Busy Day Tomorrow

[cowpip]

Brilliant post, Milliard. Thanks.

Many (if not most?) of us using retail brokers reading this thread will not have access to the tools that you pro's have access to. I believe they would provide a strategic advantage toward entering trades and having perhaps a higher strike rate. But...

I would like to emphasize that although the more tools you have in your bag, the better, having such professional tools is not a prerequisite to success in forex. You can still quite capably bring in excellent cash flow if you abide by some simple rules (most of which have been repeated often in this thread):

1. Find an "edge" that works consistently for you.
2. Spend as much time at the screen watching as possible.
3. Be PATIENT in waiting for the GRADE-A setups.
4. Be DISCIPLINED in executing your edge without hesitation.
5. GO WITH THE FLOW.
6. Choose your battlefield (currency pair) carefully. Skew the odds of success in your favor as much as possible.
7. Use WISE MONEY MANAGEMENT. Protect your entries against losses. Don't ever let a winning trade become a losing trade.

These are repeats of what we all probably know. And most of it I was taught myself by those now present in this thread. But it doesn't hurt to repeat it over and over (and over).

Yes - having an underlying (higher-grade) view of the news and order flows would certainly be nice and could be used to sharpen your edge, but they aren't a prerequisite for success. (I know that Milliard wasn't implying that they were a prerequisite, but I can see some reading this thread who might feel like they need it to be successful.) A heap-load of money can be made using retail brokers by following these simple rules, even if you don't have access to anything more than a news calendar.

I have read of some people complaining that their retail broker has been playing tricks of various sorts on them, requiring them to switch brokers (supposedly because they make too much). The only people I can honestly think of who would be affected by this are those playing the news or the very fast time-frames (or those with very bad brokers). I've been with OAnda for years and can honestly say that if your edge isn't news-based or based on the very short time-frames (like the 1-min or smaller frames), there is very little that a broker can do to prevent you from making money, aside from turning off your feed. If your edge is flexible enough to be utilized on the larger and mid-term chart-frames (even down to the 5-min frame if you're very careful and picky), the "good" brokers won't be able to knock you out of positions very easily at all. So despite what some have said, I believe you CAN make excellent money from good retail brokers (I continue to do fine) if you abide by the rules.

Learning Forex is easy. Trading forex profitably is easy (once you find your edge). The hard part is learning to control your mind so that it doesn't prevent you from being profitable.

[milliard]

	Quote:	cowpip
	having an underlying (higher-grade) view of the news and order flows would certainly be nice and could be used to sharpen your edge, but they aren't a prerequisite for success. (I know that Milliard wasn't implying that they were a prerequisite, but I can see some reading this thread who might feel like they need it to be successful.) I have read of some people complaining that their retail broker has been playing tricks of various sorts on them....The only people I can honestly think of who would be affected by this are those playing the news or the very fast time-frames If your edge is flexible enough to be utilized on the larger and mid-term chart-frames (even down to the 5-min frame if you're very careful and picky), the "good" brokers won't be able to knock you out of positions very easily at all.

You cover some very valid points, especially those highlighted above.

There are so many things that can go terribly wrong attempting to chase these instruments around micro timeframes unless you know exactly what you're doing.

Most of the common & repetative mistakes can be very easily eradicated by simply viewing, planning & executing via the slightly larger timeframe references.

I'm not suggesting folks can't earn a wage trading exclusively technical templates off sub hourly sheets, but the odds are incredibly low if a very keen awareness of the bigger picture isn't taken into context at all times.

Smart post Cowpip.

[cowpip]

Amen to that, Milliard.

It's suicidal not to pay very close attention to the larger time-frames. Sentiment and momentum don't switch on a dime. The daily, 4-hourly and hourly frames (in order of importance, imo) are the "truth-tellers." I really prefer the 4-hour time-frame. It seems to be the best in terms of determining market sentiment and providing relatively tight entries (of course, zooming in to the hourly and sub-hourly as needed to secure the best possible entry).

[Sledge]

Milliard-
I cannot do any more justice to follow-up the post that cowpip made. I think he covered it quite well. I also THANK YOU for an outstanding and carefully crafted response once again. My hat is off to you!

Cowpip-
A stellar follow-up post and a most beautifully articulated group of thoughts. I agree with you 1000% about the larger timeframes and am glad to know that this somehow natural progression I made (without really realizing it) to Daily, 4 hr and 1 hr charts is indeed the path to further success. It made a tremendous difference in "pip gain" when I cherry picked my set-ups utilizing these much larger timeframes. To have folks such as yourself and Milliard continually confirm the stance speaks volumes to anyone who may run across this thread. The hope is that a very green and eager trader will read, absorb and attempt.

No doubt the "paint drying" will initially be to slow for them, they will bang their head hard on the 1 minute wall, the hope is they come to their senses before their seed capital runs out, remember this advice posted and say "I remember this thread somewhere on a forum that spoke to larger timeframes.. where is my Google bookmark?"

Sledge

[Anna-Maria]

	Quote:	milliard
	Hi Aaron, He’s not around until Wednesday of this week. Anna’s back tomorrow. Neither of them are positioned on the Cable at present. They’re long Sterling via EURGBP & GBPCHF.

Was asked today what the reasonings were for taking recent Pound longs v/s Euro & Swiss when the clear trend on both pairs is to the Pound bear side.

Simply, technical mirrors of a short-term shift in fundamental bias. Nothing more complicated than that really.

The near-term picture on these things can change & react aggressively from day to day. If you look at a daily & 4hr chart of both pairs you’ll see the obvious behaviour unfolding. No need to expand on that.

Taking advantage of near term counter adjustments is valid as long as the environment justifies the execution. Technical set ups & flows will confirm the fundamental shifts if you give it time, & as long as the risk can be managed appropriately, then the trade can be tick boxed.

There are very visible upside-downside markers on both crosses to assist management of these counter trade opportunities, & they in no way disrupt the core (pound) short stance on either pair.

Regardless of who holds the aces in the long term trend pack, you’re still going to witness the price relationships at key levels which will enable you to make informed decisions. The choice is yours whether or not you wish to play ball, & will be dependant upon your preferred style & trade aims.

I'll pick one (Pound/Swiss) to stick up here as an example. Nothing fancy, just marrying up the Fundamental chatter with the technical map as the bars print & mirror the behaviour.

[Sledge]

Thank you Anna-Marie.
I foresee the GBP/USD this evening on a similar path. We have been playing the ping pong between 1.9960 and 1.9680 for a week + now. Every day I work to see if we are close to one or the other- and gauge whether it has momentum to break the line or is it going to bounce like a vending machine rubber ball- then back the other direction we go.

Looks as if their was still plenty of activity- even with the Rate Decision tomorrow- a lot of times we see a slow down, other times, it acts as if it is of no concequence what so ever.

The "Double boxed area" on your chart- did you mark it to show that beautiful row of test bars? That is a pretty sight. Testing and a lot of buying on the lows going on- and what a beautiful space ship launch off the pad as a result!

Aaron

[Anna-Maria]

	Quote:	Sledge
	The "Double boxed area" on your chart- did you mark it to show that beautiful row of test bars? That is a pretty sight.

Hello Aaron,

Yes I did

9600-650 established itself as the solid floor there from early March. Not really too difficult to assume that once they blanketed the growing (albeit short-term) shift in fundamental bias, prices would rise as soon as the last sellers conducted their business & the mid-term liquidation was put to bed.

Drilling down even further into the 60m would have gotten you well placed to avail yourself of those 2 daily purchasing bars on the 15th & 16th.

Important to make clear though that the trades on both are counter-trend. They're not core positions, therefore require slightly different management. They're both now buffeting off the expected reaction levels, on the back of recent dismal UK data.

[Sledge]

Anna-Maria-
Through my course of study I have heard little whispers here and there about how some folks who trade GBP/USD for example are wise to watch GBP/JPY or another GBP currency cross. Andre also made a nice statement about looking at GBP/CHF or another GBP cross to verify if this activity on GBP/USD is a fluke or if the moves are, well in a sense, REAL.

Would you possibly elaborate on the use of watching other currency crosses that a trader may not personally trade that pair, but may be a good insight to see whether the moves are indeed true or a "fit being thrown" by one of the children? I can't imagine anyone actually looking at say GBP/JPY and saying "Alright- GBP/JPY just tanked last night- I'll go short on GBP/USD" but some places I have found on this wonderful WWW have stated that very dangerous stance. How much weight do these crosses carry on the other pairings? Also is it safe to say that one "cross" is the main focus while the other pairings are more fringe crosses (i.e. is say the GBP/USD the big brother and the GBP/JPY or GBP/CHF the little brother and sister to the GBP/USD?)

Thanks!
Aaron

[Anna-Maria]

	Quote:	Sledge
	Could you possibly elaborate on the use of watching other currency crosses that a trader may not personally trade that pair, but may be a good insight to see whether the moves are indeed true or a "fit being thrown" by one of the children? How much weight do these crosses carry on the other pairings?

I can elaborate sure, but I wouldn’t say that the views we hold are by any means right, wrong or indifferent – they’re simply our view & the way in which we approach & work the market.

We’re definitely not purely technical traders Aaron. We don’t fire up a chart station the minute we sit down first thing in the morning, in fact that’s probably the last thing we do, & one or two of the ‘older crew’ here don’t even bother to do that 4 days out of five.

A great deal of our prep & groundwork revolves around personal contact, fundamental diet & order book flows. I’m interested in which pair has a build up (dominant bid or offer) bias at a particular level or zone & who is stepping up to take a level on.

That’s where the “looking at other crosses” deal comes in. I want to establish wherever possible, whether Sterling is flavor of the day/week or if the buck is flexing it’s muscle across the board of late. How much weight does Euro have to throw around today & is the constant stream of data which ticks across the wires continuing to confirm one pairs dominance on the spread over the other.

By running the ruler across the British Pound, Euro, Yen, Dollar etc v/s it’s main trading partners, you can quickly determine if that currency is dominant/passive across the board or displaying a pattern of unique behaviour to a specific cross or pair.

It’s then a case of weeding out the chaff & focusing on the strongest v/s weakest pairing to see if an opportunity exists to avail yourself of a profit window.

You have to appreciate that each country will be experiencing it’s own particular economic strengths & weaknesses throughout the trading week, month, year. Different problems & challenges will affect the balance & flows of that country’s currency & it’s weighting on the world stage. And we all know how twitchy & nervous traders are when faced with uncertainty.

It’s by no means an exact science, nor does it follow a neat structure. Which is why, to stay ahead of the curve in this game you require a flexible attitude & an equally flexible approach.

[cowpip]

We can probably all tell by now that there is a fairly big difference in the tools that the pro's use to trade compared to retailers. They have access to tools that provide them with a unique view of the market (such as real-time order book flows). Most of us do not. But their view of the market is no different than the rest of us.

I'd like to be clear about one thing: Anna-Maria and the rest of the pro crew would be perfectly successful in their trading with or without access to those tools. We have to remember that they are dealing with entries that are SIGNIFICANTLY LARGER than the sizes retailers play with and that they likely NEED those extra tools in order to justify placement of such large orders. When you're dealing with many thousands of dollars PER PIP on a trade, you want to be absolutely certain that not only is the situation a GRADE-A setup according to your 'edge,' but that anything and everything else that is known about the market is skewed toward your entry. They are dealing with some SERIOUS cash. Their investors would balk if they weren't using anything but the highest quality information.

But their access to those tools does not in any way negate the effectiveness of their strategies they employ. I've seen some of them trade on their personal accounts with absolutely fantastically stunning results.

So don't let their use of these professional tools distort your thinking about what is and what is not possible.

They could undoubtably trade naked in the bathtub while simultaneously blow-drying their hair without getting shocked. Although I'm not certain I'd want to see proof of that!