The Captains Chest - Naked Trading & Other Stuff

[mjws00]

Let's take gbpjpy as marked by mike. Assume price is at the first leg of the w. in order to print the second leg, fox needs to buy first(or is he selling) and then push prices down by selling (or is he buying) until peak low where people start selling and they are taking the counter position(buy).

Once they get the required volume, they will then push price up by selling their positions or buying their positions?

I mean we have always been trading the m and w, I.m just wondering the actual trades that happen for this to happnen

I know this was the question that sidetracked us. It is a profound one to think about and difficult to answer.

• What are the actual trades that have to happen to print the M or W?
• Why does it work. Over and Over?
• Where is the best place to run this gambit?
• When is this most likely to occur?

Thinking about this from the dark side is a VERY powerful exercise. Unfortunately my initial thoughts weren't clear enough or succinct enough to post. There is some really cool psychology and positions available to the MM with this formation. With some very interesting points for deception, and places to force errors.

I hope we get a little discussion of this at some point.

Mike

[banteka]

I know this was the question that sidetracked us. It is a profound one to think about and difficult to answer.

• What are the actual trades that have to happen to print the M or W?
• Why does it work. Over and Over?
• Where is the best place to run this gambit?
• When is this most likely to occur?

Thinking about this from the dark side is a VERY powerful exercise. Unfortunately my initial thoughts weren't clear enough or succinct enough to post. There is some really cool psychology and positions available to the MM with this formation. With some very interesting points for deception, and places to force errors.

I hope we get a little discussion of this at some point.

Mike

Well. I think that Steve Mauro's method has that answers. The four answers. Actually, CJ's method exposed here is a variation of Mauro's method. CJ's method is more naked. But the essence is the same.
Several post before I spoke about my own trading method. It is composed by three parts:

1.- Price and Volume Analysis
2.- Naked Trading concepts by CJ's
3.- Market Maker's behaviour by Steve Mauro.

The third one is the last leg I have added to my Trading System (remember, we are building a Trading System) and there I have found the answers you are searching.

If you want to know more about Mauro's method, try this link and go directly to minute 10.00:
http://www.youtube.com/watch?v=bnwTo3EKwNk
NOTE: It is an introductory video and it's LEGAL.

[Jemook]

Some great conversation in this thread lately. Banteka I had a look at your videos and tried the translate into English using closed captions... Would be awesome if you could redo the video with an English translation, looks very valuable..

Either way keep it up.

J

[Pedigree]

Let's take gbpjpy as marked by mike. Assume price is at the first leg of the w. in order to print the second leg, fox needs to buy first(or is he selling) and then push prices down by selling (or is he buying) until peak low where people start selling and they are taking the counter position(buy).

Once they get the required volume, they will then push price up by selling their positions or buying their positions?

I mean we have always been trading the m and w, I.m just wondering the actual trades that happen for this to happnen

I know this was the question that sidetracked us. It is a profound one to think about and difficult to answer.

• What are the actual trades that have to happen to print the M or W?
• Why does it work. Over and Over?
• Where is the best place to run this gambit?
• When is this most likely to occur?

Thinking about this from the dark side is a VERY powerful exercise. Unfortunately my initial thoughts weren't clear enough or succinct enough to post. There is some really cool psychology and positions available to the MM with this formation. With some very interesting points for deception, and places to force errors.

I hope we get a little discussion of this at some point.

Mike

Bless you mjws00! These are the REAL issues here. These are the very crux at the heart of naked-trading that I would have preferred to focus on more, rather than on the use or not of volume. I considered them once before when this thread first started but gave them up becos I wasn't making any head-way. Banteka came along (glory!) and threw a bright light on it that has led to some amazing insights. I am still not sure if I fully grasp it all yet, so I'm hoping also that further discussion on it will come.

[xrismak]

I understood this differently, I thought the fox wanted as much volume to their opposite side as they could handle with their funds, once they have enough people wanting to buy AUDUSD they sell it off, and price can drop dramatically as banteka said, traders buys turn in DD or trigger SL becoming sells, sell stop orders are triggered too, the lower the cheaper, so once they have a lot of these volume selling cheap they want to buy it.

I don't think they want volume in their direction, because someone (the fox or other traders) must take the opposite side, becoming a loss or less profit for them, actually I think when they get too much volume to their current side is when they decide to retrace and eat that up.

But maybe I am completely wrong, any thoughts on this?

Hi Lilac, this is how I see it. The MM is like a catalyst to get price moving so they can make money. It initially costs them money to move the market because they are inducing the opposite to where they want to go. But they can't do all the buying or selling themselves, otherwise there's no net gain overall. But if volume represents number of orders then the more the better, because the fox has more than one way to "skin the cat". He'll use the true momentum to his advantage, then shake out all the weak short and longs for a profit, then stop hunt, accumulate and run it all over again, whatever way will make the greatest profit. Also the fox doesn't need to match 100% of the orders and take the opposite side, he'll just provide the liquidity to the broker and long and short retailers can offset each other. Momentum is important to make money, but the fox is a master of efficiency - making the least effort for maximum gain, just like a small rudder can steer a large ship. The fox has got the power to jump in and manipulate at any time, but he'll try to conserve energy and funds as much as possible and use market behaviour, sentiment and the herd mentality to his advantage.

Once direction is established, the herd will follow, sure some will make a profit, but the fox is always one step ahead. Volume means victims one way or another.

Cheers

Pips400

Edit: Volume in their direction, always means the fox can exit any time, but not until he's got the maximum he can make out of the move, because sooner or later retail supply and demand is going to dry up and he's not prepared to fund the move any more. It's these imbalances that's the playing ground for the fox.

Pips 400,

Simply Spot On.... A FANTASTIC VIVID EXPLANATION that makes ABSOLUTE SENSE TO ME....
Now we are all Going to Earn even More money off the Fox....

Happy Trading Y'all

xrismak

[kwanann]

Thanks all for taking the time to reply and think about it. The reason I asked was because I felt that until I can answer those questions myself I do not have full clarity about what I.m doing about trading and this will cause me to make some silly trading decisions.

It IS not something that can be easily explained BUT I believe if you are able to answer them yourself you are quite a way there

[Ingot54]

I know this was the question that sidetracked us. It is a profound one to think about and difficult to answer.

• What are the actual trades that have to happen to print the M or W?
• Why does it work. Over and Over?
• Where is the best place to run this gambit?
• When is this most likely to occur?

Thinking about this from the dark side is a VERY powerful exercise. There is some really cool psychology and positions available to the MM with this formation. With some very interesting points for deception, and places to force errors.

I hope we get a little discussion of this at some point.

Most of this was answered in CJ's posts throughout the early part of this thread.

Further, I believe Kwanann has clarified these issues nicely his thread Naked Trading 101

http://www.stevehopwoodforex.com/phpBB3 ... 097#p66097

The introduction of volume to the discussion is a refinement at a higher level, perhaps?

Not sure I can cope with it at the moment, but I agree with an earlier sentiment, expressed by FlyHighDrifter that it deserves its own thread: http://www.stevehopwoodforex.com/phpBB3 ... 700#p71700

Kwanann also mentioned "it would be good to master the basics before adding another dimension into the mix" http://www.stevehopwoodforex.com/phpBB3 ... 694#p71694

This is not to be taken as criticism - indeed I will be subscribed instantly if you decide to get serious about developing this properly in a new thread.

My main concern is that you guys really have something good here, but it is at risk of being lost in the depths of this thread. We have members new and old, discovering the huge advantage offered here by CJ teaching PA Trading, and as they arrive at this thread, they will post their questions and charts. Meanwhile volume analysis gets buried.

Another issue, is that new members will be unable to grasp the first stage of Naked Trading/Price Action Trading before being confronted with the more difficult Volume aspect of that, and just give up on it.

A tragedy in the making.

There are at least three people on this thread at the moment, who have stated they are here now "taking a second look" at CJ's teaching. I am one.

[mjws00]

Most of this was answered in CJ's posts throughout the early part of this thread.

Further, I believe Kwanann has clarified these issues nicely his thread Naked Trading 101

Not one person could answer Kwanann's question. Nor could anyone explain the structure, order flow, or strategy actually used at each point in the process. Banteka's theory does not match CJ's. It does not address the strategy or errors the fox exploits. Mauro scratches the surface, volume analysis might help, but the MAGIC is being missed. No one explained this from the other side of the glass, and that includes myself. I took the red pill... and realized I could write a book on just how to exploit that single structure.

Break down that structure. Tick by tick. What flashes on the 1M chart. What about the 5M. How about on the backside of the 15M candle. Is it a completely different message? Did they play the 15M against the 1H timeframe? Did they confirm the fibs, pivots or MA's to trap? Where did the retails place their stops? How was that liquidity first established, and how/where was that money transferred? Where was the smart money? How did it move?

Was it really just a pin? Or did they actually trap and test the weak pin bar players as well? At the turn of the mid point of the W. Why did it turn there? Who got trapped? Was there a delay? Who did they frustrate? Who did they confirm so they could get them onboard to kill later? Why did it turn this time on the second leg, and not continue like the prior retrace? How long did this look like "sell the pullback in the downtrend"? Did they hit the breakout traders on the second leg? Did they shift the zone, or take stops and trap more volume? Did they time it with news, did they use the crosses there? How many swipes did it take? What advantage was there in that?

Those structures print, and repeat because they open up holes in the game. They have technical areas they exploit, they have psychological, and even have physical (tiredness, boredom, time value of money, 3 shifts) implications.

I understand some don't wish to convert their minds to a puddle of goo on the floor. We are all at different points in the journey. In fact all those questions and their answers become instinct over time. But make no mistake the predator knows each and every variation, and exactly when to execute.

When your guts churn. When your smile beams at the massacre. When you shake your head and feel like vomiting. You'll know you are starting to get it. When you've been there done that, and fall asleep on your keyboard... you'll know you're CJ.

Mike

[kwanann]

Most of this was answered in CJ's posts throughout the early part of this thread.

Further, I believe Kwanann has clarified these issues nicely his thread Naked Trading 101

Ingot,

I believe you are referring to volume analysis rather than the content of what i actually posted. Even though volumes are different across LP, when the fox moves, the VOLUME that he is moving is typically enough to reflect correctly across most LP, this is because the FOX does not just takes from a single LP, it takes from MANY LP.

Volume analysis by itself may or may not be insignificant. In my 101 i mentioned it as one of the parameters when deciding. You sum all of them to come up with the final probability of whether the trade is going to be a good trade or not.

For a start i dont recommend looking at volume since it is highly subjective, you have to put it in context e.g which session did this volume come from, is this the 2nd leg of a M or W, which level or push is it, is it a BARF setup...

Not one person could answer Kwanann's question. Nor could anyone explain the structure, order flow, or strategy actually used at each point in the process. Banteka's theory does not match CJ's. It does not address the strategy or errors the fox exploits. Mauro scratches the surface, volume analysis might help, but the MAGIC is being missed. No one explained this from the other side of the glass, and that includes myself. I took the red pill... and realized I could write a book on just how to exploit that single structure.Mike

As Morpheus said:

This is your last chance. After this, there is no turning back. You take the blue pill – the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill – you stay in Wonderland, and I show you how deep the rabbit hole goes. Remember, all I'm offering is the truth – nothing more.

Once you take the red pill, understand the truth, you will be able to trade with confidence. I know some of you know these answers, some might have even got them down pat as instinct.

Most don't, some have it as a hit and miss, Some need indicators to point the way, but that's trading the pattern without understanding the why. Sure that might work, but until when?

PA, VSA, Candlestick patterns, MA, S/R, FIB, CSS are all there for the taking, use them the wrong way and you will get bitten. Thats because you are blindly using them without ACTUALLY understanding what is happening.

I took the red pill once, and thats where the 101 thread was born. Somewhere along the line i got lost and everything turned to crap. Its been a yo-yo trip for me since i first viewed CJ's thread. Seeing, unseeing, seeing, unseeing..

So now thats the challenge i'm putting forth to myself. To answer those questions by myself before i get back into the game. I want to stay on the dark side, and not keep switching between both sides of the mirror

[Pedigree]

Most of this was answered in CJ's posts throughout the early part of this thread.

Further, I believe Kwanann has clarified these issues nicely his thread Naked Trading 101

Not one person could answer Kwanann's question. Nor could anyone explain the structure, order flow, or strategy actually used at each point in the process. Banteka's theory does not match CJ's. It does not address the strategy or errors the fox exploits. Mauro scratches the surface, volume analysis might help, but the MAGIC is being missed. No one explained this from the other side of the glass, and that includes myself. I took the red pill... and realized I could write a book on just how to exploit that single structure.

Break down that structure. Tick by tick. What flashes on the 1M chart. What about the 5M. How about on the backside of the 15M candle. Is it a completely different message? Did they play the 15M against the 1H timeframe? Did they confirm the fibs, pivots or MA's to trap? Where did the retails place their stops? How was that liquidity first established, and how/where was that money transferred? Where was the smart money? How did it move?......

Oooooh Bless you again mjws00!!! These are the questions that MUST arise in you at some point if your intent is to take this to the utmost. These are the questions that THIS THREAD raises in anyone who has taken it seriously, and if we have to create yet another thread to answer it, if attending to these questions here will constitute "clutter", then maybe we should just do that.

I really don't think the progress of a thread, of any subject at all, should be held up because of the new people that may just show some interest later. It behoves any new people, if they are really interested, to catch up fast - and this should not be difficult as demonstrated by what happens when one picks up a good novel.

Mind you, it's not that you cannot trade and be prosperous without answering these questions; you certainly can and several are doing it already. However, the issue of a six-figure income and higher has come up now and again of recent, and if that is going to become reality, the more of these questions that will need to be answered.

My fear is that no one here really knows the answers to these questions and we can only postulate regarding them. They hold the key to how the world economic order that has persisted for decades now if not centuries, was created and now runs. If this notion is wrong and there are indeed some amongst us here who have some clear answers to these questions, I implore them to come forward now, take this issue by the scruff of the neck and deal with it in such a way as leaves no stones unturned. We'll be lucky. We'll be really lucky were this to happen.