The Darksiding of Forex

A constant influx of newbies sucked in by adverts and get rich websites, surround the internet, spawn forums and debates on bizarre ideas, then run tests and demo accounts on indicators and strategies that do and then don't work. Then do for a while more, then don't.*

Nothing is going to work all the time. Nothing but the market itself. Its all their in black and white or your colour of choice. (mine being a burgandy red with light green on white).

I want a thread away from anything that resembles a strategy. (not for calls and the like but the discussion of a deeper understanding) That includes the likes of big Ben, breakouts, anything indicator related, Ross hooks and anything that has a set of rules. Anarchy people, anarchy in the forex world! All the above happen for a more simpler reason and the best way to make consistent returns in this game is delving in there and understanding it.

There are threads for price (but moreso for stocks and indicies), and price and volume but us unfortunate spot FX traders don't have volume, we just have price.

So, carrying on from something that started with Jacinto and co recently and urged on with a hypothetical dagger in the brain from mr.marcus, convincing me not to be so lazy... and as Mike skinner allegedly 'sings' in his mockney accent.... 'Let's push things forward'....

____

Here is a chart with a few trendlines and some basic obvious signals of price losing steam, setting up for the reversal......

Any thoughts









*Yes, I know I have one allready thanks! doesn't mean thats me done and happy, far from it. Incidentally, anyone who does want a system thats pretty consistent, the WASP system is only 10k short its goal now (thanks ZAR!) so please, PM me!!!!

should it not be the dark side of Forex? Are is there an esoteric meaning to the dark siding?

good luck, wasp!

I am trying to lose the indicators, and like jacinto, have found pin-bars (dojis) to "indicate" better, (for me, a couple bars ahead of my stochastics), so I think I am getting there, albeit slowly.

I still have problems with "intent", but I suspect, with the right posters and info, I can find out.

that mr.marcus chappie - hes not bad is he?

"1) Why is there no volume?"

GIVE US REASON Why there HAS TO BE volume !

Give Us A Clue! Does volume show the trend, the change in trend ...?

I like a combination of an indicator method and none indicator methods.

Non indicator method -
For example, at 00 25 50 75, if the hourly candle is down and daily is down (red = price lower than open of candle), go short. Draw horizontal fixed lines on your chart at these levels, which unlike indicators, do not maove and remain static.
When hourly is up and daily is up, look to go long, and grab a handful of pips - maybe only 1-5 pips profit per trade.

Use a 1 minute or 10 tick chart for timing and managing the trades, and marking LL, LH, HH & HL so that you can see when a trend is forming or in existence, or when the market is ranging/consolidating.

The major merit to this is that fixed horizontal lines at 00 25 50 75, do not move, and remain static.

I think that 00 and 50 levels are more important than 25 and 75 for GBPUSD & EURUSD,

Do not enter long when price is retracing strongly from its hourly high, forming a big upper wick, with a decreasing candle body size. Vise versa for shorts.

Look for higher highs, lower lows, higher lows, lower highs to confirm you are looking to enter in the right direction.

Don't go long if either the daily or hourly candle is red/down. Don't short if either the hourly or daily candle colour is green/up.

Waiting for both candles to match at these levels in terms of colour/direction provides enough entry opps per day - maybe 4-5 between 0800-1600.

Perhaps this method is more suited to cable than EURUSD as price moves quicker.

I'm not saying this method works all the time, or that I use it often, but it does have merits, and works best when momentum picks up.

Obviously, the narrower the spreads that you use, the easier it is to be in profit using this method.

This method is not about chasing a big amount of pips per trade.

Keep losses small in terms of pips.

Sorry if this sounds like a strategy .

Always been a bit on the dark side here, and my recent attempt at personal self-inflicted control with some sort of indicator based system has not yet yielded a decent set of statistics for me to rely on. So I strongly think price only, with SERIOUS discipline and a touch of MM thrown in is the way forward for myself. I hate to be vague but I'm doing better with "feeling" the price action than sticking to a given system, whether it's candlesticks or S/R or WHATEVER!
Glad I din't "feel" like writing any naked options recently!
Cheers
Q

linesniffer said:

Hi guys.

Excuse my questions, i don't do forex, but i am interested in this thread as i may do forex in the future.

1) Why is there no volume?

2) What 'moves' a spot forex price?

Thanks in advance, guys.

Click to expand...

1)Because the over the counter marketplace for spot forex is such a massive worldwide affair that starts in the east and travels west in 5, 24 hr cycles in one week, there is no, one central spot that can take in and spout out which orders are going through the system, so no way to gauge the volume. Some brokers have started 'offering' volume with their packages, but these are only showing the volume that is going through their system and is not indicative of the total volume for say gb/usd.
I do believe that it will happen one day, but don't hold your breath.

2) Banks, countries, and news. That controls movement of the fx. The best time to trade is the first week of any given month. Major news tends to come out then and the big boys take advantage of it.

That's about the gist of it. I am sure someone will add to this if I have left anything out.

wasp said:

A constant influx of newbies sucked in by adverts and get rich websites, surround the internet, spawn forums and debates on bizarre ideas, then run tests and demo accounts on indicators and strategies that do and then don't work. Then do for a while more, then don't.*

Nothing is going to work all the time. Nothing but the market itself. Its all their in black and white or your colour of choice. (mine being a burgandy red with light green on white).

I want a thread away from anything that resembles a strategy. (not for calls and the like but the discussion of a deeper understanding) That includes the likes of big Ben, breakouts, anything indicator related, Ross hooks and anything that has a set of rules. Anarchy people, anarchy in the forex world! All the above happen for a more simpler reason and the best way to make consistent returns in this game is delving in there and understanding it.

There are threads for price (but moreso for stocks and indicies), and price and volume but us unfortunate spot FX traders don't have volume, we just have price.

So, carrying on from something that started with Jacinto and co recently and urged on with a hypothetical dagger in the brain from mr.marcus, convincing me not to be so lazy... and as Mike skinner allegedly 'sings' in his mockney accent.... 'Let's push things forward'....

____

Here is a chart with a few trendlines and some basic obvious signals of price losing steam, setting up for the reversal......

Any thoughts









*Yes, I know I have one allready thanks! doesn't mean thats me done and happy, far from it. Incidentally, anyone who does want a system thats pretty consistent, the WASP system is only 10k short its goal now (thanks ZAR!) so please, PM me!!!!

Click to expand...

try forex factory and look for threads on "James PIN BARS" might suit us darksiders. Well, I lik,e it and the Asian overnight break outs.

Quercus

linesniffer said:

You beat me to it, Q.

Click to expand...

Good on yer Quirky - Many people begin the journey looking for indicators and holy grails, then come full circle and concentrate on price action (plus volume in stocks) alone. I might use any MA simply to focus me old eyes on the chart

Here is a pin Bar example from Forex factory:
You may have to register (FREE).

http://www.forexfactory.com/showthread.php?p=230230#post230230

I assume that there is no problem with posting links to forexfactory - as we are all here to trade2win right?

Here's a link to another interesting method then......

http://www.forexfactory.com/showthread.php?t=11854

PS. I'm sorry Wasp for taking this thread off course, if this is what i am doing - no more strategy links - I promise!

Jt

JTrader said:

I assume that there is no problem with posting links to forexfactory - as we are all here to trade2win right?

Here's a link to another interesting method then......

http://www.forexfactory.com/showthread.php?t=11854

Click to expand...

Shame on you Rodney - you posted a system showing Indicators :!:

wasp said:

Here is a chart with a few trendlines and some basic obvious signals of price losing steam, setting up for the reversal......

Any thoughts
[/SIZE]

Click to expand...

The market is mostly in a messy/non-smooth gradual uptrend in this chart.
There are quite a lot of spiky long candles up and down, with relatively short candles in between...........

If we are to discuss pin bars, perhaps we should define them here first on T2W. I have not had chance to extract such a definition from the FF thread, as time is limited. If someone could kickstart a pinbar discussin here, with a clear definition, that would be really useful.

Thanks.

Here you go...

JTrader said:

If we are to discuss pin bars, perhaps we should define them here first on T2W. I have not had chance to extract such a definition from the FF thread, as time is limited. If someone could kickstart a pinbar discussin here, with a clear definition, that would be really useful.

Thanks.

Click to expand...

...might save some time.

Good post Marcus, always thought-provoking whenever you appear!
I for one have found price action a little hard with fx mainly I think due to the varying levels of volatility, coupled with a distinct lack of volume assistance. Where this leads to confusion for me is the difficulty to assess the strength of tests at certain levels - eg a test of spt can be seen with buying pressure which visually can create a "pin bar", "doji", "hammer" - whatever you want to label it. The assistance of volume allows a simple deduction of strength of the test, if it occurs with very high vol then it can more easily be seen as stronger support in the form of buying. If the test has occured, on the other hand, with average or even low volume then it is more likely to be a simple test which would likely be repeated at some time sooner or later. All this talk of volume is of course "relative" to what has been before - much easier when looking at ES or NQ for example - especially on Tuesday!
I have yet to find something in the form of a visual aid which can help to define these varying strength "tests" - maybe I'm not looking hard enough - or maybe I'm just not "seeing" them. If anyone can throw any light on this subject without frightening us possums in the headlights then I for one would appreciate it!
Keep it Green, (and of course Dark)
Cheers
Q

Wow chaps! Didn't expect that much response so quick cheers!

Something came up after starting the thread and to coin a phrase, I'm a bit bizzi!!!

Pinbars are one of the main reasons of the thread and one i want to take further (thanks for joining in mr.marcus). This is the thing, so many of these subjects are touched on but not properly delved into so hence the thread to take it further and really get to understand the intent better. Not just the pin bars though, the before, during and after too, plus more....

I will be back.

pins

wasp said:

Wow chaps! Didn't expect that much response so quick cheers!

Something came up after starting the thread and to coin a phrase, I'm a bit bizzi!!!

Pinbars are one of the main reasons of the thread and one i want to take further (thanks for joining in mr.marcus). This is the thing, so many of these subjects are touched on but not properly delved into so hence the thread to take it further and really get to understand the intent better. Not just the pin bars though, the before, during and after too, plus more....

I will be back.

Click to expand...

Wasn't there a trader called Tom Williams who called Pin Bars "upthrusts?" Such bars would spur traders to take trades in the wrong direction. However, Williams did say that preceeding bars had to be taken into account as part of a continuing story of accumulation etc. It would be unwise to see a Pin Bar as a sole arbiter of change - look at the surrounding environment
( whats happening before the pins formation.)

Next .............

pssonice said:

GIVE US REASON Why there HAS TO BE volume !

Give Us A Clue! Does volume show the trend, the change in trend ...?

Click to expand...

An interesting comment and one I hope you expand on pssonice. I have never used volume and do just fine, but there are clues there aren’t there. So is it required, what is the difference, and can one really trade to the extent of someone who is using volume? Some swear by LII and that’s not on offer either.

Do we need either or is it all there in the bars/candles?

JTrader said:

I like a combination of an indicator method and none indicator methods.

Non indicator method -
For example, at 00 25 50 75, if the hourly candle is down and daily is down (red = price lower than open of candle), go short. Draw horizontal fixed lines on your chart at these levels, which unlike indicators, do not maove and remain static.
When hourly is up and daily is up, look to go long, and grab a handful of pips - maybe only 1-5 pips profit per trade.

Use a 1 minute or 10 …………………………………

Sorry if this sounds like a strategy .

Click to expand...

JTrader said:

I assume that there is no problem with posting links to forexfactory - as we are all here to trade2win right?

Here's a link to another interesting method then......

http://www.forexfactory.com/showthread.php?t=11854

PS. I'm sorry Wasp for taking this thread off course, if this is what i am doing - no more strategy links - I promise!

Click to expand...

No problem JTrader as this is part of the problem and it highlights it well. (Nothing personal) but there are discussions on things like pin bars and the such everywhere on the net and they just scratch the surface. Lets delve deeper to why that system (amongst others) do sometimes work.

options said:

2) Banks, countries, and news. That controls movement of the fx. The best time to trade is the first week of any given month. Major news tends to come out then and the big boys take advantage of it.

That's about the gist of it. I am sure someone will add to this if I have left anything out.

Click to expand...

That’s one I’ve always wondered and read the usual stats of the big banks etc but as linsniffer so eloquently put in another thread, you should know everything about the animal you feed from and knowing who exactly the big boys in cable specifically would be great. If anyone knows?

mr.marcus said:

......not being a snob....i read this thread in a few mins and it has nought to do with darksiding at all.....ie ....it still based from a weak hands point of view...seeing the visual but not understanding....is it a mirage or reality...do you guys really want to learn about these so called pinbars?if you do why not use these are a focal point of debate to start....you want to ask why they occur,what are the weak hands and the strong hand doin?,do they only occur in one place in markets,what is the underlying condition in supply and demand
,why do they turn the way they do,what clues are there in the proceeding action and following action?

so why know this, itll allow you'll to know with such a high the future market direction,and help to give a handle on its duration through appreciating its function.also,if you understand the location and the way they are likely to occur....you can actually enter them at the very apex ...no need to wait for the 2nd half confirmation if you like.anyways....good hunting mark j

Click to expand...

mr.marcus said:

....you can see that these pin bars themselves mean nothing.the key as always is context.context will then help you to determine there nature.....is it a reversal point ...or just a temporay halt in the current market direction.this is the very point im making on the dax thread to firewalker at the moment.so another prime question is this.what ways can u use to appreciate context?

to add pin bars are fast reversing yes?....in the context of there neighbouring bars.....so....again....what is the condition here....what is the true nature of these bars....btw...the term pin bars says nought about what there functions are.....and on the charts posted on the ff thread...there are more than 1 type of functioning bar but being considered in the same breath.....which is misleading...anyways? happy hunting

Click to expand...

This is exactly the point of the thread. I didn’t want one purely for pin bars as they are only part of the picture aren’t they. It’s the before, during and after that matters as much so you can’t just say pin bars, sorted. We need to delve deeper and pin bars and the like are just the start (of hopefully something wonderful! :cheesy

Quercus said:

Good post Marcus, always thought-provoking whenever you appear!
I for one have found price action a little hard with fx mainly I think due to the varying levels of volatility, coupled with a distinct lack of volume assistance. Where this leads to confusion for me is the difficulty to assess the strength of tests at certain levels - eg a test of spt can be seen with buying pressure which visually can create a "pin bar", "doji", "hammer" - whatever you want to label it. The assistance of volume allows a simple deduction of strength of the test, if it occurs with very high vol then it can more easily be seen as stronger support in the form of buying. If the test has occured, on the other hand, with average or even low volume then it is more likely to be a simple test which would likely be repeated at some time sooner or later. All this talk of volume is of course "relative" to what has been before - much easier when looking at ES or NQ for example - especially on Tuesday!
I have yet to find something in the form of a visual aid which can help to define these varying strength "tests" - maybe I'm not looking hard enough - or maybe I'm just not "seeing" them. If anyone can throw any light on this subject without frightening us possums in the headlights then I for one would appreciate it!
Keep it Green, (and of course Dark)
Cheers
Q

Click to expand...

I still think it can be done with just the bar/candle itself and as an FX trader, endeavor to understand without the volume hopefully, as it just ain’t there!

JTrader said:

The market is mostly in a messy/non-smooth gradual uptrend in this chart.
There are quite a lot of spiky long candles up and down, with relatively short candles in between...........

Click to expand...

That it certainly is, yet, the opportunities showing, even in that tight range of spikes etc is enormous, if it can be read right…

neil said:

Wasn't there a trader called Tom Williams who called Pin Bars "upthrusts?" Such bars would spur traders to take trades in the wrong direction. However, Williams did say that preceeding bars had to be taken into account as part of a continuing story of accumulation etc. It would be unwise to see a Pin Bar as a sole arbiter of change - look at the surrounding environment
( whats happening before the pins formation.)

Click to expand...

Exactly!

So, this brings us to the 2 charts. Blank but the candles alone.

Do we need volume?
Do we need trendlines?
Do we need anything?

Is there not every clue available in each candle?

It would be good if everyone downloaded the blank charts and uploaded them with thoughts, opinions etc based on just what is there, nothing more or less and ideas on how just the action itself hints at the future.

I realize this is in hindsight and the future written is obvious but you gotta crawl before you can walk….

rols said:

...might save some time.

Click to expand...

Thanks rols.

So basically a Pin (pinocchio) bar, is a spiky bar/candle with a long nose (high/low that withdraws to form a long nose/wick) - telling us a lie about where price is going. We then look to trade in the opposite direction of this pinocchio style nose.
When an above nose has formed, the high of the bars on either side of the pin bar form the eyes for the pin bar. The open and close of the pin bar must be within/lower than the left eye.