forking mad

[forker]

so i have seen a lot of banter about the lack of content and decided to do something out of character. let me be crystal clear from the start, i am not doing this for any reason other than providing a window into the way i do things. Over the years i have handed out my fair share of banter and its perhaps time to give something back.
My chosen market is forex from which i am able to supplement several streams of income to provide a comfortable lifestyle. To be honest, while i enjoy trading, i don't ever wish to engage with trading on a level that i rely on profit for my sole income.I don't ever what to be in the sh!tter without a plunger if something were to go horribly wrong.
The journey i have undertaken to get to this level is irrelevant and it is my strong belief that my journey is of little value to anyone else. We must all walk this road alone and my experience of using other peoples ideas is disastrous and a waste of time. that being said lets continue....

Everyone talks about an edge and while its definition is arbitrary, my edge is a combination of several elements including:

-light weight fundamental analysis
-keeping an eye on other markets
-a basket of setups


I don't care for sitting in front of screen for hours on end which is why I focus on 4 currency pairs and only participate on the 4 hour and occasionally the daily time frame. I also don't care for xmas tree charts, that is charts with indicators- because there is nothing an indicator can tell me that i can't see in price.

my day starts out with about 30 minutes of reviewing headline market news and noting any economical releases for the day. This sets up a baseline picture of what is happening. I don't read into details because its of no value since i am only looking for the mood over the last session and the mood for the current session. I then go onto looking at other markets. This is vital because forex plays an intermediary role where money movement is concerned. Follow the money is the term typically used. Once i have the general feel of the market i look at some charts which can take anything from 1 to 3 minutes depending on what's happening. my eyes are so well tuned to opportunities that it doesn't take long to shift through 4 currency pairs. If nothing catches my eye then i wont look at the charts until the next day.
i think its important that i spent a few lines explaining why its important to follow other markets. If a particular market is moving strong then there is going to be movement of money both domestic and international. for example if Europe's main markets are very bullish and the UK's is sluggish or even bearish then money is likely going to move from sterling to euro or sterling to dollar or dollar to euro. i hope this makes sense.

a lot of people are going to be surprised to know that my technical analysis is on charts that have absolutely nothing on them. I used to have a handful of support lines but since i trade mostly on mobile nowadays where i cant draw anything i have come accustomed to analysing virgin charts. you'd be surprised at the clarity of your analysis by doing this.

i have several setups of which some are very common and others less so. I have names for them because it makes it easier to harden in the mind instead of just an anonymous image. I haven't included all my setups however these are my bread and butter.

the stinger:
categorised as the first pullback into an opposing swing. Works in ranges and is super at changing trends.

the flip-flop:
categorised as price reacting to a level,moving through that level,rejecting that level by moving back through the level and then testing that level. works great in ranges and catching reversals. in tight ranges adjust target accordingly.

the steam engine:
categorised as a continuation of a trend. it is distinctive by its higher high camel hump shape.

the missus:
categorised as a woman who changes her mind. its a variation of the flip-flop but quite often doesnt have those distinctive levels. by this is mean the entry zone can be as little as 2 candles or clearly visible. basically its a rejection of the level.

 

[Lord Flasheart]

Lovely to see it. Looks great to me,I have even less set ups. Learning that simple methods work and then just apply some easy MM skills and you are there.
why do you stick to so few markets, do you feel those patterns work better in just those markets?

 

[forker]

Hey flashy,

I'm very comfortable with fx and don't need other markets to supplement. I have setups that accommodate range and trending which keeps me involved throughout and by keeping things very simple I am always in control. Many years ago I had a go at ftse stocks but found it very time consuming and had my @rse handed to me. I think fx is one of those markets that provides sufficient opportunity while allowing simplicity.

 

[Liquid validity]

Hey flashy,

I'm very comfortable with fx and don't need other markets to supplement. I have setups that accommodate range and trending which keeps me involved throughout and by keeping things very simple I am always in control. Many years ago I had a go at ftse stocks but found it very time consuming and had my @rse handed to me. I think fx is one of those markets that provides sufficient opportunity while allowing simplicity.

Simplicity is vastly underrated

 

[forker]

Simplicity is vastly underrated

And so many overlook it.

 

[DionysusToast]

Ugly charts - I like them

 

[forker]

I only drew on them to show you nutters how I roll

 

[DionysusToast]

seriously - we see so many 'clean' charts with higher highs/higher lows, it's refreshing to see REAL charts with the sort of imperfect price action that is the norm.

kudos

 

[NVP]

excellent excellent Thread F.......one question on intermarket analysis

i think its important that i spent a few lines explaining why its important to follow other markets. If a particular market is moving strong then there is going to be movement of money both domestic and international. for example if Europe's main markets are very bullish and the UK's is sluggish or even bearish then money is likely going to move from sterling to euro or sterling to dollar or dollar to euro. i hope this makes sense.

Do you think that each Countries Stockmarkets are still isolated (globally) enough to justify the comments above ? ..........most Indices have a very Global feel to them these days regarding the earning sources of the big players so to me the differences in relative strength on the big indices are normally more around market hours and the gearing of the constituents ?

happy to be told different as this is very interesting stuff F

N

 

[forker]

Hi NVP,

I am convinced investment houses interconnect global markets. I have consulted for numerous investment banks and some hedge funds (data warehousing) where I have seen first hand how many of them implement a follow the sun model with their trading teams. I also consulted for ThomsonReuters who offer a closed circuit communications service where banks and investment houses engage in trading. A trader in NY can open a trade in Europe or Asia via a chat room. The they even developed bots that can relay orders. Technology and competition is removing boundaries between open markets. A classic case of this is can be seen if studying the crisis.

In terms of currencies, the more interconnected these markets are the better the flow of currency. If an investment house in the USA wants to buy into the European market they need to convert $ to €. Now I can't speak about correlations of markets as I only focus on money movement. That being said it's not like I can see transactions being placed. Experience tells me which currency to look at when there is something going on. Typically I focus on $ pairs although I do trade €/£

 

[rsh01]

hi forker, good thread, thanks for sharing.

what are the 4 ccy pairs? you allude to looking at correlation, so you're only ever putting one trade on at a time?

the steam engine chart 3 - theres a smaller hump just before, why is this not valid? not enough time/space?

a lot of your pattern set ups have similarities to what i trade with derivations from supply & demand, always good to see. eg the stinger not far off a inv h&s; the flip flops on chart5 also inverted h&s and bottom buckets.

 

[forker]

hi forker, good thread, thanks for sharing.

what are the 4 ccy pairs? you allude to looking at correlation, so you're only ever putting one trade on at a time?

the steam engine chart 3 - theres a smaller hump just before, why is this not valid? not enough time/space?

a lot of your pattern set ups have similarities to what i trade with derivations from supply & demand, always good to see. eg the stinger not far off a inv h&s; the flip flops on chart5 also inverted h&s and bottom buckets.

Gbpusd, eurusd, usdjpy, eurgbp. I only take 1 to 2 trades a week (occasionally 3) and never double up. In other words I don't trade Gbpusd and eurusd long at the same time, I would trade for example short Gbpusd and long eurgbp at the same time however. I don't class that hump as valid on the steam train chart. That's a minor reaction to the level. There are 2 variations to the steam train. 1) a classic 3 hump 2) the 2 hump. Both variations require higher high or lower low. You want to catch them just after a breakout but avoid them when they are at extremes in trends or when there are clear levels visible (price flip) on the short term historic that price is likely going to react with.

 

[scose-no-doubt]

A man after my own heart :clover:

 

[forker]

a lot of your pattern set ups have similarities to what i trade with derivations from supply & demand, always good to see. eg the stinger not far off a inv h&s; the flip flops on chart5 also inverted h&s and bottom buckets.

I think it is good to understand the dynamics of what price is doing. I think a lot of traders give up on good techniques because they don't think of it in the context required. Take the flip-flop for example, on the surface it looks like inverted hsh but the shape isn't important. I trade flip-flops with only a few bars and by definition wouldn't be categorised as a hsh. The key is price reaction at these levels regardless of how much time has passed. I guess what I am trying to point out is that the shape isn't important

 

[rsh01]

The key is price reaction at these levels regardless of how much time has passed. I guess what I am trying to point out is that the shape isn't important

ok so you are looking all the way left (to next price action) regardless of time passed, wasnt too sure as you mentioned you do not draw lines and thought this cld be a hassle on a mobile.

yes i completely agree re your point about shape not being important - i mentioned the h&s cos it stood out in your examples, i did mention another pattern which doesnt depend on recent price action but will leave it there as its not my thread. these setups actually provided me with a logical picture as to why block orders may build up behind/in front of certain price levels - something which was v important in my progression.

with respect to the time passed though, i am still much more comfortable trading setups which are more recent (for H4 setup then circa <4 weeks), i do not understand why institutional orders would remain or get reentered say with your stinger example if price hasnt returned there months. i would appreciate if anyone can shed light on this.

 

[barjon]

............... i do not understand why institutional orders would remain or get reentered say with your stinger example if price hasnt returned there months. i would appreciate if anyone can shed light on this..........

maybe when institutions are building large positions it takes time and they take the opportunities when they arise in the "value" areas they have determined - although that's probably more appropriate to equities.

 

[rsh01]

maybe when institutions are building large positions it takes time and they take the opportunities when they arise in the "value" areas they have determined - although that's probably more appropriate to equities.

possibly. but reading gammajammers article on market participants and their activities, speculation is a small part (not sure with respect to vols traded) - which is where i guess they wld look for value as they have no time constraint apart from to make money before end of year/bonus day. and i wld have thought the speculators wld be following order flow as well as TA = so they wld make money front running without having to wait for price to hit a value area, though GJ doesnt talk about this so its all a guess!

equity flow transactions, market making, hedging (investments) appear to be the main activities, and i cannot see how these would generate large order blocks in price areas which may not come into play for potentially a long time.

 

[barjon]

possibly. but reading gammajammers article on market participants and their activities, speculation is a small part (not sure with respect to vols traded) - which is where i guess they wld look for value as they have no time constraint apart from to make money before end of year/bonus day. and i wld have thought the speculators wld be following order flow as well as TA = so they wld make money front running without having to wait for price to hit a value area, though GJ doesnt talk about this so its all a guess!

equity flow transactions, market making, hedging (investments) appear to be the main activities, and i cannot see how these would generate large order blocks in price areas which may not come into play for potentially a long time.

rsh

I don't trade forex - too fast and furious for me - and and really know virtually nothing about it. Like you, though, I'd guess that the vast bulk of business is the sort of thing gamma was describing and the sorts of things you mention, plus government interventions. Nonetheless a lot of that activity is perhaps likely at specific levels that trigger it.

To the extent that heavyweight speculation affects things - the Soros episode, for example - I would suppose that positions are built as opportunities arise at various "value" levels.

Maybe forker will explain it for us

 

[scose-no-doubt]

Forex is massive. I can't see why anyone would need to place block orders but I don't have a working knowledge. Also, consider that A LOT of forex transacting is done through swaps and forwards rather than spot. I'm not gonna go into the dog>/<tail wagging in terms of pricing as it's very circular and I don't have any answers. I do remember GJ saying hat sometimes it's dog wagging tail and sometimes teh other way around.

 

[Liquid validity]

rsh

I don't trade forex - too fast and furious for me - and and really know virtually nothing about it. Like you, though, I'd guess that the vast bulk of business is the sort of thing gamma was describing and the sorts of things you mention, plus government interventions. Nonetheless a lot of that activity is perhaps likely at specific levels that trigger it.

To the extent that heavyweight speculation affects things - the Soros episode, for example - I would suppose that positions are built as opportunities arise at various "value" levels.

Maybe forker will explain it for us

Yeah some of it, EURCHF 1.20 SNB intervention as a prime example.