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Price is everything

  • #30,261
  • Apr 25, 2015 8:59am Apr 25, 2015 8:59am
The difference is with RSI and MACD is that divergence shows up on REDS chart which he marked with the red lines, this shows the buying drying up as we approach a supply level and can get in at the best price with yours you have to wait and miss half the move and increase risk.
Also the tail of a J16 pinbar is created by the early buying /selling of an S+D trader.

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  • #30,262
  • Apr 25, 2015 9:24am Apr 25, 2015 9:24am
Risk:Reward is an inseparable, dynamic equation (it seems to me).
A trade-off between Pros and Cons which comes down to personal preference.

Committing to the trade when P enters or touches our zone, represents the maximum value in return but equally the greatest risk. Having seen too many zones get demolished I now find it psychologically difficult to buy or sell into a massive candle, much as standing in front of an oncoming bullet-train. When it comes off; it looks great, but Neo I am not. Look at the chart I posted yesterday. 3 times P washed over the upper limit of the zone before turning South. I mean is that not the worst to have your stops taken out only to see P eventually move in our direction after all!?

Are we lesser traders because we wait for confirmation? Yes, we lose some of the move, but as long as there is still enough left in it I am happy to for the trade off and give u some reward if it means it is a more secure ''sure thing.'' Personally, I like to trade with the wind of momentum and confirmation in my sail.
  • #30,263
  • Apr 25, 2015 10:06am Apr 25, 2015 10:06am
Quoting aus1way
The difference is with RSI and MACD is that divergence shows up on REDS chart which he marked with the red lines, this shows the buying drying up as we approach a supply level and can get in at the best price with yours you have to wait and miss half the move and increase risk. Also the tail of a J16 pinbar is created by the early buying /selling of an S+D trader. {image} {image}
Since Red's departure their hasn't been even one trader that approaches his ability that posts on this thread. Sure there are a lot of setups and after-the-fact posts and such and that is fine. I don't for a second join the camp that criticizes those who don't post live trades. That kind of requirement would severely stifle learning.

I have yet to see a trader using so-called pure PA and nothing but s/d zones consistently profit. You and others point out how a trader would have blindly entered with a so-called "tight-stop". The smart money loves your tight stops (an order they can see) and those stops will be taken out more than they will survive. Even Red waited for an engulf before entering a trade.

Volume is real-time and is no more lagging than the actual candle. Appropriate interpretation of volume enriches the candle shape. Volume is not calculated data like ALL other indicators are including MACD/RSI. The volume I use is central and I pay a fee for that data feed. Volume from forex brokers is from the broker.

The J16 pinbar is actually as you say. It occurred with very high volume leaving behind a considerable shadow indicating the smart money selling in the background. However to confirm this notion one must wait for the next candle which was bearish with moderate to high volume. The color of the volume bars is actually immaterial. It is the volume in relation to the candle.

You describe Red's use of MACD/RSI very well. It is actually very similar to how I use volume. So it seems immaterial whether one uses MACD/RSI or any other indicator to augment their style of s/d trading. But it is always nice to know how one uses it.

The truth is that indicators were never forbidden by Red. He however made fun of those who enter based purely on an indicator. His famous one is those entering when the Red line crosses the blue line.

So while I don't mind the criticism it would be nice to see you back up your knowledge with some charts. Live would be great but I won't put you down if they're not. I however will continue posting my charts many live trades but not all.

Anyway I won't be defending my position on this topic any further. I will just back it up with charts not chat.

In that spirit here's my emini S&P 500 futures 10min chart. Have a nice weekend.

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  • #30,264
  • Edited 10:58am Apr 25, 2015 10:32am | Edited 10:58am
At the end of the day its about protecting and increasing our bottom line.
Agreed, whether its macd, volume or whatever.. if increases your edge - why not??


Winston, all I would say, and its not a critique but a mere observation is that most of the people on FF do not trade on TS or Ninja or whatever the platform is you're using and do not have volume or at least not the same one that is accessible to people trading Futures. Would that be correct?

So, while you'd be journaling your trades, in terms of this thread being about helping and sharing in the spirit of ''traders helping traders'' if that is your interest and commitment, then there isn't much if any use, is there?
Hidden Gap also posted something with no annotation or explanation even but you 'got it' Well, good for you guys, lol... but, It would be a shame if it became esoteric for the secret-members club only, don't you think? Don't know about you, but I prefer open-ness and transparency or why bother at all? Please, don't tell me people have to earn it by grafting hard and reading the thread 10 times and somehow figuring it out! A riposte I've heard often enough... what reality is that belief grounded in? oooph...

btw, I lost interest in Rocky's thread when he went off in that direction too, again, not because it was not interesting and useful to him but just irrelevant to me. However, it might be useful to start a SD+Volume thread for people trading futures and sharing the tools you have at hand. Having said that it doesn't bother me at all what people post; what I say is just feedback, just in case you're interested, lol... one could equally say, why not have a mish-mash of differing Price Is Everything styles?

Vive la difference...
  • #30,265
  • Apr 25, 2015 10:43am Apr 25, 2015 10:43am
Quoting livindaylite
Risk:Reward is an inseparable, dynamic equation (it seems to me). A trade-off between Pros and Cons which comes down to personal preference. Committing to the trade when P enters or touches our zone, represents the maximum value in return but equally the greatest risk. Having seen too many zones get demolished I now find it psychologically difficult to buy or sell into a massive candle, much as standing in front of an oncoming bullet-train. When it comes off; it looks great, but Neo I am not. Look at the chart I posted yesterday. 3 times P washed...
I feel your frustration. I've been there and honestly I still get frustrated.

Below is a 3 min AUD futures. It is busy but it illustrates how dynamic the market can be. I often trade the 3 min chart because multiple trading opportunities present as the day progresses.

1. Frustration illustrated here. What looks like a great supply zone gets broken. However once price entered the zone there was no confirmation that it would sell off.

2. No worries. Price creates a new trading opportunity as it moves past New demand is created.

3. Price returns to the new demand and the volume profile would have met my criteria to go long. However a supply zone is just above and this is where R:R comes in. With the supply this close one must consider if it is worth taking the trade. If your a scalper the answer might be yes. I would have taken it since the tick value on this is $10.00/tick on one contract. One has to be nimble and ready to exit.

I have marked other zones. Some bounce and some are violated.

This is a s/d trader's task: A. Find the zones (the easy part). B. Develop a strategy for entering or not entering a trade in the zone.

There are many ways to do this. Red often used MACD/RSI divergence. Using an engulfing type pattern or particular candle within the zone might be another strategy. I use volume. It's all up to the individual trader.

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  • #30,266
  • Apr 25, 2015 11:02am Apr 25, 2015 11:02am
Quoting livindaylite
At the end of the day its about increasing protecting and increasing our bottom line. Agreed, whether its macd, volume or whatever.. if increases your edge - why not?? Winston, all I would say, and its not a critique but a mere observation is that most of the people on FF do not trade on TS or Ninja or whatever the platform is you're using and do not have volume or at least not the same one that is accessible to people trading Futures. Would that be correct? So, while you'd be journaling your trades, in terms of this thread being about helping and...

A lot of pessimism in your post. I'll let HG speak for himself. I know one thing. If I see a trader making money and he/she demonstrates this consistently with a well-defined strategy then I am interested and I will pursue available avenues to trade similarly. I too used to think the way you do about individuals like HG. I got past that. Instead I studied every post HG ever made (at least the ones with charts). Rocky and Bantro1 also heavily influenced me. I don't trade like them either but I did incorporate volume into my trading. I don't use the fibs, the TLs or Andrews pitchfork. S/D, volume and little J16 is all incorporated into my trading strategy.

It's interesting that you and aus1way with very limited posting on this thread come here and post more criticism rather than study the posts of the ones who are successful traders. It's easy to feel sorry for yourself and find excuses why s/d may not work.

By the way Red traded futures frequently. Gold, Silver, Oil, etc, etc.

Later.
  • #30,267
  • Apr 25, 2015 3:10pm Apr 25, 2015 3:10pm
If one is set on trading s/d "naked' then one must have a some sort of indication that a zone might hold. Placing limit orders in zones or blindly entering a trade upon price entering a zone I believe will lead to account erosion unless your money management is supreme. I believe in some sort of confirmation and while I use volume for this I will not speak about volume in this series.

The first strategy is to observe PA as price enters the zone. In the example below price enters the zone and even pierces the top of the zone. This is not necessarily a reason to abandon the zone as it could be a fake-out. Subsequent candles in this example never give any indication that price wants to go lower. Once price closes above the zone on whatever time frame you are using then IMO it's time to abandon the notion of trading short.

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  • #30,268
  • Apr 25, 2015 3:54pm Apr 25, 2015 3:54pm
In 2 as price exits the supply it creates new demand. The rejection candle prior to the large candle exiting the area would have been tempting to buy on its close knowing the supply zone is already violated. However the safe thing to do is wait for price to travel away and return.

Price moves to 3 with a large bullish candle. Price touches supply and the next candle is bearish but not engulfing by any means. In fact the large bull candle entering the zone really has created its own supply near and just below its' open. Therefore I would not have shorted here.

At 4 price finally touches previously broken supply and is rejected nicely. This is followed by an inside bar closing bullish. However supply looms above and one must consider a long here may be short lived and thus target would be the supply areas above.

At 5 price enters a strong supply zone which is actually a H1 zone from futher back. Again I would not blindly enter but wait for PA. Initially price wedges with 3 inside candles then gaps down. With nothing else to go on at this point I might have sold the break of the bottom of the gap candle which at least would give some indication that price might continue to sell off. In this case we would have been rewarded with a large bear candle closing on its low. This candle also creates new supply and this is very important. An engulf for sure! Price retraces and if you hadn't entered yet the pinbar-like rejection candle at the new supply would have provided another opp. There is no demand until the previously broken supply area now considered demand that has already been tapped. I would have this as my target but knowing that it was already hit one might have sat tight to see what happens.

So this would be my thinking if I was trading naked PA. It is of course in hindsight and as everyone knows hindsight is 20:20. However when one is learning then you must start somewhere. Historical PA is all we have so I recommend studying it.





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  • #30,269
  • Edited 4:19pm Apr 25, 2015 4:04pm | Edited 4:19pm
Quoting Winston Reed
{quote} A lot of pessimism in your post. I'll let HG speak for himself. I know one thing. If I see a trader making money and he/she demonstrates this consistently with a well-defined strategy then I am interested and I will pursue available avenues to trade similarly. I too used to think the way you do about individuals like HG. I got past that. Instead I studied every post HG ever made (at least the ones with charts). Rocky and Bantro1 also heavily influenced me. I don't trade like them either but I did incorporate volume into my trading. I don't...
I didn't mean to sound critical, so I apologize if that's how it sounded to you. I know tone can get lost in written communication, which is precisely why i made the point of prefacing my post with saying that it wasn't supposed to be a critique. I also tried to make it clear that a) anything that helps be it macd volume etc is good by me and b) that I didn't mind any mish-mash of postings underlined with 'vive la difference'

I have nothing against Futures. I just don't have an account to trade full Lots, so, I'm left with MT4. Otherwise, I am also of the disposition that I look to incorporate, adopt, model and integrate anything useful a proven successful trader has to share. I was merely pointing out that while most people don't trade Futures and have volume available, it makes demonstrating that kind of irrelevant - sorry

But, you're right, I have not posted enough to earn the right to just walk in and make such comments.

All the Best
  • #30,270
  • Apr 25, 2015 4:13pm Apr 25, 2015 4:13pm
I use NinjaTraderBrokerage (NTB) who bought out Mirus Futures a while back. I use the free version of Ninjatrader (NT) provided buy the brokerage. They do have fee-based NT platforms but they really are not necessary. However when trading futures, commodities, etc one has to pay a small fee to obtain the feed. A bundle is available for $15/month and this allows you access to all feeds. NT is not as easy to use as MT4 but it is much easier than think or swim from Ameritrade.

NTB has a minimum opening of $500. They do offer forex. I don't trade forex anymore however the currency futures are nearly identical to spot forex. Trading futures does require caution as the $/tick minimum is generally much higher than spot forex where you can trade micro for as little as 0.10 per pip. For example trading the emini S&P 500 is $12.50/tick. Some are more and some are less. I've seen some markets trading for as low as $1/tick.

I know starting capital can be an issue for some. I know Oanda will open an account for very little but I have an opinion on this.

Let's say you can afford to open a micro acct for $100. Instead open a demo and put your $100 in savings and add whatever you can until you build up a little more capital. Undercapitalization is a big reason why many traders never get anywhere. When you start trading substantial amounts of cash, all of the sudden you become acutely aware of whether or not your trading strategy is worthy. If you trade a small account live and know it really doesn't matter whether you win or lose the psychological impact of this will prevent you from moving forward and bullet-proofing your strategy.
  • #30,271
  • Apr 25, 2015 4:19pm Apr 25, 2015 4:19pm
Quoting Winston Reed
. Undercapitalization is a big reason why many traders never get anywhere. When you start trading substantial amounts of cash, all of the sudden you become acutely aware of whether or not your trading strategy is worthy. If you trade a small account live and know it really doesn't matter whether you win or lose the psychological impact of this will prevent you from moving forward and bullet-proofing your strategy.
Agreed 100%
  • #30,272
  • Apr 25, 2015 4:26pm Apr 25, 2015 4:26pm
Quoting livindaylite
{quote} I didn't mean to sound critical, so I apologize if that's how it sounded to you. I know tone can get lost in written communication, which is precisely why i made the point of prefacing my post with saying that it wasn't supposed to be a critique. I also tried to make it clear that a) anything that helps be it macd volume etc is good by me and b) that I didn't mind any mish-mash of postings underlined with 'vive la difference' I have nothing against Futures. I just don't have an account to trade full Lots, so, I'm left with MT4. Otherwise,...

Hey livindaylite,
I was merely trying to point out that you seemed negative and I don't mean that in a bad way. You have to be positive when trading especially when learning. Please don't dismiss anything as too difficult or not worth of trying to obtain. You dismiss the notion of using volume and label it as irrelevant. It is not. HG and others use volume with forex. They dismiss the notion that volume provided by the broker is not valid for trading. So while I have interjected caution about volume from forex brokers it does not mean it is useless. If I could only use forex volume I would do so. I would however do my research and find the best forex broker possible. This would be one that services a large number of traders. OANDA comes to mind. It does not matter whether you trade full lots or a micro. This is irrelevant.

Futures and forex don't move differently. The smart money plays the same tricks in both. One can be as successful trading Forex.

In the spirit of helping traders I have offered some posts above analyzing trading without volume I hope they help.
  • #30,273
  • Apr 25, 2015 4:35pm Apr 25, 2015 4:35pm
Btw, do you know http://www.ampfutures.com/ ?
$500 min. & no live-feed fees
  • #30,274
  • Apr 25, 2015 4:38pm Apr 25, 2015 4:38pm
I moved to futures because they are most active during the NY session. Living in the US in the Mountain Standard Time zone makes trading the London session very difficult unless you are trading high time frames like the monthly/weekly and daily. If you are going to trade Forex then the London session is where the action is. Yes forex can be traded in the NY session but volatility diminishes rapidly. The emini S&P 500 (ES) is my favorite and trading on LTF like the 2, 3, and 5 minute provides many trading opportunities so I don't have to look at multiple charts. Most of the time the ES is all I need. During the Asian session I look at AUDUSD futures since it is often active during that time. The aussie futures chart looks just like the spot chart.
  • #30,275
  • Apr 25, 2015 4:44pm Apr 25, 2015 4:44pm
Quoting livindaylite
Btw, do you know http://www.ampfutures.com/ ? $500 min. & no live-feed fees

No haven't heard of them. Fees are required so this broker must be paying the fees.
  • #30,276
  • Apr 25, 2015 4:51pm Apr 25, 2015 4:51pm
This from Amp Futures website. They don't charge fees for the trading platform but they do for the data feed.

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Quoting livindaylite
Btw, do you know http://www.ampfutures.com/ ? $500 min. & no live-feed fees
  • #30,277
  • Apr 25, 2015 4:56pm Apr 25, 2015 4:56pm
When you open a futures account this will be required.

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  • #30,278
  • Apr 25, 2015 5:26pm Apr 25, 2015 5:26pm
LL, i used to think RR and confirmation are day and night that can't see each other.

but they actually can co-exist.

it depends on ur choice, and mindset. i'm sorry that i don't have charts right now, maybe later with examples, here i'd just try to make a point that they can co-exist.

the key is on the FO. Fakeout, fakeout, it is Fake, and Out, so you can't trade any needle on chart and expect high RR,
but there are some 'needles' they are both fake, and OUT in the middle of nowhere! Those FOs may be taken and enjoy high RR w/o DD.

of coz, the Q would be 'where will be the FO?', 'what if there's not a FO', the answer is extremely hard to find and understand. but i'd try to put it in a plain way: expect, even believe that there'll be a FO after an engulf, and enter there.

entries will be fewer, but still often.

sorry for being unable to clearly elaborate this, but hope you see the point.

Quoting livindaylite
Risk:Reward is an inseparable, dynamic equation (it seems to me). A trade-off between Pros and Cons which comes down to personal preference. Committing to the trade when P enters or touches our zone, represents the maximum value in return but equally the greatest risk.
  • #30,279
  • Apr 25, 2015 5:48pm Apr 25, 2015 5:48pm
Quoting charvo
LL, i used to think RR and confirmation are day and night that can't see each other. but they actually can co-exist. it depends on ur choice, and mindset. i'm sorry that i don't have charts right now, maybe later with examples, {quote}
Thank you for volunteering to comment and share your insights. I am really interested to understand what you're pointing to, so I hope you will bring some charts up
  • #30,280
  • Apr 25, 2015 7:38pm Apr 25, 2015 7:38pm
Quoting Winston Reed
{quote} Hey livindaylite, I was merely trying to point out that you seemed negative and I don't mean that in a bad way. You have to be positive when trading especially when learning. Please don't dismiss anything as too difficult or not worth of trying to obtain. You dismiss the notion of using volume and label it as irrelevant. It is not. HG and others use volume with forex. They dismiss the notion that volume provided by the broker is not valid for trading. So while I have interjected caution about volume from forex brokers it does not mean it...
Hi Winston, I've been reading your recent posts and find them very, very helpful. It's very hard to find traders that explain so straightforward. Please keep on posting. You've got me reading right now Master the Markets. Anymore suggestions are highly appreciated. BTW, really loved your post on Prostitution of Supply/Demand. Sooo true .
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