The Captains Chest - Naked Trading & Other Stuff

[Riddermark]

I'm at page 28 of this thread and have read that theres manipulation by the big boys.

I can see this happening with stocks as there are limited shares, even a stock like Microsoft/Google etc.

However, Forex market there are no limited shares. It is a 4 (5?) trillion dollar a day market.

By comparison the United States "budget" (if you wanna call it that, more like credit line from China/Japan etc.) is projected to be, if I interpret it right, 3.8 trillion over the next ten years.

Who are these "foxes" that are trapping shorts/longs in a 4-5 trillion a day market?

Can even a central bank move a 4-5 trillion/day market? Can even a nation move it(?) if the US budget over the next ten years is 3.8 trillion?

Forex is around 5 trading days per week X 52 weeks = 260/days per year X 5 trillion/day = 1,300 trillion dollars or 1.3 Quadrillion dollars per year market.

Something doesn't seem right based on these numbers.

Who are these "foxes"?

[SteveHopwood]

Something doesn't seem right based on these numbers.

Who are these "foxes"?

The market makers can send whatever they want to your platform. I am quite surprised that you have not gleaned this from your early reading.

Post here with care. If I even begin to suspect that you are a crim rep then I will delete your registration and all your posts in about 5 seconds.

My word is law here and there is no appeal.

[Kruspe]

Hi Riddermark. Look at this. I think you will find an answer in this picture. 10 banks with over 75% FX market share.

[Kruspe]

Today´s EUR/USD 15M.

[Kruspe]

AUD/USD 15M.

[kwanann]

My trades for today, not as successful as most of you guys out there. returned the profits i earned from shorting yen back to the bank

Had a nice short with gold, but my BE was set too low and it got triggered, so entered a secondary trade

EURCAD buy is a hit and miss, i may end up losing on both trades

Personally i prefer to trade off the ipad, so naked trading works well in this sense.

Definition: Pin Bars are candles with long wick and short bodies. They must also be at some form lowest low or highest high in the past 10 or so candles, the more candles they are LL or HH, the better

For now my steps are

1. Look at all charts DAILY TF, see if there is any pin bars

2. For those DAILY TF pin bar, look for confirmation in H1, usually there will be, decide whether to enter if SL is < 30pips or put in a pending. Daily pin bars tend to also take days to reverse so swap will also play a part. I typically do not put in a position where i short AUD or NZD since the swap cost is ridiculous

3. For those with no pinbar in Daily TF, look at H1 (i skip H4 since it may not be accurate) and 15M. See if there is any. H1 will be looking at intraday trading. Again a SL of < 20pips


Note:

1. I'm not trading exactly naked, i have a 960MA from 10.4 in to tell me what is the trend. CT trends will have tight SL and DE, trend following trades, i will let them ride

2. I also stuck in Steve's MPTM, to add a BE at 20pips JUST in case things don't turn out my way

[mjws00]

Something doesn't seem right based on these numbers.
Who are these "foxes"?

You don't have to view this in a conspiratory way. Yes bucketshops used to play tricks. But most have figured out they do better taking the spread, and keeping you alive as long as possible, while trading against you where profitable. Mostly brokers just match trades, whether internal or external. We all have multiple feeds, if they are cheating too much it is easily spotted. At least that is my moderate viewpoint. Obviously there are some who are scum, but they are exploiting dumb money not moving the market.

The fox is the biggest and the smartest money. As an aggregate. They aren't playing against you. You don't even exist to them. They are playing against each other. Like all traders they exist solely to transfer the account of the loser to the winner. They aren't playing nice. If they are getting paid by the spread, i.e market making and providing liquidity, by definition they are short while the masses are long, and must eventually rebalance their book.

In order to not be exploited by their peers. They MUST hide their intent. They must entice big smart money to take the other side of their trade. They do this by buying or selling aggressively to create momentum, using timing to paint candles, and by withdrawing their bids to create a vacuum. They are certainly smart enough to do this at strategic points on a chart, and exploit someone using a simplistic system or indicator.

All we see is the collective war waged. This is predatory in its nature. It is the strongest trying to screw whomever will take it. They don't give a crap about us. They want to smoke that prick that works 2 blocks down the road at a different bank and score a huge bonus. It will require strategy, finesse, and deception in all cases.

Make no mistake when you see a pin and a bear trap. Some very very smart well heeled people just got taken. SOMEONE GOT PAID. Someone was wrong.

Whether you view it as a fox, market maker, supply and demand. It is all the same thing. Money flows from the weaker players to the stronger ones. Every sentence and statement made by CJ, and every pattern can easily be translated into the other models. Some paradigms allow us to see that one step further that adds clarity. Skip the fur. Skip the conspiracy. Understand that the smartest traders on the planet are trying to steal from each other, and you can only pick one side.

Two bits. For me the lightning in the jar was level 2 thinking. Intent and strategy beyond a pattern or candle. I can only relate it to poker or chess. You can trade without it, but if you can learn to see through the eyes of the alpha. Different Game.

Sorry bout the book. I think much of CJ's brilliance is lost on M's, W's, Stop Hunts, and 3 pushes. That is just the tip. Albeit a very effective one.

Mike

[f451]

Hi Riddermark. Look at this. I think you will find an answer in this picture. 10 banks with over 75% FX market share.

This also explains why the Fox (read big banks and other commercials) behaves the way he does. It's all about liquidity. If you and your smart insider competitors make up 75% of the market, when you want to move price around a bit, who are you going to find to take the other side of your trades? Goldman isn't going to sucker too many of the traders over at HSBC into buying a false breakout.

Retail traders make up about 10-15% of the forex market. If you can induce 20 or 30% of them to take the opposite side of your position, you have your liquidity - and you've soaked up enough of the free floating "dumb" money that a move the price in the other direction will be easy.

The basic play is - identify a level in the market that retail traders are looking at - for example breakout traders look at the Asian range, yesterday's high and low, this week's high and low etc etc - take some of your Fox capital and push price beyond this level - or on a Empty4 platform manipulate the feed or spike the spread past that level - induce some traders to go long (short) - if they're buying to go long on the "breakout" they're buying from someone - now who would that be - oh yeah - the Fox - now the fox has his position (which he can't get from Goldman or HSBC or the other smart players) - so he takes a little more of his capital and sells some more - but now no-one is keen to buy anymore - so price plummets down a lower level where until it can find buyers - and Fox books his profit.

The M and W patterns (and triple tops or bottoms) are just differing examples of the number of times the Fox needs to push price up (down) to trap enough traders to build enough liquidity for his desired position. Sometimes he needs two pushes, sometimes three, sometime only one. It varies, so the pattern varies.

The other thing to remember here is that there are some big players with deep pockets that will buy a breakout, and won't care if the price moves 100, 200 or 300 pips against them. They're in the market for different reasons to you and I. Maybe it's GM hedging their wages bill in their foreign plants, or it's a hedge fund taking a fundamental play because their models predict the currency must appreciate. Doesn't matter. The point is, a 100 pip spike against them is of no consequence. The problem for the Fox is there just ain't enough of these guys buying and selling when the Fox wants to make money. Which is why he needs to trap retail traders, and other SM players when they're not sharp enough, and big hedge funds and and and

[swisscheese]

AUDNZD

PA approaching to former buy level = Watchlist

Edi

I give it a try

Buenos Dias a todos

Retest confirms my Entry-Level
I wish you nice guys a superb trading Day (well generally a superb Day...)
Edi

[swisscheese]

Shorting Kiwi
a bit dangerous...

Still shorting KIWI

Edi