Great thanks ! ill have a look at those books .
- #63
- Oct 29, 2015 10:16am Oct 29, 2015 10:16am
{quote} I wondered if you had any charts examples of this ..is it the sort of action you can see on a chart ?
however in futures and equities it does..
as on your question if you can spot these things on a chart , well no you cant ,
as we dont see the order size ,, u could use Volume plotted on your chart do compensate this a lil bit
like so ,
On this 5min bar chart of MSFT for example ,
(A)
we whitness that a minor support is broken and volume starts to increase so basically the trading acivity increases and on the third bar of the decline , volume is the highest but we close off the lows and the bar contradicted, at this bar we aknowledge that at least demand is able to halt the decline , so what an institution XY might have done , is Offering into the selloff , or hit the BID with relative large sized orders , to test if demand is indeed increasing to even reverse the selloff if they whitness that huge chunks of offers get quickly absorbed or/ and that hitting the BID actually provides no follow thru ie. we still stand BID at the price level they hit , then they turn buyers aswell , as buyers / demand seems to outrun supply here , it all comes down to what price is capable to do and what not , and which way the path of least resistance is
(B)
now as on the next bar vol. is still quite huge and we even make a higher low and close on the high we could consider that the institution XY allready buys aswell
(C)
this bar is interresting as it gives us a clue that sellers are done for most part and the path of least resistance is up as, we rallied quite far , maybe because other institutions whitnessed the change in behaviour and jumped on board aswell to buy but as price moved rather easily and quick ie, with no real resistance , they stopped the buying , (they dont want to pay more premium) and we closed back on the lows
(D)
as the path of least resistance is up (we make back all the ground the previous three downbars marked , within one bar, on decreasing vol.), after demand picked up on the lows, everybody (smart) buys whats left and leave the market for a nice mark up ...
its not neccesary to see "probes" in order to judge the market by its own action , ie what is price capable to do and what not,
what happens if vol. picks up ? how does the market react on high activity ? , where is the path of least resistance etc..
remember this story is just made up , it could have been a whole lot different , ie why this or that happend ,who participated and how , but it isnt important
just judge the PA on its own and your good to go , yes its interresting to know how others (big boys) trade the markets and this and that but its not neccesary ... to pinpoint their intentions , just follow price and watch waht its capable to do and what not
at certain level or after certain price behaviour etc..
...Ill post one up and we can see if any improvements can be achieved...try and learn something .
- #71
- Oct 30, 2015 8:03am Oct 30, 2015 8:03am
thanks ..interesting ! ............. How about entry signals ? do you use market orders or limit orders ? wait for pin bars at interesting levels etc .? do you have a prefered risk reward ratio ?...I try to have minimum 3:1 .
basically iam looking at the bigger picture by evaluating the current / trend we are at on the weekly TF
to get the context , then i watch where we trade within that context on the daily TF and evaluate the current state of teh market
then i look at the H! and watch out for anything i want to trade , like a reversal or breakout or retracement , depending on PA and loctaion , finally i get into the 1min TF and plan the trade , execute it and manage it
simply said :context, location, price action
in the case of EU it would look something like this:
Context: (weekly)
we are still in downtrend and price rejected the suppyline and broke a demandline
which is a sign of weakness
Location: (daily)
the selling pressure increased , towards a minor support level of 08150ish
price reacted at the round number of 0900 and broke a minor supplyline
Price action: (hourly)
the rally towards a fromer minor broken range , with res. 10800(50%mark) and sup. 10240
on increased momentum , but seems to reject the broken support level ,
Plan:
in this case iam looking for a short setup near the broken support level ,
i want to see the demandline broken , and enter on a retr. woth a sellstop below the retr.
teh SL would be at the intermediate high at arround 0200
targeting the 50% retracement of the current rally at 09660 ish..
managing the position on each reaction off a demandline along the way ie. reducing risk
entry: XXX depends on PA ..
SL : 0200
TP: 09660 * target is not fixed may hold for further downside potential
approx RR 1:3
- #79
- Oct 30, 2015 9:21am Oct 30, 2015 9:21am
Very nice ! ...looks like a solid trading plan.
just a lil outdatet .. but the core is still the same
