The System (Irony included)

Quoting feb2865

Disliked

oh man you just hit the nail in the head!!!!

you can call me big brother if you want

you made my day !!!!!! thanks a lot for your observation

Ignored

Quoting feb2865

Disliked

I am going to make your life even easier. Just follow me on this

let's start with a very simple trendline on the daily charts


The blue "down" lines are for corrections - well a fancy way of calling a pullback

anyway note the depth of these corrections - some of them are shallow while others are deep, like the first one.

but there's a problem

how to avoid...or better to say, minimize my risk of getting caught up in a correction for 200-400 ticks???

stay tuned

Ignored

Quoting Trader_V

Disliked

I noticed there was a little confusin over what Feb is trying to explain. I am not at all trying to steal your thunder Feb just offering my 2 cents on my entry style. I am a bit more conservative with my entries. I do not like to fight the power (the trend) so I go with the flow and enter on the most basic of all formations 1-2-3. Trend continuation. This is what Feb has been advocating here along with using price action. Follow the trend and let the market prove itself and show you entry areas and exit criteria based on price action.

I have marked up the GBP/USD with 1-2-3 points and where my entry and stops had gone. There was 332 pips in between the first enry and the last possible entry. You could have added on to your positins as the market continued to move in your direction.

I did not cherry pick this picture this is the current market condition and this is how I trade part of my system.

If you don't understand these formations and how to use them find a good book like Pring on Price Action or something and study it until you can spot these things in your sleep.

It's not magic folks just look at the charts it's right in front of you.

Hope this helps someone a little.

Nice thread Feb!

Trader_V

Ignored

Quoting Green_David

Disliked

but only in small time frame such as 15M, and 1 hour and AFTER a retracement.

Ignored

Quoting feb2865

Disliked

I wish I could post some charts LOL!!!

Ignored

Quoting Mr Trend

Disliked

I read the first page, and found your view of trading very very very much just like mine. Refreshing. Keep it up.

Ignored

Quoting Antra

Disliked

Seems like some gremlins have been at work on the FF site and I think Merlin is aware of it all and hopefully it will soon be fixed.

This thread is really interesting reading. Thank you Feb for your patience in explaining and sharing your experiences of many years. There is so much to learn from in this thread and your advice greatly appreciated.

Ignored

Quoting feb2865

Disliked

Maybe that's something you must reconsider to improve your odds. Don't you feel it's to "noisy"????

Ignored

Quoting Green_David

Disliked

Mr. Trader_V:

I want to back test your simple 1-2-3 method. I picked up E/J by random. And starting from Aug. 16, well, by the end of August, I have already suffered a loss of more than 300pips. And I stopped.

It is about 3% of E/J's price, therefore to control my loss to max. 10%, I can use 3 times leverage only.

If I don't add more positions for the next 1-2-3 signals, I will have positive results, a 60 pips gain. So, maybe it is better not to add more positions.

By trend definition, 1-2-3 is definitely trend-following. I am also using 1-2-3 method most of time, but only in small time frame such as 15M, and 1 hour and AFTER a retracement. The problem with me is that, the market tried to fool me many times, and a lot of times, I got stop loss by false breakouts or narrow stop loss.

So 1-2-3 method sometimes, to me, will become trend chasing not trend following especially for bigger time frame such as 4H and daily.

And, after a positions opened by 1-2-3 method, and with some profits, I think I better move up S/L, because when market turns against the position, I couldn't wait until it hits my S/L. On the middle of negative price movement it already tells me that maybe my trend assumption is wrong.

Ignored

Quoting Green_David

Disliked

I posted some charts, but they can't be seen now. Never mind, we can look at our own charts. Just tell us what charts.

I opened A/U long positions @0.8805 & 0.8825. I placed these two long positions against these 5 days trend.

But based on my previous analysis, 0.88 could be a support if we look at A/U from a bigger time frame. Of course, it is trial position and dangerous. So, I set up S/L at 0.8788. The probability of winning is very low, but the reward/risk shall be very high.

Isn't it? So, what would do you think, Big Brother?

Ignored

Quoting Trader_V

Disliked

Hi David,

Thank you for your comments and observations. Very much appreciated.

Can you please tell me what TF you were testing on? I assume 4H but want to be sure. Also I am curious if your entries were based on the definition of a 1-2-3 setup and not jst 1-2-3 highs and lows. I am not saying this to be critical only that it is easy to mistakenly select what looks to be a 1-2-3 setup which is not actually a true setup by definition.

I wish to help in any way that I can with these setups.

Also when it comes to trade management it's more of a to each his own. Some folks are comfortable with entring a single position and following with a trailing stop. Others are comfortable withadding on to their position and moving stops appropriately. And others are a breed of geting in and taking their profit at a set number of points type of trader.

There are 50 ways to skin a cat (sorry for all you cat lovers out there) but that's the truth. There are as many ways to get out of a trade as there are to get into one.

Also you mentioned that you trade these setups on lower TF that are deemed appropriate for scalping. I know trading on higher TF's can be a real emotional ride. It takes patience and discipline to be able to enter a trade, experience some drawdown while it develops and then either recognize that it's not going to work out in your favor and close at a loss or follow it into profitable teritory.

Trading can play on your emotions a great deal. You must be a machine when it comes to winning and losing positions. Emotions have no place in the market!!! When you can take a win the same as you take a loss in the market this is when you have control over your emotions and prevent from making emotional decisions based on fear or greed.

OK I am getting of my soap box now I havenlt even finished my first cup of coffee...lol.

May the week be profitable for everyone.

Cheers

Ignored

Quoting feb2865

Disliked

I think brother David needs to deal with timeframes in order to see the whole picture. Let's see what he can come up to.

Hey, will you set another cup of coffee for me??

Peace

Ignored

Quoting Green_David

Disliked

You are right. I made some statistics, there are about 50% of false breakouts for GBP/USD.

Maybe I should use 1h, or 4h for breakouts, but, I need to reduce my position size, because if the market hits my S/L, that will be too much. So, how much leverage do you use, Big Brother? I use 50 times. Now I feel it is still too high.

Ignored

Quoting Trader_V

Disliked

Coffe on the way my friend!!! I swear I have java beans runnin through my veins...lol

I have seen so many new traderss bow their accounts on the hopes that a scalping system on lower TF's wil bring them $$$. The money is clearly in the higher TF's. But I cannot knock all the scalpers there are some who have an uncanny pulse on the market and turn a nice profit . But not me...lol too much stress!

I gotta run out for a while it's my and my wifes B-Day today so I gota go buy some flowers and stuff. So I will catch you a little later on.

Ignored

Quote

Disliked

Thank you for your comments and observations. Very much appreciated.

Quote

Disliked

Can you please tell me what TF you were testing on?

Quote

Disliked

There are 50 ways to skin a cat (sorry for all you cat lovers out there) but that's the truth. There are as many ways to get out of a trade as there are to get into one.

Quote

Disliked

Also you mentioned that you trade these setups on lower TF that are deemed appropriate for scalping. I know trading on higher TF's can be a real emotional ride. It takes patience and discipline to be able to enter a trade, experience some drawdown while it develops and then either recognize that it's not going to work out in your favor and close at a loss or follow it into profitable teritory.

Quote

Disliked

Trading can play on your emotions a great deal. You must be a machine when it comes to winning and losing positions. Emotions have no place in the market!!! When you can take a win the same as you take a loss in the market this is when you have control over your emotions and prevent from making emotional decisions based on fear or greed.

Quote

Disliked

OK I am getting of my soap box now I havenlt even finished my first cup of coffee...lol.

May the week be profitable for everyone.

Quoting feb2865

Disliked

need to adjust it based on risk tolerance, trading capital and position. Good thing you guys have using forex brokers is that leverage could be reduced to 1 cent (please correct me if I am wrong). Also, you don't need to be worried about news, re-quoting, slippage etc, because your time horizon is longer.

Ignored

Quoting Green_David

Disliked

Yes, some big players are behind AUD/USD. My long position entry of A/U around 0.8810 seems going to have some trouble. This is not your method, nor Trader_V's 1-2-3. I only can forgive me for that I used small amount, and I set up S/L at 0.8788, and potential reward/risk is higher.

Wish Dow Jones will go up.

I am using OANDA platform. You can open a lot the size as small as 1 dollar with that platform!

As for E/U, are you going to close your long positions or wait for bounce-back to close?

Ignored