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Building an equity millipede
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Aug 20, 2010 6:17am
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crede quod habes, et habes
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Mel
You said the golden phrase.
Biggest move happen when price doesnt retrace back to trendline. (or any type of s/r, .00)
Readers need to really know this...
Its why volatile breakouts are used by alot of pros as it has
1. Greater probability to create a profit
2. Big moves usually are start of something huge. Not always but plenty of times.
Sincerely,
Graeme
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Aug 20, 2010 6:24am
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crede quod habes, et habes
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I hope all traders are noticing the explosive momentum happening on eur/usd.
Today is Friday. See how market doesnt care about such wrong myths.
My little position died on -13 pips @ 1.27850 but I wanted a breakout to south when price pierced that area with volatility if it happened.
1.27500 was stalled for a moment before being cut into by a explosive momentum. Hope all traders caught this as this is the easiest way to make money in forex; volatile breakouts.
Unfortunately I missed all this cause I was at dinner. I know there are plenty more next week.
My positions on eur/usd from last week are now well into profits and I believe this is start of something very large.
Good weekend to all.
Edit: I would like all readers to notice 3 long upper wicks on 1hr eur/usd chart before the compelling momentum. Buyers pushing hard but losing power. Tested a tight area of price 3 times before finally succumbing to sellers. Sellers had enough and blasted back. Everyone should see the wicks as the first warning and then after the first notice of explosive volatility should have piggyback rided all other traders for an awesome ride.
Sincerely,
Graeme
Last edited Aug 20, 2010 6:43am
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Aug 20, 2010 6:37am
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crede quod habes, et habes
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Quote:
Originally Posted by geoffrod
definitely with you on this one graeme
up nearly 100 pips so far
it is great to be on the good side of the strong momentum.
i got out of my eur/gbp trade -15 little loss for being on the wrong side of the momentum, it may turn around again, but it was going the wrong way for me with momentum.
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Well done, Geoff
Its also a skill to know when to quit. Wrong side of momentum is the worst thing I can think of. Its going the wrong direction of one way lane.
There is something that will happen today.
I call it law of elasticity.
Newton's law: There is always equal and opposite force.
Such steep price movement will be corrected by a steep opposite force. Stack early and when momentum slows down, STOP stacking.
Watch this elasticity bounce happen tonight. Price cannot continue on at 170 degree steepness.
Edit: The best thing sellers can do on eur/usd is stall the price. That is the best. But traders are very temperamental. They will close their position in fear of losing their hard earned profits. I see a long wick already. First sign of weakness. Your stacking should have stopped many minutes ago.
Sincerely,
Graeme
Last edited Aug 20, 2010 6:48am
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Aug 20, 2010 10:01am
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crede quod habes, et habes
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Quote:
Originally Posted by pip_daddy
Hi Graeme. Thanks for your continuing contributions. I know I have benefitted tremendously from it.
In all honesty I do not see what you are seeing . Without knowing the 3rd candle was going to breakout, what makes those 3 candles that much different from the previous 17 candles? I see at least 2 groups of 3 doing the exact same thing but nothing came of it those times. What I do see is that these last 3 came at the start of Frankfurt/London session and that is significant to me. Is that part of what you like about those 3 candles? Reading your...
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Good question, pip_daddy
I trade when I have the time to sit at my computer. I do not have a set routine when to trade. That is defining my action and I do not pre-define anything in the markets.
Alot of traders believe that they need to take every opportunity they come across to maintain some type of consistency to create profit. Trust me when I say it is the very opposite. You only take few of the opportunities that come across. Remember the random number game we played few weeks ago?
This random participation works out very well for me as I'm 'unknowingly' spacing out my entries.
Yes, I miss few golden opportunities (like today, on eur/usd) but I also fortunately miss most/all of ranges. Profits are similar on the long run.
Wicks warns first. Wicks are before the complete formation of a candle.
They give great hindsight. Not all the times but enough times. Focus on extra long wicks. They are there for a purpose.
Look at this week eur/usd. Some major wick interpretations
I use long wick interpretation all the time to great success
Sincerely,
Graeme
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Aug 20, 2010 10:09am
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crede quod habes, et habes
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I wish to say something very important.
This is an important lesson.
Does all traders know that all indicators, support/resistance, trendlines differ from each individual traders??
And yet the market is completely neutral and universal it will accomodate all traders different lines (focal interpretation).
In other words, a trader who uses 21 ema can have equal success to a trader using 40 ema.
Also, two traders using just trendline break can interpret little differently and yet both still make profit?
I could draw a support line but you wouldnt.
You would draw a support line but I wouldnt.
But we both still win? (or both lose)
Does anyone know why??
If you really know why..
Then what universal 'element' exist between two different traders that at the end cause similar results?
Sincerely,
Graeme
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Aug 20, 2010 10:37am
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crede quod habes, et habes
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While I have your minds thinking about my question above.
Allow me to add another tool to your interpretation.
I also use this to gain a hindsight to what might happen next.
Not all the time but plenty of times.
I hope all readers remember my long wick interpretation with charts many posts back. Allow me to add the icing on the cake.
Does all traders agree with me that wicks show weakness in the movement?
What if I know with greater probability that the weakness is genuine?
So in other words Im looking for a decrease of power on the charts?
That would be a very useful and powerful tool to have. To know that buyers are losing power or sellers are losing power by using price action and not by an indicator.
This is the final and advanced level of wick interpretation.
A decreasing slope indicates buyers losing power as time goes. A greater chance of sellers to push price down hard.
They are on top of the emas as we are looking for buyers weakness.
Here are few. They need to be good angle (not too steep) and very close in pippage.
What happens after?
There must be at least 2 but preferably 3 wicks. The wicks need to be relatively longer than usual. The slope must not be steep but reasonable.
Here is another
What happens after?
Preferably next to each other, but could be little apart but the angle must be reasonably not too steep.

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Aug 20, 2010 10:41am
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crede quod habes, et habes
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Aug 20, 2010 10:44am
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crede quod habes, et habes
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songbo, willf
Thank you very much for the answers.
I was looking for 2 answers specifically and glad to see them as the first two.
Yes.
Participation and Trend. Superb!
ozziedave
Thank you for sharing. Im absolutely thrilled to hear your new found hindsight and also glad to see that you have overcome your emotional hurdle. Thank you for staying from the very start. Only the best wishes to your trading.
Sincerely,
Graeme
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Aug 20, 2010 11:04am
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crede quod habes, et habes
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Quote:
Originally Posted by ozziedave
Universal element is price. Everyone has their own interpretation of trend lines, support and resistance and even indicators but price is the only consistent element.
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Excellent.
Excellent.
Dave took it one step further.
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Aug 22, 2010 12:04am
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crede quod habes, et habes
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Good weekend to all
Apologies to address everyone in one single post
stimulus - Yes, that would work as well. Everything works cause its all relative. The reason why various applications work is because the risk is minimized to a static small loss while the profit is maximized to the very end of the opportunity. Static loss versus infinity growth?
dsan - Yes, all correct. Traders needs the risk tolerance required to take small losses to achieve bigger goals. Following the flow of the market to create profit and maximizing their profit by stacking positions. All correct.
fugly - Yes. I will come to this topic today in detailed post. Thank you
mjotic - Yes, I will also come to this topic today. Thank you
Midknight - Yes, I will also address something for your benefit today. Thank you
Swingman - Thank you for your critical contribution. Greatly appreciated.
Today, I wish to spend few hours to address some of the common questions that are always asked. There is no such thing as wrong questions and I understand why similar questions are asked.
I understand that this thread is now very long and unfortunately it jumps around from topic to topic without any constructed flow. Even though the puzzle pieces are all over the place there is enough blueprint here for any avid new learners to piece the information together.
I hope that the next 10 or more posts that I do here will be the strings that attach those puzzle pieces together.
Sincerely,
Graeme
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Aug 22, 2010 12:26am
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crede quod habes, et habes
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Why is stacking important? How does it benefit a trader in the long run?
Market is never always a perfect opportunity. Most times, the market will make you lose. It is the traders ability to minimize these losing periods. There are many ways to minimize losses but the main purpose of minimizing losses is that you are conserving your capital for the next better opportunity.
The best way to minimize a drawdown is being upskilled in your entries. Knowing when to enter and how to enter. Growth/profit starts from your participation however there are bad ways to enter and good ways to enter.
Never overexpose. There are many traders trying to hard on one single day. I rarely do more than 1 re-attempt after a failed entry. Anything more is overexposure. Sometimes I have streaks of successful entries. I simply continue adding more positions until I encounter first loss and then I move away from the pair of currency.
All the above has been said few times already in this thread so I wont continue anymore.
Market is neutral and universal.
If you set a pre-defined entry and exit like:
Enter after pin bar, 40 stop loss + 160 take win. (or anything similar)
Will you agree with me that your equity curve is more or less look like below?
The time represented in the above chart could be over a span of few weeks or months. Even though the curve is slowing arching away from the $0 but we all know how painfully slow it takes for the trade balance to grow. Would you agree?
There are few traders who believe that they could raise their lot size to compensate a good return but assure all traders that is very dangerous.
You should never raise your lot size to make your profits look bigger.
You should raise your lot size when you know you can make your profits bigger.
This is the ideal equity curve for the same period.
Ofcourse we all prefer the above equity curve. Lets analysis the above equity curve. Technical analysis work everywhere in life. Not just forex markets.
The dips are much shallower and the sharp injection of profit is almost a volatile breakout. How can we achieve this?
Continue on next post..
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Aug 22, 2010 1:12am
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crede quod habes, et habes
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It is by stacking positions into a given golden opportunity.
Last 2 weeks of eur/usd has been fantastic. A rare opportuntiy that should have been caught by many. There are plenty more coming so please do not worry if you missed it (infact I missed most of last week).
Why did I focus on last 2 weeks on eur/usd? It was golden buddha on the weekly chart.
Nobody mentioned this so Im assuming that most traders are not looking at weekly chart. I spend more time on weekly, daily chart then the smaller ones. Weekly/monthly charts are your total battlefield. Smaller charts are precise locations to deploy your soldiers.
Now if price moved 550+ pips for you and a trader captures 190+ and basks in the glory unfortunately they are on the losing team in the long run.
How many 550+ for 2 weeks movement do we experience in eur/usd? Not often...
A trader enters with 20 pip stop loss and 180 take win. He is thrilled that he got it cause its 1:9. Shame, thats not what risk:reward is there for.
I assure you, if this same trader does the same thing everyday, everyweek, he will notice one very important fact.
1:9 is very hard to achieve.
Lets stop here and analysis 1:9.
Market is neutral and universal. It would be safe to 'assume' that a trade with 1:9 has approximately 10% chance to achieve its final reward. All numbers are related and correlated with universal happenings and items. However in the markets, numbers (expectations in %) are slightly bent out of reality. If you have 1:9 trades you will find after few months of trades that your successful positions are not 10% of all your trades taken. This is because of the random fluctuation of the market.
Thats why alot of traders say trading is a zero sums game and it is very true.
However, you can play this dirty game against the market itself. If market is going to play tricks on you then you can use the very same principal against the market.
When market wants to take your money. Let him. Let him take 1 lot.
But when market needs to payout, make sure you always take more than he took from you.
Its a give and take game but when he takes you only give 1. When you take you take infinity. Thats when your making money from the markets.
Range is when market is taking money off traders.
Trend is when market is paying out.
1. Your entries must be tight
2. Never overexpose
3. Always be willing to give some to the market
2 traders looking for the flying buddha pin bar. Trader A has fixed stop loss and take profit. Trader B looks at stacking and keeping his losses minimum.
Trader A & B both suffered -100 pips over the last week.
Finally a good flying buddhas comes along.
Trader A takes 150 pips and is very happy that he has covered -100 pips of last week and made net profit of 50 pips. He moves onto next opportunity.
Trader B adds 2 more positions after the initial and his average pip per position is 100, total 300. Trader B closes 3 positions and banks net 200. 4 times more than trader A.
The risk? It was the same for both traders.
Trader A risking with stop loss for 1 position.
Trader B risking positions @ breakevens and 1 position with stop loss.
Same risk for 2 different rewards.
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Aug 22, 2010 1:23am
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crede quod habes, et habes
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So what happened last week?
Two weeks ago we noticed the flying buddha on eur/usd weekly chart. He noticed it first and text me.
Joe made a whole bundle for the last 2 weeks +1000 pips at least. All his positions closed.
Myself?
Last 2 weeks on eur/usd
I have 112 pips of total loss and 5 positions still open.
Average pip per position: 200 pips
Current unrealized: 1000+ pips
Total realized loss: 112 pips
Total realized profit: 0
Joe is winning for now but if the current downtrend continues for few more hundred pips I would double his golden opportunity by doing nothing.
I will gladly pay 112 pips everyday, everyweek for something similar.
Sincerely,
Graeme
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Aug 22, 2010 1:57am
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crede quod habes, et habes
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Graeme what entry methods do you use?
I use the very same entry methods that I use on lower timeframe in the higher timeframe.
Alot of pros recommend traders to use highter timeframe first and then move onto lower timeframe.
I recommend the opposite.
I believe that all traders have alot of unnecessary fear. To overcome this fear I believe all starting traders need to experience some pain purposefully. Pain on the shorter timeframe equates to smaller losses. Pain on the higher timeframe is big drawdowns.
1. Low risk setups; flying buddhas, inside bars, pennants.
2. Price action; wick interpretation, price pattern

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Aug 22, 2010 1:58am
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crede quod habes, et habes
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Price pattern at .00, outer limits of bollinger band, 50% fib of major weekly/daily trend
For Short
For Long

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Aug 22, 2010 2:13am
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crede quod habes, et habes
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3. I look for volatility breakouts all the time.
a. Open price of the day
b. .00 and .50
c. Continuation breakout
Open price volatility breakout
.00 breakout
Continuation breakout
Best advice I can give the starting trader is to experience a few dozen small losses on shorter timeframe and once you taste the success you will know that small losses/drawdowns are inevitable and necessary for the bigger cause. Once you can really get your emotion under control then you would move to higher timeframe with bigger losses and drawdowns but doesnt effect you mentally.
Sincerely,
Graeme
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Aug 22, 2010 2:31am
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crede quod habes, et habes
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Today I would like to show you another way to manage your positions on the lower timeframe.
I have used this method for some time and works well.
It helps with emotional control + managing stacks of positions + allows to keep larger leg for bigger growth
Does your positions on lower timeframe die when it could have been a golden win?
Does this look familiar?

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Aug 22, 2010 2:34am
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crede quod habes, et habes
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Another common scenario. Agree?

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Aug 22, 2010 2:44am
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crede quod habes, et habes
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Watch carefully please.
Did you know stop losses can also be a benefit?
So you banked +24 pips from position B. This is where I use this 24 pips to my advantage and add it into position A as the stop loss. If the stop loss is hit then 1 position is lost for 2 positions. If price doesnt hit the stop loss you have captured position B for 24 pips + gave position A the chance to run homerun. Can you see this??

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Aug 22, 2010 2:50am
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crede quod habes, et habes
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And this method is bendable to anyway you like.
You can focus on your initial position and once price is far away you can start it again and again. It is repeatable. Risk:Reward is always on your side as you are risking 1 position for the profit of 2 positions. The more you add into it, you still only risk 1 position but now profiting from more than 2 positions.
Another common scenario. Agree?

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Aug 22, 2010 2:55am
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crede quod habes, et habes
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Aug 22, 2010 3:02am
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crede quod habes, et habes
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You would be amazed how a small 10 pip help from your subsequent position could have helped. Not all the times but enough times.
The risk:reward is always in your favour and you are capturing all the small positions if the focus position survives. Even if the focused position dies you will lose nothing or 1 position.
Hope this position management helps.

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Aug 22, 2010 3:49am
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crede quod habes, et habes
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Quote:
Originally Posted by Bakuli
Thanks Graeme for showing another approach to position management. One of the approaches I use, when trading the 5 mins TF, is taking off 50% of my initial position when I reach +20 and then leaving the remaining 50% at -20 sl, which gives that position more breathing space but also a breakeven trade should price reverse on it. The flipside to it is that my position has been"diluted" so any runs captured would also be 50% less. I like the approach you just showed as it adds on to the value of the focus position if it survives. The risk to reward...
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My pleasure, Bak
You will find the above position management will help your emotional control as well.
Good evening all
Sincerely,
Graeme
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Aug 22, 2010 6:32pm
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crede quod habes, et habes
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Good morning, all
Thank you for the kind compliments. It makes my efforts worthwhile.
The position management above is used by many. I have used it in the earlier days of trading. The benefit is quiet simple:
1. You are risking much less for greater reward so the r:r is always in your favour
2. If the focus position dies, you lose nothing or 1 position
3. If the focus position lives until you close with profit then you take profit on all the smaller position you added into its stop loss + the profit of the focus
4. It gives the focus position a much greater survivability
5. You can do this any timeframe and you will be capturing short bursts of profit and the short term growth of the focus position
6. It is repeatable in any way you like
Sorry to address all in one single post again
cameron1st - Yes, alot of traders open 2 positions. For the slight increase in risk you would be looking at slight increase in profit. On 5 minute timeframe I recommend just opening 1 position at a time as the random fluctuation of 5 minute timeframe whipsaws alot. On the higher timeframe, opening 2 positions at the same time is more viable. Correct, once the price moves away from the focus position by alot then you would move the stop loss to breakeven which captures the profit of the smaller positions that were helping out.
Bak - thank you, Lee
Ray - Fantastic results. Soon you wont even notice that you were up 1000 pips but now only 250. 1000 pips wont even get you out of bed anymore as you know that the market offers more for the resilient. Keep it up, Ray
George - Correct. Less risk for potential bigger profits. Im sure you have methods that you use to filter any bad trades as entries only from .00 with hard stop loss at 100 will cause a large drawdown. Im just saying this as I have genuine interest in your trading and hope you take no offence. I understand we have work committments however just adding the smallest touch to your current trading will work wonders. May I ask what this small touch could be?
Starvin4pips - Greatly appreciated. Thank you
pip_daddy - Also a warm thank you
flyer415 - Very true. A very small sacrifice that could turn the whole battle into our favour. How many times did we get stopped out by 2 pips for the price to move our way for 200+? Plenty.
Dear all,
You can use the position management much more than the shown.
One of the key notes I would like to address is when you see that focus position is correct and now growing larger. Add positions to double, treble your profit.
When market is in one of those dark moods and ranges. Runaway or be willing to give one position as a maintenance fee.
When market pays out, make sure you always take more than you gave to him.
Just with this mentality, you are already ahead of the rest of the group.
Good day to all
Sincerely,
Graeme
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Aug 22, 2010 7:25pm
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crede quod habes, et habes
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Quote:
Originally Posted by leggo
Morning Graeme,
Can I ask a question? I was wondering if you ever take a small gamble of sorts and try and get right on the tip of a four hr wick? I have shown what I mean in the chart below. It seems to me the best place to go short is as soon as the price hits the previous 4hr candle high. This way you can enter with very small risk and have your trade right on the apex of the retrace. If the price pushes through this resistance and takes you out then it wasn't to be and you can maybe try again if there is a breakout later on? It is something...
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Good question Ben
Yes, I will always anticipate what might happen.
I would normally watch price action at such areas. If its a bounce and retrace then I would enter with the flow early and place stop loss above the area. If the area breaksout with momentum then I will follow the flow and enter a buy with stop loss below the area.
This also works for yesterdays high/low, daily open, and .00
It happens everywhere.
Edit: Most important thing is never to re-attempt more than 1. We are looking for trades that goes to profit with one attempt. And when the first attempt works out, we would stack until the first loss and then stop. But this is at everyones personal risk tolerance.
Sincerely,
Graeme
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Aug 22, 2010 9:03pm
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crede quod habes, et habes
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Quote:
Originally Posted by fguru
Hi Graeme,
I want to thank you very much for this wonderful thread and your great support.
I see a Flying Buddha on USD/CAD H4 time frame. Checking lower time frames like M30 I see there could probably be a breakout at 1.0470. Do you think this is worth watching?
Your comment would be very much appreciated.
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Good morning, fguru
Flying buddhas are always worth watching.
Consider the tip of the upper wick of the flying buddhas a strong resistance. If price closes above it then it failed. If price closes below the flying buddha then the chances are on your side.
We can only participate with low risk and see how it plays out.
If it doesnt work out, we lose 1 position
If it does work out, we stack positions until the opportunity is over which could be few hours later, few days later, or weeks.
We will never know by sitting on the sideline and just speculating. We have to participate at low risk entry.
Your profit/growth starts from your participation.
You have clearly marked s/r on 1hr/30min. The key to successful breakouts is in the volatility.
"we are interested in breakouts that never retrace back to its entry"
Sincerely,
Graeme
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Aug 23, 2010 1:02am
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crede quod habes, et habes
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Quote:
Originally Posted by leggo
Hi Fguru,
I am watching this too, 3 FB's on 4hr and counting. On my feed the last 3 wicks have a nice downward slope as Graeme discussed a few posts back. Could be one to watch.
Thanks,
Ben
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Good observation, Fguru and Ben
Notice the slight decrease in slope which is a hint.
Top of the wick of the tallest flying buddha still holding resistance.
I would be very interested to what happens 'after' this range.
Current 4hour candle is below the range, but its important to close below it and not retrace up.
Not a volatile breakout but if you had a position at 50% fib of the tallest flying buddha candle, you are participating well.
See how you are participating on a small risk, approximately less than 20 pips for something that could yield so much more if it happens.
Once the momentum picks up and drives the price further down, zoom in and stack till the opportunity is over. It could end in few hours or few days.
20 pips for the potential of unlimited profit. Perfect risk:reward and definitely worth a position for.
It is also a psychological assurance to see that to break the flying buddha upwards, price needs to pierce 1.05000.
Volatile breakout to the north or the south?
For now, its south. The only thing that worries me is that there are no momentum after the flying buddha. Im interested in volatile movement after a flying buddha. Anything else is a stall.
Willf - I use to use 1,2,3 however noticed that what I do now is very similar to what could be done when using 1,2,3 more or less. If it works for you then please keep to it but remember to stretch out your profits when the opportunity does arise.
swingman - thank you for the continued contribution.
Sincerely,
Graeme
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Aug 23, 2010 1:13am
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crede quod habes, et habes
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At the moment Im focusing on gbp/usd 5min.
Triple wick bounce @ 1.55720
I prefer these type of high probability low risk entries.
My entry is at sell 1.55670 & stop loss is at 1.55760. Just over 10 pips for something spectacular.
Im also interested in adding more positions into eur/usd this week and was anticipating an upward retrace.
Only low risk entry I took notice was few hours ago on 5min chart of a flying buddha @ 1.27210. I entered and stop loss above it @ 1.27260. Risking less than 10 pips for something that would be huge if the price continues the downtrend of the last 2 weeks. If this position is successful then it would be on the upper wick of the down weekly candle at the end of this week.
So at the moment just over 22 pips is on risk at the moment. But can you see that if any hits that would be at least few hundred for me + the opportunity to keep larger legs in my millipede.
All the above is slightly different to what I mainly do in position building but Im participating into this thread and doing what all traders should be doing for now. Which is low risk entries for infinity yield.
For now, Im prodding here and there
Sincerely,
Graeme
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Aug 23, 2010 1:52am
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crede quod habes, et habes
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Just an update:
gbp/usd 5min is now well into my intended direction. Stop loss moved to BE and another position added into 1.55600. Good compelling momentum at the moment.
eur/usd 5min is now well into my intended direction. Price now dropping back to open price of the day. Another position at 1.27100 and initial position also moved to breakeven. Good momentum pierced daily open line.
Can traders see what Im doing?
Sincerely,
Graeme
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Aug 23, 2010 1:59am
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crede quod habes, et habes
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The more price moves towards the intended direction the bigger my potential profit but the same small risk.
I can do this everyday, everyweek.
If price reverts back to its entry I lose nothing.
Will I feel disappointed? Absolutely not. Do I feel excited? Absolutely not
Why?
Cause I know inevitably market will take notice of my efforts and give me a great golden opportunity where price does move few hundred pips easily.
Does all traders know the secret to ema??
Price always comes back to ema.... whether it is 5ema or 200ema.
Im sure many traders know this little trick but do they implement it?
Unfortunately not
Traders are looking for crossovers for entries, meanwhile I look for direction.
Sincerely,
Graeme
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Aug 23, 2010 2:01am
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crede quod habes, et habes
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Quote:
Originally Posted by geoffrod
hi graeme/leggo
i have been watching this one for a little while myself, waiting for it to show its hand.
either way i will be going with the flow
cheers
geoff
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Very nice 1ema line chart.
Yes, I use 1ema line charts all the time.
It gives very accurate market sentiments.
Sincerely,
Graeme
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Aug 23, 2010 2:18am
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crede quod habes, et habes
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Update:
4 positions closed.
2 at breakeven, 2 @ -6, -8 pips.
I paid 14 pips for the chance of so much more with 4 positions. I will do this over and over again. Average loss per position is just about 4 pips.
Wouldnt you pay 4 pips for every good setup?
There should be no hesitation in your answer. It is a definitive yes.
Eurusd had a perfect pin bar which was also a flying buddha 20 minutes ago on 5min chart indicating up.
For the traders who missed the opportunity I took but took the opportunity that was just now on eur/usd, you will be already 20 pips up and stacking.
See how all traders are different. I miss what someone else takes and I take what someone else misses. At the end of the day we still meet at the final door of profits.
Sincerely,
Graeme
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Aug 23, 2010 2:50am
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crede quod habes, et habes
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Quote:
Originally Posted by leggo
Hi Graeme,
So what your saying is the further the flying buddah is away from the ema the better because by the time the price gets back to the ema(which it always does) you are in profit??
Regards
Ben
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Good question, Ben
Not better or worse per se. However, I prefer the actual flying buddha to have a smaller range from top of the upper wick to the very bottom of the lower wick.
Why?
This would be a tighter entry with smaller hard stop loss
I remember a perfect inside bar which was 14 pips on 1hr chart in total range which worked out to a 200+ pip movement after.
I do not overlook larger flying buddhas/inside bars/pin bars however, I would prefer tighter entry and usually wait for the price to slighty retrace for my entry to have a tighter entry.
This is what I mean by tighter entry.
Sincerely,
Graeme
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Aug 23, 2010 3:46am
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crede quod habes, et habes
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Quote:
Originally Posted by paul1
Hello,everyone.
Pipeasy,Thankyou from me and my family.
I'am 44yrs old with a wife and 3 children.
My business in consruction collapsed in 2008 due to recession.
I've always had an interest in money markets but didnt think it was possible for someone like me to participate.
And also while my construction business was alive I would never have got the time to devote to deep study of this business.
I would love to find success in this,because I
would be doing something I love and find very satisfying.
Over a period of six months I've been demo trading...
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Good evening, Paul1
Thank you for sharing your experience with us. I read your post twice before typing this reply.
Im sorry to hear your loss. I sincerely hope that you find the success you seek in the markets.
I too experienced a failure in a business venture fortunately early in my life. However, it is this failure that has kept my spirit stronger and my motivation greater.
Also would like to say thank you to miracle16 for his compliment and all others for their kind and loving support.
I sincerely hope that all traders do achieve what they are looking for in the markets. We do not need to be anti-competitive in the markets as there is no need to. There is abundance of wealth to be made for the willing that is almost everlasting and without limits.
It wouldnt be a bluff to say that anyone with a sensible approach will/can efficiently create an extraordinary source of wealth from the markets.
Once again thank you all.
Sincerely,
Graeme
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Aug 23, 2010 6:08am
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crede quod habes, et habes
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Quote:
Originally Posted by paul1
Entry eur/usd 1.2710 now at be.(short)
previous attempt stopped out at b.e.
I would previously took profits on these 2 on first sign of reverse.
But am sticking to your method of getting to be even.
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Perfect.
You took the entry on flying buddha which was a breakout to below. I missed the flying buddha you took.
I have 2 positions from 1.27262 from 5min chart. Entered with hard stop loss @ 1.27320, risking 8 pip each position. Both positions @ +30 pips each. The area had 4 long wicks and I was prepared to anticipate another wick bounce. If not, I lose very small for something great once again.
I took 2 positions @ 133.120 on gbp/jpy 5min chart. Hard stop loss just above flying buddha @ 133.36. Risking 28 pips each position. Flying buddha also near high of todays. Current price at 132.630 making both positions @ +47 pips each.
With jpy crosses you need to be extra careful and tighter entries when possible.
Tighter entries are simply smaller tighter hard stop losses.
You can be slightly aggressive and enter immediately after a flying buddha or be conservative and wait for the next candle to retrace a little making your hard stop loss smaller.
While I took gbp/jpy, I flicked chart to usd/chf to notice a row of 3 flying buddhas on the 5min chart. Each flying buddhas had long lower wick which hints a struggle of sellers to push it down. 1.03055 was my entry with 3 buy positions and hard stop loss at 1.02980, risking 9 pips per position. Currently price is at 1.03420, +37 pips per position.
Can everyone see what I do?
I normally wont trade this many entries on 5min charts as I use higher timeframe as I aim for bigger goals. Im doing this for the benefit of all readers.
But what I do on lower timeframe is exactly the same as higher timeframe. The reason why I suggest all traders to start on 5min chart is that your drawdowns are only few pips. Once you emotionally get over the fact that small losses are part of winning then you can apply this mentality on higher timeframe with the same principal but obviously with bigger losses/drawdowns but much bigger profits.
Everything I do on 5min chart is done on 4hr, daily, weekly.
I took 11 entries today at the higher probability setups.
2 breakevens, 2 losses totalling -14pips.
7 positions roughly +260 pips and counting. All 7 positions stop loss are moved to breakeven.
If I close out now my risk:reward for today is 1:18. See how I calculate my risk:reward at end of the day and not pre-defined when I enter?
But I do not necessary want 1:18. I know the market is offering more if I persist even further.
Are you doing similar to what im doing?
Sincerely,
Graeme
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Aug 23, 2010 6:10am
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crede quod habes, et habes
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Quote:
Originally Posted by paul1
put order to stack 2 at 1.2680 (short if it gets there)
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Paul1
Your doing well. May I suggest that you shouldnt forecast in terms of price.
Please do not condition your trading habits to tell you that you should enter @ 1.2680 if price gets there. Market will disappoint you more than you prefer.
The required mentality is that you should be entering buy/sell at what is happening at the moment.
Sincerely,
Graeme
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Aug 23, 2010 6:24am
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crede quod habes, et habes
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update:
eur/usd closed below 1.27000 after a longish looking flying buddha. Double wick bounce. Buyers cannot seem to control the sellers for now. This is ideal sell opportunity but I would like to see a tighter entry
gbp/aud is a homerun tonight and including myself I missed it sadly. Triple wick bounce just below daily open which was also high of the day. The biggest tell tale sign was at the 2nd 5min candle when uk session opened. Dark, bold and commanding. Very easy pair that should have been taken advantage of with many opportunties for stacks of position with tight entries.
All traders need to keep flicking charts and look for 'better' opportunities.
Sincerely,
Graeme
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Aug 23, 2010 6:27am
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crede quod habes, et habes
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update:
eur/usd 5min chart. Long bold up candle completely engulfing previous 2 small down candles. Everyone should wait and see how far the buyers can push this up. Higher than the bold candle down after flying buddha means buyers are back and pushing price towarsd open price and even higher. If this current 5min candle stops around 50% of the bold down candle and then stall, that is a sell opportuntiy.
Sincerely,
Graeme
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Aug 23, 2010 6:29am
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crede quod habes, et habes
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Quote:
Originally Posted by paul1
thank you graeme i just have 1.2680 as the break below what i see as current range and 1.2730 as break above range.
is it ok to have orders at these prices?
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Good question,
Orders are fine however on smaller timeframes all decisions should be up to date and live on the fly.
I interpret price action just before my entries on 5min chart and use orders on higher timeframes.
However, if it works for you please perservere and enhance your current working method even further.
Sincerely,
Graeme
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Aug 23, 2010 6:32am
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crede quod habes, et habes
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Quote:
Originally Posted by pipEASY
update:
eur/usd 5min chart. Long bold up candle completely engulfing previous 2 small down candles. Everyone should wait and see how far the buyers can push this up. Higher than the bold candle down after flying buddha means buyers are back and pushing price towarsd open price and even higher. If this current 5min chart stops around 50% of the bold down candle and then stall, that is a sell opportuntiy.
Sincerely,
Graeme
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And boom. Volatile breakout.
if you had orders that were triggered before the current huge 5minute up candle then you have a significant loss that could have been avoided.
May I suggest that average loss per position on 5minute chart should not exceed 10-12 pips. This is your responsibility.
Sincerely,
Graeme
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Aug 23, 2010 6:38am
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crede quod habes, et habes
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Am I contributing too much into this thread?
Sometimes less is more and I feel that I have lost few readers.
Does anyone have any questions for me?
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Aug 23, 2010 6:54am
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crede quod habes, et habes
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Quote:
Originally Posted by leggo
Hi Graeme,
From my point of view you cannot contribute enough! Every day is like been back at school. I have had a frustrating day today. I seem to be moving my stop to b.e. to soon and then get taken out. Do you have any advice on when would be a good time to move stop to b.e. on 5 min chart.
Regards,
Ben
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Good question, Ben
Im prepared to lose few pips and move stop loss when the trade is away from danger.
If price reverts as soon as I enter then I will wait for the close of the 5min candle and then close it out.
The price should never revert back to your entry and then close above if your sell position/below it if your buy position.
That is sign to close with loss.
Until the above happens I will leave the entry with no stop loss for until the move develops.
Some days are great and some days are slow. Please do not be disheartened. I know you are a bigger person and you will make it.
Sincerely,
Graeme
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Aug 23, 2010 6:58am
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crede quod habes, et habes
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Quote:
Originally Posted by paul1
Up to now just been ranging on eur/usd. Don't mind the b.e. stuff.
I'll try get buy an sell to break even at best price i can if thats acceptable.
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Paul1,
Please have a look at last week on eur/usd. Mon, Tues was great upward movement followed by a stall and crash south causing the completion of weekly candle as a down candle. Thurs and Fri who have made more profit then what you would have lost on mon, tues.
1.27128 is triple wick bounce on eur/usd 5min. Im expecting a flying buddha very soon and I will enter will flow.
Sincerely,
Graeme
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Aug 23, 2010 7:10am
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crede quod habes, et habes
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Thank you Ben and Lee
I thought maybe it was too much and more confusing than adding clarity.
I just added a sell position after the breakout down on eur/usd 1.27056 on 5min.
Triple wick bounce with breakout to south with momentum. I could have done a better entry and anticipated the wick bounce and entered closer to the top of the wick for tighter entry.
I will close this position if price comes up and closes above it.
I will think of a better and faster way to relay my thoughts to all readers who might be interested.
Sincerely,
Graeme
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Aug 23, 2010 7:26am
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crede quod habes, et habes
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update
im out on eur/usd for -3 pips.
Price closed above my sell entry. That is a fail.
When I enter I expect momentum to the intended direction.
This places me 3 losses with total of -17 pips on eur/usd.
Graeme
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Aug 23, 2010 7:30am
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crede quod habes, et habes
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Thank you for the compliements.
While we were debating on eur/usd, eur/jpy had a clear flying buddha breakout which we missed.
eur/usd is over for me for today. I will hold onto 2 positions at 1.27262 and move on.
I will flick around now and enter on other pairs live for all
Sicnerely,
Graeme
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Aug 23, 2010 7:43am
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crede quod habes, et habes
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I like aud/chf at the moment.
If price closes below 0.92666 I will enter sell
Looks like the flying buddha that played out few bars ago is still in effect.
Im entering 2 sell positions on 1.41811 of eur/aud, hard stop loss @ 1.41920.
Graeme
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Aug 23, 2010 7:51am
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crede quod habes, et habes
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Quote:
Originally Posted by geoffrod
hey graeme,
not all of us missed this
i added 3 positions to my e/j millipede,
i also added legs to my u/j as well
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Excellent.
See you at the final door of profits
Graeme
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Aug 23, 2010 8:20am
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crede quod habes, et habes
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Quote:
Originally Posted by leggo
Im short on eur/chf after flying buddah and 3 wick bounce on 5min
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Good. Im in now with 1.31680 with hard stop loss above the wicks. Hard stop loss at 1.31770.
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Aug 23, 2010 8:21am
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crede quod habes, et habes
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Quote:
Originally Posted by pipEASY
Good. Im in now with 1.31680 with hard stop loss above the wicks. Hard stop loss at 1.31770.
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Volatile breakout and we are on the wrong side. OUT
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Aug 23, 2010 8:26am
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crede quod habes, et habes
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Keep moving guys.
Keep calling entries. I will try enter with everyone on all calls
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Aug 23, 2010 8:29am
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crede quod habes, et habes
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Im in gbp/chf buy 1.61110
eur/jpy sell 108.225
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Aug 23, 2010 8:50am
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crede quod habes, et habes
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Quote:
Originally Posted by leggo
OUT -6 pips. Starting to make sloppy entries now just for the sake of it!! Going to bed good luck everyone.
Regards,
Ben
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Ben
chf/jpy buy position is correct
Double wick bounce, flying buddha and up candle engulfing previous downcandle.
This is a good trade, Ben.
I know you are not upset but you are doing everything correct and taking best setups.
Im in this one too with you.
If this good setup doesnt work out I will call it a day as well.
Graeme
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Aug 23, 2010 8:52am
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crede quod habes, et habes
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Quote:
Originally Posted by @mel
Hi Graeme,
May I ask if you enter the eur/jpy based on a FB? Because I don't have a FB around 108.225 on my chart. Maybe this is because we are using a different broker with different time zones...?
Thanks
Mel
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Hi Mel
I took it after the previous buddha and then a engulfing pattern after the up candle.
That position just died on BE. I was hoping the price would pierce S1 but stalled.
Sincerely,
Graeme
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Aug 23, 2010 12:12pm
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crede quod habes, et habes
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Good evening, all
I couldnt sleep well knowing that I have unfinished my previous task of today.
I spent a good uk session entering trades live with fellow participants. I felt what they felt and it concerns me to a degree.
It is all part of healthy learning and that is the whole purpose Im dedicating my efforts here.
First I will reply some posts,
miracle16- I will answer your question together in a chart now.
ozziedave- perfect. Wick interpretation is spot on, tight entry with perfect looking flying buddha. This should most likely made you alot of profits
pip_daddy- good question and I will answer in my next chart
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Aug 23, 2010 12:23pm
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crede quod habes, et habes
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First of all.
Tight entries.
What is a tight entry?
Tight entry is when you spend or anticipate to spend less than the required hard stop loss.
Where would you enter?

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Aug 23, 2010 12:34pm
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crede quod habes, et habes
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Another example of what you might be currently doing
Movements like this should be avoided if you missed it. Dont try to enter movement like this after it happened. Its too late and your leaving too much for stop loss.
Watch next charts
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Aug 23, 2010 12:46pm
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crede quod habes, et habes
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Risking less and less is always better. This is exampe of the best tight entry I have performed.
Total risk was 3 pips

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Aug 23, 2010 12:55pm
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crede quod habes, et habes
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Aug 23, 2010 1:07pm
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crede quod habes, et habes
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Now to answer pip_daddy and for all readers
Can all traders see how I tighten my stop loss?
I do not need to force an entry.
If the big volatile movement happens before I enter: Too late
If the big volatile movement happens after I enter: Just right
Once you completely understand the important of low risk entries, this will answer pip_daddys question quiet easily.
Traders ask me how its possible to keep such low average loss per position?
It is because my realized loss of a position rarely goes over 10 pips on 5 min chart (except jpy cross which I will not go over 25 to 20).
This is possible cause most positions breakeven if they fail because I enter on higher probability setups.
Positions that does close as a loss is most often below 10 pips.
Today I took more than 10 entries during uk session however to roughly summarise 10 trades
3 loss, 3 breakevens, 4 still running.
3 loss = 18 pips
3 breakevens = 0 pips
4 sill running = 0 pips (stop loss moved to breakeven)
My average loss per position for 10 trades?
1.8 pips average loss per position.
Potential profit? Sooooooooo much more. This is my risk:reward
Im a statician. I can guarantee that my success is nothing but statistics. All I do is stack favour to my side and make sure all my choices are over 50% probability. I might experience short term drawdowns but numbers do not lie. Sooner or later I will win overall.
Thank you all.
I feel much better and returning to my bed
P.S Fantastic, cameronstar. Keep it up please. Tradestar, good question and I will address it in my next topic which will be using higher timeframe market sentiments into shorter timeframe.
Sincerely,
Graeme
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Aug 23, 2010 1:11pm
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crede quod habes, et habes
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Quote:
Originally Posted by paul1
Are these on 5 minute chart graeme ?
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Yes they are zoomed in 5minute chart.
Graeme
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Aug 23, 2010 10:00pm
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crede quod habes, et habes
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Good morning, all
Thank you for the continued interest and the compliments. It is greatly appreciated.
I have read all the posts and I would like to explain few things.
Currently, alot of the traders do not have a personal trading data on themselves yet.
This is very important information that you can reflect back to improve your future trading plan/method
For example:
For the last 2 weeks a trader took 80 entries.
40 losses @ 15 pip each (im being fair with this amount)
30 breakevens
10 still alive
Total realized loss is -600 pips
Average loss per position is 7.5 pips.
That is well below suggested 10-15 pips average loss per position.
You are doing well as a professional trader and keeping your risk to minimum.
-600 pips doesnt look pretty for now but it is only a dip before the volatile breakout on your equity curve.
For the last 2 weeks, alot of the discussion was about entries. More specifically how I do it on the lower timeframe. Hence, I explained mini s/r breakouts, momentum breakout, price action at .00 and so on.
If the last 2 weeks was focusing on lower timeframe entries, allow me to show all traders how to bend with the wind by using hindsight from higher timeframe and zooming in.
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Aug 23, 2010 10:16pm
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crede quod habes, et habes
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What do you do on the weekend?
I log into my platform and draw up a battleplan for the coming week. Looking for areas of interest before monday. Do you do this?
Alot of traders ask how I can focus on almost 20 pairs. I pre-select my interest on the weekend before monday.
This is a true story that happened only recently. Hope readers gain a new insight.
Now I dont know what can happen after that flying buddha. However I do know that if the price after the flying buddha goes towards the preferred volatile breakout with change of direction that is huge potential for profit.
Now use this hindsight gained from weekly chart into lower timeframe
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Aug 23, 2010 10:36pm
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crede quod habes, et habes
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Last edited Aug 24, 2010 3:29am
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Aug 23, 2010 10:48pm
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crede quod habes, et habes
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So you gained hindsight from level 0 (weekly chart), entered level 1 (4hr chart) for a setup and then took it one step further and entered level 4 (5min chart).
The more you enter levels the less you are risking for a higher profit but more smaller losses.
You can use inception to any way you like.
You could even gain hindsight from level -1 (monthly chart) and then keep entering/filtering all the way until level 4. Risking less than 10 pips for few thousand pips.
This is level -1. Monthly chart. Very very large battleplan. Its a shame not many traders venture here when the biggest profit is here on the monthly chart.
Can all traders see that the flying buddha 2 weeks ago on level 0 was all part of the plan from level -1????
Must understand this
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Aug 23, 2010 10:55pm
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crede quod habes, et habes
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May I request all traders to please re-read the last few charts I have done today.
I believe that is the final link to what most traders are looking for.
If your question is any of these:
1. 5min chart feels so aimless. All I can see is losses and drawdowns.
-- You know that just entries on 5min chart is fruitless without a proper bigger goal/expectations in mind.
2. How do you know when to trade and where to trade
-- Using battle plan on level -1 and level 0 into level 4
3. We can see how you enter but I still dont understand how we can profit in the long run
-- This is because you have no idea what to expect. Last 2 weeks I was hoping/expecting a volatile breakout after the flying buddha on weekly chart (level 0) on eur/usd. Sometimes it doesnt work out but if it does then you hit a very very very large jackpot that will last you more than enough for the next golden opportuntiy. My reward? +500 pips per position that I currently hold
4. So why all these entries on lower timeframe
-- Doesnt matter if you can shoot 3 point basketball shots when you cant dribble properly across the field.
I request that all traders use the last few charts to connect everything we have discussed in the last few weeks; entries, breakouts into what I have shown today. All part of the intended flow.
It should click now.
Sincerely,
Graeme
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Aug 23, 2010 11:19pm
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crede quod habes, et habes
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Quote:
Originally Posted by TradeStar
Hi Graeme,
Going by your weekly plan last week's EUR/USD candle ( I mean a week prior) also would have prompted to us to look for potential break out to the down side with possibly some failed attempts
Is this understanding correct?
Thanks
TS
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Thank you for the compliments wooli and great question.
I mentioned once before
"look inside of the inside of the inside"
Always anticipate then minimize your risk on entry and then let it play out.
Draw your battleplan on weekend on level 0 on all 20 pairs of currency marking all the pair that has interest. As the week plays out, zoom in for perfect entries.
Im just stepping out today and will return later on.
I have a final assignment for all the willing participants.
Sincerely,
Graeme
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Aug 24, 2010 1:19am
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crede quod habes, et habes
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Good afternoon all fellow traders
It has been 2months since I have started this thread and I appreciate the support and the care of the fellow traders out there.
I know how frustrating it is with so many information on how to trade but believe me when I say that trading effectively is far simpler than you think.
You will be amazed how complex yet simple our market is.
Some readers only need the small push in the right direction before they pick up momentum while some readers require a bigger re-conditioning of their perspective.
I never imply that my method/ideas are the only correct method however please acknowledge that I once too was sitting where you currently sit and what I do now has proven very successful over and over for myself.
Although I had benefits that Im fortunate enough to have when I started which is not the case to most. However, never let this be held against you as once the ball starts rolling your capital will grow faster than you think.
Currently, Im still working on the written material for all and will keep my promise. I can honestly say that I have contributed far and wide with enough details for any readers to use the pieces and the blueprint I have shown to form their very own juggernaut trading method.
I plan to push everyone who is willing to jump in faith and emerge what they have read and translate it into action in my next assignment. You do not need to participate if you do not want to.
My primary goal in this assignment is to prove that all readers are mostly ready to trade effectively. Im going to push you into depths that you have not experienced and hopefully it will be the first step on each traders personal juggernaut trading method.
All the reference needed to complete this assignment is in this thread and there is no need to ask other participants if your answer is right. There is no right or wrong answer as we will all inevitably meet at the final door of profits.
Continuing on..
Last edited Aug 24, 2010 3:22am
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Aug 24, 2010 2:00am
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crede quod habes, et habes
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I have been blessed by many readers to acknowledge my efforts and issue me with vouchers. They are greatly appreciated.
I feel obliged to also reward traders that I feel that are correctly interpreting and participating in the markets.
Plaese note I do not place myself higher authority to be a judge so please dont take it as an offence.
For the willing participants here is my next assignment for all.
We are going to use:
1. Drawing a battleplan on weekend using the recent completion of weekly candle to forecast the next 2 weeks of movement.
2. Inception into lower timeframe and the traders ability to pin-point tight entries.
3. Traders ability to minimize risk and safeguarding their capital
4. Managing the positions to stretch out the profits indefinitely
5. Using various position management tactic to ensure that your battleplan is working out as intended
If all the 5 points are ticked, I will guarantee you a big hefty profit after 2 weeks and my personal vouch for your efforts and positive outcome.
I have created an email address specifically for this project and its at pipeasy at yahoo.com
Just like any good assignment I wish to see a properly structured flow of thoughts in the next 2 weeks.
Starting from this weekend:
1. Going through each 20+ pairs of currency and pre-selecting just 1 pair of currrency that you deem to have a higher probability of intended movement. It could be a flying buddha, inside bar, engulf, ema crossover, pin bar or any you can think of. I want to see a clear valid reasons why
2. Once the monday opens after the weekend I want to see all traders using the hindsight gained from above point 1 and at least zoom into one level down. Preferably multi level down. I want to clearly see that your entries are respecting the hindsight you have chosen and you are also minimizing risk.
3. I do not want to see overexposure by revenge entries, thoughtless invalid entries or just for the sake entries.
4. I would prefer to see traders zoom in multi levels and finally use pure price action on 5mniute charts with average loss per position not exceeding 15 pips on any pair except jpy cross (for jpy 20-25 pips average loss per position). You can still multi level and draw battleplan from level 0 (weekly) and then price setup on level 1 (4hr) and then execute a precise low risk entry on level 3 (1hr)
5. I want to see effective position management. Profits should be maximised and risk should be minimized
6. I want to see full committment on your pre-selection that you did on 1st weekend until it 'clearly' doesnt work out.
7. If the pre-selected pair of currency does not work out as intended for the next 2 weeks, I want to see traders placing effort in minimizing their drawdowns.
8. I want to see more effective stacking when the movement is working as intended on battleplan from level 0 and when movement doesnt I want to see traders prodding with extra small scouts.
9. I want to see that you clearly understand the difference between guessing and anticipating.
10. All work needs to be submitted with trades taken from your mt4/oanda platform. It can be demo or live and ofcourse you can black out any sensitive personal id number.
Now for the template for you to work on
Continuing on..
Last edited Aug 24, 2010 9:11am
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Aug 24, 2010 2:31am
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crede quod habes, et habes
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Please present your trading to myself as structured below and email me:
Date: (first weekend)
Pair: (pair of currency you have chosen)
Attach 1 weekly chart showing clearly your interpretation. Trendlines, s/r.. anything
Reason: (reason why you chose the above pair of currency to focus)
Entries: (post the trading sheet from your platform. However, I would like to see at least 3 entries with charts on how you entered)
Last edited Aug 24, 2010 6:25am
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Aug 24, 2010 2:40am
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crede quod habes, et habes
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I wish to take a step back for the moment from this thread to allow some space for the traders to stand on their own.
It is now time for you to 'just do it'
I earnestly look forward to many participants with the new assignment.
If the initial battleplan did not work out as intended after 2 weeks, start again and re-submit your new choice.
I will print everyone's submition for personal reference and will post successful attempts into this thread to show all. (I will blackout any sensitive numbers that you might have forgotten to)
If you have any questions please private message me or email me thank you.
I sincerely hope that this big push will be the start of a successful trading career to the some that I have managed to touch.
Edit: I will submit my battle plan over this weekend into this thread as a guide/reference
Godspeed
Sincerely,
Graeme
Last edited Aug 24, 2010 3:03am
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Aug 24, 2010 7:00pm
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crede quod habes, et habes
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Good morning, all
Thank you for the enthusiastic response to the assignment. I can assure all participants that you will reach new heights in your trading endeavour and I will push you into depths.
Its amazing to see the progression of questions at the moment. One month ago most of the questions were about entries and now most of the readers are experiencing their first emotional hurdle.
"Temptation to close early"
I have replied the below in a private message to a fellow trader but thought this information could benefit all.
By the way, I have read all the posts since yesterday and once again I thank you all and sincerely look forward to our collaboration.
For the traders who posted their current standing, they look impressive and I urge you on. Well done.
Good morning, (xxx)
Thank you for sharing with me your current experience.
I read your post twice and understand what you are asking.
Here are some straight answers that I hope will help you.
1. Are you surprised at the speed/strength of growing you equity from 5000 to 16000 in a relative short time? Im not as I know how hard and fast your equity grows once you have few positions gripped in the markets.
2. I know the emotional hurdle that is involved with the temptation to close out the larger legs. It was one of my emotional hurdles as well. I strongly recommend that you try and keep the largest legs. Perhaps for your peace of mind you could close just the 2nd largest for now? Sooner or later once you taste success on a live account I assure you that you will need no such assurance from myself and it is you who will be now tempted to hold onto more and more positions for a bigger reward. You will shift views very quickly.
3. Demo is great way to practice. However, I suggest that you move into a live account as soon as possible. The emotional hurdles involved will be a memorable struggle that you will always reflect back on in the years after. I still vividly remember back in the early phase that I spent 2 weeks debating furiously whether I should close 4 legs that grew for 2000+ pips for few months. The monthly candle closed above the previous downcandle signalling a reversal. Its hard to say no to 8000+ pips @ 2 standard lots. Can you handle this emotion?
I did close 3 of the positions and at first I was glad I did cause the price reversed strongly. The remaining leg started to dwindle down from 2000+ pips to almost 800 pips. I now had few legs on the reversal that were growing. I didnt care about the lonely leg that was dying. Infact I childishly pondered whether I should close that dying leg now for a little profit which is clearly against my trading principal.
8 months later, the reversal was just a deep retrace and that remaining one leg is still fighting for me and is currently worth 3000+ pips alone. I never hold any regret in trading but it is these pangs of regrets that sets me straight as a position trader. If all 4 positions were held that is potential 12000+ pips and still growing instead of realized 6000 pips. Yes, there are benefits to capture some realized profit but as long as your trade balance is holding its ground then you have no clear reason to close them early.
When I use to hold business meetings I always preferred a good steak and wine. Sometimes a meeting will take place at a japanese sushi restaurant. At first I held my ground and refused to order anything raw. Unfortunately at a japanese restaurant most dishes are raw and that leaves you with a mild tasting noodle soup or its variance. I couldnt understand why people payed alot more than a quality steak on something that was not cooked. This mini personal refusal lasted few years. Then one day my wife (who adores sushi) told me that I was choosing not to understand. Although she said it as a caring gesture, I quietly sat down and pondered. Only then did I admit that I never really tried to enjoy/understand this exquisite cuisine on offer. I was inside my little 'only steak please' box and refused to listen to anything else. Nowadays I enjoy japanese cuisine far more than my weetbix. Infact I frequently visit a nice sushi train bar to enjoy it all over it again. I now have wasabi/soy in normal daily dishes that wasabi clearly shouldnt be near.
And this happens in trading. Its amazing how quick a humans perception changes. Flick of the light switch.
At the moment all starting traders are worried and tempted to close their position right now to capture the profit.
After the first taste of live success it completely changes you.
Trust me when I say that you will be holding onto more and more positions without even the slightest notion of what you worried before. A complete reversal.
Fantastic results and I urge you on.
Onward and Upwards,
Graeme
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Aug 25, 2010 6:03pm
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crede quod habes, et habes
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Good morning, all
Beautiful morning here.
Im just about to step out for the day but thought I leave a post for the readers.
I can clearly see some of the areas I need to brush on before the start of the assignment this weekend.
It sounds most of the traders have the puzzle pieces and the blueprint required and they are trying to make the connection between the pieces but still missing the 'aha' moment.
I will touch on
1. Interpreting price action in a finer detail
2. Why inception method is valuable and how you are trading like the banks with the hindsights received.
3. Difference between guessing and anticipation.
4. How to use opposite signalling hindsights between different higher timeframe to your advantage on the lower timeframe.
Just quickly, yesterday daily candle of eur/usd had a double wick bounce in a 'tight' area which was also the open price of the previous 2 days before.
You can guess by saying 'price might go to the top of the previous days upper wick and then bounce back'
Or
You can anticipate by saying 'price is retracing, where is most likelyhood of a bounce and where can I enter with a very tight stop loss for an awesome ride back down again? Ofcourse this is possible if market allows the bounce to happen in the first place but I will make sure to be participating around that area'
Now, even though the eur/usd daily candle is now an oddly shaped up candle against the main trend, I still used the hindsight of the higher timeframe on the lower time frame and made a very nice profit on only sell positions just from yesterday. Its because I participated and anticipated the wick bounce and was prepared to spend few pips. On 5min chart of eur/usd a flying buddha happened just around the top of the upper wick on daily chart (where I was anticipating/hoping a bounce) @ 3rd and 4th 5 min candles of uk session. It just doesnt get better that that. The smooth drop from there to daily open price had oodles of opportunities for stacking.
Please do not worry if the above is not making much sense. I will make sure I will go over the 4 topics before the assignment.
If I could please request all serious new readers to perhaps attempt to read the thread and please join us in the assignment this weekend.
Good day all and will come back later on
Sincerely,
Graeme
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Aug 25, 2010 10:28pm
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crede quod habes, et habes
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Thank you Traderray.
Your question is related to one of the topics I will touch on before this weekend. It is about using opposite signalling hindsight on different higher timeframe to our benefit on the lower timeframe.
First of all, I would like to take few steps back to basic and rehash on price action.
Alot of traders on this forum understand the importance of price action. This is true as price action is far more effective/faster than what an indicator might indicate. For example, most large engulfing price pattern that closes below/above the previous up/down candle will signal a reversal. However, this will show on ema crossover later on when the prime opportunity is already over.
Interpreting price action is very simple and it is heaviliy related to the phrase I have used few times, if its up then buy, if its down then sell.
Please allow me to add further clarity in price action first before advancing on to explain the other topics.
So we already have a 'hindsight' that price is reversing. This is interpreting pure price action. Lets add some emas.
Continuing on..
Last edited Aug 26, 2010 2:02am
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Aug 25, 2010 10:34pm
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crede quod habes, et habes
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Interpreting price action effectively is deadly in a skilled traders hand.
Allow me to show all, candle by candle how I interpret price action. Interpretation is the same on lower timechart or higher timechart.
You will notice how simple and deadly it is. This is what happened last night for me.
This is eur/usd 5min chart of last night. Blue is uk session.

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Aug 25, 2010 10:44pm
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crede quod habes, et habes
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uk session opens.
I note that price is coming up. First 3 candles are flying buddhas (for now im disregarding any hindsights from higher timeframe and just concentrating on price action on 5min)
This is my train of thoughts
1. First candle after flying buddha. Does not close below or above the s/r
2. Buyers pushed up but couldnt close over the previous down candle. Sellers still in charge but support not broken
3. Sellers push and break the support of candle 1 and 2 but not flying buddha. This is good sign.
4. I notice open price is same as the low of lower wick of candle 1. Buyers push up but close at 50% fib of candle 3. Not enough power from buyers. Goody.
5. Buyers gather strength to push it up but all they create is a wick. This new wick creates another descending wick pattern. Getting better.
6. Clear breakout of support from flying buddha and closing well below it. Now I know sellers in charge.
Continuing on..
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Aug 25, 2010 10:57pm
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crede quod habes, et habes
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Now I know sellers are in charge but I want a low risk, very tight entry from candle 7 onwards (by the way, I hope all traders are not looking at the charts this close..)
7. I do not want to enter at open of this candle as the stop loss is larger than what I think is required. However, yesterday I did (we will come to this later and the reason I entered sell at the open of candle 7 is because I had hindsight from higher timeframe). Price retraces past 50% of previous down candle. Uh oh. And then bounces off at open price of the previous candle. Yes, seen that all too often and another position around there. 2 positions on single 5min candle. This means im very confident but will not risk any more until something better comes out.
8. Im expecting a big drop of price. It doesnt. Uh oh. My only saving grace is the descending wick pattern. Still ok.
**As long as price doesnt retrace and close above the breakout I will wait. Dont need a hard stop loss yet**
9, 10. I notice the price is now stalled again in this mini range. Another support happening below candle 6,7. Not good but not bad.
11. I still see descending wick pattern. Buyers are away for now.
12. Uh oh. Price closed above the previous down candle. Not good. Is this the end to my 2 positions? Price couldnt close above uppoer wick of 9. Still ok.
13. Hmm... down candle? Closing below candle 12 the up candle. Good Good Good.
14. And there. Breakout again. My 2 positions was never in danger. Now I want to stack more
Continuing on..
Last edited Aug 26, 2010 2:08am
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Aug 25, 2010 11:05pm
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crede quod habes, et habes
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15. I notice ema crossed over and now a gap is opening indicating strength between 5/10ema. Good Good. Price opens and retraces up. Excellent I say. As long as it doesnt close above the previous 14 down candle. Since this is fresh momentum. I add 1 position at open and another just around 50% fib. Need to be quick on fingers. Now 4 positions and I will close out 3rd and 4th position if price closes above candle 14.
16. Big rush down and I didnt want to add another position at open. Thats overexposure. No retrace but I note the very short uppoer wick of the previous candle. Not even 33% indicating sellers are well in charge with good strength (which also means other sellers are jumping on). Candle 16 retraces and I add another position at around 50% and ready to close this position if price closes above the previous down candle.
17. Goody. 5 positions and all ok. Candle 17 another retrace to 50% another position and finger ready to close it if price closes above the previous candle 16. If price closes above 16 I will most likely close this one and the one just before just to minimize my risk little further. Total 6 positions. Now every tick is worth 6 pips for me.
Continuing on..
Last edited Aug 26, 2010 2:11am
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Aug 25, 2010 11:16pm
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crede quod habes, et habes
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Now I know this long streak of opportunity could last very long time or stop very soon.
I stop stacking as soon as something happens against this momentum and go into defensive mode.
18. I remember placing another position when price retraced to 50% of candle 17. However didnt know it will close around that area. Uh oh. 7th position is now in danger. Im watching carefully now.
19. I really want to see price close below candle 18 as a engulf pattern. Please please please. Hmm.. it does close below 18 but it doesnt close below 17. Looks like a stall.
** Price all over the place, ascending wicks, double top wicks **
I need a clue very soon or I will start to close my legs.
20. Not good. Alarms ringing. 3 up candles with price closing over previous down candle of 19. This is not a good sign. My only saving grace is that the price did not close above 17. My 7th is now in danger and now Im going to get ready to close it if price moves sharply. Finger already on enter button here.
21. Hmm.. Engulf pattern. Buyers chickend out. Sellers pushed it down and closed below 20. Good sign but I want to see other sellers also seeing this.
See how I buy if its up and sell when its down???
Continuing on..
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Aug 25, 2010 11:35pm
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crede quod habes, et habes
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Candle 21 is hinting a continuation. This is a good sign but I need more info. I will be extra tight and draw a s/r lines on this candle. I dont want to see price closing above this engulf pattern.
22, 23, 24. Stuck in another mini range in between candle 21. Not a good sign but not a bad sign either. Upper wick of candle 24 breaches resistance but does not close above it. Good.
25. Breakout. Danger is over and I held on with 7 positions.
I notice daily open line coming and I know there will be most likely a stall or clear breakout. I prepare for the worst case scenario.
Move all positions SL to BE and off to dinner.
7 positions, 0 loss.
When I came back it was up 400 pips. So I closed last 3 positions for a small profit and let it run.
Final end story?
All the remaining legs just died on BE today. Not disappointed but happy that I risked very small that could have been very large.
Now the above step by step interpretation is very important and I need all readers to understand what/why my train of thoughts. It is linked to my next topic in a planned flow of explanation.
I will address next topic tomorrow afternoon but until then I have a mini quiz for all
Continuing on..
Last edited Aug 26, 2010 2:17am
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Aug 25, 2010 11:41pm
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crede quod habes, et habes
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This is quiet important quiz.
Can anyone tell me from the below 2 charts, which is 5 minute chart and which is weekly chart? And the reason why.
Chart A
Chart B
Chart A or Chart B?
Look forward to your answers tomorrow and will return to further add to what I have shown today
Sincerely,
Graeme
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Aug 26, 2010 12:12am
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crede quod habes, et habes
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Just before I head out I should have mentioned that there is no right or wrong answer to the quiz (to a sense).
However, I appreciate a honest response for the willing participants.
Thank you.
Continuing on tomorrow.
Kindest Regards,
Graeme
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Aug 26, 2010 5:09am
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crede quod habes, et habes
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Quote:
Originally Posted by TradeStar
Few positions put in exactly on the lines of PA notes from Graeme
Only problem I have is, I am not comfortable to move the SL to BE, since they could cause the position to close.
Anyone having similar challenge?
Thanks
TS
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Good evening, TS
Apologies but Im assuming the little arrows are entries. Please do not take any offence but your entries are little overexposure.
Im currently trading eur/usd from one hour before uk session open.
I have 3 sell positions. Very very similar areas to where you took them.
Im glad to see that you are interpreting price action accurately.
I have no stop loss set. No need to yet.
Price has stalled currently and im watching very carefully.
I was anticipating this week for eur/usd to be another down weekly candle. If this happens it will be tonight and tomorrow with huge momentum down and we are participating correctly to the hindsight from higher timeframe.
However even if weekly chart is indicating a down trend I see 3 daily candles ascending wicks.
I give myself 50:50 chance for a big profit or zero loss.
Please space out your entries as much as possible and sometimes purposefully miss few out. You will still have similar profits but much less drawdown or losses when things dont turn out to your plan.
I see triple upper wick bounce on 5min chart.
Its either a freefall down or a huge push up breaking the tips of those upper wicks.
Get ready to defend.
Sincerely,
Graeme
Last edited Aug 26, 2010 5:23am
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Aug 26, 2010 5:11am
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crede quod habes, et habes
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eur/usd OUT.
Clear volatile breakout upwards.
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Aug 26, 2010 5:19am
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crede quod habes, et habes
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I just moved stop loss of all remaining positions on eur/usd to BE.
1 loss @ -5 pips.
Thats enough for me.
Before I step back to prepare the material to present to all for tomorrow may I request all readers to read the price action posts that I have posted today.
What I have explained today is what I only do in the markets. It is that simple to interpret pure price action.
It will be required knowledge for the next step tomorrow.
Sincerely,
Graeme
P.S I added a buy position on eur/usd after the flying buddha. This respects the hindsight from daily candles (we will touch this topic tomorrow). Lets see what this leg can do for me. Never be biased with one direction. Keep moving.
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Aug 26, 2010 5:39am
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crede quod habes, et habes
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I keep forgetting to address some of the important issues on hand before hitting the submit button.
I see few traders who has grasped the correct mentality as a trader.
They can interpret action sensibly and it is looking well.
However, do you feel like its all still more luck than skill?
You still feel that your trades are not improving?
I have sensed a great excitement last few days from traders about their growth. I understand why its slightly died down as the whole market across the board is ranging.
On a lighter tone, from what I can see from your charts/questions, I can assure most of the participants are at least top 30% percentile of the mass traders. Unfortunately, most of the top 30% percentile do not make money in the long run. Im planning to push all willing learners into the top 10% percentile very soon. There is an intended flow of explanation in the next few days.
I see great potential in all the readers from the questions asked and I have genuine interest in everyone's trading success.
I assure all traders that it will soon be clearer. Im planning this weekend to be the cornerstone of such endeavour.
Just answering cameron1st, everything in the market is all relative. Different traders can draw different s/r lines at body of candle, wicks and still achieve same purpose. I shift from wicks to body without any second thoughts. Just what I see on the charts. You will fully understand this very shortly from the intended explanation im preparing.
Sincerely,
Graeme
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Aug 26, 2010 5:53am
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crede quod habes, et habes
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Quote:
Originally Posted by dongsky
Hi Graeme,
i happened to opened this thread last sunday and had read all through - unknowingly undoubtedly a goldmine
i tried using it last monday and continue experimenting with it and slowly it sheds light... and now i find a newer freedom. don't get me wrong, i've been trading forex for a while now and i can say i'm doing fairly well the reason that i don't bother reading other peoples success stories of their own system or methodology.
i am a bit excited because the longer i'm looking and more focus... the clearer i see the...
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Good evening, Dongsky
Good to see a trader using line graph (1ema).
Thank you for the compliments.
Tradestar - Thank you. Alot of traders believe moving stop loss to breakeven is fruitless and leaving the random fluctuation to close the position when it could be a winner in the long run with some breathing space. Unfortunately not.
Let me assure you that an entry that grew more than +20 pips to reverse direction and come back is a fail. This reversal (or price against your beliefs) is a sign of bigger things in the market. No need to go against them. If price moves away from danger and stalls and coming back, you do not need to give a 'breathing space' in the stop loss to see if it survives (unless its free. Remember this few posts back?). Its already a worthless leg and your focus should move away.
muntu - No problem, sir. Feel free to start 2 weeks after this weekend when I plan to do it again for the readers who missed out. Obviously biggest kudos to the readers who participate first this weekend leading the class.
Dhaos - Good question, sir. Apologies but I cannot retrace my steps at this moment to answer your question. I ask for your understanding.
Now I will stop here and return tomorrow as I have an intended flow of explanation. This is important for me to get across before the weekend.
I will show many examples of battleplans which will be similar to what is asked from the readers this weekend.
Please dont fret as all of the readers are on the right track at the moment.
Sincerely,
Graeme
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Aug 26, 2010 7:59am
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crede quod habes, et habes
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Quote:
Originally Posted by paul1
Hello everyone seem to have fell behind with reading the posts.
Just got a micro account, so am trying to familiaries myself with the platform on demo.
hope this is last platform i have to learn so i can concentrate on this method.
Regarding the graph puzzle I would say:-
a) Is 5minute the ma's move further apart to me saying price moving sharply. So based on probabilities I'd put money on a= 5minute but with a tight stop loss lol.
Also in recent posts you concentrated on 5 minute for entries quickly stacking and contemplating exiting within hrs...
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Good evening, Paul
Thank you for the post.
I just had to reply to this one.
At the moment, you are not the only one with that type of question.
There is a valid reason why I closed few of the legs last night. The answer for now (and tomorrow I will go into very deep detail why to this question) is that the 5 min chart I was analysing could have been a weekly chart in a sense (I wouldnt know if I randomly chose and covered up the label on top left). Many candles happened after my entries and even though each candle only represented 5 min timeframe, it was mature enough to diversify. Imagine the exact same chart but it was weekly. Those positions would have been matured for a diversification. The only difference (and I hope some readers can connect the meaning) is the scale. Scale is different but its the same Paul.
One candle on weekly chart represent a week.
One candle on 5min chart represent 5min.
The principal and purpose of diversification remains the same and has no regard to the difference of the timeframes. And this applies to everything else as well.
Market is universal and neutral.
Price reversing? When your ready you will be able to profit on both side of the coin.
For now, may I request all readers to perhaps re-read (if needs be) some of the material I have presented over the last few weeks.
I have contributed earnestly for everyone and all I ask in return is their devotion just for this weekend. Allow me the opportunity to show you all on a tailored personal level that you are ready and if not, the areas you need to improve.
My next set of topics will connect everything into one smooth flow.
Please take a look tonight at eur/usd weekly chart. Look at the current shape of this week candle. That is a pitiful looking candle at the moment. Not many can make profit from that kind of looking candle.
It would be a completely different tune from traders if the weekly candle is either a bold up or bold down.
eur/usd market is taking all traders money at the moment. So let it take a position or two until its willing to give again.
Sincerely,
Graeme
Last edited Aug 26, 2010 8:21am
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Aug 26, 2010 6:12pm
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crede quod habes, et habes
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Good morning, all
Thank you for the posts.
It is true that there is a possibility that im a fraud. A fraud with alot of time to invest in a thread that will reward me with fancy v's that alot of traders cherish more than their actual trading wellbeing.
Everyone has the freedom to express their opinions and in a sense I appreciate the feedback received. It made me reflect on my actions and my motive and made me wonder for a moment why I spend hours per day answering questions on private messages and now email as well. If its the attention I was seeking it is now certainly overwhelming to take any pleasure from.
May I request all readers to hold back from replying to the negative posts as there is no need to and focus on the important matters on hand which is the upcoming weekend.
Im confident that I have contributed positively to a number of traders and I know that there will be good results from this weekend which will authenticate the knowledge I have passed on but most importantly the traders own confirmation of their own abilities.
This is how I plan to authenticate.
I do not need to blog or post my current profit statement. It only makes me look just like one of them and for what purpose is such action required when I can prove to all through the success of others?
Lets move on.
Sincerely,
Graeme
Last edited Aug 26, 2010 6:47pm
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Aug 26, 2010 6:39pm
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crede quod habes, et habes
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Im planning to spend a considerable amount of time/posts to connect everything today/tomorrow before the weekend project and then explain the project in further detail.
It will answer most of the questions that are currently circulating.
For the willing learners, may I request that you read my yesterday posts of interpreting price action and then take it one step further and open any chart and try apply what I have shown to the choice of your own pair of currency and any timeframe.
You will notice a definite similarity/occurence that happens over and over again in the markets.
Its amazing how much hindsight is gained from watching price closing above/below to any s/r line you have drawn to your own personal discretion. Interpreting price action is very simple and straight forward and only requires a few key patterns/candlestick/wicks to be effectively taken advantage of in trading profitably.
If you are wondering how a project that runs 2 weeks will prove a trader to be profitable in the long run? Even though market is neutral and universal there are set repetition of generalized actions that occur in cycles. A professional trader knows this cycle very well and can apply the same principal he uses over and over in the same manner in any pair of currency and on any timeframe.
From the feedback received overnight, I assure you from the 400+ posts I have done in this thread, Im really only talking about key 5/6 topics. Unfortunately I had to stretch out my explanation and sometimes slightly step on different grounds to retrace and gather all readers to the same level of understanding before proceeding on forward together.
I cannot express how important this weekend will be to most as it will signal a final ending to my endeavour and also the final confirmation to the successful traders who make it.
My interest lies within your success and I look forward to our collaboration.
Edit: Will return in few hours as Im still preparing.
Sincerely,
Graeme
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Aug 26, 2010 10:09pm
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crede quod habes, et habes
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Quote:
Originally Posted by leggo
Hi Graeme,
I know your busy with preparing for the weekend assignment. I just wanted to post this chart showing my failed stacking attempt. I tried stacking aggressively without initial stop loss. The problem I have with only closing positions after 5min candle has closed above or below s&r is that if the candle is huge you can end up with quite a substantial net loss compounded by stacking. I just wanted your take on it,(or anyone else's)as Im sure the below scenario is quite common.
Kind regards,
Ben
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Good morning, Ben
I would like to step in here and answer your post.
I studied your charts and you have interpreted price action very well.
You did nothing wrong.
Lets go over the numbers:
5min chart entries, 4 positions.
3 positions closing for net -30 pips and 4th position for zero.
Thats 7.5 pips average loss per position. That is well below recommended 10-15 so its good.
What if the price was a clear breakout of .00 and never came back and went for 50+ pips?
200+ pips for the risk of 30-40 pips? I will do that everyday, everytime since sooner or later it will work into my favour. Thats statistics. And what stops a price at such 50 pips? Nothing, it could continue on for next 300+ pips.
Your question is also about the sudden large movements. Yes, I do experience a sudden big spike up from time to time. Market is fair and with all fairness there are times when price does spike towards my intended direction as well.
The difference?
Yes, a sudden price spike against our direction will cause a larger loss than usual (only a temperamental increase of loss) but
what about the other half of times when a sudden spike in price is towards our direction?
You would lose what you lose on ' x1' 5min candle when it goes against you.
BUT
You will profit on at least x1 5min candle if it goes in your favour.
The loss remains static and pre-defined at x1 5min candle whilst the potential profiting is minimum x1 5min candle. Must understand this all
The 'occurence' of such large spikes when they do happen would be more or less 50% of times to our favour and 50% of times against our favour (I will have to add here that one of the planned topics today will change the above % much more to our side).
It is the statistic fact that we will profit more when it goes to our favour and lose much less when it is against our favour.
Will I scare you to inform you that once I had 5+ positions on gbp/jpy to have a huge spike up against me for -40 pips on x1 single 5min candle. -200 pips from that one single spike of price against my intended movement.
But I also remember many times when I have stacks of position and then 40+ pip movement towards my intended direction.
Everything is all relative in the markets/or any matter on the same plane of physics and if I can calculate my risk:reward for forex I can use the same universal principal to apply it to any given formulae on any given grounds to achieve results for the same universal purpose. In other words, r:r of the above simulation of my gbp/jpy story will also show and work out with positive expectancy on the intended series of random outcomes as the time line progresses on.
Sincerely,
Graeme
Last edited Aug 26, 2010 10:21pm
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Aug 26, 2010 10:18pm
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crede quod habes, et habes
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Quote:
Originally Posted by leggo
Thanks Graeme,
I must admit it feels a bit like banging my head against a wall at present, however its good to know my application was sound. Just Random price action that took me out.
Regards
Ben
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Ben,
I promise you tonight, that everything will be much much clearer.
I understand how you feel at the moment, and trust me few traders are feeling this right now.
One of the first emotional hurdles that I need to get all readers over tonight.
Everyone needs to keep their beliefs intact and see the bigger picture and I will add my next topic on top to make everything click into place.
Sincerely,
Graeme
Last edited Aug 26, 2010 10:38pm
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Aug 26, 2010 11:10pm
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crede quod habes, et habes
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Quote:
Originally Posted by TradeStar
Graeme.
Please allow me to add my two cents as I am looking forward to learn as well based on what you think
Leggo,
Position 1 -- was perfect entry
2 -- was kind of too much for Stop loss, even though it broke the support, could have waited for some 50% retrace
3 -- is a good entry with a defined SL
4 -- is too soon given you just entered 3
Technically you could have only 1 and 3 or 1 and 4
Overall too many positions too close based on Graeme's feedback to my trades earlier.
This is for my learning as well; invite inputs
Thanks
TS...
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Good afternoon, TS
I sincerely hope Ben doesnt feel cornered or take any offence as we are discussing his efforts from last night.
Ben I hope what TS has added is a help to you as TS has perfectly pin pointed 'tighter' entries.
If TS was trading the same pair of currency last night and the same setups, the outcome is the same for both Ben and TS however, TS will have much lower drawdown and less risk on the table and the potential of equivalent profits. This helps alot in preserving/safeguarding your capital and it is very important. But also adds a huge bonus on your emotional control.
There was nothing wrong with Ben's entries, especially .00 breakout entry however with .00 breakouts you expect the order flow/interest of other traders pushing your newly added breakout entry almost instantaneously into profit with rows of long bold candles. If not, close out as it will stall on you and whipsaw around that area.
Ben, please feel free to question me as Im always willing to help.
Sincerely,
Graeme
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Aug 27, 2010 3:50am
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crede quod habes, et habes
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Good afternoon, all
Yesterday I posted how I interpret price action. I found alot of readers not having a clear price interpretation and I deemed it necessary to re-hash again.
I hope you have gained positive insight from my posts.
Moving on in a planned flow of explanation, I asked everyone a mini quiz.
Which chart is 5 min and which chart is weekly
Chart A
Chart B
I read all the answers and I thank the participants for their contributions.
Please do not take me the wrong way but I had no intention to reveal which chart is 5min and which chart is weekly.
The main purpose was to show all that nobody can tell the difference. It is exactly the same without any numbers. So why is this important?
I would like all readers to think with me.
If chart A and chart B has a big timeframe difference but looks exactly the same then the only difference is the scale.
Before I explain the scale, traders must agree that you could have drawn s/r lines, trendlines, price action (flying buddha, inside bar, engulf, pin bar) to EITHER CHART A OR CHART B and still have same price interpretation. You must understand how important this is.
I say a very very important sentence:
your profit expectancy depends on the scale
Continuing on..
Last edited Aug 27, 2010 6:05pm
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Aug 27, 2010 4:01am
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crede quod habes, et habes
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your profit expectancy depends on the scale
What do you mean Graeme?
Even though I would prefer my legs to grow on the main weekly/monthly curve for the next 2-10 years. First, I must be realistic in my expectation at the events that is going to happen before the 2-10 years of growth.
If you are entering positions on 5min chart then your realistic expectation after 20-30 candles is??
Even though it has moved very strongly down for us the potential profit is just over 60+ pips. And we all know market is more than just 60 pips on offer.
Now, the above chart can also be a weekly chart.
Exactly the same but the scale is different. Scale is the potential profitable 'ground.'
If the above was a weekly chart then you would all agree that 20-30 candles would be few thousand pips.
What is the difference??
Continuing on..
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Aug 27, 2010 4:12am
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crede quod habes, et habes
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Obviously the main differences are:
Weekly - few thousand pips for 20-30 candles
5min - 50+ pips for 20-30 candles
There is also the time difference.
x20 5 minute candle can be covered in a day but 20 weekly candle will take 5 months.
Apart from the reward and time inversed difference. Everything remains unchanged.
The market doesnt know you are looking at a 5min chart or a weekly chart.
Entries just from 5min chart, hoping to move SL to BE and then pray for a few years growth is about 90% of the readers here.
It is a correct mentality however when you are dealing with 5min charts, REALISTICALLY you will first experience very small win and with great luck (?) that position may or may not grow the next day or the next week.
You just became an average trader with professional traders mindset.
Continuing on..
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Aug 27, 2010 4:23am
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crede quod habes, et habes
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But Graeme, you said you take every low risk opportunity markets give either buy/sell and then let it grow indefinitely.
Yes, I do. But also I know just blind luck and skills required to make the above happen with higher probability.
I try to explain something on the left and all the readers shift their views completely to the left. To balance it out, I try to explain something on the right and then all the readers shift views to right.
Let us not forget why I got into explaining, .00 entries and entries on 5min chart. It was from a request.
At the moment, alot of readers are in the top 30% percentile of most retail traders. They have professional traders mindset however they are still blindly trading as much mechanical as possible. Mechanical trading means emotionless trading not what most readers believe.
All traders are still asking for rules and systems to apply. It is the easiest way for a human being to think. Being told what to do.
Flying buddha was suppose to be a hindsight (I think I have used this word at least 100 times in this thread). Hindsight is not a green flag for all to enter. Most traders here are treating flying buddha as a sign and then look for another sign to stack and a different sign to exit. This is all good but please read below:
The more you trade mechanical, expect more defined and forecastable profit.
The more you take calculated risk, expect greater and infinity yield profit.
Now....
Im going to reveal the last key. That will make you into top 10% percentile.
Continuing on..
Last edited Aug 27, 2010 6:08pm
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Aug 27, 2010 4:32am
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crede quod habes, et habes
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Scale.
Please dont strain on the 5min entries as it never was the main course. If anyone recollects properly, entries on 5min was on request which I earnestly replied and then it just grew from there. There is nothing wrong to the information I have supplied so far BUT the required focus is not there but elsewhere.
I hope all readers practiced alot alot alot of entries on 5min as that was the main point about looking at a 5min chart. PLENTY OF OPPORTUNITIES HARD AND FAST. And market doesnt know its a 5min chart your practicing on or a weekly chart. Everything works on all timeframe.
You will all agree that some buddhas work terrifically and some not so well.
Yes.
You only need 1 buddha/1 inside bar/1 pin bar/1 engulf.
You need just one calculated guess correct to make thousands and thousands for weeks and months.
Not forgetting what I just said,
This flying buddha works out to our benefit (im just letting you know upfront)
Again I ask you
What timeframe is this? (please dont answer in the post)
Continuing on..
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Aug 27, 2010 4:35am
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crede quod habes, et habes
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I will show you what happened after this flying buddha.
Now again,
What timeframe is this? (please dont answer in post)
Continuing on..
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Aug 27, 2010 4:41am
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crede quod habes, et habes
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No one can tell what timeframe it is by looking at those 2 charts.
But they can tell it is a nice flying buddha that worked out fantastic afterwards.
"8 candles of up candles. But thats only 20-30 pips.
Im sure I can add a position in the middle somewhere and make it few more."
Is that you above?
That flying buddha is weekly.
You only need to get just 1 correct hindsight.
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Aug 27, 2010 4:49am
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crede quod habes, et habes
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But I know what most readers are thinking right now
OK Graeme. We get it. So a flying buddha on a weekly chart will bring in more profit because bigger scale. And im guessing you use the same price interpretation right?
You're still 30% percentile. And you are looking at this weekly chart like this still
When I say hindsight, it means a forecastable vision of the near short future.
A flying buddha on 5min chart signals a reversal. It happens and continues 8 candles down. Pfft... 80+ pips??
A single flying buddha on a weekly chart that signals a reversal will mean few thousand pips.
Continuing on..
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Aug 27, 2010 5:01am
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crede quod habes, et habes
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To be the top 10% percentile you need to
take calculated risk and expect greater and infinity yield profit.
More or less like above. This is possible cause I use inception method to pin-point the area of my entries and then use an extra tight entry.
So I risk 10-15 pips for the potential of 1300 pips everytime.
How is this possible???
Continuing on..
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Aug 27, 2010 5:07am
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crede quod habes, et habes
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When you use weekly chart. You are slowing the time. Everything is slower and in slow motion.
One 5 minute candle is a flick of a light switch.
BUT
One weekly candle is 5 days of opportunity.
If you see a flying buddha on weekly
Treat it exactly the same as a 5min flying buddha. You all know what to ANTICIPATE after on a 5min flying buddha DO THE SAME ON WEEKLY.
For the above picture you are looking at UP trend.
Imagine only 2 candles of up after that flying buddha.
The scale is different and that would equate to few hundred pips.
Sooooooo
YOUR HINDSIGHT IS??
Up.
Continuing on..
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Aug 27, 2010 5:14am
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crede quod habes, et habes
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Everything remains the same.
Price interpretation is especially the same.
WE NOW HAVE HINDSIGHT THAT IS WORTH AT LEAST FEW HUNDRED PIPS. SO WE HAVE MAXIMIZED OUR 'POTENTIAL PROFIT MAKING GROUND' AND KNOW THE PRICE WILL MOVE AT LEAST FEW HUNDRED PIPS IF IT WORKS OUT.
Thats only half of the equation...
ITS NO USE KNOWING PRICE WILL MOVE FEW HUNDRED PIPS WHEN YOUR TIGHT STOP LOSS ON WEEKLY CHART IS ALMOST A HUNDRED PIPS per open position
You need to do the REVERSE THINKING for your stop loss. YOU WANT POTENTIAL HUNDREDS OF PIPS BUT YOU ONLY WANT TO LOSE ONLY FEW PIPS AT A TIME.
HOW?!?!?
You bring the hindsight of higher time frame into the lower timeframe. You must use inception method and SWING THE FAVOUR TO YOUR SIDE PERMANENTLY.
Im going to prove all this..
Continuing on..
Last edited Aug 27, 2010 5:27am
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Aug 27, 2010 5:26am
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crede quod habes, et habes
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Level 0. Weekly
If you only use level 0 (or just 1 timeframe consistently) you are pre-defining your actions. If you enter just from level 0, you will have 3 or 4 entries with stop losses just as big and the only thing that will save you is if the new trend continues longer than just 8 candles.
If you just stay on level 0 or any single timeframe, you may have increased/decreased your scale (profiting ground) but you have also brought the baggage of bigger/smaller stop loss. You need to detach these two completely to be top 10%.
Always always always remember:
The more you trade mechanical, expect more defined and forecastable profit.
The more you take calculated risk, expect greater and infinity yield profit.
Calculated risk???
Same period but level 1. 4hr.

Last edited Aug 27, 2010 5:47am
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Aug 27, 2010 5:44am
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crede quod habes, et habes
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Compare.
Look.
What do you see???
Let me try and summarise it very short and direct
YOU HAVE JUST CREATED MORE ENTRIES WITH SMALLER STOP LOSS/RISK BUT STILL THE SAME POTENTIAL OF 1300+ PIPS.
YOU HAVE JUST CREATED MORE ENTRIES WITH SMALLER STOP LOSS/RISK BUT STILL THE SAME POTENTIAL OF 1300+ PIPS.
YOU HAVE JUST CREATED MORE ENTRIES WITH SMALLER STOP LOSS/RISK BUT STILL THE SAME POTENTIAL OF 1300+ PIPS.
You have completely detached risk reward off its scale. Risk always followed reward and it frustrates alot of traders to notice that more risk means more profit but could mean a bigger loss. They were always related.
Now they are inversely correlated. Same/more profit for smaller/lower risk.
This is you with the current price action interpretation. There is nothing wrong with the interpretation but the parallel-related risk reward.

This is me IF i just use one level inception
Using the same price interpretation I showed yesterday: wick interpretation, flying buddhas, volatile breakouts, engulf I can roughly see this many entries that would have survived after 8 weeks, more or less.

ALREADY I HAVE MORE ENTRIES and the beauty is every new position will have much smaller stop loss/risk but the same goal or the potential to profit as the weekly.
This is creating a huge gap in the risk:reward
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Aug 27, 2010 5:53am
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crede quod habes, et habes
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Im going to warp everything even further.
Lets look at level 1 (4hr) chart again. A closer look into 'week 3'
Obvious setups that we have done many times before.
Buddha, wick interpretation, volatile breakout. Usual stuff. Or should I say set repetition of generalized cycle??
Only 3 entries?
Im sorry but i can see more...
Where?
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Aug 27, 2010 6:12am
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crede quod habes, et habes
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Where??
Inside of the inside.
Look how I warp these 'areas' of entry into an absolute money making bloodbath.
Into level 2. 1hr.
I have dissected the same one opportunity to now 3 opportunities AND cut the stop loss significantly. Potential is 3 times the total profit at end of 8 weeks and risk is not even half of level 1.
Risk:Reward is now so warped. Can you honestly think of 20 pip risk: 1300 profit? 1:650?
Apologies, I keep getting my level numbers confused as Im rushing but im sure all readers know what im talking about with 'levels'
Continuing on..
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Aug 27, 2010 6:21am
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crede quod habes, et habes
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I will make everyone head go spinning to enter one more level into 5min. I can dissect the 3 opportunities on level 2 into further 6-10 opportunities.
Just by using the same price interpretation we have been practicing.
And all this was from 1 opportunity on level 0 which was 1 flying buddha from weekly chart.
I can literally make all go crazy if I start the hindsight from monthly chart and then filtering into lower timeframes.
Ever thought of 15 pip risk for a 8000+ pips?
Continuing on..
Last edited Aug 27, 2010 6:02pm
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Aug 27, 2010 6:33am
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crede quod habes, et habes
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I can spend all night to prove to all that the market we know has a set of generalized action that repeats itself in a cycle. Pros know this well.
Hindsight is the most valuable source of information. As we all know flying buddhas dont work all the time but enough times.
If you think about my posts above you will clearly see how a skilled trader can, not only bend the market sentiments into his own focal interpretation but also bend the will of the market.
Everyone thinks r:r is a static and defined set of numbers that moves parallel to each other. The secret is doing what you can to tear these two numbers apart. Success to DIBS method? In the long tail is what petercrown said. Or is inside bar about stopping the risk at static 1 and letting profit grow?
I can guarantee that any willing readers to invest their own little time and flick through any pair. Choose a hindsight on higher timeframe and filter through few levels deep using same price interpretation you have mastered. You will get similar results in every scenario you test.
You now know the cycle of generalized action.
Sincerely,
Graeme
Last edited Aug 27, 2010 7:04pm
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Aug 27, 2010 6:42am
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crede quod habes, et habes
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Thank you all for participating.
Apologies if my tone of voice was higher than usual but just like a good ending to a movie, tonights topic is one of the last on the list that I was working down. Im glad to see many readers that joined me from start still here. Thank you very much.
I will continue on tomorrow night as I would like to add little more to the thoughts I represented tonight.
Tomorrow I will show all readers how to literally stop the time in the markets.
And then the explanation of the weekend project to all which seals off everything nicely.
Good night all and stay warm
Kindest Regards,
Graeme
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