Revisiting 'Price Action'

[barjon]

Right, Split. This is how I see it, I know always MUCH easier in hindsight:

There's more entries there even just taking it on this chart than I've listed, more aparently profitable than not (whether they actually were I don't know), short entry number one straight after the green momentum bar, but it had made a base before coming back followed by the upward momentum, the market was showing its hand with an evident supply zone. I wouldn't have taken any though as there just isn't the range between supply and demand here for me. 2nd long entry playing on this chart only is the probable stop out as it spikes through the entire supply level, following this a short MAY fall through the level (in this case it did) as price has traded all the way through the level before coming back but it's a much riskier play, for us to know a level has truly gone price needs to go through it and close i.e. it's well and truly broken...so given that and if it isn't going to fall through but come back again the potential reward isn't there in this instance. Which leads on to something else I've not shown yet but we all know about and see all the time ...flips and just what is the first pullback...hmm???

mmm, you might be right but your circled bit is reflective of the non-farms news reaction on the dow and not reflective of "true" supply and demand so far as ftse is concerned. The clue about that is in the degree to which ftse paralleled moves in the dow.

jon

 

[Splitlink]

I had a difficiult morning, i can see that!

As it was, I made 15 points on two trades, one of which which closed at BE.

I've done worse. I, actually, lose money some days!

 

[nunrgguy]

mmm, you might be right but your circled bit is reflective of the non-farms news reaction on the dow and not reflective of "true" supply and demand so far as ftse is concerned. The clue about that is in the degree to which ftse paralleled moves in the dow.

jon

Yeah the circled bit is not being very friendly is it? : That's Split's from b4: scalpers paradise, possibly. The activity going on in the circle is as you say probably reaction to the news but until the two areas of s/d are broken and there are either no more buyers or no more sellers at that price, price isn't going anywhere. Price moved between those two levels until...well you know.

Illusatred s/d areas determined from the momentum breakouts before the chop, and in both instances the area to which price immediately retraces and where it trades sideways isn't a massive surprise.

Like a lot of people when trading FX when NFP comes out, unless I'm already in a longer term position I'm out, certainly not looking for an entry, tried it more than once, didn't like it:cheesy:

What I don't know from the 30min chart is where this lies in the overall scheme of things. Discounting the news though as I say unless I was just viewing this as a scalp, which is do-able, the room for manouver between perceived supply and demand just isnt there. I'd be looking for a 'free space' of AT LEAST 3:1 between areas.

Pocket of supply, very close to pocket of demand, we don't know exactly what's going to happen but there's likely to be a battle between the two before price breaks and unless we've got those small TF entries down we're actually making the mistake of going long into supply and short into demand. Two narrow pockets situated much further apart, now that's going to be much much nicer.

 

[Splitlink]

What I have to decide is what is not worth entering for and what is. Because I never know that until after the event and provided that my risk is small, I am prepared to take some chances because my opinion is that, between 0800 and 1630, prices are random. The fact that there was a non-farm prices spike is neither here nor there. It happened and I got stopped out. I re-entered and I made 15 points. Why did I re-enter long? Because I was hoping for a breakout on the up side but, only by looking at the chart, it was clear to me that the trend was down so I closed the trade, which I should have done before the spike instead of putting my stop at BE-

 

[nunrgguy]

Right.
May as well get into levels. Supply and demand, support and resistance (yawn yawn yawn):whistling

It's pretty much an irrefutable fact that what moves any market is supply and demand. Go on, deny it! What make price move up? More people WANTING to buy than sell AT THAT PRICE (or looking at it another way, more orders at that price or more size of orders at that price than available to fill). What makes it move down?

Now what drives that WANT doesn't really matter. Do we care if it's a reaction to the news/market sentiment etc etc etc. No we don't. It doesn't matter what's driving it, ultimately it's down to supply and demand. How often do we see the market drop like a stone on apparent good news? (funny that eh??). We can spend years analysing why price did what it did but do we need to know? Do we care? What made the market move? News? Did news put in an order for 3 billion dollars worth of crude at $95.5?

If we see price not moving much for a while it means the market is in equilibrium, there's enough sell liquidity in the market at the price to match buying WANT and vice versa. If price then rapidly moves from that area with decent momentum it shows an imbalance of supply and demand at that price (if price went up rapidly, we know that from an area, putting it simply, no one was willing to sell at that price any more, pushing price up). When price gets back to that area we need to be on the ball and be ready to react to the market. Traders on trading desks know EXACTLY where the orders are/were. The best we can get with a chart is looking for these areas of imbalance. Do they always work? No! We need more to trade off than a price area alone. Are price areas from a long time ago relevant? If price blew through the area previously then more than likely not. - the more times price reaches an area the weaker it gets. Is a price level on the chart from 5 years ago relevant? For me? Probably no, only for the fact that people know what happened back then and may react to it. Will the real market movers react to it today..it's anyones guess. Watch for market momentum and trade accordingly.

The best material illustrating this in a concise and understandable way for everyone is the Sam Seiden stuff and if you're following this I recommend you watch his free videos (I'll post some links when I find them). They get EXTREMELY repetitive but watch them all. The repetition will help hammer it into your skull and you will find little nuggets in each video to take something from.

OK

Some charts to follow. Something I'm waiting for.

 

[nunrgguy]

EURUSD

So on another forum there are lots of people of the view that 'trend' is up. BUY BUY BUY...I don't think there are many traders on that board who hold for weeks...
Would anyone in their right mind be buying right now? Who buys into resistance and sells into support...dumb retail traders like you and me?

What do we have? EU right in a supply area. We've seen a stop and reverse, but yet have to see downward momentum (it's starting on h1 but for me personally that's not enough). We also have USDX in a demand area. Is the pin bar we see enough to trade offffffff. Some would say yes, I say no, wait for the momentum then get in on the spike or pullback, drilling down all the way to 15 or 5 min to finally get in. Where might price go afterwards...we don't know for sure but there are clues.

You see the problem with trend is that one man's trend is another man's top/bottom fishing. Trader A who trades a 4 hour chart (and we know you don't trade charts by now don't we?) says trend is up...I want to buy when price pulls back to X. Trader B who trades a 15 minute chart, when price reaches X says...are you insane? Trend is down you're just bottom fishing etc etc etc. It all depends on your point of view.

Trend following is only any good once you are already in a trade.

 

[nunrgguy]

Google is my friend:

Wow, there's a lot more videos than when I watched a few.
http://www.fxstreet.com/search/contributors/authors/author.aspx?id=5766b88a-1a31-4102-8221-e9bf77216d2f

You're going to need some time as they're all about an hour long

 

[volatiliti]

Fact-: 95% of forex traders lose their roll .
The majority of these "losers" relied on technical analysis .
They actually believed that they could predict the future just like a tarot card reader .

Fact-: Forex is a 50/50 proposition (minus the spread ,swap and rollover) .

 

[mb325]

Fact-: 95% of forex traders lose their roll .
The majority of these "losers" relied on technical analysis .
They actually believed that they could predict the future just like a tarot card reader .

Fact-: Forex is a 50/50 proposition (minus the spread ,swap and rollover) .

tough week eh?