In the footprints of the FOX....

[damnpenguins]

Sorry for not getting back to this earlier...

In terms of hints and timing, this is something I wrote a few weeks ago in my journal:

Context, Inventory and Imbalance.

Context:

CJ's basic premise is that the market moves in a cycle (Context)

Always keep the overarching context in mind. So if the cycle is down, look for this to occur to the short-side. If it occurs to the topside then it could simply be a form of accumulation or misdirection.

Inventory:
The FOX HAS to accumulate inventory.

Market depth / Liquidity is not sufficient for the FOX or Composite Operator to acquire a big enough position in one fell swoop. It HAS to occur over time (accumulation), and it will always leave footprints. Stops and levels are protected... Pace of Stop Hunt in opposite direction... INTENT of moves....

Imbalance:

Once the above is established:-

The is the KEY. Mr FOX has built enough inventory, so now what? He has to create the IMBALANCE in the market to trigger the move. This is the Stop Hunt in the pattern. Smoke and Mirrors. Get everyone excited, induce them one way and slam price the other way. This time in the TRUE Direction that CJ spoke of.

It is a combination of these 3 things that help me to gauge whether a move is imminent or not.

Even when all of those line up though, price can still not move the way we anticipate. CJ covered that when he discussed what I've noted down as the Inventory Play. That's a whole different post. But he mentioned it in the first paragraph of this post #47535. There are other posts as well, but this one was on hand.

Once again I can follow up with images, just need to get the time....

[damnpenguins]

DAMN - that was beautiful....

CJ was right - once you see you can't unsee. Thinking more and more like the FOX every day....

~1000 pt drop on the DAX and guess where we come back to?

DAX_returns.png

[waza]

it's coming down more if you look at the weekly it's completed it's cycle,

[damnpenguins]

550+ pts on the DOW thus far.... carnage!

Dax and FTSE followed suit. Choppy as hell today until the DOW started dropping.

Had put up a few charts with what I thought was the A-K pattern , but removed the post after the action today. Will go back and reassess.

[flywood]

This is exactly what keeps bothering me. Once you think you've found a pattern, the fox changes gears and turns it against you without warning.

Consider this pattern that formed yesterday in EU.. three pushes down, ranging in Asian, breakout to the lows, W-shape - up it goes... NOT, they bring it crashing down again to range after the RRT formed. Frustrating, although I managed to reach BE on that one, but still..



Makes me think that all the pattern recognition I try to do amounts to guesswork. There are just too many instances where the patterns are disrupted or repeated, and I'm just not good at reading signs..

Is there anybody here who is still consistently successfully applying the methods that seemed to work wonders for people in CJ's thread?

[ti6543]

Just my 2 cents, but here goes:

I think if you think of the market as just purely manipulated then you're going to struggle. People with loads of money can influence it, but they are still bound by the underlying supply and demand. A lot of the market moving is random noise.

If you're looking for a textbook M then look at GBPUSD H4. What is apparent is:
1. A major fast move into a new area. An acceleration at the top.
2. Lots of volume. The buying is being absorbed by the smart money (Fox).
3. A return leg up showing much less enthusiasm - buying has dried out.
4. Another hard drop.
5. All this happens at the top of a major trend line. The market is overbought.


If you just look for any zigzag that could resemble an M/W then I think you're going to come unstuck. At least look for an acceleration first. A major area of interest is urseful too, e.g. 1.20000, or resistance/support. If you look at EURUSD on the H4 zoomed out you'll see a giant M, although not quite as textbook as the one on GBPUSD. Buying into that would be unwise for now.


If you want to see a market that is even more dominated by manipulation look at the Bitcoin market. There the manipulators are using bots to spoof orders, and buying and selling to themselves to fake volumes. They've managed to arrest the drop to zero somewhat, but even they will struggle to go against the market.

[JonCodesBad]

Makes me think that all the pattern recognition I try to do amounts to guesswork. There are just too many instances where the patterns are disrupted or repeated, and I'm just not good at reading signs..

Trading the M15 alone is hard work. Looking at a HTF you can see a clear BARF after a few pushes higher. It's even clearer on GU. Always refer to the HTF.

"and I'm just not good at reading signs.."
If I may suggest, Find your strong suit so you have a solid foundation to trade from. The rest will hopefully fall into place later.

I'm rubbish at level counts but seem to BARF well.

keep at it!

[flywood]

Guys, thanks a lot for the input!

Of course you're both right - one should always keep in mind the higher TF. For instance with EU, I am well aware that the HTF bias is downward. However, as we've all experienced countless times, taking trades on the higher timeframes can be unnerving, because you inevitably get to ride the ups and downs of the market. And unless you've achieved some of CJ's mastery you might not be able to enter high in the pins.

What I was trying to refer to was what CJ wrote about and demonstrated in the original thread, i.e. after looking at the HTF, drop down to the H1 or M15 to look for best entries. For that, he considered timing as well as patterns. He also said several times that the patterns (M, W, RRT, A-K) repeat throughout all TF.

I think I'm generally ok with higher TF analysis, I'm doing far less well with identifying entry points.

I still refuse (and probably I'm going to regret this) to just stick to HTF trades with all the volatility involved. In the past, at least judging from what is in the original thread, people seemed to be able to see some light...

Any thoughts - or have you all given up dropping down to the lower TF?!

[ti6543]

As long as you set the size of the trade to give you an appropriate risk then the time frame shouldn't matter.

I'm actually not sure what you guys are trying to do with the whole A-K thing. Buy, Sell? In the original thread there was a little rise, then it fell. In the picture the red box is the A-K pattern you talk about. Zoomed out you get the important bigger picture - we had a rapid rise followed by chop. Price eventually drops to 0.7 about a year later.

Could you explain exactly what you are doing with an A-K trade, and why it would be successful? It seems to me that you could pick out any pattern and make it fit.

[flywood]

As far as I understand the A-K pattern, it is a characteristic mix of distribution and accumulation that occurs across all timeframes when a level has been established and/or an AOI has been reached. I guess you could also say that they occur when volume begins to dry up and they need to distribute what they have accumulated or the volume they have been able to trap.

The pattern as such gives no indication as to the direction that it's going to take off in - that depends on the higher TF bias.

What makes the pattern difficult to trade is that it can be "dirtied", parts of it can be repeated, etc. The easiest trade frequently is D to E/F, as others have pointed out before.

I totally second your point that identifying the pattern (and trading it) can be exceedingly diffcult, but I have not stopped being interested in it, since it may constitute a possibility to better understand pre-move market behaviour.