Opened Scouts Long AUD/USD
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- #78,742
- Edited 5:55pm Feb 3, 2015 5:19pm | Edited 5:55pm
- Joined Mar 2008 | Status: PVSRA with Traderathome | 23,553 Posts
The Market vs The Sonic R. System
The title implies an adversarial relationship between the market and Sonikers. Indeed, this is the case. The market is all about creating liquidity so orders can be processed by the market makers (the Robber Banks/MMs). The MMs control price. They have total authority over which direction price moves once orders are completed at any level. They, more than anyone else, know the future of price direction, because they are the ones that have total authority and control over driving the price in either direction. The MMs seek commissions on orders to be filled. They also seek to build positions ahead of their planned price drives. And they seek to profit on these positions. In order to create market liquidity, the MMs frequently whip and whack prices up and down. These moves are designed to stop out "right siders" (create liquidity by liquidating the positions of others) and to encourage new money into the market (create liquidity by drawing in some "wrong siders"). In the face of all the totally unpredictable up/down price manipulations by the MMs to create liquidity, Sonikers must trade successfully,....become successful.
The Sonic R. System is an elegantly simple and effective method of trading, enabling traders to be more successful against the market,...against the Robber Banks/MMs. The Sonic R. System, properly followed, will keep you from trading in a low volume market, when you should not be attempting to trade. It will keep you from trading in a choppy market, when you should not be attempting to trade. It will keep you from trying to pick highs and lows for entries, which you should not be attempting to do! It will put you into a trade at the best possible time, when there is market momentum to carry the trade and the least likelihood of the MMs suddenly whipping or whacking the price yet again to stop out your trade. What follows is an explanation of how to properly follow the Sonic R. System.
You can exit a trade anytime, but only enter a trade during the London session and only when the Dragon has a steep angle. This is a significant aspect of the Sonic R. System. Only during the London session is there regularly the market volume necessary to create the momentum to carry a trade. And the steep Dragon angle evidences the presence of that momentum. Furthermore, by waiting for the Dragon to show a steep angle you will miss entering before most of the attempts by the MMs to stop out traders. A steep Dragon angle normally occurs only after the liquidity creation manipulations by the MMs are over with.
Another significant aspect of the Sonic R. System is the requirement to have a proper price action wave formation crossing the Dragon. If the third leg of the most current PA wave is exiting the Dragon, entry should be at least several pips beyond the end of the first leg #3 candle exiting the Dragon. And it is frequently best if entry is not made until price moves further to evidence the breakout of any previous significant highs or lows. If the initial breakout of this "setup" has already occurred, if price has proceeded and retraced sufficiently to make attractive another entry, now further along than the original breakout, then the re-entry should not be made until the retrace is complete and itself broken out. Obviously, this is not at all like trying to pick highs or lows for entries!
A steep Dragon angle and waiting for price to pass any previous significant highs or lows before making entry is also the key to utilizing the SL for what it was intended; to stop loss in the event of a reversal, not a stop hunt! With a steep Dragon angle at time of entry, you should be mostly past the stop hunt moves and mostly "okay" finding a suitable place just beyond the other side of the Dragon. If price does hit the SL under these conditions, it is far more likely a reversal is underway. On the other hand, by waiting for these specified entry conditions, a SL of just 5 - 20 pips, or just below the previous most significant highs or lows might suffice most of the time.
The attached picture helps to summarize. Entry during the London session would not have been made until the Dragon developed a strong angle and not until the price broke out the previous significant highs (red rectangle area). By that time, the final "whack back" was over with, and price went on to achieve a 75+ pips gain. Admittedly, in this example there isn't any significant whack attempt, but you can see that even if there was, the awaited entry was past when they would have occurred. Note that there are several PA waves. What do you do about confronting multiple part PA waves? There must be a proper PA wave for the "setup" to exist. Beyond that, what is important is not how many "parts" it has, but if it is definitively bullish or bearish. What you are primarily focused on is waiting for steep Dragon angle and for price to breakout the previous most significant highs or lows. What about "targeting" the exit? Well, practically always the price lands in the are of whole or half numbers. And the ones where price lands are typically the most significant previous whole or half numbers (the case here).
Finally, let me say this to those who begrudge giving up "lots" of pips while waiting for these entry conditions. There is never a good trade forming in the market where the MMs will not attempt to create liquidity by whipping and whacking the price to suck in "right siders" (to stop out) and "wrong siders". Market moves are all about the MMs creating liquidity to build positions ahead of planned moves and then profiting on those positions when they drive the price per their plan. On the gentle side, the whipping and whacking creates the PA waves we look for. On the rough side, it takes us out of the trade before the trade even begins! If you begrudge giving up "lots" of pips to favor making an entry in this mess and trying to survive the rough swings designed to stop you out, go ahead, and good luck being successful long term. The greatest success is to trade momentum after all that mess, however brief or enduring it might be.
Hope This Helps,
-tah
The title implies an adversarial relationship between the market and Sonikers. Indeed, this is the case. The market is all about creating liquidity so orders can be processed by the market makers (the Robber Banks/MMs). The MMs control price. They have total authority over which direction price moves once orders are completed at any level. They, more than anyone else, know the future of price direction, because they are the ones that have total authority and control over driving the price in either direction. The MMs seek commissions on orders to be filled. They also seek to build positions ahead of their planned price drives. And they seek to profit on these positions. In order to create market liquidity, the MMs frequently whip and whack prices up and down. These moves are designed to stop out "right siders" (create liquidity by liquidating the positions of others) and to encourage new money into the market (create liquidity by drawing in some "wrong siders"). In the face of all the totally unpredictable up/down price manipulations by the MMs to create liquidity, Sonikers must trade successfully,....become successful.
The Sonic R. System is an elegantly simple and effective method of trading, enabling traders to be more successful against the market,...against the Robber Banks/MMs. The Sonic R. System, properly followed, will keep you from trading in a low volume market, when you should not be attempting to trade. It will keep you from trading in a choppy market, when you should not be attempting to trade. It will keep you from trying to pick highs and lows for entries, which you should not be attempting to do! It will put you into a trade at the best possible time, when there is market momentum to carry the trade and the least likelihood of the MMs suddenly whipping or whacking the price yet again to stop out your trade. What follows is an explanation of how to properly follow the Sonic R. System.
You can exit a trade anytime, but only enter a trade during the London session and only when the Dragon has a steep angle. This is a significant aspect of the Sonic R. System. Only during the London session is there regularly the market volume necessary to create the momentum to carry a trade. And the steep Dragon angle evidences the presence of that momentum. Furthermore, by waiting for the Dragon to show a steep angle you will miss entering before most of the attempts by the MMs to stop out traders. A steep Dragon angle normally occurs only after the liquidity creation manipulations by the MMs are over with.
Another significant aspect of the Sonic R. System is the requirement to have a proper price action wave formation crossing the Dragon. If the third leg of the most current PA wave is exiting the Dragon, entry should be at least several pips beyond the end of the first leg #3 candle exiting the Dragon. And it is frequently best if entry is not made until price moves further to evidence the breakout of any previous significant highs or lows. If the initial breakout of this "setup" has already occurred, if price has proceeded and retraced sufficiently to make attractive another entry, now further along than the original breakout, then the re-entry should not be made until the retrace is complete and itself broken out. Obviously, this is not at all like trying to pick highs or lows for entries!
A steep Dragon angle and waiting for price to pass any previous significant highs or lows before making entry is also the key to utilizing the SL for what it was intended; to stop loss in the event of a reversal, not a stop hunt! With a steep Dragon angle at time of entry, you should be mostly past the stop hunt moves and mostly "okay" finding a suitable place just beyond the other side of the Dragon. If price does hit the SL under these conditions, it is far more likely a reversal is underway. On the other hand, by waiting for these specified entry conditions, a SL of just 5 - 20 pips, or just below the previous most significant highs or lows might suffice most of the time.
The attached picture helps to summarize. Entry during the London session would not have been made until the Dragon developed a strong angle and not until the price broke out the previous significant highs (red rectangle area). By that time, the final "whack back" was over with, and price went on to achieve a 75+ pips gain. Admittedly, in this example there isn't any significant whack attempt, but you can see that even if there was, the awaited entry was past when they would have occurred. Note that there are several PA waves. What do you do about confronting multiple part PA waves? There must be a proper PA wave for the "setup" to exist. Beyond that, what is important is not how many "parts" it has, but if it is definitively bullish or bearish. What you are primarily focused on is waiting for steep Dragon angle and for price to breakout the previous most significant highs or lows. What about "targeting" the exit? Well, practically always the price lands in the are of whole or half numbers. And the ones where price lands are typically the most significant previous whole or half numbers (the case here).
Finally, let me say this to those who begrudge giving up "lots" of pips while waiting for these entry conditions. There is never a good trade forming in the market where the MMs will not attempt to create liquidity by whipping and whacking the price to suck in "right siders" (to stop out) and "wrong siders". Market moves are all about the MMs creating liquidity to build positions ahead of planned moves and then profiting on those positions when they drive the price per their plan. On the gentle side, the whipping and whacking creates the PA waves we look for. On the rough side, it takes us out of the trade before the trade even begins! If you begrudge giving up "lots" of pips to favor making an entry in this mess and trying to survive the rough swings designed to stop you out, go ahead, and good luck being successful long term. The greatest success is to trade momentum after all that mess, however brief or enduring it might be.
Hope This Helps,
-tah
- #78,749
- Feb 3, 2015 10:55pm Feb 3, 2015 10:55pm
EUROGBP
Last week EG start moving UP till the closed market on yesterday. we can hypothesize that MMs are in short side there. Then we need to prove that assumption. Here are some evidance that i found:
Last week EG start moving UP till the closed market on yesterday. we can hypothesize that MMs are in short side there. Then we need to prove that assumption. Here are some evidance that i found:
- The MMs Activity is getting weaker to support the Long. VPA show us in H4-H1- and M15 TF - the blue and green is getting smaller.
- On H4 and H1 TF we can see there is a stopping volume bar in quarter number area 0.75750 after the Roober Bank MMs push the price UP in several times.
- M15 TF shows -- there is a PA Wave indicates a resetting wave to prepare the reversal.
Nevertheless, we need more evidance to become more clear that MMs are trully on the short sides. The PA Wave i explained above just in smaller TF. We need more than that. Just wait n see, what would MMs do in LO. We need more clear PA Wave to break the R- Level in that ranging area. Its would be more clear while the PA Wave make a classic wave through the dragon to make our classic setup at the right time.
Comment is welcome
__MJ 
"Bulls make money, Bears make money, but hogs get slaughtered"
- #78,752
- Edited 7:14am Feb 4, 2015 1:18am | Edited 7:14am
- Joined Mar 2008 | Status: PVSRA with Traderathome | 23,553 Posts
Sonic R. System Example
On M15 GBPJPY shows a series of bearish PA waves crossing Dragon. We need steep Dragon angle and for price to breakout previous significant highs or lows. As you can see, the Dragon does have steep angle already so early in the London session. Price went down to a very significant previous high and retraced. A breakout of this support is key....
......and meanwhile, the MMs might go to work whipping and whacking to create liquidity. Do we want to be involved in that? Or do we want to wait? The day is still very young, with a lot of time for the MMs to do their position building, which needs liquidity. This presents a wrinkle to think about. If the breakout comes early, won't that leave still a lot of time for more - and more extravagant - liquidity creation moves? Should we trade an early breakout if it happens? Or should we wait until into the US session?
Let's see what happens. 
Now we are into the US session. No bear breakout. But no bull break either. In fact, it looks like the bears have controlled and still control price, meaning that the MMs are bears and they intentionally pushed price up to further their accumulation of short orders,....up above a whole number, and where the highest activity levels of the day occurred so far. So, let's see what happens. 
On M15 GBPJPY shows a series of bearish PA waves crossing Dragon. We need steep Dragon angle and for price to breakout previous significant highs or lows. As you can see, the Dragon does have steep angle already so early in the London session. Price went down to a very significant previous high and retraced. A breakout of this support is key....
......and meanwhile, the MMs might go to work whipping and whacking to create liquidity. Do we want to be involved in that? Or do we want to wait? The day is still very young, with a lot of time for the MMs to do their position building, which needs liquidity. This presents a wrinkle to think about. If the breakout comes early, won't that leave still a lot of time for more - and more extravagant - liquidity creation moves? Should we trade an early breakout if it happens? Or should we wait until into the US session?
Let's see what happens.
Now we are into the US session. No bear breakout. But no bull break either. In fact, it looks like the bears have controlled and still control price, meaning that the MMs are bears and they intentionally pushed price up to further their accumulation of short orders,....up above a whole number, and where the highest activity levels of the day occurred so far. So, let's see what happens.
