop loss, I will continue trading like this even if it is illogical. It is a lot more complicated than that because I research price correlation, fundamentals, volatility and various other elements, but when I press the trigger it is very much instinctual. Some of the top traders in the world don't have fixed strategies and kind of go with the flow. Sure, they know everything but they know so much that they know it is impossible to be right 100% but 80-90% is good with manual entry and hard stop loss. It can't be proved on paper, it is just feeling from experience.
  • #4,026
  • Sep 5, 2014 9:13am Sep 5, 2014 9:13am
Quoting ForexT1000
I trade full time, and I only trade during London Hours. Not just London hours, but I wait for maximum volatility during London hours for trades. I don't quite agree with being just about right all the time with forex. For me, forex is just about making money. Sure it is interesting, but i'd rather be travelling around the world and meeting interesting people. Sure I do not just want to get lucky all the time as it might end in the future, but if I am coming out lucky 75% of the time by trading in crazy situations with a hard stop loss, I will continue...
I, absolutely agree with you.
This comes after you've studied and tested hundreds of trading "systems".
After you've got so complicated that at some point you broke and retuned to simplicity.
After you've understood it is best to go with the Big Guys, with their flow.
After you've learned to read the action of the price, the minute reactions of the price line.
Then it becomes intuitive, though it isn't really intuitive, it is programmed in your mind.

It is always like that.
The final mastery of every path you take is ultimately "intuitive".
When the dancer becomes the dance!
Trade the facts, not opinions.
  • #4,027
  • Sep 5, 2014 10:47am Sep 5, 2014 10:47am
Today I got reconfirmation that what happened yesterday on the EURUSD has nothing to do with trading.
It was the Central European Bank's decision to weaken the EURO.
Trade the facts, not opinions.
  • #4,028
  • Sep 8, 2014 12:43pm Sep 8, 2014 12:43pm
Here I'm in an awful fight or flight situation, fighting for my account survival. I was going long on the m1 chart and the price started to head south endlessly. I started to trade up on time frames because I felt that that move was really not bearish (the move is too steep and is not supported by fundamentals). I could've headed out with a small SL but there were reversal setups that kept me in longer and longer. Looking on the D1 chart, I can see why I probably shouldn't have gone long. This has never happened to me before as I'm very careful but this one caught me off guard. Technical analysis shows that I have a way out to BE around 1259 levels. This is a relatively conservative BE position (I just want to get out and trade profitably again). I shouldn't even be in this position but I'm just showing what happens to me in really bad circumstances. The reason I trade smaller time frames is that I can save myself using higher time frames like situations like this but I only trade AAA setups - guess I got caught out real bad. Note how even though this position can be rescued, we should never place ourselves within any distance of defeat. In Art of War, it states that we must secure ourselves against defeat before we can take victory. I hope I get out alive and learn a valuable lesson.

Let's see what happens.
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  • #4,029
  • Sep 8, 2014 1:28pm Sep 8, 2014 1:28pm
Quoting ForexT1000
Here I'm in an awful fight or flight situation, fighting for my account survival. I was going long on the m1 chart and the price started to head south endlessly. I started to trade up on time frames because I felt that that move was really not bearish (the move is too steep and is not supported by fundamentals). I could've headed out with a small SL but there were reversal setups that kept me in longer and longer. Looking on the D1 chart, I can see why I probably shouldn't have gone long. This has never happened to me before as I'm very careful...
Personally, I would never trade XAUUSD on the M1 chart!
However, everyone is free to do as he or she wishes.

I would, though, suggest plotting out the potential trade ranges.
I would use smth like M15, if I were to trade the M1.
Even though I really can't understand where you got the Long idea, nevertheless, consider this:
Attached Image (click to enlarge)
Click to Enlarge Name: GOLDM15.png Size: 39 KB

You just drop my script on the last Red of the Bearish trend.
You would have colored zones and lines, you could observe PA on them.
Attached Image (click to enlarge)
Click to Enlarge Name: GOLDM15_1.png Size: 34 KB

In case you didn't like the colors, there is an option to switch off the Zones and leave only the lines.
Attached Image (click to enlarge)
Click to Enlarge Name: GOLDM15_2.png Size: 36 KB

I also follow the trend if the price breaks the extremes.
Attached Image (click to enlarge)
Click to Enlarge Name: GOLDM15_3.png Size: 38 KB


Attached File(s)
File Type: mq4 Dadas_Secret_Weapon_Script_500.mq4   12 KB | 804 downloads
Trade the facts, not opinions.
  • #4,030
  • Sep 8, 2014 1:37pm Sep 8, 2014 1:37pm
I am trying to figure out how you got the Long idea on M1, but sorry, can't see any at the levels you entered.
Attached Image (click to enlarge)
Click to Enlarge Name: GOLDM1.png Size: 38 KB
Trade the facts, not opinions.
  • #4,031
  • Sep 8, 2014 1:47pm Sep 8, 2014 1:47pm
ForexT1000, you are trading the way which I tell everyone not to trade.
You assume a S/R level and you assume trend is going to shift there.
That is, by me, total BS.
Naturally, using a decent Risk Management system together with Money Management,
theoretically the math should be in your favour, that is, provided you stick to your rules.

But, what you have done here, is the typical scuicide method.

Besides, how is there any Bullish Trend when you get Lower Highs & Lower Lows???
Trade the facts, not opinions.
  • #4,032
  • Sep 8, 2014 2:26pm Sep 8, 2014 2:26pm
Quoting ForexT1000
I only trade AAA setups - guess I got caught out real bad.
Who decides which setup is AAA?

Quoting ForexT1000
Note how even though this position can be rescued, we should never place ourselves within any distance of defeat.
In Art of War, it states that we must secure ourselves against defeat before we can take victory.
Wrong again!
You have absolutely no chance to win this battle!
You only have the option to join the Fat Guys.

I've heard one guy saying that "trend goes on forever".
Not that it actually does that, but this is the proper frame of mind!
Statistically, price remains in trend much more often than it changes trend.
Trade the facts, not opinions.
  • #4,033
  • Sep 9, 2014 9:58am Sep 9, 2014 9:58am
I was finding a retracement level on the m1 from a fading bear price, but didn't look on the H1 to see a breakout pattern. I've been shorting for weeks and I picked up that gold turned from bullish to bearish the very first day it happened, not really sure why I wanted to go long. setup was valid but when trend is strong technicals don't work. With the US economy going strong and Ukraine settling down, it's not looking too good for gold at the moment. It would've been alright if the price was whipsawing or flatting. I really can't tell you my AAA++ setups (more confirmation, higher TP, more directional confirmation, better RR, and correlation with silver and other currencies), they make money because people don't know about it. It's like if you are on a boat, if too many people are aboard, it is too heavy to move. That's why I don't follow forex gurus that charge fees, because if they could make money, why would they teach people for money. Maybe if they were a bit older, then yes they want to pass on secrets.

Got out on a small loss in the morning on a retracement. I've decided to call it quits on forex. It just feels too uncomfortable trading forex full time given the graveyard hours. About the premium trades, they only occur on smaller time frames where a different story is occurring. Since gold on the m1 is equivalent of most higher TF forex pairs it is good to trade and you can get things like 1:10 RR with good probability and TP in literally under 5 mins but they come fast and you have to have your eyes glued to the screen. I don't like H1 because I filter out good trades, and get the best trades. Maybe you get a good setup once a day, but AAA setup comes maybe once 3 days or more. I'm not really scalping on m1, because some setups take a whole day of waiting for 1 or 2 trades, your profit comes from very accurate entry levels and extremely conservative TP levels. Given that I worked on forex full time, 5% roi per week is just too low for a low capital base + the graveyard hours+ trying to push that number to around 10% was what got me in trouble. I guess the main reason I don't want to trade is that I don't really enjoy it, and money is not a motivator unless I'm getting something amazing like 20-30% weekly on setups and I feel like I'm not pushing my chances. Sure on H1 trend continues for a long time, but you cannot trade with the trend because, you are making too less trades on a higher TF, it is difficult to set SL where price has been going in the same direction for so long, and the market makers know what direction most of the traders are trading. If prices go long, they will short first. If prices go short, they will go long in a constant zig zag pattern. That's why they hate scalpers, they are like sparrows. You can shoot one, but the rest will fly away in different directions.

You can set wider SL, but TP will suffer. You can set tighter SL, and enter many times but you might have frequent draw downs. I know people who trade profitably like this, but I don't enjoy doing it. You can be right on the trend and still lose money just because if prices was in free fall the economy will crash tomorrow.

Recently just got back into poker. It is one of my hobbies and I actually want to play it when I have free time. Went up 70% roi in 3-4 days with strict MM on micro stakes. It's not just about being profitable, but I feel comfortable with the game as there is a lot of psychological management. I wouldn't say that it is easier, it's not as hard as forex for me. The game has changed a lot since there are a lot of books have been written on it. Hence, the rules have also changed a bit for me. With a side job, I will contribute maybe 5% of my income to my poker account weekly and only increase stakes when I increase my account by 20x. The major plus is that now I can sleep in the evening and work in the morning so I can do things I want.
  • #4,034
  • Sep 9, 2014 10:13am Sep 9, 2014 10:13am
Quoting ForexT1000
I was finding a retracement level on the m1 from a fading bear price, but didn't look on the H1 to see a breakout pattern. I've been shorting for weeks and I picked up that gold turned from bullish to bearish the very first day it happened, not really sure why I wanted to go long. setup was valid but when trend is strong technicals don't work. With the US economy going strong and Ukraine settling down, it's not looking too good for gold at the moment. It would've been alright if the price was whipsawing or flatting. I really can't tell you my AAA++...
I am glad for you to have found your calling!
Everyone should be doing what they find best for them.
No matter if others agree, or not.
It is your life, live it your way!
Trade the facts, not opinions.
  • #4,035
  • Sep 16, 2014 8:50pm Sep 16, 2014 8:50pm
Just subscribed, thank you very much for this thread. Do you offer/sell training on Price Action? Thanks again.
  • #4,036
  • Sep 17, 2014 7:03am Sep 17, 2014 7:03am
Quoting Koqn
Just subscribed, thank you very much for this thread. Do you offer/sell training on Price Action? Thanks again.
There are books, vidoes, pdf's, there is my thread.
Why do you think that when I tell you the same which I have already written, it will help you to learn?
Has anybody already invented a method to transfer data from one mind to another?

Finally, there is the chart!
Learn PA by reading the chart, not by reading books!
The whole theory means nothing, until you can understand why.
Because every PA pattern has only 50% chance of realisation.
It is your ability to read the market from the chart, which tips the scales to your advantage.

Nobody can teach you that.
Only you can learn it, yourself.
Trade the facts, not opinions.
  • #4,037
  • Sep 20, 2014 2:06pm Sep 20, 2014 2:06pm
So, what's cookin' around here, guys?
Nobody interested in trading any more?
Nobody wants to know anything?
Nobody sharing any news?
Trade the facts, not opinions.
  • #4,038
  • Sep 20, 2014 4:49pm Sep 20, 2014 4:49pm
Quoting Dadas
So, what's cookin' around here, guys? Nobody interested in trading any more? Nobody wants to know anything? Nobody sharing any news?
Hello Dear Dadas!
Your last messages, especially from the beginning of September is very significant and important, at least for me.
To date, I reworked a couple of indicators using your research as basic. Now, in real time, on any time frame, and for every pair I can see "repetitive market movement" in the described standards. I'm dialing with statistics for the "right" and "wrong" signals to optimize the real trading.
Now I see a lot of reasons to confirm your words: "There are no False Break Outs! The Market never bluffs! The only False thing is the False Interpretation of what the Trader sees on the chart!"
Thank You!

ioms

Examples of my charts:
Attached Image(s) (click to enlarge)
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  • #4,039
  • Sep 21, 2014 2:45am Sep 21, 2014 2:45am
Quoting ioms
{quote} Hello Dear Dadas! Your last messages, especially from the beginning of September is very significant and important, at least for me. To date, I reworked a couple of indicators using your research as basic. Now, in real time, on any time frame, and for every pair I can see "repetitive market movement" in the described standards. I'm dialing with statistics for the "right" and "wrong" signals to optimize the real trading. Now I see a lot of reasons to confirm your words: "There are no False Break Outs! The Market never bluffs! The only False...
Hello ioms!

I was thinking that if I could count on anyone here, it would be you.
I am very happy that you are progressing and seeing the market on the charts.
I have, also been working and I have reached real simplicity.
There is one candle pattern that is almost deadly precise in showing the direction.
It is so simple and obvious that we simply ignore it as a pattern.
It is as easy as 1,2,3.

I have reached a certain internal peace with trading.
I am now sure, IOW, I know that trading is a good business, that one can really make a living on.
Thus, I am now not doing so much programming, just a tweak here or there, and I have more
time to engage in on-line social activities, so I am active on the Polish Fx Forum (forex-nawigator.biz).
Especially on the daily thread "DayTrading".
This is a great platform where poeple exchange trading ideas and opinions for the given day.
It is a great experience, because one can not see every opportunity while being busy trading, and
you can pick up an idea, there, and check it out on your charts.
Also, some guys are always in-touch with the fundamentals, and that's another good thing.
They share, I share, and so it goes on.

When I share, the Universe returns abundantly.
My latest charts look like this:
Attached Image (click to enlarge)
Click to Enlarge Name: [DAX30]M15.png Size: 32 KB

As you can see, the new MQL4 technology enables us to create buttons in a simple way.
Also, there is the OnChartEvent() function which enables us to execute codes on the click of the mouse.

I will, probably, be slowly and gradually building the whole system, improving it.

What we should be looking for in trading is what I have always been telling people, here:
Buy at Bottoms, Sell at Tops.
Which simply means: Recognise Peeks and Throughs (Swings)!
That's where the PTECZ becomes most helpful, because it tells us that there could be a swing.

For the rest, I have given you the tools already.

Keep warm, or cool, whichever is more appropriate to the situation!
Trade the facts, not opinions.
  • #4,040
  • Sep 21, 2014 8:41am Sep 21, 2014 8:41am
Quoting Dadas
{quote} I am very happy that you are progressing and seeing the market on the charts. I have, also been working and I have reached real simplicity. There is one candle pattern that is almost deadly precise in showing the direction. It is so simple and obvious that we simply ignore it as a pattern. It is as easy as 1,2,3. ...
What I have in the chart?

1) Areas of support, resistance, which are built according to your research.
Areas are drawn automatically when certain events (signals) come. Levels are drawn in the direction of the history of the chart and live there before the the new signal come. So you can better see the accuracy of the self-built areas with the received signal.
2) From the active signal candles painted colored (red or green) line with the comment. Gray lines are drawn from the signal candle in history.
3) The potential trading range is a rectangle (red, green) (color corresponds to the signal line candles)

There are other little helpers (ma, trendline) to facilitate the decision-making...
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