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  #751  
Old Aug 10, 2010 9:41pm
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Notice the huge push by buyers which fails and ends up closing lower than open price. See how the market reacts to this.

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  #753  
Old Aug 10, 2010 9:50pm
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We are focusing on long wicks. Long wicks is the first sign of weakness.

Look at first up candle. Hear its story. There was alot of buyers who pushed hard however sellers still managed to keep them under control and moved it back down creating that long wick.

We dont know what happens on next candle but when its forming I would watch price go back up to the tip of the high wick and 'bounce'



Once I witness the bounce I will enter 'with flow' and place a hard stop loss above the high of the wick (make sure you leave space)



Very small risk for something big. And it gets so much exciting when you allow this position to grow in line with the weekly/monthly trend
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  #754  
Old Aug 10, 2010 10:01pm
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Wicks is the first sign of weakness. It shows traders leaving, and opposition entering.

Long wicks are sign of weakness.



Look at the uptrend. Notice the last candle. A struggle between buyer and seller. Their powers are evenly matched. They are telling a story. Sellers had enough of being pushed around and started gathering power. But failed to make a close lower than open. Anyways, the fact that buyers couldnt close higher than open price + long upper wick is a sign of weakness from buyers. I would focus on the next candle happening.



Look at the bold down candle. Very short wick at top. No short wick at top means no buyers or buying power. Buyers are now leaving and sellers had enough and pushing it hard down.

I will enter on next candle but this time, there is no wicks to base entries. I could use the open price of the down candle and try and find a bounce. Bounce happens near open of previous candle, 50% fib, or tip of the high wick. Look around that area for bounce.



Sometimes I enter at 50% fib if the hard stop loss I place above the previous candle is not too large and also on the looks of the current bold down candle.
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  #755  
Old Aug 10, 2010 10:12pm
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It is disheartening to see many capable traders ignoring wicks. Wicks is the first sign before the formation of candle. Its how I have positions on wicks on daily candle and traders wonder how?

Pin bar. All traders agree pin bars are reliable indicators.

Its reliable cause of the long wick!



There are many shapes/sizes and placements of pin bars. However pin bar is a story of epic tragedy. The last candle is a pin bar in my personal opinion. Some traders disagree because its too large to their taste. However look at the previous 3 up candles. The body of the pin bar almost comes back 50% of total distance/price moved and the wick is almost twice as long as the price actually moved. That is a legit pin bar. Or whatever traders would like to call it.

Its telling a story about group of buyers making slow steady small progress, and then alot of other buyers gathered force. But, unfortunately, sellers couldnt take it anymore and totally dominated their efforts in one single move and ended up closing lower than open. And to add further embarassment to buyers sellers came down to 50% with one candle which buyers did it in 3 candles. That is a huge amount of power that will not 'suddenly' vanish in the next candle.



All other traders appreciate this remarkable push down and joined in. Candle after pin bar has small wick at top. What does it mean? Hardly any resistance from buyers.

The problem I dont like about pin bar is that most of the time the price move is so powerful I dont get a chance to witness a bounce near the open of the previous candle or top of the wick or 50% fib. I wouldnt enter by looking at this chart and place my stop loss at top of the pin bar, thats too much. However I now have inside information that at least for the next 4-8 hours it will be down. What do I do?

I zoom into smaller timeframe and use this inside information and stack positions aggressively.

Last edited Aug 11, 2010 5:59am
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  #756  
Old Aug 10, 2010 10:22pm
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Lets continue on.

Uhh? Whats the last small candles at the bottom?



Long down wicks??

What does it mean??

First sign of weakness for sellers

Its telling us another story. It means, sellers had enough fun and most are leaving the scene.

3 medium sized wicks 'bouncing' around the similar price. What does this tell you?

A very important message: Sellers cannot penetrate that area! They want to but not enough juice. What do you think it will happen?

Sellers will leave and become buyers and new buyers will jump into it at the sign of this weakness.



I can position myself ready to get in the action at 2nd/3rd bounce. I can use smaller timeframe when bounce happens and have a position on the wick and very small hard stop loss below the 3 wicks. Very small risk for something spectacular.

Last edited Aug 11, 2010 5:59am
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  #757  
Old Aug 10, 2010 10:31pm
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Lets now focus on last 4 candles.

I like the bold up candle. Sellers are leaving and new buyers are jumping on at the sign of 3 wick weakness before.

Uh... but..

2nd candle is inside bar.

Does everyone know the story of inside bar?

Inside bar is when buyers and sellers are not pushing anymore and both staring at each other. Just like western movies when there is a pistol duel. They are standing facing each other in the dusty desert waiting for one of them to draw their pistol first. Its that very climatic moment which is called a inside bar.



Lets just say, I missed entering on the wicks before and ended up entering at inside bar candle. I wouldnt know it would be an inside candle cause I would have just entered at 50% fib and place my stop loss just below the open of the previous candle.

I would have suffered a drawdown but would have stayed in cause if price did breach/closed before the open of the previous candle, only then would I admit my defeat.



Close call. Price did come back to open of the bold up candle but couldnt breach. Infact it 'bounced' and I was hoping such move. What do i do??

I would now zoom into smaller timeframe and use this inside information and enter well with the flow of bounce. I will have a postion on the wick.

Sellers tried hard twice to push it down to new lows but couldnt. Their power is diminishing for now and that merits another position from me.

USE THOSE WICKS
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  #758  
Old Aug 10, 2010 10:42pm
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We have just analysed/read the above. This is eur/usd 4hr chart. Each candle is 4 hours. Plenty of time/space for you to plan your pinpoint executions using the inside information here and then using that info in smaller timeframe.

I say this again, but it disheartens to see many many capable traders ignoring long wicks. This is first sign of exhaustion. If you are fighting someone professionally you need to look for signs of weakness; are they left/right handed, any repeating tell tale signs.

This weakness is the best place to attack.

The quality of decision is like the well-timed swoop of a falcon which enables it to strike and destroy its victim.
Sun Tzu

Last edited Aug 10, 2010 10:58pm
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  #759  
Old Aug 10, 2010 10:56pm
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Most often than preferred, you will arrive too late in the scene if you wait for the close of the current candle. You need to be looking within the candle when its 'forming'

You must look for clear bounces and then enter with very small stop loss at next s/r area but sensibly and not too tight. (Just one of the methods and I will explain more methods like this tomorrow)



All candles tell a story.

Look at that huge long candle. Looks like jimbo the zumbo has finally arrived for Mr Buy. Mr Buy, Mr Buy2, Mr Buy3 who is now back to wearing normal mens underwear and jimbo have gathered force.

uh...

Price stalled. It has barely made new higher price on the next candle. Price went just above the wick of the previous candle but then bounced. However not enough energy for remaining sellers to push the bounce any further down.

I wouldnt do anything at the moment. Perhaps I might have 1 position when I saw the bounce but I will do nothing more. My stop loss would be just above the wick.

3rd candle is inside bar. *whistles western tune* Both buy and sell gunmen staring at each other waiting for someone to move first.

Unfortunately the last candle would have stopped me out on a loss. It happens.



Lets now focus what happened next. Price moved well below the range, this is a breakout! But i need to know for a fact that no smart buyers is going to jump in and surprise me. While the last candle is 'forming' I would notice price go above the previous wick and then 'bounce' down again but this bounce down would be more rigorous then before as it covers more move/range (there is momentum on this bounce!).

I truly love seeing wicks reach a certain 'area' or price and cannot penetrate and when they bounce back with momentum you can bet that I will be already on there with my tight stop loss at top of the wick.



See how I arrive in the scene much earlier than most and have tighter stop loss than most and capture most profit.

Im scouting on 4hr timeframe using wick bounce.

I used this method for a long time and still use it often.

Sincerely,

Graeme

Last edited Aug 11, 2010 6:03am
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  #762  
Old Aug 10, 2010 11:18pm
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Quote:
Originally Posted by Chorlton View Post
Graeme,

Quick topic-related question:

How many of the previous bars are important to take into account when analysing the current action? At what point do the previous bars become unimportant?
Good question.

Its all relative. It could be just one candle before or 10 candles before. Usually its between 1-4 candles.

To prove its all relative.



4 candles. Whats the story? Buyers are winning but only slightly. They are taking baby steps upwards. No momentum. They look tired. Sellers look at this sign of weakness and pile on pushing the price well below most of the buyers effort in the first 3 candles. Huge power down by sellers.



Or you can just look at that last 2 candles (this is same chart, candles). Buyers tried hard to make a new high but failed on the way. It couldnt make it to the top of the wick but I would notice the bounce when the price is coming down towards open of the red candle and then I would enter there at the open.

What happens after?



Look for long sized wicks. They are not common but definitely worth the wait.
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  #766  
Old Aug 11, 2010 3:05am
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Most important aspect of price action is that it gives a 'reliable' hindsight to which way the market might move.

When I mention 'reliable' it means not all the time but enough times.

It is very imporatant to interpret price action without any biased views.

It is also traders ability to control risk and prefer to use smaller hard stop loss but sensibly. Just above/below the next s/r is the most sensible. This is why inside bars are so attractive. Cause the price range of inside bar are usually small, traders can blindly enter on breakout and place stop loss at the opposite end of the whole inside bar and it will still be a relatively small loss.

On the other hand, pin bars have potentially a bigger range. I would never enter just cause I see a pin bar but I would prefer to see the price retrace to either open of the pin bar, 50% fib of pin bar, top of the wick of pin bar before bouncing down again. However I can enter if there is a big momentum without any retrace after the pin bar.

Now I say something very very important.

Interpretation of price action will never be 100% accurate. It will be a reliable hindsight 'when' it happens.

It is your job to 'ensure' when your interpretation of price action does happen to your 'forecast' to MILK IT AS MUCH AS POSSIBLE without increasing your risk.

When a pin bar happens on 4hr chart and you know its going as planned, please do not sit there and rub your hand in glee. You should USE THIS INSIDE INFORMATION TO YOUR ADVANTAGE. Jump into 1hr, 15min, 5min charts and enter as many positions towards the intended direction. Sensibly and as planned. This is where your razor sharp entry methods are required.

And after few stacks of position, monitor the strength of the move. If the movement is dying down and we have 5 positions alive what do we do?

Diversify. We close out smaller 3 positions for a small profit and keep the larger 2.

Mini diversification on mini timeframe is same as doing diversification on bigger timeframe after bigger growth.

Other systems/method on this forum limits its potential growth/profit. And it is very disheartening to watch it happen as there is so much more than the 80 pips they just extracted.

If there is a well known method to enter on s/r break on higher timeframe. Trader must not stop there they must use this inside information to the traders advatange and milk it as much as possible.

Below is a true story and very important for all traders to understand this story fully.

I remember few years back on gbpy/jpy, there was an inside bar with a tremendous momentum breakout going down after it.

This breakout lasted 3 weeks, and it started with that inside bar on the 4hr timeframe. I could have been the 'average' trader and just enter on breakout with 1:3 and bank about 90 pips. Be very happy and move on and look for another one.

That is seriously limiting your potential.

For the next 3 weeks, price moved 900 pips. I based my first interpretation on the 4hr inside bar and then zoomed into smaller timeframe and comfortably stacked positions continuously. I diversified near the end of 3rd week and closed half of the smaller legs for a very large growth/profit into trade balance and kept larger half of the legs.

Most of the larger legs died however 3 remained to fight for me further 8 more months when I finally closed them out for thousands of pips each.

How did this all start??

From that single 4hr inside bar.

Look inside the inside of the inside.

Sincerely,

Graeme

Last edited Aug 11, 2010 5:46am
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  #769  
Old Aug 11, 2010 4:31am
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Quote:
Originally Posted by songbo View Post
hi Pipeasy,

Hope you can show examples of how you stack positions based on 4hrs setup. I like the idea of high probability setup and bet larger...
Good question.

What is your '1 thing?'

To see a pin bar on 4hr chart and to know which direction price is going is already knowing more than half of the information.

My '1 thing' is judging momentum on lower timeframe. I request that you look for your own '1 thing'

It could be trendline break, s/r break, .00 breakout, mini pennant breakout, order flow breakout, but we would know which direction to enter. This is putting the advatange on our side.

If we know our opponent is a left handed boxer, then we can anticipate heavier punches and more frequent punches than kicks and from his left flank. Not all the time but most of the time. Make sure when he does reach out to punch with his left, you are ready to intercept and pummel him in anticipation. However when he does use an occasional right handed punches make sure your defense is tight.

Sincerely,

Graeme
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  #770  
Old Aug 11, 2010 4:42am
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Quote:
Originally Posted by wooli View Post
Hi Graeme,

Your thread just keeps getting better & better!!! Awesome!

I don't think this has been asked before and my apologies if it has.

When you enter off a wick/previous bar open/50% retrace do you:

a) Use a limit order

b) Wait for price to retrace past your proposed entry level and then use a stop order when price starts to flow in your anticipated direction

c) Use manual discretionary entry

Thank you

Michael
Good question, Michael

More B and C than A.

I will only use A when Im stepping out of office and the setup is very tempting.

For example, after a long wicked candle. I watch the next 'formation' of candle closely. I want to see a retrace.

Does everyone know what retrace is? It is the the last attempt of buyer/seller trying to push it back to their direction. The last gasp of breath before dying.

Retrace could be very short or could be quiet long. I prefer to focus when retrace suddenly 'stalls' at opening price of the previous candle, or at 50% fib of previous candle, or 'near' the price at top of the wick.

You need to look at smaller timeframes to see it stall, preferably use 5min. Sometimes the bounce is very clear and violent. Price reaches 50% fib of previous candle and then an opposite long bodied candle suddenly appears on 5min chart. That is order flow and anticipation of other traders. We dont care about x1 single 5min long bodied candle but the momentum after it. If there is momentum I will enter.

I prefer price to reach near the top of the long wick on the candle before and suddenly lose power and start dropping. You can set a very small stop loss above the top of the wick and enter. Very small risk for potential big returns. Not successful 100% of the time, but enough times to create a very large profit everytime it does happen.

Sincerely,

Graeme

Last edited Aug 11, 2010 5:27am
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  #771  
Old Aug 11, 2010 5:40am
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Quote:
Originally Posted by luqmanz View Post
Welcome back sir .. thank you for your guidance ...
I've started practising your method since yesterday .. I just managed to deploy 11 positions with SL at BE in 12 currencies ...

I improved my entry with the golden rule that you taught "Long above Daily Open, short below Daily Open".

One question. How do u use the EMA to decide when to diversify .. ? Im planning to diversify when the price is between blue and red since it could be the turning point of the current trend.

Thank you sir.
Good evening, luqmanz

I almost missed your question.

11 positions with SL at BE is impressive. Good work.

May I ask the following for your benefit:

1. How much did you lose (realized) to establish 11? Hopefully less than 100 but no more than 300. If its larger then please look into tighter entries and practice. And try to partcipate less aggressively. We need to space it out.

2. How would you feel when one week later only 1 is alive?

3. How would you feel when one month later none of the legs from this group is alive?

I use ema just to see the direction of the trend (the angle/steepness). Although I personally see 5ema on daily/weekly chart as the 'real retail' price however I would choose not to base decisions on when to diversify/exit from what ema line is showing.

I diversify when I feel uneasy and there is nothing more than that, a gut feeling. The only thing you need to guarantee before diversification is ample time (weeks/months) for growth on the group and that you are diversifying for 3 golden things.

1. Replenish trade balance
2. Add realized profit into your trade balance, increasing your equity
3. Keeping few of the larger legs

This will clear the whole scoreboard to zero which definitely helps with your emotion.

When price reaches between blue/red could be a turning point for a new direction or could be a very cheap price to add position in the current trend.

But you are correct to diversify when price does enter between the 2 lines. I would most likely do the same or sometimes I risk little more and let it play out by not diversifying.

Lesser number of diversification = Greater growth/profit in the long term
More number of diversification = Smaller 'guaranteed' growth but also retaining a smaller interest for infinity growth.

Its give or take with pros and cons on both side.

Very good question

Sincerely,

Graeme

Last edited Aug 11, 2010 6:12am
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  #772  
Old Aug 11, 2010 10:55am
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Today I have explained to all what wick really is. Im sure alot of traders already know what a wick is and what it represents but unfortunately it does not get mentioned enough.

I witness RSI divergence, macd, ADX being talked more frequently than the actual wicks or candles.

Did you know that after the wick, candle has formed and then this data is calculated into the indicator?

Price action -> wick (candle) -> indicator -> your action?

or

Price action -> your action

You will always arrive first on the buffet table by correctly interpreting price action. Indicators should only be used as a reference/confirmation of your beliefs.

Wicks are a great indication of exhaustion/weakness of current movement.

Question: If you are planning to attack on counter trend when do you think is the best time to execute an attack?

Answer: The best time to attack will be ofcourse when the opposition is slowing/stalling/losing strength. But never hit alone first, always hit together with other groups of attackers

Wick entries do not result in 100% success however more than enough.

If I were to place a hard figure I would say out of 100 wick entries I do,

20 would be losers with small losses
30 will breakeven on first attempt and I will never reattempt 2nd on same wick or same setup
35 will produce a good short term profit captured in my mini diversification a few hours or few days later
10 will capture very large medium growth few weeks later
5 will remain growing as my infinity growth legs

These stats are very close to what I have achieved over the course of last 2 years.

Let me show you some failed wicks so I can lower any readers 'bloated' expectations.



Look at above candles. Long bold up candles. The excellent thing about these candles is there are no wicks on the bottom. What does this mean?

No selling pressure. Everyone is buy for now.

Look at second candle. Look at that huge wick. What does this mean?

Its a sign of weakness for buyers. And I have a feeling sellers are going to pounce at this opportunity.
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  #773  
Old Aug 11, 2010 11:03am
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I will now focus on what happens on the next candle. Im looking for a safe place to enter sell; open price of previous candle, 50% fib of previous candle, retrace near/same price as top of the wick.



Interesting. What does the new candle try to tell us? Whats its story?



Open price is already 50% of fib of previous candle so im looking for something else. It starts to retrace upwards. Good I want to see buyers gasping for their last breath so I know they are dying. I was hoping a nice clean 'bounce' at/near the top of the wick but it fails to get there. Ok perhaps buyers didnt even get a chance for a last gasp. I would watch the bounce happen on lower timeframe (5min) and see the price coming down towards open of the candle again. I would enter and place a stop loss at top of the new lower wick. Why? Cause if price somehow finds enough strength to get back up again then it has a strong purpose and would most likely be a breakout upwards.

Good momentum with alot of power going down. BUT. Buyers start to gather force again and start to push back hard. Price closed lower than open but you must now look at lower wick of the new candle!
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  #774  
Old Aug 11, 2010 11:17am
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The table has now turned. Now we know the weakness is on the sellers side! I was hoping that candle would be a bold down candle but you cant expect anything to happen in forex. You just have to follow.

I would most likely move my stop loss to breakeven for that position cause as we all know when momentum dies I will move on to different pair.

What if I stayed? I now know many buyers have gathered their force and is not willing to lose this fight. What happens next? I would watch..



Sellers want to win this fight and they are fighting very hard but there is almost even number of buyers also fighting very hard not to lose. Price is not moving much but the wicks are crazy. It moves + into buy territory and then + into sell territory only to have the close price very close to open price. Its almost a draw but sellers are winning slightly.

What do you think I have noticed??? Something very very important just happened. What is it?



The new candle lower wick went to the same/near price of the previous wick and 'bounced'!!

But, unfortunately, I was away at dinner when that happens. But what does this tell us? That is two attempts by sellers to try push it harder but failed to make any new lows or close lower than before. Sellers are losing their grip here. Next candle I would look for buy entries now as I know sellers cannot continue pushing as hard as this, they will soon tire out.
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  #776  
Old Aug 11, 2010 11:41am
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Im hoping for a big push up with new buyers noticing this weakness of sellers. Sellers cannot continue pushing hard as this. They need other sellers to jump on but other sellers are not happy with those wicks too. Infact other sellers are now thinking of becoming buyers. Sellers are in real trouble here. Something big is coming.



???

That is just embarassing. What a pitiful attempt by buyers. No short wicks and its telling me buyers only managed to push the price to open of candle just 2 candles before? There was no retrace so I would try and base my entries with momentum and Im sure there was no momentum in that midget candle. Something to notice here is that buyers did take back the control of the situation and pushed the price above the opening price. I dont know why but sellers are taking a rest at the moment.



What does that tell us? Buyers and sellers now dont know what to do. They are baffled. Both tried so hard in the last 4-5 candles and now is almost same as 5 candles ago. They dont what to do.

In situations like this, you need to expect the unexpected but one thing for sure it will burst out of that pitiful range. Can you see the situation has now turned into a breakout setup?



Price cannot stay in a range bound too long and it will breakout. I will only look for breakouts with great momentum. I will be poised to take buy or sell that breaks out from that last candle range.



Amazing momentum. No short wick. Sellers stayed quiet and buyers pushed the price clearly out of range. Fantastic! I would definitely have a position on the breakout and easily have SL moved to breakeven.

But in the markets, expect the unexpect to happen.



That was a surprise. Sellers had groups of friends waiting and the new buyers who pushed the price out of range decided to close out and go home. No warnings from the wicks.

2 attempts and 2 breakevens. No happy ending but Im content.

Can all readers see how I might interpret price action and minimize my risk to bare minimum but shooting for extra large rewards?

And this is just wicks....

I will try continue with candle bodies another day.

P.S You can be a successful trader by just using wick interpretation. It could be someones '1 thing'

Sincerely,

Graeme

Last edited Aug 11, 2010 12:01pm
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  #777  
Old Aug 11, 2010 11:49am
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Could someone kindly explain why some of my pics are broken?

It is disheatening to see my efforts dwindle away into a void.

Is it an imageshack issue?

Edit: Apologies, Im too tired tonight to continue. Please think about wicks for me. It can be used to a traders great advantage. Thank you all kindly. Good night

Edit2: Please disregard this message. The broken pictures came back and its showing correctly. Good night all.

Sincerely,

Graeme
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  #786  
Old Aug 11, 2010 10:06pm
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Good morning, all

Apologies to address all enquiries in a single post. I wish to keep this thread as condensed as possible for the sake of new readers.

Leggo - Good question. 50% is loved by alot of traders. Alot of retail traders look for retrace also. They are interested in 50% and the 33% and then 66%. I consider 50% as a psychological level. We should never tell ourselves, 'ok graeme, price is at 50% lets enter.' We should be really saying 'ok graeme price is at 50% which is loved/followed/believed/cherished by the larger group of traders lets see if they all join force and enter/place buy/sell stop orders there at 50%. I always witness the 'bounce' first and then enter when its coming back down. This ensures a much higher probability as you are piggyback riding.

Geoff - Thank you. You are correct, they are temperamental.

Sixx58 - Good question. Emotional control does/will improve over time. Position trading has the best rewards compared to the small risk taken. Part of the small risk is perserverance and unbending faith.

There is a very good reason why I urge all traders to sharpen their entry method non-stop. Cause this will help their emotional control immensely. If a trader has lost 8 positions before the 1 winning position he/she will most likely be greatly attempted to close the 1 winning position earlier to re-coup his losses. We are all guilty of this.

However, if you know your entry method very well and have kept your losses very minimal, you will look at your losses from a different angle. You will look at 8 losses/breakevens as just part of something you had 'no control' over cause you know there is nothing wrong with your entry skill but it was the inevitable fluctuations of the market that took you out. It is a very different psychological mind game.

Dave - Good question. For me, 250 pip leg is not worth the trouble to negotiate a close or not. We prefer legs that are few thousand pips big. However, you can cushion your emotional hurdle by capturing this good short term profit by diversifying and keeping 1/2 larger legs intact and watch what happens. Sooner or later you will undoubtedtly prefer to hold them without my recommendation anymore. Then you are over that emotional hurdle. I pray for your enlightment to happen soon.

Please allow me to show all readers some realistic expectations. This is answering to sixx58


Last edited Aug 11, 2010 10:43pm
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  #787  
Old Aug 11, 2010 10:20pm
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The good side of this story, please look below



There is another reason why trading multiple pair of currency is to its advantage. While gbp/jpy had a lukewarm trend for the last one year and while we wait for the next golden opportunity, all traders must expand their exposure in the market by adding positions into other pairs.

This will balance the risk and reward proportionally.

Infact this will ensure that your equity curve keeps growing while you position yourself for an opportunity of infinite growth. Since your participation is stretched out, you will have continuous flow of diversification throughtout the different pairs. This is important and please think about it.

Yesterday, I have showed all readers, wicks. Please try using the interpretation method that I have showed into your own interpretation. You will be surprised that you are grasping the market sentiments better. It might lead to related discovery.

Sincerely,

Graeme
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Old Aug 13, 2010 6:14pm
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Good morning, all

Apologies to answer all question in one post. Answering in order of posts

jashanno - thank you for your contribution. what works for you then works for you and im glad to hear of your success. there is different purpose to why i place both buy and sell. if you interpret this as just hedging unfortunately please read my posts again. i do not care if i have one position on buy and one position on sell; what im doing is positioning my positions as the market flows and sometimes a flow can last weeks to months. how does a trader know the next s/r is going to be a change in trend? they cant. just follow with flow.

luqmanz - you are definitely on right track. Please do not feel bad cause your results are fantastic if not little too fast. Your legs will happen. Most important thing in trading is not to rush but take your time and space out your exposure. From my earlier posts, by spacing out, you will miss few golden opportunities but you will avoid all/most of ranging periods.

tommbstone - im very glad that you have moved away from usd/chf current ranging period to a pair that is trending stronger. Can I ask for your learning benefits, how do you know a pair is trending stronger than other pairs? The answer will lead you to a very very important related discovery. Please try answer for me.

pip_daddy - good observation. Same reply to tommbstone as above, how do you personally judge whether the pair is trending or not? I have hinted few times in my earlier posts that I use scouts on higher timeframe to prod into market sentiments OR the fact that market moved strongly in last 2-3 weeks will not 'suddenly' change and stop. It could but it will give alot of warnings before it does stall and change. May I also add for your enlightment that for example, one of my wick entries could also turn into a long term scout and I can base my personal interpretation of market sentiments at its growth. Scout doesnt always start from higher time frame, it can also start on 5min timeframe. New trend can start from all of daily,4hr,1hr,5min timeframes.

Frenchcuff - thank you for your question. I have used heikenashi candles for some time. It is reliable source of 'indication' of trend and change with less short burst of whipsaws. Unfortunately with heikenashi users arrive little later than most traders on scene. I prefer to arrive first at buffet table with the mentality to spend few pips to know that I was right or wrong. If im wrong I will admit defeat and move on, but if im right I will stay awake to capture most out of it. May I suggest that there are many entry methods one can upskill so you can arrive at the scene much earlier with tighter stop loss than you can currently imagine.

knukk - thank you for your interesting charts. i looked at them closely for some time. You have contribtued alot of efforts into the charts. May I ask what the 2 question is that you would like answered? Im assuming its the 'x' on the charts? If so, and hopefully im answering to your question properly; price always moves .00 to .00. If price is coming down from .00 then look for sells, if price coming up from .00 then look for buys. If it does not work out, please try not to re-attempt but let the opporunity pass. It will be a hard mind game not to re-enter cause traders think there is an opportunity at every moment they glance at the charts. Once all traders understand the importance of 'ignoring' the markets they will find that 'somehow' they are avoiding ranging periods magically.

mcornbill - thank you Mark for a unique question that hasnt been asked before. I read your post twice and believe I can add some hindsight to your understanding. Personally it rarely takes me more than 30minutes to 1 hour to move my SL to BE when I enter manually. However, on days when I do need to walk out of office and see a good setup on higher timeframe, I would not use a SL but please do not use this approach as yet. All traders starting to build their millipede 'must' or 'prefer' to use entry methods on shorter timeframe or scout on higher timeframe and then zoom in to stack positions.

leggo - Good. Shorter timeframe for now Ben. Sooner or later you will phase into higher timeframe with no recommendation or assistance. There is a related discovery once this happens. Good result from skill than luck is a fantastic mentality. I urge you on.

luqmanz - Nice tight stop loss. Im sure you have your entry methods well planned and practiced.

glenj - thank you for your compliments. Yes, 50% is where most traders should watch other traders. But it also happens quiet often at the opening price of previous candle or the top/bottom of the wick. If I were to choose in order: 1. 50% 2. Opening of candle 3. Top/bottom wick. I personally prefer the wicks to touch a price or tight area and bounce off twice. That is a huge huge hint.

jashanno - you are mentioning scaling out? In forex, the more you lower your risk, then you ensure yourself a smaller guaranteed profits. I personally aim to minimize my risk when 'entering' and then letting the market reward me infinitely. 2 different perspective and I request that you please think abotu it. Your perspective is: lowering your risk as the position plays out, my perspective is: lowering my risk on entry and letting the market reward me indefinitely or close the position with no loss.

mechthildche - yes, you are referring to hedging. Im not hedging as such. Perhaps if you could please read the thread. Buy/sell should not be replicated in one net buy or sell position = cause that is just taking one sided opinion of the market. Alot of traders seemingly believe that nothing happens when you take one buy and one sell on same pair of cuurency. It is true when you look at capital balance/unrealized profits/loss however different result when you move both buy and sell positions to breakeven and let it play out for few weeks. I take both buy and sell at whatever opportunity market gives me cause I dont know where the market is heading towards for the next few months.

Sincerely,

Graeme

Last edited Aug 13, 2010 9:11pm
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Old Aug 13, 2010 8:04pm
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Quote:
Originally Posted by knukk View Post
Thank you for your answer. I'm afraid I might have been too unclear in stating my questions. The X's are just the liquidation points at which all positions are closed and have nothing to do with my questions. My questions are asked with a colored text in the attachment, with a corresponding colored illustration on the chart. I'll rephrase them:

I'll add the attachment from my original post to this post.

1) Question one is marked with cyan. Look at the cyan circle....
Thank you for your quick reply.

I read your post twice before typing and im assuming your question is more for all to think. Can you then please explain why you would think the cyan are weak and green would be a mistake?

Look forward to your reply

Sincerely,

Graeme
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Old Aug 14, 2010 12:43am
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Good weekend to all

Hope everyone is safe and warm.

While explaining how to interpret wicks and the possible hindsight we can gain from its appearance on the charts I have noticed something very important and strange.

Im going to go ahead and break some common myths that are circulating amongst this forum.

What I say next might go against the beliefs of most but if you keep an open mind for me, readers mght be able to notice something important.

If I ask why a trader uses indicators/price pattern/price action, most will answer: cause it gives us an entry/exit with higher probability for a profitable trade.

Please read this carefully.

The main purpose of analysing/watching indicators/price pattern/price action is to gain an hindsight to which direction it may go. Not all the times but most times.

We then use this hard earned 'inside information' to our advantage and by using various personal entry methods, stack positions indefinitely until this inside formation is no longer valid.

Is this you??

You know pin bars are great 'indication' of change in trend.

1. You wait for pin bar
2. You see a pin bar on chart and notice the indicator also indicating that price is oversold.
3. You enter with r:r in mind. You decide 1:5.
4. You place stop loss at end of pin bar, e.g 40 pips. And then you place take profit at 200.
5. Your position goes your way and you exit with 200 pips. You move on to next opportunity.

That is most traders here.

Allow me to tell you one thing for certain.

Pros do not 'just' take 200 pips cause price moved 200 pips or cause its their defined r:r. They take minimum 200 pips if price moved 200 pips.

If price moved 500 pips, pros take minimum 500 pips, maximum: infinity
If price moved 1000 pips, pros take minimum 1000 pips, maximum: infinity

When I say minimum, this is worst case scenario.

I do not understand why alot of traders think stacking positions is too dangerous. This is a wrong myth and you are taking things too literally. It is only dangerous if you dont know what you are doing or more importantly dont know what you are expecting. And we should all be expecting/hoping infinity returns on our investments.

Please allow me to further explain what 95% of traders do and see how their trading perspective is actually hindering their potential growth/profit.

Trader awaits for the perfect evening star pattern to happen. He picks very carefully and expects everything to perfection and he admits the appearance of such perfect setups are often rare sighting. However he is confident that such perfect setups will be most likely a profit or a small loss. This trader has a good balance of r:r that he/she religiously apply to every trade to stay purely mechanical. The only discretionary decisions he does make is the entry and the rest he leaves to r:r for exit.

Now allow me to reliterate the above story in a different version but with the same ideology behind.

Group of highly trained blackjack players enter a casino. They have practiced thousands of hours (have you?) of playing advantage blackjack. When they refer to advantage playing it means they know 'when' to start playing to ensure a 'higher' probability of winning. They know when the remaining cards in the deck is full of high cards like 10, J, Q, K which changes their odds of winning against the dealer much higher. Even if the deck is almost full of high cards they know that their winning rate is only marginally over 50%. They dont care if the winning rate is just over 50% of the time, as long as it is over 50% they will consider that a premium opportunity to start playing.

One player will sit down alone on the table and start playing using +1 and -1 counting technique (personal entry method). He is playing very small bets and just watching the action, prodding here and there. Soon he notices a premium opportunity when the remaining cards in the deck is now mostly high cards. He then raises his betting size greatly as he knows the odds are in his favour. Soon after winning hand, he then leaves the table cause he just won more than he lost. He moves onto next table and starts counting again.

??????? No. Thats not how professional blackjack players win.

Lets rewind little bit. One player sits alone on the table and starts counting cards by playing with very small bets. Once this player 'knows' that the decks are full of high cards he will do a hand gesture or a signage for his other team members to now join this table. This table is now hot and ready for picking. Other team members will join this table and bet heavily into every hand as they know most cards are in their favour. As soon as they notice that the deck has lost its edge they will get up and leave with their winnings. This is a true story about a group of MIT blackjack players who made millions before being caught out.

They did not count all those cards to make one large bet and to walk away after winning one hand. Once they know the deck is in their favour they will milk it out as much as possible. The exact same perspective is required in trading. Do not focus on few minor losses you encountered over the last few days. Just make sure when a win does occur, you stack positions and exit with a much bigger profit that will cover all your losses before and adding a big chunk of realized profit into your trade balance which should be more than enough to cover any future small losses necessary for the next golden opportunity. This is the correct required mind frame.

Sincerely,

Graeme

Last edited Aug 14, 2010 9:01am
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Old Aug 14, 2010 3:11am
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Good afternoon, all

Darren teo - thank you for your continued interest. Your method will save you from doing pinpoint entries however this will result in a massive drawdown which will effect your emotion greatly. No one can stomach a 3000pip drawdown. My initial trade balance would have lost 40% realized loss if I allow such thing.

leggo - Yes, Ben. Momentum usually happens during uk/us sessions. However there are great spurts of momentum usually on jpy cross during asian session. I will try show few more tricks. Im wondering if Im confusing any of the readers by introducing too many new things.

pip_daddy - Thank you for your contribution

Sincerely,

Graeme

Edit: Does all readers understand my blackjack story in the above post? The message behind that story is important for all traders. You cannot profit greatly if you dont maximize the profit taking in a given golden opportunity.
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  #823  
Old Aug 14, 2010 3:44am
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"Market cannot be beaten. Its to be followed"

"Trend is your friend if you allow your positions to grow on it"

"I admit that I cannot predict which way the market will go but I can follow it and still profit"

"Following the flow is simply; entering sell if price is coming down from .00 or entering buy when price is going up from .00"

"To stay with trend; only buy above the open price of the day and only sell below the open price of the day"

"I aim for infinity yield on my positions"

"I enter both buy and sell on same pair of currency cause I dont know what is happening today, tomorrow, next week, next month"

"I enter at every low risk opportunity given by the market. Risk is at entering, profit is allowing it to grow"

"I do not pre-define my entries, exit in anyway. R:R is calculated at the end of the trade"

"Entries are at your own personal discretion. Find out what works for you literally and psychologically"

"You should know your entry method so well you can vouch it with your life"

"You only need 1 or 2 entry methods but your participation in over 10+ pairs of currency. You will be very busy"

"Some positions last years, some positions last few minutes. We keep the ones that last years and we let the positions that die in few minutes rest in peace"

"Some of the most valuable insights I have is earned through practice not learnt by reading"

"20 x3 take profit exercise was my teacher and Im here cause of its related discoveries"

"You do not need to know 200 things in forex to make money. You only need to master just 1 thing"

"Most traders fail cause they dont have this 1 thing. Some think they do but whether they really have it or not is questionable"

"From last 2 years of live entries I can sensibly claim that 80% of my entries on 5min timeframe will at least have SL moved to BE by using momentum. This is my 1 thing"

"I piggyback on other traders when I enter. If there is no participation from other traders then I got no one to piggyback"

"From my stats, I have placed over 4000+ entries over the last 2 years. Thats about 40 positions per week, 8 positions per day. My participation in the market is almost 20 pairs"

"From my stats, my last 14 months have $7 million+ annual growth rate. Most of it largely unrealized. I have easily doubled my trade balance in the last 2 years as realized profit"

"From my stats, 1.7 positions per week have survived for long term growth. Most closed on BE and some closed to capture short/medium term growth through the numerous diversification"

"From my stats, I currently have 194 positions. All positions SL moved to BE"

"From my stats, each position is currently bringing in 37 pips of net profit. Net profit is after losses are settled and accounted for and this includes any swappage"

"Diversification keeps my equity curve growing and smooth. It is traders best interest to stay away from zigzag edged equity curves"

"Diversification settles any losses encountered while trying to establish the current group of legs. After diversification the scoreboard is wiped clean to zero"

"Diversification replaces trade balance to before building the current gorup of legs + adds realized pips/profits into your trade balance + gets it off your mind"

"I have never went below -8% on my initial starting capital in realized loss"

"I will never increase my lot size (2 standard lot). Instead I will increase my exposure in the markets by having more positions in every pair of currency"

"Bundles of positions on every major trend on every possible pair of currency. That is your goal"

"I prefer to work less as the time goes not more or the same"

"If I lose 9 times in a row on entry I know im getting closer"

"You need to be selective on entries and not take every opportuntiy. All you need to do is space out your entries by hours/days. You miss few golden opportunities but you also avoid all/most of ranging periods. Profit will be similar"

"Im an investor-trader"

"If a position was +2000 pips last year but died today on BE; that means we are currently in trend for the last year and should have positions growing as the price came back"

"Forums are more chaotic than markets. At least market doesnt purposely mislead for its own personal agenda"

"You cannot profit greatly if you dont maximize the profit taking in a given golden opportunity"

"Losers log onto forum, winners take the prom queen home. Most important learning is done by yourself through practice on demo"

"Dont stay on demo too long. There are things to that can only be learnt on live"

"Emotional hurdle is when you cant sleep"

"Glass half empty: Anguish over position closing on breakeven. Glass half full: You had chance for infinity growth but unfortunately it closed on breakeven due to controllable market fluctuation. Engineers: Trying to close the position when its only little bit in profit"

"Never use the word 'expect.' Thats a lie. Life and market will never follow to your expectation. Expect the unexpected"

"Your mind only choose what you wish to believe. Keep an open mind to everything. Never have a biased opinion about anything in the market"

"Market is a generic ever-changing dynamic energy. You cannot use indicators to pre-define something that has limitless boundaries"

"It takes tens of thousands of rounds to define an entry system's edge in hard percentage. Some thread openers claim 60% success rate with 1:2 from 4 months of entries. Such claim would make staticians rolling on the floor laughing"

"Thread openers success in the last few months was due to a trend. Watch their posts when market ranges"

"250 pip position is not even a leg for me. 2500 pip position is a leg"

"Most traders have set static growth rate. Some aim at 2% capital increase per week. So for a $5000 USD that is $100. If market moved 300 pips in a given week and you only added 2% then you are not reaching your profit potential. Period"

"Some traders quit the week after reaching a certain percentage of profit. Market doesnt know each individual traders set percentage growth rate for the week and market certainly dont care"

"Dont trade Fridays? Yes, if there are no low risk opportunities. Trade, if there are low risk opportunity"

"Accept what the market gives"

"Market always moves first then indicators. Always move with/after the market moves not after what indicator shows"

"Before indicators is candles. Before candles is wicks"

"Wicks is the earliest warning"

"Biggest surprise that awaits position builders is that at the end of the day there will be more on the table and you wouldnt be bothered wondering why"

Last edited Aug 14, 2010 7:42pm
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  #827  
Old Aug 14, 2010 5:55am
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Quote:
Originally Posted by daytrading View Post
Dear Graeme,

I have been reading (most of) your posts with interest and some hidden admiration. Having worked in in the markets since the 80's in various positions - from trading bonds, currencies futures, interest rate derivatives etc. - I have never held a position for very long. I might be a left-over breed from the time before screen based trading, when we received our quotes through telex and voice box from the brokers.

Personally, this way of exploiting price movements has suited me in the past and will suit me in the future because it...
Good evening, daytrading

Thank you for the feedback. It is greatly appreciated.

Just for clarification, I would never impose/force my method to any trader. If any trader feels uncomfortable/uncertain than it is to their discretion to close when they choose to close.

However, I diversify when I feel insecure which captures short/medium term growth for positions that are only few weeks/months old. This diversification is also not imposed but suggested as a means to control ones emotional hurdles.

If you find success to your liking and you are closing your trades earlier then by all means please continue.

When I first started live trading, I too had difficulty keeping positions open for months. It was a difficult emotional hurdle for myself as well. However after a few diversification my trading method evolved on its own. It wasnt a forced implementation but a natural transition.

In the beginning, I was diversifying to only keep 1 leg for long term growth. This soon evolved into keeping half of the bigger legs. Accuracy drops but the reward is so much greater and worthwhile.

I appreciate your constructive feedback but when I mention 'for myself' I should really have mentioned 'to your related discovery' you will notice that you will eventually keep more of your bigger legs as you slowly taste success. Its how pros enter with 10 standard lots without even blinking. It wasnt a forced implementation but a smooth transition for them.

Too many traders fail cause they are underconfident of ones ability and then when a profit does appear they are in a rush to close it to capture it while fearful of losing it. My advice for all is to be a bigger person. In the markets, the bigger person you are the bigger your profits.

Sincerely,

Graeme
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Old Aug 14, 2010 6:00am
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Good evening, all

One of the other common myths that is circulating is mechanical trading. Alot of interpretation of mechanical trading is when a trader has set rules with defined entry conditions and exit conditions adhered to everyday of their trading career.

I agree that some systems are very sensible and that good result can be achieved by following the same rules of entry and exit everytime however bigger rewards are available for traders who can trade without such limitations but also mechanically in such approach. Thats whats its meant by mechanical.

It is good to have a sensible entry system to indicate approximately when to enter however such information needs to be used in many different ways to extract more than just the 1:3 80 pip profit traders are aiming for.

I mentioned in my earlier posts about a fellow trader I have befriended last few years. This gentleman is also a very successful trader. He mostly swing trades and rarely holds positions more than a week. His success is above and beyond most traders. With his permission I wish to introduce all to one of his most used entry 'indication.' I do not know why but he calls it the 'flying buddha' but im sure most readers can relate to why.

Last edited Aug 14, 2010 9:08am
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Old Aug 14, 2010 6:14am
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My colleague wishes to remain anonymous however I do have his full permission to share his knowledge for the benefit of all.

Please note that I have mentioned that is it an entry indication.

For the sake of my typing please allow me to call my colleague Joe. Not his real name.

Joe uses 2 indicators.

Orangered - 10 ema close, exponential
Dodgerblue - 5 ema close, exponential

He only uses 4 hour chart.

He does not base his entries on the indicators per se however he does wait for opportunities when the price is 'sticking out.' He does not know the fundamental reasons why but he likes his entry 'indication' cause of the low risk involved.

His winning rate on the initial entry is only marginally better than 40% however it is this winning 40% of the initial entry trades that are so much bigger than the losers with static loss. He makes sure that his winners are stretched out to maximum. That is his '1 thing.'
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Old Aug 14, 2010 6:17am
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Quote:
Originally Posted by daytrading View Post
Dear Graeme,

My apologies for wording it in such a way that you might have misunderstood - I was by no means suggesting that you were imposing on any reader.

While I agree with the confidence part, I personally traded huge size (over $500m a clip when trading IR-swaps/options) and also quite huge size in FX without having any qualms about it. However, when working for institutions (and on the floor as I did), you have to figure in constraints that might not apply for the private retail trader here.

At times I was not allowed to hold positions...

Good evening,

Thank you for quick response. I also do apologize for my poor wording.

Personally I did not take any misunderstanding from your post but noticed that you had a greater intention in your meaning behind the post.

I rushed to answer yours and could have answered it in better detail.

Thank you for the compliment and Im glad to see ex-pit trader (apologies if this is not the correct title) here with us.

Please feel free to contribute as we are all here to share.

Sincerely,

Graeme
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Old Aug 14, 2010 6:29am
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As a messenger in relaying his method I have personally used this entry 'indication' to great results as well.

Joe would only use sells. He never answered me properly why but Im sure if it works very well for sell then it will also obviously work well for buys. I do personally believe that his concentration is so great that he would prefer to focus just on one side of the coin. He still manages to live an outrageous lifestyle with this method so I do not further question why he only takes sell.

Joe waits for a certain candle to finish forming above the 5ema 'without' any of its body or wick touching the 5ema. He calls them flying buddha.






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Old Aug 14, 2010 6:37am
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Joe explains that his first advantage in this entry indication is that it is a very low risk most of the times with potential high profits. Very similar to why inside bars are so popular.

Below is a real trade that I took this week which has brought great profits. Its from eur/usd 4hrs.

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Old Aug 14, 2010 6:45am
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The rules are very mechanical.

Joe waits for a flying buddha to finish forming. He would enter sell at the open of the next candle with hard stop loss at the top of the flying buddha with little bit more space.

This is one of the other successful entries.

Eur/usd in May

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Old Aug 14, 2010 6:53am
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Joe also describes that some of his flying buddhas are also inside bars occasionally that are positioned for a greater opportunity to be profitable.

Joe is a thrill seeking trader. This is in his own words. Even though his entry method is pre-defined (which is entering just after flying buddhas) he will whet his appetite of risk taking by stacking positions while the flying buddhas are in effect. And he would only stack positions at 50% fib of the 'previous candle' mostly from buy/sell limit orders. Stop loss for the new position is set at above the high of the previous candle (including the wick) with little bit more space.



Circles are entries, lines are his hard stop loss. X is loss from entering 50% fib and hitting the hard stop loss above.

Joe stacks positions very heavily.

Last edited Aug 14, 2010 7:27am
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Old Aug 14, 2010 7:05am
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Joe would close a portion of his legs at the first sign of reversal which for him is when price closes above the previous down candle open price. He would hold onto the remaining positions and if the price continues down trend will continue stacking positions again at 50% fib of the previous candle. He is scaling in out and out of the market but using multiple positions instead of just one.

I mention again but flying buddhas have only marginally better than 40% win rate on the initial open position. Joe knows this and makes sure every winning opportunity is stretched out as far as possible and then he would go on a holiday.



He closes some of the larger positions and some of the smaller positions. Joe always tries to keep the larger 2 positions until the very end
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Old Aug 14, 2010 7:22am
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Joe has been a live trader for almost 5 years and trading flying buddhas exclusively. He uses 8-10 standard lots per position and his success can only be dreamed by most traders. He has almost 5 years of live statement to boast and it is definitely impressive.

Joe now admits that the main essence of profitable trading is not from taking flying buddhas but from stacking positions whilst the trend is established. He knows that he can enter any low risk entry and still swing the advantage to his side by stacking positions whilst the trend is intact. However to this day he still uses flying buddhas exclusively as he does not wish to start testing out variances to his already proven method.

Personally I also agree that his success is from stacking positions to his side when the market is favouring him with a trend.

Now to show all readers some of the failed flying buddhas.







Please note that one of the strengths of this entry indication is that loss is relatively small and static. Whilst any winning position will lead to a much greater reward without any limit to what it can achieve.

Joe once told me that a flying buddha lasted more than 4 weeks and ended up taking profit in 6 figures (hundres of thousands). Im sure that will cover the next series of unlucky flying buddhas that doesnt work out
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Old Aug 14, 2010 2:10pm
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Good morning, all

fluke - thank you for the compliment its greatly appreciated

mcornbill - yes, you are correct. Flying buddhas do most times trend change but not always. I have a habit of not re-attempting after first failed attempt however I will keep this in mind and when the trend does change I most often re-attempt knowing the hindsight that trend has changed.

pip_daddy - good question. Somedays I often have no entries. However, when I know a pair of currency is trending strongly than normal this week or a scout on higher timeframe has survived or a good price pattern or a strong wick signal or a flying buddha; I would use all this as hindsight and make the most out of it. May I please ask for the benefit of your understanding if you have a technique to signal you such hindsight? When your entry method dictates an entry im assuming its part of a trend and its the best place/time to enter. This opportunity does not usually just vanish but this information can be used further in a different angle.

willhuang - thank you very much

knukk - thank you very much, I read your answer 2 pages back which was very thought provoking. Your answer is on this post http://www.forexfactory.com/showpost...&postcount=824

Sincerely,

Graeme
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  #845  
Old Aug 14, 2010 2:31pm
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My next entry method is volatility breakout. I prefer price to be in an area that needs to breakout. Not wants to but needs to.

Does all traders know that most succssful breakouts are the volatile ones which means when the price does break out of range it moves very fast and hard. Im personally not interested in breakouts that are weak.

With this entry method, im planning to provide everyone a 2 hit combo. Knowing when to enter and how to stack positions. This is just my personal version but you can definitely contribute your personal touch into making it into your own.

On the 4 hr charts or 1 hr chart (preferably 4), I look for a candle that will completely engulf the next 2, 3 candles. The first big candle is the range that needs to be broken out. Please see below

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  #846  
Old Aug 14, 2010 2:34pm
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I place buy and sell limit orders just 5 pips below and above the first big candle. When price does breakout, I expect all the other traders pushing the price very hard and fast. If it doesnt, its failed.
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  #848  
Old Aug 14, 2010 2:43pm
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When a volatile breakout does happen make sure you maximize your profit taking by zooming into 5min chart and stacking positions.

Please allow me to show you mini-stalls.

When you enter positions on 5min chart, prepare to lose few positions but since its on 5min timeframe it will be very small losses compared to the amount of pips you will reap from multiple positions at the end.

When stacking positions right after volatile breakout it is important to try stack positions early on in the move. I use mini s/r in my focal interpretation and once a new position SL is moved to BE, I will enter again at the next mini stall until I lose a position or two and then I will stop adding.


Last edited Aug 14, 2010 3:01pm
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  #849  
Old Aug 14, 2010 2:47pm
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Quote:
Originally Posted by xman View Post
Joe waits for a certain candle to finish forming above the 5ema 'without' any of its body or wick touching the 5ema. He calls them flying buddha.



Seems to me there is much better signals if we use 3 EMA.

Good morning, xman

Joe personally believes 5ema gives him enough opportunties.

You will find some opportunities that are available on 5ema are not showing on 3ema and vice versa. Its all relative. Good question.

Sincerely,

Graeme
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  #851  
Old Aug 14, 2010 2:53pm
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Quote:
Originally Posted by wooli View Post
Good Morning Graeme.

A while ago you asked several readers a question about "How do you tell a pair is trending?"

For me, this is the biggest obstacle to successful trading. How to avoid whipsaws (ranging markets).

I don't believe that there are any indicators to help and all you can use is your eyes, common sense and experience.

The different time frames are also important.
A pair may be obviously trending on the weekly or daily but when you go to a small time frame it appears to be ranging. I guess this is where you incorporate you breakout...

Good morning, Michael

Correct. Unfortunately, many traders cannot distinguish ranging to trending.

You know the market is ranging when a range is not broken with volatile force.

You know the market is trending when a range is broken out extremely fast and hard.

This is range breakout in force. This is trending.



This is range without the breakout. You should stay away from this pair of currency, for now


Last edited Aug 14, 2010 5:56pm
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Old Aug 14, 2010 2:55pm
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This is a breakout that I wouldnt touch but move on. There are no other traders pushing.

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Old Aug 14, 2010 3:00pm
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When my buy / sell limit order gets executed but the price doesnt close 'far' below/above the range then I will close it if price moves back into range and the candle close is inside the range.

Breakout with price closed just outside range. I will move SL to BE and look for oppotunrities on lower timeframe but im cautious as this is not a volatile breakout



Breakout with price closed back inside the range. I will close this position with loss and move on. Loss will always be small as it will go back inside the range and usually ranges are not large.



Can you see the difference?

Can you see the potential big rewards for a small loss?

Always 'donate' small losses for potential big wins.

Last edited Aug 14, 2010 6:11pm
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Old Aug 14, 2010 5:33pm
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Quote:
Originally Posted by fugly View Post
Graeme thx very much for teaching us this flying buddha entry method.

you said



From the chart you posted shows he doesn't attempt to stack positions at the 50% fib of every subsequent candle after his inital entry, could you please tell us how he selects which candles should be considered for possible additional entries at th 50% retracement.
Good morning, fugly

Apologies for the poor quality of the charts.

Sometimes the new candle opens at 50% of the previous candle - then he would enter with SL just above the high of the previous candle

Sometimes the new candle opens above 50% of the previous candle - then Joe would enter at open again and place SL just above the high of the previous candle. This is a bargain trade for him

Sometimes the new candle opens below 50% of the previous candle - then he would place a buy/sell limit order at 50% of the previous candle and stop loss again at the top of the previous candle

If you see that the next candle is too close to the previous then use 50% fib of the larger candle before the previous candle. But this is to your discretion and risk taking appetite.

When a candle closes above the previous down candle or below the previous up candle, then Joe would close a mix of larger and smaller positions and keep the largest 2 positions till the very end when he closes all positions.

All traders must understand that this method works:

1. Not because of 'flying buddha' but because maximizing the profit taking on a given golden opportunity.

2. Potential loss is very small compared to the potential profit.

Last edited Aug 14, 2010 6:12pm
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Old Aug 14, 2010 5:48pm
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Good morning, all

Having explained few of the methods I personally use:

1. Wick interpretaion
2. Flying buddhas
3. Volatility breakouts

All traders must acknowledge that all methods that are sensible works because of the amount of risk is small compared to the potential profit (reason why inside bar trading is so popular but unfortunately most traders dont know exactly why it is). However, this alone does not guarantee profit in the long run. It is imperative for a trader to extract as much profit/growth from a given opportunity. This will swing the odds to your favour.

I cannot stress how important the above info is.

Allow me to tell you something that happens to all modestly successful traders.

It takes a good amount of time for a learning trader who is bleeding his/her capital everyday to stop the damage and be in a grey zone in profits. Trader didnt know what he/she was doing wrong but it seems that the bleeding has stopped. However, trader also notices that his/her capital balance is not growing to his/her her expectations. Its more or less just fluctuating just above/below the breakeven mark.

This is where the trader either gains a valuable lesson and advance to next stage or blow the capital.

1. Trader noticing he has stopped bleeding believes he can still be very profitable by raising his lot size dramatically. Sooner or later due to random nature of the market this trader will suffer a drawdown far greater than he anticipated and this will ruin his capital balance or his emotion or both. He has failed.

OR

2. Trader notices that he is roughly winning 50% of the time. Sometimes row of wins but sometimes rows of losses as well. He admits that he can stay in the game because of the r:r he has implemented. Traders keeps the lot size same however 'increases his exposure' in the markets by adding further positions into the trading opportunity currently happening. At the first sign of weakness he will exit portion of his positions and keep the rest for further profiting and continue to scale out if the condition worsens or scale back in if the condition gets better.

Which one are you?

Sincerely,

Graeme
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  #858  
Old Aug 14, 2010 6:18pm
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Quote:
Originally Posted by ozziedave View Post
Hi Graeme,

On the flying buddha entry do you first determine the trend direction. For example, trend is down and we get a pullback above the 5 EMA and a flying buddha forms. This would be a short signal.

Good morning, Dave

Apologies, i have left that out and it is important.

Joe only takes sells and looks for flying buddhas when 5ema is above 10ema. He is a swing trader.

If you scan the charts you will notice flying buddhas quiet often. Please note that the success rate of the initial open position of flying buddhas are only marginally better than 40%.

Edit: Some of the larger countertrends often start with flying buddhas followed by momentum. Usually the next candle right after the flying buddhas will be a breakout.

Sincerely,

Graeme
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Old Aug 14, 2010 8:35pm
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Quote:
Originally Posted by geoffrod View Post
Hi Graeme, yet again you give us diamonds in your words.
i find this very interesting and wonder, if we where only to look and find the flying buddahs, but hold off on acting on them, until we are more certain it was a successful flying buddah, and enter and add to the position as you would normally???, the premise is we are still looking for the possible entry in the same way, but are not just blindly entering because of it???, and we are adding to the position with the momentum of the trend???

anyway just something that came to mind when i was...
Good morning, Geoff

Correct.

All readers please read Geoff's post as there is an important related discovery.

Most flying buddahs are strong indication of trend change but if you want to sincerely lower your drawdown/risk, you can 'add' a personal touch to flying buddahs and filter it. Accuracy may improve but you may also slightly lower your profit. Its all relative.

An amateur trader will look at flying buddahs and sigh at the low win rate but I assure you most sensible systems in this forum is less than 50% win rate.

Inside bar has a similar win rate however they offset the lower win rate by urging traders to enter 2 positions at entry and aim for 1:3 on one position and higher r:r on the second (apologies if the numbers are slightly off as I havent been on their thread for a very long time). Can you see what they are doing? Maximizing profit taking in one given golden opportunity by increasing exposure which in this case is using more than one position.

It is how we manage the trade to maximize our profit takings on a given opportunity that divides the amateurs from pros.

The easiest and most well known method in maximizing our profit is using higher r:r than 1:1. With a 50% win rate and 1:2 r:r you would be very rich sooner or later as the odds are on your favour. However, whether the 50% win rate is a true hard percentage or not is questionable in most cases.

Traders get confused when pros advise them to be mechanical in trading. In a sense the pros are referring to be mechanical in the 'approach' but not the trading. However, traders believe mechanical is when 'something' happens that they are waiting for which triggers their entry or exit. That is not mechanical but pre-defining your action and we all know how I feel about that.

Sincerely,

Graeme

Last edited Aug 14, 2010 11:36pm
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  #862  
Old Aug 14, 2010 8:47pm
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Quote:
Originally Posted by Bakuli View Post
Dear Graeme,

Thanks for your latest posts on entry methods. They are very much appreciated.
With regards to the early stacking of positions after a volatility breakout, am I right to assume that you stack by trading the breakouts of these mini SR in the 5 mins or do you do it differently?

Many thanks.
Bak
Good morning, Bak

Good question. When I notice a volatile breakout it looks very similar to the chart I have posted. It will be more or less a straight express way down or up.

You are correct, I use mini s/r in my focal interpretation which can involve just 2 candles or few. Please try avoid overexposure.

A general rule I adhere to is that, Im aiming to stack just 2 more positions after the first entry on breakout. This is just a psychological reassurance that I am not in a rush.

Usually when I do zoom in, Im playing russian roulette. I continue to stack until I encounter my first loss and then I smile at the result and stop. Sometimes this could be just 3 more after the first position or it could be 17 more after the first position. It whets my appetite just enough for my personal risk taking.

Sincerely,

Graeme
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Old Aug 14, 2010 9:36pm
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Quote:
Originally Posted by HornedGod View Post
First of all, thanks to Graeme for such a quality thread. I very rarely read forex forums anymore as the signal to noise ratio is so incredibly low. I'm glad I ran across this thread on one of my infrequent visits to FF.

Graeme, I know that you keep each entry at 2 standard lots and have done so since you first starting trading this way. I'm guessing that you had a large enough starting equity balance that you have no need to change your entry size.

I'm sure the same is not going to be true of many people attempting to follow this methodology....

Good morning, hornedgod

Great question.

I would encourage doing both.

If you start off 5000USD with 0.1 lot size, that is reasonable. However I do hope all traders who are serious and have the mentality to take it seriously to continue adding funds into your capital trade 'when necessary.' Not because of the realized losses but because of the margin required. 0.1 lot size requires approximately $120 usd per margin.

I wouldnt advise closing off all positions suddenly at the end of 0.1 lot size millipede as this would inject a very sharp increase in your trade balance but we are professional traders who know the importance of diversifying not just positions but risk and reward as well on an even keel.

My advice is when you have reached 1000 pips per week of unrealizard growth/profit when calculated over the last 4 months to consider 0.2 millipede. It depends on each traders skill and risk tolerance however I can sensibly say it is achievable within 1-2 years. Once you have reached that stage you have tasted success and it will get so much clearer and easier. To phase into 0.2 millipede, start building 0.2 lot size positions but when time comes to diversify start closing off more than usual amounts of 0.1 legs. Soon you will have completely phased out in a smooth transition. Just like shedding skin for new skin.

Once you reach 2000+ pips per week of unrealized growth/profit slowly phase into 0.4 millipede with the same method.

The hardest is the first year, 2nd year will just astonish you. After 2nd year its all relative.

Can you hold out?

Sincerely,

Graeme
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  #869  
Old Aug 15, 2010 3:57am
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Sorry to address multiple recipients in a single post.

midknight - thank you for your compliments. It is greatly appreciated. I had a long look at your chart. Nice spacing and well done with covering both buy and sell. Please do not forget that you much advance your skill by one more level from here. You can advance by adding your personal touch whether it is adding position whilst the trade is playing out to your advantage or some type of increase in exposure. Your loss should be forecastable and static while your growth/profit should always be maximized till the opportuntiy dies away.

leggo - Excellent. Your absolutely correct and Im glad someone has came out with it the same way you did. Alot of traders have the wrong mind frame. Its mainly due to not knowing what to expect from the market completely.



This is a gbp/usd 4hr chart. I have circled the positions that are added and x is a loss as the price retraced further than the previous candle high.

When Joe knows that the initial open position is working well, he will stack positions in 1hr, 15minutes as well with similar approach. When a golden opportunity buddha is happening he will stack very aggressively. He always ensures that the new addition has its SL always moved to BE before adding the next. He is quick to retreat when he notices price close above previous down candle open price or below the previous up candle open price. And once he believes the trend resumes he will start stacking again.

Joe scales out by almost halfing the number of positions. If he has 11 positions before the first reversal candle he will close 5 position leaving 6. If the trend resumes then he will continue stacking however if the next candle is also a reversal candle on the wrong side, he will further close 2 position leaving 3. But if it picks up then he will continue stacking from 3 positions.

He finds this very exciting and once told me that he reached 40+ positions before the first reversal candle and then continued to stack 30+ more positions before the next reversal candle. He believes that he banked enough pips for the next 100 rows of unlucky flying buddhas. What that means is, any loss accumulated from the next 100 rows of unlucky flying buddhas are already accounted and settled. A different mentality to most traders.

Sincerely,

Graeme
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Old Aug 15, 2010 2:58pm
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Good morning, zznbrm

Losses are always 1 position

while..

Winners are always maximized with stacks of positions

Even if there was 10 months of uptrend and 1 months of downtrend Joe always makes money.

Besides he trades multiple pairs of currency spreading his risk potentially 'thinner' and increasing his potential profit 'opportunities' wider.

Cant see clearly but I see few successful flying buddhas on your chart.

Joe would make sure he stretches out his opportunties.

Sincerely,

Graeme

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Old Aug 15, 2010 8:30pm
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Quote:
Originally Posted by leggo View Post
Morning Graeme,
You mention that there is sometimes volatility on yen crosses. This appears to be happening this morning. When it happens do you try and build positions on multiple currencies or do you concentrate your efforts on one? I am finding it hard to concentrate on more than one 5 min chart at a time especially when trying to add positions on every mini s&r.
Thanks and Regards,
Ben
Good morning, Ben

Im currently trading so I keep this short. Very large volatility at the moment.

Currently I have 5 sell positions on eur/usd (big retrace on 5min just now)

3 Buy positions on gbp/aud

Yes, it is hard to concentrate on more than 1 5min chart but it gets easier and more frantic.

When your ability grow you will phase into higher timeframe with same entry methods.

Good luck trading to all this morning

Sincerely,

Graeme
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Old Aug 15, 2010 8:33pm
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Sorry need to keep this short

Traders must know when to trade and this morning (asian session) is perfect

4hr/1hr support broken on eur/usd with momentum

This is prime time.

Sincerely,

Graeme
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Old Aug 15, 2010 8:36pm
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eur/usd 1.27335 is support at the moment. Price is stalling. Can everyone see?

7 sell positions, 4 moved to BE. If price reverses I will move all positions to BE and move on.

Retrace/change on eur/usd 5min is starting right now.

Get ready to defend all
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  #878  
Old Aug 15, 2010 8:38pm
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gbp/aud 1.75185 is resistance on 5min.

4 buy positions, all moved to BE.

Momentum died.
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  #879  
Old Aug 15, 2010 8:41pm
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eur/usd 1.27335 breaking.

6 sell positions moved to BE, 7 in total

Added one more on break.

I will keep adding until this momentum dies or I suffer one loss.

Im moving away from gbp/aud, I will let the market decide the fate of the 4 legs.
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Old Aug 15, 2010 8:43pm
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1.27335 leg (8th) is fighting. Where are other traders??

No piggyback.
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  #882  
Old Aug 15, 2010 8:44pm
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1.27335 8th leg is in drawdown.

5min chart is in range bound between 1.27446 and 1.27335

Momentum is gone. Traders now watching each other doing nothing..
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Old Aug 15, 2010 8:47pm
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1.27446 is broken. 8th leg is closed with loss.

Im moving out of eur/usd
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  #885  
Old Aug 15, 2010 8:49pm
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eur/usd has larger potential for down this week than up.

The reason: Fantastic explosive downtrend last week. Momentum like this just doesnt 'vanish.' It will take alot 'more' power to change such momentum.

However, I sit out while the traders debate this. I wait for the next volatility breakout
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Old Aug 15, 2010 8:54pm
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eur/usd 1.27450, entered 1 buy.

All 7 sell positions on BE.
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Old Aug 15, 2010 8:55pm
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Quote:
Originally Posted by Froggy10 View Post
good idea pipeasy... eur/jpy seems to have more down side as well.. i'm waiting for a retrace and put more shorts on..
!!!!!!!

missed it.....

thats why never focus on one pair...

edit: unless you have 4 heads and 20 eyes... keep moving around the charts
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  #889  
Old Aug 15, 2010 8:58pm
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eur/usd

2 buy positions growing. Momentum picking up

Sell positions dying on BE...
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  #890  
Old Aug 15, 2010 9:01pm
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gentleman, im just following the market using momentum.

eur/usd

2 buy

3 sells

what does this tell me?
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  #892  
Old Aug 15, 2010 9:04pm
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eur/usd

3 buys, 2 sells

1 loss (12 pips)

sellers all leaving. Traders are temperamental. They are unfaithful and unloyal. I dont like the look of the current up momentum. A big crash or retrace is due.

Getting ready to defend and will enter buy after retrace.
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  #895  
Old Aug 15, 2010 9:14pm
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eur/usd

i was watching price coming down towards 1.27500 which was also 4hr support.

I was anticipating momentum which was present however it stalled and died. This is quiet often and I do not regret it didnt work out cause they will always be more prices approaching .50 and .00.

I prefer to watch price action at .00 but this morning I just happen to be on my computer.

Currently I have 2 sells and 3 buys, all moved to BE and 1 loss of about -12 pips.

That is enough for now.

I will try again later.

Sincerely,

Graeme
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Old Aug 15, 2010 9:19pm
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I forgot about gbp/aud

3 buys still remaining.

8 positions added for this morning.

Total cost of our little adventure this morning. -12 pips.

I will gladly pay that price everyday, anytime for the opportunity to catch something many many many times bigger in rewards.

This 8 positions could be start of something huge, nobody knows and I will now leave them alone for the market to decide

Sincerely,

Graeme
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  #897  
Old Aug 15, 2010 9:26pm
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eur/usd

1.27500.. you should be watching

Momentum??
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  #898  
Old Aug 15, 2010 9:29pm
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eur/usd

2 sells, 1 buy.

See how price stalls/lingers around 1.27500. That is not momentum.

If there was a stack of sell limit orders on 1.27500 then it would be a large bold candle down.

I wouldnt touch this.

Oh dear... wick bounce @ 1.27391

Rmemeber wicks?
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Old Aug 15, 2010 9:45pm
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Just before I go out for the day

Does all traders know the cons and pros of trading higher and smaller timeframes?

Lower timeframe

More losses (less accuracy) and more drawdown. Potentially higher profit as you will be in the trend much quicker. More micro management if possible in the traders skill set.

Higher timeframe

Fewer losses and lower drawdown (hypothetically). Potentially similar profits however for the less amount of risk you would expect slightly lesser rewards. Less micro management needed which is not necessarily a good or bad attribute.

Pros recommend learners to start on higher timeframe as you would need a stronger mentality and skills on lower timeframe.

Traders often get discouraged at the number of losing trades. Pros dont care at the 'amount' of losses however ensure that each winning trades are stretched out to cover more than all the losses combined. This is the required mindframe.

Edit: Fantastic job Ben. Keep watching the markets for the next volatile breakout.

Sincerely,

Graeme
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  #903  
Old Aug 15, 2010 10:01pm
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Quote:
Originally Posted by zznbrm View Post
This is very confusing to me.

Why are you trading both sides of the EURUSD from a M5 chart during the Asian session? You started with sells tonight and then changed to buys a few minutes later. So, your discussion on the first page of the Monthly/Weekly/Daily trends means very little to your entry strategy? Really, you are just looking for short-term momentum in which you will hopefully find a few trades that will "stick" for long term growth. You've already taken over 10 trades on EURUSD alone...that seems like many more trades than you mentioned...
ok.

I have no intention to contribute to your learning seeing the nature of your post.

I took the trades as there was momentum available which is quiet rare during asian session and I was present at the computer.

8 entries per day is worked out from the average number of entries i performed over the last 2 years. It varies day to day. Soemdays I have 1 entry while somedays I may have more than 10.

I took both buy and sell from s/r breaks and momentum stalls.

Asian session is open price of the daily candle which I look forward to as open prices have a greater probability of surviving for the long term.

Trends start from 5min charts as well as daily, 4hr.

Perhaps if you were confused you should ask questions without throwing around blatant assumptions.

No offence taken and I also wish you well in your trading.

Graeme

Last edited Aug 15, 2010 10:26pm
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  #909  
Old Aug 15, 2010 11:50pm
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Quote:
Originally Posted by ozziedave View Post
Hi Graeme,

I was just looking at the EURUSD 1hr chart from the start of the day on Monday. You talked about seeing momentum on the EURO, I'm trying to figure out what you saw that gave you the indication there was momentum and where you started to place trades. On the hour chart there is a break down from a small area of consolidation that only last 1 candle. Is that the area you placed your trades in?
Good morning, Dave

Good question.

I was particularly interested in eur/usd this morning as there was a very large move last week.

I noticed that 1.27500 was also 4hr/1hr support. As we all know I only trade when there is a volatile breakout. Volatile breakouts are usually price that breaks the support/resistance and closes far away from it. If it retraces back that is not a volatile breakout and I will close out with a small loss.

Im not sure if you witnessed the movement this morning but from 9am sydney time, after first 7 5min candles you can clearly see mini range breakout followed by clear downward movement. The very first 5min candle is a flying buddha and that was my first position. What I saw at first break of 1.27500 was a single long bodied down candle which clearly pierced the support. This move would have been very large if the price didnt stall at 1.27325 but continued on as a volatile breakout.

I knew it was all over when the price stalled and the double wick bounce at 1.27327 15minutes after on the 5 minute chart. This double wick prompted me to enter buys.

Now we can see that it was a failed breakout.

I will show some charts later tonight on volatile breakouts. Best breakouts are the ones that travel very far from s/r in one single candle. These are usually the beginning/resume of a trend.

Sincerely,

Graeme

Last edited Aug 16, 2010 12:19am
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Old Aug 16, 2010 12:18am
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Quote:
Originally Posted by leggo View Post
Hi Graeme,
Could you please share with us when you move the stop to B.E. on the 5 min chart? Do you just do it from feel or do you have a set number of pips?
Regards,
Ben
Good question, Ben

5minute charts are very fast and furious.

Its like driving very fast. You do not need to look behind you or the side mirrors as long as you know your direction/destination very well and drive straight.

I do not have set number of pips, its all personal discretion however when price stalls I will move most positions to BE.

Sometimes when price stalls I close the last 1,2 positions that are in very small profits to minimize my exposure.

Sincerely,

Graeme
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  #913  
Old Aug 16, 2010 12:36am
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Quote:
Originally Posted by charvo View Post
that was very "real" breakout at that moment. i actually followed eurjpy, and buy and sell both, but both didn't work out, just exit with same reason of yours.

i love these LIVE trading examples. i LIVE them too.
Good afternoon, charvo

Im glad that my live comments helped out.

Yes, you are correct. That breakout was an official momentum/volatile breakout for that moment and I too was looking forward to it.

There will always be more price action at the next s/r or .00.

Thank you to Froggy10 as well who helped out.

Unfortunately I missed out on eur/jpy as I was glued at eur/usd.

Traders must be moving around from pair to pair.

Edit: I reassure myself mentally by knowing that it was a possible golden opportunity that I could have profited big but unfortunately due to fluctuations I have no control I ended up with -12 pip loss.

I still have buy positions on both eur/usd and gbp/aud alive as we speak

Sincerely,

Graeme
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  #917  
Old Aug 16, 2010 3:27am
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pip_daddy - true. Many volatile breakouts happen during uk/us. However when your present at your computer during an asian session and there is a valid volatile breakout there is no reason not to take it.

mjotic - Nice observation. There is no such thing as wrong observation however there is huge difference meaning between 'observation' and 'expectation.' Dont expect anything in forex and you will be fine. I was looking forward to 1.27500 this morning as I know volatile breakout would mean alot of profit and this comes from witnessing/watching many many many breakouts. I have a slightly different mentality to yourself which is choosing to arrive at the action earlier if possible without increasing my risk.

The first 4 hour candle was definitely a valid breakout (with momentum) however it failed and retraced back. I was positioning myself for a greater reward if the breakout was successful and hoping it would continue to close at the bottom of the now wick of that 4hr candle at 1.27300. Most likely 8+ positions comfortably.

usd/cad has a great move last week. Series of flying buddhas at 1.04700 should tell you that price is stalling and having difficulty to continue upwards. The most optimum entry was a volatile breakout at 1.04460 to break the 3 wick touch. I have a sell position just there and another 1.04400 as this was 50% fib of previous candle. Both positions closed at BE this morning and I lost nothing for the opportunity.





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Old Aug 16, 2010 3:30am
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Quote:
Originally Posted by luqmanz View Post
Thanks for your good lessons...
Just to share what I discovered.

It seems to me that it's difficult (for new traders) to maintain a cool head when suffering from a string of losses if trader have a fixed R:R like 1:3 ... the reason is because, for new traders, high accuracy is something almost impossible to do. Lose 3 times and trader will start to question his ability.

Only by having a large R:R ratio .. 1:50 or 1:100 (or 1:infinity) can new traders feel comfortable during losing streaks ... They feel they can lose many-many times and still...
Good.

You are correct. Just to add more to it, alot of traders are anxious to close a winning position to re-coup their previous losses they had but more importantly they are not sure what they are expecting.

The above trader definitely does not have '1 thing'

Sincerely,

Graeme
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Old Aug 16, 2010 3:45am
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Why did I trade/watch eur/usd this morning?





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Old Aug 16, 2010 3:48am
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Quote:
Originally Posted by leggo View Post
Just been taken into my first "volatile breakout" on Chf/Jpy 4hr chart. Lets see how it works out. If it closes above I will zoom in to 5 min and try some stacking of positions.
Regards,
Ben
Im there too Ben

2 flying buddhas few 5min candles before.

Other than that plenty of space to move up.
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Old Aug 16, 2010 3:52am
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Quote:
Originally Posted by leggo View Post
Hope so! Starting to stall on 5 min though will have to wait and see.
If wick bounce on 82.353 it would be golden. If broken then Im out.
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Old Aug 16, 2010 3:54am
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Price at close of previous 4hr candle @ 82.407.

Double wick bounce confirmed at 82.353

Closing soon above resistance

Good Good
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  #926  
Old Aug 16, 2010 3:56am
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Im expecting 50% retrace of previous 5min candle to 82.461, if not its even better. However, there are not many buyers at the moment.
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Old Aug 16, 2010 3:58am
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50% retrace at 82.461 happening now.

Need bounce away.

There is not enough momentum

Price should be much faster than this
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  #929  
Old Aug 16, 2010 4:01am
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82.461 bounced away

But not enough momentum/traders to piggyback. Can you see this?

I entered 82.20. Moving stop loss to breakeven
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Old Aug 16, 2010 4:02am
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Quote:
Originally Posted by leggo View Post
Im waiting to see it clear resistance at 82.50 if it does I am moving stop to be and look to stack
Ben,

82.50 might get breached but you must notice that there are no other traders. We must move on to the next 'better' volatile breakout.

That 82.50 should have been punctured very easily.

Move your stop loss to BE now and lets move on
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Old Aug 16, 2010 4:05am
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Quote:
Originally Posted by leggo View Post
Looking at daily its stalled a few times at 82.50 in recent days needs to clear that if not it could head south!
If 82.355 double wick support is broken then its south.

If 82.50 breaks with eye-popping momentum, yes Im in too.
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Old Aug 16, 2010 4:08am
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Quote:
Originally Posted by leggo View Post
Sorry Graeme I missed this post! Ill follow your advice thanks
We had the potential to capture a golden opportunity which cost us very little for something that could have been great.

We missed gbp/cad momentum breakout at 1.61990
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  #936  
Old Aug 16, 2010 4:14am
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chf/jpy

Are you watching?
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Old Aug 16, 2010 4:25am
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Quote:
Originally Posted by leggo View Post
Eur/Chf is going well this is my longest serving leg its from all the way back to Thursday! I had my first successful stack on it earlier this afternoon. Both stops at B.E. let the gods decide! I have had a couple of small losses today but seeing these legs grow makes the losses seem insignificant. my entries are still really sloppy though!! Got plenty of practice to do yet.
Regards,
Ben
Good job Ben.

Keep practicing.

Always keep moving around the pairs.

A clear volatile breakout is very easily noticed. When price approach .50 or .00 price should puncture with no effort.

Sincerely,

Graeme
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  #941  
Old Aug 16, 2010 4:31am
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The beauty with volatile breakout is you are risking relatively small for something great. Also some failed volatile breakouts still lose on breakeven most times as it still closes outside range.

Here are few successful ones





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  #943  
Old Aug 16, 2010 4:40am
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Quote:
Originally Posted by leggo View Post
Yes it broke through with a nice long bullish candle but then stalled so I have not entered again yet
Exactly.

It pierced but we care about what happens after. The next candle after the break should move fast and furious but it just stalled and lingered there. So we got no one to piggyback on.

This pair is not moving.

I have one position at BE
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  #945  
Old Aug 16, 2010 4:55am
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Quote:
Originally Posted by fugly View Post
Graeme in the above example I'd just like to ask:

1)You mentioned he moves to Be before adding each new position, can i ask at what point he moves to BE, for example will he move to BE on the close of the candle he made the entry? Od does he move to BE later?

2)In the above example as he moves to BE before making an additional entry so he makes the inital entry after the flying buddha marked by the first orange circle, on the close of that candle he moves to BE. He makes the second entry on the next candle marked by the second orange circle...
Good afternoon, fugly

Great question and observation

Joe moves his position to BE at the opening of the next candle if its in profit. And then will place another order at 50%. Yes, that X will close first 2 positions at BE and 1 at loss on the 4 hour chart.

Joe uses same principle to stack on 1 hour (and on 15minutes most times as well). So when that X candle is going up it is also closing out few of his 1 hour positions as well. However, he will continue stacking positions until a 'confirmed' 4 hour candle does close over the open price of the previous candle which in this case it doesnt. So in another words he would have positions when price is coming back down on 1hr chart that does not show on that 4 hour chart. When the first confirmed 4 hour candle does close over the open price of the previous candle then he closes half of all his positions including 4 and 1 hour.

His '1 thing' is in stacking positions without the anxiety attack most traders experience. This is up to each individual traders personal risk tolerance.

Even if the price only moved 2 4hr candles down he would still manage his positions to close out on profit and keep the rest for free.

To be honest that chart is not showing a optimum opportunity but even that chart would have pocketed Joe a tidy profit.

If you zoom out and look at a 4 hour chart, you will notice some buddhas run for days. Im not exaggerating to say that Joe would stack many many tens of positions quiet comfortably whilst ensuring that he is reducing/increasing his positions simultaneously.

Sincerely,

Graeme
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  #947  
Old Aug 16, 2010 5:05am
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Quote:
Originally Posted by alter View Post
Hello Pipeasy.
THis thread is very itneresting, however I feel u dont need to hold positions for months or years to be profitable. U said u take 8 trades per day on avarage.
You move SL to BE when price moves 20-30 pips in your favor and u use 20-30 pips SL. U also said u are able to move SL to BE 80% of the time.
So 6 out of 8 trades goes in your favor, and if u took profit just for 20-30 pips with RR 1-1 u would be up 120pips - 2 trade that hit SL for 40 pips. Just by your precise entry u are able to make 80 pips per day.
Now u trade 200...
Good question, alter

And this would be last before supper.

I have practiced many many many times to know which is a good momentum. However, you do not need special eyes to notice volatile breakout. You will clearly see them when you watch them. You need to witness roughly 50 volatile breakouts before knowing very clearly.

I chose long term trading cause I wish to work less and less. 5min trading is very exciting however I only do it occasionally. Most of my trades are buy/sell stops. Most readers here are still practicing greatly on lower timeframe and I thought I could lend everyone my focal interpretation as a small guide.

Your correct. I can daytrade 5 minute momentum breakout candles everyday and still create a large profit. Do you realize that this is a very very stressful way to trade.

Perhaps I have a different perspective to trading as to most but I choose to have my positions work for me and not the other way around. I do realize however good positions are rare which excites me very much when I do find a good rare one. It feels like picking up a large diamond from the fields.

This reward pleasure is very different to trading intraday when im pushed with time and goal to create a profit everyday, everyweek.

2 completely different psychological mind frame.

Edit: Currently, calculated on last 14 months my unrealized profit is over 700% of my initial starting capital

Sincerely,

Graeme
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  #965  
Old Aug 16, 2010 7:26pm
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Quote:
Originally Posted by leggo View Post
Morning Graeme,
Can I ask when we were trading live last night you kept refering to fib level retraces on 5 min chart. Do you add these levels after the end of each 5 min candle? Or do you just have a rough idea in your head?
Regards,
Ben
Good morning, Ben

Good question.

All my personal focal interpretation is done on fly. This is from alot of practice.

If I were to set golden rules about fibs

When price retraces:

33% of previous candle - stronger move that will most likely continue
50% of previous candle - evenly matched buying/selling power
66% of previous candle - stronger opposition power

If you look across any pair, any timeframe, you will notice:

Strongest trend will have less than 33% retrace
Stronger trends will have 33% to 50%
Weaker trends will have 50% to 66% retrace

Basically you are gouging/prodding the selling/buying power to gain a hindsight to what might happen next.

Doesnt happen all the time but most/enough times.

Fibs are not about buying/selling oportunities as most traders believe but it is an indication of buying/selling power. Is the power slowing down or is the opposite power increasing? That is purpose of fibs.

If trend is downwards and price retraces to 50% and then close at 33% of previous candle. That is a stall and the tredning momentum has halted. Alarm bells should be ringing and you should be preparing to phase out your positions.

Sincerely,

Graeme
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  #968  
Old Aug 16, 2010 9:16pm
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Quote:
Originally Posted by leggo View Post
So when you look to enter after a 50% retrace do you prefer the price to come back to open before you add another position? Or do you try and get in as it heads back to the open so your entry is on the wick?
Thanks for your time
Ben

Good question.

This is where pros and learners get divided.

Learners will enter what they believe is mechanical trading and will 'just' enter at the sight of 50%. They will close if they think its not working. Wrong.

I prefer to watch the 50% get tested which in my interpretation is:

Struggle to pierce 50% with momentum

and this applies to all areas of s/r (including .00)

When price drops, I must see other traders (momentum) also acknowledging what I believe as well for a much higher chance of moving my SL to BE at the very least. This is where pros and learners get divided.

Learners will enter cause its at 50%
Pros will enter after looking at what happens at 50% or any other valued s/r areas.

Traders must interpret price action properly to be successful. Price action is basically gouging/prodding the selling/buying power that is happening in the market on the screen.

Sincerely,

Graeme
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  #969  
Old Aug 16, 2010 9:38pm
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It deeply worries me that alot of traders know that price action is important however not doing anything about it.

The statement 'price action is king' is everywhere in this forum but I dont think it is completely understood by all. Even if it was acknowledged, traders are looking elsewhere for an 'easier' answer and there isnt if you truly believe price action is king.

Interpreting price action through your own personal interpretation requires actual live viewing of price at 5min timeframe. You need to clearly mark on the chart with .00 and other s/r areas and watch what happens. I would say after 50 live viewings you will have a good grasp.

You do not need special eyes to know a good momentum.

Good momentum is a clear pierce through the s/r lines. But we are interested in what happens after. Is there other traders also joining in with the break?

Volatile breakouts are the safest way to enter the market lower timeframe. It has the highest percentage of succesful trade.

Volatile breakouts are my bread and butter.

Sincerely,

Graeme
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  #971  
Old Aug 16, 2010 9:57pm
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Quote:
Originally Posted by leggo View Post
Hi Graeme,
Thank you so much. Sorry to clog the thread up but can I ask just one more question? You said that the trend is stronger if the retrace is only to 33% but both You and Joe prefer 50% retest for your entries. I just wondered the reason for this.
Thanks and Regards,
Ben

P.S. I have learnt more in the last week trading the 5 min timeframe than in the previous 8 months of forex. It is hard going at times but I know once I master this then any system I implement will succeed.
Good question.

Joe has more mechanical approach to myself. He would enter price without any personal interpretation on 5minute chart. His strength is in the increasing number of his positions and taking an advantage of a trend to its maximum capacity.

Personally, Im very different to Joe and I honestly have better success rate with my entries. I always always always prefer to have bare minimum drawdown. That is my mentality.

I do trade higher timeframes which has drawdowns that most traders would consider large however it is relatively small to what Im trying to achieve on the higher timeframe with a bigger goal.

50% fib is where most retail traders are watching and it is a strong 'psychological level.' Remember that I always try to piggyback ride and obviously it would be at areas where there is the most attention from others.

All trends start first at lower timeframe so it is very useful to master price action on 5min chart.

However, positions on lower timeframe has lower success rate as the random price fluctuation will take you out more often than the higher timeframe.

Lower timeframe = smaller losses but more number of random losses
Higher timeframe = larger losses but less number of random losses

Its give and take. Which one do you choose?

I believe its always better to learn from smaller timeframe and apply the success over to higher timeframe because you will have much more chances on the lower timeframe to demo your skill.

Methods that work on lower timeframe should also be working on higher timeframe with the exact same effect but just bigger in scale.

Hope my detailed explanation clears some of the confusion.

Sincerely,

Graeme
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  #985  
Old Aug 17, 2010 6:44pm
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Good morning, all

Apologies for the lack of replies. I had to travel interstate for few things on agenda.

Is everyone watching the price action on eur/usd today?

On 4hr chart:
Previous candle is a flying buddha and 3 long wicks touching 1.29000.

This should be a big hint to most traders as the price failed three times/struggle to break 1.29000.

Remember price action is gouging/prodding the buying/selling power.

Joe and I are watching carefully.

Im 'hoping' for a volatile breakout to south but Joe is already in with one position. Best of luck to him.

Sincerely,

Graeme
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  #991  
Old Aug 17, 2010 7:20pm
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Quote:
Originally Posted by Antra View Post
EURGBP to consider as well?
...a nice FB on the 4 hr...is it nice?
Good morning, Antra

Yes, that is a flying buddha, however comparing the eur/usd to eur/gbp I would personally choose to focus on eur/usd as it has higher probability of success as there is more than one evidence of decreasing buying power.

Personally I believe that flying buddha at eur/gbp is a stall in the trending momentum just before.

I phoned Joe just now and he has positions in both pairs of currency and also agree that eur/usd has a higher probability.

Please remember that all traders need to maximize their profit taking if this opportunity is indeed a golden one.

Sincerely,

Graeme
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  #992  
Old Aug 17, 2010 7:25pm
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Quote:
Originally Posted by Antra View Post
Only problem I feel that there is not a lot of momo around this time of the trading day....hence I was looking at a yen x but even that is quiet on the Asia open.
Still you never know.
There are two sides of the coin.

If the market is quiet and doesnt move then there will be no large drawdowns.

More often than preferred it is the shift of short term views (fluctuations) of the mass traders during uk and us that causes losses and drawdowns.

It is the false, misleading short term shift of views from traders that cause random price spikes.

Sincerely,

Graeme
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Old Aug 17, 2010 7:37pm
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Quote:
Originally Posted by leggo View Post
Thats true. There are a few F.B.s on Euro crosses trouble is do you take them all? I worry about been over exposed. I suppose that's the beauty of practising on 5 min time frame if you can get your stop to zero then you are only exposed to profit!!!!
Good question.

There is something weird and wonderful about purposefully ignoring the market. Even though you will miss out on few golden opportunity for now, you will notice that if you keep your principal constant your result in the long run will be the same.

Always choose the pair with the higher probability/trending.

Your mentality for 5 minutes is correct.

However can you handle constant number of breakevens and small losses?

How about 1 out of 40 entries will be long term leg.

Can you handle that mentally?

Trust me, when you finally come across a position that survives and becomes a leg that grows and grows, the feeling you are rewarded cannot be described. It is very thrilling and addictive.

All traders need to taste this mental reward on a live account to experience what you think you will feel.

Sincerely,

Graeme
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  #999  
Old Aug 17, 2010 8:11pm
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traderray - correct. eur/usd is the pair with the highest probability at the moment. Im not surprised to see flying buddhas on all eur cross. This happens from time to time and it is caused by the fundamental changes in the common currency involved.

Always choose the pair of currency that has highest probability. Be creative and always confirm your beliefs with a choice of your personal indication on top of price action you interpreted.

leggo - now its a breakout on 4hr chart with momentum.

My stop loss is moved to 1.29000 as I have to walk out of office for the day. Joe just sent me a message and he is excited to see this happening.

If price does stall and revert back to 1.29000 then there are 'other bigger factors' in play. Most likely it will continue south for the moment but will it continue is not known.

We can only participate and let the market reward us or not.

Sincerely,

Graeme
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Old Aug 17, 2010 8:55pm
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Just stepping out for the day unfortunately.

Just seeing momentum on 5 minute.

This must pierce 1.28500 with ease.

Watch the price action around 1.28500 this could turn out to be your first live viewing of volatile breakout or a stall.

My 2 positions are now moved to BE @ 1.28800

Good trading to all.

Sincerely,

Graeme
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  #1026  
Old Aug 18, 2010 2:44am
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Good afternoon all

I just came back to office for a few hours and decided to log in and see where the other traders are.

Thank you for your live participation and I hope it is contributing positively.

What I say next is with great importance.

It is exciting to see many traders successfully taking advantage of a given opportunity to maximum.

1. Good opportunities are rare and need to be taken advantage of completely. Not just 1 positions with 1:4 take profit and then bask in the glory but stacks of positions scaling in at the best times and then scaling out and locking in profits when the opportunity is diminishing.
2. To keep 1 or 2 of the larger legs.
3. Please dont overexpose yourself and get carried away with stacking. Each entry needs a valid reason. It is easy to lose control.

Now I need to unfortunately kick the sand castle.

1. How will you feel when the price now fluctuates and comes back closing most of your positions at breakeven?

A. Hopefully you look at this is as glass half full and reassure yourself that you were shooting for the stars (maximum profits) but ended up with minimal or zero losses from the random fluctuations which we have no control over.

2. What will you do if you have 15+ positions?

A. This is just one opportunity and good opportunities do not happen everyday. However when it does happen I hope you have the risk tolerance required to take its advantage and stretch out the profits to the extreme.

Today, was a very classic flying buddha and it happens randomly at any session. However please do not forget that opportunities like this can end in 10 minutes, 2 hours or 2 days or 2 weeks.

Can you handle it emotionally if it only lasts few hours?

Personally for me breakevens and small losses are not even noticed as I know sooner or later when a single golden opportunity comes along I will win back everything by many folds.

Just for your info I just spoke with Joe and have advised what is happening on the forum. He too is happy to hear that many others can start to see the potential of his flying buddhas.

He had few close calls but still managed to stack 10 positions on eur/usd with all legs at breakeven so he knows even if this opportunity suddenly ends he will at least make something from it. However if the price continues more than 200 pips from now, I have seen the potential amount of money he creates from it. Enough to cover the next 100-200 unlucky buddhas. Imagine how many more golden buddhas will appear in that gap of now to next 200 buddhas? That is his mentality. In his words, Joe believes he has saved enough ammo for the next 3000 unlucky buddhas just in his current trade balance.

Please do not bring short term success to your head but please keep trying. Im curious to see traders comments when a failed buddha comes along. Undoubtedly some will continue to search for other systems because few rows of unsuccessful flying buddhas. Will you?

Unfortunately with that mentality nothing will work.

In the markets, we only have slim chance at certain times to create profit. We must learn to overcome the losses and persist to look at maximizing profits when the opportunity does finally arrive.

Sincerely,

Graeme

P.S Just stepping out again.
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  #1032  
Old Aug 18, 2010 4:38am
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Thank you all for the compliments.

Apologies if I dont respond to them or the private messages as Im travelling abroad. I will get around to them.

My phone just buzzed. Eur/usd opportunity is unfortunately over.

May I ask all participants how they honestly feel? Honest answers please as there are no right or wrong.

Sincerely,

Graeme
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  #1037  
Old Aug 18, 2010 5:10am
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Thank you all for the honest replies.

Yes, disappointment. Good.

Do you think you can handle consecutive days of more breakevens?

Not many can.

However sooner or later the golden opportunity, or the golden position that will survive for the next year does happen. Not because you were lucky but it is inevitable.

Inevitable.

Inevitable.

The immense emotional pleasure from such findings are pure ecstasy to the first time experiencers. It is a very addictive feeling and once tasted with live account there is no going back.

Poke, poke, poke, poke, poke, tap! ??? WOAH!!

Not many traders get to woah phase emotionally.

I sincerely hope all traders get over this emotional hurdle.

I assume most traders are demo at the moment. Nothing wrong with that but the emotional hurdle will feel much bigger on live account.

18 out of 20 (just my personal estimate) traders will fail at this first stage as they cannot sustain the emotional rollercoaster. They will continue on looking for the next method and the next method after not realizing that the secret is just around the corner they were standing at.

I hate to use names to support my statement but just like TheRealThing and Peter Crowns said, "so after 20 or more consecutive losses, tell me, are you going to quit? Hmm I like to know"

What do you think they are talking about?

Remember TheRealThing mention about one of his inside bar position he entered with 11 pip hard stop loss that grew for $250000.00 over few years. Trust me, it took more than few hundred entries. Can you do that? What if I told you there is no other way... will you believe me or look for something easier?

Sincerely,

Graeme

P.S Just rang Joe to inform him of the outcome. He lost 1 position with -17pips. He just paid 17 pips for the potential to win thousands. Its a risk:reward that me and Joe will pay everyday, everytime.

Everyone's first emotional hurdle is here
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  #1059  
Old Aug 18, 2010 8:08pm
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Just very quickly.

Hope everyone noticed the first 1hr candle of eur/usd.

That is volatile breakout at best. 5 out 5 star.

Breaking 1.28500
Breaking 1.28440 (area, of the low wicks before)

No stalls, no resistance from buyers, just pure simple explosion.

Breakouts like this has the higest probability.

Hope you witnessed it live and see the difference between this type of excellent breakout to what we experienced yesterday.

I had 2 positions on 1.28500, just moved SL to BE as I have to leave the office for the day.

Sincerely,

Graeme
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  #1061  
Old Aug 18, 2010 8:30pm
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Just before I head out again.

Some traders would like to know how I can get my positions in so early.

Its because I 'anticipate' the breakout.

This morning wicks pierced 1.28500 but couldnt close below it.

I know that if price does puncture such areas that were tested but failed before it will move fast and hard.

I always enter first with the mentality to lose very small or win very large.

If the breakout was slow, I would move my SL to BE very quickly and change charts.

If the breakout was also another wick retrace and also a lack of momentum then I will close the positions for a small loss.

If the breakout is explosive like now, I will stack very aggressively knowing this is a given opportunity that needs to be stretched out.

If Im not travelling abroad i would definitely have 4+ positions easily in that move and more and more.

It could turn out to be another failed golden opportunity or it could be start of something huge. But the point is, I have risked zero to very minimal for something that can be huge if it happens.

This is my risk:reward

Sincerely,

Graeme

P.S Just noticed 2nd 1hr candle went 50% fib and then dropped like a rock now stalled below 1.28000. 50% fib = big psychological area for mass traders. Classic

Last edited Aug 18, 2010 8:40pm
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  #1063  
Old Aug 18, 2010 8:38pm
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Quote:
Originally Posted by mcornbill View Post
I got two positions in on Euro short, one @ 1.28417 and one @ 1.27950. Giving the one in profit some breathing room for today, will see if it can hold out for whole of UK session then move to BE.
Just a word of advice for your benefit. Hope you dont take any offence.

If price moved with momentum and then returns back. This means a bigger factor is in play. May I suggest that you dont need a breathing space to judge whether it will work or not.

Positions closing on breakeven should be enough evidence that its not working out.

Please try and not set a defined hard stop loss and consider it as a breathing space and hope for the best. If the price has reversed/stalled then the show is over and its time for you to move on.

Sincerely,

Graeme
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  #1087  
Old Aug 19, 2010 6:18pm
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Good morning, all

Hope everyone is safe and warm. It is winter here in Australia and it now changing season to Spring. As I grow older I can actually feel and smell the season changing. Something that I couldnt do when I was much younger. When I was young, I knew it was Spring when everyone started wearing short sleeved shirts and the jacket I was wearing is no longer necessary. However as I age more I can add more reasons to why I personally believe season is changing. Its the different glow in the morning when the sun is coming up, the smell of early spring flowers, the extended sunlight in the afternoons. Its experience and age telling me that Spring is arriving with greater 'clarity.'

Much like trading, a learner has reasons to indicate what is happening in the markets because it was told at a seminar, a strategy thread, or by an indicator. It is the age and experience that will add clarity into this interpretation. However, most traders will not make it there. Everyone is born as a trader however it is up to each individual traders approach to make it happen.

All of us expect to make an outrageous lifestyle out of trading. Just like a real estate investor aiming to mark his name on the Forbes magazine or the newly realeased hip hop artist trying to make it to billboard chart number 1. We are all doing the same thing by trying to be the best in the industry. The amount of practice required for a hip hop star to sing and dance to an awe-inspiring effect it is just more than few sessions, it is years of hard work. They do not whinge that its hard work and things are not working out at the moment. Its their unbending beliefs in themselves and the bone-aching sessions they go through to maintain their voice and body will payoff later on much greater than all his/her efforts put together for now. Risk:Reward

The key lesson for the past week is perserverance. Does everyone know the definition? It simply means not giving up or steering away from the intended goal.

What is your intended goal then?

It is your positions that could have been few pips loss or zero loss that turn out to be few hundred pips.

Does it happen often?

Not enough but just enough.

Not enough to drop all whinging, nagging pessimistic traders off the board. And just enough for the unbending true traders to profit over them.

Market knows your efforts. The more you try in a constant attempt, the market will soon notice your efforts and repay you more than you lost to get there. It is your job to minimize the losses and stretch the profits when market is finally giving you a good opportunity. And the market doesnt offer good opportunities everyday or everyweek. That would create too many millionaires.

Remember Joe lost -17 pips 2 days ago. Market took notice and gave him back more than 17 pips. Only a small opportunity but he still cashed out 200+ pips last night.

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  #1090  
Old Aug 19, 2010 6:27pm
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This is a dirty week. Why? Wicks.



How about last week then? Which was very hard and fast downtrend. Compare.

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  #1091  
Old Aug 19, 2010 6:35pm
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Perserverance. Can you?

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  #1095  
Old Aug 19, 2010 6:55pm
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Quote:
Originally Posted by geoffrod View Post
Graeme,
thanks again for your elegantly simple explanation of the weekly action, i personally am becoming very frendly with the weekly line chart as you showed it a while back, for me, it is easy to see the area's of consolitation, and to pinpoint where i might be taking some acton, put out my feelers,

cheers
geoff
Good morning, Geoff

Absolutely.

And im so glad to see you made the connection.

May I add that I have been using 1ema charts for daily/weekly chart for the last one year to great success.

Its very simple and powerful. But most importantly gets rid of all the candles, wicks, ranges.

Sincerely,

Graeme
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  #1096  
Old Aug 19, 2010 6:58pm
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Quote:
Originally Posted by leggo View Post
Morning Graeme,
Does Joe use 1hr chart for flying buddahs too? I only ask because there was no flying buddah on 4hr last night only 1hr.
Kind Regards,
Ben
Hi Ben

Yes, Joe uses flying buddhas on 4hr and 1hr. All methods should work on all timeframe. Just different 'scale'

Joe knows that 4hr golden flying buddhas work just as well as 1hr golden flying buddhas however different scale.

It can also work on smaller timeframe than 1hr but it would be useless as the golden opportunity will be relatively small for the efforts.

1hr is the smallest timeframe he will look for them.

He uses only sell flying buddhas and 50% fib only.

Sincerely,

Graeme
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  #1098  
Old Aug 19, 2010 7:03pm
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Quote:
Originally Posted by hayseed View Post
hey pipeasy......a question if ya have the time...... in post 1087, in the picture someone has written, 'double wick bottom it's over'.....

courious as to what is thought to be over and how a double wick bottom suggests it.....

if ya have the time......thanks......h
Good question.

Few posts ago I explained to all the importance of interpreting long wicks.

Long wicks are great pressure for the price to continue but failed due to equal/stronger opposite force. Long wicks are the first sign of weakness for the current movement.

Some price or tight area cannot be breached and gets tested twice or third times to finally see the price reverse strongly to opposite direction.

Not all the times but enough times to keep in mind all times.

This can be used very effectively as a trader can set a very tight stop loss just pass the tip of wick when he notices a wick bounce on the 2nd or 3rd wick. Risking very small for something much bigger. Such like inside bars, flying buddhas.

Most important aspect of long wicks are that it shows first weakness of buying/selling power before the complete formation of the candle.

Sincerely,

Graeme
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  #1105  
Old Aug 19, 2010 8:45pm
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Quote:
Originally Posted by occamsrazors View Post
Hi Graeme

Very interesting thread. I have query about where entries need to be positioned in order to survive the pullbacks in a trend. I'm not sure if I'm missing something basic.

Below is a H1 chart for EU that has a 600 pip uptrend over 12 days from July (sorry for the big chart, but I wanted to get the whole trend in). The blue areas highlight where a trade would need to be taken in order to survive the uptrend without being taken out by a pullback at breakeven.

Only one breakout area from a range (purple) survived and that was half way...
Good question.

It looks bleak doesnt it.

As long as you continue participating the market on low/zero risk and keeping the largest legs for long term growth it will inevitably happen.

I do not know when it will happen but I know sooner or later it will. It looks like you zoomed in 12 days worth of 1hr chart? 12 days is not even a dot on the infinite space and time of the markets.

I understand what you are asking but I have no answer but suggest that all you can ever do in trading is just participate and the rest market does for you.

Good portion of short/medium term growths are captured in one of the numerous number of diversification along the way of long term growth for the surviving legs.

Having said all this, I will forecast with greater probability that the downtrend of eur/usd that started last week if it continues; any positions you held onto from last week will at least survive weeks or months. I have seen it all too often.

Occam, its like growing hair. Have you grown your hair before? Back in my younger days, grunge was a huge thing. And I too participated in growing my hair.

Everyday I take a shower and notice a whole clump of hair falling out. But after 2 years I had very long overall hairstyle. How is that possible when I lose big clumps of hair everyday? Its because some of the longest strand of hair that did survive 2 years makes my hairstyle look very long when in fact most of the hair that covers my scalp are medium to short strands. Please think about it as it is very close analogy to my trading concept.

Sincerely,

Graeme
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  #1106  
Old Aug 19, 2010 8:51pm
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Quote:
Originally Posted by leggo View Post
Two failed flying Buddahs this morning Im dissapointed that I over exposed myself should not have tried 2 x AUD crosses. Lesson learnt! For a while they looked really promising tested the wick of the previous candle then came back down. Unfortunately they then pushed back up and wiped me out. I will keep an eye on them though and may trade one with hindsight later on.
Regards,
Ben
Ben

Write down your losses and keep going. Hope the initial entry after flying buddha is just one position and after the success/SL moved to BE and then you would stack. This way you arrive nice and early for the first position and the next would be in line with the confirmed direction of the movement. I know this is harder on 5min charts but the benefit of 5min chart is very very small lossses.

Sincerely,

Graeme
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  #1108  
Old Aug 19, 2010 8:54pm
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For the moment, buyers have the upper hand in eur/usd. I have one position @ 1.27950 when price bounced for the 3rd time. Stop loss @ 1.27850. Im risking 13 pips for perhaps the start of the next 2 years of uptrend? I dont know but I will participate and let the market tell me. Watch this one everyone.

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  #1109  
Old Aug 19, 2010 9:00pm
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Thank you for the compliments fxsurfer and all others.

Sorry for the lack of replies recently in posts or private messages.

I will be returning home this weekend.

Please keep practicing.

We are fishing for the big catch. Although we brought limited amount of bait with us, we cannot help when the line gets snagged or the small catches until the big large one. We keep some of the small ones to feed on and the large ones to bring back to cherish and boast on.

Sincerely,

Graeme

P.S Just stepping out for the day.
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  #1123  
Old Aug 20, 2010 6:03am
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Quote:
Originally Posted by @mel View Post
Good morning Graeme,

I came across your thread the other day and I decided to read it because the title of the thread got me intrested. There is no doubt here for me that you are a great trader, I believe that you are doing a great job at teaching your methodes to others, even if our way of trading is completly different, I really liked what you have to say here.

I took the liberty of posting my first reply to your thread, as I have notticed something concerning the ''flying buddha'' methode, and I hope you will not mind. If you do please tell...
Good evening, Mel

Excellent observation.

Flying buddhas that does work out tends to be the upper corner (or the lower corner if on opposite direction) of the (triangle) pennant. Yes, correct and both Joe and I know this very well.

It also can be a high probability inside bar.

It also can be the very start of a major trend change.

It also can trigger a volatile breakout and explode towards the intended change of direction.

Flying buddhas are the apex of the change. Its either going to change very large creating a very large opportunity or create a small loss.

With flying buddhas, you only need maximum; 1 initial entry and 1 re-attempt afterwards to know for certain if its not working out.

I choose not to re-attempt but Joe waits for a clear breakout for a single re-attempt before admitting his loss.

To maximize your profit taking, the stacks should be taken soon after the initial position is moved to BE and immediately after on the 1hr chart at every 50% fib.

If you scroll back your chart and choose any flying buddhas that did work out well, you will see that you will have multitudes of positions before the first sign of weakness on the 4hr chart in which you scale out and then scale back in if the trend picks up again.

Hope it enlightens all readers little further

Sincerely,

Graeme

Last edited Aug 20, 2010 6:32am
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