Plan the Trade

Was 71 on the week if you don't include wednesday which i traded out of curiosity and found it to be a shambles of a day.

nice ozz yes Wednesday usually stinks. the only time I trade Wednesday is if a holiday falls on Monday then they move oil inv to Thursday at 11 which is no problem since I am done by 1030

Have had mixed results and still trying to find my mojo again after an extended Christmas break.

As standard i celebrate Christmas on the 25th Dec, but out here, they worship the Eastern Orthodox church and thus Christmas is on the 7th Jan. With New Year being a huge celebration, in the middle, it always makes for a long holiday!

I've been getting back up to speed, but still a bit rusty.

The Dax doesn't move as much as the NQ, so generally requires more time for studying/trading, thus as i pointed out a few posts ago, i'm hitting fatigue too.

Here's a couple of charts with observations and trades, but the interesting fact is something i pointed out a long time ago in this thread.... the double C&H leading to the most powerful wave (the 'iii' of the 3rd).

Here is the EU chart from earlier;



and in a different context, but same result, here is the Dax from a short time ago;



If observed and recognised beforehand, it's a beauty. Combining the pattern with pullback to prior Demand (in EW terms retest of subwave 'i' of prior set).

It's not always easy to spot and thus i usually curse having grabbed a relatively small chunk!) so this is as much a reminder for myself...

The bigger picture Dax shows how powerful the ensuing move was, in context of initial risk.

Also, love the way it corrects back to the prior Demand on this bigger scale;

Post this for Caps, cos i know he enjoys a little EW 'hocus pocus')

As above, locate the correct C&H and it will lead to the powerful 3rd wave. This was the Dax a week or so ago;



Now apply those guidelines and include some Fibonacci levels;

These two charts are from the EU this week. You would be forgiven for thinking that they are the same chart, but merely different tick rates. They are not! They are two days apart.





The 3rd wave is easy to spot in it's latter stages. The trick is to determine when it might be likely and that is when the C&H trade comes into play.

When a 3rd wave has extended (become more than 161.8% of wave 1 length), the ensuing 4th wave is likely to be shallow (common sense really, due to strength of buying). In this instance the most likely level will be the 23.6% retracement of the 3rd wave.

Now if the subwave (iv) wave end was also at that level we have good support and likely demand at that level.

Look how both charts react at that level... they are both so similar. Now to tackle the 5th wave likely ending. Take fib levels of waves 0-3 and add them to end of 4th wave. Both times the 5th ended at the 38.2% level and created massive Negative Divergence in the process.

Combine all of this with buying or selling previous S/D zones and using Hooks when we know that PA is strong and it makes for strong conviction.

Thx CG.

Remember that Monday is a short day on the NQ. It will close by 1:00 EST. Most of us are done by then, so it shouldn't be a big deal. Just an FYI really.

I'm re reading and studying charts based on Law of the Chart by Joe Ross. Very helpful homework! You can find the pdf online for free.

After studying that again, I think I have been doing Hooks wrong. A good exercise to go through. I was mixing my 123 formation rules with hook formation rules.

most of my philosophy comes from this pdf

looks like no one wants to play today

Agreed. A better morning for studying. Have a great day everyone!

what do you mean?

I was looking for a bar to break the previous bars high or low for the Ross Hook, but that is for the 123. I was also not including the actual Hook bar in my 3 count when placing the Traders Trick Entry. I probably took entries that were riskier than needed.

Everyone must find what works for them, but i watch a much faster tick rate in general, so what those bigger bars don't show is the structure behind them as they are printing. Usually there will be a 123 created, but too small to see unless you watch a faster rate.

Therefore, what rules or views that work for others, is basically the same for me, but i am viewing it slightly differently.

Here's an example on the Dax from earlier;



In the blue circle, i was looking for a pullback to the line. We have a 123, triggered to a fresh low so confirmation of downtrend after the break in formation just prior (HH point 1).

But, the pullback was shallow and created a small 123 which by using a stop order instead of limit, we take the trigger back into trend instead... I place my stops immediately above or below point 3 or the trigger bar itself, so risk is minimal. We want PA to trigger and run without a pullback ideally.

There are still losers with this method, but if the 123 itself is shallow, it is basically saying that the underlying pullback is weak and the overall trend is strong.

CG you missed a couple of pullbacks and hooks in your chart

Holiday done and price is up . . . Lets see where nq goes this time.

2b break pullback

another 11 man all this movement and I got only 22 today

I think I will hang till it slows down