Losing EURUSD trade

[Geza Kovacs]

Dear Djamal and other traders,

I want to show you my live trade on EURUSD, which ended with an sl. I ask all of you, please check it and let me know, what was wrong.
On Febr. 5. I open a long EURUSD based on below (see the screenshots).
– 4HR reversal signal
– downward slope of longs on D1, H4 and H1 timeframe
– Option strike target and MT stop target inner range

After that on Febr. 13 after the CPI US data, the pair was marched down, and hit my sl. On the H1 chart I see the massive longs on the market, but it shows only after way down. I understand that there is a delay, but these longies should not see as upward line of longs? I marked on the H1 screenshot. What should I have done to avoid this sl?
Unfortunately I also had AUDUSD and GPBUSD long, and both of them hit sl. I made some mistake, or it was the news?
Please share your thoughts!
Thanks!

[ImpliedOdds]

Hi Geza. I am learning as well, so i’m not any authority for sure, but I believe that the CPI whether used as an “excuse” or if it legitimately effected price had a role in the price movement and is something all forex traders must be aware of. Your trade is basically the mirror image of my losing short USDJPY trade. Just my opinion, but my hunch is that Djamal will tell you that these reports must be kept in mind.

[ImpliedOdds]

I personally feel like the H4 had a lot going in it’s favor and justification for your trade. However, the H1 looks like it had a large green spike just before the collapse indicating that many were “betting” on long. This of course created a good scenario to crash price against these longs. This is one of the drawbacks/challenges for those who can’t watch the markets all day. You may have had only an hour or less to recognize that large green spike (buyers) to close the trade before it collapsed..

[FractalFreak]

Hi Geza,

let us go through it;
look at the first screenshot:

Below the price, there is a big cloud of LTS (pink lines).
Above the price, we have all the DM longies.
The latest DM flow is long.

Below the price, there is a rather obvious low as a target (see orange box I drew in):

[FractalFreak]

day chart:

[FractalFreak]

So while the first low has just been taken and there is no proper squeeze against the DM longies yet,
note that the red squeeze line is downward sloping (showing that shorties are leaving………….while you want them to enter) and the DM longies are entering (which can easily result even into a full day chart squeeze).

So that quick “big picture” analysis shows you, that you have to be SUPER careful trading against this development,
namely, a day chart LTS stop-hunt against the old and new DM longies.

Now let us also look at the lower timeframes:

[FractalFreak]

First the H4 chart:

[FractalFreak]

It is not difficult to see that the market will evolve into a “failed reversal” rather than an actual H4 reversal,
yes, the previous low has been cleared, but other than that nothing allows for a H4 reversal:

There are old and new DM longies clearly trying to trade a reversal up, with their stops below the low.
Of course, the SM needs to clear these out, because otherwise they would win!
Look at all the DM long position on the y-axis above the price! Do NOT join them!
So do NOT buy if you see all this green on your chart. 😉

Also, as you can see from both squeeze indis, the DM buyers are increasing, while the sellers DECREASE. You literally want the opposite for trading the H4 reversal.
Last but not least, there is not even a Net DM yellow area, so the “lasso principle” does not apply neither.

The news were just speeding up the process, without the news the price still would have gone down, albeit slower.
Even oin the H4, the LTS were VERY close.

Ask yourself, why would the SM not take the LTS, thus kill the longies and go up thereafter?
Do you see that?

[FractalFreak]

Now let us look at the H1;

firstly, the OST was filled. And yes, there was the IR MTS above the price. However, while the MTS was within reach, the big US news led the SM Algos to fish against the DM longies.

Note 1: One MTS within reach has not much value if the bigger time frames are clearly bearish as they were.

Note 2: We did NOT have a “Golden combi” here, for that you need a proper H4 reversal setup + the IR target. We did not have a H4 reversal here, as explained.

Now, without the news, the SM could have taken the IR MTS, however, the bearish higher TF bias + news were a very clear verdict for the SM.

Do you see that?

[FractalFreak]

So to summarize,
while there was no proper squeeze against the longies yet,

still, the higher timeframe was clearly bearish with all the longies. Certainly, we did not have the minimum conditions for a H4 reversal. Instead, we had all we need for a “failed reversal”, meaning EU doing down against the longies.
The US news just sped up that destiny.

Do not trade “freestyle” towards an MTS before such big news, in particular not if the SM clearly needs to get rid of all the DM longies in the way.

[FractalFreak]

Note how the SM then took the upper MTS as soon as some DM shorties came in:

[FractalFreak]

So as you can see, everything makes again complete sense;

the SM killed all the old and new DM longies.
It took the LTS.

Then, once longies left and shorties entered, they went up and took the MTS.

That way, BOTH parties on the DM side lost;
the DM longies who tried to buy EURUSD “cheaply”, as well as the DM shorties who entered expensively into the “momentum”.

THIS is how the SM operates!
THIS IS how they make the DM traders lose,
no matter whether they “bought” or “sold”.

Do you get this one?

[FractalFreak]

This is the SM Algos re-engineered in front of your eyes.
There is NO WAY of capturing all this with a naked chart! That is BS. That is why ICT is MISLEADING. It is all DATA-driven. The price chart is a MINOR and as such minor factor.

Btw, in terms of risk management,
if you buy EURUSD and GBPUSD and AUDUSD all three at the same time, then these three count as one trade.

[FractalFreak]

“However, the H1 looks like it had a large green spike just before the collapse indicating that many were “betting” on long. This of course created a good scenario to crash price against these longs. This is one of the drawbacks/challenges for those who can’t watch the markets all day. You may have had only an hour or less to recognize that large green spike (buyers) to close the trade before it collapsed..”

Yes ImpliedOdds, that is correct.

D

[FractalFreak]

Of course, ppl with such limitations may have picked an SL further away and in this case, they may have gotten away with that.

Or, others may have entered via limit, seeing that there way way too many longies in the way days before already.

D

[FractalFreak]

Also note,

the DM longies seeing the naked chart thought “EU came off so much, I will enter cheaply now”, just to get stop-hunted.
The DM shorties thought, “there is downside momentum now”, and sold after the news, just to be stop-hunted.

[FractalFreak]

[Field10]

If you can’t avoid biased thoughts you have an old mindset that needs to be changed.

[Author]

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