Price-Structure-Order flow

Watching EUR/USD:

Watching with great interest what will be happening on the EUR/USD market up through the end of this year. Price is currently hovering above a 15 year low, and price has stalled and is beginning to balance between the buying and selling. From the way things look right now, there appears to be little appetite for selling. Perhaps this is due to the US holiday, and with low liquidity, the market cannot muster. However we are now in an area where I anticipate either renewed selling, to stop out any early longs, or sellers from above the market, to be booking profits before the end of the year.

Over the past 24 hrs or so, the order flow has changed from net selling to balanced. So I am "stalking" this pair.

Sorry I don't. I do appreciate your time and as I can not reproduce these charts I have taken the liberty of drawing on yours! Given that the H1 chart would be the same across different brokers times, I assume you went short off the H12, however there was no candle closed below the balance area.

The MT5 platform (which I prefer if I HAVE to use Metaquotes), is NOT configurable to the NY close...it requires the broker to configure to the server. Thus, depending on where in the world that server is located, or configured, a new daily candle normally begins at midnight - server time. Thus, when the market opens on Monday Morning in the Asia or Australia Market, it is still, Sunday night in NY. And you get a "short" candle that will be open for a few hours until midnight server time (depending on where that is).

This makes it look like an extremely low volume 12 hr candle formed at the top of a larger move higher...exactly inside my target area. The next candle (which was actually 12 hrs), closed below this top and then price ranged, as order flow balanced. Inside that balance area (best seen on the hourly) it produced a lower low and a lower high, causing me to think the order flow was about to unbalance in favor of the sellers.

We know the rest of the story...did it "exactly" meet entry criteria? Nothing ever really does, as I mentioned in the beginning of this thread, my method of trading is discretionary, meaning I try to use my noodle and not a computer to think for me. Now compare this chart to one that closes correctly on NY close

That "short" candle isn't there and was correctly absorbed into the opening candle for that week. This is how a typical continuation move looks like and there is no indication whatsoever of a reversal in order flow...the market balanced for the first 1 1/2 days then continued. Viewing this chart I would not have been inclined to take a short.

While many might say, in retrospect, that this was an invalid entry, and they'd be right. I (again I am working on this) was a bit too aggressive in my entry, as is my reaction from trading tick charts on futures. It has proven more difficult that I thought to SLOW DOWN and let the signals mature a bit more...saving me some lost pips.

EUR/USD bullish signal

Intraday charts and daily charts are now producing a bullish signal at/near the bottom of a 15 year low. I have placed two pending buy orders and will continue to monitor these into next week. Today being Friday, I doubt I'll get triggered today...but will hold this into next week and see what happens.

WTI - Long:

For any of you interested in trading oil long, I was just triggered (on this new platform) with my second buy order. This is what I should've waited for instead of just entering like I did two weeks ago. So now we will see if this trade thesis works. Any who are interested in this trade will be able to enter as soon as the market opens on Sunday eve...(Monday morning Asian session).

Thanks for the reply. You read a lot into two small down candles (that had not put a dent into the last up candle). Also the lower low on H1 was only in wicks, they had not closed lower.

Not sure about MT5, but there are many MT4 brokers use the NY close. Will be interesting to hear how find ctrader.

You are right AUD...Which of us is without sin? I repeat...I am finding it more difficult than I anticipated to switch from trading very small time frames to very large ones.

In regards to cTrader, I already like it much better...not only for the ability to configure the close time on the candles, but also for the far better array of time frames available, which allows me separate the views and see a larger portion of the market.

Short - USD/JPY:

Woke up this AM and found market was moving and had given a short signal overnight, and I had missed the "primo" entry, but I did enter short and have placed two more pending orders above the market. I suspect the retest of these highs is not over yet, so we'll have to see what happens this week.

Update on WTI - Long:

Oil has triggered all three of my pending orders and is not starting to work. I would appear the OPEC meeting is causing some volatility, which has triggered my trades. Hopefully they will come to some accord that will push prices higher.

EUR/USD longs triggered:

I had added in a long higher up after I saw a large move higher at the open of this week, but price has now come down into the original entry point and has triggered the first position.

EUR/JPY - Shorts triggered

Almost the same story as USD/JPY, looks like the buyers have run out of steam and now the "late buyer" is trying to push prices to new highs. I have one small short triggered with one more left pending.

Edit: Volatility in EUR stopped out this pair very quickly...loss of 50 pips

Update on EUR/USD - Long:

This trade has started working yesterday, but has stalled again. Nothing to do but wait it out. I suspect that the OPEC meeting today is causing alot of volatility in addition to the usual end-of-month "squaring" of books.

Update on WTI - long:

Speaking of the OPEC meeting, you can see here the volatility that has been present the last several days in oil prices even though WTI generally is not bound by these meetings. Prices have rebounded quickly overnight and I believe that after today I will have the opportunity to move my stop a little closer to the market.

Update on USD/JPY - Short:

The last (and highest) entry point has been triggered inside the target area so all three positions are now in play. Stop is set just above this target zone.

Update on USD/MXN - Short:

The Peso order flow continues to balance, which is necessary for a reversal to occur. This market is balancing now near all time highs and this is usually the first step to a major reversal. I suspect it will test the high one more time before pooping out and reversing. Should that happen I have placed one more position to trigger.

Stopped out on USD/JPY:

Position stopped out in this market for a loss of 89 pips.

Tracking (stalking) NZD/USD for a Short:

Price has entered a target zone and then bounced away giving a strong signal of rejection. Most of this volatility as been due to the OPEC meeting that has caused volatility across the entire market. I have placed pending orders as seen here, but have to wonder if price will range again this far to trigger the orders.

Hello All,

I've decided to share some stats with you all, to also demonstrate the power of keeping statistics on your personal trading results to assist you in finding the most efficient way to trade...not just finding entries and exits, but also managing stops, limits, and what to set as goals and targets, that are reasonable and achievable. I have been tracking all my FX trades since I started this experiment in journaling my trades and will update these stats at the end of each month.

A few caveats. I did not include any commodity trades in these stats. I track and trade those on a different level with different goals in mind. As well, all currently open trades are marked to market as of today. But they are still open and as such are subject to change. As I mentioned in the very first couple of posts, this experiment is to see whether or not it is reasonable to expect a return of 20% or greater on a simple trading strategy, utilizing large charts that trade infrequently. I am happy to report that not only is that reasonable and achievable, it has been done already, and I am raising the objective to 50%.

So over the next series of posts I will post some commonly view statistics as well as my own analysis to show an example of how YOU should also be tracking your results...good, bad, and ugly to help you improve your bottom line.

Win Ratio:
Total Trades = 13; Winners = 11; Losers = 2; This places the accuracy of entries at 84%. It was an unusually lucky month for me. A more normal accuracy rate is closer to 60%...however, when we have good luck we must celebrate...and I am


Expectancy of Trades:
For those familiar with this calculation, it takes your win vs loss and averages the number of average pips over the from wins and losses and applies those averages to your calculated win ration (mentioned above). This calculates your risk to reward ratio, and what you averaged (profit or loss) over every trade.
Average Win = 323 pips; Average Loss = 79 pip; RRR = 4:1 (for pips gained for every pip risked); Expectancy = 286 pips average across all trades.


Profit/Loss:
This month showed a profit of 27.9% (goal was 20%)...need I say more?

Continuing...These next few statistics are some that I track to show me how efficient my trading is and to tell me how I can make it more efficient, in terms of time, and profit availability.

Time in Trade: (TIT)
How many of you track how much time you spend in a typical trade? Do you hold your losers, yet cut your winners short? This calculation tells me how I am doing in this area
TIT to first scale out = 5 days, 16 hrs - on average; TIT to complete trade = 12 days, 7 hrs; TIT losing trades = 3 days, 7 hrs.

This stat tells me that if I am hold a loser for more than 3 days, its time to think about just taking the loss off the table and moving on to the next opportunity. If I haven't reached my first scale out in 5 days (on average) then most like I'm NOT going to. Take the loss and move on.

Cash Ratio:
This is another calculation that uses absolute values from your actual trades (not averages) to show you the actual profitability of your trading. It is expressed in a signal number that MUST be a positive number or you are losing money no matter what your balance indicates.
Cash Ratio = 19.85. Meaning, for every 1 dollar I lose, I make $19.85 back.


Average Distances:
I track the distances the movements go both in my favor, and also against me to see if I am placing my stops too close or too far away. As well to see (on average) how much movement - in pips - is available on the typical trade, and this give me an idea where to place limits
Average initial risk = 145 pips; Average actual risk = 90 pips (I could probably move my stop in closer by half its original distance); Average distance a winning trade moves = 331 pips; Number of "big" moves (500 pips or greater) = 1.


This is also telling me that I am taking profit roughly about 2x my initial risk. However, if I move my stop in closer, I will increase my RRR while still maintaining the same profit potential. In other words, risk less for the same amount of profit.

Availability of Profits:
In trading (and especially in profit taking) we must continually ask ourselves, "...what is more likely to happen?" What is the probability that I can make 2x risk, or 4x risk..etc. While holding for longer periods of time (ie. riding the trend) seems reasonable I am here to say that mentality is NOT profitable...it is far more likely, and therefore more profitable to set a goal for your trade, and take your profits when the market provides that opportunity.

On the following I tracked all winning trades (even after they were closed) to see what had the greater probability of occurring and where might the "sweet spot" be to place my limit.

It is clear to see that even though there was 1 "big winner" the probability of that occurring is only 9%, where as the probability of getting 2x risk or 3x risk is far more likely, and therefore achievable.

So the question you should ask yourself is, "why should I hold a trade for a profit level that has 9% chance of hitting when I can take profit with a greater than 60% certainty of getting filled?"

Distribution of profits:
Finally we ask ourselves, "where is the 'sweet spot' to place my limit so that I can know I getting the most efficient exit?" If I place my limit close...yes I will win more often, but each win is smaller. If I place my limit farther out I each win is larger, but there are fewer of them. So where is that "Sweat Spot" where the profit potential is maximized, while at the same time the probability remains high.

This graphic shows that 3x risk seems to be the best place to put limits. This accounts for the probability of hitting that mark (currently at 54% coupled with the greater profit. In this you can clearly see that even though the profits are larger for each winner carried farther out in time, the overall profits are smaller. The point of diminishing returns.

Considering all the above stats, we must keep in mind, that there are only 13 trades tracked so far. I usually need a minimum of 100 to draw any conclusions. So I will continue this project for at least a year to see how things turn out. Again, the stats change from one month to the next, but after about 100 trades I believe it is safe to draw some solid conclusions and make changes to your trading plan that will take advantage of the data and benefit your bottom line.

I hope you have found this kind of information useful. Perhaps you too should consider tracking data on your trades. If you have a more efficient way of doing it or if you track something that I didn't mention here, I'd love to hear from you and exchange some ideas about data tracking and mining.