Please explain

[Shalva Kutelia]

Greetings everyone, I feel privileged to be here, wishing everyone the best 🙂

I have a question regarding today’s market conditions and why the price did what it did, but first could someone please explain to me what red lines on the right mean (short position accumulation I thought) and why some of them are thin as compared to the bold ones? To me it seemed like the price was wedged between shorties and longies but then went parabolically down instead of being forced to move sideways, there were far many more stops above too.
My reasoning was that since we have open positions on both sides the price wouldn’t want to move in any direction but, as you know, instead it went right down then back up after a short while, really scratching my head over this one, I guess I could use a comprehensive guide to these indicators in particular ? (haven’t yet come across one on the youtube channel)

Thank you,
Shalva

[Admin SME]

Hello Shalva,

when the PBs on the y-axis are “thin”, it means that they are “in the money”, so at risk of closing.

SME FX

[Shalva Kutelia]

Hi Jamal,

Appreciated

[aj1985]

Hey, on this note where we discuss the indicators I would really love to see a video or get an answer here on the following :
1. How can we better understand the net money indicator – the scale because of the resolution is sometimes confusing . I really dont know what to make of the numbers on the right
2. Same question for retail traders gain – how can we evaluate the numbers better so we know how many r in the profit and how soon the reversal might come. I would love to understand the numbers for this graph too .
If there is a video already explaining all this pls guide me to it.
If only we could get the resolution better I feel I would be a ton more productive and get a better feel for the trades.
Thanks so much !

[FractalFreak]

Hi AJ,

reg. 1. The Net DM indicator (as explained in the video course) shows you whether overall the DM shorties or longies are dominating. It also shows you what the current DM tolerance is and whether we have any squeezes are in the making. It is essential to understand these topics because that way you know how to evaluate the latest DM flow.
For example, if the red squeeze line is already upward sloping and then new DM shorties come in (red bars), there is a high likelihood of the price going up further. In particular if the green squeeze line is already downward sloping (showing that DM longies are leaving the market at the same time).
The overall numbers are not the most important factor here, rather, whether one of the two squeeze lines is above the middle line and what their slope is. That may sound a little more complicated than in actually is, also watch the new yt video where I explain the H4 reversal-scenario vs the failed-reversal scenario (squeeze).

These topics are very important because they literally show you whether the market is “trending” or “ranging”. That alone is a “holy grail” for many traders I guess. .-)

reg. 2. This indicator (also explained in the video course in detail) is valuable information when it comes to trading H4 reversals. A good H4 reversal setup comes when there is a proper DM switch, no squeeze line in the way, major stops have been cleared and one side of the DM even got a little into profit (so that yellow area appears). That is when you have a good H4 reversal setup in front of you. Now, if there is a strong squeeze, sometimes that means that one side of the DM traders was “lucky” to be on the “right” side, then the yellow area can extend for a while. However, the market is then very sensitive to a DM switch (so watch the DM flow).

Does that help?
Djamal

[enbyus1]

lol Was looking at the same as you. Targeting the huge stop(s) cloud above price on H1 and the thing move 30 pips against me quick(Demo trade thankfully)

[aj1985]

Here net money looks long but position amount looks short.
How can we evaluate how much bigger is the Net money than the short positions? is there a way to understand this based on the numbers show here or on the other time frames for this pair? thanks !!!

[FractalFreak]

Hi AJ,

AU was clearly in a squeeze against the DM longies. You can see that pretty easily from the green squeeze line being FAR above the red line. These little shorties were FULLY within the DM tolerance, so I would not try to trade against these. AU came all the way down as expected.

In this example it was pretty easy to see that even on a “day chart scale”, the squeeze was significant (implying an exaggerated downmove whereby the DM tolerance is HIGH, so “small shorties” who got “lucky” are allowed to win).

See here with pointers:

[Tim Tim]

Price is very over extended. Entering a long would be seen as entering expensive. When price has moved away from DM positions this much they are probably already priced in

[aj1985]

Hey @admin is there a better place where we can ask questions ?

[FractalFreak]

Hi AJ,

this forum here is the best place to ask questions because I check it on a regular basis.

[aj1985]

Hey Djamal,I attached a photo. Its from your video with Peter where u were talking about the 4h channel . ( https://www.youtube.com/watch?v=k-7BXEzBtFM&t=552s)
Here u said that there is a 90% probability that there is a 90% chance that the price will bounce around 0.6690 because the smart money wont let those shorties win .
My question regarding this is : the red line seems small, I have no clue how to understand how big those short positions r , however the net money and the recent positions show a lot of longies and just from the scale of the green/red stuff I would intuitively say that the smart money will be more inclined to push the price down quite a bit more and not care about the shorties at 0,6690.
Could u tell me if there is a video explaining the scale of the indicators, how to better read them ?
That would be very helpful!
Thanks a lot !! Love this type of videos, maybe we can get some live videos where we can ask live questions about the trades u took.

[FractalFreak]

Hi AJ,

what is the time stamp for that particular example?

Thanks.

[aj1985]

A 2nd question if u dont mind Djamal.
Here, still on the video with Peter, u said we take a short because 82 scale of longs come in.
In other videos my understanding was that the net money graph is the most important. (correct me if I am wrong pls)
So , here net money is short.
I would have never taken this short tbh because of my lack of understanding of the scale I guess.
How can we compare the net money scale with the 82 scale of the longs coming in.

Thanks a lot !
If this is not the place to post questions like this pls let me know. I am devouring the videos posted 🙂

[FractalFreak]

I guess you were talking about time stamp 50:45.
Trade example. Note that (as I emphasized in the video), this was an ADVANCED trade (since it was against an ongoing squeeze). Beginners should skip such as trades obviously.
However, in this particular example:

– the long-term high was cleared
– the upper H4 channel was cleared
– we had a nice, inner range (IR) MTS cloud below the price
– just above the price we had old DM longies
– we had a “mini DM switch” from shorties to longies
– the squeeze was “old” / this trade was done after a multi-week uptrend.

D

[Admin SME]

Hi AJ,

no problem,
we will ask Djamal to look at these questions.

Gina
SME FX

[aj1985]

FractalFreak wrote:

Hi AJ,

what is the time stamp for that particular example?

Thanks.

[aj1985]

minute 44

[FractalFreak]

Hi AJ,

I am catching up on forum posts now.

Yes, I found it.

I was explaining the following things;
firstly, we were able to predict live that AU would go down against the DM longies which is what happened. That was not difficult. DM longies trying to trade a reversal up, so “failed H4 reversal” down towards the long-term low and targets there, this while the green squeeze line is just about to cross upwards (as we wanted it).
I was further explaining that one can even predict at which price levels there will be at least some kind of pullback, in this case, there was the “red shorty nest” below the price (see y-axis) which is a good opportunity for the SM algos to do at least a pullback to “price in” these positions.

[aj1985]

FractalFreak wrote:

Hi AJ,

this forum here is the best place to ask questions because I check it on a regular basis.

I can only wish that Djamal or someone with a lot of experience would reply.
Thx in advance

[FractalFreak]

So yes, please post any questions you have AJ,
one can see that you got more studying to do. Especially video course vids (re-visit the video on squeezes for example).

Take care,
Djamal

[aj1985]

FractalFreak wrote:

So yes, please post any questions you have AJ,
one can see that you got more studying to do. Especially video course vids (re-visit the video on squeezes for example).

Take care,
Djamal

Appreciate your replies.
Is it possible to make a video discussing every scale on charts?
I feel like I cant make clear assumptions based on the scales at the moment because everything is unclear to me.
IF there is a video already explaining that pls tell me where to look for it. I have watched all vids in the course and ofc will rewatch but couldnt find anything.
Thx again

[FractalFreak]

Hi AJ,

here again my post from the other thread regarding that:

“Regarding the scales,
again looking into the past tells you a lot; let us take GBPUSD as an example. The important part is whether the respective DM flow led to an increase in the Net DM. As you can see, on the day chart, a total DM bar of 215 is already significant. That means when you see a “40 PB” on the H1 chart, you better pay attention. HOWEVER, the DECISIVE factor here is the Net DM indi (that is why it was created). For example, if we are within a squeeze against the DM longies and then a red “40 PB” of the DM shorties come in, this one is fully within the DM tolerance and hence can even win. So that is why we perform multi-timeframe analysis and we also understand that “a trade is not a trade”.
In “low bias” market phases, put your risk per trade all the way down. In high bias phases (squeezes!), you can go for it. The best traders are highly adaptive and adjust according to the bias. That is where the money is.
You need to differentiate.
You cannot just simplify with “I just trade against any PB that comes”. That will NOT work, obviously. A PB is not a PB. But the MK shows you what the situation is overall, so that way you know how to evaluate new DM flow etc.
It is not rocket science.
Just accept the market structure as it is. Do not come with own ideas regarding “what needs to be done”, like “today I will look for shorties and trade against them”. Mr. Market decides which setup you can take and which one not. And without the MK you are completely blind. You have NO way of knowing whether overall the DM is long or short.
You have no way of knowing whether there is a DM switch, or whether the main targets have been cleared, or whether a PB nest needs to be priced in.
That is why “naked price chart trading” does not really work in the long-run, yes, that includes any SMC. Oh, you see a “change of structure”? Really? Just because there was a deeper pullback? As you know, if then DM shorties come in, the price will again go up etc.
That is why I recommend to really understand the actual market structure (so the MK) first, the price chart itself then helps a lot but on its own a naked price chart does not really allow you to consistently predict. I believe that this is rather self-explanatory.
Just be careful to not fall into a situation where “you cannot see the forest because of the trees”. The H1 can be useful, but be aware where we are on the other time frames, near a day chart MA, near a H4 reversal band etc.
Follow the steps and you will be fine.
Do not do freestyle stuff (unless you have sufficient experience that is…..then you can start to stretch things a little……like taking a trade against a squeeze here and there etc.).
If you are still learning, stick to the high bias stuff.”

[Author]

Posts