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The Holy Grail - Found

  • #81
  • Dec 9, 2007 12:27pm Dec 9, 2007 12:27pm
Quoting Angler
Hi Guys..

well....those comments from experineced traders..thats even more of a worry....that you believe in the Holy Grail of Trading...


And tell me...what valuable information have you gained so far from his posts..

So what value does it have....at this point in time...but attempting to gain attention...none at all...

See the thing is....if the post just discussed ways to look at a chart to come up with a profitable system and talked about multiple options in doing that ....no problem...this is what the forum is for but saying you have the holy Grail....come on...give me a break.
Hi Angler, trading is boring most of the time so please allow us challenge ourselves and stimulate minds out of the box…

To acquire knowledge is not the only reason many people are here.

Take care…
  • #82
  • Dec 9, 2007 12:30pm Dec 9, 2007 12:30pm
Quoting hanover
After reading gobs of material and looking at charts for 6 years, my head is totally scrambled.

David
I felt this way for over a year. I read, studied, looked at charts, and tried a little of everything. I was "whipsawed" by advice!

A month or so I realized that, despite all I'd tried, I still trade pretty much the way I did when I started out.

I had my own style of trading when I started. It really hasn't changed.

Once I realized this, I could reject 90 - 95% of what I read, regardless of how well it worked for someone else, it didn't fit me. For example, I could give up trying for those 300 pip moves, it will never be my style, I only ruined a lot of good trades by trying for that.

From then on, it was just a matter of weeding out mistakes to fine tune, and let my system evolve. Until that point I couldn't spot mistakes, I was still in confusion. Now anything I read is absorbed from the viewpoint of my system and the parts that fit are integrated in.

Once I acknowledged my style, "gave in" to it, became it, whatever you want to call it, then I could spot mistakes and make rules, on my terms.

Every week I kill a demon or two, and I am progressing steadily now. If it continues, I'll be one of the legendary 5% soon. (This week I was - hurray!).
  • #83
  • Dec 9, 2007 12:40pm Dec 9, 2007 12:40pm
Quoting blueruby
The question is, "what happens next?"

So, our BIG player wants to be short, and they've gone short, let's say, a couple billion dollars worth. I'm certain it would take at least that to hold the G/U for two days, probably more like 100's of billions.

So if big trader is short a few billion units, and the price finally starts to fall, it doesn't hurt him any to buy back 100 million, and pick up millions of dollars profit on the short, without even diminshing the position significantly. So he buys it back as it comes, taking partial profit and halting downward price movement.

In the meantime, all us little fish have gone short based on the resistance bounce and downward price action. Price went down, some traders take profit on shorts, big trader buys it up, as price heads back up to the R. More traders close shorts on the way up. Most had a wider profit target, and they hold. Their stops are just above the R.

Price stalls at resistance. Now the market is waiting to see, nobody wants to buy or sell at the R line before seeing confirmation. At that point, nobody is moving, so the liquidity is very low. Big trader steps up and buys another big chunk, price spikes up and starts hitting stops, now all the short traders start getting out (buying), others were on the sidelines waiting for the R breakout, and go long(buying).

Small traders are buying on the way up, now big trader is selling, taking profit again. Upward momentum slows.

The breakout turns fakeout as price goes back down through the R (now support) and now the longs get stopped out on the way back down(selling), the traders who waited now go short(selling), and the major trend resumes.....
In my humble opinion this is the clue

The name of this game is manipulation. Gurus are silent about this. Analysts are silent. They all know but dont want to lose their edge over small traders forming a herd.

Typical S/R lines are Fibos, ond "double zeros", sometimes (couple of times a week) Hi/Lo lines of low volatility periods (before London open, before NY open.
  • #84
  • Dec 9, 2007 12:42pm Dec 9, 2007 12:42pm
Quoting JohnW
As I said in my post, I don't use any arcane indicators. I consider the pitchfork an arcane indicator. I strongly recommend spending at least a month with James 16. Study price action (PA) only, get rid of everything else off your chart, and just watch price action. I don't give any weight to PIN bars (I have found them unreliable), inside bars, reversal bars, outside bars, dojis, hammers, and all that stuff.

Ask yourself this: when price goes to a certain level and stops (forming an S/R level), why did it stop there? Who moved it there? Who will move it away from tha S/R level? And how does this all fit in with the long term trend?

Think about why an indicator works and you will see that there is no predictive value in them.

thank u for response hohn much appreciated...any help we can get in so much appreciated.... i would venture to guess that a good strategy would be to identifys/r levels including pivot wich sometimes becomes or r and then whatch price action very carefully using james 16 hhll to see which way the market is leaning.... this might be a very powerful systm without need of indicators ... am i on the right track? I would think that sign stop or limit orders would help in prventing losess i.e if u at a pivot and u see james 16 tye price action signalling bearish movement lower los lower highs say... then u could then place a sell(short order) 10-20 pips (larger timeframes 1h and 4 h)below that in order to prevent fake outs... (like a dolly system except with price action indicating entry) seems like it would work better than or as well as any other system... am i starting to get it? can u help us?
  • #85
  • Dec 9, 2007 12:43pm Dec 9, 2007 12:43pm
Quoting JohnW
LOL. The reason I put it here is to let people know that if they discard indicators (which are nothing but derivatives of price action), watch PA alone, and just think about why prices move, they will be on the way to more successful trading.
If you rely on popular indicators you are not a hunter waiting for a 'good market move". You are a prey waiting for a hunter.
  • #86
  • Dec 9, 2007 12:51pm Dec 9, 2007 12:51pm
Quoting tunera
"The market isn't total chaos like others like to say. In fact, it is nothing more than a series of very calculated movements inside other movements down to the second. Price needs to satisfy it's goal without breaching boundaries that it has perfectly set for itself in past history."


Man, you got it

Market is 0% chaos, every movemnt it do (no matter if we talk about 1000pips movement or just 10 or 100pips movement) it's the "result-effect-consequence" of a previous movement (that it is just there, in the chart!), and at the same time, it is the cause of a future movement, it's not easy, but it is not chaos, chaos is when person don't know something, and think that it is just chaos
I would say that every movement i it's the "result-effect-consequence" of a order flow, so OF is CAUSE and move is an effect.
  • #87
  • Dec 9, 2007 12:56pm Dec 9, 2007 12:56pm
Quoting blueruby
Yes, I see. It would do as it did during my example time period. I originally wrote 2.0310 and, after looking at the chart, went back and changed it to "2.0300 or 310".

So if this big dog was going short, and wanted to keep accumulating even when there were no buyers at 300, he would place it at 300, 310, 315, to keep shorting pressure on and keep flushing out buyers.

edit: I just re-read this and it sounded counterintuitive. But, there will be BUY STOPS at the higher levels because people will want to catch a breakout, in this case, above the 300 psych level. That's one way those fakeouts occur. The big sell order comes in, it sweeps the buy stops up to the sell limit price.

Also, a really huge order might stay for weeks, months, even longer perhaps.
Institutional traders simply want to give better prices to their corporate clients so at the start of session of the day with large buy order they'll start with shorts to cause move down due to triggering SL and short odrers, and when this happens they start buying 20-30 pips lower depending on pair and time.
  • #88
  • Dec 9, 2007 1:12pm Dec 9, 2007 1:12pm
eagle-eye, the trader I spoke of does not share his method with no one, not even his wife (or so she said)
  • #89
  • Dec 9, 2007 1:14pm Dec 9, 2007 1:14pm
Quoting Ohka
Indeed, now what if such a very large short order stays in for longer, what kind of market expectation is that seller showing (or faking...), considering that putting this large sell in an order book somewhere is like publishing it to all who have access to an orderbook (level II, or whatever)? Then the next question would be why someone would want to do that, publishing a market expectation? Could it be, that this huge sell on order will be cancelled as soon as price action moves too near for comfort?
Ohka
He could protect option barrier or trying to attack it leaving large order close to it and informing Thomson about it to encourage others to start moving in choosen direction.

Of course it can be a bait to move market using other people’s money – in order to start large countermove with better price thus having far more profits for his bank.
  • #90
  • Dec 9, 2007 1:31pm Dec 9, 2007 1:31pm
Quoting Durga
Of course it can be a bait to move market using other people’s money – in order to start large countermove with better price thus having far more profits for his bank.
if this indeed were the case, what would happen with S/R-levels when that huge order is taken out of the market? What price action would ensue?

Ohka
  • #91
  • Dec 9, 2007 1:34pm Dec 9, 2007 1:34pm
Quoting Ohka
Indeed, now what if such a very large short order stays in for longer, what kind of market expectation is that seller showing (or faking...), considering that putting this large sell in an order book somewhere is like publishing it to all who have access to an orderbook (level II, or whatever)? Then the next question would be why someone would want to do that, publishing a market expectation? Could it be, that this huge sell on order will be cancelled as soon as price action moves too near for comfort?

Ohka
Well, our theorizing might be breaking down here. In the interbank market, the deals are done between banks. There probably is no "big order" just sitting out there the way it would on a stock specialist's book, getting filled little by little. There is no book at all.

So what are the mechanics of these market manipulations?

Would one bank call a series of other banks to do biz and drive price? If so he would be trading against the other banks.

How do the prices get reported from the interbank market to the retail brokers so we can sit and watch ticks?

If two banks are doing business, they aren't calling in and reporting their prices every time they make a move. But there is obviously some reporting/tracking mechanism.

I know it happens somehow, I'm just getting dispersed on the details.
  • #92
  • Dec 9, 2007 1:37pm Dec 9, 2007 1:37pm
Quoting Ohka
if this indeed were the case, what would happen with S/R-levels when that huge order is taken out of the market? What price action would ensue?

Ohka
Again, this is certainly done with commodities and stocks. Taking the order away would leave a "vacuum" that would get filled as any market inefficiency does in short order.

I just don't know how the pieces all fit into the currency market.
  • #93
  • Dec 9, 2007 2:00pm Dec 9, 2007 2:00pm
Quoting Ohka
if this indeed were the case, what would happen with S/R-levels when that huge order is taken out of the market? What price action would ensue?

Ohka
if it is taken before price touches it - none it serves only as a bait to direct market move, if market comes close then large counterorder appears and hunter has a better point of entry for his client.

  • #94
  • Dec 9, 2007 2:49pm Dec 9, 2007 2:49pm
Quoting SKUNNY
Okay, picture this.......



Do I have anyones attention? Because I don't know anyone that actually knows this, not brokers, not even the biggest institutions. When you figure out how to calculate these moves you will have created a Grail (you can decide if it's holy or not). But I can tell you this....IT CAN BE DONE!

Price action and a calibrated tool will get you there. Good luck.

Please don't ask me to share the particulars it took me a million hours to figure out (by accident) because I wouldn't want to rob you of the journey to figure it out. It is more rewarding to do the hard work yourself. I've already told you how to look at the market, it is now up to you to trade it.

I know EXACTLY what you are talking about and how you feel.

JohnW
Chance favors the prepared
  • #95
  • Dec 9, 2007 2:51pm Dec 9, 2007 2:51pm
Thanks John for your inspiration,

I for one would be delighted if you would share the bones of your system with me. Having spent one year trying to trade using all sorts of systems I finally came to the conclusion that indicators don't work. Fib levels are great when they work and when they don't very costly!

Price action is the key to it all, please enlighten us.

Many thanks and well done for figuring it out

Smalldog
  • #96
  • Dec 9, 2007 2:55pm Dec 9, 2007 2:55pm
Quoting Durga
My guess is: not the "who" but "where" and when, look at (live) order board close to popular S/R.

JohnW who is your broker?

Currently I am with InterbankFX.
Chance favors the prepared
  • #97
  • Dec 9, 2007 6:29pm Dec 9, 2007 6:29pm
Quoting SKUNNY
Okay, picture this.......

The market isn't total chaos like others like to say. In fact, it is nothing more than a series of very calculated movements inside other movements down to the second. Price needs to satisfy it's goal without breaching boundaries that it has perfectly set for itself in past history…..
Hi Skunny

This is very interesting – it appears that you've discovered something very similar to what JohnW has, and via a similar process. If I understand correctly, you are not talking about analysis using TA, but an understanding about the way in which certain "forces" manipulate the market.

"Do you ever wonder why every time you enter a trade it goes against you? It used to drive me nuts! I had thought I made the wrong decision 5mn after I clicked the damn mouse (sound familiar?)."
YES YES YES!! Then because I'd been told to cut losses short, my stop would take me out. Result: a win rate < 10%. So I widened my stop. Result: bigger losses. I kept reading posts that said my problems were inside my head, when I knew that any failure lay with the inaccuracy of my method in picking entry and exit points.

"Only when the previous journey is complete can your trade be fulfilled. Imagine you knew where it needed to go before you got in your trade?".
What you seem to be talking about is a method that allows you to pick reversal points in advance. A crystal ball that's better than a Holy Grail – that's if it's possible.

"Do I have anyones attention? Because I don't know anyone that actually knows this, not brokers, not even the biggest institutions. When you figure out how to calculate these moves you will have created a Grail (you can decide if it's holy or not). But I can tell you this....IT CAN BE DONE!".
Yes, you bet you've got my attention! That's what attracted me to this thread. I'd given up because I felt I'd exhausted all TA methods I could think of, for mediocre results at best. I'd read Darkstar's posts about finding arbitrage-like inefficiencies, but I didn't have a clue how. If there is a Grail, I somehow figured it must lie beyond the grasp of TA. JohnW says he's only made 6 losses in 240 trades since he saw the light. I can't see how any TA method – that trades only in probabilities – could ever achieve that kind of win rate (while still maintaining a respectable RR). It also explains why TA pundits have been so critical of this thread ("Holy Grail - impossible!").

"Price action and a calibrated tool will get you there. Good luck."
Fibonacci retracements, some Gann concepts, and possibly floor trader pivots, are the only "calibrated" tools that I'm aware of. Unfortunately, I don't understand enough about the underlying forces that drive the market. The best I can do is look at the PA and hope to find a pattern.

"Please don't ask me to share the particulars it took me a million hours to figure out (by accident) because I wouldn't want to rob you of the journey to figure it out."
Congratulations, and thanks for sharing as much as you have. Of course not fully disclosing your method will entice the unbelievers out of the woodwork, no doubt in colorful voice!

David
  • #98
  • Dec 9, 2007 6:39pm Dec 9, 2007 6:39pm
Quoting JohnW
Currently I am with InterbankFX.
Thanks for your answer John. It seems to me that all my guesses were wrong As far as I know InterbankFX doesnt have a feature of a real time order book. So your system is really based on PA...

30M charts - it only increases my curiosity... such a win ratio is unbelievable, strange, challenging... and fascinating

Do you observe certain patterns, for example hunting stops at the beginning of a session?

Could you PM me with further hint what to look for? I cant PM you as for now my number of posts is too low... Thanks in advance...
  • #99
  • Dec 9, 2007 7:03pm Dec 9, 2007 7:03pm
Quoting Durga
Hi Hanover, if you wouldn’t mind I’ll try to add my 2 cents….
Durga, thank you for replying to my post.
________________________________

Quoting blueruby
I felt this way for over a year. I read, studied, looked at charts, and tried a little of everything. I was "whipsawed" by advice! .....
Blueruby, thanks for this, and I too have experience the feeling of being pulled in all directions by conflicting pieces of advice.

Congratulations on your recent progress, and good luck.

David
  • #100
  • Dec 9, 2007 11:16pm Dec 9, 2007 11:16pm
"Price action and a calibrated tool will get you there. Good luck"


can u enlighten us mere mortals please... some of us are having a hard time... we need such a tool
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