As retail traders, do we have to be more or less aware of this kind of activity from prop traders?
it would be in your interests to know when these guy’s are active for sure. What they do affects the levels which you’re seeking to profit from.
weeks end, months end & quarter end are natural profit & position balancing periods for the big hitters. The (retail) brokers that you utilize, & their prop traders, will be engaged in the same zones & levels that these guy’s operate in. By that very virtue, it affects you too.
wouldn’t it be beneficial in some small way to assist in maybe understanding why a particular level is generating intense interest? or why a certain price popping around a hot zone is impacting on your stops or limit level?
it might not affect you at all, if so then cool. But just be aware of when these occasions roll around.
Half the battle out there is preparation.
Back in familair territory again huh? I’ve snagged the chart from Wednesday morning & sat it alongside today’s offering to highlight the consistancy of these ebb & flow price journey’s.
It’s no surprise they stutter & splutter when they re-visit previous zones of minor & major fulcrum activity. These occurances allow us the luxury of gathering the relevant information (fundamental as well as technical) in order to better plan out next move.
Be that based upon our favorite technical set-up or maybe a change in sentiment etc.
Some of you will no doubt have spied the technical pattern visible on the 60min & smaller timeframe?
Head & Shoulder patterns are deemed a bearish warning sign. Certainly the inability to hold & build upon the near-term s&r level of 2.0100 renders Cable suspect to follow thru sales.
I guess all this type of ongoing analysis can assist someway in prepping your favorite set-up’s & strategy plays.
Tess and Tony I want you guys to know i love when you throw a chart or two up there. It makes me feel more confident about my analysis when I see it on your charts too. Tess I saw the head and shoulders too does that mean it will show up on the larger charts soon (fractal type thing)?
have a nice weekend guys.
it’s there Johnny on the 4 hour example through a good part of this month. I’ve pinched one of her templates to highlight it for you.
quite frankly, it’s a bit of a messy half hearted affair on this timeframe, but it does focus the weak intent on & around her support & resistance camps, especially 2.0220.
must admit I giggled when she hauled that up. They’re not usually ones for paying any attention to chart patterns & such. If her brother or Poppa saw that they’d laugh her out of town, they truly would 
but I guess it addresses your your question about mirror images across the timeframes.
You can see for yourself just how important this level is over the last 6 months or so. Get ready to rock and roll (well hope so anyway)
we use price set-ups or triggers on & around our views of the pertinent support-resistance levels.
At the present time i view each s&r line equally and just look at price set ups around each one. I do take particular interest in lines drawn from the daily chart, however they can be far apart, how do u decide which minor s&r are attracting the most attention? Do you look at how many times it has tested a zone and hence apportionate weight to each particular line?
The significance of a potential support or resistance level is heightened by the reactive behaviour in & around it�s vicinity. Remember, it�s the general zone which harbours most of the potential activity, & that zone can quite often stretch to a 20-50+ pip channel of interest.
If price is re-visiting a previous level of intense traffic (such as this current support/demand zone on the GBPUSD between 9710 & 9775), then you can expect volatile & erratic behaviour.
You only needed to glance to your left & check the reaction from the nearest 2 visits in late February & mid March to anticipate increased interest as price again vibrated towards it late last week/early this week.
These levels have to begin somewhere though, yeah? We simply work from right to left when adjudging the potential of a reaction zone & carry those levels forward to assess their relevance in future price activity. Once a level loses it�s significance we adjust the specifics & continue to observe the behaviour.
Always look left!!
If your primary template is the Daily timeframe, then sure, most of your priority levels will emanate from there. Secondary levels could be observed from a 4 hour or 1 hour viewpoint if you�re seeking intermediate confirmation.
But essentially, you�re looking for levels or zones of activity, which have displayed previous strong attraction for players. The further back & more often those zones reacted, the better.
Tess, Jim & their crew mostly plot their primary action levels via the 4 hour timeframe. I then utilize & cascade those levels down onto my micro timeframe templates & my guy�s execute according to our specific aims & intent at the time.
If a level or zone is a genuine s&r reference then it�s going to react & offer opportunities whether you�re a micro (tick-1min) or a macro (240m-daily) timeframe trader.
The execution is secondary. It�s where you execute & how the execution is managed which deems the exercise productive�.or not.
Ive been demoing a method that utilizes price action around s&r zones. For breakouts i wait for price to retest a level before entering, for reversals i generally wait for an obvious LH or HL setup before entering, simple stuff really. My demo account is outperforming my live account by miles. I’m frequently closing a trade for greater than 4R, in some cases i risk 10 pips and get a 100 pip move. If these kinds of results are sustainable they would provide a better R:R than many of the ‘systems’ I’ve seen out there.
Ive made 16 trades, won 12, lost 2 and broke even on the remaining 2. I risk 2% on each trade( a bit much for some).
Below are some trades i took this week, blue highlights my entry bar, green signals my closing bar
note the entry in the second chart was actually an inside bar on the software i use.
Good for you George. Adopting those types of price triggers to engage alongside your s&r observations will serve you well over the long haul.
As you�re quickly finding out, one of the major benefits of this type of trading is, that whatever market conditions exist (range or trend), you�ll have a set of tools (well defined set up�s triggering off sound price principles) to pick your route thru your chosen pairs.
Whatever you do [B]DON�T COMPLICATE IT[/B]. Keep it simple, don�t be tempted to add any more indicators or other filters.
If the conditions aren�t suitable for your specific set up�s or triggers, then wait patiently until things line up. It�ll be well worth the wait.
One of the main (if not [B]THE[/B] main) reasons for failure in this business is a total lack of discipline. The itchy finger & impatient nature kills most new traders.
Those who spend quality time researching & preparing a simple, effective trading plan & properly test out their findings will hold a tremendous advantage over the rest.
Keep us posted on developments George 
I was wondering how you guys analyse the yen pairs, what do you take into consideration apart from the technicals?
We run through the same generic principles as we would for any pair we’re looking to get a position on kagein.
Rate differentials & impending int rate news which might impact the pair.
Specific regional fundamentals affecting each of the opposite pairings (British economic outlook v/s Japanese economic outlook etc)
Equity market flows (risk aversion - particularly relating to EURJPY)
That daily diet of information is readily available via various sources to most folks if they wish to avail themselves.
Although not really necessary for everyone, we also access newswire & squawk facilities which afford us instant & breaking news snippets, rumors & bits & bobs of order flow traffic etc which get bounced around during a typical trading day.
We get a decent feel for what’s what out there through our daily contact base too, but again - it’s not particularly necessary for the average player in the most part.
When you initiate a trade on your trigger time frame, do you stay on this time frame to manage the trade?
Very good question!
Usually yes, we will manage the position on the timeframe from which it originated.
I say usually, because there will be occasions when we need to be flexible & drop down or scale up a timeframe to locate an appropriate technical level to hide stops or locate a stop order to compound a move.
Obviously, that flexible & discretionary type of activity is always dictated by the market. We don’t subscribe to the usual rigid or inefficient methods of pre-determining risk-reward ratios. Markets simply don’t operate that way 
For instance: we might have executed an order on the 4 hour frame, but need to drop down to the 1 hour reference to slim down an appropriate technical zone to hide a stop. Same when going up the scale from say a 4 hour to the Daily in search of a level to guage a (forward) potential supply-demand zone.
It�s extremely rare however that we�ll wander too far from our template frame to manage a position.
Slightly different for intraday trading, but then that�s a whole other kettle of fish altogether.
Just wondering where you guys are looking to engage on the E/Y if your not in a position already. It’s not really going anywhere.
I have my eyes on the 161.50 & the 162.75 levels.
Oh and how does the Nikki performance effect yen pairs in general?
I am not in anything at the moment George, all a bit choppy. I missed this yesterday. Although I agree with your levels of interest a retracement into the 163 area will leave a higher low and the short then does not look nearly so interesting unless there is very strong rejection behaviour
When price is making all time highs/lows, there are no previous S&R lines. How do you play that?
The support in an all-time high is a given, resistance turns to support,
the reverse occurs in all-time lows, resistance is a given, support
becomes resistance.
The next high/low could be a round number as in E/U 1.5, 1.6 etc.
or U/Y 99.00, 98.00 etc. also the inbetween round numbers.
Also a fibonacci extension could be used, or pivot points.
Following the high/low peak/trough patterns will be of great use.
Just wondering where you guys are looking to engage on the E/Y if your not in a position already. It’s not really going anywhere.
As to this question I found this I feel it sums up the situation at present,
refer to the chart in the thumbnail.
EUR/JPY continues to engage in choppy trading in tight range below 163.09 resistance today. As discussed before, an intraday top is in place with 4 hours MACD staying below signal line. Intraday outlook remains neutral for the moment and further pull back could be seen. Nevertheless, a break below 160.12 support is needed to confirm rebound from 158.60 has completed. Otherwise, the rise from there is still more likely to resume than not. As discussed before, break of 163.09 resistance will confirm that fall from 164.97 has completed with three waves corrective manner to 158.60. In such case, stronger rally should be seen to test this resistance first and then upper end of the medium term range near to 168.93.
In the bigger picture, EUR/JPY turned into sideway consolidation after medium term up trend was limited at 168.93. It’s unclear whether such consolidation has completed at 151.71 already. Though, the strong rebound from 158.60 argues that fall from 164.97 is merely correction to rise from 151.71 and has completed. Above 163.09 will encourage rally towards upper end of the medium term range near to 168.93. However, below 160.12 support will shift focus back to 158.24 cluster support (50% retracement of 151.71 to 164.97 at 158.34). Break will argue that such consolidation is still in progress with at least another fall to the lower end of the medium term range before completion.
