forex price action as an edge

[davidmaria1]

thinkorswim has a time/sales window for their forex feed. Bear in mind it is only for their prices, not the general market.
If you study the bid/ask screen, you can form a tape, visually.
It was done 100 years ago with just a paper strip, btw.

 

[Eric J]

[Try to spend you time identifying value. Just like anything you buy or sell. If you wanted to buy a car or a house, you wouldn't pay too much would you. At least you would try not to. The question is....how do I know if this is a good value. You don't worry about being exact with your estimates because you know it is impossible. Rather, you try to buy in an area of value that common sense tells you is okay. [/B][/QUOTE]

To me value is identifying an entry and seeking an entry that offers a logical stop and a larger potential reward .

Value could also be knowing when to stay out .

 

[ddaytrader]

Quote from nirvanatiger:

From your experience, what's the difference between FOREX and other markets, like ES, NQ, stock?

The reason I ask is because there is no volume information, and times and sales, which are very important for entry. I'm not sure if the system works in other market can be applied onto FOREX trading without these information. I heard some people said FOREX is kind of like gambling.

Thanks.

I have found that currency futures are easier for me to trade than the index e-mini's, though I still trade the es. I find that currencies tend to give clearer clues as to the immediate direction that the market is going to take at S/R levels.

I do not use volume in my currency trading at all, though I do watch the depth of market. When trading currency futures, I try to trade when the market is thick - that is where there is at least someone bidding at the tick immediately below the current offer. When I se the market thin out, the spread between bid and ask go to three or four ticks, I get cautious. If I start seeing a 5 tick gap between bids and offers I stand down.

I want to emphasize that I trade currency futures, not spot retail forex. I have tried to trade spot forex. I have not figured out how to do so successfully. So long as CME trades currency futures on Globex, I am happy to stay away from the forex dealers (even those who claim not to have a dealing desk). If CME ever starts trading spot on Globex, I would be willing to try to spot again.

 

[CONR]

Quote from ddaytrader:

I have found that currency futures are easier for me to trade than the index e-mini's, though I still trade the es. I find that currencies tend to give clearer clues as to the immediate direction that the market is going to take at S/R levels.

I do not use volume in my currency trading at all, though I do watch the depth of market. When trading currency futures, I try to trade when the market is thick - that is where there is at least someone bidding at the tick immediately below the current offer. When I se the market thin out, the spread between bid and ask go to three or four ticks, I get cautious. If I start seeing a 5 tick gap between bids and offers I stand down.

I want to emphasize that I trade currency futures, not spot retail forex. I have tried to trade spot forex. I have not figured out how to do so successfully. So long as CME trades currency futures on Globex, I am happy to stay away from the forex dealers (even those who claim not to have a dealing desk). If CME ever starts trading spot on Globex, I would be willing to try to spot again.

Which currencies are you trading and what is there typical daily volume?

 

[ddaytrader]

Quote from downrivertrader:

Trendlines are more pure but they are subjective also. After all you have to decide where to draw them. But given a choice between a useless indicator and trendlines, I would pick trendlines everytime. It's impossible to remove subjectivity completely, so the key is to simplify as much as possible and respect pure price action.

I do think that there is a correct way to draw trendlines. I apply the method Victor Sperandeo describes in his Trader Vic I & II books.

I think that the reason many folks find trendlines to be too subjective is that often one finds a technician choosing to draw a trendline that has more touches rather than the trendline that starts at the correct pivot. A trendline drawn with two touches by the correct pivots provides better information than a trendline with five touches but which does not touch one or more of the correct pivots.

Tom DeMark describes a manner of drawing trendlines between two adjacent pivots that can be useful, especilly for short term traders.

Also, not all trendline breaks result in a tradable change in trend. That does not mean the trendline was incorrectly drawn.

I have attached a pic of my trading chart of the 6E H9 with recent trendlines intact. Most, though not all, of those breaks resulted in winning trades based upon my stop management and profit objectives.

Best Wishes,

ddaytrader

 

[ddaytrader]

Quote from CONR:

Which currencies are you trading and what is there typical daily volume?

I mostly trade 6E, but also trade the 6B. I will sometimes trade 6A, 6C, 6J, and 6S.

I have no idea what the typical daily volume on any of these contracts is. As I mentioned in the post you quoted, I do not use volume information in my trading decisions when trading currency futures. I do stand down when the spread widens beyond 4-5 ticks.

I only trade one at a time. I prefer the 6E over the others.

Best Wishes,

ddaytrader

 

[cabletrader]

Quote from downrivertrader:

ALL indicators are simply a reflection of price action and a marketing play for all those involved in bringing them to traders. They are a lazy man's easiest way to lose all his money.

Try to spend you time identifying value. Just like anything you buy or sell. If you wanted to buy a car or a house, you wouldn't pay too much would you. At least you would try not to. The question is....how do I know if this is a good value. You don't worry about being exact with your estimates because you know it is impossible. Rather, you try to buy in an area of value that common sense tells you is okay.

Can't agree with any of that unfortunately

Some indicators can provide useful information and are often closely monitored by market players, for example a 200-day MA.
I can't say I've ever seen anyone selling indicators, the most popular ones are available free with most charting packages, even Jurik's have been rehashed and written for platforms such as MT4 and are now widely available free.

As for value I don't believe it's relevant or calculable, currencies often go to extremes well past what could be considered over/under value, I suppose the idea being to shake out other players, and common sense doesn't really help when the market is behaving irrationally!

"The market can stay irrational longer than you can stay solvent" - (John Maynard Keynes 1883 - 1946)

 

[Reaver]

Quote from clacy:

Reaver,

Is "Day Trading" by Joe Ross, only about day trading, or would it be a worth while purchase for longer term trading?

Clacy,

The Joe Ross book is applicable to all time frames, he has some extra material on the differences of managing a day trading position vs a swing/position trade...but he says in the introduction that the book is applicable for all time frames.

 

[Reaver]

Quote from nirvanatiger:

Are you indicating trading FOREX consistent profitable is possible even lack of volume and times and sales?

I'm wondering if I need to trade ES/NQ instead of FOREX?

thanks.

Yes, most definitely it is. Give it a shot, you may very well find the T&S and vol data to be helpful. I know successful traders from both sides of the fence regarding T&S/volume data.

Also, there are a few charting packages out there that will display tick volume.

Best of luck.

 

[cabletrader]

Quote from Reaver:

Clacy,

The Joe Ross book is applicable to all time frames, he has some extra material on the differences of managing a day trading position vs a swing/position trade...but he says in the introduction that the book is applicable for all time frames.

I'd kinda dismissed Joe Ross as more of a marketing guru than a trading guru but you obviously found his book helpful, I guess it's worth a read in that case!