Flow, Structure, Correlation, and Time of Day
Weekend review time for me. I don't really have much of a life outside of trading so here I am on a nice, bright, Saturday morning in Virginia reviewing Friday's trading opportunities on the NZD grouping. Now, if you aren't working the weekends, studying your booty off, preparing for the upcoming trading week, just know people like me are here outworking you lol. For as much as people want to sell the dreams of trading wealth, we all have to start from the bottom and the only way to get to the top is through hard work So, while we, retail traders, may not have boatloads of money, we do have time and an ability to get better so we can have said boats with said cash overflowing into the sea.
I mean, I've been doing this for 4 years and have pretty much struggled the entire time. Am I a glutton for punishment? Seems like it. Do I sabotage myself doing things in the heat of the moment that are detrimental to my mental well being and my trading account when I am in the market? Yeah, I think I can discount double check box lol. So, how do I get over the hump? Well, I think the answer is to create a system that is easily identifiable, reliable, and easy to play (relatively speaking because trading is hard). Trading is a balance of how much information is too much, what is useful, and how do I find the core tenants that is the basis for which I execute trades, etc....
For me, and in all of the hours I've spent studying, to mostly get steamrolled on a daily basis, it's like, I need to figure out how to make that not happen. Can I take a beating? Yes. Do I like taking beatings? No, I'd rather not. I think most trading adventures start out that way. It's a war of attrition, this trading thing, and those who just can withstand the storm usually find a way to win in the end. I have a lot more to say about philosophy and such, but just understand that the mental side of trading is, I would say, more important than the actual setups you see on the screen, because without the mind of a champion, you will lose even when you see the right play and end up a chump-ion. I have worn the Chump-ion crown enough and it's time for a change.
Okay, so, back to NZD...Coming into 8am NY, I look for a certain structure of the moving averages I use. On a side note, I use a combination of 1h hour and 10 minute averages, but again, trading is about finding you in the market and it took me 4 years to understand that lol. Anyway, I am also a visual person. Monkey see, monkey do kind of thing. So when I am scanning across USD, EUR, GBP, CAD, CHF, JPY, AUD, and NZD pairs, I am looking for correlation within the moving average structures. So when I see (and this is for my setup as I understand what the colors mean) solid yellow, solid pink, dotted yellow, dotted pink in that order, I am interested. If there are gaps in between the averages, I am more interested. If there are 3 or more pairs with similar high flow structure, I start shopping for the weakest link and I wait for my entry signal. My entry is a combination of moving averages in addition to price action confirmation.
Now, I am not going to give up all of my secrets, but I am giving up enough to where you should be able to start to find yourself within the market if using moving averages is your thing. I still take into consideration concepts such as where is the liquidity aka orders, gaps, major news events, sweeps of price, etc... Learning how to use them all cohesively over time is a challenge and unfortunately there is no shortcut. A lot of people want to sell you a shortcut and I am saying it doesn't exist. I, myself, have had moments of greatness in trading like I am finally getting it and many more moments of where I fell like I have no idea what I am doing lol. I don't give up though even when I say I want to give up after being up 5k on the MFF challenge only to blunder it all resulting in a 5k loss and not only that, losing my account to where I have to pony up 500 more dollars to play again lol. How about those times (there have been many) missing my TP exit after price literally went through my exit price, but because of the broker spread, I don't get filled yet I get filled on the other side for a full stop loss? You know what I am talking about lol. Those painful excruciating times where you want to rage quit out and move onto something else, but you know you are meant to be a multi-millionaire trader so you keep going.
To wrap this long diatribe up, find simple and easy to understand concepts that can be executed swiftly and effectively. For me, the current order of importance is this:
1. Time of day- Show up at 730am NY, start scanning the currency groups, wait until after 8am to make a move and be done either before or between 11am-1pm NY time.
2. Structure- I want to see yellow, pink, dotted yellow, dotted pink. Yes, that is a caveman way of saying I want to see the pair I am trading in what I identify as a high flow structure.
3. Correlation- More pairs in the same high flow structure means more money is flowing into that currency pair. For example: NZD, by my calculations had 3 pairs with strong NZD strength, 1 pair with slight NZD strength and 2 were neutral as they were mixed up in the dotted lines of which you avoid.
4. Flow- Just cause structure and the grouping says, "play me I'll make you money!" you have to be a smart shopper. For instance, I took a trade on GBPNZD on Friday that went 30 pips in 3 minutes after entry (unlike the USDJPY trade I took that did the exact opposite lol). Flow can and does change within a session. I am just setting myself up with the highest probability to win according to my own studies. It's like, why not trade EURNZD instead of GBPNZD? Correlation on EURGBP. EUR had positioning of strength over GBP according to my system so if I am looking to short either EUR or GBP, GBP is the logical choice especially when given the shape and structure of of EURNZD and GBPNZD. I was also going to long NZDJPY, but I didn't catch it in time and moved on me before I had a chance to get in so I let it go.
I hope all that makes some sense and can be helpful to someone. I like to keep it as real as I can from what I understand and I know this trading thing has a lot of hype men, scammers, and the sort. I know I've paid for many courses and many indicators which is seemingly the story of every trader in existence lol. It's a right of passage and again, as a disclaimer, I am not yet fully profitable, but I feel like I am closer than I ever have been. I do think the idea of finding the proper flow can help everyone though as it has really helped me here recently ease in and out of trades with mostly what Mark Douglas proclaims to be a, "carefree state of mind." Takes a lot of practice and repetition especially for me since I can be a bit daft at times.
Keep it simple, find the flow, have a carefree state of mind, and happy trading!
I mean, I've been doing this for 4 years and have pretty much struggled the entire time. Am I a glutton for punishment? Seems like it. Do I sabotage myself doing things in the heat of the moment that are detrimental to my mental well being and my trading account when I am in the market? Yeah, I think I can discount double check box lol. So, how do I get over the hump? Well, I think the answer is to create a system that is easily identifiable, reliable, and easy to play (relatively speaking because trading is hard). Trading is a balance of how much information is too much, what is useful, and how do I find the core tenants that is the basis for which I execute trades, etc....
For me, and in all of the hours I've spent studying, to mostly get steamrolled on a daily basis, it's like, I need to figure out how to make that not happen. Can I take a beating? Yes. Do I like taking beatings? No, I'd rather not. I think most trading adventures start out that way. It's a war of attrition, this trading thing, and those who just can withstand the storm usually find a way to win in the end. I have a lot more to say about philosophy and such, but just understand that the mental side of trading is, I would say, more important than the actual setups you see on the screen, because without the mind of a champion, you will lose even when you see the right play and end up a chump-ion. I have worn the Chump-ion crown enough and it's time for a change.
Okay, so, back to NZD...Coming into 8am NY, I look for a certain structure of the moving averages I use. On a side note, I use a combination of 1h hour and 10 minute averages, but again, trading is about finding you in the market and it took me 4 years to understand that lol. Anyway, I am also a visual person. Monkey see, monkey do kind of thing. So when I am scanning across USD, EUR, GBP, CAD, CHF, JPY, AUD, and NZD pairs, I am looking for correlation within the moving average structures. So when I see (and this is for my setup as I understand what the colors mean) solid yellow, solid pink, dotted yellow, dotted pink in that order, I am interested. If there are gaps in between the averages, I am more interested. If there are 3 or more pairs with similar high flow structure, I start shopping for the weakest link and I wait for my entry signal. My entry is a combination of moving averages in addition to price action confirmation.
Now, I am not going to give up all of my secrets, but I am giving up enough to where you should be able to start to find yourself within the market if using moving averages is your thing. I still take into consideration concepts such as where is the liquidity aka orders, gaps, major news events, sweeps of price, etc... Learning how to use them all cohesively over time is a challenge and unfortunately there is no shortcut. A lot of people want to sell you a shortcut and I am saying it doesn't exist. I, myself, have had moments of greatness in trading like I am finally getting it and many more moments of where I fell like I have no idea what I am doing lol. I don't give up though even when I say I want to give up after being up 5k on the MFF challenge only to blunder it all resulting in a 5k loss and not only that, losing my account to where I have to pony up 500 more dollars to play again lol. How about those times (there have been many) missing my TP exit after price literally went through my exit price, but because of the broker spread, I don't get filled yet I get filled on the other side for a full stop loss? You know what I am talking about lol. Those painful excruciating times where you want to rage quit out and move onto something else, but you know you are meant to be a multi-millionaire trader so you keep going.
To wrap this long diatribe up, find simple and easy to understand concepts that can be executed swiftly and effectively. For me, the current order of importance is this:
1. Time of day- Show up at 730am NY, start scanning the currency groups, wait until after 8am to make a move and be done either before or between 11am-1pm NY time.
2. Structure- I want to see yellow, pink, dotted yellow, dotted pink. Yes, that is a caveman way of saying I want to see the pair I am trading in what I identify as a high flow structure.
3. Correlation- More pairs in the same high flow structure means more money is flowing into that currency pair. For example: NZD, by my calculations had 3 pairs with strong NZD strength, 1 pair with slight NZD strength and 2 were neutral as they were mixed up in the dotted lines of which you avoid.
4. Flow- Just cause structure and the grouping says, "play me I'll make you money!" you have to be a smart shopper. For instance, I took a trade on GBPNZD on Friday that went 30 pips in 3 minutes after entry (unlike the USDJPY trade I took that did the exact opposite lol). Flow can and does change within a session. I am just setting myself up with the highest probability to win according to my own studies. It's like, why not trade EURNZD instead of GBPNZD? Correlation on EURGBP. EUR had positioning of strength over GBP according to my system so if I am looking to short either EUR or GBP, GBP is the logical choice especially when given the shape and structure of of EURNZD and GBPNZD. I was also going to long NZDJPY, but I didn't catch it in time and moved on me before I had a chance to get in so I let it go.
I hope all that makes some sense and can be helpful to someone. I like to keep it as real as I can from what I understand and I know this trading thing has a lot of hype men, scammers, and the sort. I know I've paid for many courses and many indicators which is seemingly the story of every trader in existence lol. It's a right of passage and again, as a disclaimer, I am not yet fully profitable, but I feel like I am closer than I ever have been. I do think the idea of finding the proper flow can help everyone though as it has really helped me here recently ease in and out of trades with mostly what Mark Douglas proclaims to be a, "carefree state of mind." Takes a lot of practice and repetition especially for me since I can be a bit daft at times.
Keep it simple, find the flow, have a carefree state of mind, and happy trading!