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Naked BBQ

  • #1
  • First Post: Edited Dec 1, 2017 4:14am Oct 26, 2017 2:53am | Edited Dec 1, 2017 4:14am
What I trade
The pattern I trade I call LBL. You can see an example here.
The idea is based on Sam Seiden's RBDs and DBRs.

How I trade it
Entry for long trades is always on top of the base, SL is below the base. For short trades vice versa.
However, I sometimes fine-tune my entries (more details will be added).


A trade I'm currently in:
Attached Image (click to enlarge)
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Reasons will be explained soon.

This will be an easygoing thread as I am pretty busy aside from trading. Please bear with me.
Thanks J16, Sam Seiden, Udine and Jacko
  • #2
  • Oct 26, 2017 3:07am Oct 26, 2017 3:07am
Attached Image (click to enlarge)
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This I call an LBL. The basics:

  1. 1st leg shorter than the 2nd
  2. 2nd leg breaks top of 1st leg
  3. both legs have big candles in it
  4. base is pretty clear-cut
  5. strong base breakout

Thanks J16, Sam Seiden, Udine and Jacko
  • #3
  • Edited 9:21am Nov 9, 2017 8:26am | Edited 9:21am
Attached Image (click to enlarge)
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2nd trade I'm in (I promised you a slow thread). I wasn't too comfortable with this trade. Depending on how you define the legs, the 2nd one wasn't particularly stronger than the 1st one. Plus price had already approached the level somewhat which usually makes a level weaker (see grey circle). However, the level looked good enough for at least some initial push to 113.43 (put my TL there), which already happened. Let's see how it unfolds.

UPDATE: got stopped out at [email protected].
Thanks J16, Sam Seiden, Udine and Jacko
  • #4
  • Edited 4:39am Nov 13, 2017 2:26am | Edited 4:39am
Attached Image (click to enlarge)
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3rd trade. [email protected], Entry (E)@1.32004. Trailing stop (TS) already activated.

With this LBL it is a little different. I did not enter at the base (@ about 1.32396) but at a lower point where a strong move up in price occured in the past. The origin of that move (see circle) marks an area of formerly strong support which turned into resistance once price heavily broke through it (2nd leg). This is where price often turns around like it did in this example.

BTW, sorry for posting after the fact. Will make sure to mostly post trades before they happen which is sometimes not possible because I'm busy.

UPADTE: Stopped out at 1.30833 (+117 pips)
Thanks J16, Sam Seiden, Udine and Jacko
  • #5
  • Nov 13, 2017 2:30am Nov 13, 2017 2:30am
I don't use fixed R:R (risk return) rules but rather look for pronounced support/resistance (S/R) and/or supply/demand (S/D) areas that might stand against the trade. This is where I usually put my trailing-stop (TS) or move my stop-loss (SL) to break-even (BE).
Thanks J16, Sam Seiden, Udine and Jacko
  • #6
  • Nov 14, 2017 7:51am Nov 14, 2017 7:51am
Attached Image (click to enlarge)
Click to Enlarge Name: 171114_EURJPY_01.PNG Size: 41 KB


Next trade. Again an LBL. Sorry, don't have time for more thorough explanation, probably tomorrow.
Thanks J16, Sam Seiden, Udine and Jacko
  • #7
  • Nov 15, 2017 8:38am Nov 15, 2017 8:38am
Attached Image (click to enlarge)
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Another trade that I just entered. 2nd leg stronger than the 1st leg.

EJ from last post got activated and just hit my trailing stop limit (@+40pips). SL@BE now.
Thanks J16, Sam Seiden, Udine and Jacko
  • #8
  • Nov 15, 2017 12:40pm Nov 15, 2017 12:40pm
Update: UJ stopped out at +25 pips. EJ still running.
Thanks J16, Sam Seiden, Udine and Jacko
  • #9
  • Nov 15, 2017 3:04pm Nov 15, 2017 3:04pm
Attached Image (click to enlarge)
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Closed [email protected] for +56 pips.

Origins and end points of big price movements like the one I marked on the chart can be a nice way to determine S/R and hence TP, SL and levels to lock in your profits (see post #5).
Thanks J16, Sam Seiden, Udine and Jacko
  • #10
  • Nov 16, 2017 4:14am Nov 16, 2017 4:14am
Attached Image (click to enlarge)
Click to Enlarge Name: 171116_GBPCHF_01.PNG Size: 34 KB


LBL with a gap which is very nice. Downside is that price hit some serious support yesterday and may have some momentum.
Thanks J16, Sam Seiden, Udine and Jacko
  • #11
  • Nov 17, 2017 5:58am Nov 17, 2017 5:58am
Attached Image (click to enlarge)
Click to Enlarge Name: 171116_GBPCHF_02.PNG Size: 34 KB


Trade worked out as planned. Unfortunately I forgot to set my TP @1.30780. Only had a TS which wasn't activated as my computer was shut off. SL now @1.31105 (~+13 pips). Maybe it will fall down to the 1.3050 area.

What gave me confidence in this trade was the gap, the clear-cut base and something I call staircase (see chart). Whenever price slowly grinds its way up or down to some important supply/demand area the likelihood of it turning around and cutting right through the staircase is very high. I'll post some examples after lunch.
Thanks J16, Sam Seiden, Udine and Jacko
  • #12
  • Nov 17, 2017 6:08am Nov 17, 2017 6:08am
Nice Thread ... hope you will show how you do your top down analysis before you take a trade ..
Don't Predict Just React..
  • #13
  • Nov 17, 2017 6:57am Nov 17, 2017 6:57am
Quoting Nbr42
Nice Thread ... hope you will show how you do your top down analysis before you take a trade ..
Hi Nbr42, it's pretty simple: I watch ~6 pairs one the daily, 4h and hourly chart. I look out for those LBL patterns which are rather easy to spot. If you have any further questions let me know.
Thanks J16, Sam Seiden, Udine and Jacko
  • #14
  • Nov 17, 2017 7:30am Nov 17, 2017 7:30am
Quoting HanSolo
{image}Whenever price slowly grinds its way up or down to some important supply/demand area the likelihood of it turning around and cutting right through the staircase is very high.
Great thread, thanks!

I see that you prefer no indicators whatsoever. I like to monitor the tick volume (as a measure of price activity) in such case as a confirmation. If the move up is "fake", one typically sees the most activity at the relative tops of the move. This usually implies the distribution is taking place, and adds certainty that the markdown phase of the price cycle comes next.

(Note that the markdown has quite a large tick volume behind it and the pullback much less, the price will likely continue further down to some convenient accumulation price area.)

Cheers,
k

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  • #15
  • Nov 17, 2017 7:57am Nov 17, 2017 7:57am
Quoting kprsa
{quote} Great thread, thanks! I see that you prefer no indicators whatsoever. I like to monitor the tick volume
Hello kprsa, thanks for your comment. The thing with these simple patterns is that you can implement them into pretty much every trading system and thereby stack the odds in your favor. I personally found it very liberating to get rid of all indicators and see that price tells you what you need.

GBPCHF update: [email protected], [email protected]
Thanks J16, Sam Seiden, Udine and Jacko
  • #16
  • Nov 17, 2017 8:33am Nov 17, 2017 8:33am
Closed GBPCHF a bit early @1.30683 for +55 pips. Done for the week.

Week 1 recap
TOTAL = +60,8 pips

Week 2 recap
TOTAL = +78,1 pips
Lost ~60 pips on a trade that was against the rules.

Have a nice weekend everybody.
Thanks J16, Sam Seiden, Udine and Jacko
  • #17
  • Nov 17, 2017 7:44pm Nov 17, 2017 7:44pm
Quoting HanSolo
{image} 3rd trade. [email protected], Entry (E)@1.32004. Trailing stop (TS) already activated. With this LBL it is a little different. I did not enter at the base (@ about 1.32396) but at a lower point where a strong move up in price occured in the past. The origin of that move (see circle) marks an area of formerly strong support which turned into resistance once price heavily broke through it (2nd leg). This is where price often turns around like it did in this example. BTW, sorry for posting after the fact. Will make sure to mostly post trades before...
Gracias, nice thread HanSolo,
Happy to see the fresh meat well prepared for your BBQ . I am not so sure about this image ... i just think that your 2nd leg is not long enough compare to the 1st leg ?? In other word: it is not Equivalent to your previous images before it, but may be i am wrong ... ?
I am failed,but i found 1,000 ways that won't work ...
  • #18
  • Nov 18, 2017 2:18am Nov 18, 2017 2:18am
Quoting despacito7
I am not so sure about this image ... i just think that your 2nd leg is not long enough compare to the 1st leg ?? In other word: it is not Equivalent to your previous images before it, but may be i am wrong ... ?
Hi despacito7, you're partly right: the 2nd leg doesn't surpass the 1st leg very much. However, count the candles that make up the 1st and the 2nd leg. Huge difference, right?

Another argument for the trade was that price was already nibbling away the supply area below (see circles on chart). With the 2nd leg it extended well into the LBL I marked in blue:
Attached Image (click to enlarge)
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And this is another way you can use the LBL analysis. See, the LBL I marked in blue shows a strong 1st leg and a rather weak 2nd leg (again: count the candles). So this is a sign that this level is not too strong and price may make another stab at this area and eventually even break it.

So it was not an A+ trade but certainly a B+.
Thanks J16, Sam Seiden, Udine and Jacko
  • #19
  • Nov 23, 2017 3:34am Nov 23, 2017 3:34am
Attached Image (click to enlarge)
Click to Enlarge Name: 171123_GBPCHF_01.PNG Size: 36 KB

To be honest, I'm not too enthusiastic about this level. It somehow doesn't feel right but I can't put my finger on it. I'll trade it anyway since it is within my set of rules.

Assessing the 1st and 2nd leg isn't too easy with this one. But overall the 2nd looks stronger to me (see 4h chart below).
Attached Image (click to enlarge)
Click to Enlarge Name: 171123_GBPCHF_02.PNG Size: 32 KB
Thanks J16, Sam Seiden, Udine and Jacko
  • #20
  • Nov 27, 2017 9:33am Nov 27, 2017 9:33am
Attached Image (click to enlarge)
Click to Enlarge Name: 171127_USDJPY_01.PNG Size: 50 KB


A beautiful thing about the LBL pattern is that it also works in the opposite direction. Once price breaks through the base, what was demand before turns into supply. And vice versa.

The LBL on the chart above presented itself with two trading opportunities (see arrows).
Thanks J16, Sam Seiden, Udine and Jacko
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