The Captains Chest - Naked Trading & Other Stuff

[Captain Jack]

Just shorted GBPCAD ....putting it out there for comments.
Hopefully someone will point out any errors!

gbpcadpin.JPG

Oh dear! I think I have been out-foxed

On the H1, if that's a 3 level high, what comes next?

CJ

[Captain Jack]

A perfect setup: accumulation, basic manipulation and profit release..

This is example of a straight away move...they spiked price low...1st leg of the "W" but didn't spike a 2nd leg....no 2nd leg means straight away move...away from trapped volume....

CJ

[Captain Jack]

Just a quick note folks. taking care of some stuff on the home front so I'll be tied up for a bit. I'll get back to posting some charts as soon as I can....

Things to note....Asian is to set the range, reset the HOD and LOD....

London usually brings the moves... and NY is good for reversals....saw that with a bunch of them this morning....moves usually begin 25-50 pips above or below the Asian range....

The cycles are different across the pairs. They are spread so that they all don't coincide....they are staggered across the pairs..... you can use this info and find "lead pair" and "trailing pair".... who leads and who follows?

What happens on the lower time frames, repeats on the higher, at a later date....you saw some nice price swings on the 15M last night, these will be larger when the patterns hit the 1H, 4H and D1.... more on this later...

Do not try to micro focus to close on this stuff...keep a broad view on the charts, across the time frames...

For those having "indicator with-drawl", put some of your indi's on the screen and watch how price reacts around them.... you have a better understanding of how the fox uses these indicators and how he moves price to or beyond to entice action....

Start looking for quality trade setups....don't take everything you see....you will get better at this...

CJ

Hi Mon Capitaine,

What do you mean by resetting the High of The Day / Low of the Day?

All the best..

Asian reset the initial high of the day and low of the day....it's usually around 40-50 pip range....this gives all the "breakout traders" their targets....when they extend the range later, they trip the breakout stops and the stop hunt later clears them out, before they run price....

CJ

[Captain Jack]

So my next question is what happens if there is an accumulation phase after accumulation phase in one direction but no stop run to indicate how we trade the profit release? I think what the MMs might be doing here is setting the NY reversal up so the reversal itself is quick and sharp...CJ - would this make sense or am I totally wrong?

Consolidation and accumulation will take place until they have an imbalance in orders....then they take the largest amount they can....

Extended consolidation is seen before the "news" events. They build the crap out of positions, then use the news as cover to clean out both sides...

CJ

[Captain Jack]

Any nice setups forming this evening that you can share pls, CJ? And how long does it take for the average trader to go from the initial ah moment to pretty much fully understanding how the fox works?

Haven't looked at charts much today....it's mid week so look for reversals into Thursday-Friday...

CJ

[Captain Jack]

does the second high in the M formation need to be lower or equal to the previous high? Or can it be higher and the pattern still hold?

Valid higher highs or lower lows, one not caused by spreading the price above the old one, could invalidate the setup. This applies to the moves we are watching on the 15M time frame. On the higher time frames, you will see "W" and "M" patterns that are following the trend up or down and their 2nd legs will differ then.

CJ

[Jason]

Hi CJ. There was a small scientific study using MRI brain scans and the researchers found that at a non-conscious level normal people can guess the market direction 60% of the time when they make a decision on every update of the chart (if they were more selective, e.g. trade reversals at high or low points, maybe the success rate would be higher). Consciously they were no better than 50% because they would second guess their non-conscious choice by thinking things through. Is your method a highly analytical way of trading, or was the theory arrived at after becoming good at trading through intuition/non-conscious thinking processes?

[Captain Jack]

I see on the daily for GBPCHF a W formation. Probably be a good time to go long for 300 points if I had the patience to hold it for that long I'm not sure.

What else do you see? How about a head and should pattern?

What were we just talking about several posts back...on why GBPCHF didn't pull back and ran straight up instead?

Patterns repeat from the smallest to the highest....same pattern you looked at earlier....

The spiked price down once, formed 1st leg of the "W"....the did not spike the 2nd leg down because they have enough SHORT volume trapped now and do not want to release it. It's a straight away trade that's designed to bust out the SHORTS in margin trouble....

When you see this, you BUY. They can still spike a bar down, so your SL is 10 pips past the lowest low, but they have to move a ton of contracts to do this.... As price moves away, pull your stop up.

CJ

[f451]

So my next question is what happens if there is an accumulation phase after accumulation phase in one direction but no stop run to indicate how we trade the profit release? I think what the MMs might be doing here is setting the NY reversal up so the reversal itself is quick and sharp...CJ - would this make sense or am I totally wrong?

In leg 1 of the weekly shift. So after they have thrown the brakes on the weekly cycle and chopped it up. Once they pull away from the new high or low. Often they skip the stop run back in that direction. They have so much money trapped at the new high or low, that it is in their best interest to just turn up the heat, not send it closer and risk losing some fresh meat. They turn the heat up slowly on their boiling frog so he doesn't jump out of the pot.

Watch the second leg, and backtest. Many many times there is continuation there. So... they throw what looks to be a FAKE.. all the Frankie/London open "clever" traders fade it like they have successfully the last 3 days, they get stuck holding the bag, and the market runs through them.

This is the leg that pays breakout traders. It is the straightaway. It screwed me over 100 times manually backtesting, but it isn't that hard to spot.

Mike

More detail on how you spot that rare straightaway, would, for us slow learners, be *most* illuminating

[Captain Jack]

Hi CJ, thanks for starting this wonder thread and sharing your trading style.

I am still a struggling trader, and i have come to see that besides having a good point of entry and exit(as your showing us), the one thing the majority of loosing traders do not understand is the money management aspect of trading. In light of this, can u show us a bit of your money management technique, as i think this part of trading determines 70% of any traders success rate. I think it would be the iceing on the cake for us newbies, it will be a great benefit if we can learn from how you manage your trades as well. Many thanks.

hodgires

To put it bluntly....NO! Sorry...

I've already said don't even think about trading as I do. You can't do it. I don't trade like the majority or traders so I don't use the procedures they use. I'm not teaching anybody to trade as I do. You need to learn basic money management, lot sizing and risk. I don't teach or pretend to teach that.

I am a super aggressive trader who will not hesitate to max out my margin. I am as unorthodox in my money management as I am in my trading beliefs and I will let my broker close trades for me.

It will not work for anybody but me.

CJ