This trade just seems wild to me. When you make fib projections like this is it not recommended you place the SL 30 pips above the top of the fib, that is why you narrow down timeframes so you can get in at your point of entry based on a different OTE. The up surge seemed out of the ordinary so news was a big factor. On my charts the OTE wasnt even during london close, price was already moving down at that time, your OTE is the end of NYO.
I think we are getting overzealous with the higher timeframe analysis, it is supposed to guide us to points that we narrow down on lower timeframes, and looking at a 15 or 5m I dont think would have got you in this trade.
I am just trying to be devilās advocate maybe pointing out that this was a little risky
it wasnāt just the fib I entered on. Yes, I entered the trade 15 minutes before my preferable time (I like to enter LC trades between 8:50- 9:15 MST). My actual entry was on the 5 minute chart, and if you look at that chart, price stalled for 20 minutes. There were a number of factors that led to this trade: ADR, 1.5770 institutional, TT extreme high just above it, and SMT divergence. from what I was seeing, it looked like a low risk trade
After reviewing your trade on the charts I like this for some of the same reasons but also different ones.
I honestly disregard pivots as buy and sell zones because there just always seems to be other things that take precedence, maybe I need a slap idk.
I really like that highertimeframe support/resistance line.
Clearly I am trying to be conservative in the beginning teachings so I look for daily and 4h flow to line up, so i would be sidelined for something like this, but I always pay attention to 4h flow and can see you can get some good counter to daily trend setups. So 4h flow was up AND in the TT buy zone.
I guess I respect pivots more if i was looking at LC and maybe getting in on NYO but I am always watching the TT. ICT has given us so many tools lol easy to forget about things but if i was going to jump on a 4h flow change I carefully watch TT.
Other reason I would have been scared to be long is ICT own opinion on the market going lower, but being long would not have been that crazy.
Can you plz post your SMT divergence chart I would like to see what timeframe you looked at cause this tool always seems after the fact for me idk i just dont visually grasp it well. As it develops I can see oh one broke old lows the other didnt, but I never feel comfortable with this tool even though it is definitely powerful for how much it is mentioned.
I definitely commend you on your trade, way to bank pips, the trade just doesnt feel ātightā enough for me to be able to consider something like this.
I appreciate all the trade posting that has been going on, I am just trying to spice things up with the questions because I may not understand a trade and questions it:confused:, but hopefully I can be convinced on being wrong and learn something. So thx LD
Before I respond, I wonder what happened to all the charts I included in my post? Strange, they all just disappeared for some reason, but are present if I try and and edit my post! Anyway, Iāll look into this.
Regarding your concern on ICTās bearish outlook, I believe he was focusing more on the Fiber. However, since the two are closely correlated I began my trading session with lower prices in mind as well. As a matter of fact, at the onset of the London Open I had a pending order to get short around a resistance area of 1.5606. My order did not get triggered as price went south prior to providing an OTE entry, all the way to the support level I had indicated.
Once it penetrated this support level and began an initial bounce, I thought: āShort at Resistance, Buy at Support.ā I looked back at all the analysis I had done and realized if I didnāt have conviction/confidence in my analysis of S/R levels, Iāll never grow as a trader, even if I hear others discussing moves in opposite directions. I have learned the hard way that you canāt have an emotional tie with the markets and be stuck on one bias. The market is dynamic and, as it is, so must we be in our approach to trading by changing our bias when price indicates. I applied ICTās teachings of S/R levels and entry techniques, and cut my risk to only 16% since I was initially looking for a short opportunity based on the bearish sentiment.
One of my personal goals is to strengthen my self-confidence as a trader by making decisions based on my own analysis. With the tools ICT has presented, this can be realized. Iām sure ICT wants us all to become independent thinkers with full confidence in the tools he has provided us with.
Regarding the SMT div. chart, Iām currently on my work computer and do not have it available. Once I do, Iāll post it here.
Edit: Hereās the SMT bullish div. I noticed on a 1-hr timeframe, right around the aforementioned support level:
Edit#2: After looking back at my notes, I can recall Michael saying that there would be an interest to get below 1.5271 on cable IF the swing low of 1.5420 is breached. The latter didnāt occur, so it seems that even in his opinion the Cable could have moved in either direction. Michael, please correct me if Iāve misunderstood.
Thanks alot and you are right; it is very important to learn to have convictions in our analysis. Your charts work fine if you click the broken picture link. They may be to large to show in the reply window or something, but if you click it, it will appear in a larger screen.
One of the areas I need the most work on is continuing to better understand (and use) SMT divergence. On my other screen right now, I have a five minute chart overlay of the Cable and the Fiber. I think I see where you entered the trade around 5:00AM EST. I see a point between 4 and 5 AM, where the Euro was moving sideways and the pound was making the lower low (around 4:45AM), presumably clearing away stops at 1.5525. Am I looking at this correctly. I have got to train myself and my eyes to look at this more. Kind thanks, and great trade.
Looking at the 1 hour, I see this as well. On the 1 hour, the Euro was making lower lows around 2-4 am EST. Is this like an upside-down turtle soup, and this being the case, would the Euro have been the preferred currency to go long on, as it was making lower lows on the 1 hour chart.
Thatās EXACTLY what I noticed on my charts, PipARush. I typically keep an eye on the 1-hr timeframe for SMT. I havenāt had much experience using it on smaller timeframes, although many traders do.
[B]Hogarste,[/B]
Yes, I typically take the lower lows currency (in this case it would have been the Euro) in such scenarios, but I had done my analysis on the Cable and hadnāt done much pre-trade analysis on the Euro.
My interpretation of this is youāre can reasonable expect both pairs to go long. You want to evaluate both to determine which is preferred for a trade. Not necessarily use the lower low of the bullish divergence of the criteria.
I think you use the SMT divergence to establish a market biasā¦but look at the pairs to determine which to trade with appropriate stop loss placement. On the GBP in this caseā¦you would more likely see a OTE entry since it could retrace. On Euro, you would look for key suppor levels since itās making lower lows (long term fibs, pivots, prev day high/low, etc).
Euro was at a 50% gap fill from Sundyās gap up, and Fridays Pivot level.
remember Fury, S&R trumps market flow. Last nights MS1 GMT pivot was the support that the move keyed off of. After being rejected at that price so many times, that may have been the catalyst that turned the market from bearish to bullish. The move up at 3:55 am stopped dead in itās tracks before the final move up at the GMT CPP. Not every pivot point will act as S&R throughtout the day, but most of them will at least be respected.
Iām not sure if you all have this, but someone on here posted the SMT divergence which made it very easy for me to understand it, and Iāll post it here for all of you.
Lower lows, Higher Lows Divergence= UP, take the lower lows currency
Lower Highs, Higher Highs Divergence= DOWN, take the higher highs currency
Although I was not home this morning to trade either, I would not have caught this if I had been. When someone shows it to you (like most things) it seems so straight forward, and such a great tool to have in the box to harvest pips with. I have to start training myself to look for this.
I disagree with you on that one. The divergence got him into a profitable trade, which I wouldnāt say is nothing. This is a case where technical analysis lined up with fundamental, or maybe I should say, lined up before the news was out, which I donāt think is a coincidence. The news may have propelled the market, but technical analysis got him in
Au contraire. Nobody disputes the news was the catalyst behind the big move, and I fail to see how you could argue the divergence was nothing.
Although I take trades without SMT divergence, on this [I]particular[/I] entry, had I not seen the divergence I would not have entered into the trade. Since I went into the trading session with a bearish outlook, it took a lot to convince me to go bullish, and the SMT divergence really tipped the scale when all the confluences lined up.
Lazydogs is right. Here is an example where technical analysis and fundamentals came together to provide an opportunity to buy at the very low and ride up to the stratosphere.
I thought ICT has always said to take the pair that doesnāt make the lower low since the smart money is accumulating on that pairā¦Is this correctā¦or have I miss understood ICTā¦?
