How to trade on FOREX market with analysis on futures

If you want know how to see big players on the FOREX you can't do it. Forex market decentralized and nobody know real volumes. But you can see volumes on futures where are real volumes.
Because futures and spot markets have big correlation, so big volumes on futures could push price.
Let's check how is trading one of the trader who use futures analysis. And he  places positions on Forex.
First at all he do an analysis of daily chart. He marked  levels where  were accumulated big volumes before and price several time rebounded from them.  He understood price action and expect for rebound. But he  wait  for confirmation.

When price rised he checked that were initial volumes for purchasing. Too risky for opening short position.

When price was tested  level of resistance, was accumulated big volumes and price reversed. He opened short position during price consolidation. It was good trade with good reward.

And this method he use for trading on others currencies.

So, when you use volumetric analysis of futures you can deeper understand  price behavior. Daily volumes are good as levels for support and resistance. Local splash of volumes in this situation could be as confirmation of rebounds or continuation of movement. 

Bellow there are several examples how to trade FOREX with futures analysis:

Follow us and you will know more how to trade with volumes!

How to understand end of movement in middle-term ?

If you use market profile or volume profile in your trading you have to pay attention for the shape of the profile. In the end of movement there are typical forms of the profiles.
One of them classical P profile - the end of uptrend. When you use volume profile you can see it more accurate. Let's check 22 and 29 of Nov on NQ ticker. As you can see at 22 Nov was a classical P profile and after price rebounded down from it. And when 29 Nov started build the same situation it was a good chance to open short position with a little stop-losss and big reward.

And  I did it.

Four biggest Mistakes in future trading by Jay Kaeppel (part 2)

We Continue read and mark quotes of this interesting book

Mistake #2 Using too much leverage. ...Leverage is the double-edged sword that makes a few peoples very rich and upon which the majority of futures traders fall...Unfortunately, the blunt answer to the question "why do traders use too much leverage" is "ignorance"...If you do not not have any way to back test your system than the suggested formula for calculating a reasonable amount of capital to trade one contract of a given market is:
((Initial margin * 3)+ Largest overnight  Gap in $)/2

Mistake#3 Failure to controle risk. The sad fact of the matter is that the majority of traders don’t get around to addressing money management issues until after they have suffered an unexpectedly large decline in equity.
...In reality, most traders would benefit from “fearing” the markets more than they presently do. A fear of losing a large chunk of money quickly is what causes traders to keep their guard up...If you can sleep with the level of fluctuations in your account you are far more likely to stick around for the long haul...The costliest mistakes in trading are usually made when the pain of losing money (and/or the fear of losing more money) becomes too great...The primary purpose of using multiple trading methods is to attempt to smooth out the equity fluctuations in your account...
Mistake#4 Lack of discipline...A lack of discipline is defined as failing to do what you should do in a given circumstance...Of the four biggest mistakes in futures trading, a lack of discipline is the most difficult mistake to avoid...If you succumb to fear or greed or ego you become your own worst enemy...The danger is that if you are constantly tinkering with your existing system, then you may never truly develop the confidence in it that you need to have in order to stick with it when the going gets tough...A lack of discipline can destroy even the
most talented and best prepared trader.

In the long-term there is one drawback: In so doing you have stepped down the path of the 90% of futures traders who lose money. Whatever the market did to you to cause you to act this way is not relevant. What is relevant is this: only you can make the decision to turn around and head back toward the right path and to stay there.

Four biggest Mistakes in future trading by Jay Kaeppel (part 1)

For my opinion - great book about trading. A lot of book show us and recommend what we have to do but also very interesting what is wrong.

Quotes from the book:
...Waht is about futures trading that causes so many people to fail?... It is beacuse future trading is unlike any other endeavor in life.
I'm totally agree with this quote. A lot of traders want to earn a big money but  they are too lazy to write a diary, or to do hometask. They wish to be supermen who can make a lot of money just by one view on the market.
...There is much to be gained by learning from and attempting to emulate traders who have enjoyed a great deal of success without paying some dues along way.
A lot of traders try to find Holy Grail in trading, but don't understand that it is a hard work with big emotional pressure.
...Mistake #1 Lack of trading plan...Most (traders) so anxious to get started that they just don't take the time to make the proper preparations...one of the greatest dangers in future tradingis danger of high expectations...Traders who focus too much attention on how much money they might make run a very high risk of a frightening slide down a steep slope...One of the truest maxims in trading is "if you absolutely, positively cannot afford to lose any more money, you absolutely, positively will lose more money."
Big expectation of results from our trading and plan how to spend your future money is the biggest emotional pressure during your trading. Imagine if you put big sack of grain on yours shoulders and hold it during trading. It is not easy? Yes? But it is the same, maybe less pressure which we have when plan to spend our winnings.

...no inherent advantage to trading more often or less often. The question to be answered to determine which approach works best for you....Using an unemotional systematic approach to trading can greatly increase your odds of success because it can remove your ego form day-to-day decision making process and can reduce your emotional attachment to the money in your trading account.

As the Dr. Elder says - you have to earn the right to listen your intuition after 5-10 years of experience. But when you novice - just use your strong rules in trading based on previous observing. Or observe strictly the plan.

To be continued.

Book: https://www.amazon.com/Four-Biggest-Mistakes-Futures-Trading/dp/1883272084
Author: http://www.investopedia.com/contributors/337/

EUR/USD

We have a big accumulation above previous important volume level on week chart. Be ready for rebound in middle term.

Is it possible to use short stop losses with volatile instruments?

I think yes. Some of traders think that  will a lot of false stop - losses with volatile instruments. Sure you can receive some stops. But if you know conditions of input and use market profile and volume profile you can do it.

Below several examples for today trading:

FDAX

NQ

What about direction of trading?

There are 2 kinds of traders. One of them trades in both direction (buy and sell) other only in one. I mean that for beginner better to trade only in one direction, cause you will avoid mistakes. Overtrading is the biggest problem of traders. When you decrease amount of  your trades you decrease your losses. But  professional traders could do it. And trading in both side with good result is mark of mastery. But how do identify that local trend  broken and new one started? If you will pay attention for reaction of price on local volume accumulation you will  it.

Please look for the example. As you can see was down trend. Price was stopped by local volume accumulation. And next bar bounced from them. This local volume area is ideal target for open long when price tested it once more.