Price-Structure-Order flow

I have left my stop where it is...locking a 35 pip profit on the aggregate. I would appear the sellers are taking profit ahead of the week end. This is very common. I have protected my position as much as I can and will have to wait to see what happens next week. I too am holding over the week end.

Don, one question comes to my mind.. if you are short audusd and long eurusd, why not just long euraud?

I don't survey every single currency pair available it takes too long and I have other things to do. I watch mostly the major USB pairs and oil and gold. That's 9 markets to balance with my daily futures trading. I think that's enough don't you?

Update on AUD/USD - Short:

Buyers still seem to be active at the lows of the current balance zone. This is a bad sign for shorts. It would appear there is still not enough willing volume to sell this market at this level. I will try to be a bit more patient with this trade.

Update on EUR/USD - Long:

This market has gapped higher at the open of the week, and I consider that encouraging news for now. However this is a significant balance zone that buyers must chew their way through before continuing this trend. I have decided NOT to add in here, as I still see sellers waiting above the current market to push price back down. I have kept my stop for now, but will tighten further as the opportunities present.

Update GBP/USD - Long:

Pretty much the same story as EUR/USD, except that this market is less than 100 pip away from my take profit point. So I will move stop tighter as the opportunities present and hold for take profit.

A look at EUR/USD and GBP/USD shows I stopped out in profit on both for a total of 255 pips. Not a great profit but profit non-the-less.

Update on AUD/USD - short:

Price is taking its own sweet time about moving my way, and mus still break down below the 0.7520 area before I'm really convinced we have a good trade on our hands. We'll have to wait and see...STILL

Triggered overnight on USD/CAD - Long:

I saw this set up over the week end and set some orders at the market open. I was triggered at the top of my objective, but not the bottom. This position is working for the moment, but this week promises to be volatile, with NFP at the end of the week.

Hello All...its been awhile since I posted here...still waiting for someone else, ANYone else to post comments, opinion or something to start a conversation....but that being what it is, I haven't been participating much this last week, as most of the markets I watch have been ranging and indecisive.

So I thought we should look at the USD index, as that is really the market I am trading with all the different pairs I look at:

Looking at the monthly chart (on the far left), it appears as price has come down to retest an area of balance that occurred last year at this same time. After spending most of the year below this level, October, November saw a rise out of that area and solid closes above. Now that price has returned to this same area, tells me that whom ever what short for most of last year was stopped out, causing a rush of buy orders that has now fizzled out. The sellers pushed price back into this area, and may continue to push price lower, but I am expecting some buying to resume in this area or a bit lower.

A look at the intra-week charts (in the middle) shows the return down to the current levels was NOT a smooth one. Choppy price action has given way to the low side over the past 4 weeks. But there are buyers active at the lows. It would also appear that with each low more and more buyers are joining in, thus pausing the short selling more each time.

Finally, the intraday charts currently show lower highs and lower lows are continuing thus, there is no reason to jump on any buy order quite yet. However, I am looking more closely at USD longs...that would mean that what ever the market is, I would need to at least see intraday pricing reverse the current bearish trend, and show some sign of bullish sentiment.

Your comments or opinions would be welcomed to start a discussion

Hard to discuss,being daytrader

I too am a day trader...I just apply my methodology to higher time frames and increase the ratio between the time frames, to give a better overall view of the market conditions for swing trading

Is there NO ONE who wants to start a conversation? Or any kind of dialog?

what are those rectangles in your mid charts?

Get an indicator and the people will come. Use discretion and they'll avoid like the plague.

The rectangles are "target" areas where I anticipate a retrace to reverse. I base them on where I see the last obvious change in the order flow. Take a look at the following posts, and note where the boxes coincide with a reversal in price.

Hey Donpato

So I have been working through Gspajons thread (thanks for the recommendation to check out his works) trying to understand this all a bit better and see these balance areas. I struggle with defining the areas especially if the candles look choppy so to say, I don't know unless they are clear as day.

In the image below on USDCAD, is the red box that I have added where you based this long decision? Would you deem the whole area inside the red box to be balanced or? And what do your green and red arrows refer to exactly?

Thanks for keeping this updated, I am always reading and trying to learn from your trades!

I admit I first had issues with this as well, but it has become as second nature. If you keep in mind that there are ONLY TWO states to market movement it becomes easier. The market order flow is either balanced or unbalanced. Assuming we can readily recognize an UNbalanced order flow, anything else would then be balanced or in the process of balancing (if you are viewing it in real time).

Again, those big long candles, where price moves vertically...THAT is UNbalance. It clearly shows one side that dominates the other. Balanced order flow candles tend to overlap each other, and can't quite close beyond the range of its immediately previous candle. There may wicks that poke up or down, but the close cannot seem to happen beyond these areas. Thus when ever price rises, it is immediately sold off, and when ever price falls, it is immediately bought up. So you get this:
Or this: Or even this:

This "choppy" price action IS the balanced order flow...it is not always flat (as in the case with a bearish or bullish flag formation), but its characteristic is always that it is NOT UNbalanced, and when ever one side seems to be able to move against the other, that other side always comes back in and rebalances the order flow...the candles look overlapping and choppy. If you see what you would call a "false break out", that is a good characteristic of a balanced order flow.

The area where you have placed your red box, is indeed an area of balance, but on a larger time frame...look at where that red box corresponds to on the weekly chart to the left. It is the wicks of those weekly candles...


So it seemed clear to me at that point that I was entering long in an area where the buyers were dominant, and not allowing the sellers to move further down...as it turned out this trade stopped out, but I subsequently entered long again, and currently have a trade that is working with the stop to break even...

Sorry I missed you earlier...yes you are quite correct. People are looking for that "magic" indicator that takes away all decision making and therefore all responsibility for trading...just plug in this "magic" formula and watch the money roll your way.

Frankly I'm glad those people aren't interested. However, I am surprised that of the people that do view this thread no one is willing to comment or question or even challenge my point of view.

Well enough of that...I'm glad that the few how have commented or asked questions here are getting something out of the thread.

Hey Donpato

Thanks heaps for that detailed post, I will study it and retain all I can from it.

Although the price action did seem choppy to me, like you say it can still be deemed as balanced as there are no ground breaking up/downward moves or "whoosh" moves making new highs or lows.

This is something that I need to practice seeing, is there anything you did or figured out that made the process any easier for you to spot these areas? Any videos or text you would recommend to get my head around the mindset?

Did the fact that the pair was making higher highs and higher lows on the weekly help your decision in executing the trade or was just seeing the rejection of any lower closes in that area that caused you to enter? I would look at the 12h chart and nearly say it is forming a downtrend which would probably prevent me from entering long.

Thanks again mate