FX Club

[Papsak]

well, when price enters the zone the momentum created by demand is halted by sellers supplying the market in the zone. Price halts, turns and subsides, occasionally leaving a wick. Of course, it will have to break eventually. price is not being "beaten back" with as much vigor as before - although lately, two ascending triangles have tried. Seems to be some demand in the green zone.

Although shorting below the supply zone is probably a safe bet for a few pips - a good play might be to go long above the supply zone which would probably get a few more pips.

 

[Papsak]

double post

 

[FxJalarupa]

Right so does the BIG PICTURE support a short at supply, or do you think you will get better success trading long?

Where is long term momentum pointing to?

Where is price coming from in the long term? Supply or Demand?

What stands in your way?

 

[Papsak]

Could you not do both? IF it breaks through the supply zone, trade long. Until then, trade every time it retracts from the zone?

Momentum has been up for the last few weeks - but the general trend has been down or the last year.

Well, I guess supply - purely on long term momentum being bearish.

Nothing!

BTW have you ever used FXCM - and their trading station software? Heard any good, bad things?

 

[Papsak]

do you ever make use of other patterns wholly or in conjunction with supply/demand zones?

Looks like stairs..

 

[FxJalarupa]

Could you not do both? IF it breaks through the supply zone, trade long. Until then, trade every time it retracts from the zone?

Momentum has been up for the last few weeks - but the general trend has been down or the last year.

Well, I guess supply - purely on long term momentum being bearish.

Nothing!

BTW have you ever used FXCM - and their trading station software? Heard any good, bad things?

I will take you through my thought process in relation to your analysis in a future post...

Will also discuss the best way to trade a breakout (going long above supply)

RE FXCM I have friends that use and are very happy with them... Personally I find their spreads unreasonably high...
Also don't really rate their proprietary trading software as meta trader does everything I need at present (although I am currently looking into how ctrader and ninja trader manage execution and orders...)

 

[FxJalarupa]

do you ever make use of other patterns wholly or in conjunction with supply/demand zones?

Looks like stairs..

View attachment 351984

we will spend a fair amount of time on fractals in the more advanced sections in this tutorial... Besides the more complex structures, I am cognizant of double tops/bottoms, head and shoulders (inverted), 1-2-3, triangles, pennants and hooks...

We will most certainly be looking at many of these structures in much greater detail later on...

 

[FxJalarupa]

You are welcome to keep posting... And well done on your trades!

I may start posting my trades at a later stage when I have given sufficient information so that my readers would understand or be able to understand how and why I did what I did...

Hopefully we can show people that there is a way to make something that seems too difficult to do with such a high failure rate into something that is very easy to do with great success if you know how...

 

[Ciscodarkie]

Hopefully we can show people that there is a way to make something that seems too difficult to do with such a high failure rate into something that is very easy to do with great success if you know how...

Teach us how sensei

Thanks for the training, keep it up.

 

[FxJalarupa]

Question....

What is a candle?

How many points does a candle have?

Is there such a thing as a higher high after that milestone has been reached?

Is there something that is lower than the lowest low?

When a candle is larger than previous candles, what does this mean?

Do larger candles point towards profit or do they point towards loss?

Is the current candle reality or illusion?

Is it better to enter a trade on a wick or on a breakout?

These are some good questions that will help you realize a simple truth...

What do you realize?

 

[brucem]

What is a candle?
Graphic to show open, high, low, close price over a time period

How many points does a candle have?
4 as above

Is there such a thing as a higher high after that milestone has been reached?
Not if you're dealing with breakouts

Is there something that is lower than the lowest low?
Same

When a candle is larger than previous candles, what does this mean?
Increased volatility

Do larger candles point towards profit or do they point towards loss?
Neither, only volatility.

Is the current candle reality or illusion?
Illusion until it is completed

Is it better to enter a trade on a wick or on a breakout?
Breakout

 

[FxJalarupa]

Thank you Bruce...

Any realizations thus far from your experience or from what we have discussed thus far?

 

[FxJalarupa]

Right so does the BIG PICTURE support a short at supply, or do you think you will get better success trading long?

Where is long term momentum pointing to?

Where is price coming from in the long term? Supply or Demand?

What stands in your way?

So In terms of PS's analysis...



Yes you were correct we were hitting off Supply But what was the bigger picture saying... I waited a while so that I could let the benefit of Hindsight play out...

I have also done this analysis right before Janet Yellen is set to speak and see if these lines or levels hold true...?

SO... lets look at the BIG PICTURE ...



Monthly chart showing us trading into Demand... we now need to zoom in and start inserting some lines (REMEMBER if price closes beyond a line then it will surely continue to do so...)



The Weekly above offers a wonderful example of MOMENTUM (3 Candles Grouped Closing over a Breakout Point... "Higher High" becoming a "NEW Higher High")

We draw a line from the origin of that Momentum Candles Breakout and this creates a line for us to test in the future.... If price stays above or below this line then price may continue to stay above or below that line...



Above you can SEE that we are following MOMENTUM will prove useful going forward... Price fails to close below our lines... which means...? its going lower...? ummm... no.... It's going higher...



We can see that PS's Intuition was SPOT on with regard to supply being in play on the H4... BUT we needed to ask ourselves... what is this supply trading into? what stands in its way... The daily above shows us CLEARLY where MOMENTUM is heading...

We can see another group on MOMENTUM Candles providing Demand at the origin of their breakout... This is our new line (solid Grey Line)...

We are trading into serious SUPPLY... (as noted by PS) but if we break this supply... the best way to trade this would be to wait for the pullback and enter on the pullback via the WICK or the Illusory Candle...

The below is a Idea of what entering on a wick after a breakout looks like...

This is the BEST way to trade... minimizes risk and maximizes return as you can pack in a really tight stop and trail that stop along the lows (but more of that later)

 

[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...

Revisit a lesson on Lines... A lesson in a simple truth...

I don't make the rules, but you have to admit that that was easy?



H4 Playing along nicely as we FEEL for the point of bid exhaustion... AFTER our MASSIVE MOMENTUM Down...



D1 Confirming our strategy to short the WICK of the USDZAR when it pulls back into the MOMENTUM CANDLE... Enter on a wick... Make lots of MONEY! - Pay it forward

PLEASE TELL ME YOU CAN SEE WTF I'M DOING... THIS IS ABOUT AS HARD AS IT NEEDS TO BE... But by our nature we want to make it harder...

Search for MOMENTUM and WAIT... (YES WAITING or NOT TRADING IS A POSITION FFS!)

 

[FxJalarupa]

Part of trading Forex is being indifferent to feelings of doing well and bad. If I make a profit I take it. If I make a loss I learn from it. I NEVER celebrate like a soccer player that scored a goal when my trades are profitable.

I'm currently long 40 000 units at 0.6778 on the AUDCHF - Trust me... Everyday is a celebration!

 

[FxJalarupa]

I closed all my UZAR trades looking to buy again maybe tomorrow. What does the bones say?

As far as I can see we headed lower... decent demand at 14.80ish... Depends though, some minister or Gupta could say something and we could end up rallying... But the Dollar is the real power play here... it always was in relation to the Rand... DXY is weakening... Depends on NON FARM PAYROLLS (NFP) on Friday...

Will have to see... is good news bad again? I think it is.... so a beat could be advantageous to you...

 

[Papsak]

Have been following your posts - unfortunately, I think I may have got lost somewhere along the way - no problem, it happens. In fact, took me a few minutes to figure out what PS meant.

For me though, being able to understand supply and demand has been invaluable.

Looks like the same setup as before.

 

[FxJalarupa]

Have been following your posts - unfortunately, I think I may have got lost somewhere along the way - no problem, it happens. In fact, took me a few minutes to figure out what PS meant.

For me though, being able to understand supply and demand has been invaluable.

Looks like the same setup as before.

View attachment 352730

No stress PS (and anyone else following along for that matter), please let me know what you do not understand and I'll explain it in detail with pictures until you obtain clarity...

You are 100% correct that the EU pattern is repeating... It does this because the Fx market is largely traded by algo (expert advisors) and these bots are pattern recognition nuts... So they self reinforce fractals... I'll be going into fractal analysis much later after you guys have the basics down...

so let's get some feedback... Yesterday I dropped a few bombs and showed enough to make you wildly profitable... But could you replicate my simple process? What are you missing?

 

[FxJalarupa]

LESSON FOUR

All you need to find is MOMENTUM

Momentum is defined as a candle or set of candles that break out from a range... That range could be on the M1 or the D1 (remember we combine candles to make wicks and closes above or below lines relevant to our analysis)

and this is what it looks like in practice in a real situation on the H1 USDJPY (recent price action...)

NOW DO YOURSELVES A FAVOUR AND SPOT THESE CANDLES AND START LEARNING MORE ABOUT THEM BY LOOKING AT HOW PRICE BEHAVES AROUND THEM...

 

[Papsak]

A trade set up often looks great on one timed chart, but then not so great on another - talking more about candles than D/S zones. The person then, of course, works on the better chart and does any calculations on that one.

To me, this it seems odd - it's like warping the facts to fit your argument.

Or is it more a case of, this is not an exact science - you never going to get confirmation across all charts, take what you get and run with it!