AUD/USD this morning, using granular studies

The first chart below highlights buyers have been bidding up the AUD/USD, creating a directional skew to the upside.
Price has already moved away from the most recent failed attempts by sellers to push prices down, so it’s too late to enter based on this opportunity.

However, by also viewing price on a granular level as shown below, an opportunity is identified to take a trade based on the same principles i.e. entering after evidence of multiple failed attempts of traders fighting the directional skew.

The purpose of an auction is so price can find agreement between buyers and sellers. Notice how the decision of “where to exit” was made easy by looking at the previous agreement area. Price continued to sell off after reaching this area.
While the previous notes were the theory, the practice is shown below.

Understanding the role of trapped traders

Below are four two-minute videos describing what I see as the foundational concepts of trading. These are:
  • It’s a necessity of markets to repeatedly wash traders out of their positions, putting them back on the sidelines to maintain a constant supply of fuel to perpetuate continual printing of price. Therefore, being frequently rinsed out of positions leading to a coin flip win/loss ratio is not a representation of poor trading.
  • Like any auction, buyers and sellers will continually test and retest prices in search of price agreement. There are going to be periods in which buyers and sellers are matching each other out (sideways action) and times when buyers or sellers are the dominant force creating a direction skew (trend) where price simply moves in the path of least resistance.
  • Even when a market is trending, there are frequent changes in the rate at which fuel is used and replenished, hence why price doesn't move in a straight line.
  • Traders don’t volunteer to be washed out of positions; instead markets repeatedly trap traders who once caught on the wrong side of a directional skew, exit the market helping to propel prices in the direction against them/the path of least resistance.

Concept 1: Why Markets Repeatedly Flush Out Traders from thetradingpractice on Vimeo.


Worst trade of the week: SPI fade February 23

Ideally, fading aims to take advantage of momentum brought about by traders, who having entered
very late into a move, scramble to cover when they find themselves suddenly on the wrong side of the market.

Conditions favourable to fading include working off key levels as defined as those areas in the market which were the origin of a strong continuation in trend or a reversal. From an intraday perspective, I often determine key levels based on a 30 minute chart.


How to save mental energy by trading the early stages of a change in price direction

The shorter the time I spend in a trade, the less I exhaust my mental energy through:
  • monitoring and managing the trade
  • enduring the discomfort of not knowing what the trade outcome will be
  • frustration and/or impatience
And as mental energy is a finite resource, I a real focus for me is to find trades likely to move quickly.


The role of the trader

The excerpt gem below is from Chronicles of a Million Dollar Trader by Don Miller; which does a fantastic job of explaining exactly what professional intraday trading is all about.

“All I know is that our job is simply to react to what is happening now and continue to take the other side of emotion. When others are panicking, we're there with catchers' mitts.


Windows 10 quick-fix for “You'll need to provide administrator permission to delete this folder”, when already the owner/adminstrator

Okay, so I messed about with moving some Windows 10 app folders, consequently ending up with folders I couldn’t delete regardless of owner/administration settings changes I made.
The fast and simple 3-step solution is:

  1. Download Gandalf’s Windows 10PE ISO,
  2. create a bootable USB drive using Rufus (portable version option also available, and