OK, so ICT was requesting charts aswell as emotional and psychological feedback…this is his payment for the hard work he is putting in. I am more than happy to oblige.
We have had two London Close sessions so far this week, and I have taken NO trades. This is because the PRICE action was too flat on Monday and thus didn’t meet my ADR requirements, and was too strong on Tuesday which meant I was unwilling to stand in the way of a raging bull! I will post the Cable chart that I was looking at last night, and take you through what I was seeing and thinking.
As soon as I set up my charts I could see that GBPUSD, GBPJPY, and EURGBP were all contenders as they were beyond their ADRs. However, as you can see from an earlier post which I made just before the start of ‘Kill Zone’, I was warning people to be wary of such strong PRICE action. My reason for this…I had taken a trade that looked exactly the same as this about a month ago, and although it met all of the LC criteria, ICT came on the next day with his PTC and said that ‘this kind of strong PRICE action is not suitable for a LC counter trend trade’.
I knew that, but I still scouted the set-up looking for it to meet the LC criteria. Why? Well I had the words of wisdom from ICT and my previous experience saying one thing on my left shoulder (don’t trade), and the ‘Greed Devil’ saying the opposite on my right shoulder. I think the ‘Greed Devil’ thrives on what is intrinsically part of all of us in varying degrees, a lack of self-control.
So I look at my Cable trade, see it over the ADR but note it is way over the ADR (60 pips over). We have also run out of pivots at this level! Anyway, price comes down past 20% of the daily pip total. My Fib is drawn…I’m still in two minds. I note the Institutional level of 6250 bang on the center line between 79% and 62%. There is also resistance from earlier in the session at this exact level. Another poster who was in the chat room suggested that we were also in the OTE on the daily chart for a move DOWN. So here I am with a viable set-up (if it weren’t for the strong action) looking at PRICE now trade back up to OTE entry.
The ‘Devil’ is saying get in at 50 or 55. Experience is saying remember the last one…it was a carbon copy of today’s action and you blew it! So I see a strong candle come up, but I am watching the ‘Bar Left’ Indy on the P4L clock and vow that I won’t do anything until the bar closes. I will then watch where the next bar is going before jumping on it. So the bar actually continues up and closes just above 79%, with the next bar continuing up a little further. This is enough for me to sit back and take my finger away from the trigger. And we are not talking a lot of difference over and above 79% retracement…4 pips…but that was enough for me to say ‘No thanks’ until I saw where it was going next.
Well price came back down onto the mid-point of OTE, but remember this was also resistance from earlier in the session, and so I was interested to see if this was going to act as support. It did, and that was the signal for price to head up to the initial high. Would it be a Fake-out? Maybe, but I didn’t want to trade the Fake-out because, although I know it is a viable set-up (refer to ICT post ‘The $ Stops Here’), it is not part of my trading plan at this time.
So, I sit and watch it break the old high by two pips, but still it doesn’t want to come down past the point at which I was looking for OTE (prior resistance turned support). This is where I start looking at the 127% level and thinking it is heading up there…there was other resistance up there in the form of a previous weekly high? monthly high?..can’t remember, but it was noted. PRICE came off 127% but only as far as the initial high this time…so it is trading these small ranges, then moving up to a another range, trading this range for 30-50minutes, and moving up again. This is exactly what ICT mentioned in the last PTC, and asked us to look for it on the 5M. There it is!
PRICE then continues up to 162% retracement from the swing low OTE Fib, trades the area between 162% and 127% through the end of LC Kill zone, and stays in this range for pretty much the rest of the NY session. Once it breaks up from the 162% it trades between that and the 179% right through into Asia, before moving up to the 262% level which is where we are at right now. Fibtastic folks! And remember, these levels are only produced by pulling the Fib off the day’s high as it was at NY open, and the swing low just before LC Kill zone. Regardless of what happened in the London morning session, NY traders were determined to make the session their own, and that is why LC rules were not respected.
So there you have it. I made no gain, but more importantly I didn’t take the loss. This was an excellent learning opportunity in terms of self-control, and I think that was our challenge for this week.
GLGT!
P.S. The last time we had action like this…well, we had 3 very strong up days in a row. That is not a prediction, just thinking aloud!
And like Jaroon has said, if you zoom out and see a confluence of pivots on your chart, that price level may hold quite well.
