Ah I see. I have a problem with timing as well right now I work 12+ hours a day and need to get my sleep at night to function the next morning. I still feel we are missing a big chunk of his method right now and im assuming all will be revealed in the whole forexmas thing! hopefully if it all lives up to the hype I will have to think about possibly making some big changes in my life.
Anyways I’ll be following your thread with interest to see how it all works out with you and how your system evolves. Should be interesting.
As much as I look forward to trading, I have a lot to do now before Christmas, so in order to get it all done, I must stop for awhile…probably until after the new year.
These past couple of months have been very promising…from a $288 loss in mid October, the method I’ve been forging lately has given my trading a profitable total of $638 to close at a gain of $350. However, I would like to see the balance get up to $2k before I try going live again.
Reviewing what my method uses, it’s not all that complex at all. I can either trade counter or with the trend depending on where price is and how it’s behaved when I get back to my charts.
Support & Resistance: Basically my chart is mapped out using fibs, pivots, & some highs & lows from higher timeframes (the bigger picture). The swing highs and lows are then filtered with odds enhancers (to determine the better ones to trade at) which are then deemed supply & demand zones. If the fibs/pivots/other S&R levels align closely together (cluster) within these supply & demand zones, all the better.
VSA: once price gets into these supply & demand zone price action is analyzed with volume and spread(candlestick patterns) to help determine if that level will break or hold…but it’s only good if I’m there to watch it which is not often the case due to my timezone. Otherwise if a “potential” area is considered oversold or overbought and a number of S&R levels cluster together, I might just place a pending counter trend order there, or depending if price recently broke out of a consolidation area then I might place a pending order to catch price if it revisits that consolidation for hopefully a trend continuation trade…and bypass VSA.
and the Average daily and weekly ranges: is to help with oversold & over bought conditions. The fibs & pivot are also good for this purpose too.
My stops are just beyond the outer edge of my defined S&D zones which I try to narrow down to around 20 pips (lower timeframes) and are moved to break even at X pips in profit by my EA, usually 20 pips too. Targets back to the last minor S&D zone accordingly.
I don’t know…seems less complicated to me than some of the other stuff I’ve done and my chart isn’t very cluttered at all…lol
Ok, so it’s time to get back to work! Actually I’ve been back at work for a week already, and I even sneaked in a few trades over the holidays, but now it’s official
I meant to post this up several hours ago, but got caught up in a newsletter I’m the editor of (not forex related). I marked a supply zone on the AU where I put a pending short order at 1.0323…price made it to 1.0322…did I miss it by a pip?! Also at this zone is the 161.8% fib of the PDR, the daily R1 and the weekly R1.
Update:
Seems I did miss it by a pip! So I’ve removed my pending order because it retraced back down to the PDH by about 62%, so going back up (resuming an uptrend) will make it a 2nd touch, which we don’t take because the “odds” are less that it will bounce again…it could bounce down again but I’m not interested anymore. Instead, I’ve changed my pending short to 1.0380, just below the thick blue line at the top of the chart.
On this hourly EURUSD chart, I have marked a possible supply area in dark gray just above where price currently is. Because it will probably get there when I’ll be sleeping, I have a pending short order at 1.2934 which is the R1 pivot, the 162% fib and the avg daily range…confluence is good. The risk is about 15 pips which is just above at the dashed red weekly R1, and the nearest demand level below for a target, that I can see at this time, is the lower of the solid red lines at 1.2817… about 110 pips away… so R:R is great :).
Tonight there are 2 pairs, the AUDJPY & AUDUSD that are hitting their respective supply areas at the top of the chart in the dark gray area. Unfortunately I set a pending short order on both, and they both triggered at the same time. I say unfortunately because they are highly correlated and I didn’t reduce my lot size to compensate, so now I’ve doubled my risk.
2 other pairs I watch are also hitting their S&D areas…USDCAD is hitting a prior demand zone, and NZDUSD is hitting supply, however, it is somewhat correlated to AUDUSD.
im new here so couldnt read all your posts. so im just gonna ask: is this your usual strategy to enter at sp levels in both directions…? it makes sense with smart mm but im not into midterm trades not yet at least, so id appreciate a little explaining. will be watching those pairs for you good luck!
Hi kwonkicker,
If by sp levels you mean supply, not I don’t enter in both directions. If it’s a supply area, I only enter short, and likewise a demand level I only enter long. However, with that being said, if those areas fail to hold and a breakout occurs then yes I will trade in the opposite direction when price returns at a future time. This is referred to as swap level where demand overwhelms supply, or supply overwhelms demand accordingly (or in S&R terms, support turns resistance/resistance turns support).
Both those trades failed and broke up through their supply levels,… and then returned hours later. I did enter a long order on AUDUSD at 1.0390, probably a little high but you never know how far back into the level price will return and I took it on it’s outer edge. This means a bigger stop if you want to ensure getting into a trade vs smaller stop with a bigger chance of missing a trade before price takes off. I’m still in the trade but it’s close to my stop at 1.0368ish. If I get stopped out, I may still consider reentering depending on price action later in the early Asian session.
[B]Update:[/B]
AUDUSD long stopped out. Will watch to see if it’s just a deep probe to test demand and therefore I didn’t assess the range of the zone well enough and adjust my lot size to compensate for it, or if it was a false breakout to begin with.
Just wanted to give a quick little update on my progress thus far which is still very promising. Into the 6th month with it now and still making gains by following the “plan”. I keep up with the examples posted on Kenneth Lee’s threadquite a bit over at Forex Factory.
I had to change to FXCMs demo because the MF Global one finally gave up the ghost in the middle of January. Funny how that little change can cause a rift in one’s balance, both monetarily and psychologically, and soon I found myself almost a couple of hundred pips down! A bit disheartening but soon found myself back up again. My original demo balance started at $1k, and when I switched I started at the ending balance of that account ($1379)…now I’m back up to $1450ish overall as you can see by my MT4PIPS account link below my name.
I know, I know, it’s still only demo, but I really want to get this nailed down so it becomes 2nd nature before I use my live account. On this 2nd demo phase I’m up to 80 trades again: 42 winners, 28 loser & 10 breakevens…and will re-evaluate again when I reach 100 trades.
I will try to post some more charts again soon with my pending orders set, and then it’s just a matter of waiting for them to get triggered.
Most of the pairs don’t seem to have many quality S&D areas to work with tonight. This 30 min USDCHF is the only pair that has any potential for me. I put a pending short at .9085, just at a possible supply zone edge circled in yellow. What else this price area has going for it is the monthly pivot level, the weekly R1, daily R2, and a major fib level. Yes I would say it is picking a swing high that will drop to the lower grey demand level. Risk is 20 pips, reward is 60 pips, or 3:1
Normally I like these zones to be greater than the average daily range away from the highest or lowest price of the Asian range accordingly, which this is not. Now we wait.
Odds Enhancers: Strength at Origin of Move = 2 Reward to Risk = 2 Retracement = 2 Big Picture = 1 Time at Origin of Move = 1 - I need to work on this one a bit more…even though I have 6 candles in this base, it happened during the Asian session…can it be blamed for being perhaps a little more?! Arrival = 1 - I would really like it to do it in the next hour, or so, then I’d feel better about the pending order. However, I’ll give it a 1 until it shows me otherwise…which if it takes way too long to get there then if the order was still pending, I’d cancel it. total = 9
I follow your mt4pips profile from time to time and was surprised when I loaded it up today. Seems like you lost 10% and 5% on two trades. I know you’ve got your risk management down so I take it that was just a mistake, albeit a costly one?
Hi,
Yes it was a big mistake…proof I’m obviously not quite ready to go live just yet. I failed to set a stop on my pending orders and went to bed…then they triggered and got away on me, but even worse, I forgot about the margin requirement on US broker accounts… which is a lot larger than on a CAD broker account… and they got margin called…2 orders! I opened a couple more at possible demand zones thinking it had more than exceeded the daily range, but it wasn’t quite finished, so I’m still down. I took a GBPJPY trade too which I never do…and it bit me
Ouch, well good thing it is a demo account. This will stick with you and you WON’T make that mistake again. I would reset the account back to where it was because this wasn’t a failure in the system but rather your trade execution.
So after a very undignified trading performance last week, I’m back where I started 6 months ago…arrgh!
Aside from a couple of technical errors, the rest were just bad trades which required another reevaluation of the method. My biggest issue is what it is [U]more specifically[/U] that makes, or doesn’t make, a level. Odds enhancers are supposed to help with that but what I still struggled with is illustrated perfectly below:
Going back through Ken Lee’s pdf, I feel I didn’t focus enough on finding “substantial” price movements. I admit that having a lot of stuff on one’s chart does take away from seeing PA, so I removed a few namely volume, fibs, and daily pivots.
The new plan is to locate candles that are substantially larger than normal such as a 50 pip range on the 30m chart, and find the base of them which is then deemed a supply or demand level accordingly. Also, I changed the fib tool to measure out reward risk levels being 1:1, 2:1, 3:1 etc…fib tool doesn’t have measure only fib levels…to aid with t/p targets. Then I just set the pending orders…with stops and targets…and monitor. Different t/fs and pairs will have different ranges but I do have an indicator to quickly find the best setting.
I tried it out on the strategy tester, and it went really well. This morning a pending long trade on the AUDUSD worked out, hitting it’s 3:1 target. I once again proceed with continued optimism
One of my pending orders has triggered…short USDCHF at .9241…my stop is at .9264, and target at .9175. My stop will get moved to break even at .9221…currently .9228.
After a long progression of price moving sideways, it finally hit the stop. -28 pips. The length of time was an indicator that it wasn’t a good level after all, and there was plenty of opportunities to get out at least at breakeven.
Next trade triggered is a short on USDCAD at .9947. Stop is .9961, and target is .9905 (3:1).
This is a 2nd approach to this supply level, which missed triggering my pending order by a pip on the first approach. So will it repeat it’s prior action?..We shall see.
Update:
Stop finally made it to breakeven at +20…now sitting at around +15. Going to bed now so will let it run it’s course either way, at least it won’t lose any capital now. 2nd update:
Stopped out at breakeven…just!
Another one of my pending orders triggered (while I was making dinner)…long NZDUSD at .8066. Stop was at .8038 which is a bit more than my usual 20 so I adjusted the position size to compensate. Target is .8148 (3:1), and is also an area where price has reacted at before. Price moved much quicker and currently up +38 pips, stop moved to breakeven.
Update:
I closed the order at +61 which was just below the lows of the target area…where the middle red horizontal line is above price. It’s really hard not to close once in profit for fear of losing it…so this was an exercise to hold out longer than usual, and I’m pleased it paid off.
good luck!
