Busy Day Tomorrow

[Sledge]

	Quote:	torero
	When playing the lower timeframes, you have to be more accurate with your execution and price demands at the same time be flexible with the zones AM, AM and Andre are talking about. Accurate means noting the high and low of the zone wait for it to be broken (or you range trade it). Be demanding means if the zone is too wide for your stop loss, don't take the trade or reduce the position to accommodate your risk amount. That means you may have to make stop loss outside this area so the noise doesn´t take you out a trade. Personally I wait for the prices to get out of the zone, a breakout and take a small position just to make sure if it runs away quick, I´ll have small profit and not wine about missing it. If it fails then I took that small loss (from small position). The other reason why I take a small position is that the percentage is high that the breakout might be a false breakout. But when the breakout prices pull back and support keeps higher, than I know it's time to push hard and add more positions. This time the percentage is higher than the breakout trade, so I add more. Nothing is guaranteed in writing so confirmation is key.

Torero-
Excellent, so do you personally prefer to see a ranging market then as opposed to a potential top or bottom?

I think with even more screen time- now that I have been made quite aware of these "vibration areas" "Hot Spots" or "S&R zones" (Not sure we have reached a universal term) that judging a cluster of bars to look to see if it is accumulation or distribution, will lend itself to determining if the market will continue its present direction or fail and move away from the present trend.

Sledge

[cowpip]

These are all great recommendations and mark good sound money-management. Wise money-management is as crucial as having a good trading plan.

For me, watching price action is absolutely key, as Milliard, Art, Anna, et. al. have already indicated. I like to zoom into the smaller time-frames (zooming in even to the 5-min charts) at particularly key levels. When you get enough screen time (for me, it took loads of screen-time), you'll start to pick out entry's without too much trouble based on the candle patterns you see. Entries on the small time-frames at key levels will provide you with an unusually good position when price reverses on the larger time-frames. But it takes nimble fingers with no hesitation.

Price action very seldom lies.

My point is to emphasize the importance of watching price action (in real-time) and discern the formation of continuation and reversal patterns from it. It's a powerful tool when you finally start to get it, and will allow you to significantly fine-tune your entries at key levels.

[milliard]

	Quote:	cowpip
	Wise money-management is as crucial as having a good trading plan. Entries on the small time-frames at key levels will provide you with an unusually good position when price reverses on the larger time-frames. But it takes nimble fingers with no hesitation. Price action very seldom lies. My point is to emphasize the importance of watching price action (in real-time) and discern the formation of continuation and reversal patterns from it. It's a powerful tool when you finally start to get it, and will allow you to significantly fine-tune your entries at key levels.

Good post, you make some sensible points, especially regards surfing the waves of the big timeframe flows.

Most of the failure attributed to micro timeframe trading usually stems from folks not having a clue regards order flow. Attempting this type of close range trading with no appreciation for support & resistance or trend behaviour is suicide in my view.

Folks assume shorter timeframe trading is the easy option, when actually it's the exact opposite.

Most migrate to this arena for exactly the wrong reasons (capital availability, misconceptions regards risk management etc) with no real clue as to the inherant risks involved.

As you rightly point out; you got to earn your stripes thru experience before attempting to take price on down at the rough & dirty end of the street.

[torero]

Yep, I always mark the weekly and monthly chart S/R zones even before viewing the smaller timeframes. These are the most important factors that decide in small timeframes where prices stop and go.

[cowpip]

	Quote:	milliard
	Folks assume shorter timeframe trading is the easy option, when actually it's the exact opposite.

Unfortunately, most people who start are so fixated on making a quick buck that they enter the arena without the two most important qualities of a successful trader: patience and discipline. In fact, without these two qualities, failure is almost assured.

It's a sad fact that the longer the time-frame you play, the greater your patience and discipline has to be. I suppose this helps explain why most become disillusioned with forex early on. The longer time frames absolutely provide the cleaner signals and the easier paths to profits.

	Quote:	milliard
	Most migrate to this arena for exactly the wrong reasons (capital availability, misconceptions regards risk management etc) with no real clue as to the inherant risks involved.

I think you're bang on!

[Sledge]

Cowpip, Milliard and Torero:
Excellent discussion and points made by all and exactly correct. I see the new trader liking the "action" of the 1 minute charts- the dinging, the clanging, the slot machine jackpot mentality, the "Action" they get starry eyed at a quick buck, as correctly stated above.

I personally also utilize the drill down method as well. I look inward from a Daily and 4 hr chart planning my move, I drop down to a 1 hour bar chart and if set-up looks good, I will also drop to a 1 minute chart to pinpoint entry for maximum pip squeezage.

I am starting to see my trading from a much more defined perspective with the insight given here, I no longer see consolidation or sideways action as a market to stay away from- but a market to watch carefully as "something is brewing." Now all I must do is learn to better analyze those "hot zones" of consolidation to be much more accurate in determining what my next move will be.

Milliard:
I Love this quote- "As you rightly point out; you got to earn your stripes thru experience before attempting to take price on down at the rough & dirty end of the street."

Thanks all for your posts!
Sledge

[cowpip]

	Quote:	Sledge
	Now all I must do is learn to better analyze those "hot zones" of consolidation to be much more accurate in determining what my next move will be.

And all it takes to more or less master that is time. It would certainly help to have access to some of the tools that Milliard, Anna, Art, Buk and the others have access to for better analyzing the rigidity of the various zones, but we can more or less determine that ourselves through a close examination of the candles that print at those levels, and more particularly how price reacts when it reaches those levels.

Here's a good example of a drill-down for an early entry at that zone that Anna-Maria noted back in this thread. It's a near-real-time example of how I've played it today.

The trend for the day was up following a big bounce during the European session. When the U.S. came on-line, poor news combined with a dropping dollar and increasing oil prices applied pressure to equities which played out in the euro/yen as a failed attempt of the highs. When price reached the 164.80ish zone, I zoomed in, watched and waited for a signal. Price attempted multiple times to break the high, but ultimately failed. After I saw my signal (the third attempt higher, candle prints gave the go-ahead), I went short at 164.86 with a tight stop above 165.

I scaled out at the zone indicated on the 5-min chart (+50 pips) and have now fully paid for this entry in case it retraces back toward the next hot-zone near 161.50. The trend remains up on the hourly, so caution is advised for shorts. A long entry near the scale-out zone certainly doesn't hurt either (and may end up being the wiser action), in case this move is part of a larger break-out play higher. Otherwise, the initial short is in a good position to profit from a move lower.

Obviously, the way you'd play this on the longer time-frames might differ from the way I initiated this trade on the shorter frames, but it shows how I utilized the shorter time frames to select focused entries.

[Sledge]

	Quote:	cowpip
	And all it takes to more or less master that is time. It would certainly help to have access to some of the tools that Milliard, Anna, Art, Buk and the others have access to for better analyzing the rigidity of the various zones, but we can more or less determine that ourselves through a close examination of the candles that print at those levels, and more particularly how price reacts when it reaches those levels. Here's a good example of a drill-down for an early entry at that zone that Anna-Maria noted back in this thread. It's a near-real-time example of how I've played it today. The trend for the day was up following a big bounce during the European session. When the U.S. came on-line, poor news combined with a dropping dollar and increasing oil prices applied pressure to equities which played out in the euro/yen as a failed attempt of the highs. When price reached the 164.80ish zone, I zoomed in, watched and waited for a signal. Price attempted multiple times to break the high, but ultimately failed. After I saw my signal (the third attempt higher, candle prints gave the go-ahead), I went short at 164.86 with a tight stop above 165. I scaled out at the zone indicated on the 5-min chart (+50 pips) and have now fully paid for this entry in case it retraces back toward the next hot-zone near 161.50. The trend remains up on the hourly, so caution is advised for shorts. A long entry near the scale-out zone certainly doesn't hurt either (and may end up being the wiser action), in case this move is part of a larger break-out play higher. Otherwise, the initial short is in a good position to profit from a move lower. Obviously, the way you'd play this on the longer time-frames might differ from the way I initiated this trade on the shorter frames, but it shows how I utilized the shorter time frames to select focused entries.

Cowpip-
Stellar work! Time and dedication to my studies is something I pride myself on. So that is a good thing to note- that with the passing of time and dedication to learning is what it really takes. You figure in less than a year I have graduated from a 1min chart scalper making about 5 pips a day, to a 1 day and 4 hr chartist that got bummed last night because I only took 26 pips on my GBP/USD long.

If you feel so inclined- would you share more of these "after the trade" situation/outcomes as you trade them as you have here? These "after the fact" trades that give detail on your thought process while you were taking them in real-time will go a long way in assisting me (and others as well) in honing this valuable skill.

Nicely done!
Sledge

[torero]

We're stuck in a range today last few days. Seems after the big moves, time to take a break.

[Sledge]

	Quote:	torero
	We're stuck in a range today last few days. Seems after the big moves, time to take a break.

Yes GBP/USD is in rangebound hell right now. Took a short last night and closed out with only 6 pips- it is acting very stubborn right now to want to break out!

Sledge