Thank you very much Foreigner, I'm glad it finally moved in my intended direction, it meandered a long time around the 1.64 level indeed. Do you intend to ride it all the way down? 1.6180, 1.6080 and 1.5960/80 are levels I'm particular interested in. Sqa, I do post losers as well, see http://fxgears.com/forum/index.php/topic,242.msg6211.html#msg6211 for an example, you'll find more Also the gold demo trade of a few posts ago was not a good idea, it will probably go as low as 1180 before we see a bounce of some sort, so until than and confirmed by COT and MS break, no gold longs for me
Now Ive gotten over the initial euphoria of your trade hopi, Im afraid delirium is setting in.. Can I raise some doubts? 1. Bullish Divergence in 5 Year yields 2. Bullish COT Data based on historic moves 3. COT not confirmed by OI (see above)
I think Fiber needs to do some catching up with Cable... ( this initial move down in Fiber is nothing but a stop run?)
It will be interesting to see how it plays out especially if it flys in the face of what looks like overwhelming bullishness in the futures. As testament to what I dont know about trading Im going to hold for the lows. >
I think Hopi is subtly teaching us the nuances of yield/COT analysis and how to stay on the right side when the rest of the world is trying to pick a bottom. Big Thanks for bringing this to our attention at this time Hopi. (I dont see anyone else teaching that stuff) Although this trade is counter intuitive (at least for me) I can see its high probability for the same reason.
When using divergence in yields and COT data (to try to pick a bottom ), I like to use the 30 year yields. When you see divergence between them AND COT is at an extreme AND seasonal says you should see a bottom/top, that's a good indication that you're actually reaching the top/bottom. The 5 year yield I tend to use for shorter term fluctuations, think 1 to 2 weeks. 2 weeks ago there was a divergence between the US and UK on the 5 year so I suspected GU would go up (for a few days/weeks). Although you could see divergence on the 5 (us did not make lower low, UK did), it was not visible on the 30 year, so it was a suspect rally. When looking at the COT data, we can see that we still not made an (1 year in this case) extreme yet (close, but not there yet) AND large spec added to there shorts last week ( commercials added to there long position). Because more shorts were added AND there was divergence on the 5Year (UK did not make higher high) AND 30 year said it was a false rally, that's why I went short, using the 4H order block, hidden OTE (1.6450 level) and turtle soup stop raid. The COT data is released on Friday night (for me), that's why Monday is also study time and no trading time for me (most of the time ). Monday is an excellent day to study the COT data and yields and identify the fake move there's setting up for the remainder of the week (power of 3 concept). As for open interest, I just started reading Larry Williams "trade stocks and commodities with the insiders - secrets of the COT report" so although it is very important, I'm not the person to give you exact info on that yet. But what I understand is that it is really useful inside a consolidation.
5 minutes of work, 50 hours of waiting A (hindsight) example of how "easy" trading is when looking at the bigger picture and you're in a trending environment. On monday you check the COT charts. You can see that the non-commercials added a huge amount to their short position. You can see on the daily and 4 hour chart we're in a clear downtrend. We do not trade on monday but prefer to trade only Tuesday-Thursday. We add the weekly dealer range and see a level that aligns with a 1 Hour bullish order block, after breaking Market structure on the 1 hour. We enter the trade using the dealer range and order block level. We wait until Thursday NO or LC to take profit, which aligns with the STD3 weekly level. 5 minutes of work, 54 hours of waiting, 220 pips in the pocket...
I closed the trade just a bit before the final take profit kill zone, because the 200% on the fib extension was reached, and GU just made it to a previous low. 160 pips, and 1 pips away from the weeks high, so I'm really satisfied with this trade. It looks like the GU is completing a Market maker sell program to close under the 1.6050 so next week I will probably look for a nice sell as well. 1.6280 is a resistance level I'll be watching.
This is what I think will happen this week. It seems we are in the process of making a nice Market Maker Sell Model. Price hit the 1.6280 resistance level outlined last week, in a nice 15Minute order block and divergence on the stochastic as well. The weekly dealer range suggest take profit levels around 1.5970/90 area, 1.600 is a nice round number. We have the "Current Account" to bring some volatility in the market
nice setup. i agree. i am looking for 1.60 since the high on the 19th and today could be another opportunity to jump on the train. what kind of SL do you use on this kind of entry? 30 pips?
Around 30 pips yes, that's a little bit above the 50% of the bullish 1 Hour order block. If it's taken out I'll see if I see another short, unless we break MS on the 4Hour (1.6340 level), than I will be sidelined.
Apart from the GU, I couldn't resist taking the EU setup yesterday, although it was a Monday. Resistance line, 15Min order block. 140 pips and going strong...
I just closed the trade. With the news event coming and being the NFP day, I want to stay on the sideline now. The Market Maker Sell Program is almost complete, we're in a 4 hour order block as well. Still some gas in the tank, but I'm happy with my 172 pips.
Excellent forecast again this week Hop, your analysis never ceases to amaze me, well maybe just that once Id be interested in what your COT analysis was this week? I made the mistake of trying to use open interest to substantiate a counter trend/sideways week but couldnt of been further from the truth. This was the basis of my false belief, just goes to show the value of conventional wisdom, even if it was Alexander Elders; In hindsight, with large specs flat on the pound and Euro still short with dollar adding to longs its seems obvious now a short bias would have been more prudent. Still not a bad week fighting the trend.
sorry to interrupt you but i need your help, i was studying open interest for 2 months, can you please help me about it ? i searched every single piece in ICT to find out how to use open interest. At a time open interest jump and drops makes me no sense.
Sakib, Im only going by what Ive learned from Alexander Elder (you can find his stuff for free online) as you can see from the post above, its more of a hindrance than a help. There are definitely more accurate and timely tools.
