learn to trade liquidity shifting pattern

This is my personal journal. Its purpose:
- Learning and Experimenting.
- Writing can help me to think clearly.
- Maybe some experience pro trader can help pointing out my mistakes.
- Attracting like minded traders.

*** I don't give advice, share, sell anything. Follow at your own risk ***
*** I will not post chart as i think it will give away my edge ***

Many Thanks to UnnamedPlayr, I learnt
- p1: Banks withdraw unhedged liquidity pattern (fade back to balance)
Duration: <= 30 Minutes
Volatility: ~ 10 pips
- p2: Banks offloading the risk pattern (follow until balance)
Duration: <= 2 Hours
Volatility: ~ 25 pips

** 10 pips ( 4 digits ) = 100 pips ( 5 digits ) **
* Two patterns have the same start, one continue, one doesn't
* Duration and Volatily are average number, EURJPY (p2) need 8 hours and move 100 pips until balance in last Friday
* Think value in %
* I only use some forex pairs and M5, M30 timeframe charts. (M1 is too much information, H1 is late. No programming, no special indicators.
* This is my current research, observation, more to add.


Thanks to skfx, I learnt
- Volatility decides payment amounts, liquidity is the vehicle to get paid.
* Size is important. 10 lot x 10 pips = 1 lot x 100 pips.

Thanks to CIS (A Japanese trader made $34 million on Black Monday), I learnt
- Buy what are being bought, and sell what are being sold
- Tracks volumes and price moves to follow the momentum
* In forex, i like to call 'trade with the flow', because there is no offical volume or order flow. I don't like 'Price Action' term, i just think it is wrong, price doesn't create action itself. Price just react to Trader's action (hit bid and lift offer), so the correct term is Price Reaction. But because it reacts, it was the past. flow is present.
* I still experiment reading things like stop zone, limit order zone, dried up liquidity, ...
* " Its not about being right, its where others are wrong. " - Not written by me.

By know what banks are doing, it can help to know 'where' to enter and exit. By know the flow, it can help to know 'why to enter' and 'when to exit', (more winners and less losers).

Time is also important. By track flow with time, it can help where banks front run market, crowd follow the move,... (Before/Start/Middle/End session/hour)
* I also use time stop beside price stop. (like price doesn't go in 5 minutes, i will exit no matter what)

Money Management
p1 - 1 position, hit and run
p2 - i am experimenting:
3 positions, exit 2 if pullback happen, just let it run or add again
1 position and add another each 10 pips

Psychology, i read on ForexLive
"A small win is a small mirror. It reflects a winning image to us. Accumulate enough small wins and that winning image starts to become familiar. We internalize that which we experience repeatedly. Thats one of the reasons positive emotional experience is important."

Other thing:
- I used to attempt to trade strongest and weakest currency but it give me more headache. But by reading from UnnamedPlayr's journal, it help my a lot.
- I will join some demo contest to continue experimenting and try on small live account.
- Trade News and Stop-Run on the list.
- I will not post frequently.

p1

there is p2 if use another pair to compare

I think using the term 'banks provide unhedged liquidity' is can be misleading. Using 'banks work client's orders' is better.

Using market profile can help to spot imbalance much easier.
It also can help with 'where' to place take profit or stop loss.

after lost a mini experiment account, i finally get it.
(because i am so confident, no stop loss).

before banks push price up, they must go down to re-balance their books and bring value to price.

i think i will post some trades next week when i reload my account.

Zelo, don't do it. Protect your capital!
Use a good Risk to Reward instead, it will make up for those losses. R/R combined with win% is the key IMO. The strategy doesn't matter too much as long as you always follow your plan. The market will be there tomorrow. Will you? Will I?

Food for thoughts.

Matt

i found that banks always hedge risk and hunt for liquidity. because of that, price moves in pre-determined level. i think they are break-even level. they will go back to them and clear their books. i think there are some sort of agreement between them.

Wow, 1 month after 1st post, finally i can understand how they work. I can explain to a child.
They move flow around like deposit fund to and withdraw fund from banks.
If i show a picture, i will sure anyone can trade.
This pattern happened in all pairs and timeframes. Smaller timeframes, smaller pip move and vice versa.

Next week i will join a demo contest to perfect Money Management skill, this is where my weak point.
I will post result next week.