The Captains Chest - Naked Trading & Other Stuff

[jasonckb]

For GBPUSD, a M top is forming and also forming the H & S top (trap for bear) after false break neckline, several Ws will be formed to kill shorts.

[mobthehop]

CJ, for us / me being "blind bats" as yet and trying to "see" what you see - would you advise to demo on M15 with eyes on H1 for bigger picture view or is H1 / H4 or H4 / D1 the better selection for initial demo trades?

Cheers

[themaxx]

IhDT, can you upload that indicator which shows the spread and the ADR please. Or at least tell me the name please and I will find it. I have one that shows the spread only, but the ADR would be useful too, thank you. Does this same indi do the HOD and LOD lines?

I'd also love a copy of the HOD and LOD indicator. Been looking for one for a while and this is the most unobtrusive I've seen

[pips400]

I've been quiet for a while, getting my head around all of this, and then last night I found myself on the other side of the screen, and wow, makes me wonder why I never saw it before, it all seems so clear and obvious now, I don't think I'll ever look at a price chart the same way ever again. I've come too far now, there's no turning back.

When you're doing a large jigsaw you get a piece and it looks like it's supposed to fit in a particular place, and so you make the fit, only to find out later that actually it fits somewhere else. And then, sometimes when you get one correct piece in place, it leads to many others fitting into place because you just needed that key piece.

In a former career, I was an accountant with my own business, and if there's a core accounting principle it's that for every debit there's a credit and vice versa otherwise the books don't balance. Well the same principle applies here in Forex. For every transaction there's always another side, so if someone's buying, someone's selling, and if someone's selling then someone's buying. Nothing new here, and we've read it all before, but then it clicked into place. If the fox want to sell, then he need buyers, and if the fox wants to buy he need sellers. So how does he do this - he manipulates the market to create "bias" or pressure for retail traders to take the opposite direction direction, it's as simple as that. So this is in accummulation phase, and then the stop hunt. There are two things that need to happen here. First if fox has been going long, when he's accummulated enough "unrealised" profit, he needs to bank that profit, by offloading his positions and sell what he has. So on one side of the equation, fox is selling, that means he's going to create buying pressure/bias in the market for retail traders to buy. During this phase you'll get the false breaks above, pinbars etc anything to entice buyers into the market, so that the fox can close out his position, so fox just need to trap enough traders going long. Secondly, when foxy wants to play again, he'll manipulated the markets once more, go through the stop hunt to entice traders into the opposite of where he is going to take price.

That was a huge piece of the jigsaw that just fell into place for me last night. And then another piece fitted immediately after - market cycles go in threes (a generalisation, but enough of an edge here). So we're looking for the accummulation/manipulation/stop hunt phase first. Then there will typically be three moves either up or down with pullbacks/rallies in between. On a larger time frame, this will typically happen over a week, with three or possibly four days movement, and a day or two days back into the range, as fox offloads his position and setsup for the next run. To validate a move, there should be enough pips approximating the ADR, otherwise it may not be a valid move. This gives us the heads up on which way the fox is going to go next. After the three moves, we're expecting accummulation again so beware at this stage and wait. All of this happens on an intra day cycle as well, which is where we'll drop down to the 15min (or even 5min charts). Where as a generalisation we're expecting 3 moves. Typically the asian session will be accummulation, setting the high and low so far, but then fox is going to want to play, and so will begin to break out during London session, which is where we're looking for his tracks, the Ms and Ws, double tops/bottoms etc. But remember fox purpose here is to create selling/buying bias the opposite way he wants to go because the balance equation must hold, even the fox can't change basic mathematics. So once we know which way fox is going to go, we can tag along and follow his lead.

On the intra day, we can also look at the higher/weekly cycle to give us a clue as to which way this is going to go. For instance, if we've only had the first leg on the daily run, then after the asian session we're expecting the second leg in the same direction as the first. So if that was long, I'd expect to see stop hunting going short around the franky/london open, before heading long again.

And the final piece for me was reversals. If during any session, we've already had the three phases for the entire run, and ADR is reached (approximate), then I could be looking for a reverse. For instance, if during London, all three phases complete say going long, I'm looking for a definate reversal around the NY open, although it can happen later (or sooner).

So CJ/Mike how does that sound? I new to this, so hope I'm not too far off the scent here. It feels right to me, and I think I'm ready to strip my charts naked. What do you think?

Pips400

EDIT: I forgot to mention. During the stop hunt and say there's a large pinbar dropping south, this will do two things. One - it will trigger sellers, playing breakout strategies, ema strategies etc, and two (which is the missing bit I needed), when a long position is stopped out, at that point he is forced to sell to close out his buy. So either way whether it's new shorts or stopped out longs, the overall effect for the fox is the same - more sellers so he can go long. - He's a crafty devil Put it another way, when your new long gets stopped out you've been robbed by the fox at that price. Youre position is sold to close you out, and he's buying, exactly the way he wants, on his terms, at his price. No wonder CJ doesn't use a SL, why give the fox anything unless you have to

[Logs]

Thanks PIPS400. Great post. I appreciate you sharing your insight.

[Captain Jack]

So CJ/Mike how does that sound? I new to this, so hope I'm not too far off the scent here. It feels right to me, and I think I'm ready to strip my charts naked. What do you think?

Pips400

EDIT: I forgot to mention. During the stop hunt and say there's a large pinbar dropping south, this will do two things. One - it will trigger sellers, playing breakout strategies, ema strategies etc, and two (which is the missing bit I needed), when a long position is stopped out, at that point he is forced to sell to close out his buy. So either way whether it's new shorts or stopped out longs, the overall effect for the fox is the same - more sellers so he can go long. - He's a crafty devil Put it another way, when your new long gets stopped out you've been robbed by the fox at that price. Youre position is sold to close you out, and he's buying, exactly the way he wants, on his terms, at his price. No wonder CJ doesn't use a SL, why give the fox anything unless you have to

Pips400 - I couldn't have said all that any better....as a matter of fact, it's probably better than I could have said it.

Welcome to the fox hunters club! I believe you've "seen" the light!

CJ

[mjws00]

Pips400, Sounds like the light went on. Kinda crazy when it hits isn't it.

The pinbars, M's, W's, stop hunt etc are all nice, but when you start to see how precisely price is controlled and manipulated to create fear/greed supply and demand it is just cool. Exactly as you described, they have to balance the "book" racking up the longs or shorts AGAINST THE ENTIRE WORLD, then steal their lunch and unload.

It is sick when you look at how simple they play. Even more sick how long many of us have been taken in. Just a pure simple manipulation of human nature. Not cerebral. Nothing fancy. I have a friend whose brother in law used to promote penny stocks.... exactly the same thing. Hype it, control the float, get greed running and sell in to it. It is one reason I trust no news. These bankers take it to a whole new level.

Awesome to see it click.

[Captain Jack]

For GBPUSD, a M top is forming and also forming the H & S top (trap for bear) after false break neckline, several Ws will be formed to kill shorts.

I'm not sure of the longer term but short term, both charts look good Jason....the key points are the "W" and "M" reversals...when you can spot those, it's usually money in the bank. Knowing the cycles helps keep you trading in the right direction.

CJ

[Captain Jack]

CJ, for us / me being "blind bats" as yet and trying to "see" what you see - would you advise to demo on M15 with eyes on H1 for bigger picture view or is H1 / H4 or H4 / D1 the better selection for initial demo trades?

Cheers

The patterns are visible on all time frames. I've started with the 15M as they complete their process in a rather quick manner....during each day.

The time frame you choose to demo is up to you. Choose the one you are most comfortable with. The 15M is good for trades lasting a few hours, or entry and exit points into the patterns on the longer time frame. It also provides you with precise exit points from any time frame.

The H1 helps you "see" the cycle....as you go higher, into the H4 and D1, the daily trades are less apparent and the longer term trades come into play.

CJ

[Captain Jack]

I've put Mike's session indicator and a few daily data indicators on page one to help in locating them. When Lio posts his indicator, I'll place it on page one as well.

CJ