Trading is as simple as 1-2-3

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!


"Perfection is not when you have nothing more to add, but when you have nothing more to take away." - Antoine De Saint Exupery

"It is not about adding on, but taking away. The less technique, the better you are." - Bruce Lee




EDIT DEC 23, 2016:



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.

Indicators and templates are in the attachments. Look for the paperclip icon upper righthand corner of your browser.


Please do not discuss or mention EAs in this thread.
EAs are not welcome here.

EAs distract from the method.
You have been warned.

If you want to post code in this thread post the MQ4 files.
Posting only EX4 files is not welcome.

You may wonder why.
EX4 files could contain something harmful.
MQ4 files are compiled on your computer so you can feel relatively safe.
If the coder "vanishes" then the code can not be updated if/when it fails and the code can not be improved or enhanced.
Who wants to be a the mercy of some unseen coder?


Newcomers to the thread, if you want a question answered then copy/paste the following message when you ask your question:

I HAVE READ POST #1 AND THE EXAMPLE LINKS BUT I STILL HAVE A QUESTION

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.

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

Enter long here?

Move stop to break even?

Move stop up?

1.5622 - 1.5572 = 0.0050 Take 50 pip profit?

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.

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.

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.

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.

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.

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

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.

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?

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.

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

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.

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