Tag: Manipulation

Okay, okay, I know, I’ve heard it too – all the modern pseudo pop-psychology of ‘The Power of Positive Thought’, ‘Attitude is Everything’, the ‘Law of Attraction’, etc.  Aren’t we all getting just a little bit tired of all the clichés? I mean, it can’t all be true, can it?

 

Well what if it is? All of it.  And what if it’s the one thing that is keeping you from where you want to be; maybe in your trading, personal small business, career, personal finance – you name it.

 

As it turns out, more winning athletes, entrepreneurs, political figures, and other notorious characters that I can shake a stick at, have at one time or another referenced their mindset as a key attribute in the success that they have accomplished.  

 

If all of these people who have at least financially achieved a status that most of us would aspire to reach, were to openly suggest that this may be a key part of their success, why oh why, must we roll our eyes at the idea of doing such a thing ourselves?

 

I read that Muhammed Ali once said, “It’s the repetition of affirmations that leads to belief.  And once that belief becomes a deep conviction, things begin to happen.”

 

Admittedly, I’ve always had mixed feelings about affirmations.  Part of me felt like there was obvious truth to it, and the other part of me felt that it was redundant and dishonest.

However, I trained in a gym with high level athletes for years. During that time, even though I personally had a fairly high level of fitness, I had generally plateaued.  Now it’s not what you are thinking, one of these stories where I was actually reading Vogue on the treadmill and texting on the weight bench and calling it hard work.  No, this was something else.  One day I thought about the type of (affirmation) dialogue I was having with myself repeatedly: “This is going to suck’”,  “Ahh this workout is so gnarly”, “I’m about to get wrecked”.

 

There wasn’t much positivity in my dialogue.  In February of 2015 I decided that I had to change the voices in my head (fun, huh?).  I decided then and there that the outcome of every workout was going to be deemed awesome no matter what.  Anytime I was going to do, or was doing, a very large effort in the gym, I repeated to myself, “this is going to be so good”, “I’m about to gain so much fitness”, “I love working out”.

 

So what happened?  In the next 6 months I PR’d every movement we focused on in the gym.  Seriously—all of them!  Max pull-ups, deadlift, bench press, pushups, 2K row, bw in calories for time, 10min air-dyne test. Was there a correlation?  Undeniably so.

 

So what does my fitness have to do with your trading you ask?  Well, once you’ve been around the FOREX market for a while, the price action of the market itself is relatively simple.  It either goes up, or down, and always for good reason.  So why is it that some people interact so well with it and get rich, and others can’t seem to figure out up from down and blow up their accounts?

 

If you saying things like, “I got into this trade, so of course it went the other way”, “I suck at this”, “You’re such an idiot”, “This whole thing is a hoax”, “Is this ever going to be viable?”, “I’m not very good at this”… well you are, as Muhammed Ali would say, one of those people who are repeatedly affirming their thoughts into a belief, which is ultimately becoming a deep conviction and will inevitably happen.

 

Let me ask you this, how long would you hang out with somebody that was telling you all of those things?  Not very long, I would hope. So instead, try this on for size.

 

‘I’m becoming a world class trader.’ ‘I’m getting it more and more every day.’ ‘I’m a great learner.’ ‘My account is starting to grow exponentially.’ ‘Trading is the hottest thing since sliced bread.’  

 

Now of course, saying all of the right things probably won’t do much for you if you are already doing the right things like showing up consistently with a great attitude, continuously studying your fx365i virtual classroom, keeping accurate and thorough records of every trade you make, taking screenshots of your own trades and reviewing them weekly. However, if you aren’t doing all of those things, this might be the missing link.

 

Lastly, what is it that you are visualizing?  How often are you imagining what it’s going to feel like to open up your trading station and have a six-figure account balance?  How often are you imagining what your perfect trade setup would look like, and what it would be like to be in that trade?  How often are you visualizing what it’s going to be like to close out a trade for five figures in profit?  How often are you visualizing what your monthly account draw from your trading account to your bank account is going to look like?

 

If you are thinking, wow that sounds like a lot to do, I ask you this: How much thought do you think Muhammed Ali gave boxing?  And if that’s not enough motivation for you, remember, Michael Jordan didn’t make his high school basketball team.

 

Payton Parnegg

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Here are some terms used focused around Forex Market Manipulation in the FX365I culture:

 

Accumulation: A range of Price that the Market Makers have stalled the Market at in order to collect orders, and set up a pending Market Move. Accumulation comes in two varieties for purposes of what you are looking for: Short term & long term. Short term accumulation will influence short term direction and quick manipulation moves, whereas long term manipulation will influence the overall direction of the Market.

Average Price: A price that Market Makers and Retail Traders have entered into trades. Average Price is represented by a bright green line on the 1HR and 4HR charts.

Bounce: When price hits an Average Price Line, Dot, Top/Bottom of Box perfectly then moves the opposite direction following.

Box: A light blue square or rectangle found on your 1HR or 4HR chart. This is how Smart Money Profile Software defines Accumulation on a larger time frame.

Breath: While the Market travels Long or Short, it will often temporarily stall and retrace slightly before continuing.

Candles: Price movement as represented by a bar shape on your charts (MarketScope). They will show you where price opened and closed, as well as where price moved within a given time frame.

Closed Positions: The section inside of your Trading Station where you can view your profit and loss of each trade that you have closed out.

Dot: A Bright green dot found on your 5M, 15M, and 1HR charts. These represent short term Accumulation and can be used for a variety of purposes.

FX365i/Forex 365 Institute: Your new Forex Educator. We provide Software and Education only

FXCM (Forex Capital Markets): The Broker that you will be using as a FX365i student. FXCM will be processing your orders when you decide to go into trades. They also provide the trading platform that enables you to watch the Market on your Computer (See Trading Station & MarketScope).

Grid Line: A series of reactive price points.

Indicators: Tools that retail traders rely on to make decisions regarding future price movement.

Limit Order: An order, placed automatically or manually, that closes your trade in the direction you have placed your trade in.

Liquidity: A large amount of money at an area in the Market. Also high volume times in the Market.

Liquidity Line: Blue and yellow lines that appear on your 1HR, 15M, and 5M charts. They represent liquidity and belief levels in the Market.

Liquidity Swap: A manipulation of price meant to change the overall direction of price.

Long: When the Market is moving up, or a Buy Order that you have placed.

Manipulation: When Price is deliberately moved by the Market Makers in order to stop-out Retail Traders, or to build a belief of a certain direction in Retail Traders.

Market Makers: The Financial Institutions that manipulate the Market.

Marketscope 2.0:  FXCM’s program that displays your charts and candles. Also where you are able to add in Indicators to lay over top of the candles.

Net: An area that consists of two Grid Lines.

News: Financial information pertaining to a certain currency pair. Can come in high, medium, and low volume varieties.

Pip (Point In Percentage): A measure of a currency pair’s movement. More simply though, a pip is what we in the Forex would consider a “point” for calculating profits and losses.

Price Alert: A user added line that draws infinitely across all charts on MarketScope in a specified pair.

Price Line:  The blue line (once you have properly set your colors up) that represents the live Exchange Rate between the two currencies you are watching.

Profit Release: A stage in the Market Makers Business Model. This stage takes place following sufficient accumulation and manipulation.

Pullback: Interchangeable with Breath – While the Market travels Long or Short, it will often temporarily stall and retrace slightly before continuing. This is usually a chance to place a trade of your own.

Push: Price has traveled long/short in a relatively short amount of time. Usually consists of 1-5 candles.

Range: The prominent highs and lows set by price in any given time period.

Advanced Rate Indicator: The “Flashing lights” inside of Trading Station. The tool we usually use to enter and exit a trade.

Retail Trader: Any Trader/Investor that does not work for a Hedge fund, or an Investment Bank. These Traders trade their own accounts.

Rotation: Interchangeable with “bounce” – Price nearing a resistance/support point, and turning the opposite way.

Run: Generalizes a gradual large movement of price. Can be characterized by multiple pushes, with multiple pullbacks.

Short: Selling the pair you are watching, or Price traveling down.

Slippage: When the broker is not able to place your trade at your specified price (Usually happens during high news events such as; GDP, Non-Farm Payroll, Rate Decision, etc.)

Smart Money Profile: The name of the software used in the Market Makers Course.

Snap: A quick, medium to large movement of price.

Stop Order: An order used to automatically take you out of your trade to manage your risk.

Stop Out: An outcome of manipulation by the Market Makers. Hitting masses of Retail Trader’s Stop Orders.

Traders Prison: The metaphorical “Prison” that many technical Traders land in by constant system development, usually through technical indicators.

Trading Journal: A means to properly track your trades on a day to day basis.

Trading Station: FXCM’s platform that allows you to view currency pairs, and manage positions, as well as your trading account. This is what FX365i Software is installed into.

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A couple of weeks ago I noticed that there were some very specific bad habits beginning to frequently occur as I was trading. Each time these habits would come up I would think “Wow that was stupid, I definitely won’t do that again.” Then guess what, I did those things again, and again, and again.

So I decided that I needed to take some time to dissect these specific issues and find out why I kept repeating these mistakes. It has been really beneficial, and I plan to do the same thing with any recurring bad habits in the future. This is what I wrote.

 

The Issue

After seeing considerable profit in a trade, I tend to ride it negative. I have caught myself doing this fairly frequently. This happens due to the overconfident belief that price will go where I expect it to go. Most of this journal entry is written from the perspective of being in a trade, so most of the following observations apply to my mindset while in a trade.

 

Why does this happen?

A) I believe that price “has to” go places.

B) I stick to bias too rigidly, failing to take in new information.

C) I look at obstacles as “springboards.”

D) I tend to forget that breaths are normally larger than anything I want to ride through.

E) I stay in trades too long in hope of eventual profit due to the fact that I am limiting my trades.

F) I get greedy. After seeing a decent profit, often times 10-20 pips, I still expect more.

G) I am too excited to think logically.

 

A) Belief that price “has to” go somewhere

Price does no have to go anywhere. I can call directional bias, and set a profit target, but more often than not, price does not go all the way there. And if it does, most of the time it does not go straight there. Movement is only semi predictable.

To help with this issue I think that I need to remember that I don’t need to get all of the pips all of the time, anytime the market moves. Even in a predictable and unsurprising profit release it should be my goal to grab some pips out of the middle, maybe catching one of the two ends of the move, but I should never expect to get every last pip. To reinforce this, I should remind myself that 10 pips is a good trade. 10 pips is 25% of my current weekly goal. That’s not bad for one trade, yet often times I find myself turning up my nose at these profits, expecting more, and believing that I will get more.

One thing that I am realizing is that I need to treat my profit targets more like a maximum. I tend to just think that price will go to my target, and that’s that. So instead of saying, “there’s my target, that’s where price is going and I’m staying in this trade until it gets there,” I should be saying, “I could see price possibly going here, so I will stop myself just before there if price were to go that far in my favor.”

 

B) Sticking to bias too rigidly

This is almost the same as issue A, and the many of the same fixes apply. I need to be open to new info. I also feel like I need to feel the market to some degree. When price is moving strong in a direction and then it slows or stalls, it may not be a bad idea to get out with some profit. Usually I will find some content to back this up, often times though it is found after the fact. My point is that I should pay attention to stalling in price and look for clues as to why it may be stalling, instead of sticking to bias or belief that may not be true.  I always need to be looking for clues while in trades.

 

C) Looking at obstacles as “springboards”

Frankly, this issue is just dumb, but it is something that I have caught myself thinking.  Sure sometimes things such as dots or average prices will cause a slowing or some kind of rotation but to think that this will be followed by an acceleration in the original direction is just unfounded. It is purely imagination. I suppose where this came from in my mind is the fact that liquidity lines can fuel price movement, which, as I have learned, does not apply to dots or average prices in the same way.

To fix this issue, I should be treating obstacles as obstacles, and not imagining a magical propulsion of price in as a result of them. Perhaps instead I should imagine price rotating off of them into a breath, whereupon I would be stopped out with -20. This is a good scenario to remind myself of the reality of what may actually happen. I know this reality because I’ve been there and done that, and it ain’t fun and it sure ain’t cool.

I should also be looking at these obstacles as targets (maximums). Instead of setting a target far away on the other side of prominent dots or average price lines, perhaps I can use these points of interest as targets, or just play it by ear and watch closely how price reacts to them. This ties into what I said in the last section about feeling the market. Basically, if I see some funky stuff about to go down, maybe I should just get out of the trade, especially if I’m up in the trade.

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Luckily for those of us that trade the Market Maker Business Model, the way in which Forex works is extremely simple.

I’d like to lay out an example of what I would consider a pretty standard technical trading screen. It was built with free indicators that are widely available, and widely used by Traders across the world.

You can obviously see how easy and intuitive this type of trading is just at first glance…

Not so much. And it isn’t even so much an issue of which ones were used in the example. Frankly whichever indicator is added into the fold or taken out is a moot point. In a world where technical system development runs rampant, screens that take this form often fail to produce results.

Less is More

If you have ever been down the road of system development in trading, this thought is sure to have crossed your mind at some point. There is a tipping point where you are being bombarded with information and can not make a decision that holds any water. This is when the balancing act of removing indicators starts to come into play. God forbid you have access to the calculation settings, because that’s where things start to get really crazy.

It is possible to tweak nearly any screen to give perfect signals on any given day. If the market moved in the exact same way day in and day out this would work exceptionally well. Unfortunately reality stomps on that dream. So close.

So how exactly can you apply the ‘less is more’ to system development in Forex trading? Get rid of every indicator?

No we’re getting somewhere. The issue with standard technical indicators, however many of them are used, is that they mask the simplicity of how the market actually works. Using technical indicators can be great if you are playing a metaphorical baseball game. The only problem is Forex would then be football.

The Market Maker Business Model works in 3 stages:

Accumulation

Manipulation

Profit Release

  1. The accumulation of orders.
  2. A belief in retail traders is created and then manipulated.
  3. The market runs the direction most everyone thought it was going to go in the first place.

The moment you add a moving average (or technical indicator) of any type, you have added a mask to this process, as it does not show you when and where money has changed hands. It is based off of price action that will never repeat itself in the exact way for the rest of history.

To conclude, I would encourage anyone looking for the perfect trading setup to research the Market Maker Business Model. If Forex were a casino the Market Maker Business Model is card counting, while everyone else is wearing their lucky socks looking for a machine that ‘speaks to them.’

 

Shane Guth

Director of Education

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One of the rules I have for entering a trade is, “I understand the set up for the trade that I am about to enter.”  Despite this rule, I realize that I have never taken the time to actually write down exactly what those trade set-ups and entries look like on the SMP platform.  Wow, that’s pretty shocking.  How have I not done this yet?  I should be doing this on an ongoing basis.  So that settles it: my mission over the coming days and weeks is to specifically write, diagram, and (hopefully!) screen-shot successful trades that exemplify exactly what I’m looking for in trades.  My hope and belief is that as I write out more and more of these set-ups, I will recognize them better when I see them, I will stay OUT of trades that don’t fit the criteria, my approach towards each of the trades will be refined, and my overall trading will improve dramatically.  Today I am just going to start with one very simple trade.

Disclaimer: This blog only represents my opinion.  Although my opinions are based on what I have learned at Fx365i, none of this necessarily represents the official views of the institute.

Bounce Off Average Price:

  • Entry:
    • When this trade works out, it can lead to awesome trades.  Very simply, if price has moved significantly away from an accumulation area and then reaches a larger average price line, if it appears to be bouncing cleanly off that average price, I believe you must GET IN QUICKLY!
    • If you wait too long, and the bounce is aggressive, then all of a sudden there are 15 or 20 pips of risk.  To use our bus stop analogy, if you get on quickly, you’re along for the ride.  If you wait too long, you’re either a) going to take a big dumb risk and try and jump on the back bumper of the bus (chase the trade), or b) get left at the bus stop sucking fumes as the bus takes off.
    • One key to entering this trade is keeping up with measuring.  It is not every day that we see a perfect 90 pips between the dot on the hour that price just rotated off and an average price line.  More frequently, we will be somewhere in the 90 pip ballpark.  Maybe we’ve only run about 82-85 from the dot, but if you measure from the high to the average price, it’s 108 pips.
    • As such, I believe that once we’ve run 90’ish pips and are possibly getting an exact bounce off average price, you can’t hesitate to get in.  The worst case scenario is to take a small negative (stop should be no more than roughly a pip off average price).  If you have 5 pips of risk vs a 30 pip profit target, that’s an outstanding 6:1 ratio.  On top of that, a clean bounce off average price can often result in a much larger run, so you may even have better than a 6:1 ratio.  Pretty awesome!
  • Exit:
    • I’m trying to refine my technique for when to exit this trade.  The image above is shows a trade I was in recently where I got solid entry off average price.  I got in 4 pips from the bottom (which was exactly at average price).  My current rule is that if it doesn’t give me a strong initial bounce, then if I see a small positive, I’m getting out.  On that trade, I took a +5 because price did not move much for the first couple of minutes after I entered the trade. Then, on the same 5 minute candle, the trade ran 20+ pips.  After an 11 pip breath to begin the next candle, price pushed up to the point where I could have taken a 40+ pip trade (in less than 10 minutes) based on my entry.
    • One reason I got out quickly on this trade was because we had already tested that same daily average price 1 day earlier.  This made me believe we might be ready to blow through it this time.
  • Refinement:
    • One reason why I’m somewhat willing to get out with these small positives is I’m concerned about the market just taking a minuscule breath and then smashing hard through average price before breathing back.
    • On one hand, I need to realize that if we have run 90 and are now hitting a significant average price, there is a great chance we will see at least a 30 pip breath. As I mentioned earlier, a 6:1 or better reward to risk ratio is incredible.
    • On the flip side, from an overall money management viewpoint, if I end up taking a fair number of +5’s along with a few -5’s – and put those together with the occasional +30 or more, that’s a long-term winning recipe.
    • I have to admit though, it’s really stinks to get out of a trade just to watch it run straight to my profit target 30 or 60 pips away when I hadexcellent entry into the trade.
    • I’m trying to decide whether it’s better to a) play it more conservatively by taking the little +5’s and dealing with the risk that I’m about watch the market run 60 pips in my direction, or b) be more aggressive and let the trades play out while sticking my stop right under the average price so that I KNOW that I was wrong in the trade. I would take more negatives, but I would also see more 20+ pip trades.  I’m really torn on figuring out which way to play this.

Well, “Bounce off Average Price” is the first trade I have mapped out like this.  Hopefully there will be several more to come over the coming weeks.  As always, all traders’ thoughts and comments are tremendously appreciated.  Please feel free to contact me at pipaddict73@gmail.com – I’d love to hear from you.

 

-Cyrus Sidhwa

Fx365i Student

Smart Money Profile Trader

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