What Every New or Aspiring FX Trader Wants To Know

I wouldn’t worry too much about that if I were you.
Mentioning your name & trading in the same sentence is about as unlikely as a summer visit from Santa Clause.

Clint thanks again for the list and updating it. If someone has an archive I’d like to get it. There is / was some good stuff here.
I may be wrong but I think his referring to continuing on may have been a reference to his blog rather than continuing here.

I’m following the blog hopefully to continue to get good trading ideas. No charge so far :slight_smile:

JJay youre right, I’ve got lots of posts but not all quality. Assinging status based on quality would require a lot of reading and judgement so of course it’s automated based on count.

As for IP addresses. I don’t know much about IP spoofing or packet sniffing just a simple code slinger, but I know that I’ve got a dynamic address so anytime I reboot the dsl modem I get a different address, but it’s always within an assigned range of addresses in this area, so that means any one of thousands of people could end up with an ip address that I’ve used but what are the odds that one of them will post in my thread.

Thanks for the kind words, [B]jjay[/B]. — And for the premature congrats.

Well, [B]Mike[/B], I’m back to square-one on the updating thing. I almost had it ready to post this morning, when I suffered a very short-duration power failure. Enough to shut down my computer, and make me lose everything that hadn’t been saved.

I haven’t gotten back to the update, yet. But, I’ll git 'er done.

…You can delete my account. I have no reason to post or read here…

“Won’t be a next time.”

We all have big egos around here, myself included. But, ICT’s leaving/staying/leaving is just petulant. And not very adult.

Well, ICT, don’t let the screen-door hit you in the ass.

This is precisely why I stopped. I saw the thread going to be filled with mudslinging and don’t we have a good toss going here.

You folks are disrespectful and I feel I’ve made the right choice is leaving this thread to the locusts. This actually what happened in 1998 when AOL hosted my analysis board… Self-indulged mules with nothing better to do than bitebacks and witch hunt as it must be self-medicating to feel you are saving the internet from “phantom peddlers”.

I am disenchanted by the adolescent posts that border on junior high level behavior. I clearly have wasted time on some of you. The others, I appreciate the words of encouragement… But look around. Consider the company… I won’t bother posting in a animal house led by immature discord sowers and armchair knowitalls that neither save anyone or post positive material.

Clint you can rest assured I have shaked the dust off my feet and nothing hit me on the way out.

I haven’t always agreed with your views, but this was very well said!

Wow, last few pages are so filled with hate I can almost see the Emperor from Star Wars smiling…

Le Circus goes on. Enjoy it down there in the mud people :rolleyes:

Holy Mole’, I am speechless. :confused: ICT calm down, man this just has me wondering, this is too much venom even for a Crotalus Adamanteus such as myself. :o

The Ever Amazed At Human Behavior VIPER

This has now turned into a free for all and everyone and their damncat is getting in on it. I’d like to ask the admins to close the thread and put a stop to it. :cool:

I second the motion and ask the admins make sure they do not post again.

seconded.

& flush the “smuck rats” in here out once & for all so they don’t find another rat hole.

Boy, have you got a nerve.
That really is rich coming from someone who shouldn’t even be here in the first place, let alone be allowed to issue your requests.

Here is the updated list of ICT’s Key Teaching Posts. Because of the many deletions which have taken place in recent days, all the previous post #'s have changed. Also, three key posts are now lost (unless someone happens to have archived a copy).
One new post has been added at the end of the list.

I have double-checked all the “permalinks”; as of the time of this posting, they all work.

[U][B]Inner Circle Trader’s Key Teaching Posts:[/B][/U]

Post #27 - My trading routine — DELETED ([B]see post #23 for a QUOTE[/B] of post #27)
http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know-77.html#post176483

Post #33 - Key support and resistance levels — [B]now post #28[/B]
http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know-77.html#post176501

Post #123 - (directional bias) — [B]now post #118[/B]
http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know-68.html#post177673

Post #159 - (recap of 3/11 price action, and pivot analysis) — [B]now post #154[/B]
http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know-64.html#post178065

Post #177 - (brief recap of first week) — [B]now post #172[/B]
http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know-63.html#post178187

Post #211 - Professional pivot point concepts for forex trading — [B]DELETED[/B]

Post #215 - Think like a market maker — [B]now post #209[/B]
http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know-59.html#post178595

Post #238 - The $ stops here — [B]now post #232[/B]
http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know-57.html#post178636

Post #308 - My only action (recap of 3/16 trade exit) — [B]now post #302[/B]
http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know-50.html#post179031

Post #344 - (untitled chart analysis) — [B]now post #338[/B]
http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know-46.html#post179270

Post #400 - (untitled market recap with reference to chart of GBP Weekly Futures) — [B]now post #394[/B]
http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know-40.html#post179502

Post #401 - Running your own numbers and why — [B]DELETED[/B]

Post #404 - New reaction levels — [B]now post #397 [/B]
http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know-40.html#post179517

Post #429 - A professional approach to stalking trade setups — [B]DELETED[/B]

Post #474 - (untitled market analysis, 3/19) — [B]now post #466[/B]
http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know-33.html#post179940

Post #482 - Picture’s worth a thousand words — [B]now post #474[/B]
http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know-32.html#post179964

Post #503 - The cable breakdown, broken down — [B]now post #495[/B]
http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know-30.html#post180044

Post #551 - Show me the money (The Smart Money Tool) — [B]now post #544[/B]
http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know-25.html#post180327

Post #569 - Cat’s out of the bag — DELETED ([B]see post #614 for a QUOTE[/B] of post #569)
http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know-18.html#post180503

Post #617 - Patience pays — [B]now post #609[/B]
http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know-19.html#post180481

new post added to the list:

[B]Post #645[/B] - (reply to Rei regarding application of the method)
http://forums.babypips.com/newbie-island/32915-what-every-new-aspiring-fx-trader-wants-know-15.html#post180706

Clint,

I can fill in some of the holes.

from post #211
[I]
"[U][B] Professional Pivot Point Concepts for Forex Trading: [/B][/U]

Okay folks let’s discuss Pivots a bit…
It is useful to have a map and be able to see where the price is relative to previous market action. This way we can see how is the sentiment of traders and investors at any given moment, it also gives us a general idea of where the market is heading during the day. This information can help us decide which way to trade. Pivot points, a technique developed by floor traders, help us see where the price is relative to previous market action.

As a definition, a pivot point is a turning point or condition. The same applies to the Forex market, the pivot point is a level in which the sentiment of the market changes from bull to bear or vice versa. If the market breaks this level up, then the sentiment is said to be a bull market and it is likely to continue its way up, on the other hand, if the market breaks this level down, then the sentiment is bear, and it is expected to continue its way down. Also at this level, the market is expected to have some kind of support/resistance, and if price can’t break the pivot point, a possible bounce from it is plausible.

Pivot points work best on highly liquid markets, like the spot currency market, but they can also be used in other markets as well. In a few words, pivot point is a level in which the sentiment of traders and investors changes from bull to bear or vice versa. View them as mile-markers for the map price is using to fill the daily range for any given day.
[/I]
[I]
Why Pivot Points work?
They work simply because many individual traders and investors use and trust them, as well as bank and institutional traders. It is known to every trader that the pivot point is an important measure of strength and weakness of any market.

How Do I calculate Pivot Points for Intraday Trading?
ExtremeR3 = R1+ (HIGH - LOW)

R2 = PIVOT + (HIGH - LOW)
RM2= R2+R1/2
R1 = 2X PIVOT -LOW
RM1 = R1+PIVOT /2
PIVOT = H+L+C/3
SM1 = S1+PIVOT /2
S1 = 2X PIVOT -HIGH
SM2 = S2+S1 /2
S2 = PIVOT - (HIGH - LOW)

ExtremeS3 = S1 - (HIGH - LOW)

Time to calculate is Midnight -5 GMT or New York EST. Load a hourly chart and determine the highest high and lowest low from Midnight today and Midnight 24 hours prior. Use the open of the first hourly candle of today as your Close.

Monday Pivots are determined by using Friday Midnight to Sunday Midnight. The same is used for extended weekends and holiday schedules. * It is best to avoid Mondays on holiday weeks. *

Trading Pivots in a Trending Market:
In trending market conditions expect to see the currency find Buy signals form in the area under the Central Pivot Point (CPP), this is the Blue shaded area in the diagram. Look for price to find support at a Previous Day’s Low, the lowest low or even a key intermediate term intraday low made in previous 24 hours of trading.

If price starts trading at Midnight -5 GMT or local New York time above the Previous Day’s High, expect to find Support form at the Previous Day’s High and find additional Support at any of the Pivot levels, even levels in the Red area or Sell Zone. In strong trending conditions, the Pivots can and will lend themselves to both Support and Resistance properties.

When markets begin trading near the middle of the Previous Day’s high and low, demand more from your technicals. If you are looking for buys try to limit your trades to those in the Buy Zone and with supporting technicals.

If you have confluence of several technicals at any Pivot level found between the Previous Day’s High and Low, you can refer to the longer term trend on the four hour and 60 minute charts to trade for a retest of the Previous Day’s High or Low.

Many times range bound days or inside days (a day when the high is lower than the PDH and higher than the PDL) will begin inside the Previous days Range and this is important to look for early. You do not want to be buying and holding for a breakout to new highs when the market is not primed to do so. The reverse can be said for breakouts lower.

Previous Day’s Highs and Lows are critical levels at which the banks monitor flows and participate. Ideally your Pivots will line up with previous Daily Highs or Lows, key daily, weekly or monthly S&R, Fibonnaci Levels, the Figure, price patterns like Flags, triangles, Head & Shoulders formations, 123 tops or bottoms, candlestick patterns, Macd Divergence or any other indicator used to time trade entries.

The more confluence of events at a Pivot Level the stronger the signal will be. Look for a minimum of three confluences at your targeted Pivot level and in the direction of the hourly trend… you will filter many false signals this way. If you have more than three events at a Pivot level and your directional bias is in sync with the market flow and longer term trend, you will see monstrous price swings unfold and this can be exciting.

On extreme trending days, the market will likely trade above the R2 and below S2 levels. I have provided two additional levels in the formula I use for my personal trading to determine where these blow off days will likely unwind. Typically, trading will be limited to R2 as a maximum High and S2 as a maximum Low.

Once your trade has been determined you will look for the next Pivot level in the trade direction you are executing. For instance, let’s assume for a moment the 60 minute chart has a solid Bearish Divergence in the Macd, RSI or Stochastics… whatever indicator you monitor for momentum and overbought and oversold conditions will do. For this example let’s assume also the market is trading at the figure, this case, let’s say GBP/USD 1.5300.

At the time we see the market form the bearish divergence (hourly) and trading at the figure 153.00, we see price is 15 pips above the Previous Day’s high. We also are trading at the MR1 level on our Pivot levels and a bearish inverted hammer forms on the 5 minute chart, giving us a Sell.

One could expect to see the Cable trade down to Previous Day’s High and bounce a bit to suck foolish bulls into buying this level expecting the market to rocket higher. During this time price would have slide from the trade entry at or around MR1 and the Figure… for this example let’s say we Sold Short at 1.5297.

When price trades down to the PDH it pauses a bit and this would likely look like a bear flag or pennant formation on your 5 minute chart. This level would eventually breakdown and the stops under the PDH the foolish bulls placed to protect their longs made at the PDH would be targeted by Market Makers.

As price dips under the PDH and stops are triggered this accelerates the selling pressure and you would be looking to see price maybe retest the PDH but many times it will just plunge lower as Professional traders will be trading it as a false breakout and your Short from the 1.5297 would be approaching the CPP level as it’s first objective.

As the Cable drops to CPP expect it to bounce or at least pause, expect another continuation pattern to form in here as well. If it is a swing of 20-50 pips, be ready to see it bounce more. At the entry of your trade 1.5297, your initial protective stop would be moved from 30 pips risk to even now. One third of your position would be removed at CPP on a stop or limit which ever you personally choose.

Since we have the longer term market flow on our sides and possibly caught the daily High we will be looking for the numbers to be filled on the day, that is four Pivot levels traded to. If we shorted 1.5297 at MR1 the next levels we aim for are CPP, MS1, S1, MS2 and possibly as low as S2; at which we would cover any remaining position to go flat on the Short Trade. If the Cable drops under MS2 by 5-10 pips, the protective stop would move to MS2 to liquidate all position remaining and locking on the lion’s share of the move.

As the Cable trades down to each lower Pivot more of the position would be scaled off at your choosing. Most importantly after the second objective is met, the initial protective stop would move from breakeven down to lock in 20-40 pips. Where it would remain until the objectives are met and or trade is stopped out with a profit on remaining portion.

This example is just one of many possible scenarios of which are infinite in dynamics. One could just as easily found a Bullish divergence on the longer term charts and found flows moving higher and seen price find confluence at or just under the PDH to go Long and reach for higher pivot levels to exit as the Short example above hypothetically explained.

The results with Pivot levels are going to be a direct relationship to your general market understanding. It is not limited to simply where Pivots are and to expect a straight line from one to the other and a happy song and dance it will be to the bank… so if that is your expectation, allow me the honors of driving the pin in on your balloon right here.

Keep your big picture in focus… that’s where the money is found.
Trading Pivots in a Consolidating Market
When markets are in consolidations one can trade the Pivots simply as the Diagram details. Shorts are to be expected to unfold in the Sell Area (Red) and Longs are to be expected to unfold in the Buy Area (Blue).

Look for the market to trade back to the CPP level either from lower or higher prices… consolidating markets find fair value at or near the CPP level. On consolidating days expect to see prices hover near the CPP level or another Pivot level and hug it for hours. This can be a miserable experience if you are in a trade… so if you notice this occurring… you might consider taking the loss or gain and cutting bait for the day. Find a movie or reason to leave your charts for the remainder of the day.

Pivot Strategy and Key Reversals
A successful trader will use Pivots as a tool to find anticipated levels to trade on in the future. These levels are known in advance and since this is the case, it provides you a means to prepare for trade setups far in advance. This is crucial for profitable trading, since the majority of the traders react to the market with market orders and multiple trades per day; you can exercise self-control, patience and professional execution.

By allowing the market to provide you with future reference points to anticipate and not react to price swings, this will assist your emotions while in trades and control the “need to be in” that plagues novice traders. If you see prices trading between any two Pivot levels, you either missed the low risk entry point on the present price swing or you are in what is commonly referred to as “No man’s land”. You want to execute your trades as close to the Pivots as possible. Selling the Pivot as Resistance when confluence supports a short sale and buying the Pivot as Support when confluence supports a long purchase.

Pivots can be determined on Monthly and Weekly data as well. I use Daily Pivots primarily for my setups. There are plenty of trades on this timeperiod and I weigh my selections with the current trend and market flow in mind.

If one would trade hourly divergence in Macd and simply take one Pivot level to the next assuming technicals support the setup, 20 pip swings are an easy goal. You simply must have the longer term perspective in mind to see long term success in Pivot trading.

In closing, Pivot levels are perfect little eye candy to look at in hindsight where everything is safe and absolutely risk free. We can plot Pivots on charts and see where the levels stopped right on a dime and reversed and back to the higher level where it again stopped and reversed.

This is misleading to a new trader and can give you a false sense of security. While these levels are wonderful tools they should be used in conjunction with an already sound trading understanding of general market action.

I promise you, if you want to sit over a chart and discuss how you could have bought here and sold there over and over all day and whistled yourself to Forex Heaven; I can show you on the same chart where it would have chewed you up and you would have lost and given up on the day before seeing it pan out like a professional trader should.

They are sharp tools… in the hands of a mature well rounded individual you can carve out a nice living. In the hands of a fool reckless and unlearned… they can cut your throat and still leave you able to look at the chart the next day and find they will still have the same allure… beware.

Learn to use them correctly and you won’t go away thinking they are useless because you failed to manage your trading with them in conjunction with other tools. There are no be all end alls in trading.
Good luck and Good trading!"[/I]

And…

from post #429

"[B][U][I] A Professional Approach To Stalking Trade Setups: [/U][/B]
Why Aren’t You Succeeding?

Many new traders struggle with the patience that is required in the business. The worse thing they can do is read these forums and try to be spoon fed signals and become dependant in following a trader without knowing how to trade themselves.

My goal in this thread was to educate the new trader and possibly the trader that has lost his shirt and has reached the crossroads where it either is going to click for them and they profit or they are walking away from Forex and quite possibly embittered by the whole business. Should they cut bait and close their career in Forex trading, they will surely become of the many folks who conclude this business can not be successful for anyone and the bad press feeds itself.

Hang In there, Not Hang Yourself…

Folks don’t give up. If you are honest with yourself, you would be that much better for admitting you rush into trades without any real reason for taking the trade. Perhaps it was a gut feeling or you were watching the market during a particular time and saw it rally up fifty pips and figured what the heck, I might as well buy it too and grab twenty pips too. You can’t survive this business doing that and it’s nothing more than gambling.

I realize this thread may have readers returning to it daily and maybe multiple times a day looking for this “secret” weapon or indicator to direct their path to riches untold. Folks, I’m going to tell you again, like in my previous posts… you don’t need anything top secret or big bucks to make a fortune in this business. What you do need is patience. I am not posting a complete method on here purposely to force you to see how waiting for setups and allowing your tools to work for you when it is optimal for the setups to pan out.

False Sense Of Preparedness…

Just because your charts have all the latest indicator fads and whistles programmed to alert you to the next big moves, doesn’t mean it will result in a profitable price swing in your favor. If it were that easy, I’d buy a Forex Robot and let it buy and sell all day and night and I’d be rich enough to put Bill Gates on Welfare… and we all know how likely that is… right?

You want you mind to be so tuned into price action you can look at a series of charts on a pair and see what levels are critical on the immediate time horizon and what price is likely to do based on where it is trading at the present time. Support and Resistance is king when it comes to preparing for your setups. Your focus needs to be there… not anywhere else. Believe me, it is all you need to build setups you can rely on.

Which Way To The Pot Of Gold?

If you look on your charts at Historic Highs and Lows and Daily Highs and Lows you have eighty percent of the ideal trading areas setups will form… just doing that! If you look at the highest and lowest levels in the last twenty to thirty days you can find solid setups at these levels as well. You can find intermediate term highs and lows on your four hour and sixty minute charts to stalk your next trade setups as well.

Once you identify where Key Support & Resistance levels are and the relationship to the market price as it relates to each level… you have just moved from the novice or neophyte level to intermediate experienced trader. You see novice traders watch one and five minute charts because they look fast and the swings are dynamic looking. This lulls them into thinking trading this timeframe is where the gains are… remember my very first post? Their headstone is being lettered already!

Is There An Ideal Stage To Look For?

If you post your Pivot Points on your hourly charts as I recently suggested you will see the best setups occur when price has moved far away from the Central Pivot Point. When Price is at R1 or R2 this condition is awesome when you converge with Key Resistance levels and Daily Highs from previous day or Historical Highs are being tested.

Conversely, you can expect when price is at S1 or S2 and the Central Pivot is some distance away higher… you can expect some significant setups to form.

Think of price as an elastic band. When it gets pulled up so high when everyone lets go of buying it… it will snap back lower… back to the Central Pivot Point. When price trades itself down so low it will eventually snap back to Central Pivot Point higher.

This concept coupled with other profesional trading concepts will provide you a lifetime of insanely profitable setups to zero in on for your Sniper trades. When the markets are near the Central Pivot Point and we have not entered a strong trending environment… keep your expectations low. Price will enter consolidation days or periods during this condition.

Learn to take a picnic lunch or catch up on TV shows on these days. Let the neophytes force a trade in the mud… and watch and see how you feel the next day when you look and see it didn’t move much and you had a wonderful time away from the market instead!

What Do I Do After I Determine Key Levels?

Well, I am sure this will come as no surprise to you, but you wait. You wait for the market to come to your established level. If price is trading under the targeted high you anticipate seeing a reaction point as resistance… wait until it trades up to it. When the market gets close to your target zone for trade setups… then you need to turn your attention to your tools… NOT prior to price reaching your target zone.

You want to be like a Sniper. A Sniper will wait for days if need be for the optimal time to pull the trigger. He is not rushed to shoot his weapon just because he is loaded and ready to fire… he wants his target in his crosshairs… then bang!

You will sit and wait for price to trade up or down to your Key levels and when they do, you become the Sniper… you put your eye to the scope and train your crosshairs on price as it moves into range. What are your crosshairs as a trader you might be wondering? Your pivots and other technical tools are what you will monitor for trade execution. When price enters the kill zone or “trade zone” you want to look for optimal trade entry for your trigger to take the trade on.

It really is easy to do once you learn to wait and be comfortable with price trading around under or above your trade zone… you aren’t going to buy every low and sell every high… so don’t fill yourself with unrealistic goals. If you are expecting this in your trading… I’m afraid you will be schooled very early on… and you might have that Trader’s Gravestone being carved out in your honor as we speak!

Have A Life Outside Trading…

Folks, you are trading Forex to make money or at least it should be on the top of the list of reasons why you are. These currencies are always going to present setups and profits can be taken from them even if you only trade three days a week, you can still make a great living over time.

It is healthy for a trader to have a hobby outside of Trading and I already told you that Forex is and should not be a hobby. It should be your business… that’s what it is. Go fishing, hunting, sailing, horseback riding… do something away from the market and charts… everyday.

You need to step away from the market once in a while to refresh your perspective and give your body a chance to unwind and relax. Trading can take its toll on your mental, physical and emotional being. Find a means of enjoying the hard efforts you invest in building your Forex business. Find a way to have fun outside the world of candlesticks, Fibonacci and Pivot Points… spend your time cultivating happiness and longevity in your life or you might find after you make your Forex riches, you became a dry worn out old coot and not worth being around… even with all that Forex profit behind you!

Good luck & Good trading.[/I]"

Notice how its always the same names popping up with nothing sensible to say on anyones threads they just lurk untill they spot someone say something they can attack in the most juvanile way possible, admins closed the troll thread so it looks like they all came in on this one instead.