Simple's Green Room

[simplegreen]

GM Heavyweight...there are many ways to skin the FOREX cat...the chart I'm posting is M30 on NZD/USD which I've been trading a lot lately and its a busy looking chart at first glance but every aspect is important to show me what the banks are doing or are about to do.Have been using this for some time now and its very effective for me.
The hardest thing for FOREX traders to get their heads wrapped around is understanding why the banks/brokers do what they do and when theyre going to do it so my technical work has shifted to determining imminent bank/broker action.We bash these guys all the time as being crooks that are trying to trap traders on the wrong side of all trades and that's a fair description of them BUT we retail traders need to understand that if we buy or sell we buy or sell from them!This action automatically puts them on the opposite side of all trades so its not some mysterious plot its simple fact.They have the same agenda as we do..to make money.If we lose money...they make money..if we make money..they lose money.
According to CFTC reports on brokers clients success rate the avg is that 25% or less of all their clients actually make money consistently so that means 75% or more of all retail traders will lose money consistently.BTW Oandas clients have the best success rate at just about the 25% mark...the rest of brokers clients obviously not as successful.
Your best interest is not foremost in the minds of banks and regular brokers for obvious reason that if you win they lose so they will use a few simple tricks to make sure they get your money rather than you get theirs.
Probably their favorite trick is stop running...I don't use stops because early on I figured out that part of their game.All gurus..brokers ..banks..etc in good conscience advise using stops not because they want to protect you from a big loss because of they have your best interest at heart but because they don't want you to blow your acct...they prefer keeping you as a client so they can slowly bleed you to death by running your stops!
Part of my chart work is to use the various elements to determine when a stop run might occur...so I use a sessions indicator and zigzag along with supply/demand indie.
After a considerable move up on a cycling pair and on M15 or M30 chart I know/assume that the banks are or may be very short and may soon want to unload for profit...obviously they now need to trick you into continued buying because in order for them to sell they must have someone to sell to!At this point I am seeing consolidation followed by a quick upward move setting a new high above the baseing high...then guess what!..the price quickly drops after stops get run.Those stops are there to and the bank knows it...they know that new shorts are protecting themselves just above resistance...they also know buying occurs just above resistance because fresh buy orders are placed there buy breakout traders!This cause the big move up and now they go to work selling because they have induced buying!They also can continue selling for at least 38% to 50% levels as retail traders keep buying the dips that bank selling causes.Retail gets suckered into buying and in worst case scenarios will build a large position on the wrong side and this will continue til at least next baseing level...this base might be a clue to banks being flat finally....or simply an eaing of pressure to allow retail to run price back up so they can sell at a better profit level!
This has turned into a mini novel I know and I have more to post on this subject but will stop here for now and show you the chart that helps me work WITH the banks/brokers instead of against them.

M30 NZD/USD