The Captains Chest - Naked Trading & Other Stuff

[Captain Jack]

CJ, how do you know what the "true direction" will be?

The true direction is the one the fox takes price after a consolidation and stop hunt. Normally, you wait for it to show.

CJ

[Reaper]

CJ, how do you know what the "true direction" will be?

The true direction is the one the fox takes price after a consolidation and stop hunt. Normally, you wait for it to show.

CJ

So if the stop hunt is at the low of the asian range, it then pulls back, and then pulls back again to continue lower, does that mean the true direction is short?

i.e. like what is happening with GBPJPY?

EDIT: Unless I drew the asian session incorrectly and there was a small spot hunt up and a standard breakout pullback setup at the bottom?

[mjws00]

LOL was still net short from that earlier stupidity. But that was light compared to how I loaded from the top Back to flat with a healthy profit is good for us rookies. I will sleep well. I gotta learn to load em up when the entries are perfect. Ramping up slowly, but trying to get the feel for tight adds. I have always waited until they had a bunch of room to swing instead of getting them in early.

I like the longer moves, but I missed one chance to wipe that stupid move, and I wasn't missing again. Too distracting. I am not built to let them draw down. Cut them fast, re-enter if you must works so much better for me.

I know for a fact your board is green as hell. That was a beautiful move. Time for a nap.

Mike

[eltax100]

looked like a nice BARF ? on AUDJPY 15

CJ you have shown us some real gems and I cant get them out of my head !!

[mjws00]

CJ, how do you know what the "true direction" will be?

The true direction is the one the fox takes price after a consolidation and stop hunt. Normally, you wait for it to show.

CJ

So if the stop hunt is at the low of the asian range, it then pulls back, and then pulls back again to continue lower, does that mean the true direction is short?

i.e. like what is happening with GBPJPY?

EDIT: Unless I drew the asian session incorrectly and there was a small spot hunt up and a standard breakout pullback setup at the bottom?

Angat. Asia blew out the box. They hit the stops high and triggered the 126.00 pendings. Faked low and trapped weak shorts. Retested the top and took out the very weak tights, but never let the trapped bulls out. Then just jammed it home. Frankie Pulled back 20 pips, but there was no consolidation for them to fade and fake. Too much trouble to drive it up, when there was so much waiting down below. So they just hit the straightaway and drove it down. We've bounced to breathe at Yesterdays London and NY Low. 90% ATR they've thrown the first pin to stop it.

I'd say they shake it out a bit before the next leg, but I'm a junior. They may well have more carnage on the mind.

Green pips ya'll. See ya in NY.

[Reaper]

CJ, how do you know what the "true direction" will be?

The true direction is the one the fox takes price after a consolidation and stop hunt. Normally, you wait for it to show.

CJ

So if the stop hunt is at the low of the asian range, it then pulls back, and then pulls back again to continue lower, does that mean the true direction is short?

i.e. like what is happening with GBPJPY?

EDIT: Unless I drew the asian session incorrectly and there was a small spot hunt up and a standard breakout pullback setup at the bottom?

Angat. Asia blew out the box. They hit the stops high and triggered the 126.00 pendings. Faked low and trapped weak shorts. Retested the top and took out the very weak tights, but never let the trapped bulls out. Then just jammed it home. Frankie Pulled back 20 pips, but there was no consolidation for them to fade and fake. Too much trouble to drive it up, when there was so much waiting down below. So they just hit the straightaway and drove it down. We've bounced to breathe at Yesterdays London and NY Low. 90% ATR they've thrown the first pin to stop it.

I'd say they shake it out a bit before the next leg, but I'm a junior. They may well have more carnage on the mind.

Green pips ya'll. See ya in NY.

Thank you that makes sense. I was expecting the stop hunt to happen later towards the london open rather than earlier on in the asian sess. So I take it the move for most Jpy pairs will be down until they reverse around the NY session.

[pips400]

Okay time for the opticians, and have my vision checked.

CJ asks "What do you see?" Here is my answer:

There are two realities here depending upon which side of the screen you're watching. There's the reality we are supposed to think is there, and the real "darker" truth lurking just under the surface, but close enough to spot if you know what to look for. This is the realm of the fox, who doesn't rely upon brute force to influence price, but like a small rudder on a large ship can move massive weight through minor adjustments, the fox is able to manipulate price feeding upon sentiment, fear and greed to get what he wants. In his world, there are other forces at work, fundamentals, news, monetary policy all contribute to create turbulance and volatility in which the fox thrives. His goal is to take our money. He does this by drawing in both buyers and sellers by promising gain, but the promises are empty and he is cruel, because once you're in you can't get out without taking a loss. Where he seems to have greatest opportunity are at times of price exhaustion or to create areas of confusion using Asian, London and US sessions as his edge. The old saying is particular apt here "keep your friends closer, and your enemies closer still". You can't beat the fox, but if you can see where he is at work, by the footprints he leaves behind, you can learn to play him at his own game. On the chart, there are three main areas of interest, which continually move, are the upper limit, the lower limit and the "baitline" which is in the middle. Out on the limits, both buyers and sellers are trapped. They are trapped because they believe they have seen a new price move which entices their order placement, only to soon discover price reverse against them but then not let them back out or if they're lucky, they might get to break even. If they place hedge trades, then so much the better, because a trade is a trade and the more trades the more the fox makes. And so to play with the fox, we aren't looking for breakouts, but the false breakout, we aren't looking for trend but counter trend, range trading. To profit here, we are trading out on the edge, at the upper and lower limit but back towards the "bait line". The pattern we are looking for is the W and M formation, which can be seen on every time frame, and on a higher TF could be seen as a RRT pattern. But the trick here is to move quickly, because the fox is quick, otherwise you'll be left behind, only to admire his work after the W or M has been completed. You have to get in the trade whilst the pattern is being formed, or in the second leg. So for the W, we're looking for down up down then trade long, or for the M, we're looking for up down up then trade short. Clues to look for at pinbars which are like flags waving here I am, and then we're waiting for a return to this level, then place the trade as soon as price begins to retrace towards the "baitline". Eventually, the fox will disappear and allow the momentum and fundamentals to have their day, but he'll be back again and start the process all over again.

So that's what I see. I wonder if I need a new set of glasses?

[Captain Jack]

Okay time for the opticians, and have my vision checked.

CJ asks "What do you see?" Here is my answer:


So that's what I see. I wonder if I need a new set of glasses?

You will soon be able to throw away your glasses as you vision is getting much better!

Chasing the sly fox wears this old man out...taking a rest....now where's that 'shine?

CJ

[Aus67]

What I saw to make me want to put a trade on here....

CJ

Hi CJ
If you have a second could you briefly explain what is meant by the terms 'trapping volume'?
and 'continuation'

cheers
Daryl

[Captain Jack]

What I saw to make me want to put a trade on here....

CJ

Hi CJ
If you have a second could you briefly explain what is meant by the terms 'trapping volume'?
and 'continuation'

cheers
Daryl

I'll go back and check on the continuation....but "trapping volume" is sticking the largest amount of contracts or positions. When they spike it low and get a lot of people looking to short, they pull price back above them. Then they will drop it again, only not as low as before, enticing more shorts, but not letting the others out of their positions. Price is still above then. They will do this and trap a large volume of shorts, then move price away from them....forcing them to sell at a loss.

Draw a descending trend line and you will see that after a short rise, they dropped price quickly - one candle. If you draw the descending trend line, you will see it was near the point of drop. They were trying to say the down trend was still in effect. Continuation of the down trend so they could get some more shorts before moving price away from them again.

CJ