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edacsac 08-26-2008 04:07 PM

I'm enjoying this thread so far. The phsycological aspects you talk about really get me thinking, but I'm confused about your chart example for a couple of reasons. Your position entry looks like a fairy tale short trade. When you ask "do you see the entry", if the overall trend is going down I could say yes, although with a spike that large I might not do anything for a couple more candles. On the next chart I might observe that price has fabulously broken resistance. But until I see the next candle, I wouldn't've called it a short entry. Plus, both conclusions are based on interpretations.

Realistically I would be viewing the action sometime before or after your entry candle (more likely after), and would at least look for signs from an MA cross or a reliable candlestick pattern. Yet another interpretation.

Thats huge movement for a 5M chart!

TheRumpledOne 08-26-2008 08:56 PM

Quote:

Originally Posted by edacsac (Post 64605)
I'm enjoying this thread so far. The phsycological aspects you talk about really get me thinking, but I'm confused about your chart example for a couple of reasons. Your position entry looks like a fairy tale short trade. When you ask "do you see the entry", if the overall trend is going down I could say yes, although with a spike that large I might not do anything for a couple more candles. On the next chart I might observe that price has fabulously broken resistance. But until I see the next candle, I wouldn't've called it a short entry. Plus, both conclusions are based on interpretations.

Realistically I would be viewing the action sometime before or after your entry candle (more likely after), and would at least look for signs from an MA cross or a reliable candlestick pattern. Yet another interpretation.

Thats huge movement for a 5M chart!

http://i38.tinypic.com/2iw6ex1.gif

I see you like Yoda.

What makes you say "that's a huge movement for a 5M chart"?

Do you think PRICE knows what a chart is?

Do you know the average range of the GBPJPY for M5, M15, H1?

What is the reason you want a MOVING AVERAGE CROSS to signal an entry when we all know those entries are LATE?!?

You see the support?

You see the resistance?

Do you see the last two 20 pip scalp opportunities from the go Short and go Long lines?

Now, FEEL THE FORCE!!

TO BE CONTINUED...

pintodave 08-26-2008 11:13 PM

TheRumpledOne, I am new here and thank you for your thought provoking posts. As I was reading the thread, I was thinking to myself, "Is this Zen and the art of Forex?" Then the zen student story was post #20 :)

I have a lot of studying to do, but I will be keeping up with this thread with great interest.

Thanks Again for your interest in sharing,
David

daedalus 08-26-2008 11:40 PM

TRO - Ok, so what i'm seeing is this.... basing entries solely off of S/R lines that you would wait for a move to breach into a new S/R area and contract and close back above/below prior S/R from previous swings, thus not on establishing a signal, but clearly defining the Risk on the trade prior to the entry.

Am i anywhere close? :confused:

edacsac 08-27-2008 01:02 AM

Quote:

Originally Posted by TheRumpledOne (Post 64660)

I see you like Yoda.

I do. Yoda personifies outstanding wisdom.

Quote:

What makes you say "that's a huge movement for a 5M chart"?
USD/JPY has been my favorite pair based on the trading hours that are best for me, and on a 5 minute chart around 5 pips is the norm for USD/JPY. I guess I've been watching the wrong pairs all along.

Quote:

Do you think PRICE knows what a chart is?
No.

Quote:

Do you know the average range of the GBPJPY for M5, M15, H1?
Since I started learning, I've never considered a GBP pair. All I can say is wow to the movement thats going on with GBP/JPY.

Quote:

What is the reason you want a MOVING AVERAGE CROSS to signal an entry when we all know those entries are LATE?!?
I know they are late, but on larger movements an MA cross id pretty solid to guide you in and out even if it's a couple of candles behind. MA crosses would be a waste of energy on the chart you've posted. If I look at USD/JPY at 5M, 15M or even 30M, MA crosses are the best I have. I wouldn't be able to make heads nor tails of support/resistance on a USD/JPY chart right now.

Quote:

You see the support?

You see the resistance?
On your chart I see your support and resistance lines. I just opened up a 5M for GBP/JPY and identifying support and resistance is like big blinking neon lights compared to the pairs I normally watch.

Quote:

Do you see the last two 20 pip scalp opportunities from the go Short and go Long lines?
I believe I do see some opportunities, but at a 9pip spread on GBP/JPY, are they still opportunities?.

Quote:

Now, FEEL THE FORCE!!

TO BE CONTINUED...

Is your strategy mostly ultra scalping? Can you count on price action like that all the time?

Thanks for this thread! It's nice to finally see support and resistance. I wouldn't even need to draw lines on the GBP/JPY 5M it's so obvious.

edacsac 08-27-2008 01:13 AM

A question about support and resistance: How far do you go back to determine usable support and resistance?

TheRumpledOne 08-27-2008 02:45 AM

Quote:

Originally Posted by pintodave (Post 64673)
TheRumpledOne, I am new here and thank you for your thought provoking posts. As I was reading the thread, I was thinking to myself, "Is this Zen and the art of Forex?" Then the zen student story was post #20 :)

I have a lot of studying to do, but I will be keeping up with this thread with great interest.

Thanks Again for your interest in sharing,
David

You're new here? WELCOME TO THE JUNGLE!

Careful what you study... your chart could wind up looking like spaghetti.. squiggly lines everywhere!!

I don't need or want squiggly lines at least no for trading.

The most important thing is to find what works for YOU.

FOCUS ON YOUR ACCOUNT AND YOUR TRADES.

TheRumpledOne 08-27-2008 02:49 AM

Quote:

Originally Posted by daedalus (Post 64674)
TRO - Ok, so what i'm seeing is this.... basing entries solely off of S/R lines that you would wait for a move to breach into a new S/R area and contract and close back above/below prior S/R from previous swings, thus not on establishing a signal, but clearly defining the Risk on the trade prior to the entry.

Am i anywhere close? :confused:

The S/R lines are not the entry trigger. They are the HEADS UP signal. The entry line is plotted on the chart.

Have I mentioned "breach", "previous swings", "contract"?? Don't complicate trading.

Price is price. Price either goes up or down. Your job as a trader is to recognize what price IS doing, NOT what it may do in the future because ANYTHING CAN HAPPEN!

TheRumpledOne 08-27-2008 03:03 AM

Quote:

Originally Posted by edacsac (Post 64681)
I do. Yoda personifies outstanding wisdom.



USD/JPY has been my favorite pair based on the trading hours that are best for me, and on a 5 minute chart around 5 pips is the norm for USD/JPY. I guess I've been watching the wrong pairs all along.



No.



Since I started learning, I've never considered a GBP pair. All I can say is wow to the movement thats going on with GBP/JPY.



I know they are late, but on larger movements an MA cross id pretty solid to guide you in and out even if it's a couple of candles behind. MA crosses would be a waste of energy on the chart you've posted. If I look at USD/JPY at 5M, 15M or even 30M, MA crosses are the best I have. I wouldn't be able to make heads nor tails of support/resistance on a USD/JPY chart right now.



On your chart I see your support and resistance lines. I just opened up a 5M for GBP/JPY and identifying support and resistance is like big blinking neon lights compared to the pairs I normally watch.



I believe I do see some opportunities, but at a 9pip spread on GBP/JPY, are they still opportunities?.



Is your strategy mostly ultra scalping? Can you count on price action like that all the time?

Thanks for this thread! It's nice to finally see support and resistance. I wouldn't even need to draw lines on the GBP/JPY 5M it's so obvious.

http://i37.tinypic.com/wl1v20.gif

You need to UNLEARN a few things.

You talk about THE SPREAD. THERE IS NO FIXED SPREAD IN FOREX!! The spread changes during the day.

I keep repeating it because anyone who trades with a FIXED SPREAD BANDIT, I mean broker, is giving their money away. You need to trade with an ECN.

I would suggest you study FOREX and how it works then you'll know what I am talking about.

I used to trade the USDJPY all the time. I can see S/R on the chart. What's the reason you can't?

"Ultra scalping"? What's that? I just take what I can when I can.

Price action is always there. Sometimes is a little more volatile than others.

TheRumpledOne 08-27-2008 03:06 AM

Quote:

Originally Posted by edacsac (Post 64682)
A question about support and resistance: How far do you go back to determine usable support and resistance?

http://i36.tinypic.com/eqqtcy.gif

The SR RR indicator ( that plots the S/R and entry trigger lines ) defaults to 21 bars. Why 21? Why not? There are no MAGIC NUMBERS. It could be 20 or 22. Use whatever works. Sometimes you just have to test different things until you find something that works for you.

On the other hand, if you apply a STATISTICAL ANALYSIS to price action, you'll know what the "best" numbers are. :D

Look at the H1 NB SR(240) gauge in the chart on the right side.

The number is orange is the current price. The number "1" to the right is the number of times that price was a previous candle's high or low over the last 240 H1 bars. Since most of us draw support at candle lows and resistance at candle highs wouldn't it be nice to know what you are at or near those levels?

The numbers in red above are the next 5 prices and are potential resistance.

The numbers in blue below are the next 5 prices and are potential support.

It's like have a real time radar screen for S/R. I don't need to draw the lines anymore.

Sweet Pip 08-27-2008 03:29 AM

Hey TRO,
I realize you're using a different type of broker but you probably know anyways about market orders vs pending orders? From what I understand for example, a sell limit, the price has to go up for it to trigger a sell order? Just making sure I understand them, or even if I'd ever want to use them. Do you use them?

Thanks :)

TheRumpledOne 08-27-2008 03:36 AM

Quote:

Originally Posted by Sweet Pip (Post 64699)
Hey TRO,
I realize you're using a different type of broker but you probably know anyways about market orders vs pending orders? From what I understand for example, a sell limit, the price has to go up for it to trigger a sell order? Just making sure I understand them, or even if I'd ever want to use them. Do you use them?

Thanks :)

http://i38.tinypic.com/96j11t.jpg

By now, most people know I use MB Trading. I am not allowed to post the link anymore.

You will never see a market order because it gets filled IMMEDIATELY at the prevailing market price. Limit orders are stacked up on LEVEL II MARKET DEPTH.

Sweet Pip 08-27-2008 03:43 AM

Quote:

Originally Posted by TheRumpledOne (Post 64702)
http://i38.tinypic.com/96j11t.jpg

By now, most people know I use MB Trading. I am not allowed to post the link anymore.

You will never see a market order because it gets filled IMMEDIATELY at the prevailing market price. Limit orders are stacked up on LEVEL II MARKET DEPTH.

Ok, sorry for the density, so for example, the price is basically going down, so what you are doing is putting in a pending sell limit order in while it's going down, and wait for it to go up and hopefully trigger it?...and then wait for it to continue back down again?

TheRumpledOne 08-27-2008 05:14 AM

Quote:

Originally Posted by Sweet Pip (Post 64704)
Ok, sorry for the density, so for example, the price is basically going down, so what you are doing is putting in a pending sell limit order in while it's going down, and wait for it to go up and hopefully trigger it?...and then wait for it to continue back down again?


Not exactly.

No "hopefully" about it.

I put in my LIMIT SELL order at the price I want to sell.

VulcanClassic 08-27-2008 06:23 AM

Quote:

Originally Posted by Sweet Pip (Post 64699)
Hey TRO,
I realize you're using a different type of broker but you probably know anyways about market orders vs pending orders? From what I understand for example, a sell limit, the price has to go up for it to trigger a sell order? Just making sure I understand them, or even if I'd ever want to use them. Do you use them?

Thanks :)

Sweetpip,

I've had lengthy live chat discussions with MBT about Rumples claims of buy at bid and selling at ask. I've had them read the posts and comment and there is no magic order that allows this. They assure me they work just like any other broker. For a limit order to be triggered, price DOES have to hit order line to fill (at your price or better). They work like you're accustomed to.

daedalus 08-27-2008 11:18 AM

I use EFX as well, and basically what hes saying is that unlike other FX brokers you can get in at the bid and out at the ask (depending on the prevailing market conditions and orders used). When i was with gain i was always in at the ask and out at the bid, eating up my chunk of profit. With EFX i'm able to limit order into markets, and get out at the ask in certain conditions maximizing that profit in the middle.

Basically, MB isn't a bucket shop, and as has been discussed in the broker review forum 1,000,000x's before, they are a great broker to use.

TheRumpledOne 08-27-2008 11:54 AM

Quote:

Originally Posted by VulcanClassic (Post 64719)
Sweetpip,

I've had lengthy live chat discussions with MBT about Rumples claims of buy at bid and selling at ask. I've had them read the posts and comment and there is no magic order that allows this. They assure me they work just like any other broker. For a limit order to be triggered, price DOES have to hit order line to fill (at your price or better). They work like you're accustomed to.

What is the name of the person you spoke with at MBT?

You really DO NOT UNDERSTAND!

Yes, Price DOES have to hit your order. If you are long, someone has to BUY from you. But the bid does NOT have to move up. They can enter a MARKET BUY ORDER on the ECN and you will be filled if yours is the best off.

TheRumpledOne 08-27-2008 11:57 AM

Quote:

Originally Posted by daedalus (Post 64760)
I use EFX as well, and basically what hes saying is that unlike other FX brokers you can get in at the bid and out at the ask (depending on the prevailing market conditions and orders used). When i was with gain i was always in at the ask and out at the bid, eating up my chunk of profit. With EFX i'm able to limit order into markets, and get out at the ask in certain conditions maximizing that profit in the middle.

Basically, MB isn't a bucket shop, and as has been discussed in the broker review forum 1,000,000x's before, they are a great broker to use.

Thanks for posting.

Finally, someone who KNOWS what they are talking about!!

edacsac 08-27-2008 12:35 PM

I wish I wouldn't have mentioned spread in my last reply. I would hate for such a potentially educational thread to wander. I would also rather not go back to evaluating brokers again, thinking I've made a poor choice. That was way too time consuming, when I could have been learning to trade.

When you mention "studyiing forex", I'm guessing your talking about how trades are made on the broker end, the idea of sellers needing buyers, etc. I've been learning more about candlesticks, indicators, money management, etc. I'm figuring this whole learning process is going to take some time to gain well rounded forex knowledge.

Last night I watched GBP/JPY for a bit. I noticed on couple of occasions, long candlesticks touching resistance, then another long candlestick reversing into profit. Doing thing my old way, I'd wait for that next candle to close for confirmation, so even though I was successful with every trade I made on GBP/JPY last night, if I would have placed an order when price touched support/resistance I could have made even more. Is this the idea your trying to present?

This morning I thought I'd try GBP/USD, figuring the market hours for that pair should be vigorous. Not quite the same action, but watching the 5M chart is still more active and interesting. I'm not so successful though. Since reading this thread and seeing the GBP/JPY action, I started ignoring trend. Last nights GPB/JPY chart didn't care about trend. This mornings GBP/USD chart cares very much about trend. I've been faked out twice so far. Once on a pretty solid reversal pattern. I'm not sure quite what I've learned this morning.

Anxiously awaiting more goodness form this thread!

TheRumpledOne 08-27-2008 12:50 PM

http://i34.tinypic.com/ftzyxj.gif

Trend?

Price is either going up or down...

If you are scalping you find the immediate "trend".

Remember, price moves in "waves".. up, down, up, down, ....

You want to ride the waves.

Correctly identifying which way the price is moving results in profits.

And it has nothing to do with what time frame you are looking at because PRICE IS THE SAME on ALL time frames.

If you are NOT looking at a 1 tick chart, then you are NOT looking at the actual movement of the market.

edacsac 08-27-2008 01:40 PM

Your really one of the few here who doesn't say that anything under 20M or 15M is noise.

Sweet Pip 08-27-2008 01:50 PM

Quote:

Originally Posted by edacsac (Post 64797)
Your really one of the few here who doesn't say that anything under 20M or 15M is noise.

Well, correct me if I'm wrong, but it seems that's what scalping is...trading the noise for short quick profits. :) Longer term traders like to filter it out if possible.

TheRumpledOne 08-27-2008 02:10 PM

Quote:

Originally Posted by edacsac (Post 64797)
Your really one of the few here who doesn't say that anything under 20M or 15M is noise.

http://i34.tinypic.com/2n0ixdf.gif

What is noise to one is music to another!

See the 1-tick chart in the bottom window. That streams by as trades are being executed while the M15 candle goes up and down.

The 1-tick chart is the REAL MARKET. The M15 candle is just a representation of what occurred during 2 points in time.

DON'T BE FOOLED.

Sweet Pip 08-27-2008 02:38 PM

Also, would it be correct to say, and my thoughts are still a bit muddled on the matter, that limit orders won't be of any advantage with a retail broker as they are with an ECN?

Sweet Pip 08-27-2008 02:42 PM

Quote:

Originally Posted by TheRumpledOne (Post 64803)
http://i34.tinypic.com/2n0ixdf.gif

The 1-tick chart is the REAL MARKET. The M15 candle is just a representation of what occurred during 2 points in time.

DON'T BE FOOLED.

Ok, so if using a retail broker's price feed, the ticks may or may not be the "Real Market" because they can falsely lag or spike the prices when they are "hunting"?

TheRumpledOne 08-27-2008 02:43 PM

Quote:

Originally Posted by Sweet Pip (Post 64807)
Also, would it be correct to say, and my thoughts are still a bit muddled on the matter, that limit orders won't be of any advantage with a retail broker as they are with an ECN?

Limit orders mean you will be filled AT your LIMIT price ( or better on an ECN )

Market orders mean you are filled IMMEDIATELY ( unless the Fixed Spread Bandits cheat you i.e. "slippage" ) at the prevailing market price.

IMHO, the only time one should enter a market order is when they are panicking because market orders are for suckers who don't know any better.

TheRumpledOne 08-27-2008 02:47 PM

Quote:

Originally Posted by Sweet Pip (Post 64809)
Ok, so if using a retail broker's price feed, the ticks may or may not be the "Real Market" because they can falsely lag or spike the prices when they are "hunting"?

What you wrote isn't really true.

FOREX is NOT a consolidated market like the stock market.

Different brokers use different banks or liquidity providers so prices may vary.

So unless your broker's feed is delayed, it should be real time for them.

FIXED SPREAD BANDITS (FSB), I mean brokers, do NOT have to hunt for stops. They already know exactly where they are. That's just another market myth.

If one FSB moves their market too far, someone will ARBITRAGE their (_*_)s!!

TheRumpledOne 08-27-2008 03:28 PM

http://i38.tinypic.com/2dhhauv.gif

Look at the RISK / REWARD.

Would you trade now?

edacsac 08-27-2008 03:58 PM

At the very last candle or the very next candle? Even with an almost 1:3 risk/reward, I wouldn't. But that is because the last candle is telling me the downward push is not done yet. So it' not time for a buy and it's too late for a sell.

Sweet Pip 08-27-2008 04:27 PM

Quote:

Originally Posted by edacsac (Post 64831)
At the very last candle or the very next candle? Even with an almost 1:3 risk/reward, I wouldn't. But that is because the last candle is telling me the downward push is not done yet. So it' not time for a buy and it's too late for a sell.

Sounds about right to me...I wouldn't either...the range is too narrow?

TheRumpledOne 08-27-2008 04:37 PM

http://i34.tinypic.com/2z4ae6a.gif

How about now?

Would you enter a trade?

Sweet Pip 08-27-2008 04:54 PM

Hmmm...I'm thinking perhaps setting a buy limit for 200.93 ?

TheRumpledOne 08-27-2008 04:57 PM

What day of the week is today?

Sweet Pip 08-27-2008 05:00 PM

Quote:

Originally Posted by TheRumpledOne (Post 64848)
What day of the week is today?

okay....Wednesday...

TheRumpledOne 08-27-2008 05:14 PM

Quote:

Originally Posted by Sweet Pip (Post 64852)
okay....Wednesday...

What usually happens on Wednesday?

Sweet Pip 08-27-2008 05:20 PM

Quote:

Originally Posted by TheRumpledOne (Post 64856)
What usually happens on Wednesday?

Triple interest day?

TheRumpledOne 08-27-2008 05:54 PM

Quote:

Originally Posted by Sweet Pip (Post 64859)
Triple interest day?

I said USUALLY, NOT ALWAYS.

It is ALWAYS triple interest and the shorts USUALLY cover right before rollover.

But they didn't today!

That's the reason you have to focus on what is happening instead of what you think or believe will happen.

TO BE CONTINUED...

Sweet Pip 08-27-2008 05:55 PM

Back to limit orders...I found this explanation of when/why one would consider using them:


1. Limit orders are commonly used to enter a market when you fade breakouts.

You fade a breakout when you don't expect the currency price to break successfully past a resistance or a support level. In other words, you expect that the currency price will bounce off the resistance to go lower, or bounce off the support to go higher.

Sweet Pip 08-27-2008 06:06 PM

Quote:

Originally Posted by TheRumpledOne (Post 64868)
I said USUALLY, NOT ALWAYS.

It is ALWAYS triple interest and the shorts USUALLY cover right before rollover.

But they didn't today!

That's the reason you have to focus on what is happening instead of what you think or believe will happen.

TO BE CONTINUED...

So when you say shorts cover, that means they "close" (buy back) their positions to avoid negative interest, and this drives price up? But price didn't go up so that means they didn't today for whatever reason.

Sorry, I don't have access to any charts here at work, so I can't see what's happening. :o

TheRumpledOne 08-27-2008 06:14 PM

Quote:

Originally Posted by Sweet Pip (Post 64875)
So when you say shorts cover, that means they "close" (buy back) their positions to avoid negative interest, and this drives price up? But price didn't go up so that means they didn't today for whatever reason.

Sorry, I don't have access to any charts here at work, so I can't see what's happening. :o

Yes, you COVER a SHORT and you SELL a LONG.

Yes, usually the shorts cover right before rollover and you can take advantage of that occurence.


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