ICT Homework Thread July 20th - 25th

[Tansen]

 

[the golden gun]

Bias Analysis - Example

Given the controlled nature of the recent 5-day sell-off through the EMA band, I'm expecting the EMAs to act as strong resistance going into today's GBP reports/speech.

Specifically the EMA band is converging at ~7080-7090

Daily market flow is also pointing Down.

 

[AusDoc]

Bias is sound but be very careful to avoid thinking any moving average, or band of averages, acts as "strong resistance". This is an error of conventional technical analysis and is commonly sprouted by talking heads and experts of similar stature. Of course, it is then sprouted everywhere by inexperienced traders, and a good few more experienced ones too.

MAs are extremely useful tools when used intelligently but they can never overrule price action. It is wise to remember that no matter how many times you observe that a MA "supports" or "contains" price, that in fact, no such thing has happened other than in your interpretation. I can assure you that price will slice right through any MA whenever it has a mind to do so.

You may be well aware of this the golden gun and perhaps were just talking loosely but for the benefit of any who may read this I think it is worth trying to at least avoid possible confusion.

 

[the golden gun]

Bias is sound but be very careful to avoid thinking any moving average, or band of averages, acts as "strong resistance". This is an error of conventional technical analysis and is commonly sprouted by talking heads and experts of similar stature. Of course, it is then sprouted everywhere by inexperienced traders, and a good few more experienced ones too.

MAs are extremely useful tools when used intelligently but they can never overrule price action. It is wise to remember that no matter how many times you observe that a MA "supports" or "contains" price, that in fact, no such thing has happened other than in your interpretation. I can assure you that price will slice right through any MA whenever it has a mind to do so.

You may be well aware of this the golden gun and perhaps were just talking loosely but for the benefit of any who may read this I think it is worth trying to at least avoid possible confusion.

Wow. Did you not just witness the selloff in cable from the 7090 level? In the context of the price action, the EMAs did act as resistance, sorry if you don't know how to utilize the tools properly. I can assure you that you can't teach me about price action either, so cut the patronizing tone please

 

[Kuzia]

Wow. Did you not just witness the selloff in cable from the 7090 level? In the context of the price action, the EMAs did act as resistance, sorry if you don't know how to utilize the tools properly. I can assure you that you can't teach me about price action either, so cut the patronizing tone please

Hey! we all are on different and exceptional journey. Don't listen to anyone and trade yourself

 

[AusDoc]

I can assure you that you can't teach me

No doubt you are right, after all, you would know.

 

[the golden gun]

Hey! we all are on different and exceptional journey. Don't listen to anyone and trade yourself

You expect the know-it-alls to come out when you make a bad call, but when you nail it, almost to the pip... and they still come out? I mean c'mon.

I don't care how he tried to be diplomatic in the last paragraph, the first part was patronizing. I think he's jealous that I had the guts to make a call, so he had to pick apart the tools I used in my analysis.

 

[AusDoc]

Hey settle down sharp shooter, no one is picking on you here.

Congratulations on your successful trade. I wish you many more.

 

[sqa]

MAs are momentum indicators, but, in a classic ICT point, any vertical aspect to S&R is a function of Time and not Price. So it only functions as "resistance" due to a currently similar relationship between the moves and the Time the function is calculated over. Trendlines have this same problem.

However, enough people, even the Banks, use MAs that it's not a terrible idea to keep an occasional eye on them. There's a reason ICT even teaches the 9/18 EMA setup. It's a good place to start to learning Order Flow and Trend, but it's functional effect as S&R is far more limited.

 

[the golden gun]

MAs are momentum indicators, but, in a classic ICT point, any vertical aspect to S&R is a function of Time and not Price. So it only functions as "resistance" due to a currently similar relationship between the moves and the Time the function is calculated over. Trendlines have this same problem.

However, enough people, even the Banks, use MAs that it's not a terrible idea to keep an occasional eye on them. There's a reason ICT even teaches the 9/18 EMA setup. It's a good place to start to learning Order Flow and Trend, but it's functional effect as S&R is far more limited.

Yes, the 9/18 EMA band I use is primarily a tool for monitoring the order flow and deriving biases. Which is exactly why I first mentioned the Price Action context of the setup. This is one scenario where the S&R aspect of the EMAs can be utilized to determine a specific level of resistance or support.

It's a conditional setup that I have learned from real trading experience, not something "sprouted by talking heads" that I picked up as AuzDoc was suggesting.

It's a shame his know-it-all ego got in the way, he could've actually learned an extremely potent technical setup....

Let's watch the GBP fall... and remember you could've been in this move at 7090 with a 10 pip stop based on my EMA analysis

 

[sqa]

I meant to point out that the HTF level is actually closer to 1.7110 (by my Feed), while 1.7090 was a CDR-stack level over the previous 3 days leading to the drop. Plus, they were hunting the Monday Stops, while leaving the major players in the move.

I'm glad you for getting in the trade, but there's a good number of reasons to why the trade developed, though mass psychology does help explain certain actions.

 

[the golden gun]

I meant to point out that the HTF level is actually closer to 1.7110 (by my Feed), while 1.7090 was a CDR-stack level over the previous 3 days leading to the drop. Plus, they were hunting the Monday Stops, while leaving the major players in the move.

I'm glad you for getting in the trade, but there's a good number of reasons to why the trade developed, though mass psychology does help explain certain actions.

Yeah lots of 20/20 hindsight reasons for the move. It was my fault for calling it before it happened... d'oh!

 

[the golden gun]

Bias is sound but be very careful to avoid thinking any moving average, or band of averages, acts as "strong resistance". This is an error of conventional technical analysis and is commonly sprouted by talking heads and experts of similar stature.

Hey AuzDoc, check out the cool optical illusion on this EUR/GBP daily chart. It really looks like the 9/18 EMA band is acting as resistance. Glad you were here to teach me it's all in my head!

 

[rod178]

 

[Kuzia]

Hey AuzDoc, check out the cool optical illusion on this EUR/GBP daily chart. It really looks like the 9/18 EMA band is acting as resistance. Glad you were here to teach me it's all in my head!

OMG ITS A HOLY GRAIL!!!! ill be rich for life now

 

[foreigner]

OMG ITS A HOLY GRAIL!!!! ill be rich for life now

Monkey see Monkey do.

 

[the golden gun]

OMG ITS A HOLY GRAIL!!!! ill be rich for life now

You're already rich... with knowledge!

 

[Peterma]

Hi Golden, it's been a while, good to see you still in the loop.

Just wondering when you say about gbp falling, do you mean Eur/Gbp falling or the value of GBP falling across the board, I presume the latter?

I'm always interested in other's thinking - but I still do my own thing

Btw, wasn't a bad call back there, and no I'm not patronizing - I'm not really familiar with the 'new' ICT stuff such as 9/18 ema's .

 

[the golden gun]

I just meant the Cable (GBP/USD), and just in the short-term. I'm looking for a retrace to OTE on the daily chart ~6840 before taking out 7200. And if you look at a weekly chart, the bullish trend is extremely strong, it really looks like it wants to reach above 8000. There's just such a vacuum between 7000-9000 from the 2008 'crisis'.

Despite monitoring the longer term price action, I still focus all my trading on intraday setups. That way I can harness the news-based volatility with relatively tight stops. I just like knowing the context of the intraday setups, from a wider perspective.

The 9/18 EMA isn't that new, although originally ICT mentioned the 18/40 combination back in 2011. I'm not sure it was ever in an instructional video, but back in those days I picked up every little tip I could. I've always had a problem with being too contrarian, fighting the longer term trends, so having my bias analysis backstopped with a strong trend-following tool like the EMA band has curbed that bad habit.

I would never think you're patronizing Peterma, you're probably the most respectful poster I've ever seen.

 

[rod178]

My recollections is that ICT uses (mostly for educational purposes, as easier to interpret than MS) the 9/18 EMA as a trend filter, not as a level of KSR.