ForexTraderX

Well, surprisingly good (and somewhat unexpected to surprise) news came out regarding the British economy, including their unemployment... so I just closed out the entire GBP/USD short I was building up. I'm not opposed to re-entering should we see a 1hr candle completely reverse this impulse move up, but as it's going right now, that may not happen, and I'd rather not take any other unnecessary loss than what I need to. So i'm out for now... will be looking for a reversal candle to get back in, as my bias is still to the short side, but unless we get it, no use in throwing good money after bad. FTX

Hard to say which way the GU is going to go right now. It could go either, though I think down is a bit more likely. Here is a chart drawing out my ideas on what is going on here...

THe large impulse move up in the euro right after the NY session (and yesterdays official trading day) ended is a bit suspicious to me... seems like a low liquidity stop run more than a true impulse move up.... but, if it's a stop run, price will drop back down. if it's an impulse based on a lack of supply and too much demand, it'll move up... that's less likely. However, i'm really not expecting any large retracements here on the EUR/CAD... with nothing looking stronger than the euro, or weaker than the CAD.... i don't see how anything will stop this market from pushing well above 1.3000 by the end of the month... and prossibly even by the end of this week or next week. guess we'll find out one way or the other.

I find many aspiring and even quite a few successful traders have some pretty interesting ideas about the news and economic data releases. For myself, it's best if my technical bias and sentiment bias are in line with one another. For the GBP/USD short I have on now... news like this article here gives me further confidence in the trade, and also will encourage me to risk more than I may have origionally planned, or possibly go for targets that are further than I had origionally anticipated targeting. Pound Drops Against Euro as U.K. Inflation Slows; Gilts Decline - Bloomberg

Well, looks like the CAD is still the weakest link. Here's an article published today on bloomberg, regarding how sentiment is shifting in accordance with the move dovish tone of the Bank of Canada. Canadian Dollar Falls as Carney Douses Rate-Increase Speculation - Bloomberg With the market being so extremely net long CAD'S.... and then this sudden shift in sentiment (which will likely be followed by fundamental data coming out showing more reasons for the Canada to persue a softer monetary policy... interest rate decrease or weak housing numbers are likely going to be the first bits of hard fundamental data to show up), is really creating the perfect storm for the CAD to be sold off against all other major market currencies... most of all the EUR. At this point, i'm seeing a very likely move up toward 1.3300-1.3400 in the EUR/CAD ovewr the next 2-3 months tops. MOre likely by the end of november. Here's a weekly chart of the EUR/CAD.... with the yellow lines being the likely next major stalling points before we move upward toward 1.40-1.44 and unless we have an incredible euro union default (which looks more unlikely now than it has at any time over the past year).... I don't see much stopping this from retesting 1.40-1.44 within the next 8-12 months.

well, after a bit of looking and weighing various factors, I'm thinking the easy trades for this evening are likely the GBP/USD short, and then probably the USD/CAD long, and then the 3rd place prize goes to an AUD/USD short... GBP/USD short is probably good all the way up through 1.6220ish... until we can break and hold above that price, I'm looking for short opportunities. For now, anything 1.6130-6150 is a great place to get short. Above that, 1.6170-6200. I'm short now, will get shorter if we can push above 1.6130ish, and i'm targinet around 1.6050, and then lower at 1.5960. The only "problem" I see with the trade is potentially that the EUR could push up and drag the GBP up with it, however, I don't see the euro pushing up much against many markets for at least the next 24 hours... as it's overextended right now. I do believe it will see more upward action in the days to come, but a day of consolidation as it is overextended and coming into several important resistance levels on a variety of correlated markets... I think we'll see consolidation. And that should be enough weakness in the risk currencies to allow the GBP to drop... possibly quite a bit.

Ok, I see your point and there is some validity to it, but what I'm referring to by qualitative vs quantitative, and I think your referring more to subjective vs objective. Make no mistake about it, there are some quantitative aspects to it. When determining a previous daily high or low, that's pretty quantitative. When drawing a trendline, it either has a positive or negative slope, and that is quantitative. However, when looking at a pinbar for example. what EXACTLY is a "pinbar"... well, i'm not exactly sure how I would define it. It has a long wick on one side , relatively small body on the other, and if the wick extends in the direction of the current swing, this pinbar is then a warning of an above average odds of a reversal or retracement of some degree. Or, what about the AUD/CAD chart I was recently talkiing about the "big reversal or retracement" coming (which did work out even more than I had expected in fact)... I was talking about it bouncing because it was approaching a "singificant" level of support on a daily chart. Well, what exactly is significant? define significant? I'm not sure I can. I can show you why THIS particular level is significant, but you could show me another level with those exact same reasons I list, and I may say "nahh... this is not as significant, and I would need to see confirmation before acting" etc. And when it comes to major turning points and such, like impending weakness I saw very likely to play out this week in the CAD and NZD, and the strenght I was expecting in the EUR.... well, I can show why I thought that, but if a person looks at the specific details of what I'm pointing out... they are going to be slightly different than the details in another situation (like last weeks AUD/CAD and AUD/USD strength, for example) And when it comes to market sentiment and fundamental data trends, those are also more subjective, because I'm not just factoring "is the news good or bad?" but how much importance I think the market is going to put on it, as well as what news matters at all in the first place. Same goes for my criteria for which elements are most important at determining opportunities. last week, the AUD/CAD and AUD/USD long opportunities were determined primarily based on 3 elements: an oversold market, significant support levels, and market symmetry on a longer term scale. This week, long trades in the EUR/CAD and EUR/NZD (for example) actually pretty much IGNORED the potential resistance in the EUR/CAD at 1.2800, but factored heavily in COT analysis, strongest vs weakest markets, longer term (weekly, monthly) candlestick charts and price action, and even a little bit of elliot wave. How did I know to choose completely different factors to determine opportunities? :::shrug::: Experience no doubt. Maybe a little talent. Probably a little luck. But could I give you a quantifiable way to measure and make such determinations for yourself in a "paint by numbers" fashion? No. I can't. I just figured certain elements were most important last week, and different elements were most important this week. Right now, i'm short the GBP/USD and AUD/USD. no idea if they'll work out, but i'm taking these going based on longer term trend, market sentiment, market profile concepts, and correlated markets (such as the DX) coming into support... And the fact that the GBP and AUD are relatively highly priced considering the average of the last 12 months... Again, completely different factors. I could also totally lose on these trades as well (as I often do)... but, this is what I'm talking about when I say qualitative. it's not subjective, it's definately more than subjective... there is a method of emperical analysis here no doubt... but it's not all strictly quantitiative...as I can't say "if the COT is blah blah more than this number, than it's the most important, if it's less, than it's not" etc. I can only say "well, I think it's more important for these reasons right now... but next time around, there could be completely different reasons, so it's just situational for now" Anyway, I think you've probably got my point. Hope this helps flesh it out. FTX

As a follow up point to the above post.... the real reason why I don't need "discipline" to avoid some of the problematic situations in the markets that I outlined above... is because once a person has a good understanding of how markets work, why, and what is influencing any given market at a particular moment...etc... when those things are known (or at least understood and taken into consideration)... one doesn't need discipline as much as it just becomes common sense: it becomes something like: "no stupid, don't go buying after an 11 day, 1000 pip rally into a previous yearly high after price has made a significant bearish reversal candle on the daily charts, but has not fallen even half way to the closest likely significant support level...which wouldn't even be a 15% retracement of the move if it did hit that support level." I know this may be a very obvious situation, and not all are this obvoius, but, this is the basic thought process that I personally experience. Or even something like: "ya know, if half the reasons you see say price may go up, and the other half say it may go down, it's pretty stupid to try to pick a direction now... so lets not do that" Anyway, I would be interested to see what you or others have to say regarding my 2 posts right here.... FTX

well, i thought u said something about 2 pics. I only saw 1 pic...and i did click it and get to see it bigger...so I know what your talking about (I think) Of course there are many variables here... but in general, I watch my trades close enough to see if they start to reverse after coming incredibly close to a target (or even just quite close)... and I close them manually at that point. Fib or no fib, level or no level... I'm not letting 97 pips of paper profit drop much below 80-85 pips of a paper profit if my original target was 100 pips, with a 50 pip stop (just using this as an example). If i'm really just intraday trading, and going for true "day trades", I'm usually taking something off around 20-30 pips, and reducing risk at that point by usually moving a stop loss up. In other words, If I see a trade moved 80% of the distance from my entry to my target, and I make less than 50% of the possible profit I had planned for...I totally fucked up in that trade. That's how I look at it. But, addressing your point more specifically... there are many factors that can play into creating a level of support or resistance. And of those, I find previous session/daily/etc highs and lows, market sentiment, candlestick patterns. classical chart patterns, etc all more relevant and important and more effective than fib's in finding turning points. Particularly turning points of real significance (say, 50 pips or more) Ok. I agree with much of an edge. Again, I've just found previous highs/lows to be an order of magnitude more relevent and significant than fibs. Maybe it's just me, but that's what I've found. as far as TA/Wycoff traders, I don't have much to say one way or the other. Agree with you regarding daily TF and moving averages. But again, any derivative of price I find much less effective (though not entirely ineffective) than price itself. Makes sense to me too that it would be this way, as the entire universe of traders all have roughly the same highs and lows on their 1 hr charts, and a U.S. session high or low is universal for everyone, but derivatives of price like MA's and fibs are not only used by fewer traders than price itself, but the way they are measured is less exacting than say, the high of last week in the XXX/YYY. Furthermore, more traders will tend to put stop loss orders and other types of orders at or very near previous significant highs/lows, than they will a fib level. Of course, not all...and many use fib levels rather than previous highs/lows... I'm just saying of the two... there are MORE traders who place orders around previous highs/lows, than there are traders who place orders around moving average levels, fib levels...etc. I don't find them totally useless (as I do the MACD or parabolic SAR for example), but I find them the least important of the tools I use. simple as that. Hmmm... i'm not sure what point your making with this last comment... but I don't get too caught up with precise definitions myself. To me, it's more qualitative than quantitative in trading over all, so precise definitions are more limiting than a more flexible, qualitative approach to defining market opportunities. FTX

Eddie, I'm gonna use your statement here to pose an alternative viewpoint on "discipline" with regards to trading. Let me pose the following analogies: If you leave your house, and walk outside to a busy street... does it take discipline to wait for the cars to stop rushing by before you try to cross the street? How about when your cutting vegetables to prepare them for a dinner. Does it take discipline to not cut your hand with the knife? Now, I'll grant you that these are highly imperfect analogies.... as with cars and knives, our 5 senses can literally see the potential risk or danger in a very physical, tangible sense. In the market, we generally must imagine in the abstract the relative danger (we do get some tangible, visible indications of danger or opportunity, but these are to a much lesser degree than watching cars rush by on a busy street)... but over all, once a person has an idea of how markets work, and how to properly evaluate various opportunities that they provide, it does become much more like waiting for cars to stop before crossing a busy street... rather than some deep, internal well of fortitude to resist the urge to jump out into the street (or market, as the case may be) before the cars have stopped speeding by. Of course everyone's method is a different, but I believe my point still stands. Now, a person DOES need discipline to a degree in determining appropriate bet sizing, as well as taking a loss (because identifying high probability opportunities in the markets is not as simple or obvious or accurate as high probability opportunities to safely cross a busy street)... and also some patience to wait for the right moment to enter or exit a market... but, discipline in the traditional sense... I'm not really sure what that means exactly anymore. When lighting a fireplace, I don't need discipline to avoid burning myself with a match. I don't need discipline to wait for the cars. And when seizing on a trading opportunity, I don't need discipline to avoid trading with conflicting signals, or to keep my order away from entering the market in the middle of a low liquidity "gap" situations, or to trade against an obvious and significant bearish or bullish engulfing candle that occurs at a previous mulit-month high or low. I just need to know how markets work in general, and what the sigificance is of various patterns, price action, and price levels, market sentiment, etc... are in the marketplace. FTX

ART... I'm only getting one pic...but I get the idea. Ya know, I was thinking a bit about a post you made here a couple days ago, regarding trying to get pinpoint accuracy on a turning point, with very little risk in terms of both pips and percentage, and then getting a good return...etc... And I saw another post you made about moving averages being S/R (on another thread), and you've mentioned fibs...etc. Look. Those are both fine tools. They will work to a degree. Particularly if you follow the trend (whatever that means) and let your winners run...etc, etc. But if you really want pinpoint accuracy in turning points, I can't emphasis enough that if your best bet is going to be focusing on session highs and lows, daily highs and lows, weekly highs and lows...etc... and really trading only from around those points. going by Eastern Standard Time (new york time), why don't you open a 1hr chart (any major or major cross currency will do), and draw a horizontal line at the following times: 8:00 pm New York time (start of asian session) 2:00 am New York time (start of europe session... london starts 1 hr later) 8:00 am New York time (start of U.S. session) Now, watch how many times those lines are hit, only to stall within a few pips, and then reverse in the opposite way for a very nice move. Here is a couple examples in the pics I attach. So, as far as fibonacci goes... lets say I have 2 or 3 price levels with session or daily lows...say london session lows at, whatever, 1.3822, and that low has not seen a retest of price, but the next day, we have a U.S. session low of 1.3847... and then, the next day, I want to take a trade. In this case, I have two possible levels, about 25 pips apart from one another. In this situation I MIGHT throw on a fibonacci from a recent swing high to low, and see if one of those two points intersects the fibonacci. If it does, I MAY put more consideration on the one that has confluence with a fib level.... however, that will still take a back seat to price action, what TIME price reaches each level, and my overall market directional bias... as well as many other things. So, do I use fib levels? Yea... sometimes, but not really on intraday stuff. If I do use it, it'll be like in the following situation.. look at the daily AUD/USD chart I've included. The 38.2% fib level happens to intersect the 1.0330 level, which has about 3 significant daily lows within 20 pips of each other that ALSO are right around the 38.2 fib level. In THIS case, I will look hard at this level with the intention of taking a trade in the expectation of the AUD/USD reversing and dropping downward for at least 20-40 pips (maybe to even break 1.0149 recent low)... but, honestly, the fib didn't even need to be there for me to watch this level. So yes, I do use them, but only in a very specific situation, and generally only on longer term charts (daily and up), and only if they further demonstrate a good confluence of previous session/daily/weekly/etc high's lows, and if my price action leading into the level (daily price action primarily) is looking weak or overextended.... my point? fibs are a relatively inferior tool in market analysis, and I only use them to add additional support to a level I am already interested in, or to pick between 2 levels as the one I will focus on, but never as a tool themselves, and never more important than price action, trend, correlated markets, previous signifigant highs/lows, overall market bias, time price arrives at a level, newsfeed information of current bids and offers, barrier option information, general option info, news catalysts, market sentiment, areas of liquidity and liquidity gaps, various classical chart patterns, reversals/retracements based on market symmetry...etc. As you can see, fib's are pretty far down on my list of whats important and what tools I use to decide whether to trade any given price level or not. Does this make sense to you? Please let me know one way or the other... I'll await your response. Thanks. FTX

Hehehe.... over 15%, 6,000+ pips, and 2.5 months later, and somebody asks about the "trading room" You guys here are a tough crowd! I figured folks would have been on it like stink on shit... I know I would have back in the day, but it didn't turn out that way. Actually NYC, i've not been doing it or trying to do it for some time now, since literally the interest in it was about 1 or 2 people at a time at most, and those people tended to only be able to make it on certain days, and during different sessions (asia, london, or U.S... but none at the same times really) Tell you what though. I am still interested in doing it, but I wanna get at least 4 people at a time, and then I'd be happy to do it on skype as a group chat or whatever. If you or anyone else is interested, tell me what day (day and date, because international stuff can confuse me), as well as what session(s) work for you guys, If we can get 4 people who want to see the same day and the same sessions, i'll do it. So, just post up here (do not PM me) what day, dates, and sessions work for you. Hopefully others who are interested post up as well. We get 4 folks, we got a deal.

I use thinkorswim charting for longer term stuff. I get up to 10 years back. I generally use spot forex charts for longer term levels (like monthly/yearly) levels, but then if it's in an XXX/USD pair, trade the futures version of it when the spot reacts to the level. I try to avoid using futures charts to determine older levels because of the continuation and variance of pricing aspects of them. For anything less than 90 days old, I find any differences really to be negligable, but longer than that... I use spot since it's a "constant" vs a "variable" reference. I don't have yearly candles, my charts only go up to monthly, but that's good enough for me.

Huh.... well, what do ya know? I hold onto trades a bit more, and I get 1.5K pips, and about 3% profit in a day... who knew? Very nice start to the week. Gonna have to try to do this more often...

Ya, your right Kuokam about the timing. It's great for magnitude and reversal (as opposed to just retracement), but bad about timing. Buuuuut... the longer term chart price action i'm seeing on a variety of major currencies priced against the CAD is looking pretty good as well, and against the comdolls in general look good (I mean daily, weekly, and monthly charts) Don't want to take away from the thread here being COT, so i'll leave that for another time and place... but, yea. I think timing is right about now for the CAD... ESPECIALLY considering the Bank of Canada's recent dovish talk, "accomodative policy" blah blah...and the increased expectation that they will lower their interest rate, that WILL be the likely catalyst for a CAD short squeeze of record proprotions. And... I think they are meeting this week? So... anyway. Been short cad this week, up over 100 pips in some pairs (I have more than 1 trade on shorting CAD), and I'm in no rush to take more profits yet... next stop, 150 - 200 pips. Ok, a little luck here, of course... but just saying there are more reasons than COT alone for my belief here. As far as Upperman... I didn't even know that was a guy, or that he teaches COT. I know of larry williams, and believe he is very good. But have no direct familiarity with his work. Couldn't help you there. FTX

well, with the EUR/USD long closed out, I'm pretty much done with all the stuff i need to manage. I'm calling it a day.... the other trades that currently I have on will resolve themselves, either for a profit or a loss, but I never had any intention of "babysitting" them. I'll post up more this week as things start to resolve or my analysis changes. Happy trading FTX

Ok... now that we've nearly matched the asian session highs for the EUR/USD, i've closed the position out. Still holding on the EUR/CAD long, but i'm done with the EU for now. I'm exposed enough to the market as it is right now, and no need to have a sub-par trade on to mess with my head.

Ok, well, now the E/U is looking better. finally seeing the volume inflows on the bullish candles that I wanted to see. London could change everything of course, but so far, so good. I wanted a drop rather than a rise first.. I got it. I wanted better volume, I got it... now, if london can maintain this momentum, this trade will be solid. FTX

Well, E/U is finding support here at the 2900 level... but it's pretty early on for this type of support in the session. Usually london session proper is the more frequent session to establish session highs/lows....not frankfurt. At any rate, i'll just continue to be watchful of this trade as the next 2 hours goes by. After that, I'll probably konw what i want to do with it, if I still have it open.

I see this E/U long trade like this - If we push up to 1.2395ish, before we retest 1.2990 or lower, we could be pushing upwards, OR it could just be a run of the asian session highs to sell off at a higher price and with less slippage. So, should we test asian highs first, i'll look to reduce a good portion of my position, ideally eliminating my risk. If we push down first, this is probably better for my long trade, however, I'll be very cautious, and I won't be getting in any bigger unless something clear and compelling develops that really has a high probability of moving up for the rest of the day. So, until either 1.2895-90, or 1.2930-35 is hit.... I just wait.

wewell, the EUR/USD seems to be pushing upwards, but i'm not counting on anything right now with this trade. I do feel if we move up, here and now, we will retest the close price on friday...but other than that, I really have no solid grasp on what may or may not be developing here.

1. I've learned it really is totally possible to make buckets of cash watching red and green bars go by on a screen. 2. I've learned that a significant portion of people who try are actually not wired in the way necessary to make buckets of cash. However, I've also learned that most people who want it bad enough, can find a way to make a profit. Maybe not even great living... but a profit, yes. 3. I've learned that some simply are ill suited for this line of work. 4. I've learned that it really is about finding what works for you. 5. i've learned that without confidence, success is impossible. 6. I've learned that with too much confidence, success is impossible. 7. I've learned it's completely possible to beat the living snot out of the markets, year in, year out. 8. I've learned that you can only have what the market will give you, if your completely prepared and skilled enough to receive what is given. 9. I've learned that all the discipline and patience in the world is a piss poor substitute for an actual understanding of market forces and the drivers of supply and demand imbalances. 10. I've learned that this business requires a great deal of experience to reach a break even point. Profit requires even more experience. What's a great deal you ask? Years. Literally. Years. 11. I've learned that most people try to trade based on a shadow image or distorted understanding of how markets work. 12. I've learned that most people who trade, lose. 13. I've learned that the "secret formula" to trading is much like the "secret formula" to getting laid. Every time you go out with the goal in mind of meeting someone and having sex, it's basically just like the last 50 times you did it. But, it's also going to be completely different than every other time you did it too. Trading is the same way. Possibly unless your quant trading, but to that I couldn't say. 14. That not a soul on this planet has ever found a way to use a MACD on an intraday chart to make a good living for a period of 3 years or more. And i'm being really generous here with this one. 15. And finally, I've learned that if I had to trade for the rest of my life, and could never have another career doing anything else... that I would die a happier man than anyone I know of.

Well, looks like we could get up there with the EUR/USD... however, being the asian session, i'm not holding my breath. In fact, I wouldn't be surprised if london retested the lows we just made, arouhnd 1.2890, and then bought it back up to fridays close at least. Frankly, if we DO recover most of this during the asian session, I'd be wary moving into london that price could reverse back down pretty quickly on me. I'd almost rather not move up before europe/london opens... just due to the fact that there will be easier access to buy stops, and that may be enough to encourage the larger institutional traders to gun for those stops. Yea, i'm weighing out all sides of it, and the only thing that's crystal clear is a weak CAD. I'll look to reduce my position as we roll into europe if i'm stil unsure with this EUR/USD bias.

Still not seeing a high volume impulse move. That doesn't necessarily mean there isn't some serious buying interest. Remember, a big buyer could simply be refreshing their limit bids, and raising the bids as price moves up. Thus filling their demand without price running away from them. This is good if it's the case, and they have a significant order, but ultimately this will need to see some aggressive bidding, and a lack of offers to fill those bids. That will produce the big, solid green, high volume candles that ultimately will put this trade well into the "gonna make some money" catagory.

The biggest concern for the EUR/USD bounce at this point is the relatively low volume on the reversal and bullish candles. It's not horrible, but the 15 minute chart clearly shows an overall lack of the typical high volume committment I usually want to see before I start in with the victory dance. it's still more likely to move up from here than more down, but I would like to see some conviction in the form of an impulse move upwards before I really relax with this particular trade.