To keep it simple
1) Identifying the side to trade is more than half the battle in putting on successful trade
2) The side most vulnerable is the one where there are market stops at risk
It is as simple as that although with the caveat that there are no guarantee in trading, only looking for ways to out the odds on your side.
Here is a lesson that will at a minimum save you money
This chart is an example of a falling knife
Every trader likes to try and pick tops and bottoms.
EURUSD has been moving higher this week and in fact traded to a new 2024 high earlier before retreating.
So the temptation is to look to pick a bottom at every pause and mini uptick.
BUT WHAT IS THIUS CHART TELLING YOU?
9 red down candles in a row with no retracement.
It is telling you not to try and catch the falling knife as the odds are against you unless you get lucky.
If you want to buy, be patient.
The better play, with hindsight, was to be short but that is easy to say than do. Those who subscribe to The Amazing Trader are shown how to do so in what I call The hard (to find a good entry) trade is more often than not the right trade.
The takeaway is when you see a one way move with no retracement, assume there is real money selling and don’t look to bottom or top pick until charts tell you it is okay to do so. This is not meant as a plug but the best way I know is by using The Amazing Trader.
In any case, don’t be a sucker when you see a one way move.
AT Ladder Pattern – EURJPY 4 Hour Chart
Look at the rising red AT ladder lines … this is a classic AT ladder pattern.. buying with a stop below the most recent preceding red line anywhere along the pathway would never have gotten stopped out.
This pattern can be seen on any time frame. If you don;t trade 4 hour charts, this pattern would tell you only to trade from the long side and look for an up ladder pattern on shorter time frames to trade.
EURUSD 15 minute chart – Amazing Trader Ladder Strategy
1) Red support lines = ladder lines
2) As long as the last red line that preceded a new high is intact (called a preceding line), risk is pointed up
3) Strategy=> buy, preferably a dip with a stop below the most recent preceding line.
Contact me (jay@global-view.com) for a half price offer and a free AT trial
Using what I call AT (Amazing Trader) logic, key levels are the last key low that preceded a new high or the last key high that preceded a new low.
What I mean by a preceding low or high is an AT line.
If you look at this daily EURUSD chart, there were no red AT lines from 1.0949 => 1.1201.
This makes 1.0949 the preceding low/line ahead of the 1.1201 high and the key one on this chart.
The same logic can be used for shorter time frame trends.
But in any case, you can see why 1.0949 was more important than 1.1026 on a daily chart.
s always feel free to ask us any questions in the Q&A.
The Amazing Trader Story
Those who have seen my charts posted have noticed that I use The Amazing Trader charting algo on them.
To be fully transparent, I hope our club members subscribe, not just to increase our subscriber base but because I feel there is nothing like it for trading. See why I say this…
Drilling Down’
While Bobby and I have different approaches to trading, it is interesting that we often agree on the important aspects. I suggest reading his Ibtra-0day Trading Techniques – Part 1 and then seeing how my Drilling Down is very similar in concept.
The following is from The Amazing Trader Guide
The term “drill down” means starting at longer time frame charts and then moving down to shorter time frames. The process is designed to look for confirmation of a trend or episode on multiple time frames and then find an AT ladder pattern to trade.
Drilling down time frames:
Daily => 4 hour => 1 hour => 30 minute > 15 minute => 5 minute
If you see AT ladders building in the same direction on say daily, 4 hour and 1 hour charts, you can assume there is an imbalance tilted in that direction
What the means for trading is that the institutional type traders who trade larger size and use longer term time frames will be looking to buy dips (ladder up) or sell blips (ladder down).
What this means for you is when multiple longer-term time frames confirm each other (I.e. AT ladders pointed in the same direction), you can identify the side to trade from, which is where big money traders are looking to do the same.
You then drill down time frames until you see an AT ladder pattern or a high-low reversal pattern and employ the strategy to trade.
However, you don’t trade blindly as you need to be aware of any levels, especially on longer term time frame charts, that would dampen or reverse the current episode. In this regard, go to the next lesson that describes the importance of preceding lows or highs.
Note, we will discuss AT Ladders and how to use them ti trade
I suggest reading this article I posted in our blog
The old trading adage that says “the reaction to news is more important than the news itself” is even more relevant in today’s market as central banks embark on a rate cutting path.
Forex market Has a Never Ending Quest to Run Stops
I doubt you will see this discussed in many places but this is one of the strengths of the Trading Club, to share insights that you might not find elsewhere.
If you can master the skill to identify where stops might be vulnerable, it will help you identify the side most at risk.
For me, I find The Amazing Trader invaluable in identifying key levels, but you can use whatever works for you.
In any case, we can only share what we know works but if you want to take the next step, you should interact with us by either using the Q&A or ask your questions directly by email (jay@global-view.com) and we will answer in the Q&A.
Take a look at this video and see what I mean by the forex market’s never ending quest to run stops.
PLEASE PARTICIPATE
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In this regard, we have created a short questionnaire for members to fill out.
All answers will be kept strictly confidential and for our own use only.
Global-View Trading Club Questionnaire
Thanks in advance to make this the best trading club it can be.
Let me explain further…
When I ran a dealing room for a commodities company that arbitraged futures vs. the spot forex market, there were days when trading was easy. Markets traded one way and we took advantage of it. However, if we missed maximizing that day and came in the next, the “easy money” was no longer there.
Now I am not saying trading is ever easy but it is the same concept with the indicator I am willing to share.
When the indicator lines up, and the key is how I use it, which you will not find in any trading book or course, the odds can be tilted to your side. Let’s say trading those times are not easy but easier as with one glance you can identify the side to trade.
Note, this was a big decision for me to share this with our club members so if this makes sense to you, as it should, then contact me.
An Indicator You Can Use Right Away
Let me be clear. I am not an educator. I am not a teacher. I am not a mentor. I am just a trader like you with a lot more experience to share. This is the aim of the Trading Club, which is to pass on some of what we have learned over the years, often the hard way, that we have found works.
In this regard, there is an indicator I use that helps me identify, at a quick glance, what side and when I should be trading. I find it invaluable for short-term trading. The key is not so much the indicator but how to use it.
With full transparency, I am trying to figure out how to say this. This is not something I am willing to share in public. However, it is something I am willing to show in private to a select group of club members who are really interested in elevating their trading, or for beginners finding a tool they can use right away.
So, if this perks your interest as it should, then either post a request in the Q&A or contact me directly at jay@global-view.com
Stealing Pips
Look at this 15 minute EURUSD chart (5 minute is even clearer) and ask yourself whether you would have gone short. For me it was like Stealing Pips.
Logic
1-1/2 hours trying to break 1.0989-90
There are no key stops until the high of the day – this is the key to the trade
Worth a 5 pip risk and reward would have been up to 17 pips
Key takeaway is the high of the day was out of reach and only above it would see key stops.
How Markets Work – Trading the News
You need to understand the dynamics of the market and how it works so you can evaluate the reaction to a news event or a news headline.
There are news algos that are programmed to react to keywords. So, if a news headline comes out, such as a geopolitical news headline, the algos would react by buying or selling even if it eventually turned out to be a non-event.
Now, let’s get down to what most traders look at, which are economic data reports. No matter how fast a news feed you have, the news algos, programmed to react to economic reports, will be faster. I have a fast news feed and before I even see the data, markets have already reacted.
This was the case overnight and is a classic example.
As this chart shows, AUDUSD was trading at .6588 prior to the release of the July employment report. fell to .6556 on the release and then quickly rebounded, currently trading at.6627.
This is commonly called a whipsaw, which can be painful to seasoned traders but disastrous to retail traders without deep pockets.
Whipsaw: In trading, a whipsaw is a slang term that describes a volatile market where price suddenly moves in one direction and then quickly reverses.
Why did it react that way?
News algos reacted to the headline, including a tick up in the jobless rate but on closer inspection, it was not a weak report. This was no solace to those who saw their stops get run on the initial reaction only to see the market quickly reverse.
This is why I do not hold positions into economic data releases, as stops are not safe, even if you have the right idea as witnessed by the AUDUSD reaction to the data.
So, bottom line, if you want to be a player in the global trading market, you have to understand how it works and why you see sharp reactions to data that sometimes follow through and other times quickly reverse. News algos are mindless, and react first while traders evaluate the moves afterwards.
Feel free to ask questions.
Identifying a Potential Reversal – The Amazing Trader (AT) Directional Indicator
Bobby discussed different reversal patterns. Here is one I use that you will not find in a trading book. This is just to wet your appetite to what comes next. Notre AT Alerts, which are included in the AT program, are based on Directional Indicator patterns.
The AT Directional Indicator
The AT Directional Indicator is a name I came up with to describe a trading pattern highlighted by the Amazing Trader. It is formed by 2 AT lines drawn off the low or high of a day (or time frame). .
The AT Directional Indicator can act as a POTENTIAL indication of a CHANGE in the directional risk in the market. There are times when it provides a great opportunity to trade using its lines by itself and other times the market may make a sharp move before the indicator pattern is confirmed.
The AT Directional Indicator is a pattern you will see repeated across all time frames, in all currencies, metals, stock indices, CRYPTOS and other asset classes. .
The AT Directional Indicator acts as a compass. it either points North (up), South (down) I FIND THE BEST FOR DAY TRADERS IS USING A 15 OR 30 MINUTE CHART It helps indicate when an episode ends and a new one begins. It is like an early alert signal. that the directional risk MAY BE CHANGING.
This is how it works
The Amazing Trader trading lines form patterns that can be used as a Directional Indicator. It is formed by higher red lines or lower blue lines drawn off the low or high of the day (or time frame chart. It tells you the side where the odds are best and helps determine whether to be a buyer or seller of a currency in a new episode. The strongest patterns often occur after a high or low of the day or time frame.
Why the Directional Indicator works – read this
The reason it works is that once a low or high is made the market often makes another run at the low or high and ultimately fails. That failure results in a higher or lower ladder rung and a Directional Indicator,
This, in turn, sees the market lose interest if there are no stops to run as long as the low or high stays untouched As you will see, this often results in the start of a new episode as the ladder builds in the opposite direction of the current episode.
NOTE A Directional Indicator by itself can signal a new episode. However, there are times, especially in shorter time frames, when a Directional Indicator only indicates a pause before the market continues on in the direction of the current episode.
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