For example, we’re stalking price level A (OTE sweet spot on a higher time frame), price hits A and begins to retrace, we wait for price to hit A again before opening our position, or, we wait for another OTE to form between price level A and the high/low of the smaller retracement.
The Cable had a great example of this yesterday. We rallied right up into that OTE sweet spot (around 13:45) for the current range we’re working within, and then on the 5M (even on the 15M, but harder to see) we had confirmation with the OTE sweet spot getting tagged at 14:50 @ 1.6093 or thereabouts for a short after the small retracement, rally back up, then drop off. So, using that 1H chart, then down to the 5M for confirmation/fine tuning the entry point.
I think your list of 5 is a pretty good start and if you have those trading methods down then there isnt much that will stop you from making some great profits (i love market structure too, but not an easy thing to grasp initially!).
hi peterma, what settings do you have on the ADR? 'm trying to figure this indicator, with default setup neither side was touched… or maybe is it the feed?
thank you
As others have said the key is HTF SR
I would not blindly take that OTE trade, unless there was a higher TF SR or a HTF OTE, supporting the original hi
Many times, you will see an OTE on a higher TF, with a nesting OTE within that structure
The best way to sort out what works and what doesnt is to look at successful OTEs at tops or bottoms and identify the factors that may have caused that
Dont know whether that helps, but unfortunately, chart time is the only thing that will help you sort out high prob entries
I’m going to leave that for now, I’m think of that as Part 2.
I think this enough for any newbie to get started with.
Where on Earth do I Start?
Start with these 5 key areas, get fluent in these first, then the rest will start falling into place, these tools in themselves should give you enough of an edge to see some real progress in your trading career.
Support and resistance on Daily Timeframe.
Study these carefully, you will be quite surprised at how often they are hit, if you think you don’t have the patience to wait for these areas, forget about trading and go onto something else.
Fibonacci/OTE.
Understand how to place your Fib correctly using the predominant moves, see how your entries are often beyond the classic 61.8%
Kill Zone.
Understand how important these times are, trading at these times improves your win rate dramatically, reduces your SL requirement and your trading stress.
Using USDX.
Understand the relationship between the USD Index and the pair you trade, I also use the EURX.
Double Tap.
This is a trading habit you must get into, it’s simply placing two identical trades on to the same value rather than the one trade, it makes it easy for you to effectively sell half your position at your initial target of 30 PIPS profit.
Asia.
Understand what goes on in the Asian session to prepare you for the London Open and then also the NY open, see how the Asian session High’s and Lows come into play throughout the day and sometimes throughout he week.
Even though I’ve been using the Dollar Index and Euro Index and understand their relation to the currency pairs they are part of, I don’t understand what the Dollar Index actually is.
“It is a weighted geometric mean of the dollar’s value compared only with
Euro (EUR), 57.6% weight
Japanese yen (JPY) 13.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight and
Swiss franc (CHF) 3.6% weight”
“The US Dollar Index (USDX) is a futures contract offered by the New York Board of Trade. It is a trade-weighted average of six foreign currencies against the dollar.”
How can something be both a weighted geometric mean and a futures contract?
that is exactly how I trade these concepts; use HTF to search for likely levels and then use 5 min to get a tight confirmation entry -GU gave a nice pin to confirm rejection
I also agree that market structure is important (essential actually)
and that it helps a lot to have some concept of where we are in the weekly cycle - tho probably not too relevant at this time of year
I second that, risk management is one of the most important things… And its a simple set of rules that if somebody applies, can help even a losing trader preserve capital…
And personally, i think preservation of capital is priority #1
Part 2, the whole point of it is to learn from the bottom not everything at once, a prerequisite if you like, risk management is no good to you if you don’t know how any of the ‘above’, see what I’m getting at? You have to limit a set of priorities.
Anything can be a futures contract - if its tradable people will take a view and place money on it! I think I know what you’re getting at though - in itself it has no fiat value and cannot be used to purchase anything or hedge against like real currencies. Re its weighted average - its like inflation figures, CPI and RPI - its mearly a method of showing realtive value. From a practical point of view the important thing to remeber is that the Euro makes up most of its ‘weight’ so when we see USDx going up or down we can be sure that normally the Euro is going to be inversely affected.
Haha Agreed.
Also when you also start thinking about what these price moves in forex actually mean in terms of the international value of a nations currency against others and how that value is moved by banks attempting to influence those changes it’s all a little scary.
could be damaging to your brain