Fakeouts, Supply & Demand. (@dom M JNR) PDF
Fakeouts, Supply & Demand. (@dom M JNR) PDF
This is a journal breaking down my thoughts before during and after fakeout trades.
We will cover:
- The aim here is to find the most obvious levels. Don’t think about it too much
- You can use a line chart to see them more clearly
- We can clearly see a nice support at the bottom, most retail traders will buy as soon as the market hits
these levels
- Let's take a closer look in the next slide
What Really Happened?
- We can clearly see that after several wicks below the support, market made the push
to the upside.
- This was a trade I was watching in real time so let's look at my thoughts while the
market was playing out in the next side.
What Was Required To Trade The
EURUSD Fakeout?
The most important thing is that there was a clear demand zone below the retail support!
- This pair, at the moment, is notorious for fakeouts. So as supply and demand traders
we can find really nice setups
PSYCHOLOGY!
All of the setups we have covered so far would have been losers without proper execution.
Having a proper trading system without a proper mindset will not give you consistent results.
In order to close the gap between your potential and current results you need to analysis yourself and
your mindset when you are taking trades. This is an idea that in often expressed by Mark Douglas
Author of Trading In The Zone.
In the book Thinking Fast and Thinking slow the idea about 2
system which our brain uses to make decisions are broken
down.
Have you ever woken up, looked at a blank chart and said ‘this looks like a perfect trade’, taken the trade and
it went straight for your stop loss lol .
When you trade using system one you have a tendency to make impulsive decisions which can really harm
your trading account.
The majority of traders will most likely be trading based on impulsive decisions, this is why they all buy and
sell on retail levels - leaving a sea of SLs around theses areas. Professional traders know this and take
advantage of this as they have to take out the trades in the opposite direction before market can move
properly in the direction of smart money.
Priming
This is the idea that information that you consume throughout the day subconsciously affects the decisions
you make when trading.
For example you go on instagram and see 3 different traders telling you to sell GBPJPY. For all we know each
trader is taking the same sh*t signal. However system 1 does not know how to validate information from
different sources. Later on when you are on the charts, you already have a bias and are so focused on finding
a sell opportunity that you are completely blind to a high probability buy opportunity.
It is hard to regulate what we see throughout the day however we can reduce the effect of priming by
focusing only on trading rules and trading responsibility for our trades.
“ You are not right or wrong based on whether the trade goes in you direction or not. You are right when
you follow your rules”
Things To Observe:
The rest of the presentation is just going to be fakeouts that I have traded recently with my
thoughts on them.