AR01 Market Structure Basics

February 12th, 2011, 01:26 PM

redegenerated

ok i see what you are saying now

well to be honest, i don't feel too confident in those kind of lines. I mean, if i'm trading and a round number come, i will keep an eye to the monitor but i will not expect in advance any particular move. Well it's not easy to explain, i really need to download some software to mark up charts

for example, in reference to the chart we were talking before, the line was 1,600 if i'm not wrong, but i would prefer to consider that line as the support of a trading range that is also 1,600 and not teh opposite way around.
well, i hope you don't mind for my dump consideration

I understand. I never get into a trade just because a number is touched. But exits are different for me. If a number is touched and it is around my target, I'm out. If price doesn't continue around the appropriate number, I'm out. If price blows through that number and can't hold, I'm out. These big banks and financial institutions do trade the numbers because their traders are measured on getting the best entry. They have huge portfolios and they are trying to hedge their portfolio and build their portfolio at certain prices structures. Therefore, they will be getting in / out at a price area regardless of if the market is trending or not because they don't care about that at times. They care about the overall cost structure of their portfolio and they have time and cash to wait.

Andrew

February 12th, 2011, 01:45 PM

I have attached a chart with a vertical line from my last chart earlier in the week. Look at how price got up to the 1.37 and like a magnet back to 1.36, fluttered around, broke down, and stopped at 1.35. Hmmmmm

Again, the point of this is that we can't get so focused on our bars, price movement, indicators, etc. and lose site of the fact that we are trading a price based object. We must be aware of these areas.

For Forex, I like the 00, 20, 50, 80, 00 price areas since I am trading a 5min chart most of the time (I found this on some forum or in some training somewhere).

So,
1.3600
1.3580
1.3550
1.3520
1.3500

Study your instrument and see what happens and how you want to use this information, if at all.

Andrew

February 13th, 2011, 11:00 PM

If you have elite access you can follow my journey here:

AR01 Our Journey

Here's how I trade a breakout. See the attached.

Otherwise, see my exit and why related to round numbers with this attachment.

I will keep real trades out of this thread most of the time but I thought it was important to show practical examples of the theory for this one right now.

Andrew

February 16th, 2011, 05:10 AM

ok i agree, round number can be good exit point or may be area to watch price action closelly

AR01 Market Structure Basics

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AR01 Market Structure Basics