ForexTraderX

Here is a chart of where I think ideal price points are for a long in the AUD/USD today, going into the london and U.S. session. I will feel these are great entry points until price reaches upwards to a minimum of 1.0235, but more likley 1.0250-1.0275 Ater that, I couldn't say. But for now, thats what i'm looking at.

by the way, we just saw some MAJOR volume on the AUD/USD as we pushed into and bounced from the 1.0180 level. Volume that normally doesn't occur except during london open. Volume like this is almost never seen in asia unless there is a major news announcement. Or, if there is a real bottom/top being put in due to very large quantities of orders being triggered, most likely buy large players who are making a major shift in their directional holdings...nearly always to the opposite direction. Well, it seems today there was no news. So.... Oh, and for a possible target point on the AUD/USD, I think we'll see price top out between 1.0250-1.0275 today. After all, we DID just have a central bank rate reduction... so I'm not too keen on thinking this is a long term reversal, more of a short term retracement on our way down to parity.

Now, since I see risk markets looking a bit bullish, I will hedge myself a slight bit by taking a very small long on the AUD/USD at 1.0185, with a 40 pip stop, and a target between 40-65 pips. This will allow me to take advantage of other traders, particularly large institutions, who are probably looking to take profits off the table (as well as other counter trend traders such as myself in this trade). At this point, assuming that 1.0182 is the low of the day until europe opens, Anyone who is long going into london will likley have their stop loss (which is a sell order that will close their current long trade for a loss) at or around the current daily low, and maybe as far down as 5-10 pips below the major low of 1.0166 made in august. Furthermore, some major institutions and many speculators will have stops for their long trades at or very close to that 1.0167 low made back august. So, those stop loss order are all sell stop loss orders. And because we are very over-extended to the downside (it will be almost 200 pips of a drop without even a 40 pip retracement if we hit the august low), it's safe to assume that those who are in the AUD/USD short, particularly those who are holding from the RBA rate decrease announcement, not many have taken profits, and they will look to take profits as we approach such a significant support level. Because if they wait, they won't see such a significant level again really until parity at 1.00. And because of the amount of stop loss orders for current long position holders, as well as "short the breakout" novice players, both of whom are building up a large amount of sell orders between 1.0185 and 1.0165, this is going to be the best place for 200 pips for a large institution to cover all or part of a short position because they will have enough liquidity to buy to close what they want, without much danger of pushing the market back up against them. Remember, the big boys can't just get in and out where they feel like it. They buy and sell at such a large quantity that they need to find heavy concentrations of many sell orders in order to help them buy the quantity they want without creating a reversal in the downtrend before they are done buying what they want! People who are long who have their stop loss orders at 1.0185-1.0165, as well as those who want to sell the breakout around 1.0165, are going to be who the "smart money" uses to fill their very big buy orders. One mans loss is another mans gain. This trading opportunity here in the AUD/USD is based almost entirely around this concept . P.S. snice it is counter trend and has some correlation to other trades I currently have on, I may risk very little, not even 0.5% over all. By the way, i'm currently up 25 pips on the GBP/AUD short.

For those that are following the thread here, I intend to give a sort of "blow by blow" commentary on this GBP/USD short trade, as well as on the overall GBP/USD shorting opportunity I see here, at least through the first hour or so of the london market open. On a seperate note, I'm seeing the GBP/AUD show some potential opportunity as well. The AUD/USD has sold off strong this week since the RBA annoucement. However, it's coming right into a significant support level at 1.0168 (about 20 pips down from current price) I believe this level will very likley hold, given how significant it has been in the past, and how there has been pretty much no real retracement upwards in this downswing. So today for, AUD/USD = I'm looking for an upward bounce/retracement from between 1.0180-1.0140. Somewhere in there I beleive will very likely be the low of the day through the close of the U.S. session tomorrow. However, I'm quite bearish as my recent posts indicate on the GBP/USD. so, if i'm about to get bullish on the AUD/USD, and i'm already bearish on the GBP/USD, it only makes sense to look for a potential trading opportunity in the GBP/AUD for a short. So, I've taken an entry at 5785 short already, with about a 45 pip stop and a 45 pip first target, 80 pip 2nd target (around 5705). My risk is very small on this, about 1/4 percent. Then, I have another entry around 1.5815 for a short, with a 45 pip stop, and a 90 pip target. I will risk about 0.4% on this trade. This will trigger about 10 pips before the stop of my current trade. So, for a short time, I could have 2 short positions on. So, I could lose a max of about 0.65% on this GBP/AUD short idea. But should either trade end up hitting a target, I could make upwards of 1.17% Also, I like the fact that the GBP/AUD hit 1.5797 and started to sell off a bit. This 1.5797 price is just a few pips above yesterdays high. Remember, stop loss orders are frequently placed above previous days highs and lows, and institutions will target these stops in order to find enough buy orders (the stops are buy orders, because anyone who is short from yesterday would have a buy order as a stop loss at or just a bit above the high of yesterday) So, buy taking a trade right around this price, I help increase the odds that there is a big seller who is also placing a sell order here due to the fact that he needs those buy stops in order to fill his sell order. Now, the next major price levels that are likely to be targeted by institutions looking to fill large sell orders is 1.5820 and 1.5850. After those prices are hit, the next likely place for a reversal is 1.5870, 1.5900, and finally 1.5920. However, I will not look to get a short on the GBP/AUD price reaches above 1.5850. I currently am holding short from 1.5785, and will take another short entry from just before 1.5820. That will complete my entries on this trading opportunity, unless later on I see clear evidence that the AUD/USD is bottoming out or starting to rise, at the same time that the GBP/USD is topping out or starting to fall. FTX. P.S. for the record, the BEST resistance zone that I see on the chart for GBP/AUD is a 50 pip wide zone between 1.5895, and 1.5945. If price can reach this zone, I will look to develop a plan to see what the AUD and GBP currencies are doing against other markets (most of all the USD), look for confluence of support and resistance for both the GBP and AUD across several currencies, as well as look at specific session/daily/weekly highs and lows in which to place a counter trend trade to the short side. Currently up 15 pips on the GBP/AUD short

Also, as the GBP/USD moves downward, the first place where the downswing could run into some decent support would be between 1.6070-1.6060. If we can push below this price before europe opens in about 4.5 hours from now, it is likley IMO that we'll see 1.6035-1.6040 during the euro session before we see any bounce upwards. If we can stay abovfe the 1.6060 price point going into europe, we may have a more likely chance of having a bit of a choppy day. I wouldn't be surprised if right as europe is opening to see price move upwards between 1.6100-1.6130, before later in the day dropping down to touch 1.6035-1.6040. So, it really depends on the momentum that builds up in the GBP/USD as it moves down. if strong momentum downward has pushed under 1.6060, then europe will likley finish the move to support at 1.6035-6040. If we have not yet broke that price when europe starts to open, we could then likely make a run upwards to 6100-6030 before resuming a downward move. And finally, if europe opens to price hodling between 6095-6120, we could see price push as high as 6150 before moving downward. Though, I would be more cautious about things if this were to be the case coming into europe... and I may even hold off on the levels I am looking at and wait for price action to hit those levels, and then confirm it will move to the downside using volume and 1 and 5 and 15 minute charts to help me determine if there is excessive supply at those zones (basically, VSA concepts) These are the 3 possibilities as I see them, and their most likely outcomes. Of course theyu all could be completely wrong, but I think these are the most likley. If someone isn't sure how I came up with these scenarios, feel free to ask and I'll explain more. FTX

Here's where I'd get short from today. Target between 1.0640-1.0655 Stops between 30-40 pips each. Larger positions at each of the 3 zones I have highlighted....smallest position at the 1.6100 zone, larger at 1.6120-30, and largest position at 1.6140ish I will make sure my stops are not so close as to trigger before the next order is hit. Basically, from 1.6100 up through 1.6170ish, I want to be short. So, I make sure that as price moves deeper, my orders get bigger. and my risk reward ratio gets better, though never risking more than about 1.5% total on every order triggered. I want to make sure that wherever the market stops moving up, and starts moving down, I have a trade on that will make enough to give me a profit, regardless of already having 1 or 2 losses so far. Until price hits 1.6170ish or higher. at that point, i'd say "I'M WRONG", and want to take a final stop loss. FTX PS: i'm myself short right now, from just under 1.6100. personally, I feel we could press up a bit higher, to about 1.6108-1.6120, but I have another order that will fill a bit higher as well, and it's possible we move no further up than about what we already did, so I enter the smallest of my orders (in percent risk of course) at this point.

Probably done for the week, but if I trade anything else, I will try to post a chart as well. good trading all.

Ah Gary Smith's book. MAN that's a good one that NOBODY talks about! I have to say, it's probably the most original one out there in terms of what his strategy is, but I literally think about the things he discusses in that book probably several times a week, every week. I sometimes don't even mention it to people because I almost feel it gives too much away about a very crucial part of the puzzle, that it's not fair for the rest! It opened my eyes completely to the value and some basic methods of determining market sentiment, and I use this constantly with my technical analysis to help develop my trading strategy on a daily basis. Good stuff, kinda surprised to see anyone mention it, but I totally agree, one of the best hidden gems in the trading book world.

Well, just closed the final part of my GBP/USD trade. It worked out almost as I had hoped. I did believe the drop would be faster, but we did manage to see about 57 pips of downward action since my previous post out of the anticipated 100 pips, and my short trades pretty much all worked out well. also, the NZD/JPY and NZD/USD in particular did sell off also. Wish I had held the NZD/USD longer, but profit is profit. All 3 of these trades I based primarily on the price action of the daily chart. Big pinbar reversal daily candles that occured when price is at or near a point where it met resistance before. the NZD/JPY and NZD/USD both had this occur in the last 48 hours. GBP/USD had made a pinbar several days ago (last week), but had yet to really drop, until about 3 days ago we had a bearish engulfing candle and then GBP/USD trade in a range for 2 days, really without much to support it. Given the pinbar + the bearish engulfing + failure to immediately move back upwards the next day + a parabolic move upwards into a resistance area that occurred the last couple of months but has now broken the upward trendlines = about the most simple, straightforward reasons to have a short bias. Combine that with the news releases that have been coming out of the U.K. have been a bit more disappointing then hopeful, and it's really an extremely high probability trade situation. Did anyone else catch part of the GBP/USD shorting opportunities this week or last? be curious to know who else saw reason to short and made some pips...?

Well, it's been a while since I've done anything over here. Was a bit frustrated with my own trading, not to mention the fact that I was pretty much completely wrong on market direction for the last 2 weeks of september. Had a few exceptions of course, but my level of conviction on future direction was very strong, and it hasn't really played out that way. So I've switched up my trading to a more short term, actively managed trading approach. It's something do when markets have less convincing indications of future trend, say at the end of an overextended move, as they come into support/resistance, but haven't given clear indication if they will continue, or reverse. Last week of september was a bit tough, and I was down a bit. I really was surprised to see that the bounce/continuation of the bullish move in the risk markets took so long to finally stick, and now I hve no idea actually if it'sll do anything more than just bounce. However, there have been some great trading opportunities in spite of my own market opinion being wrong, thus i've been able to start october strong. Wanted to point out for today, the GBP/USD looks particularly good to short. It's probably the single best opportunity I see for today. I'm short now, and will primarily focus on this market over the next couple sessions. Also, the NZD/JPY and NZD/USD show good downward bias based on their daily candle price action, but I've already taken some of that move, and won't enter again unless NZD/USD or NZD/JPY can rise up to the support they broke earlier today. We could see 100 pips pretty quick on the GBP/USD. Could even happen in the next 24 hours. That's my hope anyway, as I'm holding short for a final target of 1.6040ish May even just let it run itself. it's kinda rare to have such a solid trading opportunity with really nothing to create support for nearly 100 pips. Particularly after such a parabolic move up, the market is overextended but has not yet really broken. I'm expecting it today or tomorrow, and I don't see anything else out there that provides such a solid combination of potential as the GBP/USD does today.. Also, this week will mark about 1 month since I started the myfxbook in my signature below. So far, up about 4.66%. Would like to finish out the week with more than I have now, but if not, no big deal. I typically make between 4-8% in any given 30 days, but i trade pretty small size on my positions because that's what works for me. At any rate, it's a fun game, and I take my trades based pretty much off of the concepts i've discussed already in this thread. So anyone can see, this actually does work.

Also, the EUR/JPY looks good for a long around 100.00. Technically, it's very nice. major psych figure, intersecting downtrend line, major support, eur/usd looks possibly supported giving eur/jpy likely even more support, etc. however, i think the best is still EUR/GBP.

Well, I take it back on the NZD/USD. tonight I'm having a hard time getting a very good read on much, except the EUR/GBP for a long. Other than that, and the two longs I have in other markets, I've not going to be taking much tonight. USD/JPY also looks like it has some long potential tonight, but EUR/GBP from '45 is what i'm looking at most.

Well, it's been a volitile couple of weeks for me, and I"m not a big fan of my own account equity variance, particularly given the ROI i'm getting. Of course that's likley because some of my longer term outlooks have been primarily wrong. However, tonight I see a few opportunities that seem decent. In particular, I like a long on the EUR/GBP, and a short on the NZD/USD. Look at the daily charts on both. in particualr, the EUR/GBP is showing a pinbar like daily price action off of support, and the NZD/USD has made several strong bearish moves, but has not yet broken support. I'd love to get short NZD/USD if we could pull back up to 0.8220 the EUR/GBP i'm in long already. 7965-7945 look like great price range to get long, particularly 7955 or 7945.

Well, i'm somewhat surprised I am doing pretty well so far this week, considering i was dead on corect for the first trading day of the week, and then mostly wrong from then on after. Since then, the E/J and U/J and E/U have pulled back deeper and for a longer period than I had anticipated. however, EU, UJ, and EJ all look to be at some prettysignificant support levels.If these break, I will have to think twice about my bullish bias. at any rate, have two small positions still on, and i'm done for the day.

Well, both the EUR/JPY and the USD/JPY are at the next level down where I mentioned would be a good place to buy. i'm long again, we'll see.

Define consistent, lol. Yes trading is my primary income source, and last year I didn't have a single losing month, this year I had 3 in a row that made the first 5 months of this year just a bit better than treading water. Since then, it's been good over all except one week when I lost my head and had a double digiit drawdown. Pretty much the first half of this year I have essentially broken even, then the most recent couple of months have contributed to most of my profits. Of course, the problem was all internal, and had nothing to do with my method or setups and triggers or my understanding of the markets or even my analysis. It just sometimes fell short at the execution stage of the game. I've depended on my trading to produce an income for about 4 years now. This year has been my leanest year, but not my toughest (volatility in account equity my first year was enough to puke over)

It's when large players simultaniously buy and sell at the same time in order to generate a specific appearance of demand or supply or even a specific time and sales print out. An easy example would be an institution that wants the illusion of a bullish breakout about to happen. They may buy blocks of futures contracts at 10+ contracts per trade, but that same institution may also be on the offer with 1 lots...so folks watching time and sales see aggressive large buying going through and assume a big player is buying in anticipation of a breakout. Little do they know that the prints they see are immediately getting sold off 1 lot at a time to the same entity, thus producing a misdirection of sorts.

There are of course as many ways of approaching trading as their are people who trade... But I want to draw a distinction between three main types of traders: 1. Mechanical - A mechanical trader is one who's rules could very likely be coded into a computer and it would make no difference (and of course, all fully automated trading falls in this catagory). For those who are 100% mechanical, or automated, I would like to know what type of information you use to determine your trades. Do you use any fundamental or sentiment data? is it pure price action/volume based or are their other price derived indicators you use as well? Do you find this is a very comfortable way for you to trade, or do you find that you second guess signals, and/or feel you are "missing out" on opportunities due to the rigidity of your rules? 2. Rule Based Discretionary - a rule based discretionary trader is one who has very specific rule critieria for their trades, yet does use their own judgement to grade the quality of the possible opportunity, as well as the markets they use it in, etc. For those that are rule based discretionary traders, do you have a specific list of criteria that you use to determine if a potential opportunity is viable or not? does this list ever change over time, or from market to market? are there any absolutes in your plan such as "never take a trade if XYZ is happening", or "never trade the first 15 minutes of market open", etc. And if you do have these absolutes, how did you determine that they were appropriate for you to include in your plan? How often do you find you get "sloppy" and overlook details that may be pointing towards either taking or not taking a trade? For example, "this isn't STRICTLY an A+ pennant formation, but it's pretty good, and it's with the daily trend, so, good enough" etc. 3. Conceptual (pure discretionary) A conceptual or pure discretionary trader is one who may not have any specific rules or criteria for a trade, and will use their own judgement to determine which markets, which tools to use to best determine possible opportunities, and then may employ said tools quite differently depending on the situation. This is not to say that they have no plan... on the contrary, conceptual traders usually have a very comprehensive plan for their trades... it's just that each and every trade may have a completely unique plan just for it. They will often (but not always) use multiple disciplines of analysis to identify opportunities, and they generally view the big picture as it pertains to the markets they are trading. For conceptual traders, Why not choose one of the other, more empirical forms of analysis to work with. Do you have any set rules for trading opportunities? or do your rules pertain primarily to risk management. Do you manage your trades as they are running? or do you set hard stop and target rules? Do you trade primarily using one style and time horizon? or do you have multiple styles that each have trades that resolve on completely different time horizons? such as daily scalping of the ES, but position trading emerging market bond funds, etc. As for myself, i'm a conceptual trader. This works for because I find the other two approaches too restrictive, I also am looking for the best opportunties and by allowing myself to trade any market, for any reasons, it helps me find markets that are offering "once in a lifetime opportunties" on a regular basis. (i've had a short german bond trade on now since early/mid summer because I felt no other market provided quite the confluence of factors that the german bond market did for a short) And finally, there are days when I only feel like scalping, or swing trading, or investing in stocks,and on those days to have to work the market in a way that I don't feel like I find is counter productive. So, what about you?

First off, i'm somewhat curious as to what you would be "studying" regarding the markets...? In my experience, there are precious few books or instructionals that are even worth looking at in terms of learning about various trading methods/techniques.... and there are even fewer on the proper mindframe/mental game of trading, etc. Second, I will say that I believe if you are struggling to stay focused on what your studying, you either are not engaging your own ideal learning style. Maybe your better one on one, or possibly in some sort of debate format where you challenge other people and they do the same to you (regarding trading concepts of course). Maybe you would do better with a mentor (mentor, not guru... no one does better with a guru) FInally, I'll say that for me, regarding trading... wild stallions couldn't drag me away from something if I felt it could help me learn more about trading. To be honest, I feel it is one of a very few things that I was born to do. The thought of "studying", if it ever crossed my mind, was more like "no no, i'm sorry naked supermodel in my bed, i'm going to need you to take your tounge out of my mouth now because your not even remotely interesting to me compared to this book on technical chart patterns" Point is, learning and developing my skills as a trader is an obsession. And I daresay that for those that "make it" as full time traders... the great majority will probably feel the same way as I do. I never struggled to enjoy sex, or "overcame distractions" in order to enjoy a chicago style deep dish pizza, nor did I have to "remember to try different listening approaches" to become consumed with various great musical groups. I may be wrong, but for me, if you are having difficulty becoming engaged in various trading material you read, then maybe you like the idea of trading, but the reality of trading may not be for you.

Really? how about in a "trendless" or "ranging" or "choppy" day, the ES makes a new high, but the TICK and the NQ fail to make a new high... it's a pretty darn good signal to short the ES. If it's the NQ that makes a new high, but both the ES and the TICK fail to make a new high, then short the NQ. One can often pick the high or low of the day this way (regular trading session of course). It doens't work if you have a very strong move that day, either up or down. But in ranging or otherwise trendless conditions, it works great. I imagine one could use an ATR calculation to determine if it's a range expansion day, as well as maybe wait to trade such strategies until after the first hour establishes market tone, and don't trade if it's been a very obvious bullish or bearish first hour, but...yea, i actually used it just the other day in fact. Oh, combine with the TRIN as well for better signals. Trin above 1.1, Tick fails to make a new high, ES makes a new high, short it. TRIN below 0.9, TICK fails to make a new low, ES makes a new low, go long, etc.

Well, ended up holding part of an entry for over 100 pip loss due to the network problem I had yesterday. Ended up closeding it out a bit ago. Actually, still believe in the trade opportunity, but I had a larger position than I am comfortable with, and if I'm not comfortable, that can undermine my entire progress for a full week. So, i'm happier taking a small, known, acceptable loss now, than waiting for later and possibly having to take a large, unknown, and unacceptable loss later. still up over 2.25% for the week so far, and I have the opportunity to make more, without losing more than I can "live with" As far as opportunities, go, I think a long in the USD/JPY is still very strong, though I am a bit skeptical of the EUR/JPY long idea, as well as the EUR/USD long idea. I like them well enough, but upon further consideration I know I could be totally wrong, and this market could just drop away. The lack of further gains in many major risk markets after monday has me a more cautious than I normally am... and hwere we are a few days into the week, but still not breaking the high set the first trading sessions of this week... well, I'm just listening to the market, that's all. I like the trades, I wouldn't change a thing, but I'm not married to them, and I won't risk more than i'm comfortable. I will also look for possible opportunties or justifications to get short those same markets, so I can be prepared to reverse if I determine it is the better courese of action.

Aright Bob, if you all don't mind, i'm gonna grab my teachin cap, and do my best to help tie various ideas together for you. Be forewarned, this is going to be a long post, and I'll do my best to keep it as simple as possible, but no guarantees. I'll stick with just the points and questions you bring up here, and then we can do question/answer and futher the depth of discussion as conversation requires. First off, you seem to frame value to some extent in opposition of supply and demand. These things are better viewed as "cause and effect", than they are viewed as two seperate factors that influence price. "value" primarily has one of two distinct contexts: 1. Regarding capital markets, value as seen from the individuals perspective is the "perceived worth" of an underlying financial instrument that trades in a free floating exchange. Value is seperate and distinct from price in this context, as an individual can feel a financial instrument may be priced too high or too low for the value that this individual may assign to this financial instrument. 2. Regarding capital markets, value as seen from the AGGREGATE perspective of market participants is more complex, but it is most simply viewed as a range of prices where willing buyers and willing sellers are able to transact with each other at will, with little to no impact on available liquidity in that range of prices. When liquidity is no longer available for either buyers OR sellers, the market will move until it has found a now price range where there is adequate liquidity for both buyers and sellers. "Supply and Demand" on the other hand, is how value beliefs of various individuals as well as aggregate market participants express themselves in a free capital market. Lets take value from the individuals perspective for starters. If an individual looks at a stock currently trading at $20.00, he is observing price. However, if he feels the VALUE of the stock is actually $25.00, he may place a order to buy at market price, because he feels he is able to buy something priced at $20, that has a value of $25. In this case, lets say he decides to buy 100 shares His "bid at market" order will be for 100 shares of this stock, and this 100 shares hits the marketplace in the form of "demand". When his order is executed and filled, he will have absorbed 100 shares of "supply" out of the available liquidity at whatever price the trade was transacted at (probably about $20) So you see, opinions of value are what dictate the various prices that bid orders and offer orders are placed in the marketplace. So it's an individuals perception of value that ultimately determines what price they place a bid or offer in the market. Thus, individual perceved value is what determines supply and demand, or the lackthereof. Ok, so we have that cleared up. This next part is more complex. I really would need to spend a few hours with you to properly explain it fully. However, I will do my best to keep it as simple and straightforward as possible. Now, as far as what you were taught with supply and demand, I think you may be overlooking some very important distinctions, conceptually speaking. Here is what you said: First of all, every single transaction has both a buyer and a seller, so using deductive logic, price rises or falls based on an equal amount of buyers and sellers making transactions that influenced price. If a stock goes from $10 up to $13, there were not more buyers than sellers who were making trades that influenced price to move up to $13. There were in fact the exact same number of buyers and sellers who were collectivly responsible for moving price up from $10 to $13. At first thought, this seems like some sort of paradox or impossibility. However, the actual mechanics are that there are actually two distinct types of bid orders (buy orders), and two distinct types of offer orders (sell orders). Making 4 types of orders available in the capital markets, not just 2. There are active buy orders (which would be a "bid at market" order), and passive buy orders (which would be a "bid at limit" order) There are also active sell orders (offer at market), and passive sell orders (offer at limit). There is also a "bid/ask threshold". I will assume you are familiar with these concepts already, so I will go on for simplicity sake. however if I am wrong, please do ask me to clarify and I will happily do so. So, in our example where the $10 stock moved up to $13. THere were exactly the same amount of buyers as there were sellers who made the transactions that moved the stock up. The DIFFERENCE is that there was a great deal more ACTIVE BUYING, and PASSIVE SELLING. (again, assuming you know why this makes a difference and how price actually moves as well as how market and limit orders affect price in their distinct ways, etc, but if you don't i'll go into more detail). This is important because it relates to two of your questions: first, the "why did the buyers stop at a certain point?" etc. And then, the statement of So, first off, neither buyers nor sellers ever do stop at a certain point. Ever. What DOES stop is ACTIVE buyers and ACTIVE sellers (orders placed at market, as opposed to limit( As far as volume goes, it can provide some very powerful clues as to what THE OTHER GUYS believe is "value" I will just give one very simple example, and then wrap it up. Then ask away and i'll address those specifics as I can. Say you believe the value on a stock is $20. It just broke out from $10, and went very quickly to $15, where it has just stalled for the past 2 trading sessions. This is where volume can help be your "radar" to "hone in" on large players and what they feel value is for them. If you see price consolidating just under $15... but you see high volume each time as it makes a little run up towards $15, and then suddenly, you see volume climax as it attempts to brek through $15 but fails to do so. If this happens for a period of time, it is reasonable to conclude that a large player such as an institution has a rather large offer at limit order at the $15.00 price point. In other words, this institution is a passive seller around $15. But how do we know it's a rather large order? Well, this is where the volume comes in. As volume spikes when price charges towards $15, a reasonable assumption can be made that the driving party behind the charge towards $15 were Active buyers who were finding passive sellers continuing to pull their sale price up with each transaction that takes place. This creates a long green candle, and it clearly shows that there was a lack of sufficicent liquidity on the supply side to fill all the active buy orders (otherwise, we would have no long green candle of course). But suddenly, we get to $15, and we see high volume, but now, price no longer advances. The only way this is possible is if a large amount of active buyers suddenly came to a price where there was enough liquidity to absorb all of their buy orders (for the moment anyway). Then, a short while later, another "rush" occurs, and price shoots into $15, and volume again shows many transactions... but, price again fails to break over $15. The only way this can happen is if there is a large, passive seller, who just keeps placing Limit offers (limit sell orders) at $15.00. And they have to be large, because price has made several attempts to breach $15, and even though large volume is transacted, it does not breach $15. Obviously, a large passive sell order is sitting at $15 If this happens over a period of minutes or hours or days, each time volume is met with a lack of penetration through a level... it literaelly is "big boys" tipping their hand as to where they see value at. And you may see value at $20, they obviously think $15 is overvalued, and thus they will sell their shares there. So, now you have some very good clues as to what your opponents belive value is. Moreso, this is a big player, because only a big player would be able to absorb that much volume, and not have price break out to the upside. Volume is good for more than this of course, but volume can proovide a very important piece of the puzzle... it can tell you where the "smart money" believes value is in terms of price, as well as whether something is overvalued or undervauled., based on how price and volume act when they reach a particular price, The obvious conclusion is regardless of what price you feel is a good value, or that a market should be valued at... if there is a seller who may be unloading a great deal of stock or whatever at a price LOWER than what you feel value actually is... well, the market will never trade up to your price until this large seller either sells every single share that he wants, or until he changes his mind on value (thus canceling his large sell order) To sum it all up: 1. value is what an individual determines something is worth. Or it can be an appropriate description of a price range that the aggregate of market participants are able to trade without any problem with liquidity. 2. supply and demand are the "effect" of value. A market participant believes that the value for a market is higher than the current market price, they will then place an order in the market to buy. That bid they place to buy that market is the "demand" side of "supply and demand" 3. price in free markets does not move up because more buyers enter the market place. it is because more ACTIVE buyers are willing to make a transaction over a specific range of prices than active sellers in that range of price. The sellers filling their orders are passive sellers. Anytime you have "Active buyers/sellers" matched with primarily "passive buyers/sellers", you have an impulse move. 4. In the markets, you only make money if someone, somewhere, loses money. Volume can be a very helpful tool to determine at what price large institutional orders are, and thus, you can then know what price and direction large institutions are currently seeing as a good value for them to sell or buy at. This can help you adjust your own view of value to accomodate the situation, rather than to determine it for your own self. In fact, I would argue that If I know at what price a very large institution will find a market to be "overvalued" or "undervalued", this in itself will help me determine value. I do hope this helps. it may create more questions than answers, but that's fine. ask those questions, and maybe we can get a really good discussion going here.

Dang Mystic, now I really should have signed up for this. I'd be in the lead since starting the myfxbook thing... and actually caught 2ish% for the first two trading days of the month (days not pictured in myfxbook) so I'd be close to 6% up although, I did have a seizure and drawdown 6ish% at one numbskulled moment, so that may have DQ'd me anyway. oh well, next time I will do it, and win. unless that one guy signs up who had 50ish% ROI's and 2% drawdowns in a single month. thats just sick.

By the way, I kinda feel that today we basically saw the low of the EUR/JPY and EUR/USD until break the highs set earlier this week. anyone have any thoughts on this? P.S. I feel the same way about the USD/JPY also.. I think we're in for a couple hundered pip upmove before we get really any lower in USD/JPY.

by the way, because of the network crash, I actually wasn't available via skype, for those who may have sentme a message. Really sorry about that, would have prefered to talk shop than diagnose my system. Anyway, may be around tonight as well, if so I will post a message here. thanks