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Trading spot fx euro using price action

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  #211 (permalink)
 Adamus 
London, UK
 
Experience: Beginner
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Just catching up on my lessons learnt journal so it'll be a while before I get going on the next phase of watching the live charts.

Here's Monday's

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  #212 (permalink)
 Adamus 
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Vague feeling that I overanalysed Tuesday's chart.

What looks close-up like a whole stream of opportunities looks a bit like chop from the other end of the telescope.

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  #213 (permalink)
 Adamus 
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The quiet days are the most confusing. If only the bid/ask spread and the commissions contracted at the same rate at the ATR.

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  #214 (permalink)
 thewardiknowof 
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Hello Adamus,
This thread is of great interest! Finally I have gone through it all. You appear to be progressing now with the YTC method. A couple questions for you:

1) Have you begun trading on demo to reach your four consecutive positive weeks?
1b) If not what is holding you back from continuing? You have said you have gone through one year of printed charts. This is a great achievement. Doing this you have come much farther than many.
2) You have so many supply/demand lines on your charts. Do you not find it confusing or overwhelming and even that it clutters your charts?
3) Are you considering where you would place stops and targets? You may find it helpful to place these on your charts.

Please be patient with me and my questions. This is my first post, It is the first time I have tried even becoming a part of anything like this (chat, online journals, online communities, etc.), so I am unfamiliar with proper protocol or etiquette in this type of thing. I am working through the YTC method/program using EUR/USD as you are.

You have come a fair way from when you started posting here. Keep it up and all the best!

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  #215 (permalink)
 Adamus 
London, UK
 
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thewardiknowof View Post
Hello Adamus,
This thread is of great interest! Finally I have gone through it all. You appear to be progressing now with the YTC method. A couple questions for you:

1) Have you begun trading on demo to reach your four consecutive positive weeks?
1b) If not what is holding you back from continuing? You have said you have gone through one year of printed charts. This is a great achievement. Doing this you have come much farther than many.
2) You have so many supply/demand lines on your charts. Do you not find it confusing or overwhelming and even that it clutters your charts?
3) Are you considering where you would place stops and targets? You may find it helpful to place these on your charts.

Please be patient with me and my questions. This is my first post, It is the first time I have tried even becoming a part of anything like this (chat, online journals, online communities, etc.), so I am unfamiliar with proper protocol or etiquette in this type of thing. I am working through the YTC method/program using EUR/USD as you are.

You have come a fair way from when you started posting here. Keep it up and all the best!

Hi thewardiknowof,
I have been posting on forums since the 1980s so it is probably good that you warned me Good luck with it, as you begin to get a feel for the difference between people's virtual personalities and their real personalities. Although Big Mike's forum is probably the best place to start since he moderates really well, you could always benefit from making sure you know your 'netiquette':

Netiquette - Wikipedia, the free encyclopedia

HTH (hope that helps!)

re trading: thanks for posting. Great to find more people into YTC PAT. I am not as far advanced as you think - the year's worth of charts that I went over was to learn Al Brooks PA, and although it was very interesting, it just has nothing like the structure of the YTC PAT programme, which I seriously need if I'm going to translate my ambitions into reality without losing shed-loads of money or wasting months of my life.

I just finished 100 days of studying charts for S/R and YTC setups. For this stage in the programme Lance Beggs advises not to worry about entries or exits, but just to concentrate on the market structure and the price action. Next step: real time or mkt replay studying the same thing (i.e. without hindsight) for 10 sessions. That's what I'm doing now. That probably answers your Q (1)

(2): sometimes I do find the S/R lines too close together. If they are very close together, that's great because I can amalgamate them into one zone and that works fine too, but when there are 3 or 4 lines with 5 pips between each, it's tough and I suppose I should watch price interaction at that level and if no visible interaction occurs, just remove the line. Or maybe I should be more picky about the swings highs and lows that I use in the first place, e.g. a swing high in the Asian session two days ago can be ignored if there's too much in the area already. What do you do?

(3) That's not in the programme at the moment but it's very tempting and would make my charts more interesting when I look back on them. However I'm still building my skills at reading the bias and following the S/R price action. But it's not far off - 10 sessions and I'll be at that point in the programme.

What time frames are you using? I'm using 60mins, 3mins & 1min. I was going to use the 5min chart which is why I use the 60min chart for the long term. That was an Al Brooks habit - but I switched down the trading time frame to 3 mins without changing the long term. If I change my long term time frame to 30 mins I will have even more S/R on my charts! Probably not a good idea.

Are you going to start a journal here?

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  #216 (permalink)
 Adamus 
London, UK
 
Experience: Beginner
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Just went back to read over the material again and found what I'd missed or hadn't taken on board. Quoting YTC PAT:


Quoting 
... more often than not, price action is choppy with much overlap between candles. Strictly following our definitions for swing high/low would leave us with a market structure that is just unworkable.

This is demonstrated in figure 3.25, where strict adherence to the definitions of swing highs and lows provides a chart with support and resistance lines showing every 10-20 pips.

In these cases, we're required to mentally zoom out and select only those most relevant levels.

Our intent is simply to identify those key turning points which stand out on the chart as the most obvious levels, and therefore offer potential barriers to future price action.

Don't try to make this too complicated. It really is as easy as, "If it looks like a relevant S/R level, then it probably is"

The absolute best S/R, which should NOT be missed in your creation of market structure, are those levels which displayed the greatest supply/demand imbalance when price last left the area.

That is, those times when the difference in urgency between the bulls and bears is greatest, leading to RAPID price movement.

This will be evident at swing highs and lows which show a rapid reversal of price; and at areas of congestion which lead to a sudden and strong breakout with good follow-through.

I note generally speaking Lance has got about 50 pips between S/R levels.

What you want though and what Lance omits here is that you want S/R levels that everybody in the market is looking at, because that's where traders will be making decisions, that's the region where break-out traders will be entering, novice traders will be getting trapped, traders will be putting stops, wholesale traders will be taking profits, and even just on the off-chance that they will be self-fulfilling prophesies.

In fact, and this is another thing that Lance omits, they don't even have to be S/R levels, they could be Fib retracements or pivots - as long as enough traders are watching them and will do something based on them and will cause the market to stall, then that's good enough to define a low risk entry.

So the theory goes

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #217 (permalink)
 thewardiknowof 
Edmonton, Alberta Canada
 
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Trading: Forex
 
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Adamus View Post
Hi thewardiknowof,
I have been posting on forums since the 1980s so it is probably good that you warned me Good luck with it, as you begin to get a feel for the difference between people's virtual personalities and their real personalities. Although Big Mike's forum is probably the best place to start since he moderates really well, you could always benefit from making sure you know your 'netiquette':


HTH (hope that helps!)

re trading: thanks for posting. Great to find more people into YTC PAT. I am not as far advanced as you think - the year's worth of charts that I went over was to learn Al Brooks PA, and although it was very interesting, it just has nothing like the structure of the YTC PAT programme, which I seriously need if I'm going to translate my ambitions into reality without losing shed-loads of money or wasting months of my life.

I just finished 100 days of studying charts for S/R and YTC setups. For this stage in the programme Lance Beggs advises not to worry about entries or exits, but just to concentrate on the market structure and the price action. Next step: real time or mkt replay studying the same thing (i.e. without hindsight) for 10 sessions. That's what I'm doing now. That probably answers your Q (1)

(2): sometimes I do find the S/R lines too close together. If they are very close together, that's great because I can amalgamate them into one zone and that works fine too, but when there are 3 or 4 lines with 5 pips between each, it's tough and I suppose I should watch price interaction at that level and if no visible interaction occurs, just remove the line. Or maybe I should be more picky about the swings highs and lows that I use in the first place, e.g. a swing high in the Asian session two days ago can be ignored if there's too much in the area already. What do you do?

(3) That's not in the programme at the moment but it's very tempting and would make my charts more interesting when I look back on them. However I'm still building my skills at reading the bias and following the S/R price action. But it's not far off - 10 sessions and I'll be at that point in the programme.

What time frames are you using? I'm using 60mins, 3mins & 1min. I was going to use the 5min chart which is why I use the 60min chart for the long term. That was an Al Brooks habit - but I switched down the trading time frame to 3 mins without changing the long term. If I change my long term time frame to 30 mins I will have even more S/R on my charts! Probably not a good idea.

Are you going to start a journal here?

Thanks for the netiquette suggestion Adamus, I have reviewed the information.

For S/R lines, I try to keep it very simple. I look at the HTF (mine is 30 min) then starting at current price, look left and mark off major turning points. The next day I review my lines and look how I have placed them differently. Then delete them all and start fresh redrawing them.

For time frames I have been focused on 30 min, 5 min and 1min. As for starting a journal here, I think I will. I want to review more of them to be clear on what exactly is best and how to properly go about this.


Adamus View Post
Just went back to read over the material again and found what I'd missed or hadn't taken on board. Quoting YTC PAT:



I note generally speaking Lance has got about 50 pips between S/R levels.

What you want though and what Lance omits here is that you want S/R levels that everybody in the market is looking at, because that's where traders will be making decisions, that's the region where break-out traders will be entering, novice traders will be getting trapped, traders will be putting stops, wholesale traders will be taking profits, and even just on the off-chance that they will be self-fulfilling prophesies.

In fact, and this is another thing that Lance omits, they don't even have to be S/R levels, they could be Fib retracements or pivots - as long as enough traders are watching them and will do something based on them and will cause the market to stall, then that's good enough to define a low risk entry.

So the theory goes

You made some great points here, particularly that 'as long as enough traders are watching them and will do something based on them it's good enough'. Thus, it appears, the more obvious the better.

Again, thanks Adamus

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  #218 (permalink)
 Adamus 
London, UK
 
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Started looking at the charts in real-time - exercise number 2. "Observe market structure and setup areas (no trading).

Only 3 hours. So for what it's worth. V. interesting to finally get back to live charts.

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #219 (permalink)
 Adamus 
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Just realised from watching the DOM on the future that the futures traders are trading 3 to 5 points below the forex price...... so for me @ 1.4200 hoping for some kind of price reaction, the futures traders are all looking at 1.4194 or 1.4195.

Which means what..... dunno, except I'll see the forex 00 reaction at 1.4200, but then I might see some futures trading reaction at around 1.4205. This might explain why the reaction around the 00 levels is more volatile in my small xperience to the reaction around other S/R

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  #220 (permalink)
 Adamus 
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Friday's EUR/USD chart.

Sat in front of screen from 12:00 to 18:00.

Tried watching the DOM on the price ladder as well but with NinjaTrader 7, the ladder itself moves up and down so that the current price is always in the centre of the ladder, which I found difficult to follow - don't know what that says about my mind, probably not good. But there is another module to NinjaTrader called the Static DOM which doesn't move the ladder with the price, only catch is for reasons I haven't worked out yet, you have to pay some kind of extra commission or exchange fee to use it.

Since I'm on the subject of transaction costs, my German partner just asked me if I'd be able to work as a trader in Germany (you can tell where that conversation was leading) and I said "yes" immediately but then I figured there might be added costs if the EU brings in this "Tobin Tax" which apparently is now a serious proposition. I always thought it was a complete joke! So I need to find out (1) how much would it be if it affeects forex trading and (2) if so, would it also affect futures trading?

I might have to change the way I make notes and mark-up - my current style which is the easiest way in NinjaTrader, looks pretty ugly and not so readable, as well as obscuring the bigger picture on the chart. I suppose it could be worse - it could be plastered with indicators as well

This is price action.

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