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The Captains Chest - Naked Trading & Other Stuff
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Author:  banteka [ Fri Aug 02, 2013 9:13 am ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
pips400 wrote: If you take volume on its own, and I could be wrong so forgive me, I think it's a recipe for disaster, because you have to understand the overall context and where you are in the market cycle.
I absolutely agree. Volume is an important piece. Put in context.
Author:  Ved [ Fri Aug 02, 2013 10:48 am ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
Hello Captain and other members of this thread,
I want to thank you for sharing your knowledge and experience. I am well into fox taxidermy.
Now as my first post, I have a question or rather analysis that someone can give an opinion to.
Attached is yesterdays(1.8) chart of AUS/USD. As you see price was moved up during Asian session and London until news at NY open(blue box H/L of Asian). I assume here fox was collecting long contracts, as fox already knows the news, it was just a matter of time where to drop it.
But in this case, if I were fox, I would pop up bit more over 0.90 to validate previous "resistance", collect more longs, because I am a greedy bastard and than go down. Can somebody comment on why that did not happen? Maybe not enough contracts there worth for them going up?

I also took few scalps of the stop hunt at the bottom as shorts got trapped, just enough to pay round of drinks for my mates in the pub last night and get them singing " Hey yo Captain Jack, Bring me back to the railroad track (RRT)"- Captain Jack-1995

thank you all,
Best V
Author:  lilac [ Fri Aug 02, 2013 11:27 am ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
pips400 wrote:I could have taken any price chart but the AUDUSD is a good example. I've marked the bearish candles with high volume on the H1 chart for the past week, and there was no reversal but only a continued down trend. If the volume is high and the candle is bearish then it means bears have won (albeit those bears may be made from both retailers and MM's), and if the volume is high and the candle bullish then the bulls have won etc. Once there is momentum signifying the MM have got price moving in their direction, they want increase volume in their direction because that means more profit, it's just at some point if the MM have a lot of positions open they need to close them, and that's going to create volume also.
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?
Author:  pips400 [ Fri Aug 02, 2013 11:56 am ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
lilac wrote: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.
Author:  magdelen [ Fri Aug 02, 2013 12:44 pm ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
Here is a link to 3 articles on volume and how to interpret it, hope you find it useful:
http://www.mrswing.com/articles/search/ ... 20Analysis
Author:  lilac [ Fri Aug 02, 2013 3:09 pm ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
pips400 wrote: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.
This is a very good point here, so they have a risk free business because they have complete control of price move, and It's not easy to follow his tail.

I am currently stack at a EU sell and UF buy, I thought I saw a second leg of an M for EU and second leg of a W for UF, on the daily charts, H4 and H1, but news brought it the other way. I hold it as I think the daily and H4 will rule next cycle, but who knows...

Thanks for the hints, I still have a lot to learn to interpret volume correctly.

I find it specially difficult to distinguish the fake big moves, such as stop hunt or some news pushes that retrace inmediately, from the real pushes in the direction they intend. Once I notice it's alredy too late.

Have a nice weekend you all!
Author:  BONZO [ Fri Aug 02, 2013 9:11 pm ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
I have been reading up on VSA and it has helped a lot in knowing what is going on behind the scenes. Mix VSA with price action, S/R, 50-61.8 fib zones and trend lines/channels and it works really well.
Author:  hannele [ Sat Aug 03, 2013 3:02 am ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
Hi, those who are interested of Banteka's videos... they can be translated to English via captions.
In youtube first hit captions for Spanish, then above it click word Africaans and you'll get dropdown list where you'll choose English or any other language, then hit okay and VOLA'
Translation is word to word so you'll have to use your imagination a bit but I'm ethnic so no problems for me :D
Thank you Banteka, great videos.

cheers
hannele
Author:  joswald [ Sat Aug 03, 2013 8:26 am ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
Not sure if this helps, the example below is bit of a freestyle approach or my interpretation to understanding how the fox operates, I get a little level/push lost but I think I'm slowly beginning to think like a fox. Or I could be completely off the mark, anyway, just putting it out there.

Cheers,
observations.png
Author:  Ingot54 [ Sun Aug 04, 2013 3:23 am ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
I suppose with Volume analysis being the current rage here, purists like me are being sidelined from this thread.

I encourage you all to go for it, but I can't get interested in it - I just see it as a distraction, because my broker can only offer me dummy volume figures, based on his own business volume.

I just hold the view that there is no real assessable volume available for Forex ... at least at the retail level where I operate, so I will leave you all to it.

I'm doing fine with the CJ strategy as taught, and to see charts filling up with all these indicators and analysis, makes me wonder what Naked Trading really is. I am certain you guys are deriving a benefit from using Volume, or else you wouldn't be using it. But I just can't warm to it, and I want to learn Naked Trading as it was presented in the first 374 pages of the thread.

Maybe when I reach the level of trading evolution you guys are at, I will feel the need to join in here, but today ... hmmm ...
Looking for CJ.JPG
I notice in the above group, we have the whole flock looking in one direction, except for 3 black sheep doing their own thing. Of course, they are facing the same way as the other animal in the picture :D

Moral: (only applies to black sheep like myself): Don't always follow the herd
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