Commercial hedgers are just that, hedging. They are the counter party, i.e. the market maker. You are trading with those firms for currency, not actual banks. So as they anticipate the EU moving higher and therefore their trading clients trading long, they must offset that long by hedging short so they do not lose money.
DONT GIVE UP, Forget about the $16.244.
Hordane explained it very well. The picture is even clearer in other commodities where the Commercial Hedgers are the companies involved in the actual production of the commodity. They are not in the market to make a profit. They are buying āprice insuranceā, to ensure their production costs are covered and to lock in a decent profit, and they are willing to pay a price for that service.
edit:
And in currencies, where the hedgers/market makers want to take the other side to limit their exposure, their profits come from the bid/ask spread, which over a large volume, is a huge amount of money.
re-edit (lol):
Now Iām not sure about that last bit I wrote. If all the speculators in the spot market go long, then the market makers are very short. Since they make their money from the spread, they just want to limit their short exposure, and the only way they can do this is by locking in the current price in a different market, like buying calls in the options market. Is that right? Lol, I have totally confused myself. 
Essentially yes, you have the spot market and the futureās market at play here.
Commercials are made of two groups: 1) market makers and 2) institutional investors; probably a 80/20 split but donāt quote me on this. Until a few years ago they were grouped together and you saw total commercial movement; under the new data the commercials are split out which is what my excel sheet was programmed to show.
The market makers are the people that are your trading partner. If you want to go long EU they must go short, this is the basic principle. As a collective, they see their spot/futureās traders as a group going long EU so they buy futureās contracts in the opposite direction to cover for losses to the traders. This is premium and they make lots of money on covers and spreads and commission. This is a very simplistic explanation of how it this system works and why your broker isnāt losing money taking a position opposite of you.
You also now have the institutional traderās data, these are more-or-less your union pension markets that are actually trading in the currency as part of their portfolio. It is a small measure percent of commercials but watching them can give you a clue as to what their long term thinking is as well. This is all listed under the desegregated COT report.
Finally caught up a bit here. Simon Templarās life and business experience very, very loosely matches mine; I used to work for a living but now have small businesses and I am essentially following into forex because, well, itās entirely possible to get good at this. Iāve made a fair number of the same mistakes along the way. Butā¦ Iām getting there. His story is an inspiration.
With regards to Akeakamai, I think that respect for decisions is in order. Heās made a decision, and a good one, I think, based on hard evidence: whatever he was doing, wasnāt working out for him.
[I]Thatās a very wise thing to recognise. [/I]
Who knows what his job challenges are. Only he does. As for what he does next, for instance, does he return to forex at a later time, does he change his strategy, does he stay out all togetherā¦ whatever he decides, letās support the decision for his sake. He is clearly a rational, sensible individual.
I would add only this. Iāve been trading a demo account, and technically neither āgainedā nor ālostā anything at all. But had I applied the same hours studying forex so far to my other businesses, there would have been a lot more than 16k on the table. By practical and opportunity cost measures, Iāve ālostā more than he has, though of course psychologically it may not pack the same punch. Over the course of a life, 16k isnāt much. If you are a working white collar professional, millions will go through your hands in your lifetime. For my part, Iām committed to learning this, becoming good, and not only that, making serious profits with it. How fast that happens is not a big concern.
If I dare overstep and make a rare character assessment, it is this: even if Akeakamai does not do forex for the near term, or ever again, heās going to take away quite a bit from what heās learned here and apply it quite profitably in the future, somewhere. Iāve trained a fair number of people in electrical engineering, yes thatās unrelated, but Iāve seen people capitalise as much upon what didnāt work early on, as what did. I too failed once in business when I was in my twenties and spent decades working for others. Were it not for that particular failure though, my first business failure would have been in my late thirties instead.
Revel in the failures. Most people who dare to fail, tend to have a string of failures (as I have too) but along the way, find a few winners. Iād still be working for a boss and saying āyes sir yes sirā if it were not for overcoming the fear of failure. As it is now, Iāve had MBAās ask me for advisementā¦ laugh Not that I really know all that much.
The biggest failure is to never try, and believe your bossās evaluation. If I must confess to something completely inappropriate, there was a fellow who once interviewed to get a job from me, back in the 1990ās. It turned out he was the selfsame person who told me I wouldnāt amount to anything when I applied for my first engineering jobā¦ from him. Ooooh yes, you should have seen his face when he walked into my office, amazing how well people remember! And I had a capacity to be a lot meaner in my 30ās, too. Though had I been truly evil, I would have hired him insteadā¦
Interestingly, Iām battling the same issues that Akeakamai mentioned, even though I donāt have formal working hours, per se. Yes I salary myself from my own company and technically have a ājobā but Iāll deal with customers even well after dinner &c if I feel like it. The problem, however, is sleep. Being a bit of a night owl, itās nothing for me to stay up until two in the morning, which from California is a bit after the London open. But, waking up to alerts at 5am, 6am after thatā¦ is difficult. I find myself not at my peak thinking ability precisely when I need to be sharp. Itās a direct correlation to Akeakamaiās problem, and I donāt even have a ābossā to give me a hard time and fixed hours.
So, what to do?
ICTās strategies are my primary strategy, but I have been looking at others that are more suited to my timeframes. One being āBig eā that was created by a fellow who is in California as I am, and it only causes him to check the four hour at 10p, 2a and 6a (forgive the oversimplicity). The other I find very interesting is purplepatchforexās VSE strategy, with regard to trade times. I donāt have to stay up all night for that one. Iām also trying to get a handle on eremarketās orderflow ideas as well, though my visualisation of such is still rather poor. There are other good ones, but, I can only absorb so much. None of this invalidates what ICT is teaching, and in fact I suspect that given enough time ICTās likely encompass quite a bit of what Iāve read elsewhere.
Anyway ~ this thread is not about all those, itās about ICTās strategy and I have done exactly as he has, set an alert on my smartphone to wake me at key levels. One truly doesnāt have to stare at charts all night, this is important to understand.
But the one thing I havenāt figured out how to do well with Oanda MT4, in an automated way, is move my SL to breakeven and take 1/3 of my trade off the table if it goes my way by say 30ish pips during the night. As often it has, only Iāve missed it and paid the price. Yes perhaps I can set another alert at the new level, but at some point I need regular sleep.
Perhaps this can be a question for ICT, do you use any expert advisor or something to do basic trade management when you sleep?
For instance, something like āTrade has made X pips, move SL up by Y pips and take profit of Z% of my tradeā?
Best of luck for all dealing with the adverse weather in the NE right now.
I donāt know whether ICT has some similar EA or not, but you can try this official mql site and look for some script, it is not so difficult to write something like that and for sure someone already made it:
MQL4 Code Base: expert advisors, custom indicators, scripts and libraries
other option is to hire for a few bucks some programmer here:
ā¦third option is that I can do that for free, but cannot tell when, because Iām very lazy 
So, does this mean that the data on commercial traders is useless? Since most of them disregard the trend and are just in it to profit from the spreads and commissions. This also explains the interesting correlation between large specs and comms.
Desmond, I enjoyed your post and as another old boy (40 woohoo) Iām sure youāll take my disagreement with the respect that is meant :13:
Akeakamai is a young guy, 24 I believe and I respect him but I donāt respect his decision. Quitting will not achieve his goals, heās frustrated with his circumstances and how these affect his trading results. If AK ever wants to quit that day job, Iām sure heās well over 50% of the way there with his forex knowledge. He needs a break or to satisfy himself with only trading one session. It can take great maturity to give up a dream for the right reasons but to stick with something through the tough times makes your eventual success all the sweeter and quitting out of frustration will lead to regret imo.
I get some echos of my life in your post DS although I [I]was[/I] in my 30ās when my business failed. I was an airline pilot throughout my 20s and following a downturn in the market after 911 I accepted a redunancy package to try new things. One small and successful restaurant was followed by one very large and unsuccessful restaurant, closing in 2008 with me down about Ā£300000, and including no wage for me and my partner for 2 years I say the venture cost me nearer half a mil :46:.
This was a big blow to my confidence but there were very real silver linings with me being able to spend more time with my young family, get properly fit again and learn forex. My boy is starting full time school on September 6th and Iām going live and full time on the same day. I havenāt decided yet wether to post my results, I can see pros and cons but Iāll probably just pipe up interesting bits :24:
Life will deal blows but roll with the punches :34:
The correlation is almost a perfectly negative correlation. The data is lagged by a week so not really relevant to intra-day trading. However, the COT data is useful when you look at spikes and the price points hit when those spikes occurred. Can give guidance for when price returns to that level or you see a spike occurring it can indicate a fundamental shift in PA direction. When I get a chance Iāll post up a picture of what I mean.
Remember it is but one tool in your trade analysis.
I believe ICT does it manually throughout the night as he does not sleep much, thatās what I remember him saying in the Babypips Chat.
I myself use an EA provided by IBFX called the partial close. In it, it allows you to scale out and re-adjust stops, etc.
Thereās a way to crack it so all MT4 can use it, but Iām clueless when it comes to coding. Maybe some here can help with that.
Regards,
Clark
Lol, I was waiting for you to reply, if not, I would have squeezed that EA out of you anyways 
If you need help on how to use it hereās a link:
Forex Trading Tools - Partial Close EA - Interbank FX
Thereās also a video at the bottom.
Iām not advertising IBFX in any way, just trying to help you guys set up the Partial Close EA. Donāt want another banā¦
Regards,
Clark
Partial Close EA! Yay! I just hope itās a sensible thing to use with ICT strategy; hopefully heāll comment.
Sometimes I feel like a kid playing with sharp objects; hopefully this will be one that falls in the āsensible to use if sleeping anywayā category.
Regarding rolling with the punches, indeed, thatās a skill too. A variety of perspectives is important; anyone can disagree with me and I wonāt mind. I think we are universal in wishing him the best and all of us giving him the best input that we possibly can. I had a few business āups and downsā myself; while clearly the ups are better, the downs rarely kill you.
If I could exchange being āupā and in my late forties for being ādownā and in my twentiesā¦ Iād do that in an instant! Just havenāt found a way to hedge that, yetā¦
ICT has no internet due to the storms and such in his area.
Regarding the closing here is what I have from notes on videos. He takes some profit at 30 pips + profit and leaves the rest. You want to have your TP points set at certain levels such as the 100% fib and the 1.618% fib, leaving 5-10% on to run for longer if you wish or to stop out. He doesnāt mention using any EA, rather, the points are places he simply has limit orders set.
+30 pips, then best judgement for the other targets. Personally, I use +30, the 127.2 (then move stop a little higher up) then typically closing at the 161.8. The EA allows you to set your own targets, your own % closure and allows you to move the stop as much as you want at each point.
Dont quit mate. Youāve contributed hugely to this thread. I read your posts and wish I could be at a stage where I can understand forex as well as you. Maybe you can trade with a smaller account and just trade one of the session(LO/NYO/LC), whichever is most suited to you and become an expert at that session?
In my ICT notes it says watch for SMT divergence at month-end and quarter-end as the funds are rebalancing their portfolios. This is H1 SMT from Friday trading.
Regards
Very Nice Ali, There was also Huge divergence on the 4 Hour chart. I thought this would lead to the formation of the STL on Cable.
I did however trade Fiber instead as I found Cable was hard to determine an entry. Entry 4350, TP was +30 ,4450 & 4480.
Cable bounced exactly off 38.2% Fib drawn from higher TF
Iād like to interject, because thatās the mood Iām in, and I donāt really follow this thread that much, but doesnāt ICT go on about timing your trades? And since itās Bank Holiday in the UK, isnāt it poor timing to be in the market at all today?
I donāt see anyone stating that they are in the market TODAY. I most certainly am not and I wouldnāt recommend anyone else to be either.