Sonic R. System

USDCAD

Is it possible this is on the verge of reversal? Well, maybe next week since the LS today has little time left to it.

Today the MMs pushed it to the upper half number, but you can see the most notable volume was coming back down from there. Wednesday, the MMs used the power of their "book push trades" to force the price up over 300 pips. My guess (all it is) is that they did so to force traders to accept the new, higher price area to do their trading in, while the MMs focused on closing out their longs. If the MM's "book push trades" up to the half number today did not disclose a shit load of eager longs, then the MMs are probably going to reverse the price. But with so little time left today, the MMs will probably continue their status quo until next week.

But, we can never know how the MMs will move price next.

NZDUSD

Here is another one for next week, maybe, because the hour is late now today.

Today the MMs pushed the price below the lower whole number, from which the price blew back up strongly. And all on notable volume for the day. Now we have a classic long setup. But there are two reasons to not jump in.

First, there is not much time left in the LS. Yes, the US MMs could do a surprise move in after hours, but don't bank on it.

Secondly, the trend has been down. In such a situation, where the Dragon is still below the Trend, it is best to at least wait for the price to break out the Trend line, maybe even to do so and then come back - retest and bounce - before entering a trade. That easily might not happen with the time remaining today.

EURUSD Long Trade Closed:

Closed for loss of 172.4 pips average, 344.9 pips total loss. I gave up on the trade this week. I should start following Gupito's good example and simply close anything that goes modestly red.

GBPUSD Long Trade Closed:

Closed for loss of 71.9 pips average/total.

NZDJPY Long Trade Closed:

Closed for loss of 30 pips average/total.

I still consider your cut of losses very good trade management. The fact that you didn't blindly add as the trade moved against you is very impressive. Especially good for volatile times.

Cut your red as fast as possible before growing to be fatal cancer said Gupito and now I begin familiar with my RED. Thanks Gupito

The Three Keys to Becoming a Successful Trader

They are: cognitive recognition, understanding the cause of price changes and reaction discipline.


Cognitive Recognition

When traders finally "find their niche" it is because they have latched onto a trading method that suits them and that they are having success with. The method can involve the use of indicators and/or studies or nothing at all but price. There are countless combinations ranging from complex to simple, but they all coalesce into one thing for each trader: looking for a picture representation of the market that they recognize as historically producing runs with a completion success rate sufficient to warrant entering a trade.


Understanding the Cause of Price Changes

In the manner that Pavlov's dog learned when food was available, or that a child learns to not touch a hot stove burner, traders can learn what makes market price change. Moreover, by learning and experiencing how the market really works, traders can become as responsive as Pavlov's dog to a good picture, yet be as defensively reactive as that learned child when adverse price changes occur.

Baring intervention by central banks, the various big market making banks in the currency market are in complete control of market prices 100% of the time. When central banks do intervene, as a courtesy they inform the market making banks in advance, so they can posture themselves to profit from the coming pressure to change price, or if profiting is not possible then to posture to lose the least. It is rare that a central bank will intervene without notice (as in the case of the SNB last week). These market making banks are all linked together (electronically connected network) to act as one market making entity. In this day and age of computer technology, comprehensive and efficient software and high frequency trading this market making entity has complete knowledge of the price queue and instantaneous evaluation of the potential to create market liquidity (and profits) thru manipulation of the price up and down the price queue. Just how they do this has already been discussed repeatedly on this thread. What is important to learn is that future price direction and distance is the purvey of this market making entity. It can whip and whack prices at any time however it wants to. It has price queue software telling it - on an instantaneous basis - what price queue manipulations will produce what liquidity (and profits). It has HFT execution to carry off whatever price manipulations it decides on. And, being a syndicate of banks, it has virtually unlimited funds to carry off whatever price manipulations it decides on.

Once the trader learns this about the market, they should be at a point to accept that regardless of the picture before them, there is no way of knowing how the price will move next.


Reaction Discipline

The discipline to react appropriately to changing price is what separates the men from the boys, the women from the girls, the successful trader from the wannabe successful trader. How quickly can the trader assess that the current price move against the picture trade invalidates the picture trade, accept the loss and close the trade? Is the trader disciplined enough to realize it is better to be wrong about closing the trade and to re-enter the trade later after taking that loss, then to be wrong about holding the trade and suffer mounting loses?

Nobody wants to lose. This is our natural mindset. Only discipline can overcome the natural inclination to want to not "give up" on a picture trade going awry. Only discipline can overcome our natural aversion to accepting a loss. The discipline required here is the discipline to accept that the picture trade is currently invalid and to quickly react by cutting the trade off and keeping the losses from mounting. It does not matter what happens with the price next. What matters is having developed the proper reaction discipline: quickly accepting when a picture trade is no longer valid and terminating it without further thought, no matter what might come next.


Summary

Cognitive recognition of the picture looked for on the chart calls the trader to trade. Understanding how market pricing works keeps the trader defensively alert to price changes. Reaction discipline, the discipline to assess that a picture trade is no longer valid and to react quickly to terminate it - no matter what might follow - is the only thing that will combat our natural mindset to not be a loser; a natural mindset which in the matter of trading will ultimately cause a trader to lose everything.


Sincerely,
-tah

Reminder About Classic Trading


Sonic R. System Trade Checklist:

1. MTF Trend Check

1. H4 trend = M15 trend

2. Classic Setup Check

1. London Session
2. Wave Quality
   1. Smooth, not ragged
   2. Spaced out, not just a few candles
   3. Can be improper wave if due to Leg #2 spiking beyond important local S/R or key level
   4. Best if preceded (earlier in day or previous day) by spike or by consolidation beyond a key level

3. Dragon Quality
   1. Steep angle
   2. Above Trend for longs, below Trend for shorts, and if this is not the case wait for price to go beyond Trend, retrace and bounce

3. Entry

1. Normally, enter at least a few pips beyond the end of the first candle exiting the Dragon in Leg #3 of the PA wave
2. If the Dragon is on the wrong side of the Trend (see above) then wait for price to go thru the Trend, retrace and then close above the end of the retrace

4. Stop Loss

1. Set it just beyond the start of leg #1 (wide) or leg #3 (tight) of the PA wave
2. The tight SL is safer if the trade is being opened during the 2nd part of the London session rather than the 1st part

5. Take Profit

1. Use S/R levels and consolidation areas from PA history
2. Keep in mind whole and half levels, and RDH/RDL and RWH/RWL marks

-tah

Prof TAH,

Thanks a lot for the remainder regarding classic 15 min .
I am new but I believe I have read post no 1 properly enough and still cannot get a clear picture on WAVE quality.
Can you please show me correct direction on this matter.

In this Pic , What kind of wave quality is present in London session. Is it consider as smooth. I am not sure.
Please excuse my question if it is too stupid to ask.

Thanks

GBPCAD

50trader,

Welcome to the Sonic R. System.

First off, your posted chart contains banners not necessary. If you will look at my posted charts you can see the difference. This was discussed in detail a week or two ago. Please go back and find those posts and in the future post your chart without all that "surrounding" garbage. The lesson here for you is that you need to keep up with your Post #1 homework, which clearly obligates you to stay current with posts. Each time you return to the thread, you need to read from where you last stopped, and intake the information posted since you last left. Okay?

As for your question, I have marked the M15 chart with two suitable PA waves starting with the open of the London session. You can see the PA waves, EPs and SL choices marked there. Clearly, the H4 trend is up, so it is appropriate to favor trading a classic long setup. However, you will note that the first M15 setup is one where the Dragon is below the Trend. In this situation it is best to wait to see if price breaks up thru the Trend, retraces and bounces before making entry. The "bounce" point is where a candle closes above the low of the retrace. So, in this case the 2nd EP shown for the setup - the "bounce" EP - could actually have been lower, inside the Dragon, maybe just above the Dragon center line, though I did not show it that way. The second setup is with the Dragon above the Trend, however for this one the LS is closed by the time the EP zone is produced. This should not be traded, especially on a Friday.

Please catch up on reading the current thread. Remember, Forex Factory gives you 24 hours to edit posts, should you ever decide you need to do so. And it is always better for this already large thread that posts be edited instead of adding more, whenever practical.

Sincerely,
-tah

Thanks a lot TAH
I will surely take care of chart surrounding garbage and will keep up with post #1. Lesson is learned.

Sincerely,
50 trader

TAH, do you remember that PDF that was typed up on how to use PVA indicator written by a gentleman who used to post on here? I have someone asking for a PDF on how to analyze PVA but I don't have that pdf anymore and can't recall the gents name. If you can link me to that, I would appreciate it, thank you.
EDIT: never mind it's on page 1 as I thought... Man people need to do more research Good luck fellas.

GBPUSD

Sonikers, this was looking bullish at the end of last week. It still is. We can see the high activity at the lows Friday. So far today, the highest activity has been in coming back up from the recent lows. The H4 Trend is down, but a counter trend Classic long setup could come. If it does, we have these stated facts as reasons to consider it.

Per a recent post on qualifying setups, it might be best to let price break up thru the Trend, retrace and bounce whenever entering a Classic long setup where the Dragon is below the Trend.

USDCAD

Good information to have whenever the next setup comes,......highest notable increases in volume show to be when price sells off from the highs above the half number. This is a PVSRA indication the MMs are bears. Well, there has been that indication right along now for some time, yet the MMs keep supporting the price, and even pumping and then supporting the price again. So, from this alone we should not make any trade decision. We can consider this information though, whenever a Classic setup forms.

usd/jpy long trade opened,just a tiny position。

GBPUSD Long Trade Open:

M15 Classic setup entered in early LS. Too soon, as it turned out. Didn't break until the US MMs pushed it. Then retraced below half number for a Scout addition. TP is set, but tentative. SL now raised to BE+100.

GBPUSD Long Trade Closed:

Closed for gain of 55.3 pips average, 553 pips total gain. End of LS. Will look what's what tomorrow.

EURUSD Long Trade Open:

M15 Classic setup entered after US open and Dragon was above Trend. TP set, but tentative. If price makes it above whole number, I plan to raise SL to insure some profit.


EURUSD Long Trade Closed:

Closed for gain of 14.8 pips average, 74 pips total gain. End of LS and MMs seem to be retracing price. Might go down more in next AS. Decided to take profit and see what's what tomorrow.

AUDUSD

Sonikers, I am trying to not "Comment" so much anymore where speculation is concerned. With the high frequency with which our "opinions" tend to be trashed by the MMs, it just clutters the thread. However, here we have (I think) a good possibility for a Classic long that might precede the London session because there is an AUD high impact release coming in just over one hour.

Drawing the larger waves we can see the importance of the whole number. Activity yesterday was mostly below it, and price might be taken briefly below it again in conjunction with the coming release. This might or might not happen. It will be significant if the MMs do whack the price and then take it upwards to form our setup. It would be an indication of strong bulls. Keep in mind, however, if this happens we still cannot know if the LS will bring additional whacking. If the MMs whack it once for liquidity at lower prices before taking the price up, they could well do it again later. This would be a SL placement concern. But, the more times they do this, if they do this, the more confirmation we have that the MMs are building for a reversal move up.

This is just a speculative "Heads Up!" for a possible pre-LS Classic long setup, one that might or might not be followed by ranging and additional whackings. We can never know how the MMs will move the price next, for reasons well documented on this thread.

-tah

AUDUSD Long Trade Open:

M15 Classis setup from yesterday entered with a Scout today on pullback to EP zone due to AUD high impact release and MMs creating more liquidity at those lows to load up on longs (what it looks like to me). With a good chance this will happen again in the LS, I am not setting a SL at this time. And if it does happen I might add another long Scout. TP is set, but tentative.


AUDUSD Long Trade Closed:

Closed for gain of 11.4 pips average, 34.3 pips total. I added on two retraces, but then the price stalled out. With the US session coming, there is a good chance this will retrace further, so I decided to close the trade and wait to see what's what.