The Captains Chest - Naked Trading & Other Stuff

[Captain Jack]

I'm going to start a thread here in hopes of providing some insight into trading without systems, indicators or EA's. Most of you have heard many people talking about trading price. Most of you probably are still wondering what the hell they are talking about when they say....Trade price....WTF? This is how I trade and just possibly, the light might turn on for some people and they will begin to actually "see" price as it really is. I'm not going to get into candlestick patterns as they are covered by many experts in the field. What I will be talking about is price action and price patterns - it's what you see on your screen when it's "naked", void of anything that clouds your view. Perhaps, if you follow along, you will understand better, why price moves the way it does. Price is "alive" in a manner of speaking. I treat it as a hunter would his prey. Learning it's habits, and it does have habits that repeat over and over, makes all the difference between bringing home a trophy buck, putting meat on your table or going hungry another day.

When I look at all the systems, EA's, indicators and a the latest bells and whistles that people use to make their trades, I can't help but compare those people to "trappers". They are setting a trap....maybe the fox will show up and get caught, but more than likely, the sly little devil will backtrack on you and slink away. I'm not saying "trapping" is a bad method for hunting, I'm just saying all the conditions have to be right for the prey to get caught. This is why ALL EA's and systems work some of the time, but none them work all off the time. When the conditions are correct, the EA or system's trap will spring and you got a yourself another pelt. Sometimes, the trap is sprung but fails to catch the prey and sometimes, the trap never springs. Your success as a "trapper" depends on a mechanical trap, left to it's own means. Let's not forget that the fox is a cunning creature and he will learn your trapping ways. He learns to survive by adapting to your ways.Trappers who can't adapt to the changing ways of the fox, will not last long in the forex wilderness.

On the other hand, the hunter takes more of an active roll in "the hunt". He doesn't just set a box and come back and check it 4 days later. He spends days in the prey's habitat, learning all he can of his adversary. He actively tracks his prey, looking for sign along the way. Learning when and where it feeds, and what it eats and if the prey is large enough, finding the remains of a "trapper" or two along the way. Soon enough though, the hunter tracks the fox right into his den, where the fox lives and is most comfortable. Before it knows it, the fox is skinned and the hunter bags another trophy.

Price moves with direction "and" intent. Too many people try to trade direction only and have not a clue as to the intent of price. Price moves for a set, determined reason. Make no mistake here, price does not move on it's own. Price is driven or piloted by somebody or some thing. It is driven with intent. The direction of price is the easy part, it's intent is something entirely different.

Most if not all of the orders placed by every member here and in all the bucket shops across the world, never see the forex market. They are handled in house, by your brokers. The brokers have some influence over price and what happens to your trades. ECN brokers have the widest spread swings on the planet, blaming liquidity when a 60pip spike takes out your trade. . Staying with a fixed spread broker gives some protection from these guys but you pay a little more for each trade. In my trading, I use no stops for 99% of my trades. I trade by the seat of my pants and actively manage all of my trades If you are serious about trading these markets, sign up for trade rebates with one of the places on the net that offer them. I receive a 4 digit deposit each month from my provider as I make a great deal of trades across my accounts.

As the predator, I choose to take the fox in his den along with all his little babies. Learn some additional skill sets and your trading will improve greatly over time. Enter this thread with an open mind and leave all your "window clutter" and preconceived notions, ideas and beliefs of the forex market on the doorstep. You're not in Kansas anymore, Toto.

Enjoy the ride!

CJ

I would highly recommend that you pay a visit to Nanningbobs HGI forum. He teaches a manual trading method that works, provides guidelines for stacking trades and his HGI indicator works extremely well without cluttering up your screen and obscuring your view of price. His teachings will prevent or limit your entries into bad trades if you are trying to learn the naked trading methods, as well as provide many trade opportunities along the way. .

nanningbob @ HGI

Craig Stoltz at FXAW was gracious enough to compile my BARF Your Way To Profits thread. You can find the 500+ page PDF here: BARF Your Way To Profits

I've added a couple daily data indicators for visual reference in the RAR file....and placed Mike's session indicator here as well.

Added Pueo's GMT +0 template

Added StratMans mini chart indicator

Link to Barron's PDF summary of this thread:
https://www.dropbox.com/sh/dxgt5h2fh6mc ... n=10122712

Added link to Fahedska's PDF summary of the thread and charts
Fahedska's PDF Summary

[Captain Jack]

I've been reading Bob's 10.4 Complete System thread and EURGBP has presented a possible trade setup that fits the system. Here is a chart showing EURGBP without any templates or "dirt" to cloud view of what lies under the glass of your computer screens. PRICE!

Here you see what you don't see when looking at lines, indicators, dashboards and alert boxes. PRICE!

A very important event just occurred, actually comprised by a series of related events, on this pair. I have labeled all the "events' for ease of discussion. Looking at the naked chart, what do you see and what do you think is happening or just happened here. Let the discussions begin....the only dumb or stupid questions are the ones not asked.

CJ

[mjws00]

Right on CJ. Admittedly my price action terminology is more than a little rusty. I Look forward to learning something.

I see: A false breakout at A. Probably with lots of profit taking to drive it down Retesting at B. Lower High at C. Possible bear control coming. D Maybe an opening gap, short run back into consolidation ending at E with a breakout to new highs and a pullback into the zone. G we have an exhaustion gap followed by a nice little pinbar at H into railroad tracks ( in the same consolodation zone. ) Small half hearted bull rally into railroad tracks at J and back into K where we are back where we started and looking to bounce, and continue the trend or fail and turn lower.

I know I've made a mess out of the terms. And missed a lot. Look forward to learning.

Mike

[davek]

Hi Captain Jack:

Great intro to your thread, I like the hunting/trapping analogy, being a hunter and trapper myself, really looking forward to what you have to teach us. My cup is empty, looking forward to stalking price action, call me a Pilgrim. Would price action on the eurgbp be consolidating now and getting ready for a breakout?

[aworex]

Hi Captain Jack,
I see price consolidating without making lower lows, which might imply price is in an acceptance phase and waiting for new orders to resume the trend.

[Captain Jack]

If you were going to war, would you buy your guns and ammo from your enemy? Easy answer - NO! Unfortunately, in the forex wars, that's exactly what we have to do. The very terminals we use and the tools provided with them are given to us by the brokers, whose money we are trying to take. They set on the other side of the glass and they "see" everything we do. They know our habits and nature much better than we know theirs, or even our own. They know all the "tricks" in the book. They know all the tools we use and they use those very tools against us.

How many times has a level or pivot point been broken, or a MA line crossed, with an order being placed, only to see price reverse and head the other way? The fox knows where every level or line is better than we. Most of these "markers" are used to set buy or sell stops, and TP or SL levels.

A lot of people have heard of "stop hunts" but do they know what they are? Some people think it's a broker sniping their stops. It's not, although some brokers have been know to spike a spread to clear them in house. This type of activity has slowed from what it used to be. Has anybody heard of Steve Mauro? Pretty famous guy in forex who teaches high priced seminars of a subject called the Market Maker Method. Makes a lot of money doing so.

In the EURGBP chart, what you are seeing in the end of an extended move and the beginning of the next move. All of the letters on the chart indicate what happens in between, and yes, there's a "stop hunt" there. The bulls and bears have no control of what has happened here and will happen time and time again, across all time frames. Price has been driven in many directions, to specific levels with intent. The rate of change in price is a factor in this process as well. It has been driven by that "some one or some thing", likely the Fox, to each point for reason. Trader mentality is the reason this process occurs over and over again. after all, traders are creatures of habit, set in their ways.

I'm going to take an early entry into the direction I "think" price will move. I fully expect every trade I enter to provide me with a profit. It doesn't always happen, but that's my mentality. When I see "pins" like these, many times I will take entry into a trade I'm considering. I've set a stop here, for visual purposes, just below the pins. Most of the time, I'll add 10-15 pips above or below the pin. If I'm right, I've just entered into a high R:R value trade. If I'm wrong, I've got a very small loss. The "pins" are not the only reason for entry, but they are one of the "tracks" the fox leaves. Notice also that a bear pennant "appears" to be forming. This pennant formation, gives me notice of a possible false move lower before a break higher. The fox lives on deception. Let's see what happens with it.

I'll begin discussing the lettered areas in the next coupe posts.

CJ

[spotdespot]

Hey CJ - great to see you here.

Ok - here's my shot - we have an good trend that shows exhaustion at A (with the "J" type formation - whatever you want to call it).

Price drops and fails to break previous low showing buyers still in the market and forcing price back up. At C the previous untested breakout lower from A is tested. This fails and we get a consolidation area for a few bars then price drops when buyers get scared and offload (or take profit if they haven't already).

D tests the previous significant untested breakout UP that formed the last leg of the main trend, picked up the orders sitting there, which pushed price back up.

Then I start to get a bit lost. We test previous untested breakout level (the level below C) and fail. 0.8600 gets tested multiple times. I guess you could say the top at F and bottom at G form stop levels for people and H and I clear them out paving the way for wherever price is being lined up for I am not sure of the significance of J - yes it's a double top/tweezer/railroad tracks type pattern and price after that looks like it's consolidating and building up orders (accumulating) but I might not have said that if you didn't have a big red up arrow after K - I might just be going

Also FWIW lots of turning at round numbers going on.

I look forward to your insights.

Cheers,
Dave.

[pips400]

Thanks Captain Jack, really looking forward to this thread. I'm a big believer in price action and understanding the story that price charts tell. Looking at your myfxbook.com stats is proof you know what you're talking about Bring it on!!

[erikskenne]

Thanks Commander

What I see first is the yellow line which is some kind of middle line from were prize stretch out from and snap back to, dealing range maybe, then I see that lines as former support becomes resistance are very important to pay attention to. Also wait to set yr order until after news release. Just my newbie 2cent

[Jemook]

If you were going to war, would you buy your guns and ammo from your enemy? Easy answer - NO! Unfortunately, in the forex wars, that's exactly what we have to do. The very terminals we use and the tools provided with them are given to us by the brokers, whose money we are trying to take. They set on the other side of the glass and they "see" everything we do. They know our habits and nature much better than we know theirs, or even our own. They know all the "tricks" in the book. They know all the tools we use and they use those very tools against us.

Not to turn your thread into a broker discussion but from what I've seen brokers out there are slowly moving away from market making because traders are becoming more profitable and making too much money from the brokers.

I believe Global Prime is one of the only brokers in the world that does not run a book (market making) and is completely transparent in the Direct Market Access approach.