16 candles in the '58 edsel'

[soultrain]

It’s [B]the[/B] most important aspect of why brokers & savvy punters make money.
It’s why we backed & absorbed Trump bets so heavily for the party nomination ticket.
It’s why be backed & absorbed Brexit bets so heavily in the referendum vote.
And it’s why virtually all the so called experts got both outcomes so horribly wrong. They failed to read, identify & filter the over-riding sentiment of the majority of people. It’s not like the smoke signals weren’t there for both circumstances months & months beforehand either.

We absolutely adore amateur fundamentalist punters just as much as we covet & love purely technical punters, reason being they lose so regularly & consistently primarily because they’re stubborn & really hate being wrong which is why they regularly reload their account balances, repeating their bad habits time after time after time.

The most successful players aren’t fundamental or technical practitioners, they’re punters who can successfully & consistently read people, mood & sentiment & they continually fade them. They don’t marry opinions, neither do they congregate with sheep.

It’s why a few well capped savvy punters pulled 6 & 7 figures out of the market recently via the Trump ticket & again after Brexit last Friday for very little risk. The hot money was piling on anti-trump & the remain camp, whilst the clever dough was backing trump/brexit.

They’re the same faces who have been predominantly long dippers in New Zealand for much of this year, long dippers in Canada into 1st quarter, short dippers UK & long dippers Oil & Gold.

Stupid money tries to call tops & bottoms, generally believes & swallows most of what it reads in the media & usually feels more comfortable in cliques & crowds. Just look around this very forum, you’ll see confirmation of it wherever you look.
It’s the same behaviour on all forums & brokers/savvy punters lap it up in spades.

[corpellan]

It’s [B]the[/B] most important aspect of why brokers & savvy punters make money.

The most successful players aren’t fundamental or technical practitioners, they’re punters who can successfully & consistently read people, mood & sentiment & they continually fade them.

I suppose the nearest we’ve got to work with would be these sentiment graphs that some of the larger retail brokers now include as part of their research data?

I haven’t gone too deep into it, but it sometimes makes for interesting reading, especially when price is headed in one direction yet the majority of clients are clearly positioned in the opposite one.

[laine]

I suppose the nearest we’ve got to work with would be these sentiment graphs that some of the larger retail brokers now include as part of their research data?

Yeah, they offer a snapshot of punters current & rolling positioning of a currency & its collective pairings. Some of the information & data that used to be the exclusive domain of dealers is being made available to clients by various brokers & spotlights the often conflicting scenario between price movement & weighting bias.

soultrain mentioned a few candidates that are typical examples of using something like a sentiment theme to help cement a view or add confidence to rolling over or playing dips in & out of a particular currency, the type of which this approach advocates.

A recent example being usd/jpy where into late may, weighting was biased to the long side & continued that bias during june down thru 105 even though the correct stance is/was shorting into rallies & those keying off this framework would have been identifying & filtering that pair as a strong shorting candidate.

If you dial back on any of the regional currencies soultrain referenced & run the rule over them you’ll be able to quickly & accurately identify which direction you would/should have been weighted using this background/foreground criteria.

[forexspot99]

@soultrain

When you manage to time it ok the ride is usually pretty stress free.
The commodity pairs are still the horse to be on v/s sterling on this latest leg down, so just continue to track & trail it.

So we’ve covered a decent amount of ATR this week already, and i’m not surprized to see a higher low forming. That higher low has prompted me to lower my trailing stop. So mentally prepared to be taken out now after sitting on the trade for a week.

I also see a potential higher low on UsdJpy at 100.60 which would also make sense as there 's probably not much interest as we appraoch NFP.

Just want to say thank you for the guidance you’re offering here.

[soultrain]

So we’ve covered a [B]decent amount of ATR[/B] this week already, and i’m not surprized to see a higher low forming.

Just want to say thank you for the guidance you’re offering here.

No problem.
Decisions are always somewhat less stressful whenever you have a defined framework from which to operate. Tends to make life a little easier to navigate back & forth on a daily basis.

If you’re using stair-step, cyclical price activity to engage & trail then it makes sense to use it on the flip side whenever the market sends you smoke signals that it’s preparing to disengage from it’s one-way journey either temporarily or permanently.

The structure works both ways just as effectively.

As we’ve constantly reminded throughout the thread, if the moves are continuing to attract one-sided pressure or biased participation & pause temporarily, they’ll usually pick up where they left off & continue to print that cyclical activity when they click back into trend mode off a pullback or exhaustive pause.

That very same activity following a prolonged move will usually be your first warning sign of a potential pausing in the trend, especially as you note if the [B]average day/week range[/B] is edging near to it’s extreme.

[forexspot99]

@soultrain

No problem.
Decisions are always somewhat less stressful whenever you have a defined framework from which to operate. Tends to make life a little easier to navigate back & forth on a daily basis.

If you’re using stair-step, cyclical price activity to engage & trail then it makes sense to use it on the flip side whenever the market sends you smoke signals that it’s preparing to disengage from it’s one-way journey either temporarily or permanently.

The structure works both ways just as effectively.

Yes I’ve definitely benefitted from observing the structure this week, along with giving the market room to breathe.

So…I realize that runs like this don’t happen often. So when they DO happen, it makes sense to press the trade (possibly without pressing your luck). So I did some hypotehtical spreadsheeting this morning…creating a base-heavy pyramid that I’d like some input on.

I kept it quite realistic (I think?) with 4 total entries. 1 last week, 3 this week as detailed in the chart below.

And here is the spreadsheet

The ingredients are: only add additional positions when the initial stop can be trailed and risk reduced. The subsequent positions are all added based on (add-in stop loss pips/initial entry stop loss pips). So basically if the trailing stop moves slowly, then we haven’t travelled much and a subsequent entry will be smaller. If we travel a good distance, the trailing stop will lock in more profit and the subsequent entry can be larger.

I “feel” that this is a conservative yet logical way to approach pyramiding into moves. I’m using 1H hooks if the week is already moving, tight consolidation breaks of asian lows, 15min hooks if the day is already moving…

Does this seem like a decent way to play, or given your experience, will this blow up in my face sooner or later?

Thanks!

[double_6]

I realize that runs like this don’t happen often.
When they DO happen, it makes sense to press the trade.
So I did some hypotehtical spreadsheeting this morning creating a base-heavy pyramid that I’d like some input on.

I “feel” that this is a conservative yet logical way to approach pyramiding into moves.

The important factor you’ve noted there is that these situations are the exception rather than the norm & that’s very important to bear in mind when considering bringing this type of tactic into play.

The punters we’re personally aware of who adopt it definitely choose their pyramiding battles carefully. They’re certainly visible & active since Brexit & some of them are making an absolute fortune pyramiding to their hearts content because of the volatility uptick. They’re also diversifying though & spreading the love around, which helps to balance & mitigate the risk.

Yours isn’t the worst set up we’ve ever seen but unless & until you can back those feelings up with cold hard stats it’s not going to get the job done is it. That’s where your homework comes in.

Don’t underestimate the pressure this type of game play places on both your psyche & your pocket. It’s not an easy psychological game to play, especially if you lack experience & a decent wedge.

You also need to be well grounded first in the basic template approach.
Ensure you’re comfortable & competent in the identification & filtering stages so you’re starting off applying this tactic on the higher probability candidates right out of the traps.

[forexspot99]

The important factor you’ve noted there is that these situations are the exception rather than the norm & that’s very important to bear in mind when considering bringing this type of tactic into play.

Yes & it’s been referred to a few times on the thread. I’m trying to adopt the best practices outlined here and one of them was “roll over /compound into” bets at every logical occasion.

The punters we’re personally aware of who adopt it definitely choose their pyramiding battles carefully. They’re certainly visible & active since Brexit & some of them are making an absolute fortune pyramiding to their hearts content because of the volatility uptick. They’re also diversifying though & spreading the love around, which helps to balance & mitigate the risk.

This is interesting actually. What I can “logically” think of is that any add-on should be at a stage where there’s good ATR available on the day AND week (and month? depending on the objective?) and possibly not near the end of multi-month trends. Trend risk gets quite high when the herd starts to take note of a large trend. I think - based on some prior discussions - that the DRIVERS might be one of the key things to pay attention to, namely Central Bank actions.

So as a matter of fact…you might disagree but I felt compelled to take on Kiwi long yesterday, for 2 reasons:
a) Spencer painted a rather bullish case when the market was expecting a bearish case
b) retail folk were increasing shorts

I played it intraday though, with NFP looming, and with the fact that it’s not really a high-quality situation. I couldn’t play Nzd against Gbp for ATR reasons. But talking about drivers, maybe that would be something that could influence a potential pyramiding scheme, IF there was also space available and a better looking background situation?

Yours isn’t the worst set up we’ve ever seen but unless & until you can back those feelings up with cold hard stats it’s not going to get the job done is it. That’s where your homework comes in.

That made me smile - it’s not the worst but evidently not quite good enough. I’ve tried to find info on the web but it seems like there’s simply no good info out there unless I haven’t done my homework well enough.

Don’t underestimate the pressure this type of game play places on both your psyche & your pocket. It’s not an easy psychological game to play, especially if you lack experience & a decent wedge.

Good point - I intend to start VERY small (you’d laugh at the size) just to get the feel for it.

You also need to be well grounded first in the basic template approach.

Another valid point but I feel confident that practice makes perfect.

[corpellan]

with oil continuing to drop one or two of those cad pairs are definitely worth watching, but your gbpaud trade is still bubbling nicely judging by today’s price moves.

[forexspot99]

@corpellan

with oil continuing to drop one or two of those cad pairs are definitely worth watching, but your gbpaud trade is still bubbling nicely judging by today’s price moves.

Right you are. I’ve added to GbpAud today…I missed the initial fake of asian highs but caught it on the breakout of asian lows.

I’ve also shorted Crude hoping to get down to the 43 handle this week.

And I’ve got a breakout order on UsdCad…since USD seems strong this morning (I still have no evidence of retail flows, need to wait till the afternoon for that) but I imagine it’s partially because of Crude, and partially because this week’s BoC meeting is the first we’ll be hearing from Poloz post-Brexit and dovishness is expected. My objective on UsdCad is to attempt a longer stance with the D1/4H primary, looking for 3200 initially.

[stakz]

Just a case of getting your head down & beavering away.

That pretty much describes what i’ve been doing.
Using the common structure to experiment with different timeframe combinations, discovering which style or styles i’m more drawn to & comfortable with.

I love the flexibility. I don’t have to switch strategies or set ups to suit the conditions, just move up or down the timeframe scale depending whether i want to trade a morning or day session and/or if the potential is there to run it a bit longer.

Still have US indices + the ftse on my personal radar again this week. I noticed the sentiment gauges were top heavy with folks shorting them the last 2 or 3 weeks, yet this structure was screaming longs.
Same theme on oil - folks longing when they should have been shorting.

Also still going with usd/jpy & copper longs.

[forexspot99]

@stakz

That pretty much describes what i’ve been doing.
Using the common structure to experiment with different timeframe combinations, discovering which style or styles i’m more drawn to & comfortable with.

I love the flexibility. I don’t have to switch strategies or set ups to suit the conditions, just move up or down the timeframe scale depending whether i want to trade a morning or day session and/or if the potential is there to run it a bit longer.

Still have US indices + the ftse on my personal radar again this week. I noticed the sentiment gauges were top heavy with folks shorting them the last 2 or 3 weeks, yet this structure was screaming longs.
Same theme on oil - folks longing when they should have been shorting.

Also still going with usd/jpy & copper longs.

Hey Stakz,

yes I agree 100% on your filtered assets with risk being bought and the crowd fighting it. I closed my Dow CFD long last friday, after taking it long on the 11th. The carry cost on CFDs kills…no wonder they’re called contracts for dummies.

Little pullback on UsdJpy today as well to get on board.

I’m stalking “volatility event opportunities” this week on Nzd, Euro and Gbp. I shorted 1H hooks on NzdUsd and NzdCad (basket case) yesterday, but the RBNZ came out early and shoved prices down the ladder. I reduced my exposure on Cad since the BoC surprize “hawkishenss” last week is giving way to Crude influences (which are negative as you say, although quite volatile at that).

So I remain short NzdUsd since yesterday, looking to add if/when conditions dictate.

Since you have also experimented with time frame combinations, can I ask you how you set your stall when deciding whether to go with a D/4H background rather than a 4H/1H background? If, as I’ve gathered, we’re looking to match up the potential movers & shakers of each week (fundamental background) with trendiness, then a short term approach seems adequate (4H/1H background + 15Min execution). But for the longer term trades like kechel and yourself are taking, can I ask how you identify the fundamental influences that guide you towards them? Or is it a case of pure charting this time?

Again, any help would be great because I’d love to lengthen out my time frame to help me work around my day job.

Just as a primer on what kind of work I’m currently doing: weekend watchlist preparation (looking at a few bank sheets to get the main event risk for the week + market’s expectations, and marrying it up with techs) which has led me towards Nzd weakness, Gbp potential weakness (althoguh just starting to move back in trend today as we break yesterday’s lows), Euro potentail weakness. And I marry that with USD strength (also Cad strength up to yesterday…I mistakenly thought the BoC’s resolve would have been more influential). Then each morning I do a roundup of what happened overnight just to see if there has been any conflicting information with my main candidates that could put a stopper in the trend. Sometimes there’s no news, and we’ll get a pullback entry. Sometimes we’ll get news and it’ll be asub-hourly entry off of a momentum burst…

But how does all this translate onto the longer term view?

Thanks!

[forexspot99]

It might also have something to do with being in a position to allocate much more time than you can & possessing more experience.

If you’re working a full time job & can’t operate an intra-session/day game plan then all the positive short-term background structure in the world isn’t going to be of any use to you is it. And there are usually a plentiful supply of those doing the rounds during a typical week.

So if you’re handicapped by time or resources you have no choice but to focus on the only angle you can operate under. Unfortunately, there will be consequences & limitations when doing so & this is where your patience & discipline will be tested to the enth degree.

I don’t really think you’re missing anything that anyone else has managed to grasp, just the fact as Kevan highlighted, you’re often attempting to slot that square peg into the wrong hole

Hello Double 6,

so far as experience goes, I definitely cannot compete with you guys. However I “feel” like I’m gaining relevant experience quickly by operating from the same angle - which is directly a result of your efforts an patience.

My day job allows me to stare at screens more than I probably should - but moreover, I’m trying to learn what indicates the necessity to adopt either a longer term or shorter term pair of glasses. I do not want to fit a square peg into a round hole. I’d like to learn how to choose the right peg for the right hole, as often as possible.

And I’m totally at ease with losses and setbacks…I keep my risk under control and the day job is there to allow me to risk without stressing.

So for the last time - and I seriously will take in whatever you say, and mull it over for the rest of the week at least - can we address the conditions that would dictate “short term intra-session stance” as opposed to the conditions that would dictate a “intraday stance” and the conditions that would dictate a “daily or multi-day” stance?

For example, on Kiwi (which I’ve been following recently) would it have been the case to adopt a short term stance after Spencer’s announcement last week? We had broken the current week lows at 7200 and were headed towards the prior week lows near 7100. I didn’t play that but was aware of the driver.

The market started pricing in a rate cut and I “thought” that given the RBNZ’s surprize assessment it would continue into this week. When we broke the prior week’s low, it was overnight on CPI Sunday so I waited for a pullback to get on board, looking for a multi-day run as my understanding was that these were the kind of conditions to wait for. Then of course anything can happen…and I exited maybe prematurely, after seeing the higher low overnight despite a close in the bottom half of the range yesterday.

Is any of this logical by your standards or am I forcing things once again?

Thank you and like I said above - I will mull over any feedback you give me after this and you won’t hear from me until next week at least.

[cator]

One other thing that I would like to ask about, using a current situation. I have been short NzdUsd since monday’s pullback, hoping to run the position and add.
Yesterday’s close was encouraging but today we issued a higher low during the asian session, so I simply exited the position.

I understand that 7050/60 is the key zone which has been repelled this morning with a stoch divergence, but with the higher low this is quite “risky” correct?

Well if my objective was to try run a multi session rollover gamble I certainly wouldn’t be eyeing intra-session charts looking for pattern recognition, but that’s just me. My style, preferences & objectives are clear & unambiguous as should yours be whenever you’re interacting with the market.

The figure (0.7000) is the temporary stumbling block, which protected it into yesterday’s close. If you were short at c0.7100 then you’ve speared a short term bet right around a typically busy level & booked a decent gamble.

[B][U]No-one[/U][/B] knows if the figure will hold or break, so if you’re probing further continuation & this is your [U]desired[/U] or [U]primary[/U] objective & outlook going forward you’re simply going to have to construct your activity around those objectives.

One option would be to increase your bet sizing to offer you more flexibility with bet management, possibly allowing you to encash & book profits on the run whilst adding back in at opportune locations.

Another option will be to simply look at restructuring your stops to offer & allow more breathing room to test the resolve of a potential rollover run.

If your preferred style is geared towards sniffing out medium term duration gambles then surely you’d be eyeing prior day/week & visible swing levels as your reference points?

You’re still taking a short term view to a potentially longer term bet.
Jumping in & out on intraday gyrations isn’t going to get the job done.
You either have to fully commit to a style/preference/objective or change your modus operandi.

so far as experience goes, I definitely cannot compete with you guys. However I “feel” like I’m gaining relevant experience quickly by operating from the same angle

We’re not talking about us, we’re referring to the likes of sketcher, wyntac, stakz, carll, kevan et al.

So for the last time - can we address what would dictate “short term intra-session/day stance” as opposed to what would dictate a “daily or multi-day” stance?

Sure.
Your time allotment, preferred style of operation & goal objectives.

On Kiwi we had broken the current week lows at 7200 and were headed towards the prior week lows near 7100. I didn’t play that but was aware of the driver.

Well if you were aware of the driver & you identified the opportunity & presumably you could afford to financially commit to the gamble, then why didn’t you bet on it?

You can’t afford to allow those kinds of gambles to slip through your fingers if you’re intent on adopting this type of activity because you’ll constantly be in a situation where you’re chasing value & getting involved deeper into a move than is acceptable for the risk the deal offers.

[corpellan]

can we address the conditions that would dictate “short term intra-session stance” as opposed to “multi-day” stance?

Sure.
Your time allotment, preferred style of operation & goal objectives.

that’s also the conclusion i arrived at when reading & studying the content.
you’ve repeated numerous times the framework which includes the momentum cycles, session + day-week highs & lows, the average day-week ranges & the round numbers, big figures + the structure of identifying & filtering the trades are the same regardless whether we choose to adopt a short or medium term view of the market.
that’s where the flexibility angle comes to the fore.

if my style & preference is to take session or day trade positions i will still use the basic template to establish my higher probability trade decisions, but obviously my trade sizing, defensive stops & objectives will be different to those of someone considering a slightly longer term view.

one of the main difference in those 2 scenarios would possibly be the choice of timeframe(s) used to collate & determine the decision making process, but everything else remains the same.

[cator]

like I said above, after this you won’t hear from me until next week at least.

You don’t need to go radio silent, you can be as active as you like on here but we can’t tell you anything more than we’ve put out and/or repeated already. As corpellan correctly observes, it’s a man for all seasons.

You’ve got a consistently efficient route into the repetitive momentum peak trough cycles the market scratches out every day/week & it’s up to you how you adapt, configure & apply it based on your preferred style & time limitations.

We purposely steered away from complex structures, unnecessary technical analysis, multiple indicators & spurious/subjective support & resistance in order to keep it focused, tight & relevant.

There are no secrets or magic formulas to this game - it is what it is.

[corpellan]

The figure (0.7000) is the temporary stumbling block, which protected it into yesterday’s close.

and has been successfully defended from the other side this morning when price pushed through earlier during the overlap period.

i’ve been watching these round numbers & big figures a lot more closely across the pairs since they were reinforced on here again & this scenario occurs time & time again.

you guys have repeatedly stated why price is attracted to these areas & apart from playing them from the obvious angle, how else do/would clients you’re aware of typically use or integrate that info into their everyday planning & activity running a non-automated approach?

[DoubleEcho]

how else do/would clients you’re aware of typically use or integrate that info into their everyday planning & activity running a non-automated approach?

They might observe & record how often & consistently they tag the high & low of the business day/week & incorporate daily & weekly average range extremes alongside directional flow to formulate an unambiguous template.

There’s a game plan just screaming to be constructed from that small, efficient box of toys wouldn’t you think?

[grantyboy]

Too busy job hunting to be trading much of late but pickings seem pretty slim anyway in a data packed week. Only thing I can see with any kind of trend is USDCAD at the moment. If my pulse were the same as the charts on most others pairs then I’d be seeking medical attention. :26:

[wyntac]

Only thing I can see with any kind of trend is USDCAD at the moment.

Yeah, that + short oil obviously.
European & American indices are still retaining a long bias as is usd/jpy, so long pullbacks and/or breakouts is still the smarter play on those particularly given most of the herd are (still) shorting them