Friday - Damian Trade 1 and Volume Entries following a fall in Retail Sales in the US

An early GU trade setup formed with a DTFL ADR trade validated by volume, though this did occur during the Asian Session so is not a trade I took.

I was following Vincent and Pip in the Skype room, with Hank at Bencotto's on Friday following a Retail Sales announcement from the US that was below expectations. A USD - scenario that was used by SM to whipsaw the price, stop out a huge amount or RT's.

The A) setup was there because it was a lower volume retest of the same level, this happened 3 times, the 2nd time it was with candles 3) and 5) and note how all the moving averages are group exactly around this point. The 3rd lower volume retest of  the level was an entry I eventually saw and took, though SM had pretty much finished for the day the move still produced 8 pips of profit.

As it was Friday, there was no DTFL setup and the volumes were very low for the day prior to the details sales release, however VSAlift did produce an AJ trade which I took though there was an candle which at least hit his Stop Loss Point - this was the news candle - it would be interesting to see what this would of looked like on a higher volume mid week day.

I got a copy of Anna Couling's book on VSA, highly recommended by the people in the room, so I will spend the day going through this. 

Wanted to include some Great V and P Quotes - "if there are enough orders stacked to make it expensive for SM to move THROUGH either up or down, then SM can gap the price one way or another, this will leapfrog over traders who were in the red and they may hold on to the trade because these guys won't know when to TP anyway and those that get stopped will get stopped. SM can continue their push in the desired direction with very little encumbrance"

you  know what is funny V?

[13-Sep-13 7:01:42 PM] Pip: the same exact signal happened near the high and near the low

[13-Sep-13 7:01:52 PM] Pip: both were low volume retests..amazing

[13-Sep-13 7:02:43 PM] Pip: both solid signals, the only difference is that the first was a bit harder to spot (i didn't in the begining) because price did not retest the high, but the second we had the retest of the low near the low

before SM can move price they need to make sure the coast is clear.  So for example, if they plan to take price up they want to make sure there are no sellers in the market and so they they retest at price levels to see if sellers will jump in.  If there are sellers volume would increase (i.e volume bar will go higher) and so they won't take price up until they get rid of those sellers. 

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Will make a note to go through the entries days conversations on Skype, some really good stuff in there. 

For example - Elliott was posting examples of using the 61.8 fib retracement level as a way to enter SM trades that have been missed - he did post some charts to back this up though the links have expired - I will add this to my trading plane as a confluence factor. 

"

Wednesday Trade - ADR to ADR

Been working 8-4's this week so haven't been able to keep a close eye on the markets, however I spotted a nice trade first thing this morning - I left for work a little early so I could keep a close eye on the London open and this trade presented itself.

We were expecting the 3rd push up on the EU today in line with Cycle and this trade hit the ADR low before giving a pin bar confirmation on the 3rd candle. The stop run was well presented by being well under the 200EMA.

It does go to show how important it is to believe in one strategy and to stick to it religiously and also how vitally important it is not to second guess the market. We deal in probabilities here which leads to the profit in the end.

SCHOOL of Pips

There was some very investing comments from Vincent and Pip in the room today about PA and Volume, a summary of which I have posted below.

Pip firstly marked up a chart of what he felt was happening on the EU - notice his assumption of a 3rd push up.

Then he started talking about expected PA with the EU - notice these were the comments around point 1 on the chart - he wasn't talking in retrospect.. 

(1) note the ultra high volume on that bar, lots of contracts exchanging

SM are defiantly participating in that up move and most likely selling in it

they are off loading their buy contracts.  

(2) now we will see a small retracement due to retailers taking profit

SM will gladly buy those contracts from them to sell again at higher prices

same old tricks

one might ask, how do you know if it is a real breakout?

the answer is summarized in two points

(3) the bar closed above the range of the channel taking out previous highs that was tested multiple times (which means it was weakened)

(4) the ultra high volume on the previous bearish bar with pin to the low coupled with the ultra high volume on the last bar.  The first indicated SM buying in prep for the up move while the second SM selling into the up move, which means more up in the short term

now look at the current bar with 5 min left and high volume (1 +1) with all this high volume price didn't really move anywhere which means SM's are eating up all the contracts (i.e. fading the herd) and when that happens, you get trend continuation

SM are always both buying and selling at different levels, the question is, when are they doing one more than the other earlier in the day they bought more than they sold, which would make you think they will go up later  now that they have gone up we see more ultra high volume, which means either they are selling or more buying  based on price action and the DTFL cycle count one would be lead to believe that this high volume is SM activity releasing profit into the up move as they are selling into the move they are picking up buy contracts as well for more up, but their net activity is still selling in the up move I know it sounds confusing but if you think about how the SM work it will make all sense.  I struggled with it at first but it becomes clearer as you practice that trail of thought more and more..

now, just for the record; you don't need to learn volume analysis just yet if you are new or struggling with basic DTFL knowledge i say this because learning volume analysis will not help you if you are struggling with basic DTFL knowledge and SM basic thinking process once you have solid understanding of how SM operate, by learning DTFL methodology, volume analysis seals the deal and provides understanding of the underlying forces

Pip is a Forex Oracle - :) 

Speaking of Oracle's - Vincent looks a little more at Volume than PA though he always comes up with the same analysis as Pip... some of Vincent's comments today ref Volume. 

guys, volume is still high now so don't go long blindly on price, we want to see price stall on low volume, it is not your entry price that matters but the fact that the SM activity is reversing even though Pip said 1.3295 and I said 1.3290 as possible long, allow price to test and retest, see how far it pushes, each time it tests lower, look for reducing volume, once a level is reached where there is no volume, price will "spring" like a jack in the box, that is when we should look to get in, no point being price-conscious and getting stopped out if they hunt deeper but better to take a trade and find SM has no business going back down to that level again (in this case)  it usually takes about an hour or so for this to happen, no hurry, just patience to watch how the price-vol develops because you may or may not have a DTFL setup. 

TRADING BOOK UPDATE 

AFTER 6 TRADES I AM +7R - MY RISK IS £100 PER TRADE 

SO 7xR = £700 PROFIT SINCE THE START OF THE MONTH. 

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Friday and VSAEAGLE

Sterling did not post his levels until I had left for work on Friday, but as it was Payday, I bought Damian's VSA system... really exited to be using this..

I will also post a trading diary with entries and exits..

As for the week I am a few hundred pounds up so musnt grumble :) - I have been over trading though and need to keep a handle on this, I got a little lucky with NFP and following peoples advice in the room.

I will update my trading bible to incorporate Damian's system -

Saturday was a blast at the Saturday Film School in London - had an amazing time, though Dirty Dancing left a LOT to be desired.. didn't sleep much but the juice bar really helped.

Trade 4 - Also a little bit more understanding of the VSALift Method by Damien.

Had a GREAT day yesterday, the day off work and after picking up a table, Me and Hank took Romper for a river walk in Woodbridge, we stopped off first at the marina and found a couple of cool places to see. Also, met with Will from the gym who is thinking about taking my room... Also in the last 3 days after being very careful with alkalising I have done 2 Insanity workouts and I weights... basically I am cooking on GAS. 

OK, back to trading. 

Ok, here is my entry on EU - it was a little early but I really liked the rejection bars at 0730 - I felt this was Smart money showing there hand and it turned out to be the case even though I got stopped out at BE at the NY open.

Here is a trade I also posted but alas I missed.

OK, here we have two perfect text book trades and I missed them both, clear stop runs at key levels, both coming back within 15 pips of the high, both returning a very easy 2/1 RR - I was panicking because of the STUPID news trade I took that day and when you are panicking, when you are fearful you are not thinking clearly and you missed setups that are staring you in the face. This is what happens when I succumb to one of the four fears of trading, missing out, being wrong, fear or greed, which is why it is so important to manage risk. I will take a hit now and again and I must learn to accept this risk fully and completely. 

This worked out quite well, but the small range made this not a great trade, which is interesting though is the Fib retrace levels from yesterdays move - defiantly one to add confluence to a trade in the future. 

OK - spent some time with Damian on Skype yesterday, his method I have attempted to summarize on this chart, 

there has been a MASSIVE downtrend on this pair moving down 600 pips in the last week, what we can see from this chart is that we have a cross, and supportive congestion, identified by the 3 dark green boxes, indicating strong buying, we have a trend change with the dots turning green, now we look for a high volume up bar break out of the previous range. 

OK, so I took this trade as London opened which turns out to be OK, also had a few people supporting Damian so it looks like I will be making an investment in this. 

Also, took my Trade 5 on the GU this morning now moved to BE. 

OK, lets see what happens.... 

Trade 3 - 3rd September - DISASTER DAY !!!

I Lost a considerable amount of money today, around £600.00. Not only did I take a trade that was against cycle, showed the briefest hourly conviction close, and then rejected the 55EMA, I immediately followed up this trade by a news trade against the GBP... I didn't even check what the news was, I just got sucked into believing Chad and that the market was going to reverse.

This move caused panic in my psychology and as Trading in the Zone tells me, when I am fearful, I cannot see clear setups...

This was the trade...

And here was the exit... 

  

Now, as I was panicking I missed these 2 great setups on the £.. it does look like we get these trades almost every day, sometimes two or three... 

SO, AS A LEARNING POINT - I WILL LOOK FOR REASONS NOT TO TAKE THE TRADE AND APPROACH EACH DAY WITH THE MINDSET THAT TODAY I WILL NOT TAKE THE TRADE. 

... It wasn't only the fact that i lost money being so stupid and losing this trade, Chad has a very strong record in the room and its worth listening to his opinion, but my reaction to losing a trade means I am not in a place where I can take the hit and not give a shit. My game is as still much mental as it is technical. 

As an aside, I took an immediate trade out of London this morning, as soon as I see a stop run against it then I will exit the trade.

Daily Market Review - Trades 1 & 2

Today was a Bank Holiday in the US so Sterling did not post a commmentary, Chad's commentary was looking for an 1hrly close above the 1.5547 level, which we got several times. we also had 3 backend tests of this level prior to the news at 0930. I took the trade long on this third test

As we can see from this Trade it immediately his the second level and achieved 2R. 

Now, I didnt quite take the 2R on this trade, because I hadnt setup a TP, so I will update my trading plan accordingly. Chad specifically mentioned this level as a potential TP and then would consider a short from this level... This is exactly what happened. 

TRADE SUMMARY - DTFL TRADE NUMBER 1 - +2R 

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OK, the next trade I took today was an M formation stoprun at a key level. I actually took +10pips of profit when NY opened though moving my stop to Breakeven could of netted me +30pips, I will adjust my trading plan accordingly.

TRADE SUMMARY - DTFL TRADE NUMBER 2 - +1.5R 

Daily SUMMARY - TRADES 2 = +3.5R

Cash summary after Day 1 = + £350

Potential Cash profit = + £700 

Lessons: Always consider setting a TP, Move SL to BE at NY open. 

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As for tomorrow, on the EU was have had 4 down days, so we are really due a reversal, volumes didnt really return to the market today, and we still have the threat or war breaking out with Syria which will promote $Strength. WE do have a pin bar at a key level which is worth watching.

The GU we have 2 Pin Bars at a key level and also a rejection on the Daily 200EMA. A good entry for the long is my preference for tomorrow.

Getting up to date so I can then do a daily commentary

OK, the next 2 trades showed a new level setup during London, followed by a clear stop run and a great entry - Sterling was in the room when this trade was taken and he said its a good entry - BUT the market hasnt moved 90 pips, a major criteria of the NY reversal. And as we can see from the 2nd Chart - this trade ended up in a loss or -1R

LEARNING POINT - A NY REVERSAL TRADE NEEDS TO OF

 MOVED AT LEAST 90 

PIPS

 OK, Another GU entry below, a little bit of manipulation out of Asia and a large move up, followed by a big bounce off the daily highs.
 

This moved a little in my direction but after such a strong set of legs rejecting 55EMA and with NY approaching - it may of been exiting this trade at that point. I took an aggressive trade on this though and went out at BE

SO after 5  Trade I am  +40 pips. 
I also wanted to post some mini trades