I've been trading for 5 years and in that time I've already traded through about 3 major crashes. Sadly this is the new normal and we better get used to it.

When trading through potentially tough times, mental discipline becomes even more important. It's very difficult to see all these pips and ticks going up and down in front of us and not pull the trigger.

However, we really need to try and stay focused and only trade our setups. Look for a base on lower timeframes, such as 30 min and 15 min. If it's later in the day, check your market profile for most likely day type development. Ask yourself how far in or out of balance the market is. Compare that information with your possible consolidating levels, also created that day. And then when you see an opportunity that resembles your trading plan, make sure you do take it. If it works it works, if not, leave it alone and go do some exercise.

We are all human and I've also had some discipline slips, which is why I wanted to remind everyone to do whatever they can in order to stay away from gung-ho trading. Whenever I decide to trade without first visiting the gym and beating the ego out of me, I trade like an idiot. I'm not afraid to admit that. Impulse control comes easier to some than others. I am one of those others - I need strict rules, a tough exercise regime involving a lot of weight lifting, followed by creating a zen atmosphere in my trading space. I try to meditate as often as possible, because meditation slows down our alpha waves and make us relax, giving access to our rational brain, creativity and executive decision-making. Otherwise as a Mediterranean girl, I am way too impulsive and not risk averse enough to sit on my hands. But always remember - markets have been around for over 100 years and they'll still be around 100 years from now. So just wait another day to pull the trigger, there will be other opportunities.

Trade well.
While many struggling retail traders will continue to look for magical non-existent Fib levels in the middle of nowhere, re-counting Elliot Waves to see where they've "miscounted" and rubbing rabbit feet while praying to a higher power, those traders who have managed to survive in this job over a number of years will almost always know how to locate the real supply/demand. And for this feat, you don't need any indicators or special level 2 data that costs an arm and a leg. Nor does it require knowledge of astronomy and possible order of seasons on exoplanet Alpha Centauri Bb. All you need is your own two eyes. 

Isn't supply/demand just support/resistance?

In short. No, it's entirely different from support/resistance. Comparing apples and oranges comes to mind. Both fruits, but one is a malus fruit, the other one citrus.

Support/resistance is marked whenever there is a low or a high on the chart. Supply/demand is only marked when there is equilibrium prior to the move. Anything else are pivotal highs/lows that are much less important. So you want to be looking for areas of prior large moves that came out of a consolidation - out of previous balance. This implies that prior to the large move, everyone agreed on the price. 

Most struggling traders might look at a chart and know how to read where the price turned. But do they know the REASON why the price turned? I'm not talking about fundamental news - I am 90% a technical trader and news are not a big factor in my decision making process. I am not blind to a possibility of changing interest rates and NFP numbers, but I certainly won't close my trades out if I'm 200 ticks in profit and a UK PMI figure comes out. Why? Because in the grand scheme of things, if my analysis is correct and interest rates are the same, technical side of charts should tell you a very precise story on where market participants agreed on the price previously. In other words, equilibrium. In other words, supply/demand. True supply/demand. 

There are really only about three reasons why prices might change direction. 

First one is profit taking. 

Second one is either short covering or long liquidation. This might also fall into profit taking. 

Third one is a change in supply/demand from previous equilibrium. 

Think about this last one for a minute. If at any one point, all market participants agreed on a particular price, how is that going to look on a chart? 

Something like this? 

A rectangle with several sideways candles. When you see such a price action on your chart, it's a good idea to see what price does AFTER it's created this. Assuming that the price proceeds to move MINIMUM 3x away from the egde of the now very obvious zone (although I aim for 5x because 3x will make you a barely profitable trader until you get your accuracy fairly decent), you can then mark it as your level of interest. If it scores well on the probability enhancers, you may decide on a limit order or a confirmation as your method of entry. 

This works on ANY chart but you have to be VERY exclusive with your levels. 

I mention something called the "normal" formation of s/d zones in my webinars. These "normal formations" are comprised of two candles. When you see these on lower timeframes, like m30 and lower, they are NOT valid levels unless you can find an even lower level base/equilibrium that preceded the move away. Reason for this is because these moves are made by people taking profits, NOT by people agreeing in price!

However if they are located on a 4 hour chart and above I usually go down to lower timeframes to investigate whether there's a "base", indicating agreement on the price prior to the move. If I find my "base" there, I will mark it as my point of interest to make a trade.

Cue Megan Trainors "All about the bass" song :)

Once again, Greece is wreaking havoc on the Eurozone. Whether it's almost-bankrupcy or left-wing party rejecting austerity measures, Greece continues to be an eye-sore to all normal EU countries. 

There's something about Balkan countries that prevents people living in them to see the long-term picture. And when I say that - I'm part Greek part Serbian, so trust me I know what I'm talking about. They are all very much concerned with "me, me, me, now, now, now" attitude. If Greece rejects austerity measures, out they go from Eurozone and they can say bye-bye to free trade with EU and visa-free movements and work opportunities throughout EU. Greece refuses to see how their exit from EU would affect them in a highly negative way.

Even if they do exit, Greece will still be broke and would have to turn to IMF for other kind of austerity. And I seriously doubt that it will be as favourable as the one EU gave them. 

Yes, times are hard for the people, yes they lied about their numbers prior to getting into EU, yes they've now made a mess by electing a left-wing party. So shouldn't here be some kind of retribution for their past actions? Greece continues to misbehave politically, playing mind-games when they're not really in a position to do anything. All they're doing is bluffing. Adding self-importance and boosting egos has never ended well historically for the small countries. The only countries allowed to bluff are those with enough power to actually cause serious harm to economy by NOT being a part of a union.

But my frustration on Greece's inability to see further than its own nose aside, I won't be touching euro-related pairs until this is all sorted out. Events this week on euro will likely be news driven as the situation unfolds with the negotiations, but generally at times like these its wise to not rely on technicals. One piece of bad news can send eurusd plummeting down. Another piece of good news will make it sky-rocket. I would rather play the aftermath of the outcome than be caught in trying to predict how the talks will end. And I suggest you do the same. 

My oh my. Wasn't that one of the craziest weeks ever for the markets?

Thursday announcement from SNB about removing their floor for EURCHF at 1.20 brought the house down, literally - Alpari went bust, FXCM had to be bailed by Leukadia tsk tsk tsk. 

Many times I was asked why I don't trade the swissy - after all it's a currency of one of the strongest countries in Europe. The reason why I stay away from swissy is because a) its a smaller currency and b) I really don't like it when I hear stuff like: "we're setting the currency floor at X price" - purely because that immediately means that the currency is widely rigged by the country's central bank. Anything that's being kept afloat by such practices like "defend 1.20 at all cost" is likely to bring a massive amount of volatility once that floor gets removed. Especially in a less liquid smaller currency. It implies that the price we are seeing reflected in the markets isn't a fair value as perceived by market participants, but merely a price that the central bank would like to keep for their own agenda.

Hence, 2 years ago when I noticed a massive blip upwards spanning around 2000 ticks, looking like a stop-hunt but in reality just a low liquidity volatility moment, I removed all swissy related pairs from my trading portfolio. Last week, my decision to do so was fully vindicated.

But enough of the carnage and aftermath of brokers going bust and retail traders losing their shirts. Surely, there are now some new millionaires as a result of the SNB floor removal. 

Onwards to the topic of EU QE. 

Draghi obtained support from EU justice court to go through with the new bond purchasing program. I've seen a few people around asking "Why did the DAX jump so much? Does anyone know the reason?!"

So let me help those people put 2 & 2 together and lets review what modern practices of QE have shown us. Using the most recent example of US QE - a ridiculously aggressive policy from the FED has seen their equity markets go on a 5-year rally and generally in hindsight it was an exceptional move from the FED that saved US economy. 
Fed chairman Bernanke began the US QE program and caused a huge long-term rally in equity markets. 
Draghi got the green light for QE, German DAX immediately rallied 2%. 

Will history repeat itself? I say, most likely. I expect to see EU equity markets rallying for the duration of QE, because of the influx of all that new cash into companies. None of that money will reach the regular consumer, just like it didn't reach your average Joe in America. This money is aimed towards business to create jobs and to help propel the economy, not to repay debts - this will come later, once the economy is strong once again. I doubt it will cause hyperinflation, in fact US inflation stayed at historically record lows throughout QE. So in conclusion, I genuinely think that this is another great move from Super Mario and I am looking forward to the next couple of years. We live in turbulent, but interesting times and I'm happy to be a part of the action as a trader.