The Trader's Academy - by Traders for Traders

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It was halfback of the up move from 11,720 to the tick. It doesn't need to do anything on that same level today, we are talking just of probabilities.

To me it is something that every day trader should be aware of, and make difference between RTH high/low of day or overnight high/low, espec. on US indices. It is really of question where exactly they are, close or far away from current price (i.e. is market exhausted untill it get to them or not), what is market doing at the time and so on, but very often you get a reaction from these levels especially in ranging markets. It can be just a scalp, it comes with experience, like gaging every other level. Previos day low is often a support level in bull market. It can often be breached for just a few ticks and then higher we go...

Yes it is the most important thing, but still, traders must TRADE those levels, and many people are to afraid to do so, analysys-paralysys, that is why everybody wants to be analysts . Most people can find S&R, than they do not trade these, but in frustration trade some shit in the middle with small stop and lose. I pay attention on horizontal levels, or zones first, then comes everything else - fib retracements, 3rd touch of trendlines, moving averages.

You sound negative? I think you are among positive people around here. Negative ones are the one that are already bitter and sarcastic, blaming the market, market makers, HFT, moon phases, their own children or what not, for their own loses.

A friendly discussion, as far as I am concerned.

Thank you Cat for all your input in this thread. I ve been through it all and i appreciate all the time you took, especially with posts where you show how you enter the market and what you look for to enter it. I ve studied them all! And if you choose to post more of those, i do appreciate that, especially since i also focus on the Dax.

Btw, can you show/explain to me how you found the resistance of 12.100 you mention in carpe diem? That was spot on! And what are your thoughts on Market profile? I m learning a lot on this thread! thanks again for your input

Thank you Langenes, that is good to hear. I was about to post a chart, so I'll do it here on this quote reply to you.

Quite a few people have asked me about the 12,100 level I called for Dax on the Carpe Diem thread when the market was at its most bullish. I did exactly thew same with the Dow though I didn't post that. I can only say that it was due to a moving average, a pretty reliable one, that I had positioned at that level, though I would not share it on a public forum, though even if I did include all my mas on my charts, with explanations how I use them together on the different time frames, it would only confuse. Most of my mas only work in combination with others, though on the 12,100 level, I did have what I call a medium strength topping ma which I was fairly confident would cap the price around that level, even if it is only temporary...we will have to see what happens next week.

Then I went and offended a few people on that particular thread, which I used to post on a lot, by calling out one particular poster, who I know from old, who posted to others not to sell, that there was absolutely no reason to do so, blah blah blah. It is for this sort of reason that I no longer post on that thread, or any interactive thread here on ff, because they are full of people, whether they know how to trade or not, and most don't, posting assertations of what others should and should not do as if the market itself has ears and will obey them. Why should anyone believe them? I will draw traders' attention to something if I think it is significant, but I will never tell anyone not to do or to do something. So, some of the other regular posters on the thread joined in by affirming how absolutely right this poster was by telling others not to sell, that there was no sell, and this morning the price had dropped from the high by 110 pips. Simply because they were not able to see on their charts what I was seeing on mine, they were right and I was wrong. For these sorts of reasons, I usually stay away fro interactive threads. They are good for entertainment if you are bored trading alone all day, but as conduits of knowledge, they are limited. There are some decent traders who use them, but they are few and far between, and most never provide much in the way of analysis for their trades beyond incomprehensible charts.

Enough said on that theme, because what I really wanted to do now, is post an incomprehensible chart of my own. This is just to show, as simply as I can, the sort of things I look for everyday for support and resistance, and you have to have your main S&R levels sorted before you begin trading every day, it is the most important part of the pre-trade analysis that I do every morning before trading kicks off. Generally, for the intra-day trader, the 30m or H1 time frames are the best for this.

The chart is today's 30m Dax, which I've now finished trading for the day. I've picked today's because it shows the price pretty much doing everything I was expecting it to do, a lovely swing day between S&R.

The 200ema/sma is the first thing to look for, because when a market has topped, as this one did at 12,100, it will always fall back to its 200ema. The 100sma provided a bit of temporary support overnight, but downward momentum was too strong and it broke through to head down towards the 200ema. Now look at where today's S2 was. If it had been a bit lower down, closer to the 200ema, then traders probably would have sold it down to it, but here it is close enough to the 200ema for profits to be taken as soon as the price hit it.

So now what? If it's found support, then there's only one direction for the price to go, and that is back up...you see, trading can be pretty simple, sometimes! How to get a good entry for the long? Well, for me, this is where my smaller time frames and my own TA comes in...you have to know how to pinpoint entries on the smaller time frames. Yes, a simple entry with a wide enough SL below S2 would have worked great, on this occasion, but you really have to have further confirmation from the smaller time frame before entering the trade, at least I do.

So now, where do we take profit? Well, I can let you into a little secret, if it is indeed a secret, and that is in a situation like this where you've got the 200ema below as support, and the 100sma curling over the top, that this is going to be the main resistance, and the price will very often be taken by the big money, back up to the 100sma. Today I liked it especially much because it was right on top of today's Central Pivot, so a great magnet for the price to move to.

So now up on the 100sma, this is now resistance, and the smae thing applies as applied off of support - if it's not going to go higher, then sell it. Again, using the smaller time frames to gain an entry, and this is down to your TA expertise. The price as you see did move briefly above the 100sma, but it soon dropped, as I would have expected it to do.

So, down again to support, the price stalls, puts in a bottoming pattern, which your smaller time frames should give you if you are reading them correctly ( I use, 10sec, 1m, 3m, 10m, 30m, and am also checking the 15 and 20m to see where the S&R is on those, and I use six monitors, excessive for some, but not for me ) and you must assume, as you did before, that if it not going to go any lower, then the highest probability is that the money is going to buy it back up again, why wouldn't it, after all, no one is going to make any money BY SENDING THE PRICE SIDEWAYS, AND SO WHen traders are confident that it is not going to go any lower, in a situation like this where there is clear, identifiable S&R, they will simply buy it back again.

There, I bloody well deserve a beer after that post. Have a good weekend all

If there are any Dow traders reading this, you might be interested in a thread of mine called ' Hunchback head & shoulders pattern emerging on Dow ', and if you want to know what I mean by that, then go have a look at the thread. The Hunchback head & shoulders pattern, as you will see, produced a 1,170 pullback on the Dow before the Trump rally kicked in, so the prediction I made did pay off. I updated the thread just yesterday.

Goodmorning Cat! Thank you for the explenation
Do you know of other forums where the Dax is being discussed? Sofar i only know of FF and i like broad amount of information on this forum. I just try to learn as much as possible from the more experienced traders.
Thanks for taking the time again!
Have a good trading day

You're welcome Langenes. I only know of the Carpe Diem interactive thread which is mostly Dax.

One thing that really fucks me off is when people pm me, to which I always reply, sometimes quite lengthily, and then because they do not get the response they were hoping for, they do not even bother to reply with a thank you.

If this is you, then you know who I am referring to. I will be keeping my pm replies very short in future. If anyone has anything they want to ask me, then they can do it here on this thread, unless it's a specific question for which a brief response is appropriate.

Hi Cat,

Lately I've been following and trading GJ.

I usually get a clean entry few minutes after 6:00GMT, Frankfurt and London open. But today hasn't been easy, it's a choppy day for GJ at least on lower TFs (2min and 30sec) it does appear so.

At 6:00GMT as I opened up my chart I usually first look at 10min GJ had a bullish pattern 200EMA/SMA and my other MAs were all below the price providing support. Then came 6:ooGMT I would usually look at 2min and 30sec charts along with 10min , price was just below the 2min 200EMA/SMA so was on 30sec chart. It chopped back and forth since then until Frankfurt open, sent the price out of the range down to 10min 200EMA/SMA where 10minutes into the session price found support. At this point I had a gut feeling it was going to go up ( I didn't know when to get into) usually I'd get a pretty good indication either candle or pattern formation but this time it was different from any of the scenarios I've experienced so I decided sit on the sidelines and observe.

Now doing some analysing after all the action I'm thinking I should have went long in an area where I circled in pink where price went sideways between my 20EMA and other EMA/SMAs not a perfect apex but it kind of looked like it, but I wasn't sure.

So the London opens and I get a violent bearish candles right after, I was hoping 30sec and 2min 200EMA/SMAs would contain the price from plunging even further if it does I thought after candle confirmation I'd go long (just like how I usually go short after the initial reversal) but as you can probably see from the 30sec chart I've attached price weren't contained in the area I would have liked referring back to the chart, a circle in pink I'm thinking I probably should have went long there but then again it wasn't something I've experienced I would have preferred if price found support above the MAs.

I don't know if this is educational, but like you mentioned many times London open can sometimes be very unpredictable (not always but especially today) and violent but if you know what to look for and which direction to go it does give you a good 50 pips easily.

I will appreciate any feedback :-)

For what i know before big news, market makers usually clean the levels, SL, TP H/L etc...

that could be one reason for violent moves...

Today big news for EU and US

OR

it could be the reversal of the week...it is Thursday after all...

Hi Piquant,

Only just seen this post, so apologies for the late reply. I'll get back to you on it asap

As predicted, the $ index is indeed coming down, and I'm expecting further falls this week and beyond in the US Dollar.

No problem

Right. Firstly, I wasn't trading GJ on the 10th, so I can only help you as far as my historical charts guide me. For the London open, I prefer the Dax, simply because usually there's a much bigger reaction. What I would say for GJ on the 10th though is that the first thing I do in the mornings is see where the 200ema/sma is on the bigger tfs, and so I look at H1, H2, H3, and H4 mainly. The 10th had these moving averages sitting not far above the price, and to me this means only one thing - Resistance, which I will not buy into, but I will be ready to sell off. Friday was a choppy old day though heading into NFP.

Pre London, GJ can gibe some nice moves, especially from 6am London time, but if you want to catch big moves off of London, then Dax is better than GJ. I know I have said in the past that I would do something on the London Dax moves on this thread, but it is difficult because it really depends on the set up on that given day. The only way to try and help people would be a live take on it, but I'm not keen on that as it goes into interactive thread territory, and as I am busy trading, I don't really want to go down that road. That's not to say I won't, but for now at least, I'm keeping away from the interactive threads.

Sorry that's not too helpful piquant.

Nicely on cue, and it's got a lot further to come down. How much is difficult to say, but we could easily see the $ index falling another 700-800 pips from here, and eu to rise above 11,000 over the coming days, though there is the Daily 200ema to get through first, and that could well provide some solid resistance. Whatever happens, all those people who were swearing blind that the euro was heading for parity not so long ago have so far been proved wrong.

It's alright.
You're not obliged to.
What you have shared here is plentiful. We've got to do our own work. Putting it out there sometimes helps me.

I've done a bit of analysing and thinking on my own. That's usually when I really "get it". I'm sure its nothing new but I found a little trick, that's got to do with the flow it's helpful with deciding the direction in instances when GJ doesn't care about the MAs if happens more often that i'd like.

The trick is if Asia and late NY was up I sell and vice versa. I do look at my accompanying MAs on 30sec,2m,5m and 10m price has to be above for a buy or below for a sell, in some instances closer to these MAs for me to take the trade. Works for me pre London 5GMT until London open. London open is a different story , I haven't got a way around to it for now. I probably should take your suggestion and observe DAX during London open, but for now considering my inexperience and acc balance I should trade GJ.

Whatever works for you. You are right, we all have to find our own way in this business because there are many ways to skin this particular cat ( pardon the pun ). Some people, like me and you, trade on MA positioning, whilst others swear blind that they are useless, which they are of course unless one knows how to use them, and that applies to any indicator. I just found over the course of time that the more I studied and traded the markets, the better I became, which means I'm a better trader today than I was this time last year, and expect to be better a year from now than I am today. Screen time and the hands on knowledge and experience it brings is everything in this game, and those who try and run before they can walk always fall flat on their faces. The road to consistent profitability is there in front of our faces, but it is a long road, too long for most, and has to be followed for as long as it takes with all the deviations along the way.

I always learn something new from my failures/losses. They don't make me feel good. But they sure aid me great deal in becoming a profitable trader (one day). I've had a losing streak for a week or two. So I feel like I'm a better trader now than say two weeks ago :-)

One thing, whats your thought on not trading on Fridays and Mondays ?

I don't know how things run with DAX but with forex pairs I have noticed that bigger clean runs tend to occur more from Tue-Wed-Thurs. I've been observing GJ since 5AM GMT my bias is up usually I'd get a good run from 5:30 to 6GMT until London open but so far nothing exciting is happening same with last Friday NFP week. It seemed like GJ had no clue where it wanted to head. Same thing today, it can't decide.