Trading S+D With Facts Ebook

The bottom 2 levels are places where alot of people (well kind of alot) were short from who had been trapped when the market moved higher

In the bottom zone people shorts were trapped from the 119.40-119.50 range

And the zone above contained trapped shorts from the 119.70- 119.80 range.

In regards to your chart sunny i think you've got it right the only problem is all the currencies apart from USD/JPY-EUR/USD-AUD/USD-NZD/USD contain very little data , the oanda traders seem to focus on these 4 currencies the most so me personally i tend to focus on these.








notice the difference between these two graphs how the bars on EUR/AUD are very spiky this is means that not alot of people trade it.

EUR/USD Order Analysis

Seems USD/JPY did as expected,only they took it up at London open instead of US (see post 73)

Congrats on the thread.

Apologies if this point has already been specifically made but just wanted to comment about the "trapped" traders aspect of some of the charts (also an opportunity to dust off the drawing tablet )

Once a supply zone (for example) sets up I'm not sure it's in the trader's best interest to think of this as trapped buyers. At the end of the day, when fresh supply come into the market any margined retail that are still long without stops are going to get wasted. In those situations most stops should've already been triggered, and as a side note, I'd say that any open buy orders at the formation of supply will most likely belong to much higher timeframe participants who can withstand the lower timeframe swings.

For those trading PA at the levels, the concept of trapped long is critical and should be applied once price hits/tests the fresh (supply in this case) level/zone. The trapped buyers way of thinking is then relevant and can be applied to those traders that got in long way too late in the game and quite often just because price was rising (been there done that). Once the bearish divergence at the level has set in, trapped retail buyers will now be feeling the pain and most likely having their stops hit. On the other hand, those trading PA at the levels are now more than likely looking to enter short.

If USD/JPY start moving up quickly (large range candles) these trapped shorts will close allowing pro traders who went long to take profits

Yes correct Simond good explanation



These kind of movements multiple large range candles, typically the first few candles are mostly from forced liquidation from the sellers who went short in in the above example this movement then pushes the market up enough for lower time frame traders to identify that a trend exists which causes them to buy, then the market will either consolidate or retrace making the the late longs liquidate allowing pro traders to either reload on more long positions or if the trend is visible to many people across lots of different time frames they take it lower making alot of money in the process.

Think the longer the trend the more identifiable it is to more people because it shows up on across longer timeframe's

be back in 15 gotta go shop get some ciggs

Thanks willo123 for the pdf. :-)
I wanted to ask you what exactly you mean by :
"Sell Stops Around here" - Do you mean there are open buy positions ( long traders) that will close their position and result in a sell stop when price reaches 1.0890
or do you mean there are sellers (TRAPPED short straders ) who will close their position and result in buy stops

i am referring to post 83

it would be great if you can elaborate.

cheers,
elogik

Could see a run into the buy stops then a move down taking out the sell stops causing a price cascade.

sorry elogik only just saw you post.


what I'm referring to is the open orders graph not the open positions, if you look at the open orders graph you can see there is large blue bar at 1.10000 these are buy stops from the traders who have gone short after the downmove.

we had a similar situation yesterday if you look at post 29 you will see i said that there were stops building below the consolidation on USD/JPY.

When the FOMC statement came out they ran the stops and price shot up, this could be whats developing on EUR/USD

thank you for the tip

thanks for the clarification will go through the post 29 as you mentioned and try sum it up ...

Np guys, if you have any other questions don't hesitate to ask

look like the high of the day has locked after showing a long and agressively selling the EURUSD

hi Willo is it correct to say the next short term level is 1.0920?

Yes i think that if they do not run the buy stops today what will happen is the market will slowly move lower tonight leading more people to believe that the market is in fact going down so then even more stops will be placed at the high of the current pin, coming into London open tomorrow they'll run the stops.

just my opinion i could be wrong, see what happens over the next hour.

If you look at the order graph you can see that they have moved their stops.


This is before the pin



This is now


The've gone from being between 1.0990-1.1000

To now being 1.1000 -1.1010

There scared that the market is gonna hit their stop because they see that this 1hour candle is bullish.

if they see the market move lower they will probably bring their down stop, all depends on the price action really