This would be a long
lesson about the Difference between "Scale - In"
from "Creative Account" and broad market analysis that lead me to maximize the potential gain.
From the perspective
of Money - Gained and Money - Risked, creative account and Scale - in technique
is completely different. They are nearly opposite in my opinion.
Why...? With creative account you multiply the PIPS
and MONEY risked while with scale - in you multiply the MONEY and the PIPS
gained. Creative account would split the initial entry to 10 or something just to jack-up number of pips gain as well
as pips risk at the same time, yet money risked and gained is just the same as
if the initial entry were not split. This maybe done just to impress readers
for pips gain.
On the other hand
Scale in entry split the initial entry for Money Management to ensure a
winning position if price later go against the trade while preparing to ride
the move if price go in our trade (Please spend time learn and apply YTC-PAT's
the importance of exit strategy and
Trading in the Zone for this point). The next scale in would be a safe trade at
all. Look at my post on 203 Pips on May 30 Apr. The step explain clearly how
the stop adjusted at every step of the scale in. A wrong trade/loosing trade
might occur but no money would lost.
While scale in
taught by Steve Mauro's MMM could be just nearly the same with the above
Creative Account. It's like betting with all your money assuming that you know
where exactly the market is heading while "Trading in The Zone" is
totally correct "ANYTHING COULD HAPPEN". That's why I REFINED this
Scale - in Scale - out incorporating the most powerful "entry-exit Money
management" taught by YTC - PAT and Trading in the Zone (some still ask
what YTC-PAT is, it is Your Trading Coach - Price Action Trading, by Lance
Begs).
Followings are trade
on June 1st, GBPJPY and GBPUSD. They are example of what so called
"Creative Account". I could have just split my initial entry to 2 or
3 units instead of split to 7 units. The pips gain would surely impress you
all. If only I scaled in along the way i would double that pips.
I could have gain
more than 1.671 Pips trading back and forth if I were not exited too soon in
some exit.
But the most
important lesson in the above post is the PER-ANALYSIS of TREND STRUCTURE that
lead us to the move that we exploited (a rally in to the bottom - a strong
spike bounce then Re-test of the Low) that result 1.671 Pips gain.
I have explained
this situation in the last 2 post that GBPUSD and EURUSD is heading toward a
very strong DEMAND area.
GBPUSD, D1 May 31st:
The picture above is
Daily chart of GBPUSD on May 31st, it was halted by a channel line. You'll
notice the 3 thicker gray lines I drew. Look at the top lines. It was the
situation that I explained in the comment of my post "The CALM before
STORM" where GBPUSD was halted by a Demand area while EURUSD has been over
shot its Demand area. So I was tent to believe that both GBPUSD and EURUSD
would go for their next lower Demand area.
The middle and
lowest lines is the demand area I drew manually. From this point there are no
barriers to halt GBPUSD to test its Demand area. Sam Seiden would say it would
be only Novice who's going to sell in to such strong Demand area. But Sam
Seiden also say that, since professionals need novice to buy from, a strong bearish move in to the Demand would
often created to create believe that price is strongly falling.
So I would expect a straight trade instead of
a pullback/stop-hunt to the high. I noticed that there is still more than 150
Pips to be exploited. But I also need to
be extra careful to watch the reversal sign. Look to the left and apply odd
enhancer. The price was leaving the area strongly strongly and leaving a pin.
Samething is going to happen on June 1st. The price would aggressively penetrate
and reject by this area leaving a pin. And if there would be a strong rejection I would wait for the price to test the low for a long opportunity.
So, as
taught by YTC-PAT, I would visualize the movement tomorrow would be a strong bearish move - bullish rejection -
retest of the low. Anyway, as Trading in the Zone taught, ANYTHING COULD
HAPPEN. So I would evaluate the sign in every step whether my premises are
validated or in-validated.
GBPJPY, D1 May 31st:
This is the Daily
chart of GBPJPY on May 31st. Price was halt by a Demand area but it was not a
strong Demand area. Besides, we have two long low close bear candle. Both Al
brooks and YTC-PAT would suggest a break through. Additionally, I would target
the trend line as well. GBPJPY has more than 200 Pips to be exploited. Having
this pre-trading analysis, I was ready for the trade next day. So, tomorrow I
would expect a Short trade that could be preceded by a stop hunt to the high or
just a Straight Short Trade.
Look how I exploited
the market based on my future price visualization. Following are trade that I
took. Just to remind, yellow lines are entry lines while red lines are Stop
loss.
GBPJPY, June 1st:
I placed 3 units
short after Asian box. Price was reluctant to go up. There were no divergence line by LST as it was not an
extreme area but it was a hidden
divergence following by a stoc cross. I got no time to scaled in since the
shorts were placed while at office then rushed home while the price made a
strong bearish move.
Look how I neglected
the Bullish Divergence line drew by LST as I realized that we are on a strong
bearish move. I have stated many times that during a strong move the price
might diverge several times before reverse. Thus we need price action
confirmation to take the trade. Look how price action are over all of any
indicator. Though, I anticipated any possibility by adjust my stop right under
the lowest entry line which was never
been touched.
The trade exited
after the chart made a hammer for 126, 121, 112 Pips.
GBPUSD, June 1st
Something was wrong,
I could not place further entry on GBPUSD. I was being rejected all the time
and finally managed to place 2 shorts on GBPUSD. The trade exited for 31 and 26
Pips.
Image3a.jpg
GBPJPY made a
retrace. There were a divergence line by LST. I took long trades after a failed
test low but it wasn't looks like a
strong pullback. The trades were scratch for small profit when the chart
showing a bearish hidden divergence. I was reluctant to go short anticipating
the move has over. I didn't take the short at the pins as usual but I waited
for confirmations. I didn't even take
short after the stoc cross down until the yellow MA crossed down. I witnessed
that the price still away from its channel lines and there were no "Last
Thrust/Volume climax" yet. I also realise that news is coming. The big
move is imminent, I was aggressively place 5 shorts on GBPJPY and 2 Shorts on
GBPUSD. I was excited to know this situation (Russ Horn would say: I feel like
I am cheating). This is the emotional situation that I would not recommend.
Price indeed made I spike low fueled by the news. See, Steve Mauro said that Market
makers use News to complete the MM pattern.
I knew that this move will create a pin so I exited at the first pause
for 75, 75, 75, 78, 78 Pips.
GBPUSD.
Same situation on
GBPUSD. Exited at Demand area for 26 and 28 Pips. This bar is a news bar that
later turn to long pins.
Image5a.jpg
As I have visualized, the price were wild around the Demand area. The Market Maker indeed
create this move. Professional were buying at this area that create such
massive moves. We'll compare this picture behavior with the picture from
previous Demand area and asses if this
is going to be trend reversal. GBPJPY was moving wilder that gave me no time to
make decision. I was able to take a decision after GBPUSD made two pins to the
low. I placed 7 Long trades aimed for the above Supply area. This is a mistake
that made me exit too soon. I should only tighten my Stop in this situation.
The price made more that 130 Pips while I exited around 70 (68, 68, 67, 67, 67,
68, 68)
Image9a.jpg
Image9b.jpg
Price indeed reach
its upper channel. Look at Daily Chart. I have said several times that Pins on
S/R or SupDem would 80% of the time being tested so I place 7 units Short when
the price action told. Look at the price behavior on M1 and M5 where I place the
short and stoc divergence and cros on M15.
Again the trade
exited too soon for 50, 48, 48, 47, 50, 51, 48 while price still reach the aqua
line.
GBPUSD-D1
Now look st this GBPUSD - D1 chart. Its a pin to Demand area. Lets visualize the future movement. The price was strongly rejected in this area compare to the upper Demand area. See it in M15 chart. This strong rejection could be a start of a bullish trend.
But Look it in Weekly chart:
GU-W1:
It was a low close bear candle. Look to the left, this demand area have rejected GBPUSD up four times. Yet the price took process to reverse, learn the candle form. The price might reverses up from this point but could also just a retrace for a larger bear move (could take 1 week to develop). If price would broke the Demand area then there would be more than 10.000 Pips to the next Demand area.
Which one would happen...??? we don't know anything yet. We'll see the price developed and act accordingly. Remember, this is what we call: THINK GLOBALLY, ACT LOCALLY.
But seeing the M15 chart I was thinking of a short term future price visualization for the next week. Base on the large pile of Buy at this demand area, next Monday i would expect an intra-week bullish move that preceded by a stop hunt low to test the low, straight long trade, or a gap-up price then fill the gap to test the low. Here is where LST and FMM play their part but we already know what to expect. Lets see them prove themselves.
