Pound Sterling Futures - Commitment of Traders Summary - 10/26/10 thru 10/18/11
— I have added the green arrows
This is for everyone that doesn’t know what we’re talking about lol. It really was a great entry!
Thanks for opening the wound that was just starting to heal, AK 
I can’t look at that chart for more than a minute without :17:
Hi folks, hi ICT! First of all, thank you for this great thread and source of knowlegde. I just finished the School of Pipsology and trying to gain some practical experience with my demo account. After finishing the School, i thought its all about combining indicators and the news but ICTs videos really taught me its about price action. So keep up the good work!
Regarding Fibs, i really think im messing something up. Maybe you can help me. Im not really sure which Highs and Lows to use? I will give u and example:
Orange fib - green entry zone - green stop
White fib - light green entry zone - light green stop
Its the GBP/USD 1H chart. Well, i could use several Highs and Lows here and get different results. I could even use the Low at the white 61.8 mark. Using the orange fib, green entry zone and stop can be dangerous, because the white fib tells me price could easily break the green stop, even reaching for the light green stop. Regarding entry, i could use the overlapping area but these zones arent overlapping all the time. Im not sure about the stop either. Im so confused right now but im sure someone can help me out.
it depends-
what session are you trying to trade?
where is daily H/L from yesterday/two days ago?
what are session H/L for London/Asian/NY?
More important than fibs, is the S+R points .
Thank you for your reply. I got all the the lines in my chart but cant attach high quality pictures yet (under 5 posts). Actually, its the GBP/USD right now, so maybe u could take a short look at your chart in your software, or we just talk abit in here, so i can get my 5 posts. :18:
Im trading the London/NY session. White fib low is the weekly low, orange fib low is the low from thursday. The recent high just shot through the october/previous week high.
Oh man I know what you mean, but I like to think of it this way… would you rather have done this with a $5,000 account or a $500,000 account? LoL
Let’s gouge that wound open so it leaves a scar so you have something to look at next time you are in that situation, muahahah :16:
Don’t worry, I got screwed on that move as well, just a few hours earlier. Nailed the LO swing, but it didn’t hit my final T/P before the NYO reversal. I thought NYO would blow out those highs, but it just kept retracing further further down and my 4% gain quickly turned to a 1.5% gain.
I think the demon here is [B]assumption[/B]. Eventually maybe I’ll learn to stop assuming. Assuming gives zero room for being wrong and we all know how the market handles that mindset…
I wanted to see if I had my chart set up to do this correctly. This is the 1 HR GBP/USD chart as of 10/22. And then I just move the lines as new session high/lows are formed, etc., right?
In Traders Trinity video on 8/14, ICT uses the prior week high / low to create zones for the week that follows with a ‘no person’s land’ and buy and sell zones. does anyone do this for longer time frames than only 1 week? when things start to trend a little, it seems like a larger time period would provide more centered buy / sell zones? I’d really appreciate thoughts on this if my question makes any sense.
I wanted to bring this brief discussion up regarding the GU and higher TF Institutional levels and chart stretching. This is me thinking aloud and going through a thought process. This is a little long so all pictures are linked to not add to the space.
First chart stretching, I really realized that I zooming on the charts and stretch the candles out of shape. What I mean by this is when I look at a TF I have a bad tendency to make the candles fill the chart window. The stretch results in 30 pip candles looking very large and a 100 pip candle looks like Armageddon occurred in the currency. I believe you know what I mean and by looking at screen shots many of us do this. I have a new trade setup and one of the byproducts of this setup results in a de-stretched view of the candles. Upon seeing this view, I realized I have improperly analyzed the higher TF Cable and did not see what was pretty crystal clear in terms of its moves. Mainly, the GU has moved in 1 large range while observing intuitional levels.
Here is a picture of the Cable as it bounced since July. The s/r lines are adjusted to major institutional levels and what I found surprised me. When the Cable hits the middle range lines it reacts in 2 ways. It either slices through with a vengeance or it simply wicks across them. These are 4hr hr candles and the wicks only cross the levels, the bodies stay firmly on one side or another.
Now look at a 1hr chart of the last many days. Notice how price reacts at the main levels. Cable either wicks or hovers right next to the area or it slices through with momentum.
Image 1319300003-clip-13kb.png
After viewing the cable in this regard, I realized I can plan and anticipate cable changes. What surprised me the most as I started plotting s/r and fibs is how strongly the cable respected institutional levels. Once the levels were plotted, it really showed that the currency loves to test and change directions on those levels and drift towards the next major level.
Here is a view of the cable for the last couple days with s/r drawn only on the institutional level. These lines were drawn a few days ago as I started piecing this together.
I notice immediately after the cable moved strongly above 56500 it stopped at the 57500 area. Only price action above this area was wicks, the dumb money buying into a rally. Indeed, each real move for the currency occurred almost to the pip at these levels. Several OTE entries also occurred at these levels as well.
After seeing the above I started thinking on the structure I’m seeing and decided to throw a fib on between the upper range and the lower range, like a Z day and what I saw basically dropped my jaw.
Those institutional levels mainly lined up with the fib levels as well, what a great confluence between these fib levels and the institutional levels. I feel like I’m looking at essentially the same chart, the GU again reacting at fib levels which are almost perfect institutional levels. I can really craft an analysis now seeing the currency move so strongly into this supper half of the lower range. Now the moves on the GU didn’t seem to random on where they attempted to go, I just didn’t look at the big picture.
Naturally the next point was to place the fib on the lower half of the range and see if the cable continued to follow those same institutional levels.
Here we have really the same situation. GU following the main institinoal level boundary for the range and half range. Once PA hit the middle lower range it bounced back down to the key fib areas. Reverse the fib direction and that 72 touch is a 23% fib touch, 61 is a 38, etc. Obviously when looking at the higher tf the cable is very technically correct, even when there was news the move was constrained by the technical variables.
Here’s the same chart with the fib reversed so you can see what I said but on the 1hr time frame. If you had this setup do you think you could have found possible trade zones?
Even has the cable climbed from September, each extension and test was at the overall fib areas of the lower zone and those areas are basically institutional levels. It appears that the institutional levels are the overriding controlling factor. I would place these levels are the strongest element in looking for trade.
Now I’m going to do the same analysis for the upper end of the range and keep those areas in mind going forward. I want to point out in the last image look to where GU is reaching. I wouldn’t be surprised to see a gap towards the 1.600 on Monday morning and a trade below, I also want to point out that the 1.618 extension of the lower price action range is almost the midpoint of the upper end of this range and it so happens to be the gap high range from Sept 16 that has acted as the main resistance level all month. Coincidence?
Finally I wanted to comment on what Client posted with COT data. Remember the 4hr chart from above:
Around Sept 27, Commercial piled on longs indicating an anticipation of further move lower on the cable (they are hedging against the short move, offsetting the losses from that move) What did the cable do, it reached up and touched the midpoint of this range and fell down to the low of the range. Notice on COT we had a spike the next week and ultimate spike on the week of Oct 8. Simultaneously the cable spiked below the range low on Oct 6 and selling pressure eased.
What happened when selling pressure eased. The currency moved strongly to the upper end of the range where we traded the last 2 weeks. This selling pressure was reflected on the COT data as the commercial longs eased as well and non-commercial shorts similarly eased.
I anticipate if we move above the 1.6 range, the next week’s COT data will reflect a move of non-commercials to take long positions and we might see more net commercial shorts and a further reduction of those commercial longs.
There is soo much more I want to share in my thought process that I’ve noticed in the last weeks. I will say this: add your pivot points to the charts (both gmt and est) and look at what you see. Is it me or when a pivot is very close to one of the fibs + institutional level then we have very strong reaction from that level. However, when a Pivot is in between the fib levels the pivot is really not a reaction point but more likely to be a pullback and test point before continuing in the move’s direction?
Keep up the good work Hordane, I like the higher TF S&R adjusted to levels.
There’s a similar thing called ‘The Quarters Theory’ but I think your approach is better.
Wally
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See Santa Claus does exist.
jingle bells jingle bells
You lost me?!?
Edit: Nevermind, gotcha!! :59:
After a few weeks wondering why there was such a large discretion between the ADR(5) figures between my Alpari (US) account and IBFX account, I realized that one considers Sunday, while the other does not…
So now, the question is, does Sunday count towards the ADR or should it just be ignored?
Regards,
Clark
I wonder whether the metrics that are based on the idea of a trading day are all a legacy of other markets that really did close overnight. Forex doesn’t, of course, and there seems to be no consensus on when a forex ‘day’ starts and ends. I think pivots and ADR are clearly in this problematic territory, and I have no answer other than…
[U]Theoretically[/U]: dividing the 120-hour forex trading week into 5 equal days of 24 hours puts the start of the day at 2100 GMT (i.e. +3 hours). I note that some do actually use this for pivots.
[U]Empirically[/U]: analysis of past years of trading would show any statistical preponderance of metrics to respect GMT-based over non-GMT-based time frames, or otherwise. I’ve not done this.
Thank you for sharing this information… It help me tremendously. I now have a set goals of 60 pip a week…
I am sure other “newbie” like me will learn from this… Thank you, Thank you
Hey guys, sorry about requoting myself but i got no answer so far and its still very confusing. Its the actual GBP/USD and both OE-zones got different support lvls, telling me to enter a trade right there. Maybe someone could take a look at their own charting software and explain me which one would better in case of a downfall and why? I just saw the video, where ICT entered in an overlapping area but again, its not always overlapping like in the screenshot. Thanks in advance!
The answer is neither. You drew those fibs to that high looking for an entry in complete hindsight. Did you know that high was going to be there before entering? No you did not. Also remember that a fib is NEVER a reason to enter by itself, you want a confluence of factors (at least 3) to get a better probability entry.
LO had a great entry there, go back and look at the confluences for that entry and post a picture of what you see. Hint: look at institutional level; pivots; trend; fib drawn before the the move. I have a picture and I’ll post up after you respond with what you identified.
I think ur getting me wrong here. I did not enter at all. Its just an example. Imagine, this will be the high for monday/tuesday and the price will drop down to the green/light green area. So the question would be, where to enter exactly in case of the future drop down.
Let me show you the scenario and how it looks like in my charting software. Green Line could be a possible entry, lots of confirmation so far, but OE differs when u draw different fibs.
When plotting monthly pivots and TT are you guys working with the previous month i.e. september or a rolling previous four weeks re-plotted every week?