The Fundamentals of Trading

It pays to pay close attention to the market for subtle clues

here is an interesting one

GBPNZD - coming down off the highs 100+ so far
EURNZD - Coming down off the highs 30+ so far

NZDUSD should be appreciating with this action in the crosses
but its stuck basically doing nothing

so what do we duduce from this

A - NZDUSD is heavy its going to coming down, if it can't rally while the crosses are going down then the upside is done and the levels we spoke off will be next 6735 and 6594

Simon

GNZD
As mentioned earlier
20650 looking possible, its friday that could cap the downside for today
see how it plays

Simon

Thanks Simon, something like this

that flag formation will break lower

ok here is the CADJPY video hasnt been a great day for technology, better late than never



Simon

Very nice Video and explanation, thanks a lot for your time Simon, really respect that.

First thing, I am happy that I could pick some levels that you liked as well. Second, if we take a step further, as I said just for exercise, do we plan a trade on these levels ?

I can post how I plan to trade these levels and then you can give you input and see if we are in sync. (I know you don't like demo trading, but just to make things more clearer and for exercise, I suppose).

1. I would watch how it is going to break near 83.60, depending on the push and conditions, I would like to short (if other conditions are there) with a stop near 84.20 then trail it down till 81.60.

Limit order can be set for that and depending on what is happening with oil and BoJ, we can track it!

I would say this is a perfect opportunity for not shorting it at 83.60 and this is why I dont like it:

Price Action only really comes in a few flavors, when you get a steep fall like yesterday, ask yourself how do you want it to come back

1. Quickly and just and steep as the fall
2. drift sideways
3. drift up slowly with pauses along the way.

I see a slow drift up mixed with sideways, this is what the big cash call a distrbution, meaning that they are selling to retail traders who are buying. If the move had come straight back that level would of made perfect sense for a short, looking at all the yen pairs I think they are either going to do two things:

1. drift sideways into a consolidation range after the fall (very likely at the moment)
2. drift up but will no real force, perhaps even into small stacking bricks pattern

We need more time to see how it plays first where does it want to be, some hours are needed, friday is a bad day we need a new week

Make sense

Simon

Yes makes sense completely, I don't plan to place a trade any ways, this is just to trying to make case scenario if we plan to play that level. Yes definitely need to see what happens when it reaches there. I agree with everything you said above and also context is very important. It is going to be a slow drift upwards/sideways for now.

Meanwhile Cad news just came out which is good, should give it a push but again I believe news is just a catalyst and price will do what price has to do.

AWESOME and well stated, Simon!!!

I'm starting out with a demo account, but only to become proficient with MT4 and familiarize myself with the rhythm of a few pairs, and with my broker's executions. I come from a Futures background and using NinjaTrader.

Thank you for such an informative thread and for sharing your knowledge!!

Regards.

GNZD Update

So 20650 got hit

this is an excercise in finding where next the market is going in a stagment market more on this next week,

but the low was 20647 almost bang on to to the pip

I picked up 80 pips for this risked 20 so you dont always have to find big levels sometimes its just about taking advantage of lazy market days

Simon

EJ

125 didnt get hit got a kick in the pants at around 124.20,

you win some, some stay on the table.

Simon

GA

Didnt quite make 18600 on the downside got close down 18618

see where it goes early next week, we can clean the slate off and start again.

Simon

Very good thread Simon!

You've gave me a totally different approach to the forex market I used before.

Thank you!
Subscribed!

SuperP

Sunday Analysis GBPNZD



Simoin

Sunday Analysis GBPUSD



Simon

Hi Simon, thanks for your videos and good week for all

1.42 a level that has already been visited countless times over the years and now broke.
Long term view 1.08 or 2.4 (to 1.08 can be a quick move a big gap to 2.14 can take longer, many noise and a lot of stations in the way)

Trading Psychology

Lets get uncomfortable as the only way to really succeed in trading or in any business is to be uncomfortable.

Let me say right at the outset that if you are one of these people that likes a comfort zone, doesn't like pain then these next few sentences are for you, read them over and over again.

Years ago I starting doing long distance triathlon racing so when I say long distance I mean Ironman distance which is a 3.8 kilometre swim approximately 2.4 miles, a 180 kilometre bike ride or 112 miles and 42 kilometre run or 26 miles, so a long F@cking way.

I know what you are thinking WTF does this have to do with trading, well everything, trading like triathlon is about pain management, its about being able to block out the pain and keep your eye on the goal, you are going to get some hits along the way and how you deal with them is key to future success.

I am not saying you should go out and punish yourself physically, I am saying that you have to learn to get yourself in uncomfortable situations (obviously safe ones though) and deal with it effectively, this way your brain learns what to do, ask any woman that has been through child birth they know what its like to have to mentally deal with pain.

Pain comes in many forms in trading, the feeling you get when your stop loss is about to be hit, the feeling you get when your take profit is nearly reached and it retraces a little bit, that feeling when price is approaching your entry. My advice is this, treat it like a business and all of this crap goes away, in business you win and you loose, trading is exactly like that, loosing is part of the game, how you loose dictates also how you win, if you loose big cause you haven't got the balls to close it then you will win small cause any profit will be irresistible to you, and you will close it early.

Start something that makes you mentally tough, find something that makes you feel uncomfortable and get comfortable with it. The markets will range most of the time so there is no excuse to not do other things in the downtime.

If you are spending downtime fiddling with indicators, programming crap onto your charts, then sorry your a failure.

Simon

The Cookie Cutter System

Only one word for this:

BULLSH!t

Mechanical systems do not work, wall street has successfully fooled the trading world into believing that everything they do has some magical system behind it and the robots are in charge that's just complete crap. They may use computer trading models but mainly this is used to protect their accounts against an aggressive sell off or buy by getting in and out of multiple positions very quickly.

Anybody on here promoting a system that basically uses the same set up every time is wrong, and I say this because of:

The markets are governed not by machines but by human behavior, let me ask you this do you wake up every morning and have the same thing for breakfast lunch and dinner at the same time every single day, if the answer is no then you just answered the fundamental question as to why systems don't work because humans act differently to the same situation each time.

The situation occurs each time (hence levels are created and either respected or ignored this is a constant) but humans treat them differently each time, so unless the world can build a computer which can take into account every thought process from a human then systems in trading are floored except for getting into and out of trades

All they do is basically execute quick orders based on a set of rules.

If you feel uncomfortable reading this post cause it throws out everything you have known then good now your getting somewhere.

Simon

More on systems

If you are reading along then by now you know I hate any sort of system, cause it relies on humans doing the same thing everytime (which they don't). Have you noticed reading this thread that I have dispelled every myth thats perpetuated out there, thats not because I have some reason to do so, its because there crap for the most part.

Let me offer you this:

1. Why do humans congregate as part of clubs, sporting teams etc
2. Why do humans seek the approval of family members for advice (who may not be experts in the field being sought) rather than seek expert advice
3. Why does pub talk become gospel in some people's brains.
4. Why do people hear something on the TV and take that as the truth

Humans have this fundamental need to be validated which is a completely devastating behavior in trading.

let me tell you what I think, if you want to be really successful you have to be an independent thinker, you have to stop now and completely re evaluate everything that you do in life that relies on other people's research or ideas, sure you can take pointers from others and you might even end up agreeing but you must first satisfy yourself that you have done the work to arrive at your numbers.

Simon

EAUD
15157 should cap the asian session topside orders will be filled, and momentum should lag till europe.

Simon