The Darksiding of Forex

[wasp]

Hey Mr. Seven stripes, master trader, and whole personal thread of worshipers at the shrine of Wasp, please spare a little magnanimity for the little guy. :cheesy:

BTW did I miss something. RU really in NZ? Last time I looked it was Brighton!

Sorry rols, the floor is yours whenever you so wish.... :cheesy:

As you said in the your following post, and although I don't want this thread to be another 'live calls' thread, it is good to have trades shown live, not just 'in here, out here = +.... pips' but the reasoning behind it. Your trade Friday with ongoing analysis and management was a great example of using price alone (sans volume) and much appreciated.

Yes, I have emigrated. I came out just before Christmas and no desire to return to the UK again apart from the odd greasy spoon breakfast and pint of harveys!


PS. its nine but I'm not counting and 'master trader' I don't think so...!

 

[wasp]

good thread chaps with regard to Wasps post above it is interesting to note once signalled every weak hand 20pip rally was sold by the strong hands for 50 but the last one failed to reach target 404 until Monday

Back to lurking for now

It was a great example of just that, unfortunately they don't always run down quite as smooth!

 

[wasp]

PS if i dont make sense, it is because of one of these

Get a few of these inside you instead, much better than that Newc'y brown stuff!

 

[wasp]

Perception

Thanks for the kind words. The posting of the trade was a spur of the moment thing. I wish more would post the thought processes that go into actual real time day trading. We all know that back testing and paper trading has its limitations because the charts are actually unique to every tick.

You see this brings me back to the key word for all traders - perception. As every moment in the trading day is unique to us then how we perceive it and how we measure and evaluate each of these moments is sometimes an overlooked element of our own trading realities.

"Perception" must be the real key, don't you think?
Clearly perception creates the market in itself, for without an opposing perceived viewpoint there would be a very one-sided trade flow. Not trying to be esoteric here, but clearly on that last one I perceived a turning point (wrongly I know, probably down to poor context understanding I know Marcus!), and therefore saw a reasonable R/R for a long. Whereas your perception and probably experience led you to believe in the other direction - hence a market is made!
Very simplistic I know but thought it worth a post!

Simplistic but I think thats how it should be no? It can be made very complicated but on the flip side in theory, it should be simple. A set up is going to work or its going to do something else. DC looked for a long Friday from 25. I can see his reasons why and he said it would be invalid come 05, which it was, and thus became a short. Of course though, we aren't all seeing, or perceiving the same thing.

1) I understand what you mean by cliche text book setups. I actually agree. text book setups are good for that, text book. however, i guess that in the context of how the setup is being formed is when you actually end up seeing if a text book setup is relevant or not. I guess that want I want to say is that those setups work and work very well, as long as (this is where I get corrected as in another thread by you know who) ( lol, Monsieur M) you can see price forming them, as opposed to seeing a chart, and say "err, just saw a descending triangle, think i will short. where what is actually happening, is the formation of a double bottom that gives a false break.

2) I am no expert whatsoever with price reading, or price blending. but, what i am seeing or learning (and i can easily be wrong here, and don't want to mislead), is that by doing that, I am eliminating many times the need to wait for closes or even better, breakouts, and simply take early trades in the correct direction.

anyway, there is a lot of stuff to learn still on this topic, and I am definitely no expert on it.

There is loads to learn for me too so hopefully this thread will go some way to helping all look.

it just proves to me that one sees what one wants to see.......

Perception.

We all take our own piece of the market and without our own different perspectives, would we have a market. I realize this has been covered plenty before and on plenty other markets so rather than the sweeping generalizations of 'the market is a mirror' and 'its all your perspective' lets go further than just saying it but why and more specifically, how best to use it and also, how differently does everyone see things...?

lots to add but not got the time today. Wanted to chuck this in though and get some thoughts going.....

Here is how I have perceived the market over the start of this year. What I look at and where I have seen turning points and reasons why. It would be interesting to see how different other peoples are. (its a 4 hour chart BTW).

Most of the trades are based on weakness on trendlines and s/r with the one addition as marked on the chart. Very textbook stuff yet, at each point, there is more clues, I'm just not seeing them as well as hoped. For me this analysis works fine but, understanding the prior and post action around those turning points will be a great addition.

My perception might be the most textbook going..........




.

 

[wasp]

spot the clues

four points of reversal. All very different. where/what are the indications in the action to show its a reversal before its too late......................?

 

[wasp]

That'd be great mr.marcus, thats what the thread is for...........

It would be great if others did too, don't leave it all to mr.m, we all have views and its those different views that make the markets....

 

[wasp]

....then it would be my pleasure......but i will be asking questions and would like feed back from others.....i will explain the real nature of the included pin bars on jacintos chart and how not to get shakin out....cheers mark j

Whilst I can't speak for others, my participation will be there.... hopefully others too....

 

[wasp]

here you are...............

 

[wasp]

Hindsight heaven

Okay, obviously all these analysis' are going to be in hindsight and we can say anything but, this thread has nothing to do with ego or showing of, its about comparing, analyzing, looking deeper and deciphering the difference between weak/pro hands etc.............

This is actually a bit small frame for my usual trading and was short from the day prior but did use similar to manage the position. so, looking at it now, here is my take on what I would have done and how I think pro hands may have been looking at things....

 

[jacinto]

hindsight and nothing to do with ego or showing of, its about comparing, analyzing, looking deeper and deciphering the difference between weak/pro hands etc.............

I agree with you. I doubt those posting here are here for the ego side of things. Most certainly not me, showing my mistakes in public (lol)!

OK, lots of coffee and monsters inc. let me had a go at the chart. posting 2 versions. bars and candles. sorry about black. simply cannot see stuff in white.

j

 

[wasp]

ahhh coffee, what a wonderful thing it is...........

I won't comment on your chart yet mate, lets wait for another 10+ (yeah right!) different analysis appear to see the different perceptions first..................

 

[jacinto]

no worries mate, the wife has finally taken pity on me and i get to have a small sleep, when the little monster also sleeps. mmmm, no words. catch u later.

j

 

[Quercus]

Will be trying to do my own stuff here too, young family permitting! So may take me a while, and I'll be avoiding others' comments as much as I can.
Cheers for now
Q

 

[wasp]

Great stuff Q. It doesn't matter if last week you thought forex was a bad aussie beer (aren't they all!!!!!) or you've been doing this for years. Its the multitude of different views that make the market and with as many different perspectives as possible, the more we will learn. Nothing is offered on a silver platter so if everyone chips in, its only going to help everyone to learn.............



2 so far.....

 

[jacinto]

.....good try jacinto....i would like to give you a couple of questions to think about......what exactly is indecision....indecision with who.....weak hands...strong hands...sometimes we use terms and dont consider what we actually mean...have a think about this simple term which is freely but incorrectly used.if youd like to mail me on it feel free....after the recent exploits im worried not to upset anyone by asking questions back.although they are poignant of course and leading you to very valuable answers..

cheers mark j

thanks mark. you dont upset me, that is for sure. this type of question is the one that is relevant, and I would actually encourage you to keep on having a go with them.

Indecision: you are right, I shoud first think before i write, and I guess I should take that back until i know how to define it. What was in my mind in that chart was that after the break, on every push up, price cant close up, immediately rejected. apparently same with pushes down. however, red candle in the middle engulfes small green spinning top, and the following candle simply breaks and closes at the bottom, making a lower low. following candle manages to push up, pip above previous candle and close in the middle of the range. until that point, is where i see the indecision (hence rectangle showing price action finishes there). after that, the market reveals itself, since there is no single close or relevant new high above that level(only 1 new high by 1 pip) and confirms move is down.

...and a second question....what exactly was it that shook you out of the move...

to answer it to the point:
1) fear of loss. fear of having a situation in which I enter into doubt and hope, fear of not having placed my stop adequately, fear that I analysed wrongly the situation (clearly, my first chart does not have the thorough analysis i did on the post trade analysis. it gives me a lesson) etc. (I am open to talk about the psychological aspect in public, but wont expand on this topic on this thread. )
2) probably having memory of price being rangebound before, with clear rejections with that type of action (clearly under different circumstances) and not wanting to be in a scenario where I could have closed without a loss instead of waiting for my stop to be hit. I guess that is the excuse, and not the explanation, and is related to the above.
3) probably missing the whole point of what I was reading. Not that i want to use text book jargon, but the break of the hourly inside bar is the bar that would tell me intent, and that my stop would have been completely safe at the top, I guess doubt made me forget that.

if so....one simple point....ask yourself this....have you seen markets v from these points?bigger picture locations key here...if not ....wait for a test of the lows....if pros are short it wont take out the highs at this point....so you were safe to hold as intent was downside ...in pretty sure looking at the action....the bigger picture market had already been falling away from the highs and the early part fo the chart is at the top of a correction......so this was all about weak demand ....as in weak hands buying the upside....all of the top....and short term weak shorts getting shakin out......pros small amounts but that wasn't the primary motive here...this is an exchange on a correction but not a major top.

any idea where the intent was confirmed to be supply(selling)...there are 3 very telling candles....in fact this is a fantastic chart to analysis....im looking forward to it...i will be doing it in 2 sections......one will be the top.....and one the break ....i will explain in detail the market has basically 2 modes.....exchanging and controlling.bare with me on this chaps....as its gonna mean a good 5 hrs work i need tosqueeze in somewhere this week.

cheers mark j

first paragraph, I guess it also tells me a mistake, stayed at the shorter timeframe and forgot to keep a good eye on the larger timeframe. it is a mistake on that front. I dont want to answer your points just yet, need to think.

Second paragraph about intent.
a) the not so obvious (in my eyes at least) 2 candles prior to the bounce that made me get out. I think that one reveals intent quickly. It breaks a 60 min inside bar (not that i want to get into text book jargon)
b) The more less obvious (in my eyes, and obviously post chart analysis), is the bar that closes prior to breaking the spinning top that makes the third attempt at the low of the overnight range (the 3rd lower high). A break of that candle, IMHO, simply says it will be a down day.
c) There is one that is obvious, and is the one that breaks the weekly low and down consolidation (prior to the so called indecision rectangle, just as a description for simplicity, not a definition)


Well, that was the go at the intent question. Probably I should have waited, but there it is.

Thanks for the time mark, truly appreciated

j

 

[Priceman]

Here are some of my thoughts for what they're worth... seems like most of us have young children now which is clouding my vision got up at 0700 to do the morning feed of my 5week old and now he's whinging in his chair! Haven't got more time to devote now so will watch to see what others have to say.

Great to get a good discussion going and hope no-one comes in to ruin the party! Great thoughts coming out on here too.

TTFN, the sleepy trader

 

[Quercus]

Okay then.........
This is very crude, and as wasp mentioned the time frame is smaller than my norm, but a chart is a chart and it don't matter a jot what the instrument is or even what the timeframe really! I had to re-do mine as the eyes are not what they used to be but it's essentially the same beast.
Apologies for the very basic annotations too.
Firstly we break out of a narrow range and after some minor swings the first blue rectangle shows the initial area of support which becomes resistance. The three ticked candles are to me significant, and stand out from the rest - they gap higher at their opens and then encompass the action of their previous cousins. The first tick shows to me the initial intent of the session, and it's down - the s/r region was not reached and the action of the candle shows the intent. this is followed by the second blue rectangle of support turned resistance, and whilst this was approached, it was not really reached. Intent has momentum.
The second ticked candle is important as it opens above the prev close but immediately reverses this action and finishes as an engulfing bar, thrusting through the area of potential support. This is followed by a nice symettrical triangle of price action which I was unable to annotate, but also indicated a continuation of movement.
The next area of potential support is similarly breached by the third ticked engulfing candle which is also the widest on the screen and is a clear sign of continued direction. The next area of indecision/battle is the round number .9450, but this gave up relatively easily. Though I suspect as usual it will play a part again soon, although with all the LL and LH printed, there is little to indicate to me that a reversal or even significant "test" is on the way soon.
As a side note - I find this hindsight analysis both useful AND frustrating. I've done LOTS of it over the years but seem to find my ideas remain fairly simple and limited. Perhaps some of it is becoming a "motor skill" but I'm not convinced that the level of education has been anything near to acceptable or useful. In short I guess I'm looking for a translation of a language which has yet to be defined!?
Bedtime!
Q

 

[wasp]

so far.............

wasp
jacinto
priceman
quercus
......

 

[wasp]

This isn't 'darksiding'.

This is technical analysis.

Can darksiding be actually taught?

This is the question you need to answer before you go on.

What would be your definition of darksiding?

to me, its taking each bar as it comes and reading it alone and acting accordingly, to get to that, first IMO, you need to start with the bigger picture, start to understand that, then you can zoom in....

 

[rols]

Perception.

We all take our own piece of the market and without our own different perspectives, would we have a market. I realize this has been covered plenty before and on plenty other markets so rather than the sweeping generalizations of 'the market is a mirror' and 'its all your perspective' lets go further than just saying it but why and more specifically, how best to use it and also, how differently does everyone see things...?

My perception might be the most textbook going..........

.

A few thoughts. Before diving straight into analysis of the maps of our perception re trading - the charts - I'd like to try to get down to the fundamental issues. i was thinking about this last night and I could write a book on perception and trading without even going into specifics of TA.

Wasp's new sig is a great starting point.

"If the doors of perception were cleansed every thing would appear to man as it is, infinite. For man has closed himself up, till he sees all things through' narrow chinks of his cavern."

Huxley found that by taking mescaline, a psychedelic drug, space and dimension became irrelevant and he saw the world as never before. The drug blocked the usual filters in his subconscious and opened the doors to true perception.

How does the eye see?

First of all there is no such thing in reality as colour. Light is composed of waves of different frequencies. Here's what happens.

Rays of light pass through the cornea to the inner part of the eye, the retina, which transforms the images projected onto it into neural impulses that are then transmitted to the brain.

The human eye has over 130 million optical cells, only seven million of these are actually responsible for the perception of colour, the rest for black and white. These cells produce colour though combinations of three pigments depending on the information they receive.

There are three receptors for colour; green, blue or yellow. So when the eye 'sees' colour, the colour value is first broken down into these three components first, then added back together again giving us the perception of the original value. Our perception of red for example is induced by the receptors for blue and yellow.

Now in the micro-second between the waves coming into the brain, being processed and giving us the colour and image, guess what happens.

We add our own personal interpretation - our own subjective, subconscious slant through the use of perceptual filters.

Next time you see a red candle stick try and catch yourself intuitively before you have had time to 'think'.

Red after all is only a combination in our brain of blue and yellow pigments, the rest is all us.

Red in nature and our world symbolises danger and anger. Red is also a stop light.

Green suggests go, the colour of nature, a more pleasant feeling colour than red.

So why to many of us put ourselves at an immediate disadvantage by using red and green candlesticks whose colours are loaded with associations, some of which run deep into our primitive survival mechanisms?

Try switching the colour of your candles and see how differently things feel.

The above, and I apologise if it's too long, is just scratching the surface of what we don't know is going on inner minds every second of our existence.