Odd Enhancers - Sam Seiden

[MeiHua]

PROBABILITY ENHANCER
Score
Max Score
Strength of the Move

Strength of the move (max 2): How did prices leave the level: strong fashion, or a more gradual move away from the level. Gives clues to supply and demand imbalance at the level. Strongest turn in price level is where supply and demand is most out of balance. So our quest is to look for price levels where supply and demand is most out of balance. The biggest clue in how in balance or out of balance prices are at a level, is how quickly they leave. The more quickly they move, the more out of balance they are.

2
Reward/Risk

1. How far did prices rally up from demand level before coming back to it. That is initial profit margin.

2. If buying at support or demand, where is the nearest area of supply. If risking 20 cents on trade, is nearest supply level 60 cents or farther away? If not, we are not interested in the trade.

Support and demand levels all around, we only want to take the best.

2
Big Picture
Looking at daily charts for big picture. Most of Sam’s trades are intraday, but he still looks at daily chart for big picture. Big picture is important to day trader for two reasons:

1. big picture trend up or down - determines which side we want to be on

2. Where are big picture support and demand levels? We dont want to short right above a demand level. We only know that from the big picture.
   If we are taking shorter time frame short positions in context of a big down trend, then this gets a 2. If we are shorting during a bigger picture uptrend, and we are close to big picture support, it is a 0 or a 1.

2
Retracements / Tests
We may look at this different than conventional wisdom. Once prices have left a level, (example of picture explanations), sell zone with a lot of candles - we want to enter on the first retracement, it is highest probability entry. First time entry is a 2. second time is a 1. Third time is a 0.

This is all just motion into mass. The mass is the supply and demand, the big stack of orders.

Chopping tree example: Every swing removes some of the mass. The more swings, the more chance to go through.

2
Time at Level
Very much in line with first enhancer - strength. At price levels with supply and level out of balance the most, price will spend the least amount of time at the level. The textbooks talk about this in the opposite way.

At price levels with the most imbalance, price will spend the least amount of time: few candles.

If price is in balance, price will stay there a long time. it is equilibrium, we dont want to trade there. We want to trade at the extremes.

Question: How many candles in what time frame: Be very careful about coming up with a specific number. Changing time frame will change the number of candles. At your time frame, compare the number of candles to time spent at other levels, dont get hung up on specific number.

1
Arrival
How did price arrive come back to the level. We want to be anywhere near other levels. We don’t want new resistance levels before we buy, or new support levels to form right before we sell. Strong arrival usually means strong departure at the level.

1

Total score:
The worst possible case is an 8 - This can be a confirmation entry.
Here are the scores:
If it was a 9 or 10, it could be a limit order. - limit order
8 - confirmation entry
7 - No trade if less than 7

Another odds enhancer for short term traders: Time of day that trade is meeting entry. The opportunities that we point out that meet entry in first 45-1 hour of the day, these are usually golden opportunities. Later in the day is often not as great.
Coming from the institutional side of trading, you know, because you see the order flow. Time of day odds enhancer is, in any market, supply and demand is most out of balance at or near the opening of trading in any market. I saw this day after day. Given that, if you are good at picking out levels and turning points, those will be most profitable. If entering in the first hour of the day, the best day traders make their money in the first hour of the day. I don’t know anyone who makes money just trading in the afternoon. If they are trading in the afternoon, they didn’t make money in the morning, and it will be tougher. After all the orders get processed, usually supply and demand are back in balance.
If you dont know what you are doing, don’t trade at the open. But if you do, trade because that is the time when most of the transfer between accounts occurs. Morning is the golden opportunity.

Thanks this is exactly what i was looking for

[KENNETH_LEE]

Thanks this is exactly what i was looking for

If you send me a PM with a e-mail I will send you some JPGs can’t upload them for some reason .

error 302 ??

[MeiHua]

If you send me a PM with a e-mail I will send you some JPGs can’t upload them for some reason .

error 302 ??

email sent

[KENNETH_LEE]

anyone know what error 302 means when trying to attach jpg’s ?
would like to share some charts but can’t download them . Ken

[MeiHua]

No idea. I was having problems posting pics from tinypic a few days back. Then just reuploaded again and it worked fine. No idea why

[KENNETH_LEE]

Thanks I sent a note to support , well get it sorted soon i am sure

different load window came up guess it got sorted :28:

[KENNETH_LEE]

gbp’s daily chart and level

[MeiHua]

Thanks I sent a note to support , well get it sorted soon i am sure

<img src=“301 Moved Permanently”/>

different load window came up guess it got sorted :28:

Great charts btw. I see the 3rd candle but I don’t see the TP going back to the demand level. I see price reaction but not a full swing back. Also how small of timeframes do you trade on spot forex with this method?? I noticed this was 30 min.

[KENNETH_LEE]

@MeiHua

Great charts btw. I see the 3rd candle but I don’t see the TP going back to the demand level. I see price reaction but not a full swing back. Also how small of timeframes do you trade on spot forex with this method?? I noticed this was 30 min.

here it is a new chart.

As small as a few minute if need be, the key is to be able to spot the levels. I use the 30 min as that time frame seems to give clear levels and enough for intraday trading, But as shown by the gbp daily chart you must know where price stands in the big picture as well , or you can find yourself fighting a losing battle.

The key as with most any trading idea is to start at the higher time frames working your way down to lower time frames looking for trades that compliment the trends on the longer time frame charts. in other words don’t try to go long if your sitting at or near the bottom of a supply zone wait for a short chances. If you can’t see one clearly one your preferred trading chart maybe scan other time frames. With a little practice this becomes easier.

if your a fan of Sam’s teachings in one of his webinars he talks of taking 3 or more day trades short from a daily supply zone which did finally fail and go higher but for 3 days he got 3 great shorts finding entries off a 2 min chart.

here is a current example from him.

Lessons from the Pros - 08/16/2011 Issue - Featured Article: Try This to Lower Your Risk

[KENNETH_LEE]

new gbp

p daily

[KENNETH_LEE]

other gbp options

[MeiHua]

@KENNETH_LEE

here it is a new chart.

As small as a few minute if need be, the key is to be able to spot the levels. I use the 30 min as that time frame seems to give clear levels and enough for intraday trading, But as shown by the gbp daily chart you must know where price stands in the big picture as well , or you can find yourself fighting a losing battle.

The key as with most any trading idea is to start at the higher time frames working your way down to lower time frames looking for trades that compliment the trends on the longer time frame charts. in other words don’t try to go long if your sitting at or near the bottom of a supply zone wait for a short chances. If you can’t see one clearly one your preferred trading chart maybe scan other time frames. With a little practice this becomes easier.

if your a fan of Sam’s teachings in one of his webinars he talks of taking 3 or more day trades short from a daily supply zone which did finally fail and go higher but for 3 days he got 3 great shorts finding entries off a 2 min chart.

here is a current example from him.

Lessons from the Pros - 08/16/2011 Issue - Featured Article: Try This to Lower Your Risk

I am a huge Seiden fan. great graphs I really enjoy them thank you for sharing your knowledge. I really hope to take this system and running with it

[Zw8]

Hi Kenneth Lee,

I have been playing with the principles as well, and am enjoying it.
But looking at your chart, are you sure to qualify the 1.6550-1.6500 level as a quality level? The reason I do not view it this way is beacause price did had a real drop and instead just formed a congestion prior.

Do you see flaw in my reasoning? looking forward for your answer.

[Zw8]

Picture of what I mean

[KENNETH_LEE]

http://www.forexfactory.com/attachment.php?attachmentid=795748&d=1317247235

This is a link to a PDF I put together for this trading idea. Tried to download the pdf here but just get a failure to load message file is only 5 mb.

.

                            Cheers  Ken

[TalonD]

Hi Kenneth Lee! What a coincidence. Just a couple days ago I remembered an old thread here that you started and went back to read it and followed a trail to forexfactory and found that very pdf that you just linked too! If you haven’t seen it yet, check out this thread… he got his start with Seiden so it’s all very familiar territory.

http://forums.babypips.com/newbie-island/39827-professional-trader-offering-free-mentorship-via-babypips-chat-room.html

[gravitas]

http://www.forexfactory.com/attachment.php?attachmentid=795748&d=1317247235

This is a link to a PDF I put together for this trading idea. Tried to download the pdf here but just get a failure to load message file is only 5 mb.

.

                            Cheers  Ken

Thank you! I’ve been trying something like this for S/D trading for a while now. Most recently, I saw a Seiden video on fxstreet where he discussed trading forex futures intra day on a 5 minute chart. Do you have anything on that as well? Thanks again.

[KENNETH_LEE]

His , Fast trading or intra day trading . Is basically the same as his regular swing trading just using faster charts .Find good levels on 30 min and hrly charts . then uses a faster chart say 5 or even 2 min to time the entries with as small a risk as possible. The key remains to picking the BEST levels off the 30 min or hrly.

The basic trading idea is the same , but using 4 hr and daily charts even weekly , to find the supply and demand levels then using a 30 min or faster chart to enter. This is what makes the trading idea so good it is rule based and all the same rules apply across all trading time frames.

Here is a trade that showed up on Oz . That shows the idea in a nutshell. This shows a swap level then using a faster 30 min chart to get the best entry with little or no draw down .

[MeiHua]

@KENNETH_LEE

His , Fast trading or intra day trading . Is basically the same as his regular swing trading just using faster charts .Find good levels on 30 min and hrly charts . then uses a faster chart say 5 or even 2 min to time the entries with as small a risk as possible. The key remains to picking the BEST levels off the 30 min or hrly.

The basic trading idea is the same , but using 4 hr and daily charts even weekly , to find the supply and demand levels then using a 30 min or faster chart to enter. This is what makes the trading idea so good it is rule based and all the same rules apply across all trading time frames.

Here is a trade that showed up on Oz . That shows the idea in a nutshell. This shows a swap level then using a faster 30 min chart to get the best entry with little or no draw down .

great example as always kenneth. really showing how supply/demand works on all timeframes.

[jen28]

Hi Kenneth Lee,

Great write-up! Thank you!

1). If price gap up from a demand area (give 2 points for the score?), and if it did not move far enough (did not move 3x, x is the size of the demand area), do you still give it 2 points?

2). If price moves out of a demand area with a wide range up bar (give 1 points for the score?), and if price immediately comes back to area slightly above the demand area and move higher (thus form a new demand area on top of the original demand area), do you still give it 1 point?

Many thanks for your advices!
Jen