The Fundamentals of Trading

Wow another Gem.I trade UC AC almost exclusively and always had to scratch my head when I see rookies all over the place.
Green pips

AUDUSD and GBPAUD

Its love no is really is these two just love to play together, people say trading is a science no it isn't its just buyers and sellers, fear and greed so lets look at what we can learn from each other:

AUDUSD

- It went down 100 pips now just for context 100 pips down for this pair is basically 300 pips in the other direction for GBPAUD
- It fell like a stone until it hit the first minor level (see post 137) for an explanation

As a sidenote people always question me on my levels and why I have so few, but look I am not gloating here but I telegraphed 75 as a minor level days ago and 7435, it falls like a stone and 7500 stops it these are not flukes these are just recognizing where retail trader money isn't present.

GBPAUD

- The last swing low for this pair couldn't go lower than the previous, the first time this happened in weeks
- I posted a video last evening during the London session way before it took off (post 123) or here

that this pair was going to run up the hill.


These are not coincidences they are just about allowing your eye to see the small machinations in the markets as these are the pre cursor for the next move.

Lets watch these two and see what happens

Simon

UC moving south
got 6 orders riding.Could test 3020-40again

oh yes thats me
i trade eurusd exclusively
and i know very well how to dance with her

Aussie Analysis

I am going to use the 4h charts for this analysis as sometimes the picture is much clearer and analysis much easier to grasp.

Audjpy

- I see two areas on this chart the top area and the most recent consolidation zone from 8350 and up
- The second area is the area 8050 to 7750 which should be used in the next two weeks

Potential trades are shorts coming back into 8300, this is a low risk play with a tight stop, if you look at the complete fall of AJ over the week the first half of the week was spent getting out of the consolidation zone, Big cash needs to get it out of its range to reach the second block of orders which has nearly done, retests of 8300 make shorts low risk trades as falls of this nature normally whip back just as fast.

Keep in mind that every level is revisited eventually at least once.

http://www.forexfactory.com/attachme...1&d=1460087899

AUDUSD

I know we have pretty much done this pair to death but anyway whats a bit more twaddle between friends. This pair IMO is heading lower, this isn't really anything to keep it where it is, no major levels that I can see on the topside, all the juicy orders are below 7435, this level will be tested, reaction is key to whether we can break into the lower zones.

If 7435 breaks easily then a retest of this level is a key place for a short because once this pair gets under 7400 there is fresh air for 200 pips, no levels to stop the fall. Under 7200 is the next consolidation range IMO this will be close to the top of the next consolidation range.

EURAUD

This pair is like a steam train the slow bloody grind up the hill, the next stop is 15367 and then to 15667, once we get through there we are in the next zone imo, seems improbable to me that we go down unless the unexpected happens, (draghi disaster)

I will say this EA has to go up for my Aussie analysis to be correct so if I am wrong on this one then a lot of my analysis is garbage for today.

Apart from that this pair is asleep at the wheel

http://www.forexfactory.com/attachme...1&d=1460088677


GBPAUD

I have said a lot about how I think this pair is rolling over and I stick to that analysis, its losing its momentum, the shorts are getting frustated here smaller and smaller pushes lower only signifies its getting tired.

The first hurdle for it is 19220 once its past there then 19550 starts to come into play but that's a large zone and their will be opportunities to trade it using pullbacks towards 19220 or stop orders from 193 onwards. Once this pair is clear of 19600 you want to be on it as their clear air for 500 pips so that break will happen and keep going.

http://www.forexfactory.com/attachme...1&d=1460089441

Bit of longer term view today, as it the end of the week its ponderings for next week and beyond.

Simon

Word of Caution

I am happy to share my analysis and that was certainly part of my motivation for starting this thread to help traders get ahead, but keep in mind I don't take many trades I prefer to wait for high probability when the deck is stacked in my favor, so all the analysis I share dosen't mean I am taking this trade or that trade. I am sharing with you my thought pattern and potential areas to shop in.

Unlike many on this site who think there an expert, I am prepared cause I believe in my own abilities 110% to put my chin out and make analysis and calls before the fact not after now sometimes I am going to be completely wrong so just be aware.

I am trying to teach you how I trade and how I think you should trade not give signals.

Simon

Clutter

So much clutter today I did some lurking over at the trading discussions forms on this site, let me pose this to you

If I got in your car and started drawing lines all over the windscreen do you reckon you could still drive it safely.

I mean how do these guys do it so many indi's and lines and god knows what else no wonder they fail.

Simon

Time Frames

One more thing as well, when someone says they only trade one time frame clearly this is silly and you shouldnt pay attention to what this person is saying.

This is like saying I know there is other business in the street I could be doing business with, but I am happy with just dealing with just one customer.

Open your eyes people you think the guys sitting on dealing desks are there staring at a 1h chart only, you don't think they have the gold chart open, the oil chart open, the local share index open, multiple time frames of what there looking at so they can study turnover and the supply and demand of the market

Simon

Good Morning Europe

EJ

125.00 looks possible today and will set up nicely for a run to the lows 122's

Simon

Position Size

I am often asked about position size and whilst I don't want to discuss my position sizing cause that breaches a couple of agreements I have, we can talk about you and what I did years ago when i started out.

The traditional theory in the market is get a small account (few hundred dollars) and trade micro lots.

Complete BULLSH!T

Now I have said before that I think the stress of taking a few hundred dollar account to a few hundred thousand dollar account is pretty impossible that dosent mean you should trade pennies either.

If you are starting out nothing focuses the mind more than losing real money, this makes you an awesome money manager and forces you to get uncomfortable and start killing losing trades. Its too easy to let a real loser run if you have pennies initially on the line.

- Really learn patience
- Really learn charts
- Really learn money management

and then trade real cash, that way when it goes 30 or 40 away from you, the decision is easy

kill it or face extinction

you probably wipe out like 5 small accounts before you really focus and treat it like a business.

Simon

GNZD

Looks like it has room to come down to 20650 at news time before going up

Watch it make an ass of me now

Simon

GJ

room to come to 15500 at the moment

See what news does

Yen is an example of two things at the moment

1. BOJ said they may intervene if UJ gets to 106 (big cash interprets this as absolutely necessary to get price their to find out)
2. It needs to go up first so it can get orders to come down, hence the sell off in yen today after yesterday.

GU
room to come up to 14160 and remain in downtrend

market baking the cake prior to the news,

my guess is big cash knows its bad news

I am doing the ostrich thing again sticking the next out

Simon

GA

room to come to 18600 at news time

18860 on the upside

Simon

Good evening Simon,

Look at this Cad/Jpy chart and I tried marking a few levels which could be of interest depending on how they react there (not trading, just for exercise), would like to take your feedback on that please or if you were looking at this chart, what would you look for and how would you plan/map out things!

I will do video on this shortly if you like on this pair

technical issue with my video machine should have it fixed shortly.

Simon

Cool, will wait

Morning all

@workingforex my thoughts lets see what Simon says

doing first video now should have it up shortly

uploading video now