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Inverted Logic Trading

  • #1
  • First Post: Edited 4:59pm Apr 25, 2018 5:06am | Edited 4:59pm
What is one of the most searched PriceAction signals? (I want remember you that the 90%+ traders are losers)

The breakouts. It's easy! The price break and goes up. Yup, let's trade and make money.

But the reaility is another.

You just can't know if the breakout is fake and you can't know how far it will go (if it will), because you can't predict the future.

And at this point i think you are all agree with me.

Now, i strongly believe that for be succesful you must "trade out of the box", we are not talking about what to do, but what not to do.

So, what if we just trade the breakouts... in reverse? "You are crazy man! if price goes up and break.. " yes yes yes. Forget everything please.

Open all JPY pairs in m5 with period separator and plot an horizontal line on the high/low of previous day; then set 2 moving averages (EMA, 20 and 63)

Warning:


-openmind and humility required. The arrogants and naysayers will be instantly removed.
-If you don't have experience, you will not understand this. You must know Candles and Price Action like your birthday's date
-Who will talk about EA's will be instantly removed. The most powerful EA is between your ears.
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  • #2
  • Edited 5:00pm Apr 25, 2018 6:44am | Edited 5:00pm
Other examples
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  • #3
  • Apr 25, 2018 6:53am Apr 25, 2018 6:53am
CHF/JPY right now
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  • #4
  • Apr 25, 2018 7:03am Apr 25, 2018 7:03am
Yes your logic is good, but there is one thing. If you go to small charts you have to take small profits, yes yes i know you will say keep it waiting for a long, yes you will cacth them, that is true. But the other question where will you put your stop loss. If you will get more stop loss than big profit you will fail. If you will take inouf small profits would be ok, but one bigger loose and you have nothing. There is one good point of your thinking out of box, everyone maybe will make a lauf. But does anyone tryed to trade with other guy who loose his money. Yes sometimes even they hit nice amount of money, but in the end they loose. The point is simple, find a guy who loose, and trade against him, his profit is your stop loos your profit is his stop los. Trades are the same quantity everything is the same. Well as i sayed most of you will make fun of it, but does anyone really try? Nope? Than why you lauf if you even dont know how it works?
  • #5
  • Apr 25, 2018 7:43am Apr 25, 2018 7:43am
sorry, for the maybe stupid question:
You're aiming for the course to either reverse on the high / low of the previous day or on the reset after the breakout !?
or have I misunderstood something here?
  • #6
  • Apr 25, 2018 7:51am Apr 25, 2018 7:51am
Quoting alexf82
sorry, for the maybe stupid question: You're aiming for the course to either reverse on the high / low of the previous day or on the reset after the breakout !? or have I misunderstood something here?

Open a daily chart. What do you see on top and bottoms of each candle? Wicks, spikes, shadows. I hope we understood each other.

It's about trading the wicks, the reabsorption (that are always present since the creation of candlesticks). Nothing so new... one need to be creative and have imagination.

On the trading system section i only see 2000 useless indicators and people burning their accounts. Try this in demo 1 year and let me know ;-)
  • #7
  • Apr 25, 2018 8:34am Apr 25, 2018 8:34am
Quoting 8Lietuvis8
Yes your logic is good, but there is one thing. If you go to small charts you have to take small profits, yes yes i know you will say keep it waiting for a long, yes you will cacth them, that is true. But the other question where will you put your stop loss. If you will get more stop loss than big profit you will fail. If you will take inouf small profits would be ok, but one bigger loose and you have nothing. There is one good point of your thinking out of box, everyone maybe...

You have to set your SL to 20 pips, there can't be "one bigger lose".

Sorry but i don't know what means "lauf"
  • #8
  • Apr 25, 2018 10:25am Apr 25, 2018 10:25am
Looking it also on other pairs. Here is Eur/Usd right now

TP reached
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  • #9
  • Apr 25, 2018 11:48am Apr 25, 2018 11:48am
Brother, This method seems to be very much discritionary. eg your first statement of "When price starts weaknening" and second statement "when price is away from MA" are very discretionary statements. i.e what is weakning of price and two traders views can be different regarding this. Next what is meant by far from MA? i.e how much is far for you?

These are so discritionary statement that trader will fuzzel soon. The rest If your trade is against the breakout then keeping TP smaller is better.

If I suggest you that anti breakout approach will be much successful on pairs like EURCHF, EURGBP, AUDNZD etc i.e less trendy pairs. And the pro breakout trades part of your strategy will have good success ratio on trendy pairs of JPY and GOLD. I will suggest one more thing that inrease the Reward in pro-breakout trades.

Regards
Forex; the game of movements not the game of candles.
  • #10
  • Apr 25, 2018 2:27pm Apr 25, 2018 2:27pm
Quoting Joseph95
{quote} Open a daily chart. What do you see on top and bottoms of each candle? Wicks, spikes, shadows. I hope we understood each other. It's about trading the wicks, the reabsorption (that are always present since the creation of candlesticks). Nothing so new... one need to be creative and have imagination. On the trading system section i only see 2000 useless indicators and people burning their accounts. Try this in demo 1 year and let me know ;-)
Okay, now we're getting somewhere! The 1st part of the explanation re the 2 MAs, etc, was a little hard to follow, at least for me, but I now see that you're using the whippy candles as the pullback signal after the break through the previous high/low (the fully-annotated chart was very enlightening, thanks ... the others not so much). Still unclear on the purpose of the MAs in this system.

BTW, basic semantic pattern-recognition: 'lauf' probably means 'laugh' ... and I enjoyed his suggestion; after all, this thread is about 'Inverted Logic', right?
  • #11
  • Apr 25, 2018 2:44pm Apr 25, 2018 2:44pm
Quoting Joseph95
Looking it also on other pairs. Here is Eur/Usd right now TP reached {image}
Um, but if the system rule is (as specified thus far): "Enter on Pullback After Breakout", it would have put me in the trade at the 1st low after the breakdown, failed to to make 10 pips on the 1st re-cross higher, run back down below my entry-point (but probably not enough to pop my stop, and THEN re-crossed up a 2nd time, and, yes, probably given me my 10 pips ... at the 2nd high above the 63MA, not where your TP is shown (above the 20MA).

With all due respect, I'm not a naysayer (yet), but the explanation thus far is long on generalities and short on details. I really would like to understand if this system works ... have you actually traded it live?
  • #12
  • Apr 25, 2018 4:21pm Apr 25, 2018 4:21pm
I can’t get the point. Both trades would ended in profit, mine and your.

Regard the rest, if you can’t understand the Logic behind the trades watching entries in screenshots, you just have lack of competence and lack of basic PA and indicators knowledge.

Go study candles and what is a Moving Average and how it works.

Removed you and your friend, go give suggestions in other threads and search for magic indicators
  • #13
  • Apr 25, 2018 4:51pm Apr 25, 2018 4:51pm
Quoting Joseph95
So, what if we just trade the breakouts... in reverse?
Last September I attended a workshop run by an institutional trader; he called the zones that you are trading from "C liquidity". I posted some example charts here, here and here (that's another thread on false breakouts). One possible reason why price behaves in this way is explained here. FWIW I've also heard it called "stoploss hunting", and (if looking for reversal price action in these zones) "swing failure patterns" (illustration here). Mark Chapman also teaches similar techniques (among other setups) on YouTube.
  • #14
  • Edited 5:17pm Apr 25, 2018 4:53pm | Edited 5:17pm
Quoting hanover
{quote}Last September I attended a workshop run by an institutional trader. He called the zones that you are trading from "C liquidity". I posted some example charts here, here and here (that's another thread on false breakouts). One possible reason why price behaves in this way is explained here....
Finally an interesting answer. Thank you very much! I ‘ m reading and this is pure gold so my "intuitions" wasn't completely groundless and senseless. I will study further

Cheers
  • #15
  • Apr 25, 2018 5:03pm Apr 25, 2018 5:03pm
Quoting Sajid
Brother, This method seems to be very much discritionary. eg your first statement of "When price starts weaknening" and second statement "when price is away from MA" are very discretionary statements. i.e what is weakning of price and two traders views can be different regarding this. Next what is meant by far from MA? i.e how much is far for you? These are so discritionary statement that trader will fuzzel soon. The rest If your trade is against the breakout then keeping TP smaller is better. If I suggest you that anti breakout approach will be...

Not so much discretionary. When price it's weaker compared to previous 5-10-20-60 min it's obvious. All can see it: smaller candles, dojis, hammers, inverted hammers, pinbars, long wicks etc... all this means loss of momentum.

What means "far"? When price drop down with violence going far from the average distance usually maintained from the MA
  • #16
  • Last Post: Edited 6:42am Apr 26, 2018 6:25am | Edited 6:42am
One more Question :-)

in post #1 you wrote "open all jyp pairs" ....
in post #8 you show us a chart von eur/usd! did you trade all major/minor pairs??

and what role do the MA play?
did I overread it? are they ever needed?
and yes, of course I know what the MA is and how it works! I just do not realize what they should use here?


Are you always waiting to see if the TP / SL is hit or are you canceling your trade sooner?
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