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-   -   Trading is as simple as 1-2-3 (https://www.forexfactory.com/showthread.php?t=549745)

TooSlow Jul 16, 2015 2:07pm | Post# 1

Trading is as simple as 1-2-3
 
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When price is above an open, it is up. Conversely, when price is below an open, it is down. It is a good idea not to short when price is up and not to buy when price is down. Naturally, most traders look for reversals but are impatient and trigger happy thus buying when they should be selling and vice-versa.

A sell below the H1 open of the bar immediately following the bar making the highest high would have resulted in profit. In summary, a bar makes a high and closes. Next bar fails to make a higher high and reverses. Sell when price drops below the open price of the current bar.

A buy above the H1 open of the bar immediately following the bar making the lowest low would have resulted in profit. In summary, a bar makes a low and closes. Next bar fails to make a lower low and reverses. Buy when price rises above the open price of the current bar.

Please understand none of this is original or new and this is presented for EDUCATIONAL PURPOSES ONLY. You may find your results may differ. Please check with an accredited financial specialist before using real money. FOREX trading can be risky. YOU HAVE BEEN WARNED!

EDIT DEC 23, 2016:

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Someone pointed out RULE #3 could be interpreted in more than one way.
See modification on chart.
You want to trade AWAY from the daily high after price makes a new daily high and
trade AWAY from the daily low after price makes a new daily low.
You are ALWAYS trading towards the daily open with this method.

TooSlow Jul 16, 2015 7:17pm | Post# 2

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Highest highs have red caps. In summary, a bar makes a high and closes. Next bar fails to make a higher high and reverses. Sell when price drops below the open price of the current bar.

Lowest lows have blue socks. In summary, a bar makes a low and closes. Next bar fails to make a lower low and reverses. Buy when price rises above the open price of the current bar.

These are the #2 candles of the 1-2-3 pattern.

Use your own discretion in deciding when to trade.

TooSlow Jul 17, 2015 9:59am | Post# 3

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Decide at what price to enter and decide entry ( long or short ) direction.

TooSlow Jul 17, 2015 10:07am | Post# 4

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Enter long here?

TooSlow Jul 17, 2015 10:14am | Post# 5

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Move stop to break even?

TooSlow Jul 17, 2015 10:22am | Post# 6

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Move stop up?

TooSlow Jul 17, 2015 10:28am | Post# 7

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1.5622 - 1.5572 = 0.0050 Take 50 pip profit?

TooSlow Jul 17, 2015 10:36am | Post# 8

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How much are you up? How much more is there? Will it continue to go up?


Socratic method is named after the classical Greek philosopher Socrates. It is a form of inquiry and discussion between individuals, based on asking and answering questions to stimulate critical thinking and to illuminate ideas.

TooSlow Jul 17, 2015 10:40am | Post# 9

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Will price make a new daily high from here?

Will price close above or below the daily open?

Will price close above or below my entry?

Will price make a new daily low from here?

Are you thinking about what price will do or what is happening to your trade?

Socratic method is named after the classical Greek philosopher Socrates. It is a form of inquiry and discussion between individuals, based on asking and answering questions to stimulate critical thinking and to illuminate ideas.

TooSlow Jul 17, 2015 10:47am | Post# 10

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Price moved down 10 pips from where it was.

Should you have exited?

Should you exit now?

If you exit and it goes up, how will you feel?

If you do not exit and it goes down, how will you feel?

Is your focus on price or your emotions?

"Successful people ask better questions, and as a result, they get better answers." - Tony Robbins

Socratic method is named after the classical Greek philosopher Socrates. It is a form of inquiry and discussion between individuals, based on asking and answering questions to stimulate critical thinking and to illuminate ideas.

TooSlow Jul 17, 2015 10:52am | Post# 11

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Hello. I see about 10 traders are viewing. Please introduce yourself. Don't be shy.

What questions do you ask yourself before, during and after a trade?

"Successful people ask better questions, and as a result, they get better answers." - Tony Robbins

Socratic method is named after the classical Greek philosopher Socrates. It is a form of inquiry and discussion between individuals, based on asking and answering questions to stimulate critical thinking and to illuminate ideas.

TooSlow Jul 17, 2015 10:58am | Post# 12

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Hello. I see about 10 traders are viewing. Please introduce yourself. Don't be shy.

Price went up again.

Should you wait or exit?

Where should you move your stop?

How many pips are you up?


"Successful people ask better questions, and as a result, they get better answers." - Tony Robbins

Socratic method is named after the classical Greek philosopher Socrates. It is a form of inquiry and discussion between individuals, based on asking and answering questions to stimulate critical thinking and to illuminate ideas.

kprsa Jul 17, 2015 10:59am | Post# 13

Interesting and very simple. And I love simple! I myself like to quantify what "most traders" do...
How well does this strategy work for you?
Cheers,
k

TooSlow Jul 17, 2015 11:01am | Post# 14

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Should you exit?

Should you exit and reverse?


"Successful people ask better questions, and as a result, they get better answers." - Tony Robbins

Socratic method is named after the classical Greek philosopher Socrates. It is a form of inquiry and discussion between individuals, based on asking and answering questions to stimulate critical thinking and to illuminate ideas.

TooSlow Jul 17, 2015 11:07am | Post# 15

Interesting and very simple. And I love simple! I myself like to quantify what "most traders" do... How well does this strategy work for you? Cheers, k
Hello kprsa. This is not really a strategy per se. Just a rule for entry. It works pretty well for me when I follow it. There is always temptation to mess with it under the guise of improving it. So easy to lose one's focus and be distracted by what other traders are doing. Not to mention, the plethora of indicators, systems, methods, strategies, etc...

How would you quantify this, kprsa?

TooSlow Jul 17, 2015 11:09am | Post# 16

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Price is below the previous bar high and above the current bar open.

Will price breakout?

"Successful people ask better questions, and as a result, they get better answers." - Tony Robbins

Socratic method is named after the classical Greek philosopher Socrates. It is a form of inquiry and discussion between individuals, based on asking and answering questions to stimulate critical thinking and to illuminate ideas.

kprsa Jul 17, 2015 11:13am | Post# 17

{quote} How would you quantify this, kprsa?
Sentiment: It allows me to follow what the majority of (retail) traders are doing almost in real time.
Retail traders' sentiment quantifies the prey mentality. It is good to go against them, particularly when they are wrong about direction.

I know what you mean about focus and following a single strategy...

k

vlady1974 Jul 17, 2015 11:39am | Post# 18

I was going to write this in the other forum, but this place is much better!

I see the Open as a reference point on a field, eg. Football. Hi/Lo is the depth that the opposition got into the other zone. The deeper into the zone, lower lows or higher highs. Therefore Open is a form of fixed reference point and the mid of the Hi Lo is my variable reference point until close.

If Price is above Open AND above OH mid, then Long on next candle.
If Price is below Open AND below OL mid, then Short on next candle.

TooSlow Jul 17, 2015 3:32pm | Post# 19

I was going to write this in the other forum, but this place is much better! I see the Open as a reference point on a field, eg. Football. Hi/Lo is the depth that the opposition got into the other zone. The deeper into the zone, lower lows or higher highs. Therefore Open is a form of fixed reference point and the mid of the Hi Lo is my variable reference point until close. If Price is above Open AND above OH mid, then Long on next candle. If Price is below Open AND below OL mid, then Short on next candle.
If Price is above Open AND above OH mid, then Long on next candle. This looks "backwards". In keeping with your football analogy, the closer the ball gets to the opposing team's goal line, the more likely the team with the ball will score and the defense will play tougher. If price fails to make a new high and closes below the OH mid, a trade entered in the opposite direction would be the call. Otherwise, an entry in the same direction as the ball is moving would be late. The two bar charts show this. If I understood you correctly, you would have gone short, when I was going long because price closed below the OL min.

http://www.forexfactory.com/attachme...1&d=1437142015

Price failed to make a lower low - the defense held. Enter long. But your entry: If Price is below Open AND below OL mid, then Short on next candle, would have resulted in loss. On the other hand, maybe I have misunderstood you altogether.

vlady1974 Jul 17, 2015 5:56pm | Post# 20

{quote} If Price is above Open AND above OH mid, then Long on next candle. This looks "backwards". In keeping with your football analogy, the closer the ball gets to the opposing team's goal line, the more likely the team with the ball will score and the defense will play tougher. If price fails to make a new high and closes below the OH mid, a trade entered in the opposite direction would be the call. Otherwise, an entry in the same direction as the ball is moving would be late. The two bar charts show this. If I understood...

I see what you mean, and would have to agree. Isn't this then just swing trading on a smaller scale?


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