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C-12's Supply, Demand and PA thread

  • #4,341
  • Jul 17, 2016 5:34am Jul 17, 2016 5:34am
Quoting C-12
{quote} Here we go. Forgot I put this demo account up fxbook. 398 trades in a week... 180 in commissions. 4% drawdown. less than 40% winrate. Not happy with this at all.. I dare not even look through the trade log since it's insanity. Anyway, it's a 30 day demo so was mostly just looking to play around with the platform.. Can't swing on this so got something new lined up for practice. It seems like a good broker though and NY charts. Looking for a much better performance next week (with some discipline). Now I've got...
Why should you care about winning percentage at all? you obviously are making a killing. I remember very very Clearly that Sam Seiden / the father of supply and demand taring as we know it/ said that the person he personally know to make the most money out of trading has super bad winning percentage. You obviously are making a killing.

There is nothing more to improve if you ask me making 1400 pips is enough in it self to know that someone has some knowledge about the market who cares about winning percentage ?
  • #4,342
  • Jul 17, 2016 5:48am Jul 17, 2016 5:48am
Quoting C-12
One thing I'd definitely encourage people to do is to journal the week's / day's action on the pairs you trade. I use Evernote for this. unless anyone can suggest anything better? You do see the same patterns / tricks repeat themselves but it's easy to forget them... If you journal it, then you can refer back and always keep things fresh in the mind. Basically I just review the weeks action and annotate bits on the chart. {image}
If anyone would like a copy of this trade journal let me know. It's for Mac users and is something I've cobbled together in "Bento", which is a very simple database tool (may even be free to download these days) but has suited my needs for this particular application.

Regarding the "Screen Grab" function, one needs to manually grab charts of completed trades and file them separately with a thumbnail link dropped in the Screen Grab window.

Regarding the "Entry Criteria"/"Exit Criteria" drop down boxes, one would first need to enter the variables into the master database file. The variables would obviously need to be in accordance with the specific trade plan/method.

There's a "list view" function that if used at the end of say, one month of trading, makes a basis statistical analysis of one's trading performance quite straightforward.

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  • #4,343
  • Jul 17, 2016 6:24am Jul 17, 2016 6:24am
Quoting simond2002
{quote} If anyone would like a copy of this trade journal let me know. It's for Mac users and is something I've cobbled together in "Bento", which is a very simple database tool (may even be free to download these days) but has suited my needs for this particular application. Regarding the "Screen Grab" function, one needs to manually grab charts of completed trades and file them separately with a thumbnail link dropped in the Screen Grab window. Regarding the "Entry Criteria"/"Exit Criteria" drop down boxes, one would first need to enter the variables...
Damn that's awesome Simon.

That would be really useful if there was a PC conversion.... Although not sure how I could possibly journal 398 trades though, I'd run out of hard drive space!!

I really like the 4 trading definitions displayed at the top since I clearly fail on the discipline and patience side... Yet win on the courage side. It would be nice to see it logged down in cold hard text as it would shine a light on all my wrong doings.
  • #4,344
  • Jul 17, 2016 6:47am Jul 17, 2016 6:47am
Quoting teodosy87
{quote} Why should you care about winning percentage at all? you obviously are making a killing. I remember very very Clearly that Sam Seiden / the father of supply and demand taring as we know it/ said that the person he personally know to make the most money out of trading has super bad winning percentage. You obviously are making a killing. There is nothing more to improve if you ask me making 1400 pips is enough in it self to know that someone has some knowledge about the market who cares about winning percentage ?
I'm ok with a poor win percentage but it was the scruffy way in which those losses occurred. In a lot of cases, the trade direction was right but I've entered and exited maybe 3 or 4 times before I've decided it's a good entry....

Most of these losses are very small but there's an additional cost to those (in accumulated commissions). I'm wondering if moved to STP from ECN (with wider spreads) it might encourage me to be a bit more selective and stick to a position.

I originally intended to start the week with a bit more flexibility on stop size to allow breathing room on trades but that clearly didn't happen.

Anyway, onwards to next week. I've got a busy week at work so probably will help reduce the trading volume.
  • #4,345
  • Jul 17, 2016 7:28am Jul 17, 2016 7:28am
This kind of thing happens more than I would like to admit to myself. In hindsight it is quite funny...

1) M15 Bull engulf (long, looks good with M30 supporting)... Exited as didn't like lack of follow through.
2) M15 engulfed south (shorted). Hmm I think actually we're heading down to retest that H1 zone first.
3) M15 bull engulfed again (went long)... Crap I knew I was right in the beginning, it's obvious on H4 !!
4) Decided to exit as it's probably too late in the day - Lost around 15 pips in the process. Oh well.
5) Come back to the screen an hour later and price went exactly where I thought it was going....

It can be a pretty frustrating business at times.. On the positive side, I never ever let a trade run massively offside in the hope it reverses.

That is the cardinal sin of trading. If this ever happens then best close out of the trade immediately and take a few days to cool off and re-evaluate.
  • #4,346
  • Jul 17, 2016 7:36pm Jul 17, 2016 7:36pm
C12,

Thanks for this comment. If I understand this correctly our options would be to. A) wait for the H4/H1 retest to reduce the size of you SL B) Scalp M5 M15 primarily looking for a RR of 2:1?

Quoting C-12
So to conclude, does this method of trading work? Of course it does. It's how the market moves. How can it not? The main question is how you can make it work for you. What rules and criteria can you wrap around it and pairs / time frames that works for your own strengths and weaknesses. You can try this on any pair but I think (personally) it's better to build a relationship with a few selected pairs and get to know all the tricks. Also don't just stick to EU only. It will drive you insane eventually. You also have to ask if you're willing to put...
  • #4,347
  • Jul 17, 2016 10:27pm Jul 17, 2016 10:27pm
Quoting C-12
I miss the old AG Skype group we had going in 2013 with Ken, Julexo, Infest, Adrian, Roman, Alex, Lehman, Daud, Emene, Simon and the rest of the guys. It was a riot. Especially the daily EU scalp sessions and weekly conference calls. I wonder what happened to Adrian, he was excellent but just vanished? Trading (full time) is quite a lonely endeavour it's good to have a bit of a laugh with a group of like minded traders.
Hi C-12, wow ... its been 3 years... just open up chart few days ago and go through some old files and journal. Took a while to enter this forum as I don't remember the password. Need to pick up bit by bit and start over.
I miss you guys, hope everyone is well
Please send my regards to others if you still with them
  • #4,348
  • Jul 18, 2016 3:55am Jul 18, 2016 3:55am
Quoting C-12
This kind of thing happens more than I would like to admit to myself. In hindsight it is quite funny... 1) M15 Bull engulf (long, looks good with M30 supporting)... Exited as didn't like lack of follow through. 2) M15 engulfed south (shorted). Hmm I think actually we're heading down to retest that H1 zone first. 3) M15 bull engulfed again (went long)... Crap I knew I was right in the beginning, it's obvious on H4 !! 4) Decided to exit as it's probably too late in the day - Lost around 15 pips in the process. Oh well. 5) Come back to the screen...
What you’ve described here sounds like an instance of trading in too low a timeframe when price is actually at a higher timeframe zone or point of interest?
  • #4,349
  • Jul 18, 2016 7:04am Jul 18, 2016 7:04am
Quoting simond2002
{quote} What youve described here sounds like an instance of trading in too low a timeframe when price is actually at a higher timeframe zone or point of interest?
It could also be clear on H4 (just in terms of direction) but M15 might want to take a scenic route or retest another zone (above or below).

I've analysed Ken's old scalp charts to death and he mostly wasn't putting stops behind LTF PA (or even LTF zones).

It looks like he was taking direction off H4 and scalping within HTF parameters.

So this chart for example. Notice the drawdawn he must have sat through but knowing the bigger picture was still in play.

This is where higher TF confidence, account size and flexibility really helps I think... for the rest of us, I think this is a dangerous strategy (unless our accounts can accommodate it).
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  • #4,350
  • Jul 18, 2016 7:25am Jul 18, 2016 7:25am
Hi C12,

Here is my view of GBPUSD ,

H4 Down
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H1 Down

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M30 Down

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M15 Down

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  • #4,351
  • Jul 18, 2016 7:39am Jul 18, 2016 7:39am
Quoting C-12
{quote} It could also be clear on H4 (just in terms of direction) but M15 might want to take a scenic route or retest another zone (above or below). I've analysed Ken's old scalp charts to death and he mostly wasn't putting stops behind LTF PA (or even LTF zones). It looks like he was taking direction off H4 and scalping within HTF parameters. So this chart for example. Notice the drawdawn he must have sat through but knowing the bigger picture was still in play. This is where higher TF confidence, account size and flexibility really helps I think......
Great observations and analysis C-12.
All one has to remember is higher time frames rule.
  • #4,352
  • Jul 18, 2016 8:15am Jul 18, 2016 8:15am
Quoting C-12
I've analysed Ken's old scalp charts to death and he mostly wasn't putting stops behind LTF PA (or even LTF zones). It looks like he was taking direction off H4 and scalping within HTF parameters. So this chart for example. Notice the drawdawn he must have sat through but knowing the bigger picture was still in play. This is where higher TF confidence, account size and flexibility really helps I think... for the rest of us, I think this is a dangerous strategy (unless our accounts can accommodate it).
I think you’ve hit the nail on the head with the above observation. It is a dangerous strategy, it’s also an extremely confusing strategy especially for those at the front end of their trading career trying to cut their teeth on SD. With all due respect to Ken, this is one of the main reasons I decided to go it alone.

I’ve blown hot and cold on multi-timeframe analysis and trading this past few years, but I’ve always been resolute on the dangers of trading lower TF PA at higher TF zones. Notwithstanding the factors you mention like entering on lower TF PA but trading higher TF stops, I still believe it’s better to trade in the TF that the PA/Zone sets up.

It’s difficult to articulate without a chart but fortunately, NZDCAD recently gave a really great example:

D1

The short entry speaks for itself.

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M15

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If we illustrate here what a lot of traders go and do, they attempt to trade the higher TF move but instead of using D1 (in this example) stops they trade the M15 TFfor the “discounted” entry, but allocate M15 stops, which, as we see in this case is how they get burned.

Once price touches the D1 zone they’ll short the first M15 bearish PA they see and place a stop above the M15 PA. They get quite comfy because price moves away nicely, and there’s even a period when it looks as though they’re going to get a really decent payout but then what does price do? It does what it very often will do in these situations and begins to pull back against their position.

M15

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What happens next is classic. Price eventually pulls back so far that it nicks out their stop. But, maddeningly, it is right at the point where the market collapses in the direction they originally anticipated.

This situation becomes even more frustrating when one considers what the trader has endured: 3 or 4 days of uncertainty, 3 or 4 days of carry fees, 3 or 4 days when an element of his risk capital is locked in the market; and that’s just for starters. The impact on his psyche, morale, emotions, and his ability to rationalise his trade plan - well, this can often be immeasurable.

The cruel irony is the following chart:

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If the trader had considered that when price is in a D1 zone had he just traded the M15 PA until D1 sets up, he could have traded his original M15 entry and taken profits accordingly at 1:1/2:1. But I think we rarely, if ever, see this happen.

D1

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Returning to the D1 we could ask ourselves, what would a trader need to have done on this occasion to get a decent (confirmed) entry given that the original supply zone is a D1 zone? Well, once price hit the D1 zone, he’d have needed to wait 4 days for a signal to short. He’d also have needed to adjust his position size accordingly. Trouble here is, far too many traders are both incapable of exercising the level of patience needed to trade like this and they also don’t want the associated risk, even though they do want the D1 rewards! (I’m not saying this is you or anyone here btw, it’s just a general observation of FF and other trading websites over the years).
  • #4,353
  • Edited 8:57am Jul 18, 2016 8:40am | Edited 8:57am
Quoting simond2002
{quote} I think youve hit the nail on the head with the above observation. It is a dangerous strategy, its also an extremely confusing strategy especially for those at the front end of their trading career trying to cut their teeth on SD. With all due respect to Ken, this is one of the main reasons I decided to go it alone. Ive blown hot and cold on multi-timeframe analysis and trading this past few years, but Ive always been resolute on the dangers of trading lower TF PA at higher TF zones. Notwithstanding the factors you mention like entering...
Oh, there's a good argument for just trading the higher timeframe zones and PA due to the reliability and that's a great example.

The problem is that trades like NCAD (and that was a peach of a level that should have been on everyone's swing trading radar) is they come around very infrequently so you end up dropping time frames anyway. People want to be able to make a regular daily income out of this. You have to be willing to sit on your hands for long periods (days or even weeks) if only trading these setups.

The only way I've been able to scratch out decent scalping results (GU and EU mostly) on M5 and M15 is with very tight stops and a dreadful win rate of usually 40% ish.... a whole pile of break evens and niggly stop outs.

This style isn't for everyone and it can be a pretty soul destroying strategy at times but I'm comfortable and I've managed to stick to keeping things tight without positions escalating out of control (like the days of old).

I don't think Ken was teaching the things he was doing, he was a big proponent of Daily / H4 zones and PA. Although, it's hard not to see what he was doing on M15/M30 and try and emulate it though.
  • #4,354
  • Jul 18, 2016 9:00am Jul 18, 2016 9:00am
Quoting ydaudw
{quote} Hi C-12, wow ... its been 3 years... just open up chart few days ago and go through some old files and journal. Took a while to enter this forum as I don't remember the password. Need to pick up bit by bit and start over. I miss you guys, hope everyone is well Please send my regards to others if you still with them
Hah!

Nice to see the old crew back out. We've got Simon, Daud and now Alex. now just need to find Infest.

Hopefully see you around more. I've remember some of your old trades and you were pulling out some really nice stuff on M30 and H4.
  • #4,355
  • Jul 18, 2016 9:14am Jul 18, 2016 9:14am
Quoting C-12
{quote} Oh, there's a good argument for just trading the higher timeframe zones and PA due to the reliability. The problem is that trades like NCAD (and that was a peach of a level that should have been on everyone's swing trading radar) is they come around very infrequently so you end up dropping time frames anyway. People want to be able to make a regular daily income out of this. You have to be willing to sit on your hands for long periods (days or even weeks) if only trading these setups. The only way I've been able to scratch out decent results...
I agree. Regarding NZDCAD it was the pair that lent itself best to example due to the decent entry PA on the D1 zone, however, a similar setup could just as easily have manifest on a M15 chart and served as a legitimate example.

I've actually found day-trading 6 x pairs on the M15 TF suits my approach well. GBPJPY/EURUSD/GBPUSD/EURCAD/USDCAD/CADJPY always seem to give up enough pips. The CAD pairs today, particularly EURCAD and USDCAD have performed well.

I guess my point with this is that I personally believe it's a good idea to learn how to trade on one TF first before dabbling with the lower TF inside the higher TF stuff. It's all horse for course though; like you say, there's no right or wrong way, and certainly no one out there really teaching this stuff - a trader's got to find his own way
  • #4,356
  • Jul 18, 2016 9:19am Jul 18, 2016 9:19am
Quoting simond2002
{quote} I agree. Regarding NZDCAD it was the pair that lent itself best to example due to the decent entry PA on the D1 zone, however, a similar setup could just as easily have manifest on a M15 chart and served as a legitimate example. I've actually found day-trading 6 x pairs on the M15 TF suits my approach well. GBPJPY/EURUSD/GBPUSD/EURCAD/USDCAD/CADJPY always seem to give up enough pips. The CAD pairs today, particularly EURCAD and USDCAD have performed well. I guess my point with this is that I personally believe it's a good idea to learn how...
I agree, I'm leaning toward 6 majors (2 timeframes next to each other) so less EU M5 needed.

I like the pairs you've chosen due to having nice confluence with each other.

So I guess you caught the UCAD move? Are we trading M15 or are we actually trading the H4....

AU also looks ripe for a short. H4 specifically.
Attached Image (click to enlarge)
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  • #4,357
  • Jul 18, 2016 9:55am Jul 18, 2016 9:55am
Quoting C-12
{quote} So I guess you caught the UCAD move? Are we trading M15 or are we actually trading the H4....
Nope, I was out a lunch and missed the (M15 for me) setups. But if they pull back I'll trade them. In truth I'd prefer to wait and see what EURCAD does at 1.4415 M30 supply. If it turns before, however, I'll re-assess.

In terms of whether or not USDCAD is trading M15 or H4, well, at the end of the day if it's H4 the stop needs to be below the zone or behind any fresh market structure that sets up, which arguably it has done. So I guess it's H4
  • #4,358
  • Jul 18, 2016 10:09am Jul 18, 2016 10:09am
Quoting C-12
AU also looks ripe for a short. H4 specifically.
Can you post a chart? (H4 I really only see it bouncing around S/R atm)
  • #4,359
  • Jul 18, 2016 10:26am Jul 18, 2016 10:26am
Quoting simond2002
{quote} Can you post a chart? (H4 I really only see it bouncing around S/R atm)
I can see a D1 bear engulf off a daily zone (although mid zone)

H4 bear engulf (with what looks like space to run some).

H1 bear engulf (which just got tested a few mins ago). Will have to see if that gets taken out.
Attached Image (click to enlarge)
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  • #4,360
  • Jul 18, 2016 10:44am Jul 18, 2016 10:44am
C12,

I took this trade after the H1 retest with SL above H1 Zone but it looks like you are waiting to see if the zone is taken out. Could you explain the reason for waiting? and if the H1 zone is taken out what do you look for next? LTF M30,M15,M5 entries.

Quoting C-12
{quote} I can see a D1 bear engulf off a daily zone (although mid zone) H4 bear engulf (with what looks like space to run some). H1 bear engulf (which just got tested a few mins ago). Will have to see if that gets taken out. {image}
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