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Higher Edge within a Single Candlestick

  • #141
  • Apr 13, 2015 2:18pm Apr 13, 2015 2:18pm
Since we know that price moves away from a certain point in in time now how do you manage your trades?

Do you still look at risk reward trades or do you compound the trades (i.e. starting with 1 lot long and flip to 2 lots short) looking for just 1:1 risk reward ?

Or do you use another compounding factor?
  • #142
  • Apr 14, 2015 6:42am Apr 14, 2015 6:42am
Quoting Alpha-Omega
Since we know that price moves away from a certain point in in time now how do you manage your trades? Do you still look at risk reward trades or do you compound the trades (i.e. starting with 1 lot long and flip to 2 lots short) looking for just 1:1 risk reward ? Or do you use another compounding factor?
A-O, not sure if you're addressing me in particular. But i can at least tell you how i handle things myself.

Whatever i do in terms of execution, whether that be initial entry, adding on, taking off, i do it through market feedback.
Which essentially means that the market dictates what i do and not the other way around. If i am imposing myself on the market expecting it to bend to my wishes i will be given a rude awakening.

There will be times when you should be going all-in all-out. Other times, adding onto a profitable trade will pay further. There will also be occasions where you may be net long and need to swing it instantly into a net short position, allowing you to benefit from a change in sentiment.

Regards
  • #143
  • Apr 15, 2015 3:18am Apr 15, 2015 3:18am
Quoting skfx
{quote} Reference points we use, should be reference points important for everyone and in particular institutional traders. Arbitrary reference points are just that, arbitrary.Who is interested in random/arbitrary reference points? When the NY bell rings and you're an equity trader, what tends to get stuck in your mind? When the NY bell closes, what tends to get stuck in your mind? {image} What are we trading above? We are trading the performance of the British Pound against the US dollar and we are doing this short-term. #1 We see when London comes...
Golden!
This is something to study. Not read once, not read twice. This is something to commit to memory. Already i can see this chart when i close my eyes. As well as i can still see some of your order flow charts that i first looked at in 2011.
My signature is: "Classified".
  • #144
  • Apr 15, 2015 3:33am Apr 15, 2015 3:33am
Quoting yaed
{quote} Golden! This is something to study. Not read once, not read twice. This is something to commit to memory. Already i can see this chart when i close my eyes. As well as i can still see some of your order flow charts that i first looked at in 2011.
Thanks Yaed! I'm glad it's leaving an impression on you.
Good trading to you!

Here's another one below.
Live CAD futures trade(6C)
Trading doesn't need to be as hard as some traders are making it out to be. Just go with the bloody market!
Regards
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  • #145
  • Edited 4:50am Apr 15, 2015 3:37am | Edited 4:50am
Neio, i really like this thread. One of the few really usefull ones. One of the few threads where the thread starter actually seem to be looking at a chart and thinking about it. Most other threads seem to be mostly filled with... i dunno personal reflections that maybe sometimes touches on whats going on in the charts.

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And then the purpose becomes clear: To define what it is that the market is doing.

There is that and there is this other thing. Doesnt really matter if you are buying or selling and what ever way its heading and what not. As long as you have some sort of space between your trades and you think about that for some time and what to do about it, when NOT to place positions, you are going to be profitable. Thats in the charts as well, im not talking personal stuff here.
My signature is: "Classified".
  • #146
  • Edited 9:29am Apr 15, 2015 4:14am | Edited 9:29am
Quoting yaed
Neio, i really like this thread. One of the few really usefull ones. One of the few threads where the thread starter actually seem to be looking at a chart and thinking about it. Most other threads seem to be mostly filled with... i dunno personal reflections that maybe sometimes touches on whats going on in the charts.
When read properly, a chart should give you a clear picture of the interaction between buyers and sellers and the auction itself.
When the market does 'X' and then does 'Y'. What does that imply?

When the market drops the open of the 12:35 'x' min candle. What does that imply?
When the market drops the London bid and sellers cap after rejecting open. What does that imply?
You see the difference in the two statements above?

You couple this skill with macro/fundamentals, patience and discipline and you ARE making money.
Just cut some short 6C positions.
Regards
  • #147
  • Apr 15, 2015 7:38am Apr 15, 2015 7:38am
Another perfect example here below using a 5min interval


Now the questions that remain are:
1. where to enter
2. where to exit

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The quality of your life is brought about by the quality of your thinking.
  • #148
  • Apr 15, 2015 7:41am Apr 15, 2015 7:41am
Quoting hornet
Another perfect example here below using a 5min interval Now the questions that remain are: 1. where to enter 2. where to exit {image}
That white horizontal line there seems to be important hornet!
Regards
  • #149
  • Apr 16, 2015 1:37am Apr 16, 2015 1:37am
Quoting skfx
{quote} When read properly, a chart should give you a clear picture of the interaction between buyers and sellers and the auction itself. When the market does 'X' and then does 'Y'. What does that imply? When the market drops the open of the 12:35 'x' min candle. What does that imply? When the market drops the London bid and sellers cap after rejecting open. What does that imply? You see the difference in the two statements above? You couple this skill with macro/fundamentals, patience and discipline and you ARE making money. Just cut some short...
Hi skfx,

as always some food for toughts from you (but all thread is a very good one)

In other posts you say retail traders have nearly no chance looking at price only but now you say something little different or am i misinterpreting your words?

Anyway you gave me something to start thinking about, thank you
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  • #150
  • Apr 16, 2015 2:49am Apr 16, 2015 2:49am
Quoting skfx
{quote} That white horizontal line there seems to be important hornet! Regards
Looks like it, doesn't it?

Looks important today also......
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The quality of your life is brought about by the quality of your thinking.
  • #151
  • Apr 16, 2015 2:59am Apr 16, 2015 2:59am
Quoting hornet
{quote} Looks like it, doesn't it? Looks important today also...... {image}
Just between a rolled open and flipped NY PM bid, now offered. I don't know why anybody trading S/T would be long right now hornet lol
All i know is it's weak as water and sellers are getting paid.
Regards
  • #152
  • Apr 16, 2015 3:24am Apr 16, 2015 3:24am
Quoting change
{quote} Hi skfx, as always some food for toughts from you (but all thread is a very good one) In other posts you say retail traders have nearly no chance looking at price only but now you say something little different or am i misinterpreting your words? Anyway you gave me something to start thinking about, thank you {image}
You're welcome change!

Sorry if i have confused you somewhat, you need price to measure performance. Without it how do you gauge an assets/instruments performance? It's not possible.
But also without static points, price will be no good to you, its just ticking around the place.
Through both price AND static points of reference(opens/settlements/bids/offers) you'll get running performance.

Once you have that, then you look for the last bid/offer to lean on for lowest risk.
This is S/T trading, we are not swinging for months here.

If you look above at hornets chart, you'll notice the market(fluid) is trading both under open(static) AND its rolled a key bid(static) previous session.
How do you think it is performing right now? It's not performing lol.
So being a seller is a better, higher probability play, than trying to buy into weakness.

If you want to measure the performance of your investment property, do you pull up a MACD, 100 day moving average or throw a Fib on a chart of investment prices?
Why on earth anyone would try that in trading i'll never know. What exactly does that have to do with anything?

This is my belief, i'm sticking to it. My beliefs pay me and that is all that matters in the end.
If you believe in something and it's paying you, then that is great. If your beliefs about the markets and the way they work aren't paying you, then you need to align your beliefs with the way the world works.

It just amazes me sometimes how easily humans go down a road without questioning the sense of it. Myself included. But i'm getting better with age.
Hope this helps.

Regards
  • #153
  • Apr 16, 2015 3:32am Apr 16, 2015 3:32am
Quoting change
{quote} Hi skfx, as always some food for toughts from you (but all thread is a very good one) In other posts you say retail traders have nearly no chance looking at price only but now you say something little different or am i misinterpreting your words? Anyway you gave me something to start thinking about, thank you {image}
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  • #154
  • Apr 16, 2015 3:46am Apr 16, 2015 3:46am
Quoting skfx
{quote} Just between a rolled open and flipped NY PM bid, now offered. I don't know why anybody trading S/T would be long right now hornet lol All i know is it's weak as water and sellers are getting paid. Regards
Absolutely no reason to buy. Then again where to sell?
Where is the Edge in the candles, what are the entry points ?

I can see the direction, can see the momentum but where to enter for minimum drawdown?
Entry on momentum? Entry on retracement ?

What could be the targets?

I think this is the main issue here.
It's good to have talks about having reference points and higher edge in one candle but, how to put it into practice ?
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The quality of your life is brought about by the quality of your thinking.
  • #155
  • Apr 16, 2015 3:54am Apr 16, 2015 3:54am
Quoting skfx
{quote} You're welcome change! Sorry if i have confused you somewhat, you need price to measure performance. Without it how do you gauge an assets/instruments performance? It's not possible. But also without static points, price will be no good to you, its just ticking around the place. Through both price AND static points of reference(opens/settlements/bids/offers) you'll get running performance. Once you have that, then you look for the last bid/offer to lean on for lowest risk. This is S/T trading, we are not swinging for months here. If you...
All of this sounds good and rock solid to me and is what i'm working on.

May be i was confused from some sentences about level 2 order flow that my tools don't show: forget about it!

Thanks also for the graphic sample and crystal clear reasoning explanation: now i guess i've some more work to do on my own ...
  • #156
  • Apr 16, 2015 4:12am Apr 16, 2015 4:12am
Quoting hornet
{quote} Absolutely no reason to buy. Then again where to sell? Where is the Edge in the candles, what are the entry points ? I can see the direction, can see the momentum but where to enter for minimum drawdown? Entry on momentum? Entry on retracement ? What could be the targets? I think this is the main issue here. It's good to have talks about having reference points and higher edge in one candle but, how to put it into practice ? {image}
Hornet i did mention this before. You may have missed it.
Quote
Once you have that, then you look for the last bid/offer to lean on for lowest risk.

If the market is bidding 50 and we drop 50 and trade to 42, what is the lowest risk price to sell? 50
That is the exact point where the market changed from bid to offer.
Why? Because if a buyer cannot hold trade, seller takes hold and that is the exact point it changed. Sometimes you will not be able to trade that 'prime' price, but it still represents the lowest risk on the 'right side' of trade. That is where you'll measure risk on trade S/T.

In your chart above you have 2 prices to sell in 'under-performance' of that asset:
1. 40.70
2. 40.50

I don't see how candles(opens/closes) helps with determining entry.
I'm trading the market not candlesticks.
Some will say that candlesticks represent the market, pricing. But does it really?

Chopping fluid price into time segments and placing any weight on this is pointless . All you're doing is chopping price into time segments. Does the market care about price in segments determined by time?
Price is a fluid, it's always moving, cutting it up does nothing. It is diverting attention away from the market itself.

Regards
  • #157
  • Edited 4:28am Apr 16, 2015 4:17am | Edited 4:28am
Quoting hornet
{quote} Absolutely no reason to buy. Then again where to sell? Where is the Edge in the candles, what are the entry points ? I can see the direction, can see the momentum but where to enter for minimum drawdown? Entry on momentum? Entry on retracement ? What could be the targets? I think this is the main issue here. It's good to have talks about having reference points and higher edge in one candle but, how to put it into practice ? {image}
I am trading price points....bids/offers(representing a mispricing or big money holds). I want to enter where either the market is mispriced or someone BIG is working that price/level.
Candlesticks(opens/closes) do not come into the equation for entering or exiting or measuring risk on trade in any way.

Hope this helps hornet.
Regards
Attached Image
  • #158
  • Apr 16, 2015 4:36am Apr 16, 2015 4:36am
See if I got it right.
Current price is trading below tokyo low (last tokyo offer), london open and 1.0650
Price is trading below 3 reference points.
It's performing short, this is the direction.
And the good point for entry is tokyo low/1.0650

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  • #159
  • Apr 16, 2015 5:16am Apr 16, 2015 5:16am
Quoting alexx90
See if I got it right. Current price is trading below tokyo low (last tokyo offer), london open and 1.0650 Price is trading below 3 reference points. It's performing short, this is the direction. And the good point for entry is tokyo low/1.0650 {image}
Sounds good to me Alexx!
You have the base in.

Now, you must expand to find risk on both sides. Where are they bidding? Where are they offering?
If you're looking to sell, then the 50 is a possibility. Have you considered though the buy stops building above the current S/T range? What would the effect be if they were to get run. Explosion? Tame and back inside?
Look around you. Consider yourself on the 'outside' watching the game 'inside'. By doing that you'll have an unbiased view and be able to execute on reality.
What if the market goes through 50 with power and they start bidding it outside the break? Do you really want to be working shorts now seeing that sellers cannot hold trade down on poor performance? Maybe the EU starts to perform after breaking the offer(static).

I hope this helps.
As you can see, nothing black and white here and certainly no systems for quick fix and off to the golf club.
Trading is hard, it takes work and dedication.
Regards
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Quoting alexx90
See if I got it right. Current price is trading below tokyo low (last tokyo offer), london open and 1.0650 Price is trading below 3 reference points. It's performing short, this is the direction. And the good point for entry is tokyo low/1.0650
Your best trades(fast, coupled with almost zero heat) will be on the back of simultaneous liquidation AND initiation. At this point everybody is thinking the exact same thing, whether you're on the right side or the wrong side.

I've given you some ideas.
I have overstayed my presence here. posting at FF doesn't pay the bills.
All the best!

Regards
  • #160
  • Apr 16, 2015 5:41am Apr 16, 2015 5:41am
Quoting skfx
{quote} I am trading price points....bids/offers(representing a mispricing or big money holds). I want to enter where either the market is mispriced or someone BIG is working that price/level. Candlesticks(opens/closes) do not come into the equation for entering or exiting or measuring risk on trade in any way. Hope this helps hornet. Regards {image}
Got it. Thanks for your help
The quality of your life is brought about by the quality of your thinking.
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