free seminar...london / sat 29 jan 2011

[bbmac]

Re this thread, I think I have answered enough questions about the way I trade and how I trade this particular Trading Edge. Some one else trading it may well trade it to different parametres. It is unimportant how I trade my own trading edge.

The original purpose of the thread was not to go into an examination of my trading but to provide some ideas that others may find useful in enhancing/developing their own trading edge/plan. My trading edge happens to be high in probability of a successful outcome (if I maintain the patience and discipline in waiting for the highest probability set-ups, - virtues necessary for the successful and profitable execution of any Trading Edge. But hi-probability edges are not the only type that can be successfully traded for a gain over a sample, as we all know.

The techniques and advice in the presentation I made on Saturday and in the accompanying doc attached to this thread had the aim of encouraging other traders to think about their own trading edges/or how they would go about developing one, not a forensic examination of my own - the full details of which have never been published.

I shall continue to contribute to this thread with regards to it's original purpose.

G/L

 

[bedsit]

Excellent posts BBMAC.

It's a pitty I didn't attend.
I downloaded the presentation though.

Thanks for your effort.

 

[Dentalfloss]

bbmac...i said we should have made a webinar
after all,we all did work for channel 4 last saturday

 

[bbmac]

bbmac...i said we should have made a webinar
after all,we all did work for channel 4 last saturday

lol, Yes, maybe we missed a trick re ongoing royalty payments !?

 

[bbmac]

All patterns repeat

Another good example of one of the points I was talking about on Saturday.

Uk constuction pmi, like the manufacturing pmi surprises with a stronger # than forecast, knee-jerk market reaction is to buy £ (gbpusd,) but no immediate follow thru on the close of the 0930am 1min bullish thrust candle...price pulls back and a repeating hidden divergence based 1min re-entry set-up forms @@ a potential L-1min/HL - 5min potential rbs = the previous 5min swing hi x 2 zone confluence with 38.2% of that last 30min swing up, (not shown on pic below.) Look also where the 1min set-up develops in that last 5min bullish thrust (the 0930am 5min candle) I was making mention of that at the meeting on Saturday.

I wonder whether we'll get the same pattern on the Uk PMI services tomorrow ? Will that too surprise to the upside ? As always, time will tell.

G/L

 

[Black Swan]

erm..could it nor be more like this, headlines and figures come out, looks good, then analysts have a closer look and realise that it's not *that* good?

 

[bbmac]

erm..could it nor be more like this, headlines and figures come out, looks good, then analysts have a closer look and realise that it's not *that* good?

Lol, the analogy could continue

...then they decided it was good after all, the 1st dip was bought, then they thought hold on a minute on a closer closer look it isn't...sell it...and then....

It was a repeating technical pattern, so it actually doesn't matter what the fundamental thought process might have been.

G/L

 

[glyder]

erm..could it nor be more like this, headlines and figures come out, looks good, then analysts have a closer look and realise that it's not *that* good?

It may be but
the price has continued upwards again after a breather (and still is).
The analysts changed their mind again!!! They keep us guessing don't they ?

 

[Black Swan]

Lol, the analogy could continue

...then they decided it was good after all, the 1st dip was bought, then they thought hold on a minute on a closer closer look it isn't...sell it...and then....

It was a repeating technical pattern, so it actually doesn't matter what the fundamental thought process might have been.

G/L

Phew...glad to hear you don't think indicators and technicals 'drive the market'...had me worried for a minute there..

 

[Black Swan]

It may be but
the price has continued upwards again after a breather (and still is).
The analysts changed their mind again!!! They keep us guessing don't they ?

well imo this small news event is not the fundamental reason cable moved from midday Monday and has continued the smooth ride upwards.

 

[glyder]

well imo this small news event is not the fundamental reason cable moved from midday Monday and has continued the smooth ride upwards.

I agree. One piece of a bigger picture of confluencing fundies.

 

[bbmac]

Phew...glad to hear you don't think indicators and technicals 'drive the market'...had me worried for a minute there..

The question was, given the market's reaction to the data, that broadly replicated the reaction to yesterday's manuf pmi data, as shown in the knee-jerk price action, and given that it was an uptrend, was it raesonable to assume a greater probability of a buy the dip play than not ? (a classic sell the first hi-buy the first dip new/data play) If the answer was yes, how do we time our entry into that...with a repeating tech pattern should one develop perhaps ?

Yesterday the buy the first pullback (on 1min) didn't result in a with trend follow thru, price pulled back more and consolidated before this happened.

 

[bbmac]

well imo this small news event is not the fundamental reason cable moved from midday Monday and has continued the smooth ride upwards.

I agree but these 'small new events' add to and are to some extent the market's immediate measure of the overall fundie/global macro environment and the market can react to them...

G/L

 

[DionysusToast]

erm..could it nor be more like this, headlines and figures come out, looks good, then analysts have a closer look and realise that it's not *that* good?

Nope - nobody is crunching numbers in the way you describe.

No-one is calculating 'real' 'value' - there is no value - only last traded price.

Speculators are trying to outguess the next set of speculators to enter the market based on what existing speculators have done. Some of the next set of speculators will be people already in the market. Some will be people entering for the first time - the 'third hand' so to speak.

The only question remains is what percentage of the forex market is speculators trading based on technical factors (and therefore adding to confluence) and how much is trade/tourism driven.

 

[bbmac]

Triple regular immediate (seperate peak) bearish divergence from price

Just came back to desk to see if there was any volatility created by release of the U.s ADP report and as nothing doing thought I would post the pics below. The fall from the current daily hi was well highlighted with occurance of triple bearish divergence on the 1min supported by double on the 5min...

Ie: On two consecutive legs up to new highs on 1min the bearish divergence was siganlling that the price momentum may have been less than that to the first Hi, and on the last leg up on 5min the momentum may have been than the run up to the last Hi on that t/f. Triple regular immediate (seperate peak) bearish divergence doesn't occur every day and can be a good tech signal of waning divergence at that point in the uptrend.

The pullback off the highs has reached a pullback lo currently at the 61.8% of the last 1hr swing up 6150-6229 respectively.

G/L

 

[Black Swan]

Nope - nobody is crunching numbers in the way you describe.

No-one is calculating 'real' 'value' - there is no value - only last traded price.

Speculators are trying to outguess the next set of speculators to enter the market based on what existing speculators have done. Some of the next set of speculators will be people already in the market. Some will be people entering for the first time - the 'third hand' so to speak.

The only question remains is what percentage of the forex market is speculators trading based on technical factors (and therefore adding to confluence) and how much is trade/tourism driven.

LOL, that was a pretty big statement considering I only asked a simple Q..

 

[bbmac]

Illustration of 2 important points in the presentation

This morning's price action and resultant full set-ups have provided an opportunity to illustrate 2 x points I made on Saturday just gone.


Firstly, for those who were at the meeting on Saturday last they may remember me talking about 'extreme divergence' in relation to boll bands and the 20/2 bol band in particular...a good example of that this morning on 5min where a whol reversal candle closed outside the 20bol (similarly 15min closed the same) @ the potential res = 76.4% 6876-4229 and Monthly R1 pivot...entry timed as the reg div based set-up on 1min.

5min is here

1min is here

Secondly,Then an exception that proves the rule (helped by knee-jerk data react,) a 5min hidden based div re-entry set-up @ the previous 1hr swing hi x 2 zone confluence with 38.2% 6126 - the then current daily hi and 61.8% of the last 1hr swing up 6175 to same then current daily hi, setting up at a potential 5min LL/30min potential HL.

The 5min set-up is here

The potential rbs on 1hr is here (fibs not shown.)

You might recall I was saying that I would be 'wary' if such a set-up developed at a LL on the t/f it set-up on, well I did have a go at it based on the confluence of the potential rbs/supp but came out at b/e as it was going nowhere.

Then, (always lol) a big bull thrust up and like y/day pmi data (services) must have leaked or a big romour ? as market racted in a similar way ahead of the official release.. (is it his data that is sponsered and the subscribers get an advance release ? Cant remember !) Anyways a good momentum entry on close of that prefect 0827 1min bull thrust candle .

I closed out the trade just before data, in case this pre-data reaction was a big head fake...Data comes in above last month's # and like the other 2 x pmi's this week, well above forecast, but there is no real trigger to get involed as the knee-jerk momentum seems to have come come before the data.

This just left the 'sell the first hi-buy the first pullback' favoured data/news play...and as price entered the previous 4hr/daily/weekly swing hi zone leading up to that 6297 swing hi, a Decent 1min regular divergence based reversal set-up supported by an unvalidated set-up on the 5min, see pic below....

I missed the set-up as was away from desk...I wouldn't be surprised if there wasn't more supply in that previous swing hi zone leading up to 6297, with Daily R2 in there too. Price on this pairing has travelled 142% of it's 20week average pip range, so far this week with U.s NFP still to come !

G/L

 

[trader_dante]

BBMAC, you're such a legend dude. I love the way you black out parts of your explanation.

Incidentally there might be a great setup in Cable today. Price has rallied into the 1.6269 level which I have had on my charts for a long time now.

I am now waiting to see if I get my high probability setup to get short which will be a **** or a ****.

 

[bbmac]

BBMAC, you're such a legend dude. I love the way you black out parts of your explanation.

Incidentally there might be a great setup in Cable today. Price has rallied into the 1.6269 level which I have had on my charts for a long time now.

I am now waiting to see if I get my high probability setup to get short which will be a **** or a ****.

Lol, yes they are censored as unsuitable for traders' sensibilities, as they involve indicators !!

G/L with your set-up....that swing to 6297 is certainly an obvious prevsious swing hi extending to weekly...above it another on the weekly staring around the 76.4% of the 7077-4229 swing.

 

[DionysusToast]

BBMac - just out of interest - why do you black out some of the explanation.

Is there an audience for these pics somewhere that gets to see the uncensored version?