C.R.E.A.M- Naked FX/Futures Daytrading

Sure...Let's just assume we're talking about the daily chart now...though I'm sure you know that price action will behave in a similar manner on all timeframes due to the fractal nature of the markets.

You'll often get clusters of buy/sell stop near ( above/below ) your highs and lows of the day....or, in other words, at the top and bottom of the daily range. Particularly above bull bars and below bear bars...we know this. So, in a stop 'driven market' ( stop loss and buy/sell stops ) you're usually going to have the market take out those highs and lows to trigger those clusters of orders...then pulling back, placing those traders into losing positions.

Then...it either reverses or continues and price was just bumping off SR at the same time the many buy/sell stops were filled. These are the two things that can happen, that's the bet.

In the case of your Eur/Chf long...there was no follow through on this bear bar. So there was no break of the daily low by the subsequent bar filling sell stops. Something stopped it.


http://screencast.com/t/kzkFN029Z

In my view it was the close of the bear bar so close to demand. It chose to keep sell stops and buy limits out at the same time...both winners and losers. It was satisfied pulling back into the range, and reversing quite nicely, with the good many shorts that entered ' at market ' on the close of the bear bar...placing them in losing positions.

Do you know what I mean ? I think the market can keep you out if you are trading from a location that can upset the balance between the majority losing/minority winning. So in other words...you were in the right place, or, on the right side of the market, you just missed the fill.

Just my reading on that condition...you might see that already or have your own view. Traders can agree and disagree...doesn't matter, what's important is that you form your own rational market perception. It's good how you posed the question...mentioning the underlying mechanics...This is the 'order flow' that you need to get a sense of...it's the dimension beneath the charts that we cannot see but the brokers can.

Cheers,
Bryn

Thanks a lot Bryn, I was thinking a similar thing, but you put it into words, which was very helpful indeed.
Now the next question:
Is this still a valid order?
Because I left it open. What do you think, I mean, if such thing happens, i.e. both winners and losers were kept out, is this an indication to cancel the pending order, as something "fishy"was going on there?
Thanks again.
Cheers

Yeah, the market can walk a narrow line. You can take the same view on the trade but you may want to adjust your position. Look at the 4H chart...the buy area now is just above 1.085. Just below your previous swing low inside of daily demand.

http://screencast.com/t/t83FflZt51

Or...just move on to other trades, that is fine, too. If you miss a reaction that you want...it's best to not chase it.

Cheers,
Bryn

cancelled it, didn't like it anyway RRR wise. thanks mate.
Cheers

GBPUSD
Not sure if this is a flip zone, T/P above or below?

that's cool...I think it's good to have a fairly defined attitude towards conditions like tis that you will inevitably encounter when trading, repeatedly...because anything can happen and there is no certainty. So it's not about being right or wrong, it's about executing with consistency and deliberation based on rules you've established.

Are you from Switzerland ? I studied architecture there a while ago...it was awesome.

Cheers
Bryn

your tp and stop levels look fine to me. At first glance off the daily I might see them like this..

swap levels GU
http://screencast.com/t/ZC939dzZm

so my targets would be here...at the red lines...5 pips or so ahead of these prices.
http://screencast.com/t/0ziTJaymF


then on the h4 it looks good because these could be good supply zones.
http://screencast.com/t/qEbVwdryxYJ

If it advances to the ling side it may very well rally to these zones. I might widen my stop a bit on that, too. Let it revisit your entry once. I'm not quite up on British pound fundamentals but you might want to keep in mind the GBP IR data on thursday.

cheers,
Bryn

Nice top down breakdown. The 4h looks promising like that. Thanks for the feed back.

Yes, I live in Switzerland, I really like it, too. I moved here more than two years ago and it is a welcome change to France.
Some people say it's boring here, but I disagree. I find people to be on time and reliable, which is something I respect a lot. You can PM me if you are interested about other details, I'm just not so keen on displaying too much info here, I guess that is a side effect of the Swiss discretion in finance (and almost every other aspect of life) I work with everyday.

Back to business:

USDCHF
Is this still a valid short? It kind of formed a very steep trendline which was respected by the bad US news last week. Then again, the green Imbalance zone was well respected, so I'm wondering which force will be stronger. Not to mention, there seems to be an underlying uptrend in place since the beginning of May 2015.
Any thoughts on this pair/setup?
Much appreciated.

Yeah...that's valid, good entry. As with your GU long it's good that you just took out the previous swing high/low right into SD zones. I call that an 'oil checker' entry.

There's a lot to talk about on this but I don't have much time right now...will try to add to it later.

Though, if you really want to scratch the trade here are a few things you can do if you haven't thought of it already.

1. just close it out entirely and move on.
2. leave it open, break even.
3. close it partially, break even
4. reduce your risk partially...50% or so
5. close it partially, reduce risk....50%or so.
6. trail it
7. etc.......

There is a good chance we will get a nice down day at the 5pm NY ET close...so you are pretty safe for now. If you are uneasy about it...perhaps you pull some profit...reduce your risk by 50% and target the levels I've identified on this charts. This is definitely achievable this week...and the RR is decent. This way you can cover the risk, or a good portion of it, and remain in the market if it continues down with the remainder of the position.

http://screencast.com/t/LddVQjLuvJ

Cheers,
Bryn

so far both look nice. USDCHF is approaching 2R and GU took off, which mad sense. Closed the XAUUSD at B/E.
Risked USD 100 of demo money on each trade.

Actually I plan on leaving them open. Only thing that I think of is putting S/L to B/E with the USD/CHF.

Do you usually let the trades run, or do you scale out?

Cool...they look good. The Swissy has moved back on you a bit but the GU rallied quite nicely today. One thing to keep in mind is that with technical trading you want to be quite clear with yourself on your exit criteria. It should be an attitude that you apply to all or most of your trades...but it can change as well, it's not set in stone.

I have practiced trading scaling in and scaling out, and letting trades run. but I generally gravitate towards target trading and taking the whole position out at once. I use SD zones and SR for direction, target or entry, but mainly for direction. I target the same amount for each trade ( approx 20 pips )...and either hit my target, BE or get stopped out. But, I often hedge trades that move against me not using a traditional stop loss.


I had to focus quite a bit on following through on trades and holding out for the intended TP...or facing BE/DD. It's important to be in the market to catch those nice moves.It's likely we will see some volatility this week with British pound data and FOMC minutes, could drive your GU trade up or down.

With american fx accounts I do not have access to gold, wish I did.

BE on the Swissy sounds like a good idea. On the t1,t2,t3 on the GU 4 hour chart...those to me are logical scale out price levels. But...you can also choose one for your main target... t1 being the easy target, t3 perhaps taking a while ?


Cheers,
Bryn

Yes, this is a big one, for me, too.
I closed the GU before the news announcement this afternoon. Good choice 317 USD up, which is more than 3R.
USDCHF moved S/L to BE. FOMC pushing it into my direction right now.

Trying to learn the same here. I'm too greedy to scale out. If the idea is good, it's good. The good ones should offset the bad ones. That's the theory. In reality, "letting the winners run" is super hard. Almost impossible to me, and I do this on demo.
I wonder what the transition will be like from USD 5000 on demo to USD 5000 real money. I never traded more than a EUR 300 account. And overnight open positions gave me sleepless nights, I can tell you.

This whole trading thing is so nerve wrecking, but I can't just watch and not have a position (planned or open, doesn't matter). I have to be in the market. Like a junkie needs his fix, it's too good, once I started seeing patterns and opportunities.
It is such a rewarding experience, primarily for the financial aspect, but also, because I believe unless one starts to be honest with oneself, there is just no way to become profitable, and that honesty spills over to other aspects of life. Trading changes you, if you want to be good at it. Actually anything you get good at might change you. I just never felt so drawn to making it right (slow process though, not an instant "click"-moment), than I do with trading. Love hate relationship I guess. Shifting from hate to love (when I make profitable trades hahahaha).

How did you get into it?

Nice.Yeah 3R on the GU is pretty good...nothing wrong with that, locking in profit and leaving your USD/Swiss trade in to possibly drop further...they are somewhat correlated.

Right on with everything you said. I feel quite similar. It's been pretty rough on me but it's coming together. I consider myself to simply be an average learner but I feel as though learning trading has been particularly slow. But it's cool. I am not quite a junkie but I am enjoying more and more being able to follow through on my trades with deliberation and being able to stick to the elements of my trading that I am trying to improve. For several weeks now I have been focusing on improving my discipline and persistence...this regarding my trading schedule ( or, my workday ), and my actual strategy.

How I got in to trading. It was mainly through architectural school in Los Angeles where I started to develop an expanded world view and became interested in socio/economics, politics/geoPolitics and world events and relations. Then, not long after the economy fell out in 2008, I started thinking about other areas I could branch into as a way to diversify. So, trading has become like a secondary profession/occupation for me. I've also traveled a lot which has in ways fueled my interest in trading forex.

Looking back at the trade you placed on the EUR/CHF...your price line was right, there was a decent reaction at your D1 demand. This is an H4 chart.

http://screencast.com/t/UodlcregyT

So whether or not you want to pull unfilled limit orders is something you may want to put some more thought into, if you haven't already. When trading limit orders I tend to pull the orders if I don't get the fill and reaction I am looking for...but, I am also a kind of a timid trader. I tend to under-trade more than over-trade. If you know what I mean. So, the more aggressive trader might just leave the order for another run at it.

One other thing I think is important to note on the EUR/CHF trade is that as a cross pair...it is constricting on your daily chart, it's stuck between the EUR/USD and the USD/CHF. You may know this but cross pairs can be sticky at times. I stopped trading cross pairs quite some time ago for this reason and only stick to majors because they lead the market. But since you're trading a higher time frame it is probably not so critical. I have traded the USD/Swiss quite a bit but dropped it after the SNB power play in January 2015...and pretty mcuh just follow the EU and UJ for my outlook on dollar strength.

Here the price constriction on the EUR/CHF Daily is fairly clear while the EU advances to the long side and the USD/Swiss has dropped...within the last week.

http://screencast.com/t/sZV2lJ40w

You may very well understand the price dynamics between major pairs and cross pairs. But here is another example. If you look at the GC Daily...it's been trading to the downside. So, as a cross pair, this tells us that recent CAD strength is stronger than recent GBP strength relative to the USD.

hope that makes sense...and I could be wrong...lol !!! Enjoy your trades, we'll see what the USD/Swiss does this week...probably due for a correction.

There is a really nice demand level at .955...also dead on the fib50%. Perhaps a level to keep your eye on. H1 chart USD/Swiss.

http://screencast.com/t/fafA8EqXt



Cheers,
Bryn

Re the USDCHF
Profit: Gross 260.88, net 251.04.
I closed it at gross 2.6R and net 2.5R due to swap (very expensive,if you think about it, I paid USD 9.84 on a USD 260.88 profit, meaning I gave away 3.77%of my gain to overnight holding, maybe Global Prime is not the best broker for long term trades, but they let me keep the Demo account for as long as I want, which is great).
(turquoise lines are entry and exit)

In hindsight (lol...) I could have hold to 3R which would have been awesome. And as your chart illustrates, there seems to be enough space down. Further, the Fundamentals will not drive the USD stronger, the move down will continue.
The Fed will not hike the rates in December, so the only thing that could happen is the SNB going even more negative than the current -75 bps. We saw that they are in for a surprise earlier this year, but then I wonder how retail banks will be able to not pass on negative rates to their retail clients. Technically they already have, as they have hiked the monthly account fee and have introduced negative rates for cash from Institutional clients. One major bank has "chased away" clients who did not want to invest their money and have it in cash instead, the total outflows amount to roughly CHF 30 billion (yes, thirty thousand millions)
So fundamentally the direction is down, too.
But damn, I'm pissed that I did not hold it, I mean if I'm too scared to hold it on a demo account, than how will I have the courage to hold it on a live account?

You said that learning trading was and is slow for you and I feel the same, and this is a great example for the difficulties that I face in the leraning process and that make it so (almost painfully) slow.

Is the EUR/CHF forming a bull flag? If I'm correct, a bull flag is making higher lows. What's your point?


EURCHF is influenced much by what the ECB does. And if I got the information right, then Draghi prepared the path for even further QE in the eurozone (as if the initially planned 18 month long EUR 60 billion per month was not enough... throwing EUR 1080 billion on the market.... physical gold anybody?).
So that means the safe heaven capital flows into the Swiss Franc will continue.

Now if this technically really is a bull flag, then the trade that I missed would have made sense but the target for a 1:3 should have been somewhere at 1.10250, with a bit of correction at the 1.0963 area and maybe a follow through. Now is this 1.10250 really a target that makes sense? I am not sure, actually I have no idea how to evaluate this scenario.

I deleted the pending trade and did not look further at the pair, but now that you came back to it you made me thinking. Maybe I need to rethink about my approach. Thanks for pointing at this.

By the way I'm in this EURJPY short since yesterday:


I have way more confidence in the 138.431 level than in the one I took right now, but the h4 charts looks good I think:
But even if there is a h4 level nested in the big D1 level, my target is still D1 based and I'm not sure that I we will see a drop down without a revist to the upper 138.431 level.

Let's wait and see. But I really believe I will lose USD 100 on this trade. Fairly sure about that.

I got into trading through a guy from Bulgaria I know. He told me he was making some cash from online poker and Forex. I was a complete noob and called a broker and they had to explain complete basics to me, like, why my trade is negative when I enter it (spread) and stuff like that. Then came the inevitable search for indicator phase, abandoning and loss of interest, then books (mostly useless) and the came Keyser's video which someone made reference to on a different thread and then this thread here and then lots of screen time. All this takes place from 2010 on. This year I have made some progress though. Very helpful was a meeting with traders (of which just one ore two was successful if you as me), but they both stated that they trade S/R, which was a relief to me, because you can read ANYTHING on the web, from "SnD does not work, S%R does not work, trading is impossible", whatever. So I knew it was doable and I came back to the basics. So I knew traidng is possible and that was what I needed.

But boy is this industry full of scammers, unbelievable... really unbelievable. I really want to trade demo for a year and see what happens.l. I want to let it run next to my work schedule and see how it fits into it. fxtester might help me save some time, but they only supply data from 2001 on, but that's still OK, considering the fact that I could forward test trading on week-ends, too, which is when I have the most time.

Long post... again...

Cheers to you Bryn, always good to read what you write. I enjoy the exchange.

All the best
bg_sunny

Yeah Mate...plenty to talk about. My trading approach at the moment is quite defined, and often boring, so it gives me time to chat with my pals. You brought up several good talking points, I'll write more soon...a bit tied up at the moment with other stuff...gotta help my brother out at his restaurant, they are understaffed...sucks but he's my kid brother so I gotta be there.

Though regarding the EUR/CHF price consolidation. it's just a technical observation on the characteristics of cross pairs that belong to tightly correlated major pairs such as the EUR/USD and USD/Swiss.

To me it's a symmetrical triangle...the EUR/CHF. But, if we just look at the most recent price action on the Daily chart...say, the last 10 days. Notice the tight trading range on the EUR/CHF. It can't really move up or down to due to tight correlation and Euro and Swiss strength against USD weakness. So to me, under these conditions...cross pairs can be a bit 'sticky.'

Here is an illustration
http://screencast.com/t/CBrljksH1OV

Again, You may already get this. It took me a while to really grasp the relationship between majors and cross pairs...it's kind of a puzzle in a way.

Ok so you are out on the Swissy...Don't beat yourself up for taking the easy tp Mate!! You should know when you're getting out, and that is the plan, and you follow it, and move on. 2.5 and 3 to 1 reward to risk is pretty good. That's one of the beauties of entering on limit : with successful entries you can hit those targets fairly quickly because your in so deep.

I'm not quite pro yet but one thing I think is quite important to understand is where you are allowing discretion to enter your thinking. Discretion in trading is a must, I think...but you have to be careful with it because discretion can veer you from your plan and tinker with your emotions. With my entries I use a lot of discretion...but my exits are entirely mechanical. There's no question...20 pips, I'm out, the trade is done...NEXT.

Cheers,
Bryn

Sure, lots of work here, too.
Missed a great AUD/CAD trade... pretty pissed (1 pip or so).
Restaurant work is hard work, I got my cooking diplome in France after two years of work + school, though job indeed.
Will write more and post more charts tomorrow / later this week.
Best wishes
Cheers
bg_sunny

AUDCAD less than 2 pip miss:


Gold short, probably going to end in a loss, already down 100 pips


GBPAUD short D1:

GBPAUD H4 picture

That'c cool...you're a chef. We really like French chefs and cuisine here, it's the best. I just wash dishes Man...lol ! But food is my hobby.

Right...the Swissy sure has dropped. Thanks for the feedback on Swiss fundamentals...I love that stuff, well, I like learning about it. I just soak it up as it comes and slowly build knowledge on it.

Have you held onto your EJ short?...I hope so, nice trade. I saw it moving higher, too...but it looks like Yen strength has dominated.

I'm sure you will be ok by the time you are ready to go live. I hope I made sense in my last post about your trading plan, discretion, and emotion? Have you seen any of Sam Seiden's webinars on fxstreet.com. He is a very mechanical trader, I will send you a link if you want.

Also, other than Keiser's thread here there are two other traders that I look up to quite a bit here on FF. The 60MinuteMan and Davit. You probably have your own guys that you follow...but, they are both really knowledgeable. Davit used to trade trade with limit orders (he still may) and 'build big positions.' And the 60minuteman...who is totally cool, is a genius...most of my psychology and mindset has come from him...it's certainly take time to sink in. I just read though his threads and other stuff he's put online and integrate it into my thinking...he's really big on patience and DISCIPLINE. He never over thinks his approach and never tries to outsmart the market. I'm not suggesting that you take on the strategies these guys use...it's more about the mindset.

I do not have fx tester...I just use the metatrader tester...works fine for me. Also F12 will move your MT4 forward by a single pricebar shift-F12 will move it backwards...just in case you did not know that.

Are you still on Gold? Your GA short looks good. As for your AC missed fill...have you thought to enter within a zone? I mean with multiple orders...like this.

http://screencast.com/t/rCCCJeF0

There are issues with this though. 1. you compromise your R/R 2. it's more difficult to test 3. will give you ' more ' variable outcomes.' But, I think it's worth looking at...perhaps you use 2 orders instead of three ?...just a thought and not unheard of. I think it's not a 'bad idea'...because precision entry in Forex is not an easy thing to do, all of the time.

Sharks and scammers...yes. I am pretty much over it now but I still get a kick outta the market's tricks. Yesterday I was forced to close out a trade with a loss because I had to go wash dishes at my bro's restaurant ( it is not his restaurant but he is the executive chef ) Anyway, I will usually never do this...I will take the win, loss, or BE...no matter how long it takes...I could not set and forget because I was hedged and had to actively monitor the trade...but I had to go. And sure enough, on the very next 5m bar....price moved towards my TP and hit it within an hour...annoying.

Hope you are well bg_sunny...looks like your account percentage is up so that's cool.

Cheers,
Bryn