I had seen the term “Smart Money” used here and there but thought is was just a term for traders who knew where to make good entries. Then when ICT mentioned it, I finally had to ask, and it wasn’t what I thought…lol.
Whether one uses VSA, ICT’s methods, and probably a few others that consciously, or even unconsciously, trade in harmony with these traders, then it puts the odds of success on your side that much more. 
Hi Sweet Pip
I have been fortunate to have been mentored by someone that actually trades forex for a living. He used a bit of everything form Gann to simple moving averages. I could not get a feel for his methods though. I have also studied and read widely on forex and technical analysis. I like the pratical application of Miner’s simplistic approach to Elliot wave and could get a wave count working from the higher time frames (I have ful time job)… If are you not an Elloit wave fan, Miner’s dual time frame momentum analysis can be combined with Goodman’s wave count, Larry Pesavento patterns or even with Walt123’s pattern wave theories etc. Before Miner, I have had some succes with the Floor Traders method ie 10&20EMA on 4H and Daily chart. I have realised though that the Holy Grail is a method designed by the individual and should be as simplistic as possible. The key is having the psycological fortitude to stick to your money management rules in terms of profit taking and exiting to protect your capital.
regards, roger
Like trading in the direction of the commercials of the Commitments of Traders (COT) report…
Here’s a long trade I took tonight (PST). I placed a pending order at 1.5380 (80) which was also at the PDL. Now I probably should have taken it at S1 a little further down, but prior to that really long pink bar, price had already almost touched and bounced up from the PDL, so I thought maybe it wouldn’t quite reach S1 the 2nd time. I also had a bullish divergence with the oscillator.
I originally put a 30 pip stoploss on, but this time I put a 20 pip trailing stop and no take profit. At this moment I’m +40 with +17 locked in 
UPDATE: Trailing stop hit for +73 :)…one of my best trades yet!!
wow, may i ask, how do you trade with such a busy chart?
Well done SweetPip
I got in by buying into the test of the previous Low (PDL) after what i thought was a raid on the stops 
but I got out at 1.5424 after hitting resistance from yesterdays support, I’m a bit gun shy after yesterday’s cluelessness.
Wow, I’m loving these levels. SweetPip you certainly got a nice profit there.
I chickened out earlier and took profits.
What I started to use now is the vsa concept from Master the Markets, and along with Petefade’s help I’ve been able to nail my entries to almost no draw down.
Five minutes chart is a fantastic tool to do this, and althought I’m not currently at my computer I’ll try to post a chart later.
One thing I don’t like is that all the action happens while I’m suppossed to be sleeping, and althought I set some alarms, entries is something that I think you should manage at the time, in order to discern the best entry point or wether the level is significant for a trade or not.
Well I guess in this case it"s well worth the effort.
Yes I can relate to the market action timing issue in relation to sleeping time…lol. In ICT posts he had put that at 11:00am EST to look for a sweet little daily swing. for me that is 8am which is not too bad as I don’t need to be at work until 9am and I’m only 5 mins from work. I haven’t really paid attention to that time, but I will be checking it out more closely starting the new week.
I’ve haven’t gotten very far into the MTM book yet…too many distractions keeping me from fully understanding stuff and I find I have to repeat read the first few topics…lol. I’m also trying to get a grip on the COT reports. I found a site that uses the “open interest” part of the report to create a histogram by downloading the data into a spreadsheet and creating a graph from it…interesting from a longer term perspective. TMI!!!..too much information…
So what did 'ol Pete have to say? 
COT report eh? I already know where to find it, lol, that’s a start, maybe by staring at it for some time I’ll get an idea of how to use it.
Basically Pete told me to look for high volume in the 5 min chart at key levels to confirm accumulation.
Relative high volume is just not enough, price reaction is really important at this level. Being new at this myself, he recommended me to wait for a 5 min candle close as a pin bar to confirm this. Many times waiting for a pin bar gets you a not so good entry as price won’t come back. but some others it will re-test and then you can pull the trigger, or market will even mark lower levels and that’s where you get the almost zero drawdown entries.
15 min charts can confirm you acummulation when 5 min candles are not conclusive. A 5 minutes candle close completely bullish is not a good sign of a reversal, wicks are key.
Yesterday was a good example of that. Price started seeing acummulation at the PDL, but 5 min candles were not showing good reaction. finally market got rid of poor positions by marking lower levels and there we saw a pin bar and even higher volume.
You know I started lurking his thread a while ago, but didn’t quite understand the idea, now it all makes sense and I came back to re-read his posts and it has helped me to understand better what’s said in the book.
If it’s ok with you I’ll try to post some examples making emphasis in the 5 minute entries, maybe just one, not to deviate the main purpose, and there’s still information left to be learned from ICT’s blog, so I’m sure not everything’s been said and he’ll present more interesting tools.
Now I’ll use the weekend to get some rest!, lol, last night I literally fell asleep in front of the computer, I have to re-arrange my schedule and find some tactics to sleep well!
Yes get some proper sleep would ya!..besides aging you prematurely…lol…lack of sleep definately affects one’s discretional judgement
I suppose using either VSA or correlated pair divergences as a SMT to detect accumulation & distribution by Smart Money, we are othewise using the same tools to determine those key levels using market flow, S&R, pivots, fibs & chart pattens. It’s all good
So what have we got tonight. ICT has introduced his application of fibs. Basically drawn from the PDL to PDH. Still ideally want to look for trades at or just beyond those levels, at the nearest pivot level or key S&R levels, with a divergence in price between EURUSD. Now I have a Resistance line at 1.5400, which is a nice round number, at the 78.6% fib line, and a divergence with EURUSD. Checking the flows gives a bit of a mixed bag, but mostly down on the higher t/f’s. I also seem to have a bearish butterfly but for some reason my pattern indicator didn’t pick it up 
I have 2 concerns: One is that the PDH and R1 is about 30 pips above my entry, but aside from the power they naturally have…lol…it doesnt have as many confluences of events to go with it. The other is that there’s a news release in 1 hr 40mins…hmmm.
So we’ll see what happens. I entered short at 1.5400 (the upper yellow line), stop of 30 pips, and a trailing stop of 23.
UPDATE: Trailing stop kicked in quite quickly on a sharp down move. Initially was up to +38 and then price started retracing and eventually hit my stop for +15. My trailing was probably too tight but with the pending news release(s) now not too far away, I’m Ok to be out of the trade just in case
Nice catch on the Gattley.
I got a sell on the PDH which has a H4 fractal and R1 pivot (4pips below) so I’ll see when we get closer if any divergences show up too.
I’ve noticed with the fibbs PDH-PDL that the 1.27 has a lot of power any one else seen this or am I spending too much time staring at charts again?
update OH NO!!! it fell short of my entry by 0.00004 LOL, what sort of cruel joke is this!!! Another lesson learnt ENTRY ±2 pips.
That’s a bummer when that happens, but looks like you got another crack at it a little later if you kept your pending order pending ;).
I missed considering that H4 fractal :eek:
I’m still doing my “homework” with the fibs so will check on the 127.2% frequency. Once upon a time I had been working on a system where I applied fibs to the swings at the beginning of the Asian session and took pullbacks of the 50 or 61.8 levels, or breakouts of the SW highs/lows with a target to the 127.2, so and I do agree that it’s a significant level.
Hey SweetPip,
I was wondering if you have paid attention to this recommendation lately.
Honestly I don’t, at least not in real time, and by what I have been able to observe these past few days I haven’t really found a remarkable swing during that period of the day, and by remarkable I mean one with enough reasons to say 'hey I would’ve traded it if I would’ve been in front of the computer at the time´
I want to see how these levels work during the day.
Thanks
I pretty much came to that conclusion this week too but one week isn’t much of a sampling to base a judgement on especially when there’s only a few really good setups per week anyways and they may fall anytime after midnight EST. Something we’ll have to ask him for more specifics on.
love the predator concept, awesome.
Thank you, Sweet Pip, for starting this thread and always contributing such good information! Thank you also for sharing the info on market flow and fractals - another great tool to add to my toolbox. I’m still very much in the learning stages, but thanks to people like you and TMoneyBags and others who by taking the time out to post here and share what they know newbies like myself can learn, as well. Bless your sweet Pip! (I’m sure you’ve heard that b4 - ha-ha!) Keep up the good work and have a great weekend!
Instead of 11am eastern, take a look at 9am eastern.
Yes the COT report. I’ve been spending some time lately reading a book titled “Sentiments in the Forex Market” which includes a detailed section on how to use the data in the report to come up with an indicator to gauge the direction of the market. Actually tho, it seems that we want to go with the speculators rather than the commercials.
Here’s a graph I made from the data for the GBP in an Excel spreadsheet…
When the commercials (green) are buying, the speculators (red) are selling, and vice versa…so they should always be negatively correlated.
The blue line is a composite of the two groups to show when extremes in their net positions expressed in percent rank between 0 & 100. An index reading of 100 signifies a bullish sentiment extreme, and an index reading of 0 signifies a bearish sentiment extreme. This is calculated with 24 week lookback period.
When all 3 are aligned in their extremes, apparently a reversal is much more likely to happen…but when? Still working on that as another indicator, made from the COT that I found, used a delay in timing as well as a different lookback period. The book recommends a couple of lengths for comparison…but each pair will need it’s own parameters.
So it would seem that the sentiment is still currently bearish for the GU, although it had reached an extreme in the composite index, all three haven’t hit their extremes all at the same time yet.
There’s also another interesting phenomenum when it comes to market sentiment/market reversals. Even tho it’s news related, it’s not so much the fundamental implications, but rather the extreme language used in the news article headlines. Words such as “surge”, “plummet”, “plunge” can actually be used as a contrarian signal. Apparently News headlines at major turns always extrapolate the current trend.
Like the public, the media is always wrong about the direction of financial markets at the turn. Robert Prechter describes why in The Wave
Principle of Human Social Behavior:Reporters are usually nonprofessional in the fields that they cover,
so the feelings of reporters in general mirror those of the public. Reporters
often contact financial analysts who express their own feelings
about markets, thus reflecting society’s consensus feelings. A
bullish analyst rarely gets a forum at a major market bottom, and
a bear rarely gets one at a major market top. The media’s choice of
times to quote certain professionals typically shows those professionals
retrospectively in their worst light.In other words, the media has to be wrong at the turn, just like the
public. The two basic emotions in financial speculation are fear and hope.
When one of these emotions overwhelms the other, hope at a top and fear
at a bottom, it is only a matter of time until the market turns the other way.
One underestimated (?) source of news besides financial magazine covers, is Google. On the right side of the web page, you will see prices for USD-Euro, USD-JPY,and USD-GBP etc. Click on any rate. If you click on USD-Euro, you will come to a page that features a chart along with U.S. dollar articles. On the right side of the page, click on View all news for USDEUR. It does not matter what the second currency is in the pair, the news headlines returned are always for the first currency in the pair (in this case, USD for USDEUR). The most recent articles will appear first. Simply scan the headlines.
