The Captains Chest - Naked Trading & Other Stuff

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Lara
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Joined: Thu Aug 16, 2012 4:09 pm

Re: The Captains Chest - Naked Trading & Other Stuff

Post by Lara »

Hi Captain,

Its fantastic to have someone focussing on PRICE PRICE PRICE!
If I look back to the beginning of my trading in 2006, my platform looked like some of the consols from the Starship Enterprise :lol: There were so many indicators I couldn't even see price! Nowadays I am loathe to put even one indicator on my charts - they all lag so badly and remind me of journalists running to cover an event that has already happened.

The A, B, C, D, E patterns you show look like Elliott waves or am I completely off track?

Anyway I look forward to learning from you and will be following this thread with great interest.

Lara
xrismak
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Re: The Captains Chest - Naked Trading & Other Stuff

Post by xrismak »

Captain Jack wrote:
taggie11 wrote:CJ
Great to see you in here and glad you found a home for your talented and educational approach to trading.
Loved BARF and looking forward to "fox" trading.
Cheers
DocT
Hi Doc,

We could end up BARFing here as well! ;)

CJ

Hello CJ,
I hope this is the Same Captain Jack from Bluto's Corner, if so Holler at a Dude, I am giving this Particular Thread a Proper READ and UNDERSTAND, I need to Learn this Price Action thing because you make Sense always and hey let me Digress a little bit if you don't mind, I really never understood that (BARF) style of Trading so hopefully you might share and shed some light on it in this forum too and also that Better Volume Indi :) , I need a Hook up on it .

Happy Trading Y'all,
xrismak ;)
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mjws00
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Re: The Captains Chest - Naked Trading & Other Stuff

Post by mjws00 »

Slow day trading for me. Gonna see what BOJ and London can muster. So I dove head first into Al Brooks. Figured two heads up on it had to be worth something. His style ain't nearly as entertaining. ;) Hope the day went well for all. I got my foxy glasses on for later.

Mike
Reading the dark heart.
f451
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Re: The Captains Chest - Naked Trading & Other Stuff

Post by f451 »

Hi Captain!

Reading the thread is provoking a few thoughts...
One thing I feel most traders don't understand about trading in the markets is that for every buyer there is a seller. If you can get a fill, then someone else is taking the other side of your trade. In FX this might be a bucket shop market maker broker with incentive for you to lose, but on the exchanges, it's still the same deal... In order for you to make a trade, someone else has to be taking the opposite position. Now this has some interesting consequences - particularly if you happen to a well capitalized smart money player. If you want to buy, especially if you have a big position you want to establish or unwind, then you need to find someone else to take the other side of the trade, and sometimes that ain't easy...

Here's where it gets interesting - if you have buy or sell a LOT.... how exactly to do you that without pushing the price against your trades? This is where the foxes and the stop hunts come back in to the picture... you have to induce someone else to take the other side of your position, so you need to make it look like taking that other side is an attractive deal... say when price pushes down below an established support, or the low of the day - just long enough to induce enough traders to sell - where you as the fox with the big position to establish are busy buy, buy buying, in full knowledge that price is gonna be coming back up once those desperate retail sellers are exhausted.

Signs on the chart - pin bars, double bars (key reversals), especially if they're poking out beyond some obvious support or resistance level... or price moves that induce retail traders looking at standard sets of indicators to yell - yippee - breakout trade - or yippee moving average crossover trade, or....

(the contrast between how those smart money foxes see the market and how the retail traders with the asian range breakout and moving average crossovers templates often is enough to induce just enough volume to sell when then the foxes want to buy... I've definitely heard experienced bank traders talk about need to push price up or down past certain level to attract enough liquidity to dump or establish a position...)

trouble for me is I've never really been able to apply these ideas to actual trading...
so keen to be here, CJ, and to see if I can learn to see the deeper levels of the markets!
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Captain Jack
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Re: The Captains Chest - Naked Trading & Other Stuff

Post by Captain Jack »

mjws00 wrote:Slow day trading for me. Gonna see what BOJ and London can muster. So I dove head first into Al Brooks. Figured two heads up on it had to be worth something. His style ain't nearly as entertaining. ;) Hope the day went well for all. I got my foxy glasses on for later.

Mike
Al Brooks has price under a microscope....he knows his stuff and that's why I won't be tossing stuff like that out. I take a broader view and use fewer setups that work for me. "Railroad tracks" are the bomb for taking entry into a trade for me. When I see those and I'm looking for entry, I try to get it right in the "pins" at the top or bottom of the formation. The entry into the EURGBP trade was a bit late for me, as I was away when they formed, but got in real close. I have a SL of around 12 pips on that trade. When you are risking 2-3% per trade, a small stop loss allows you to enter with a much higher lot size.

For example: 3% Risk SL of 15 pips, my lot size is 3.91
3% Risk SL of 100 pips, my lot size is .57

Since I trade the D1 and H4 time frames, I pull down some nice size moves. Lets say this trade rolls to TP1 and the take is 150 pips.

The 1st trade above brings me 39.1 x 150 = $5950.00
The 2nd trade above brings in 5.7 x 150 = $855.00

I risk the same amount on both trades @ 3% but look at the outcome. This is how you turn low value R:R trades into R:R trades of 10+ and higher.

I consider these trades "anchor" trades when I trade. as this trade progresses into profit, I will pyramid additional trades, as price progresses in its' journey. There are times when I see a "pause" or test approaching, I will l close the pyramid trades out, hold the anchor and begin pyramiding trades trades when price moves in desired direction. The folks from FXAW can tell you how effective this has been for me. I last linked a live account there, one from FXMC that started with a $4K deposit. After the account hit $32K, over about a month and a half period, I had generated over 40,000 green pips. I no longer link my live accounts but may start a small live account like that again for an exercise.

My theory is why make 30 trades over 30 pair when I can make 30 trades in one pair. Works for me and works well.

Those "railroad tracks" allow this type entry with a very high probability of success. Word of advice though, don't put a trade on like this anywhere near the time when spreads flare out. Your broker will take your SL with the widened spread and this is especially true for ECN brokers. Wait for news to pass or the day to change and spreads to settle then lay the trade out with confidence.

CJ
Last edited by Captain Jack on Thu Mar 07, 2013 1:18 am, edited 1 time in total.
A man is not defeated when he is beaten, he is defeated when he quits.

The goal is not a "perfect trade" - the goal is a "profitable trade"!
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Captain Jack
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Re: The Captains Chest - Naked Trading & Other Stuff

Post by Captain Jack »

Here's chart with some examples of the "railroad tracks" and the "pins" formed at the top and bottom. If i can get entry in the pins, I'll set a SL of 10-20 pips above or below the high or low of the pin. If I'm a little late on entry, I'll set SL at the the pin level. This is one of the few times I set the stop.

If you look back in the chart history, you probably find many "areas of interest' in the past that relate to these reversal areas. Remember, the fox like to pull the bulls and bears together so he looks for common ground.

CJ
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A man is not defeated when he is beaten, he is defeated when he quits.

The goal is not a "perfect trade" - the goal is a "profitable trade"!
Jason

Re: The Captains Chest - Naked Trading & Other Stuff

Post by Jason »

When you see the railroad tracks, it has already happened. How do you enter near the top and risk only 15 pips? Is it by looking for railroad tracks on the m15?
garyfritz

Re: The Captains Chest - Naked Trading & Other Stuff

Post by garyfritz »

Jason wrote:When you see the railroad tracks, it has already happened. How do you enter near the top and risk only 15 pips? Is it by looking for railroad tracks on the m15?
That's what I wondered too! By the time you see the RRtrax, the opportunity to enter "in the pins" is long gone. If you enter up "in the pins" of the first bar, it could just as easily keep moving in that direction and never FORM the RRtrax.
f451 wrote:Here's where it gets interesting - if you have buy or sell a LOT.... how exactly to do you that without pushing the price against your trades? This is where the foxes and the stop hunts come back in to the picture... you have to induce someone else to take the other side of your position, so you need to make it look like taking that other side is an attractive deal... say when price pushes down below an established support, or the low of the day - just long enough to induce enough traders to sell - where you as the fox with the big position to establish are busy buy, buy buying, in full knowledge that price is gonna be coming back up once those desperate retail sellers are exhausted.
I understand the idea behind this, but I never understood how you could do it. So you push the price down to induce people to sell -- well pushing the price down there TAKES a lot of selling. So you have to get pretty short in order to push the price to where you want to buy. Then I would expect buying would push it UP just as fast as the selling pushed it down, so at the end don't you end up buying back the shorts you used to push it down, you're about flat, and the price ends up back where you started?
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Captain Jack
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Re: The Captains Chest - Naked Trading & Other Stuff

Post by Captain Jack »

f451 wrote:Hi Captain!

Reading the thread is provoking a few thoughts...


Signs on the chart - pin bars, double bars (key reversals), especially if they're poking out beyond some obvious support or resistance level... or price moves that induce retail traders looking at standard sets of indicators to yell - yippee - breakout trade - or yippee moving average crossover trade, or....

(the contrast between how those smart money foxes see the market and how the retail traders with the asian range breakout and moving average crossovers templates often is enough to induce just enough volume to sell when then the foxes want to buy... I've definitely heard experienced bank traders talk about need to push price up or down past certain level to attract enough liquidity to dump or establish a position...)

trouble for me is I've never really been able to apply these ideas to actual trading...
so keen to be here, CJ, and to see if I can learn to see the deeper levels of the markets!
Let's see what I can do here. I once read something that I think came from Steve Mauro, that said it takes 10,000 full lots to move price one pip. That's a lot of trades to make minimal price impact. For the most part, none of us will be doing this or have to worry about who takes the other side of the trade we put on. This is another reason why people say EA's and systems quit working after so many people start using them are full of beans. If the above statement is true, and I don't know if it is, it would take 1,000,000 traders placing .01 trades in the same direction, at the same time to move price 1 pip. 100,000 traders placing .1 trades or 10,000 traders placing full size lot trades. This only moves price 1 pip. EA's and systems quit working because the conditions they are programed for are not taking place. Period. It's the trap that's set that will only trip when those conditions are met. The falsehood that the market makers change the way they trade is another part of trader paranoia. That's how the rationalize it and that's what they believe.

Consider this - what is price? Price is nothing more than a reflection of the number of transactions put forth and the price paid or these transactions. You can see this so easy on the charts I've posted with tick volume on them. The largest price swings are usually during the highest volume of price ticks, reflecting increased transactions. This is why the fox wants both bulls and bears present. It creates more transactions and the fox can move price with his intent.

You can take all the retail traders in the world and the orders they place are sucked up by the market. Some are offset, against other traders, with the broker taking the chop, some are offset by the broker's in house traders, some are passed through where they are but a spec, offset by large institutions. Look at the numbers above. It takes and enormous number of "transactions" to move price. Hedge funds, bankers, large institutions, and perhaps some whales and sharks have that ability. We do not.

The bulk of retail traders orders are to large institutions. It is the large institutions that direct price and it to their intent it moves. Our goal is to trade with the fox, not against. This is why it is so important to understand why price is moving as it does instead of just looking at the cross of price and a line. When we trade the cross of the line, we trade against the fox. He is the one who created the cross. When you understand this, then you begin to travel with the fox. One way to learn this is by learning the habits and the patterns of the fox. This is what I try to put forth here. Pattern recognition and what it means. The tracks of the fox.

Price is not random. Price is moved deliberately, and is manipulated by logical decisions. It is the fox who makes these decisions and we, as retail traders react to their decisions. Let me say that again, we react to their decisions. The conditions we trade in are created and presented to us and we react to them. Most times, we react emotionally and not rationally. This emotion is what the fox preys on. Most traders are on the edge of their seats when trading. Trading should be stress free and devoid of emotion. I'm so devoid of emotion any more, I find my self waking up with my laptop on my lap and drool dripping down my chin, or that could be old age creeping up. Trading to me is mechanical process anymore, boring at times. This is why the fox drags the bulls and bears together, punishes their emotions and creates transactions to manipulate price. When you hear that the bulls and bears are fighting it out now, you'll know it's the fox behind it all.

This is how a large institution offloads or builds a position. By drawing as many traders to common ground and then manipulating them to make as many transactions as possible, so that the institution can drive or push price to their intent. Again, look at the chart with tick volume of it and take not of the price swings and volume. There are large transactions taking place and price is moving a great deal, causing a lot of emotional distress. There is also a large number of price ticks and price in NOT MOVING. This is the institution accumulating for the next phase.

You may not have been able to apply this to your trading because you are on the wrong side of the glass. You think and reason and rely on what's been put forth to you, up to this point. Perhaps you might be able see things in a different light now and just maybe make changes to your trading accordingly.

Any questions, refer back to your post where the traders "yell yippee!" ;)

John
A man is not defeated when he is beaten, he is defeated when he quits.

The goal is not a "perfect trade" - the goal is a "profitable trade"!
Jason

Re: The Captains Chest - Naked Trading & Other Stuff

Post by Jason »

Hi Captain. Do you have a different type of volume indicator? I've looked at a few volume indicators and none of them show a large increase in activity on the EURGBP like on the picture you posted.
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