FX Club

[FxJalarupa]

So I feel like I'm not being all that fair to you by not at least helping you to SEE the Obvious Truth...

So here are 4 very rough markups each showing a theme that is completely different yet related... This should help you along your path...

What story does a wick tell?

Same chart different TimeFrame... Yet the story of the Wick remains... Can you see the same wicks here as above? do your EYES cast judgement on a wick that is no longer there? How are the new wicks different to the previous?

Our Focus has shifted from wicks to something else... why are these candle bodies significant?

Believe it or not, the above study holds the same premise as the previous yet your EYES deceive you still... what is it that you SHOULD be SEEING?

 

[Papsak]

maybe I need to say what I've looked at and then discarded as ether not being reliable enough as an indicator of change of direction or of trend.

When reaching a peak/trough (often because of a supply/demand zone), does the battle the between supply and demand create longer wicks? Frequently - but not always.

Are wicks more likely to form in D/S zones? Not that I can see.

There might be a case for stronger trends have candles with less wick?

You have now got me looking at the relationship between significantly stronger candles and what happens after. I am easily side tracked..

Later in the day: I have re read all your posts and have been staring at charts for hours today. No aha moments - but have seen some patterns emerging. To me though, it's still a bit random.

Something that sticks with me...

5 things can happen when you enter a trade.

1) Loose a little
2) make a little
3) break even
4) make a lot
5) loose a lot

the first three should even out. And with proper risk management, you can get rid of 5. Seems easy, hey

 

[FxJalarupa]

Right so let me help you along a little more...

Wicks and candle bodies are very important indicators of where price is going... In my experience wicks point towards loss and candle bodies towards profit... (your initial intuition was pretty spot on here)

Wicks
The longer the wick on a specific time frame the greater the opposing force that is creating it... Wicks also aren't only relevant at peaks and troughs (although most obviously present), they are generally found everywhere and our interpretation on their meaning in realtime or over the past couple of periods could tell us a lot about the future...

Candles
Candle bodies point to the direction of future price movement (generally more so when they create a new high or low in the form of a breakout) and with regards to candle bodies the general rule of thumb is "SIZE MATTERS" - This is because the size of a candle body is a graphical representation of something which a great deal of future lessons will focus on... MOMENTUM...

Generally momentum (and especially breakout momentum) set the stage for future price movement...

The tricky part is how long it takes for a wick to form after momentum...(being right in price, but not necessarily time) We run the risk of falling into a trap of expecting price to obey the time constrains that we place on it (hourly, daily, weekly, etc) when in fact price obeys only price...

So first we should understand these little obvious nuances about price and candles in relation to their 4 points... We should also clearly note that we can create a clearer picture of price in relation to these points by changing the time frame... (think outside the box here, it will make you rich in knowledge and sight)

Think about this and relook at the last image above... It encompasses everything discussed in this post... Try and SEE what I am taking about...

There are only two things that happen when you enter into a trade... You either take a profit or you take a loss... My job is to show you how to become an expert at taking a loss, so that you don't destroy the good work you have done up until that point... But more about this in the months to come...

If you don't have an AHA moment after this post, then I'll have to draw you a picture... But I'm sure you bright enough to get it...

 

[Papsak]

Thank you very much, I am definitely seeing a bit more of the flow.

As you say, price is a function of price - our time segments are pretty arbitrary. And although there is a case for similar patterns cropping up with double tops h&S ect. Of course, a H&S on a 5 minutes could just be a bit of wick on an H chart!

I also think a candle drawn on a 1 hr chart would look different on a 1 hour chart that was of set by, say, 15 minutes - so how much faith can you have in them?

Maybe I am just over thinking it - because, yes, even I can see more strong, wickless candle in a a strong trend and the wicks getting longer as the trend runs out of steam and indecision creeps in. But yes, it's not black and white - there is a fair amount of gray about!

BTW - when reading a chart and making a decision, would it not be fair to join two candles where the second ones start is level with the first's, and shows no wick?



Further on time vs price.

Is there any evidence to support that volume picks up at different times? Like just after the hour, when people trading evaluate the last H candle, then buy at market? Occasional you see a strong bull next to a strong bear with no wick between them.

example just before the 3rd box

 

[FxJalarupa]

Going Deeper

Well done on installing MT4! I see my training is beginning to rub off on you

I will however only consider my training a victory when you lose the crutches... I see two of them on your chart! Both completely irrelevant and 100% distracting...!

You're spot on the money... Join the Candles! But we should establish some rules round this... (coming soon)

Your H1 Offset assumption has merit, and we will be explored in due course... Keep reminding me... We can back-test it with another indicator I have...

Let's go deeper down the rabbit hole... shall we?

Now have a look at this for mind manipulation... This is where I come from, for years I used to trade intraday successfully using this simple charting setup...

The ability to look within a 1 & 4 Hour Candle at multiple Open, High, low and Closes (15minute base chart)

Now Zoomed out a little and the chart no longer looks like a 15Min Base Chart but a 1 Hour Base... Can you see it?

The analysis that I used to draw to trade typical range markets in FX looked something like this... and it used to make me a lot of money... BUT back then I also used to sit in front of the PC for hours watching the market (which is something I recommend, because its kind of like learning to fly! You have to clock the flight hours!!! Can be done WAAAY Quicker with a Forex Trainer Like (Forex Tester) - No Affiliation - I saw a Magnet floating around for ver1 some time back) - SEEing how price behaves at the Open, High Low and Close - You could actually build very successful strategies around trading pullbacks to the open of the H1 and H4 Chart other techniques... but then there is all that waiting... Meh!

Nowadays my setup looks like this... you will agree, you can see everything here that you could have seen above and possibly more... Because of the focus on the larger time frame and more data in view (MORE IS ALWAYS BETTER -People fail because they think you have to enter on the 5 minute or 15 minute chart and then they forget about the BIGGER PICTURE and then they lose their money - True Story)...

I have the ability to see all the lines I used to draw without drawing them because I know where they should/could be and what they look like... My past setup was too clinical... I was able to enter into a trade on the pip and be in profit immediately, but that sort of precision took too much effort and I have found a simple way to be almost as precise but with less effort... which takes a lot of the stress out of the trade...

 

[Papsak]

Very interesting. The overlayed candles often do not look anything like what I would expect them too. I guess I often expect the body of the candle to have the most action - whereas is interesting to find it's often not. A mass of candles on a 15 minute chart often is often just part of the wick on a 4H.

Do you find any ratio's change moving between time frame? More pointedly, the ratio between wicks and bodies? I would have thought there would be more wick more frequently on the average H24 candle than the 5 min. Weirdly, cannot see any noticeable difference.

As to the indicators, just mucking around with an system based on these lessons. early days.

 

[FxJalarupa]

Complexity is not all that...

LESSON THREE

ALL YOU NEED TO BE ABLE TO MAKE MONEY IN THIS GAME IS THE ABILITY TO DRAW A STRAIGHT LINE...

We shouldn't worry too much about ratios and stats (although these do provide an edge, they run the risk of attaching a bias to our decision making)... If we complicate something we don't fully understand (random walk) we end up with analysis paralysis...

TRADING IS EASY! We complicate it in our minds by thinking you have to be a actuary or CFA in order to make a success in this game... True, our competition is full of some of the brightest minds with the most cutting edge tech out there... and who are we? but the poor sods that think we even have the slightest chance at beating them at their own game...

But beat them you will!

The following concept ALONE when applied correctly has the capacity to take money right out of the pockets of the Illuminati and place it in YOUR pockets... I love the FX market! its like my very own pot of gold that I can dip my hands into and extract money from... and you can too believe it or not!

The concept is so simple that even a child could do it!

The concept is that of the Straight Line

If price closes over a line and stays beyond the line then price is going to go in that direction... and vice versa...

THIS IS THE MOST SIMPLE TRADING STRATEGY KNOWN TO MAN... But it is NOT a complete strategy but a piece of a larger puzzle...

In future lessons we will examine where the BEST place to place your LINE would/should be... (there are many of them, each with their on strengths and weaknesses... But more about that in later lessons... Try have some fun with lines and see if you SEE...?

So c'mon... Pony up and enroll in my R45 000 Forex course and I'll teach you how to spot when price closes over or under a line...

 

[FxJalarupa]

Welcome to the conversation Snoop!

Here is your story as I see it... I'm weary of the momentum going into the level where price is currently congregating...

It would have to be a real dramatic event to unwind all those sell orders at those lines above current price...

 

[FxJalarupa]

Something for the future...

 

[FxJalarupa]

Anything can happen... wouldn't be the first time... Kuroda did nothing last time... so Yeah... on that note, the JP225 (Nikkei) is currently Looking like its catching a bid... and the USDJPY is very bidable at those levels... so its possible... I try not to front run news though... I prefer to trade post release... especially off of a good level...

USDJPY in Green / Orange

 

[FxJalarupa]

Which sessions do you trade?

When the price is right

 

[Papsak]

BTW - please do not think I have bailed. Am on holiday in Morgans Bay - will be back monday. Reading "reminiscence of a stock operator" - so getting some studying done...

 

[FxJalarupa]

Price in its truest form

So you may have wondered if there is a way to ONLY show price data...

Well there is such a way via a chart called the POINT and FIGURE charting method... Which basically removes time from the equation and just shows the journey of price...

There are many secrets to behold when we study PRICE via this method...

So below is what it looks like Naked...

Each cell is 10 pips and it takes 2 cells reversal to print a cell in the opposite driection

How is this useful?

In many ways we can study to see which prices price likes to congregate at (this shows where the most buying and selling is going on) - During these range markets large institutional operators are busy filling their order books by moving price between price points and back to these price points in order to get their orders filled... If you have any delusions of anything else happening in the FX market then you better check that now... because this is how the game is played...

So where these clusters form we can establish ZONES ZONES that repeat themselves - because there are still so many unfilled orders at those levels and a retail sucker is born every minute...

Let's have a look...

Look at what happens when price leaves a "Cluster" with force or momentum...? Price invariably comes back to test that breakout... (Hint, this is where you would like to enter into any and ALL of your trades in the interim... while you practice seeing...

Are these charts Important...?

NO... They just make this look a little more interesting... but the data is invariably the same...

... The same thing but different... Try and train your eyes to SEE the same thing in a different way...

Remember this well, we are playing a game of price discovery against players who only play when they get their price... (THEY EVEN GO TO HUGE LENGTHS TO MOVE PRICE TO THEIR PRICE IN ORDER TO GET FILLED) You need to try and SEE where their price is and put YOUR PRICE at THEIR PRICE and in doing so go along for the ride...

That is how you make money in this game... Not by chasing the whims of an indicator... You get YOUR PRICE

Remember you have THREE Positions in Trading...

LONG

SHORT

NO POSITION

HAVING NO POSITION IS A POSITION Sometimes the BEST Position...

 

[Jehosefat]

Remember you have THREE Positions in Trading...

LONG

SHORT

NO POSITION

HAVING NO POSITION IS A POSITION Sometimes the BEST Position...

Uh, in FX trading you only have 2... NO POSITION is the same as LONG your base currency...

 

[Jehosefat]

Remember you have THREE Positions in Trading...

LONG

SHORT

NO POSITION

HAVING NO POSITION IS A POSITION Sometimes the BEST Position...

Uh, in FX trading you only have 2... NO POSITION is the same as LONG your base currency...

 

[FxJalarupa]

Uh, in FX trading you only have 2... NO POSITION is the same as LONG your base currency...

Oh look we have our first trol!

Forex is traded on margin... no position means you have committed none of your underlying equity to margin... you are staying out of the market until you get your price... ergo you are trading without trading...

 

[Jehosefat]

Oh look we have our first trol!

Forex is traded on margin... no position means you have committed none of your underlying equity to margin... you are staying out of the market until you get your price... ergo you are trading without trading...

I'n not trolling, it's a fact. If your base currency depreciates you have effectively lost money. The fact that you aren't in a leveraged margin trade will minimize said losses but they still occur, hence you had a position...

 

[FxJalarupa]

Right, let's get back to business...

HOMEWORK TIME

I would like to see if what I have shown the good traders and aspiring traders of this forum thus far is resonating with you... Please submit 5 markups of one or more forex pairs of your choice based upon your understanding of what has been shown herein...

Those who are shy, kindly DM me or contact me with your attached markups on gmail. FxJalarupa at gmail dot com

 

[Papsak]

well - here ( I think) is a supply zone on the EU/JP
seems to be fairly well defined and tested.
Or, err, have we moved on from supply/demand zones?

 

[FxJalarupa]

No That's PERFECT!

It is a supply zone BUT tell me why you think it is so... break it down for me... TELL ME WHAT YOU SEE!?

The rest of the stuff we can tackle when you are ready... all in all these ways of seeing price allows one to build a story of confluence... WHEN you have confluence then you have the opportunity to pull the trigger with little stress and worry...