New Blog...

In the past 3 months or so my method has changed enormously. So much so that it does not fit the small scope that the title of this blog gave me. For that reason I have chosen to continue it under a new address and title that is more befitting of where my trading and I are going.

Here's the link...

http://buydemandsellsupply.blogspot.com/

A big thanks to all that have helped in my journey to date (you know who you are)!

Hope to see you over there.

All the best,

George

Label More than one S/D Level on M30 Charts

Intro: All in the title really.  Today I planned my primary trades(trades off long term levels) well but needed to prep my secondary trades (short term trades into long term levels) a little better.

Thoughts: Because of yesterday's confusion I came in with almost a disregard for secondary trades, obviously there's a line I need to find. Today I only labeled one level of interest for secondary trades on all pairs this obviously was a quite short sighted.

Summary: I believe the "line" mentioned above can be met by simply labeling a few more levels of interest (high momentum areas) on the M30 chart to aid in not missing too many moves.

Morning Prep...

Afternoon Recap...

More Thoughts On Directional Bias

Intro: Today I struggled with my bias and missed a great trade on the GU. At the end of the day (literally) I believe that this is because I am getting my directional bias and trade plan in a muddle.

Thoughts: My trade plan in its simplest term is to buy low and sell high.  Low to me is H4/D1 supply and high is H4/D1 demand. Entries are found on the M30 chart, I use HOLP to get long and LOPH to get short, stops are placed at there extreme's and my profit targets are the next level of H4/D1 supply or demand. That's it, this is my strategy.
Recently I have been finding that when price is between H4 supply and demand levels I have no trades so I have added to the Trade Plan that, when price is between H4 levels to trade away from the one that has most recently been touched, this I call directional bias. So if H4 demand was touched last I should be shorting at areas of H4 and M30 supply into H4 demand.  But it must be emphasized here that this is only if there are no "Trade Plan" trades available.

Summary: Where I have been going wrong is that I have been starting each day with a bias on "directional bias" trades rather than "Trade Plan" trades which should always be overriding. Each day must start with me simply IDing Long term S&D and planning trades off them and waiting for price to come to them. Should I be lucky enough to get the opportunity to profit from a move into one of these levels I can take it but they should not overwhelm my time or attention which should be spent on focusing on the former. In other words it's not an issue if I can't figure out the DB because it's secondary. As long as I am objectively identifying trades at long term levels I am doing fine.

Here's a video of me focusing a little too much on Secondary Trades rather than Primary Trades on Thursday morning...We can see the process is labored and uncertain.

BAD 

Here's a video from Friday morning with focus on Primary Trades over Secondary trades... We can see the process is clear and concise.

GOOD

Missed GU Trade

Missed GU Trade:  GU price pulled back to an H4 demand level I should have got long on a HOLP with my stop at its low and PT at H4 Supply.

Issues: This trade was very simple but because I got my H4 demand level in the incorrect place I missed it. The lesson here is that on levels which have been touched multiple time it is better to draw a "best fit" supply/demand area rather than take it from the extreme of a pivot high or low like a did this AM.

R-0.4: Failed EU Short

Intro: EU price action has been in a range so my plan this week has been to buy at demand and sell at supply.

Trade:  Price returned to an H4 and M30 supply level so I took a short just below the M30 supply level with a stop at the top, hoping there would be some left over sell order there and price would decline into H4 demand. Shortly after entry price retraced much of the bearish bar prior to my entry, this was not  the momentum I wanted to see so I exited at R-0.4.

Summary: Not unhappy with this trade, the plan was clear simple and logical which is all I can ask for.  Only thing I would say is that price had been in this range/congestion for sometime and that in terms of pips it was quite small. As such waiting for a fresher level might have been prudent but not essential.

EU trade:

No Trades as No Edge

Very long video basically imparting that "if in doubt, wait" for a level you're more confident in to get hit.

And...

an observation regarding price action: Big bars reveal supply/demand imbalance...

R+1.5 Short EJ at Supply

Intro: Had some trouble with my directional bias on all pairs at the start of the day. This was predominantly because the H4 pivot highs and lows were not that clear/strong and because M30 price action was quite congested. Here's a video of my anguish...

Plan: Ultimately decided that the EJ was a better short as it had last touched an area of longterm/H4 supply and so shorting into longterm/H4 demand was the action I wished to take.  I labeled an M30 level of supply and shorted it once it was reached.

Summary: Had issues with profit areas, strictly speaking I should have shorted into H4 demand but ended up taking profit at the bottom of M30 congestion, where there might have been H4 demand but was unclear as the pivot low it would have been based at was imperfect (as mentioned above). Turns out it was demand, perhaps the more telling thing is not how perfect the pivot high or low is but the strength/speed of the move off the hi or low.

EJ Trade:

More Missed Trades: Late Start

Late start that meant I missed two very easy shorts, one on the GU, one on the EJ.

Interestingly the EU was at a level of H4 demand but i preferred a short on it as
1. this tallied with the GU and EJ direction
2. the EU long term trend was down and because of this...
3. demand levels would have less impact
4. finally price was at a M30 level of supply

Here's a vid...

Entries Need Work

Intro: So got my directional bias sorted and was looking to get short the EJ and EU on Friday morning as price has most recently touched H4 supply on both so I wanted to get short into an H4 demand level below.  I labeled an M30 supply level I was interested in getting short on both pairs and placed an alert there... The alert triggered and I just didn't know how to enter, whether to use candle confirmation or sell limits around the level. Good news is I got the direction right but didn't get in.
Here's a video from Friday morning before the move.... and a screenshot in the afternoon after the move.

Summary: got to work on my entries, John left me a comment last week with a good link to a entries topic on a forum so going to start there (thanks John)...

EU missed trade:

EJ missed trade:

R-0.5: 3 Failed Shorts

Intro:Can't help seeing that I got the direction wrong on the GU and EJ but still like my trade plans because they were logical and objective.  However the fact is I should have been long with the very strong trend today...Whats the answer? Honestly wrote the answer in a post last month ....Today I did the exact opposite to what it says, that being trading away from the last H4 level that has been hit. In both the GU and EJ the last H4 level that was touched was a demand level so I should have been looking for longs into H4 supply in both pairs.

GU Trade: GU price action had rallied to D1, H4 and M30 supply, I drilled down to the M5 and shorted on a Bearish engulfing pattern, after 3 bars of no downward progress I exited as momentum clearly wasn't showing up.

EJ Trade 1: Got impatient waiting for price to reach H4 supply and traded off a M30 supply level alone, once I realised I was wrong I closed out for a small loss.

here's a video about it...

EJ Trade 2: With the updated M30 supply level (from the pivot high this AM) just overlapping H4 supply I felt I'd have another go at shorting the EJ, again momentum didn't step in so got out on a time/momentum stop. 

R-0.1 GU no momentum

Really shouldn't have got into this trade 8 hours after it triggered and had shown no signs of momentum in the direction i wanted (short). glad i realized this and got out.

Poor prep: this was not a trade institutions were waiting all day for!

Missed Convergence of Supply on GU

Into: Actually a little under the weather so not beating myself up too hard for this but wanted to document this observation as I would love to capitalize on something similar in the future.

Idea: GU H4 trend down, price rallied to H4 supply (even D1 supply level), M30 price put in a top creating M30 supply then M5 price rallied to this M30 top/supply level (in an H4 supply level!) for a strong M5 short. see below...

Missed EJ opportunity

Don't plan on doing too many of these but figured it might make it easier to explain my mess up...

R-1.3 Some Failed Shorts

Plan: H4 trend was down on both the EJ and GU,  labeled overhead levels of H4 supply and initiated shorts when price reached these levels on the EJ and GU....

Thoughts: Small losses all round. EJ trade was off a fairly well used level of supply so in my opinion had less chance of working as there was likely not that greater a supply /demand imbalance there any longer.
The GU trades I were happier with as actually they originate from a previously untested supply level but we can see momentum never stepped in and price shot up to the next level.  c'est la vie...

Summary:  Not remotely bothered by any of these trades.  I objectively identified places where I thought there would be a supply/demand imbalance (edge) and waited for price to reach them before trading. Price moved against me which has only further heightened my interest in getting short tomorrow at higher levels where there will be an even greater supply/demand imbalance.

NB: quite wanted to move my stop to BE on all these trades, but resisted the urge.... kind of wish i hadn't but kind of know I shouldn't ha.

January 2015 Summary: R+0.6

Gross Profit:		85.46		Gross Loss:				78.30	Total Net Profit:			7.16
Profit Factor:		1.09		Expected Payoff:				0.34
Absolute Drawdown:		30.66		Maximal Drawdown:				30.66 (2.45%)	Relative Drawdown:			2.45% (30.66)
Total Trades:		21		Short Positions (won %):				20 (45.00%)	Long Positions (won %):			1 (100.00%)
Profit Trades (% of total):								10 (47.62%)	Loss trades (% of total):			11 (52.38%)
Largest		profit trade:						17.04	loss trade:			-15.54
Average		profit trade:						8.55	loss trade:			-7.12
Maximum		consecutive wins ($):						3 (28.10)	consecutive losses ($):			3 (-26.32)
Maximal		consecutive profit (count):						28.10 (3)	consecutive loss (count):			-26.32 (3)
Average		consecutive wins:						2	consecutive losses:			2

_______________________________________________________________________________________

Love that this was profitable and that I managed a 47% win/loss rate, everything else needs work though.

So this is my first profitable month! To say I'm happy is an understatement, but it's different to how I might thought it would be. There's a quiet calm, not excitement enveloping me.

Interestingly by my math I should have shown a higher profit than indicated as I was not adjusting risk for each trade.  At the start of the year I was a bit fed up and instead of calculating the risk for each trade to be 1% of my account like I had been doing to date, I just bet 40p a point for every trade to reduce the work load a little as I knew that each trades risk would more or less be under 0.5% of my account. End of month I am up 0.6%... had I bet my 1% risk on each trade by my sums I would have been up 4.7%. Immaterial now, but still another boost of confidence.

R+3.8 EJ M30 Short (R+2) and EU short (R+1)

Really liked this trade (EJ) but almost didn't get it... I was quite baffled by M30 direction this morning, being bang in the middle of H4 S&D and was in the process of getting some thoughts out (prior post) that were very constipated.

Once I got clear in my mind that I wanted to trade away from the H4 S/D level that had most recently been touched (and into the next level below or above it) I knew how to act... On realizing this I saw a late entry to what Brian might have called "the trade of the day".  Having watched a video of his last night in which he had the right idea but couldn't get filled on limit orders he surmised that what he learnt was that "if you want in,  click in". This all this converged in my mind and I hit sell and got the move so thank you Brian for that video. If you don't know Brian's blog it's worth a look, he's a CL trader....http://www.thetradingquest.com/2015/01/scratch-day.html

EJ Trade: The best entry would have been shorting at the M30 supply level rather than the LOHP, but beggars can't be choosers!

EU Trade: just like EJ trade.

Thoughts on Daily Bias...

Old Thought: To date my thinking on daily bias has been to get with the H4 trend (at H4 supply/demand) whenever possible.  And trade with the M30 trend (at M30 supply/demand) when between H4 levels. The issue with this is that it can cause ambiguity and as Paul says "Ambiguity in a fast moving market is going to kill you" which I thouroughly agree. it can be a fast death or a slow death through a thousand paper cut.

Issue: The ambiguity I'm talking about comes when price action is between H4 supply and demand levels or when the M30 trend is (sorry to use it again) ambiguous.  What is my bias in this case? do I trade up or down? Even when I think of it in terms of the long-term/H4 trend it has still been confusing. For example: H4 trend is down and price is equidistant from H4 supply and demand. Do I trade price down with the H4 trend off an M30 supply level OR up into the stronger H4 supply level for a "better/stronger" short with the long term trend, where there will a greater supply/demand imbalance but where I'm fighting the trend to get there?!

Today's Thought: Today my thinking has evolved to this: Yes, I want to get in with the H4 trend but more importantly, I want to be buying low (at H4 demand) and selling high (at H4 supply). I want to be trading price into H4 S&D and then off it, and into the next when it is reached... with a slight bias to holding shorts if the trend is down and longs if the trend is up.

Translating the above into a plan...
In morning while labeling my levels, whichever H4 level price touched last I should trade away from, as price/Suppdy&Demand is doing so  itself. IE the EJ today was a right conundrum for me, bang in the middle of H4 Supply and Demand. However viewing it as I just mentioned, Price has most recently touched an H4 supply level and fallen from it, thus I reasoned I should be shorting away from it and into H4 demand below using H4 or M30 supply as entries...

Put another way If I am waiting for price to reach a supply I can short at I should be getting long into it. And if I am waiting for price to reach a demand level I can get long at I should be getting short into it.

R+0.2 GU short a la Seiden

Intro: Had to go out so didn't have time to wait for a LOHP so just had a go like Seiden would. Fucked it because I trailed too quick on a bear trend bar rather than on each pivot high (just like Brian was saying in his vid yesterday)...

Lesson: don't trail too quick

Trade

R-0.5 Missing M5 trades

Just want to get this down while it's fresh.

Issues
1. missed some good EU trades this AM because I got up at 0830 (late)
2. Honestly when I start day I find it difficult to get right down into the M5 action first thing. It moves faster than I can think! I prefer starting on the M30 chart it's slower and clearer to me.
3. Missed an easy EJ short as I gave up on an M30 supply level too soon.  There was a false break, I assumed the level had no potency left so drilled out to the M30 again to look for a fresher/higher level of supply.
4. Looking at 3 pairs EU, EJ and GU on the M5 is too much for my brain and objectivity to handle.

Solutions
1. get up earlier!
2. After prep spend most of day on M30 chart only drilling down to M5 (with M30 and H4) when a level alert is hit.
3. Have more patience around levels especially on breaks of them!
4. Going to cut out the GU M5 chart for the time being (it's super choppy anyway) and just trade it on the M30.

Charts: all details within...
EU Trades 

EJ Trades

Lack of Shorter Term Trades

Intro: I am most certainly taking the correct backroom steps at the moment. By which I mean getting a trade plan together and thinking about a business plan etc. However it has become apparent in the last few days that I am struggling to get in on the M5 chart.

Observation: Trading today I felt that there was still some confusion as to what I was doing throughout the day.  The broad strokes are there, I know I am shorting at supply/buying at demand and trading with a longer-term trend. This is fairly easy to implement on the H4 trend but when the H4 is down the M30 is up I'm often waiting for the simplest thing;  M30 price returning to H4 S/D to enter a trade rather than drilling down to the M5 and trading price from am M30 into that H4 level. A good example of this happened today on the GU when I could've traded M5 price off a M30 level of demand up into an H4 level of supply.

Thoughts: I got to thinking how this could be avoided and thought that a written trade plan specific for the day would help IE.GU: Longterm/H4 trend down =  label H4 supply =  drill down to M30 price and wait for its return to this level to short into H4 demand...... Medium-term/M30 trend up = label M30 demand =  drill down to M5 and wait for price to return to demand and buy into M30/H4 supply.Having said all that reading it back is quite a chore.

Another observation I've had is that I am spending all my time on the M30 charts so it's not surprising I'm not seeing any M5 trades, duh. So I could simply ID the H4 and  M30 trends and label H4 S&D and M30 S&D then drill down to the M5 and trade price action to and from these levels, ideally trading M30 levels with the M30 trend and H4 levels with the H4 trend.

Also I could just stick to the M30 and H4 for the time being, results are better than they were when I was on the M5 and I can just trade the M30 trend and levels on the M30 chart.

Finally I could just stick to what I'm doing, allow myself to get better at it and expect that when I do I will naturally start venturing down into the M5 chart.

Summary: No real answers but some several thoughts to continue thinking on while trading, something will come of all of it. 

R-0.5 Short GU M30

Plan: H4 trend is down so labelled H4 supply, waited for M30 price to return to it and shorted it there on a LOHP (no particular candle pattern). Planned on shorting into H4 demand but exited after a couple of bars as price action wasn't going my way for a R-0.5 loss which was the correct thing to do (the first loss is always your smallest).

Trade

R+1.0 Short EJ M30

Plan: H4 trend was down so labeled H4 supply level just overhead. When price reached to this level,  drilled down to M30 and waited for a LOPH candle setup which I entered short on. Trailed stop on each bear trend bar down. Aiming to short into H4 demand  but when price went static on a section of M30 demand for 2 bars and printed a hammer I exited manually for a R+1 discretionary exit.

NB: additional reason for exit was due to Paul and I talking about scraping a trade on a time stop if it fails to do what it was meant to, because when intraday we're trading momentum; No movement = no momentum.  Part of me felt that no momentum/2.5 bars of no movement at a M30 level of demand showed lack of momentum but not sure I was correct using this method on an exit rather than entry.
... Looks like I might have been!

Trade

R-0.8: EURJPY Shorts

H4 was in downtrend so labeled H4 supply. Price retraced to this level so took a short off it initially on the M30 and then on the H1. Both failed but did manage to keep losses small, -0.2R and -0.6R respectively due to trailing stop on trend bars (nearly a time stop on the H1 chart). 

Trade 1

Trade 2

Summary: Happy with first trade as this was in the plan,  unhappy with second trade as this is not what my plan dictates, I'm not even meant to be trading off the H1 chart! However today did highlight a flaw/hole in my plan = what action to take when a trade fails as in trade 1. Let's be honest trade failure is no rarity so this is quite an oversight, in the past I have SAR'd (stop and reversed) the position but this is a little harder to plan on longer timeframes and keep decent RRR's. 

NB: after 2.5 bars the H1 trade was still at break even,  despite it inherently being wrong I feel a time stop could really have started to have been entertained by that sort of time not the full 3 bars as usual. Something to add to rules. 

The fact is as I am trading off longerterm S&D, so when a trade fails it can be quite confusing as short term price action is floating on it, which looks a mess. It also stands to reason that when I am taking a long term (H4) trend the medium term trend (M30) will be counter to it, as it has had to retrace to a H4 S/D level.  So if i'm going to look  to take the other side of a long term trade (H4trend) I should be looking on the medium term chart (M30 trend) for entry levels. AND so the following rule I am now going to add to my trade plan: should a Long term trade fail (m30 price off H4 S/D) update M30 levels and drill down to M5 to perhaps get in on a SAR (stop and reverse) of the long term trend.

Example SAR

TO DO's

1.time stop can be introduced from around 2.5 - 3 bars of price action.

2. labeling M30 S&D a different colour than H4 is helpful.

3. Add SAR rule: should a Long term trade fail (m30 price off H4 S/D) update M30 levels and drill down to M5 to perhaps get in on a SAR (stop and reverse) of the long term trend.

Missed Trades Due to Incorrect Supply Levels

On the whole I am using pivot highs and lows as my supply and demand levels on H4 and M30 charts however a little rusty (probably because I do not have a trade plan!) and forgot I can also use bull bars in a down move / bear bears in an up move as levels a la Seiden.

In the charts below I had ID'd M30 supply at pivot highs rather than the labeled counter trend bars in the M30 down move labeled...

R-0.8 Didn't Trail Stop When I Could Have

Very simple took this trade as M30 trend was down and price had returned to an M30 supply level. Drilled down to M5 and took a short off this level on a doji at this level using LOHP, with a standard stop.
Fault:  did have to go out but I was about and could have trailed stop at TS2 but "didn't like it". Blatant disregard for the rules!

EU trade.

R+0.1: One Loss , One Win

Both of these trades were taken on the M30 chart. However the major diffrence was that the loss(1) was based off a supply level originating on the same time frame (M30). While the win (2) was based from a supply level originating from a higher time frame (H4).
EU Trades

R+1.4 M5 Long off M30 Trend and Demand

Long-term: Long term (H4) trend is down and I'm looking to short at the next level of H4 supply on an M30 chart.
Short-term: As mentioned noticed price is currently retracing to the next level of H4 supply. The M30 chart is trending up and had pulled back to a level of (M30) demand so I drilled down to the M5 chart for an entry with the M30 trend to take advantage of the long-term trend retracement.

EJ Long

Basic Method Idea: Trade with the higher time frame trend and supply/demand levels but enter on a lower timeframe. IE M30 trend down = label M30 supply levels then drill down to the M5 for shorts at those levels.  IE2 H4 trend up = label H4 demand levels then drill down to the M30 for longs at those levels.

Obs: Big money is at S&D

Okay spent all day watching price espeically interesting after SNB. Wanted a pullback or rally to 20EMA on a M5 chart to get long or short anything.  One finally came on the EJ late in the day  would have made 2:1... BUT the realy money was in trading the longer timeframes between S&R.
EJ

 GU

R+0.2 GU 20EMA trades 1 win (rejected demand), 1 loss (respected demand)

Why do some trades respect a demand level while another rejects it?  God knows. Guess I could have reversed 2nd trade when it went against me into overhead supply, just to recoup the loss. This would have been a more manageable trade than it has been in the past, as with these trailing stops I've been using recently I can offset risk quickly... but had plans so went out.

Think there might be something in the order of the pivot highs and lows...
Just prior to "1" price had made a lower low and "1"s entry was on a lower high (down trend)
While on "2" price had made a higher high and higher low just prior to it (uptrend)

R+0.6 Just Shorting The Trend

Kind lost the love at moment but was just watching a pretty simple and rare orderly downtrend on the EU, so took setups off the 20EMA. Couldn't be bothered to work out the risk for each trade so just kept betting 50p a point (I'm spread betting), profit should of been higher.  Reintroduced a trailing stop, tracking the highs of each bear trend bar, which I liked as it got me risk free quickly...