Looking for my next Forex trade
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NJ is pulling back a bit now from another zone just below that 74.50 area but the zone scores a 0 out of 2 on the odds enhancer scale so it's a poor entry level. But the upper zone at 74.50 scores 2 out of 2 so it's a much better entry if we can get it.
There's not much to prop it up on a drop from 74.50 until we get back down to around 73.50 so it could be a really nice trade. Very good risk to reward setup.
I was looking over the NJ chart Heavy. That previous zone wasn't fresh so it blew right through it.
But there's a nice fresh zone right above us at 74.50 or so that should make a nice short. It's low in the curve on the large time frames, but on this one, it's near the beginning of the last big drop. Should be good for a few pips either way.
NJ 5 Minute Chart...
Yep Heavy, I cat napped and then got up for London open, then went back to bed after a while. Just got back up...LOL!
I have weird sleeping habits through the week when the market is open. I catch up on weekends though.
EUR/GBP dropping like a rock already...sweet! Almost a perfect entry on that weekly zone. Couldn't ask for better. (Link back for chart)
Well, I'm gonna hit the sack. Gotta be up in a few hours for the London open. Everybody have a good one...see ya soon.
Yes indeed...hit and run is the best way to go on the small time frames for sure, even if it's long term gonna run in your favor. I keep a swing trade or two under my belt for fun but the short term stuff is paying the bills for now...LOL!
I used to love that show. I watched every episode every week when I was growing up...awesome stuff.
Just looked at the weekly, also...was kind of getting a bigger picture idea of where AJ is.
But the weekly only qualifies as a pivot at this point. And the daily shows too many candles to be a true demand zone. It is a consolidation zone for sure though. But pivots and consolidation zones can provide bounces as well. The only real difference is they don't have as much staying power as a fully valid supply or demand zone.
ROFL! Gotta go where the money starts flowing Jav.
Heck, you do what I do. I tell me wife I'll sleep when I'm dead but for now, I'm trading...LOL!
Ahhh, I gotcha. Yep, better odds with multiple time frames in agreement. Good trade for sure...all pippies are good pippies.
Yep, when London opens at 2 AM central, things usually start to get interesting.
Have a good one, Jav.
They probably have but if it functions anything like the alerts I've seen and used in the past for other things, they don't work very well. About the best we can do is wake up early each morning, look at the long term charts to get a perspective, and then drop to the lower time frames to look for trades.
Somebody would have to program it Jav and I never got far enough along in my MT4 programming to be able to set something like that up.
It would take somebody like Git to be able to do that.
Here's the retest of that same zone now, Jav. But this is a "no-touchie" setup. Price has already been here, the zone is no longer fresh, so we are no longer interested in shorting again here. It might drop like a rock but we are following the rules for fresh zones only so we stay out.
As a matter of fact, the only retest I'm really interested in seeing is a retest of the 4 hour zone on the chart below this 5 minute chart. But what I'd really like to see first is a plunge down that blows through the previous lows, destroying the potential "demand" areas down there so that we know for sure there are no more institutional buyers waiting down below.
There's still more to it but those are the basics. I've spent probably 20 or 30 hours pouring over the Sam Seiden videos and combining what he does with what I do differently. I still keep the tried and true components I've found to work well so I consider the true zones an addition to the trading arsenal, not necessarily the only component.
Here's the final step for ya Jav.
Once a zone has been violated by price action 25% or more, it's no longer a fresh zone. If it barely touches the zone and reverses or stops just short and falls back, it's still a valid fresh zone. But entry into the zone absorbs more orders so it weakens the potential for the zone overall. So we never take a 2nd trade if price comes back to the zone again. We're done with this one. We don't go back to the well twice.
I change the zone color from red to white, indicating it's no longer fresh. I'll leave the zone there for reference but only so long as price stays below it. Once price moves above the zone, I delete it entirely.
AU 5 Minute Chart again...
Yep Heavy, they're great as long as we stick to the odds enhancement rule list. Not every spike is a good trade entry so I'm finding the rules list to be a critical component in taking the trades to maximize the success rate.
That's not one I would take Jav. It might give you some pips but it scores too low on the odds enhancement scale because it's too far down in the curve...in other words, it's too low to the overall low.
A much better short opportunity is further up around 1.3075. That one is higher up in the curve...back near the beginning of where the last large drop began. That's the one that gives you better odds of success.
UCAD 5 Minute Chart...
AU 5 Minute Odds Enhancement Zone Trade
Ok Jav, here's a breakdown of why this was a textbook perfect Sam Seiden zone trade.
1. First, we had a final high and then a sharp drop. This is just a typical rally-base-drop. As you go through Sam's videos, you'll here him mention all the basic patterns like rally-base-rally, drop-base-drop, rally-base-drop, drop-base-rally. The 2 that give you the best odds are rally-base-drop and drop-base-rally. Basically, all that means is that price rallies up (in this case) to a key level, bases for a very short period of time, and then drops hard. What we want to see is a zone develop right near that final high, like we had in this case.
2. Price showed a very fast, hard sell off after a brief consolidation zone. Remember, valid zones are only formed with a short period of time spent in consolidation, not a long time. If you see any more than 6 candles or so, it's probably not a valid zone. The departure away from the zone right after it was created was at least 3 times larger than the width of the zone itself. That gives us a higher score on the odds enhancement scale as well. 3 times is the best, 2 times is good, 1 times the distance is poor. The faster and harder the departure, the better.
3. The last low (in the small box) wiped out all of the prior support areas or "demand" areas that appeared on the chart. This means, plain and simple, that there couldn't be any more buyers in that area if price falls back there again. If there were still buyers there, price would never have made the new low.
4. Price moved back up to retest the zone I had marked off from last week. Since this was the fist time it's retested that area, we consider the zone "fresh", meaning that there are still very likely lots of sellers there waiting to short it again on the institution side of the board.
5. My target was a conservative 0.7535 simply because I follow the "big and medium number" scale for entries and TP targets. 00, 15, 20, 35, 50, 65, 80...those are the levels I look to get in and out at, or pretty close to them. So the lower level I had marked was sitting around 0.7527 and 0.7535 was the closest so I chose that to exit. My entry was near 0.7565, which also falls into the big and medium number scale.
That's pretty much it...once you identify potential zones, you just look at the other factors to see if the odds enhancers are scored as high as possible. For each odds enhancer, Sam assigns a value of 0, 1, or 2. A brief list of the odds enhancers are listed below...
1. Time spent in a zone formation...the less the better...look for 4 to 6 candles.
2. Departure...how fast did it leave the zone? If it leaves slowly, the zone doesn't represent a strong supply/demand imbalance. If it leaves very quickly, the imbalance is strong. Strong is what you want.
3. How far did price move away from the zone? 3 times or more the distance of the zone width is the best.
4. Did price wipe out any prior zones prior to returning to the zone you have marked? In this case, AU wiped out several demand zones from further back with that final new low it made.
5. What kind of pattern formed the zone you're looking at? Was it a rally-base-drop, a drop-base-rally, a rally-base-rally or a drop-base-drop? The first 2 are the best and score higher.
6. How do the candles look as they hit the zone? Do you see large candles? In this case, AU had already rallied up considerably off of the new lows and we got some final big green candles as price entered the zone. That means dumb retail was buying AFTER a rally had already occurred. They were dumb because they were buying right into an area that was clearly a sell area for the institutions and banks. Big final surges right into a zone are a dead giveaway for a hard reversal.
7. Is the zone high in the curve? In other words, is it as close as possible to where the last sell off began? In this case, the answer is yes. Score high again on the odds enhancer list.
The higher the overall score, the better the trade opportunity.
Stuff like that is what the odds-enhancers list is made up of. There are others as well. As you watch the videos, keep these in mind because they are the most common ones.
I'll post a detailed chart showing why that was a really high odds trade zone, Jav.
That's why recognizing the zones and the odds enhancements are so critical, Jav.
Once you get good at recognizing the zones, the problem isn't getting stopped out. The problem becomes missing your trade fill entry by a pip or two because you're competing with the institutions on their levels. I've had several trades get missed by just a very few pips and then had the market take the trade right down to my TP level afterwards.
I don't set hard stop losses. Instead, I just watch and handle the stops manually.
Normally, if a high-odds zone gets busted, price will almost always come back to retest it again, allowing for exits at break-even or just a loss of a few pips at most.
Once I finish getting the system down completely, I'll probably make my own videos so everything will be together in just a couple of videos.
Pretty much all of them Jav. Some of the best ones are about 45 minutes long where's he doing live analysis of real-time market charts. They're basically webinars.
Youtube has tons of them. Every time I watch one, I get another piece of the puzzle.
I like to grab a few long term swing trades in between the day trades. Looks like a really good spot based on Sam's entry rules.
ROFL!
Since I'm getting old now, I figured this would help keep my head straight...LOL!
Yep, I didn't take any new trades Friday. I had already met my goal for the week and I've found that Fridays can be unusual to say the least...LOL!
Have a good one Kirby.
Pair Profiles
Doing something a bit different here to be able to get a clean, bird's-eye view of all the zones at once on any given pair.
Jav actually gets credit for this one. He recommended setting the pairs up based on saving all the different time frames for one pair to a separate profile instead of having tons of different chart pairs cluttering up the screen. I cleaned off every indicator to keep the charts clean and easy to see.
So this is what I'm going to use to be able to just glance at a pair and see where we are, especially on the larger time frames. Then, I can just drop to the smaller time frame to look for trades.
This AU profile shows every available time frame from the monthly down to the 1 minute chart.
I only set the pertinent levels down to the 30 minute chart for now because the smaller time frames change so much. The smaller time frames are best to set levels on only as you are trading and then clean them off (except for maybe extreme fresh zones) for the next trading day.
Easy to see where you are on the big picture while trading the small stuff this way so it keeps us out of trouble.
Sweet! That would send USD/DKK flying north big time.
Thanks stargate.