FX Club

[Papsak]

For those interested in this - I think this is a pretty good video explaining supply/demand.

https://www.youtube.com/watch?v=0epdZImMZ_g

still working on how to decide on the zones though.

 

[FxJalarupa]

Yes Sam is a master of supply and demand zones... You should try and watch all his free content at fxstreet...

His methods will help you with confluence... Notice he also doesn't use indicators...

 

[Papsak]

Found this useful for identifying and drawing the demand zone.

https://www.youtube.com/watch?v=KkdShhdYdRM

Anyway - this is what a have drawn for the last two demand zones

 

[Oopsie]

FX is the same as online casinos. Your money is with the the broker and not in the market. All the brokers say they are registered with some or other regulator like the FSA.
This means nothing as they open office in unregulated countries even though they are registered with a regulator that has no jurisdiction in that country.
Now my vent on FX managers. The 2% winners in FX.
They know that most FX Co's fail and do not pay out or deceive the clients with irregularities like rogue prices to hit your SL. Not to mention the excessive slippage.
They will then resort to FX Management as the brokers will gain from this and will allow the fees to be withdrawn by the manager.
Also, they will start with seminars on FX trading for extra income as this is their only way to fortune as they KNOW fx trading will not accommodate their income.
If you really want to do this then keep your money in SA brokers.

 

[bchip]

New possible trade alert posted - pertains to EURUSD
for those interested

http://myshares.co.za/wp/2016/03/07/trade-alert-eurusd/

 

[Papsak]

Hi Fx

Looking at this mornings 15min EU/US

Sorry, cannot draw rectangles with GT

Would that qualify as a demand zone or would the exit candle not be considered strong enough?

 

[Papsak]

New possible trade alert posted - pertains to EURUSD
for those interested

http://myshares.co.za/wp/2016/03/07/trade-alert-eurusd/

What a coincidence - went on the thread, you had not posted, fiddled with my chart and then posted, during that time you posted. And both about the same currency pair.

BTW bchip - what's the reasoning behind the trade?

 

[bchip]

What a coincidence - went on the thread, you had not posted, fiddled with my chart and then posted, during that time you posted. And both about the same currency pair.

BTW bchip - what's the reasoning behind the trade?

Its a technical trade as fundamentally stimulus is suppose to weaken the euro.
Then again, the trade for parity to the USD is very crowded, it could be a squeeze on those guys.

Anyways discussions aside, technical analysis says:
- support is in,
- MACD is trending up,
- and then consider volume and gaps as well.

The combination of these factors tell me its a high probability for a Long on EURUSD.

Some could consider it a harmonics pattern as well, but I tend to keep trading simple.
I dont really look at harmonics, elliot, etc.

 

[Papsak]

Thanks for that Bchip

 

[FxJalarupa]

Hi Fx

Looking at this mornings 15min EU/US

Sorry, cannot draw rectangles with GT

Would that qualify as a demand zone or would the exit candle not be considered strong enough?

View attachment 348339

Yes it would... But you are forgetting the most important detail... What does the bigger picture look like...?

If the bigger picture is saying sell off a large time frame supply zone then price will blast past your level and you will then get the opportunity to sell when it returns to your level...

 

[Papsak]

Cheers. that brings me to two question.

So even though the price went through a demand area - the area is still valid?
And is then the best time to buy, when the price enters into the zone, and then exits in the direction of the trade? So setting a limit order when price is still above the demand zone is probably not a good idea as you really need to see how price reacts to the zone?

lastly.

Would this be a demand zone below - on the daily. Although it has a strong exit candle, the zone itself is no very well defined.

 

[FxJalarupa]

Cheers. that brings me to two question.

So even though the price went through a demand area - the area is still valid?
And is then the best time to buy, when the price enters into the zone, and then exits in the direction of the trade? So setting a limit order when price is still above the demand zone is probably not a good idea as you really need to see how price reacts to the zone?

lastly.

Would this be a demand zone below - on the daily. Although it has a strong exit candle, the zone itself is no very well defined.

View attachment 348393

I must say, I'm really impressed by your questions, they show real insight into what is happening with price...

Remember that price is the only thing that matters... All the data you need to be an exceptionally good trader is hiding in plain sight... One day you'll realize this and drop the MA and RSI

So your first question can be answered in many ways... The simplest answer is yes... If a level is broken that level is still valid, but in reverse... But this definition does not accurately depict what is happening to real traders and order flow that creates these at these levels to make then work the way they do...

Imagine for a moment that you are a trader who is buying at a demand level and price smashes through your order and gaps lower... You are now in the red and bleeding pips... The traders who are trading short have managed to run over your orders like a steamroller... You are one of many trading at that level... Some with tighter money management and others with weak hands... Those traders with weak hands crack first and start to liquidate their buy orders at a loss by selling their positions... This drives price lower and the shorts deeper into profit... The traders with tight money management (have their stop beyond a swing low) break next as price makes a lower low and takes it their sell stops... Price cracks down lower... The shorts move their stops to breakeven or trail them behind current price... Then experienced traders that are short start to liquidate and this in turn bids price higher... Trailing stops are next and then break even shorts get taken out at zero... price begins to move back toward your initial demand zone and now you as the trader who are still long and taking heat will be only too happy to exit at breakeven or as close to breakeven as possible... This creates a flurry of selling which resists price from moving higher than your demand zone and the experienced traders capitalize on this by shorting via limit order at that level thereby driving prices lower and, as price has already taken out a previous low they know that the buy stops at that level has been cleared pushing the way for lower lows... Until massive demand is found on a large scale, of the back of a bigger move...

Your final observation is so key and critical that I would be spending a whole lesson on it in time to come... I want you to ponder on it in the context of what was said above try to see such behavior in the charts and unpack their meaning for yourself...

You are well on your way to developing the eyes to see what others do not...

Keep on the journey

 

[Papsak]

Cheers, I really do appreciated the time and effort you putting into this - I hope others are also looking, if not participating. I was pretty skeptical a couple of days ago, but am certainly coming around to your way of thinking.

I am looking further back now, and looking at historical zones - some get confirmed, others do not. Do your remove those that do not straight away, or do you just downgrade them to zones of interest ? I am guessing there would be no problem to adjust the lines slightly when the do not quite align - new info trumps old.

Although I understand why a zones exists - I find it hard to understand why it would switch. *** scratch that - you have explained it...

Your final observation is so key and critical that I would be spending a whole lesson on it in time to come... I want you to ponder on it in the context of what was said above try to see such behavior in the charts and unpack their meaning for yourself...

Well, I'll say demand was a lot bigger than demand. Although find it odd that the wick on the final candle extended so far down. Maybe the real demand starts a few pips south of my line.

Have stuffed up already - I really need to learn patience and confirm my trade before jumping in with both feet. Once happy the trade is going in the right do you add to it?

will be interested to see how price reacts to the demand zone. I stuffed up quite badly over the last 24 hrs - BUT, rather happy that I know where and how I stuffed up, and if I sorted that out, the rewards would be pretty big. At the moment I am just a muppet wanting to get out even!

 

[Papsak]

Very interesting to see how price has respected the zone during the last 24hr. I am definitely becoming a convert! I need to be weary of zones and not just take it as a given that a zone is ether supply or demand.

Still need to sort out a proper entry plan. Do you scale up your position size as the trade is confirmed or do you first wait for serious confirmation before even entering? So on the graph below, talking about the major move up on the 9th, when/how would you have entered? Would it have been in the zone or set a limit order a few pips above 1.0964?

Or would you have use the candle stick as entry - the inverted hammer?

SL around 1.0946 or so?

Then your exit.

Would you have waited to see if it went through the next zone? Would you have moved up your SL? Take some profit off the table as it approached the zone?

Looks like a new zone has formed. When would you remove a zone? I guess when price does not react to the zone would be the answer?

 

[FxJalarupa]

Lessons on strategy and money management will come later as these are the most important lessons...

But in order to build a good strategy one needs a good foundation, one needs to be able to SEE opportunity where others do not and when you pull the trigger you will know that you can do nothing wrong...

Imagine being able to take money from the market at will... Turning what many deem as "speculation" into certainty...

I have a challenge for you...

Whilst this new information will be exciting and tempting you to develop all sorts of wondrous strategies and methods for exploitation... I urge you to stay the course... Learn to SEE price for what she is telling you... And if you can't hear her then start asking her questions... The right questions will yield the right answers... Her truth is right there in front of your eyes lying naked for the world to SEE... But many don't see anything more than what a stupid lagging indicator tells them to see... For those the profits may come in drips and drabs, when "conditions are favourable" ... Search out the story that price is telling you...

The story is a simple one for those with a appreciation for simplicity...

PRICE IS A FUNCTION OF TIME

TIME IS FRACTAL IN NATURE

PRICE MAKES ONE OPEN ONE HIGH ONE LOW AND ONE CLOSE IN A CERTAIN TIME (NOTICE I NEVER SAID TIME FRAME)

PRICE WILL PUSH HIGHER FOR A REASON AND CRASH LOWER FOR A REASON

THERE IS REASON IN PRICE, IT IS THE ONLY TRUTH WORTH NOTING

WHEN TRADING YOU MAY BE RIGHT IN PRICE BUT WRONG IN TIME

DO YOU HAVE THE PATIENCE (AND STAYING POWER) TO BE RIGHT IN TIME EVENTUALLY

Meditate on the above statements as they are the key to unlocking the secrets of a chart...

The irony is that trading is easy, when I teach people privately they often wonder why they are paying to be told something that is complete and utter common sense and how such simple information has the capacity to make them rich... Some get frustrated and drop out others SEE...

Learning how to SEE is the first step... Trading what you SEE comes next

 

[poffle]

Extremely interesting.
I have no idea about any forms of trading but i am definitely reading this thread closely! Keep it up

 

[FxJalarupa]

Lesson 2

LESSON TWO

PRICE DEFINED

PRICE is a function of TIME...

This means that over a span of time price edges out a path from supply to demand and vice versa (lesson 1)...

We like to break price up into little chunks representing M15, H1, H4, D1 and this gives us a clearer view for what price is doing along its travels between Supply and Demand, the crazy thing about the way we trade is, we trade based off of the graphical nature of this information and some of us even have so much faith in these time intervals that we take cognition of where the average price of the last 200, 120, 100, 75 or 50 intervals lies and we believe this to be infallible... Yet when we change the time frame our average line moves... and you wonder why 98% of traders lose in this game...?

A funny thing about price though... Is that its journey is the same on all time frames, because price is the same on all time frames (Stop and think about this for a moment)

"The Journey" described above sets the stage for one of Natures most awesome and mind boggling features and that is the creation of a fractal...

TIME is FRACTAL in NATURE

In Nature we find that over a period of time when we observe growth or maturity of a living organism (no matter how big or small) that the cellular divisions gives rise to a phenomenon known as the Fibonacci ratio... This Fibonacci Ratio hen gives rise to something beautiful! The Fractal!

A Fractal is a Natural (conscious/living/growing) object that develops either through the action of an outside force (like that of the continental shifts and the formation of mountain ranges) to the swirl of our Galaxy The Milky Way. It is minute in size from the formation of the Finger Prints on your Hand to the formation of Mountain Ranges, these fractals exist in their beauty and mathematical wonder...

WTF does this have to do with Trading...? You may be asking..? I'll give you a hint...

EVERYTHING!

So to cut a long story short, if you observe PRICE over multiple time frames you will SEE that she behaves the same way, respecting the same types of orderflow structures and forming the same / similar formations (double tops/Breakouts/pivots/and everyone's favorite Head and Shoulders)... Why is that... well the driving force behind PRICE are everyday stiffs like you and me as well as the robots that they build... Ergo, there is a living consciousness that drives price... The market is alive and full of great mysteries that can be unlocked f we have the right key or combination...

Allow me to demonstrate with a very simple example of looking at the MACRO PICTURE and scaling down to the MICRO PICTURE across the same PRICE JOURNEY - You will SEE (hopefully) that when we zoom in IN TIME we find that there are hidden mysteries of the JOURNEY being unlocked before our EYES - This JOURNEY will look a lot like this...

YEARLY CHART

6 MONTH CHART

3 MONTH CHART

MONTHLY CHART

WEEKLY CHART 1

WEEKLY CHART 2

*** Continued on next post ***

 

[FxJalarupa]

DAILY CHART 1

DAILY CHART 2

4 HOURLY CHART 1

4 HOURLY CHART 2

4 HOURLY CHART 3

4 HOURLY CHART 4

4 HOURLY CHART 5

4 HOURLY CHART 6

I hope that you start to SEE what I am talking about in the PRICE and start to SEE how PRICE moves from SUPPLY to DEMAND on a MICRO and MACRO scale... Hopefully you realize also where these two opposing forces are the STRONGEST!

My next point in the context of what was explained above is this...

Price makes ONE OPEN - ONE HIGH - ONE LOW - ONE CLOSE in a certain TIME

The DISTANCE between these 4 points represents your potential to EARN from the JOURNEY that PRICE takes over that TIME - Obviously the larger the TIME the LARGER the DISTANCE the LARGER the REWARD

Simple enough right? Not telling you ANYTHING you didn't ALREADY KNOW right?

So why can't you exploit the above KNOWN knowledge for PROFIT? Why can't you just BUY at DEMAND on a LARGE TIME FRAME and WAIT? - You could even do the math and find that the average RANGE of the last 24 bars was 1237 Pips and still you would not even hold out for 1/4 of that profit... Why not...?

Why do we not have the staying power required to exploit this simple fundamental truth that is so simple people think I'm F#$%@ing kidding when I show it to them...?

Personally because it requires work, introspection, thought, patience and understanding... Its no quick fix, no get rich NOW solution... But it is factual and it is something that we can utilize to stack the odds of a successful trade in our favour...

Now for the hard part (before we move onto more "fun" stuff)...

You have to develop some intuition around what has been said and need to start to learn to SEE what PRICE is TELLING you!

*Hint* focus on those four points the open, high, low and close of one candle and then look at the next and the next and so on and so on and so on... (don't forget to LOOK LEFT!) UNTIL you come to some sort of A-HA! moment!

When you do, kindly share it with us... I look forward to your epiphany

 

[Papsak]

Unfortunately, my a-ha moment has not arrived - but will be spending all day on it. You will be the first to know if it stikes. Unless, of course, you going to tell me that price is totally random. I am, of course, try to see some sort of pattern, waves of supply or demand. Something like that, anyway.

 

[FxJalarupa]

Just look at the charts and compare the journey and what the candles are doing when they make new highs, or lows... When the market tops or bottoms what are they doing... All this in the context of the 4 reference prices that make up a candle... Supply and Demand was last week... Let's accept that we understand all that noise and focus our efforts on understanding the story price is telling us... Let's see what you come up with... Don't need to be super technical... Remember this is also a lesson in simplicity... So try and state the obvious and SEE where that gets you?