Here are two trades taken this week with an average of 60 points per trade and enough room in that point count for pro money to be interested.
This one taken a few days ago and I took the pic just before the target was hit. The entry was just as the mid section of the chart shows a very strong up move getting its support broken. We are in bearish territory for a long time and no way was the up move ever going to keep going, it was emotional testing for the herd and the fools will have bought into it. I mentioned it many times before, if you see price shooting for the sky or the floor like this, it wont keep going. It is a means to a nasty and sudden end. Strong markets and trends dont setup like that, its just a trap.
The euro has been trying to break out of a range and is very slowly climbing up with incredible pain. The near term swings within the ranges can be traded if you look for activity at the right time. Any price thats mid range should be left well alone and let it play out to one extreme.
A 1hr chart of the eur/usd showing another trade close to its target. The emotions of the herd will have been long and stopped out for this one too. A deep spike down a few hours before this trade was taken took my eye and I watched how price would fair when it next came close. I know buyers cannot be there in big numbers or else price would not be back down there again. The spikey nature of the pair meant leaving my stop well above price as it fell. The original stop was above the top of the red candle with a tall wick where my entries were clustered. I later moved it down after the first good sized bullish candle showed up, that was minor profit taking and also provided another nice place to reenter given support was broken, tested and no buyers showed up. Any pro bear would have thrown the kitchen sink at that trade and it shows up in the fall price took.
I didnt target the usual place for a target, which is the origin of the tall green candle. There was a slim chance pro money would buy there is large amounts and I held on for the very base of the tail. The last few points did take a few more hours after I took the picture. But patience is in my nature and my stop was in a safe place and so I left it alone and rested easy.
You can now look into the 4hr chart of the eur/usd yourself and mark out some areas and compare my entries and targets to what you see, and if it makes sense to you. I know those who are only starting out would be confused by this, so do take some time to wrap your logical brain around how pro money think and where it makes best financial sense for them to become active.
Hello Doc:
ReplyDeleteNice to see your posts after a long while. Very informative, as always. In the EURUSD trade, you mentioned that "I didnt target the usual place for a target, which is the origin of the tall green candle. There was a slim chance pro money would buy there is large amounts and I held on for the very base of the tail"
Can you please explain what made you conclude that price might probably edge lower to the tail of that candle. What are the clues? Is it the prior spikes earlier at that green candle low which was the heads-up? Or am I missing something even more obvious?
Thanks again for sharing your thoughts and being patient enough to respond to our queries.
Krishna
We can see deep penetration on previous occasions and each return price makes to the same area means less orders remaining and a lower amount of new orders being placed. Given the 4hr shows a range I was looking for a push lower to the edge of the range, and we did get this.
ReplyDeleteTake a look at the 4hr chart and you will see where this has played out.
Write more doc. Once a week would be much better than once every 3 months :)
ReplyDeleteI would not have much to write once a week, the long term view changes slowly. When my current euro trade is nearing its target I will post that up. There may be something in it to help get this trading thing to click with folks.
ReplyDeleteDoc is a legend don't insult his intelligence with your spam
ReplyDeleteHello Doc, meanwhile, thank you very much, because at the base of my current working method there are your teachings that I have been following for many years. Now I'm struggling to understand a basic concept of your statement in one of your post in rtm forum. The statement is "On longer legs moves often end with many long tailed candles. It costs a bundle to stop price like that and you can be sure once taken off the monthly especially, the pro's will not want that amount of capital tied up in the market to be against them for long. pro money buys into a short market as it nears the target and it sells in a bullish market as it nears the target"
ReplyDeleteWhat I have not yet understood is: pro money start to take profit as it nears the target or pro money start new orders when it nears the target? I ask this because; assuming that the price has not yet reached the target it will go even lower (in a short market in this example) and if pro money has bought before the ultimate last leg down for some time pro money will be at a loss before the reversal appears?
The second question is: " Assuming we are in a bullish market, in a little pullback down pro money trade against them or they only are bullish and wait price come back to the origin of the last move up?
Thanks for your kindness, my email is gianluigi.rizz@gmail.com
It would be a pleasure to have the opportunity to communicate with a teacher like you. I immediately understood that all the teachings on the internet are garbage. While from the times of readthemarket I understand that you really know how the market works and do not make fun of people with lies.