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Trading spot fx euro using price action
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Trading spot fx euro using price action

  #131 (permalink)
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Thursday's chart 2011-09-08

Here's Thursday. Another news-driven day.

I've put in loads of setups right through the day - in backtesting at the moment I have no reason to ignore the high volatility bars. I'm intensely curious to see how these big bars feel in real-time.

My analysis has slowed right down - I'm not managing a day per hour at the moment - it's more like 3 days per day. I find the thought process quite hard, looking backwards and forwards from setup to setup trying to analyse where the trapped traders are. I can't speed up, it all goes out the window. So instead of using a countdown timer to forcce myself to keep it under an hour, I'm timing myself to see how long it really does take - although some days are easy and some days are complex.

You can discover what your enemy fears most by observing the means he uses to frighten you.
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Trading spot fx euro using price action-eurusd-3-min-2011-09-08a.jpg   Trading spot fx euro using price action-eurusd-3-min-2011-09-08b.jpg  
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  #132 (permalink)
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If you asked me which one area of your trading was most obviously better than mine, I would say that it is your patience in waiting for the right setups that suit you. So now you ask me how to identify more setups! It's slightly ironic.


Haha LOL
Have been simming the 6E for 4-5 months now, first starting by overtrading and as result pulling some hair out because I could not end 1 single day with positive balance. I think it is better ( read in several good books and forums ) to only take the very best entries. Maybe watch more markets ( but first try to master 1 market ) if you like to take more trades. Unless offcourse you like scalpentries. But offcourse you already know all these things.



Looking at your charts, I would have got the pull-back at 09:15 without reference to the lower time frame - why didn't you take it?


See chart 1


What you said about congestion forming at SR is well noticed from you. What I see sometimes is that price bounces off demand, but not enthousiastically. This is sign the demand can be broken soon.(vice versa supply) I think if you think of it with Seiden in mind, demand will get “ eaten” each time price revisits the level.
So 1) IF price does NOT bounce hard from SR, demand must be not that high at that level and 2) the more price bounces (revisits) the level, the more demand orders get filled ( eating demand ) and the higher the chance of breaking through. No new discovery here, but it is funny to first make yourself an observation and then read in books it is a common pattern: the descending triangle: breakout chances are short.

Attached my pullbacks today.


Good weekend!



Attached Thumbnails
Trading spot fx euro using price action-a1.jpg   Trading spot fx euro using price action-fridaymorning.jpg   Trading spot fx euro using price action-friday-midday.jpg  

Last edited by Zwaen; September 9th, 2011 at 11:55 AM.
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  #133 (permalink)
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Interesting post @Zwaen because I just went over Friday's chart just now and it was so difficult. All of the big assed bars just made it more frustrating. But as both Lance and Brooks say, don't get frustrated about the missed opportunities and I think you have to believe them. If you don't have a setup you don't have good risk, so just "jumping in" is something that only looks good in hindsight.

I haven't looked at Monday's chart yet. This is taking me forever, but hopefully I learn to go faster soon. I had to look after sick family yesterday and the weekend was full too, so life is definitely getting in the way of my progress at the moment!

Here are what I saw on Friday's chart. A couple more PBs than you, I think, plus some reversals. or just mirages perhaps.

Oh yes and you're right about Brooks's PB entry - it is late and the wrong side of the zone, but if the market is fast, you have no choice.

You can discover what your enemy fears most by observing the means he uses to frighten you.
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Trading spot fx euro using price action-eurusd-3-min-2011-09-09a.jpg   Trading spot fx euro using price action-eurusd-3-min-2011-09-09b.jpg   Trading spot fx euro using price action-eurusd-3-min-2011-09-09c.jpg  

Last edited by Adamus; September 13th, 2011 at 01:49 PM.
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  #134 (permalink)
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Monday 2011-09-12

Here's what I made of yesterday's chart. Late again but slowly catching up.

Also finding the analysis slightly easier now - but easy doesn't mean quick, unfortunately.

Huge gap on opening. I have a system that trades the gaps, but even though they are likely to be filled, it's so volatile that it's impossible to limit the risk enough.

You can discover what your enemy fears most by observing the means he uses to frighten you.
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Trading spot fx euro using price action-eurusd-3-min-2011-09-12a.jpg   Trading spot fx euro using price action-eurusd-3-min-2011-09-12b.jpg  
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  #135 (permalink)
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Tuesday 2011-09-13

Yesterday's chart. Quite impressive action in the London AM session - down over 100 points and back up again.

You can discover what your enemy fears most by observing the means he uses to frighten you.
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Trading spot fx euro using price action-eurusd-3-min-2011-09-13a.jpg   Trading spot fx euro using price action-eurusd-3-min-2011-09-13b.jpg   Trading spot fx euro using price action-eurusd-3-min-2011-09-13c.jpg  
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  #136 (permalink)
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Wednesday's chart 2011-09-14

Rushed this one. Easy to tell that it's volatile - I can't fit the marked-up chart onto one screenshot without compressing from my chosen resolution.

I'm trying to get some discussion going about trapped traders if anybody's interested. I've got more of a handle on the concept myself, but in fact I'm beginning to think I'm seeing trapped traders where there aren't any.

I'm also beginning to recognise the different kinds of market movement that I'm looking at, especially since I'm doing some current days (with huge volatility) and some days from October / November 2010. Smooth, big-barred rallies and sell-offs with tiny pull-backs, slower moves with bigger, longer pull-backs, ranges, choppiness, and lately a few days with ranges divided by big pushes from one into another.

Plus I'm getting less aggravated by the number of times the market comes back for a second attempt immediately after a setup.

But I'm still struggling though to see beyond the obvious trend, i.e. whether the market was up or down into the current setup. I still have a kind of inferiority complex that there's a picture in the chart that I'm looking at which I can't see which shows you whether the market's actually just about to reverse or continue. I guess it's just lack of experience. Technically I should know all the right things to look at but even in simple backtesting with hindsight it feels impossible.

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #137 (permalink)
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Hey Adamus,

keep up the good work

Sometimes these days are difficult indeed, attached your chart where we see a good CPB with trapped traders ( if they even exist ) but it fails.

I have been busy investigating the setups, so have been too busy for posting. I had to scroll charts of the past 7 months and decide wheter to take the setup or not, and record everyting of the trade, including several exit strategies. The work of a monk.

What I also did was divide the pictures of the good and bad trades in different maps, clicking between them, and asked myself the question " what are the differences between these " and looked at them, upways, downways, sideways and everyways. In this investigation( and I suspect a lot more to come in the future :-) ) i found something interesting I had not looked at yet. Time of the day. When I delete all PB's and CPB's after 11.00 o.clock ( and before midday) , and after 17.00 o'clock from the database, the traderecord is vastly improved. You have to be careful to not delete wrong trades from your database just to improve your record ( fooling yourself like Enron), while there is no correlation or reason the trade could be bad. But I " think" there is some correlation because the morning or midday is over and people just stop trading ( exception: heavy trendaction at that time)

I also noticed that after (about) 17.00 o'clock, when there was a downtrend, price will most likely make a 123 bottom pattern. So it is better to not take the PB with trend at that time, and better take a position that this pullback will fail. Offcourse I just investigated my batch of 7 months of data, so it is not " thoroughly" investigated. I remember ( but not for sure) reading it in Brooks, where he tells hedge funds need to fill orders of customers, so a surge in the afternoon is more likely. Just throwing ideas.

I also deleted my " the market has to move very quick my way " rule: too many 'good' trades are exited prematurely. I was definitely wrong with this. Just put the stoploss above the entrybar and wait yielded much better results.

-Oh yes and you're right about Brooks's PB entry - it is late and the wrong side of the zone, but if the market is fast, you have no choice.-
I think you are so right with this. Everything is possible, just chasing the market like a madman, if the market has the proper condition/environment. We have to adapt like chameleons.

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Last edited by Zwaen; September 15th, 2011 at 06:54 PM.
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  #138 (permalink)
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And what I wanted to add:

The last few weeks I'm playing with some ideas. The idea is just that most of us are too busy searching for setups. This while I think a trader has to put context and market environment first, and then just apply the setup suited for the environment. Since this is something the majority of traders neclect, it can be something valuable. If it is a trendday, it really doesn't matter whether you just take price-action pullbacks, buy ross hooks of even buy an ema crossover, as long as you step in that trend. Recognizing the trend day is what counts, imho
So if you're marking up the setups on the charts, you can also try to model the environment, or the " day". I also started with this, copied the charts of 200 days and try to make some catagories to label the days.

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  #139 (permalink)
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Zwaen View Post
Hey Adamus,

keep up the good work

Sometimes these days are difficult indeed, attached your chart where we see a good CPB with trapped traders ( if they even exist ) but it fails.

Thanks! I will! The most difficult bit is actually ensuring that I myself stay on the straight and narrow path and not go off chasing butterflies. But I'm working on the psych..

Your CPB on that chart is well spotted. I should have been looking out for CPBs after the size of a move down like that. However it wasn't a complete failure, the trade from that set up - it would have netted a few points because the market hit the first S/R level from there before turning round.


Zwaen View Post
I have been busy investigating the setups, so have been too busy for posting. I had to scroll charts of the past 7 months and decide wheter to take the setup or not, and record everyting of the trade, including several exit strategies. The work of a monk.

What I also did was divide the pictures of the good and bad trades in different maps, clicking between them, and asked myself the question " what are the differences between these " and looked at them, upways, downways, sideways and everyways. In this investigation( and I suspect a lot more to come in the future :-) ) i found something interesting I had not looked at yet. Time of the day. When I delete all PB's and CPB's after 11.00 o.clock ( and before midday) , and after 17.00 o'clock from the database, the traderecord is vastly improved. You have to be careful to not delete wrong trades from your database just to improve your record ( fooling yourself like Enron), while there is no correlation or reason the trade could be bad. But I " think" there is some correlation because the morning or midday is over and people just stop trading ( exception: heavy trendaction at that time)

I also noticed that after (about) 17.00 o'clock, when there was a downtrend, price will most likely make a 123 bottom pattern. So it is better to not take the PB with trend at that time, and better take a position that this pullback will fail. Offcourse I just investigated my batch of 7 months of data, so it is not " thoroughly" investigated. I remember ( but not for sure) reading it in Brooks, where he tells hedge funds need to fill orders of customers, so a surge in the afternoon is more likely. Just throwing ideas.

Very interesting. I think it is generally good to know these things - in fact I have even seen people researching how each day of the week behaves. I don't want to go that far, but I would like to do some basic checking of the ATR at through the day with my database going back to 2001. It's for a future date when I have the time though.

Also I think it's important not set too much store by those stats - the market is the market and will do what it wants when it wants, which you mention re trending. With one of my mechanical trading systems, I tried improving it by putting an hour-of-day filter on it, but it didn't make it any more robust.


Zwaen View Post
I also deleted my " the market has to move very quick my way " rule: too many 'good' trades are exited prematurely. I was definitely wrong with this. Just put the stoploss above the entrybar and wait yielded much better results.

Yes that rule sounds and feels great but I could never get it to work. Quite a few traders say that. I'm glad you confirmed my opinion.

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  #140 (permalink)
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Zwaen View Post
And what I wanted to add:

The last few weeks I'm playing with some ideas. The idea is just that most of us are too busy searching for setups. This while I think a trader has to put context and market environment first, and then just apply the setup suited for the environment. Since this is something the majority of traders neclect, it can be something valuable.

I absolutely agree with this bit.


Zwaen View Post
If it is a trendday, it really doesn't matter whether you just take price-action pullbacks, buy ross hooks of even buy an ema crossover, as long as you step in that trend. Recognizing the trend day is what counts, imho
So if you're marking up the setups on the charts, you can also try to model the environment, or the " day". I also started with this, copied the charts of 200 days and try to make some catagories to label the days.

I try to see what type of market the part of the chart that I'm looking at displays - but I also look for points on the chart where the market changes from one type to another (without any great insights so far!)

But I don't think you should make a big thing out of days - you'll never know for sure if it is a trend day until the end of the day when it's too late. We can work out what the market is doing now well enough, and we could possibly build up experience to see when changes are happening, but to see whether it's going to behave like that for the rest of the day, that's would be seeing into the future. If you work it out, let me know! I've got some money I'd like you to trade!

You can discover what your enemy fears most by observing the means he uses to frighten you.
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