That must be some big order…lol. Unfortunatley for me, I got 2, if that, pips out of it. I knew there was a news release coming out about 1/2 hr? after I placed the order. I had also set a trailing stop and went to bed when it was up +20…news report had enough reaction to whip up & just take out my trailing stop before resuming down to my target…arrgh.
Thanks Michael 
Your videos are awesome too. I visited your chatroom a couple of times this week but must have missed you.
Similar result for me too. I was up about 20pips, and decided to move my stop to break even before bed and that got hit by about 1pip, before going to reach my target
US Dollar Index: Down?
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Composite COT Report:
80-100% - Look to go SHORT - Non-Commercials (speculators) are extremely long and Commercials (smart money) are extremely short.
0-20% - Look to go LONG - Non-Commercials (speculators) are extremely short and Commercials (smart money) are extremely long.
Now JPY is the quote pair so it’s opposite.
JPY: 50% = Stand aside
GBP:100% = Short
Interest Rates:
USD = .25%
JPY = .1%
GBP = 1%
Both GBPUSD & USDJPY swap is positive on longs, negative on shorts.
Bond Futures: Rising
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Bias: Looks like it’s saying sell GBPUSD this week.
Now for S&R lines on the chart:
On the daily chart price is at the top of an 900 pip range (being an1.6300 top and a 1.5339 bottom) and already bouncing down…lower now than last week. Flow on the H4 & D1 is down, although up on the H1 until it breaks down thru 1.5992ish or creates a new fractal low higher up first before moving down thru it.
The same game plan as last week would seem to be to look for pullbacks that converge with pivots and fibs in the sell zone from which to go short. My COT reading is very bearish if correct, so I was looking to determine if the pullbacks were going to be shallow or not, and they seemed not.
Tonight I missed a really good short entry from the PDH 1.6068 which was determined with the midnight to midnight EST candles. That was also the 62% level of the Thurs high to Friday low swing. And as ICT describes, it was looking a little “toppy” 
Tonight I’m looking at shorting from the PDH, R1 and 62% of a prior swing where I’m placing a pending order at 1.6072. I have drawn a down channel and this is also near the top of it. My stop will go just above the channel near the MR2 which is about 25 pips. Target will be the pivot at 1.6026. I used the 5pm EST to calc the pivots tonight. I will recalc them at midnight EST to see how they align, but for now I am good with these calculations.
Here’s a quick recap of my last 3 trades I took yesterday. The pending short I setup (first white circle) did get triggered just before I went to bed. Unfortunately, there was a couple of news releases coming out after I went to bed that spiked price up to hit my stop before turning down again.
Upon my return in the morning, price had reached up even higher to create a bearish butterfly at the R3 & weekly high area (2nd white circle) so I decided to try a short there with a trailing stop for 30. Price did go down enough to move my trailing stop to +7 before rising up again to take it out.
Later on price seemed to be fluctuating in a 30 pip channel between the MR2 & R3 pivots levels (on the 5min chart) and was at the bottom of it, so I anticipated it would try to move up again. I entered long for +20 with a 10 pip stop, and target was hit not long ago.
Tonight the daily hi/low doesn’t seem to line up with much, but will keep looking for another such area until midnight EST pivots get calc’d.
Seems the use of my COT indicator isn’t helping as much as I hoped for. Looking for shorts only hasn’t really paid off. I lost a couple of trades putting me back about -50 in the last couple of days.
However, putting that COT bias aside and taking a few long scalps here & there has put me back ahead again.
This morning took a +15 pip scalp long off USDJPY S2 resistance coupled with what I thought looked liked a Wolfe Wave pattern (1st pic, bounce off the lower blue trendline/red support line).
Then my pending short on the GBPUSD at the PDH/R1 triggered for +20 (2nd pic, upper red line, last green bar with long upper wick).
That’s the game they are playing with Cable…picking the pockets of the retail crowd and speccies.
They are punching price from the top of the range to the bottom and back up tripping stops in the process. They have been doing this since Thu last week.
If you don’t understand what they are doing it’s best to stay out.
If you must engage try to look for long entries at the bottom of the range. Otherwise they will mug you.
Hey coxsonne…thanks for the insight. From a VSA standpoint, I can relate to that. I would hazard an analysis that this is either an accumulation/reaccumulation, or a distribution type phase, and with the commercial traders being heavily short according to the COT report, I would say distribution?
I see a range and was trying to short from the top, but also trying to be prepared for a markdown phase when the commercials can start buying again at lower prices. However, if this is the case, it’s taking a little longer than I thought which was why I was shorting on the retraces near the bottom.
However, I think I’d be better off shorting if it goes back to the top, and long from the bottom like you say, which should allow a small risk with the stop just under it, then only short at the bottom after it breaks that range and then retests it.
Sweet Pip, commitment of traders reports or even better still the retail market’s positioning tells you primarily how the speculators and retail crowd are set up.
That is the relevant information you need to look at from a short-term perspective.
And then there is the long-term perspective. Corporate flows (one-way only), some Sovereign and real-money flows are very long term.
Like, if the speccies are short and the Corporate flows, Sovereigns and real-money flows are long the speccies are likely to get flushed.
Market’s positioning entails short-term AND long-term perspective.
At what side would you rather be…minimizing your risk ?
I see a range and was trying to short from the top,
How many markers you got up there and how do you know it is the top ?
You are very likely to join a stop fishing exercise until Bids under a minor swing point from the same crowd who is doing the stop fishing turns price around and let it come straight back at you tripping your S/L which is a buy stop and accelerates the process wiping out all the stops up there. That’s what they have been doing.
but also trying to be prepared for a markdown phase when the commercials can start buying again at lower prices.
You have got clear markers down there with clear launch pads. If a corporate decides to step in because “the price is right” you join the fun with very low risk.
Ok, sorry, I need to cross-reference some of your terms :o…“retail market’s positioning” - you mean the net position of the “non-reportables” on the COT report?
I do calc the net positioning of all three groups and graph them, as well as a composite index to detect extremes. The commercials (smart money) and non-commercials (large speculators) basically move inversely to each other with the non-reportables, or small traders, correlated with the large specs).
By short term perspective, do you mean weekly since the COT only comes out weekly?
I’m not familiar with these types of flows. I’ve heard of capital flows, trade flows, bond yields, and Central Banks… any of those what you mean?
Speccies…the large speculators 
I don’t know what you mean by “markers”.
I don’t know for sure if it’s a top except that price has bounced down from that price zone in recent past…it’s at least a significant resistance area.
However, I do understand the stop fishing and how it acts as a springboard to propel price after tricking traders into the wrong direction.
Looks like I joined the fun.
This time I went with the “flow” with respect to the price on all the timeframes, which were all up. First I waited for price to break the PDH (middle blue line), and set a pending buy limit order there to catch if price re-tested it. Sure enough it did, but I’m also sure it wasn’t smart to place it within 1/2 of a couple of important news releases, 1 of which was the GPB retail sales.
Price triggered the long a few minutes before the news, and seconds after the news it shot up over 30 pips, breaking R1 and another swing resistance area (upper red lines). I had initially set my stop for 25 pips, and my target at 1.6255 thinking if it’s going to keep going up some yet, it may be aiming for 1.6300. However, I closed out the trade for +30ish and am going to bed.
Ok, sorry, I need to cross-reference some of your terms :o…“retail market’s positioning” - you mean the net position of the “non-reportables” on the COT report?
I mean retail broker’s information published every Thu 21:00 GMT. That information tells you the positioning of retail traders.
For example you are classified as retail trader and your positions would show up in your retail broker information report.
For example FXCM Speculative Sentiment Index (SSI) is a retail broker information report.
By short term perspective, do you mean weekly since the COT only comes out weekly?
Anything from a day to three months. Generally speaking.
I’m not familiar with these types of flows. I’ve heard of capital flows, trade flows, bond yields, and Central Banks… any of those what you mean?
Corporates are the treasury departments of large multinational corporations.
They are responsible for hedging the FOREX exposures of their firms, which can have dramatic impacts on earnings for firms with large overseas sales.
For example, a company like GlaxoSmithKline has massive revenues in US Dollars but has most of its cost base in Cable. They must hedge their currency exposures to try and offset this mis-match.
Real Money are end users of FX, who trade to pay for transactions or liquidate proceeds from transactions in other markets like equities, fixed income and commodities. Typically, they are institutional asset managers like pension funds, mutual funds and endowments.
And Central banks of course who are known to move a yard [1 billion], half-yard or more at any time.
Yesterday’s live presentation in EURUSD was a nice example when Central banks starting to move money in half-yard chunks.
You don’t want to be on the wrong side of these flows.
Speccies…the large speculators
Speculators … you, me, Joe Doe, Investmentbank Inc ect. … anybody who is buying and selling money for profit.
Mind you…if it goes wrong…for a loss.
I don’t know what you mean by “markers”.
Markers are prominent Swing Levels who stick out like a large sign post on your charts.
Above mentioned flows use these markers to engage.
20,50,80…
I have not posted here at BabyPips, in a very, very long time, mostly because I was turned off by the general method of trading with no regard paid to the intentions of those who have the financial clout to cause significant impact on the market, by means of their [B]orders.[/B]
It would pay all of you following this thread to take heed of [B]coxsonne’s advice,[/B] because out of the many traders on the forum here, he is the only one I would vouch for who has a semblance of a clue of what’s really going on in the market. I don’t mean to sound condescending, but when you begin to view things from the perspective of the intentions of the various participants of size, you can begin to map out their intentions, and side yourself along with them, to profit from the moves they create in price, as they fulfill their objectives. [U]It is in essence piggy-backing off the smart, or more informed participants,[/U] and will put you at a distinct advantage to the masses of clueless retail traders out there.
Pause to think for one minute, if you think an institution of size who needs to defend an options barrier, due to the massive amounts of money on the line with these derivatives, will [B]care about arbitrary X% Fib retracement, or Indicator X on Setting 1,2,3 crossing with Indicator Y on Setting 3,2,1.[/B] You look at some individuals calling trades, citing that price needs to go up/down or continue past this level, [B]because it conforms with some arbitrary condition defined by you - a retail trader[/B] and it is all so very sad, when you see them buying right into a glut of offers, or selling right into a glut of bids, merrily becoming victims of the objectives of the smart money.
But I digress…
I wanted to share with you that it may be possible that you are interpreting the COT in the wrong way. As [B]coxsonne[/B] pointed out, the Commercials you see would be those institutions interested in protecting themselves from foreign exchange risk. To do this, they [B]hedge[/B] with Futures Contracts.
Look at EUR/USD in the time period Jan 2010 - Jun 2010. We observe that the currency pair was dropping; the EUR was depreciating against the USD, indicating a demand for USD. Euros are being sold for USD, which we can posit as European entities purchasing increasing amounts of products from the U.S. Thus there is more business for European importers.
If I am a [B]commercial European importer,[/B] I want to buy for as low as possible, and hedge myself against increasing prices for the products that I am importing. To do this, I will then [B]buy[/B] a futures contract, which will in effect protect me from rising prices since the value of the risen prices would be harnessed in the futures contract. I am [B]long[/B] a futures contract even though EUR/USD is tanking because my objective is to [B]hedge, not speculate.[/B]
However, if I am a [B]non-commercial, large speculator[/B], and I wish to [B]speculate[/B] on the future value of EUR/USD, I would want to hold a position which would profit from the movement of the currency pair. In this case, it would benefit me to take the [B][U]other side[/U][/B] of the importer’s long futures contract; so I would be [B]short a futures contract[/B]. This is because my objective is to [B]speculate, not hedge.[/B]
So the COT really shows different data from differing points of view and objectives. It is not because you see Large Commercials that you must erroneously think they are the smart money! In this case it is better to side yourself with the Large Non-Commercial Speculators, because these are the individuals who have objectives similar to yours.
If I am incorrect with these premises, then please let me know.
Hope this helps,
Regards,
xXTrizzleXx
Hi Trizzle, how’s it going?
For me this past year has been all about what big or smart money is and the little games they play, thanks to InnerCircleTrader and VSA. I found it quite interesting this Options business with their exotics such as [I]Double No Touch[/I] and several others, thank to Coxsonne. (Reminds me of some card games I used to play such as [I]Kings Make Little Ones[/I], and [I]AC DC One-Eyed Jacks[/I]…:D).
The way I’m using the COT report is basically how you described. Large speculators and commercial traders move inversely to one another. As quoted in Sentiment in the Forex market book as it relates to forex:
“[I] A top in price occurs when speculators are extremely long and when commercials are extremely short (and vice versa). Commercial positioning is on the wrong side of the market for the meat of the move but is correct at the turn (reversal). Therefore it is profitable to remain with the speculators (long or short) until a sentiment extreme has been reached. Once a sentiment extreme is registered, the risk of a reversal outweighs the potential reward that comes from the continuation of the trend.[/I]”
We do know there are many different agendas at many different price points on a chart. For this method’s purposes, since we are using a few S&R “markers” such as swing tops & bottoms and daily/weekly highs & lows, I am checking if they happen to be at a time when there is also a sentiment extreme to backup yet another reason for a bounce vs a breakout at these locations.
Thanks ICT…resuming
A brief top down analysis for this week is still mainly short, but for both USDJPY & GBPUSD. Tonight I used the 0:00 GMT time’s for calculating the pivots, which caused the PDH and the R1 to coincide closely together (upper red & blue lines). Also converging in that area are 3 fib sets that I drew which landed the 200th, 127th & 78th levels (all which also ferreted out a gartley pattern). All we can do is play the odds that it’s a pretty significant “barrier”.
Entry at 1.6123, stop 25 pips, target next fib level, MR1 (mid orange line)@ 1.6191ish for 30ish pips.
That’s the idea, yes.
As a side effect…overtrading and high risk entries become a non-issue for retail traders starting out because those smart, more informed participants are very selective about their engagements in the market.
If I am incorrect with these premises, then please let me know.
You are correct, yes.
If you as a retail trader begin to think like smart, or more informed participants, what you would do to archieve (their) objective and how you would implement a strategy to get there, keeping in mind the different tools at their disposal [Futures, Options, Hedge ect.] in the market, “things” take on a new perspective.
You don’t learn those things from books, but. You need to make an effort and step outside your own habits and [tunnel]vision. But it’s all worth it, xXTrizzleXx.
Good to know at least I’m not way, way off track here.
Objective-wise, I think I have an understanding for most of the participants involved, except for Central Banks. I mean I know it’s their objective to exercise monetary policy and whatnot, and intervening in the currency market is one way of doing it, but I recall reading that you anticipated a half-yard intervention by a central bank earlier on.
I have a feeling that it was an Asian entity, but then I am curious to know whether you got this information from your feed before, or after the fact…it would certainly help to know when the juggernauts are stepping in line.
As for options, futures etc. I think I have these things nailed down. The only thing I would like clarification on is bonds…I simply can’t get around how they might generate order flow! Can bond auctions generate direct order flow? Or is the orderflow more a reaction to the outcome of the event? Any hints would be appreciated!
EDIT: I would love to dialogue with you further, would you consider enabling PM? I don’t think SweetPip will take kindly to us filling up her journal like this! 
Lovin the straight-forward wording on that quote. sometimes I need information packaged all nice and efficient like that for things to click in my mind. thanks for sharing, CoT making sense now!
…“until a sentiment extreme has been reached.”
That’s the theory…in practice it is around 90%/93%.
Validation…measure Cable Av. Day’s Range from Fri Lo (1.6030) to…where the Offers (1.6190) are lined up…subtract the spread…Limit Orders “slack” +/-2 pips and you have arrived at your most likely “sentiment extreme” for the day. It is NOT 100%.
Repeat for the week…for the month…
That’s the real world of FOREX…