The System (Irony included)

Quoting Green_David

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Thank you for your analysis. As for Pivot Price, it = (H+L+C)/3 (so it is an average price that average high and low is half-weighted, and close price is half-weighted), right? But you have three pivot price, can you explain to me?

Thanks.

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Quoting iandekoker

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Sometimes it is just too tempting to let a pin bar go by without acting on it.

You will come to realize i dont limit myself to only one way of trading. I love my candlestick formations. I like to play pin bars and inside bars. Also i love my fib retracements. I will always pay attention to them. Lastly i am all about my pivot points as you already know by now. And the V-formation is as solid as a rock.

Even if i didnt take the pin bar i would have entered on the v-formation.

I am aiming for 2.0819 as profit target level. So let's see how close i can get.

How do i know the price might make it up to this level? Well since we broke the daily pivot and weekly pivot i am looking for a long day. We flew past daily R1 and R2 as if it wasnt there. So now we are trading between R2 and R3 and that tells me we have a strong bull run.

For those who missed the trades wait for price to retrace back to weekly pivot and then go long again.

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Quoting iandekoker

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yes ur formula is correct.

I have daily pivot, weekly pivot and monthly pivot. Those are my big areas that i watch out for because once price breaks daily pivot it will go to weekly pivot and once weekly pivot is broken it will go to monthly pivot.

The reason i use pivots is because it is the only incidator that has stood the test of time. It was used by floor traders long before computers were available and are still used by floor traders. So it tends to be a self fulfilling prophecy.

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Quoting Old_Not_Dead

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Hello everyone,

As someone who has long since passed the hours of waiting for trades to setup by browsing FF, I finally felt compelled to register and contribute.

As an old dog, I am very amused by keeping count of the number of "next big thing" indicators and auto-trading algorithms that find their way onto forums. Needless to say, most fizzle out with much less fanfare than when they arrived.

Speaking from my own experience, I'm so glad to see a thread appear that addresses the purity of trading. It's great to see this being embraced so enthusiastically by contributers too!

I've been around the block a few times and, trust me guys, what Feb is getting you to look at is timeless. It will apply just as much when he and I are dead and buried as it does today (assuming liquidity and volatility aren't somehow squeezed of course). It gives me a lot of pleasure to see people being turned on to something that will actually assist their trading, their profitability and their analytical thinking rather than just clogging their screens with nonsense.

I bet some of you knew this already and just needed the push/encouragement to embrace it. Whilst others might be surprised how straightforward (not simple - the nuances of effective price trading are complex and almost artistic) an effective trading ethos can be to learn. If anyone is reading the thread and thinking "it can't be this easy, surely" - you bet it can! Just don't tell everyone our secret as keeping large numbers occupied with bells and whistles "systems" suits us just fine

Feb - kudos to you for having the kindness of spirit to get this underway and to lovingly pull people back on track when focus wavers. If my experience/thoughts can assist in any way I will of course contribute as time progresses.

I do think this can be built upon to eventually incorporate counter-trend trading and taking advantage of stop clusters, false breakouts etc but it's good that everything is being kept straightforward for the initial part of the journey.

I've not been in my office a lot lately but I'll go over my two most recent trades in my next post as the more practical examples the better I reckon. (however Feb - if anything I post detracts from the message you want to be conveyed, please feel free to remove whatever you deem necessary).

Keep up the good work folks. The posters in this thread are a real credit to it.

O N D

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Quoting Old_Not_Dead

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Hello everyone,

As someone who has long since passed the hours of waiting for trades to setup by browsing FF, I finally felt compelled to register and contribute.

As an old dog, I am very amused by keeping count of the number of "next big thing" indicators and auto-trading algorithms that find their way onto forums. Needless to say, most fizzle out with much less fanfare than when they arrived.

Speaking from my own experience, I'm so glad to see a thread appear that addresses the purity of trading. It's great to see this being embraced so enthusiastically by contributers too!

I've been around the block a few times and, trust me guys, what Feb is getting you to look at is timeless. It will apply just as much when he and I are dead and buried as it does today (assuming liquidity and volatility aren't somehow squeezed of course). It gives me a lot of pleasure to see people being turned on to something that will actually assist their trading, their profitability and their analytical thinking rather than just clogging their screens with nonsense.

I bet some of you knew this already and just needed the push/encouragement to embrace it. Whilst others might be surprised how straightforward (not simple - the nuances of effective price trading are complex and almost artistic) an effective trading ethos can be to learn. If anyone is reading the thread and thinking "it can't be this easy, surely" - you bet it can! Just don't tell everyone our secret as keeping large numbers occupied with bells and whistles "systems" suits us just fine

Feb - kudos to you for having the kindness of spirit to get this underway and to lovingly pull people back on track when focus wavers. If my experience/thoughts can assist in any way I will of course contribute as time progresses.

I do think this can be built upon to eventually incorporate counter-trend trading and taking advantage of stop clusters, false breakouts etc but it's good that everything is being kept straightforward for the initial part of the journey.

I've not been in my office a lot lately but I'll go over my two most recent trades in my next post as the more practical examples the better I reckon. (however Feb - if anything I post detracts from the message you want to be conveyed, please feel free to remove whatever you deem necessary).

Keep up the good work folks. The posters in this thread are a real credit to it.

O N D

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Quoting Old_Not_Dead

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These are the last trade I have taken. I'm posting it to add to the discussion about actual examples and it will demonstrate my thinking (free from indicators!). Of course, examples also give others the chance to decide how they'd approach it differently and, hopefully, better. My ego is snoozing so I'm not here to wow you with my trading expertise I was going to post a couple of examples but the post will get too long.

Now, as I'm new here and not a computer whizz, I am not going to try and post attachments as I'm sure I'd get it spectacularly wrong and spend hours doing so! If anyone is able to illustrate my points on my behalf with charts then great.

Trade 1 - Short E/J
I entered this at 18.41 CET on 15th November (I'm British but wintering in my 2nd home in warmer climes so I'll use European time). Entry price was 162.03. Clearly our data feeds and candle close times will all be slightly different but my entry was due to the heavy selling pressure that occured when price had climbed from 161.50 to 162.70. I entered on the 4Hr chart and could see that lower peaks (think of fractals if easier) were starting to be formed after the failure around 163.70. The daily bar for 14th was also showing me a clear rejection of the 164.20 area. My initial stop was infact just above that previous day's high at 164.40.

So, my initial risk was around 240 ticks. And my profit target was ... well, whatever the market gave me. This is where there is a lot of argument amongst trading styles. Some will say you must have a risk reward ratio of X or Y. Personally, I do not view the market as something you can dictate to in that manner. I accept the risk level that is appropriate to the price action and that my trading account and stomach can handle. My intention is always to pull my stop in tighter as price action allows it and I did this with this trade.

Ok, price moved in my favour for the next 3 or 4 bars (4hr ones) and was now sitting at just above 160.50. Clearly the mantra of "don't let your profits become a loss" is drilled into us and, with a floating profit of around 150 ticks you'd probably think me mad to do nothing.

That's just what I did though, and I didn't even move my stop at that point. So, I was still risking 240 ticks - crazy huh? Personally, I think it was the right decision at that point. Each trade has to be managed in the context of the market action occuring and it was clear to me that there would either be another assault on the 159 area or a slow consolidation before another attempt at an up move. This gave me the time to let the trade mature and guide me as to where it was headed.

Price then ran up as high as 163.20, giving me a floating loss of over 100 ticks before posting the lower high confirmation that it was ready to have another go at getting lower. The 4Hr chart again demonstrated nice selling pressure. It ended the day of 19th Nov at around 160.90 and this was my warning that there might not be the appetite for that assualt on 159. It was an inside bar and the market structure suggested a continuation of two-way price action (one day up, next one down etc).

I forgot to mention that my stop had been moved down to 163.30 by that point (just above the daily high for 16th Nov).

I thought it likely that there would have to be another test of the 16th Nov low before another push up and my limit order was therefore positioned at 160.50. This was hit for a profit of 153 ticks and price only went as low as 160.41 before moving up again.

Clearly I could have taken my profits at the exact same price a few days previous but the context of the market was such that there was a good possibility of more profit available to me. I fully appreciate this approach will not be for everyone but I prefer to never snatch at profits and to let the market guide me as to when I'm fighting a losing battle. It's difficult to put down in words what years and years of watching price action gives you so apologies if I haven't been able to articulate my thinking completely successfully. There is almost an intuition that develops but that is only through observation and recollection, not any great skills on my part.

Hopefully this has been of some use

O N D

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Quoting feb2865

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Don't hesitate to pull some charts and explain what you're doing. Iandekoker is trading cable and I believe he has an edge.
Peace

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Quoting Old_Not_Dead

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Yes, in this instance my entry was anticipating the move down rather than waiting on confirmation. Thanks for pointing that out as I should probably clarify the difference. Like everything with price action, when and where to enter cannot follow a set template. For me, it depends greatly on the market structure at that time. On my 4Hr charts the instrument had posted its 3rd lower high, or fractal if you prefer (164.25, 163.75, 163.25). That gave me the signal to wait for the selling pressure to show itself and then get in relatively early.

This anticipation would definitely not apply in all circumstances but the conditions were right.

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Quoting ownshook

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Wanted to post up a 4 hour of the usd/cad. The daily has butted up against resistance for the past few days and todays candle is telling me to take a look at the 4 hour.

At the resistance line...we have the start of a "V" formation. Given that the area has been tested a few times in the past...I will keep this on my watchlist for a "V" completion and a trade with the overall trend...which is down.

As for the Euro...I got into the trade premature late last week (1.4659) as the third candle did not break the high of the #2 candle. It dawdled but today I lucked out on my error with a bullish candle. I have zoomed into the 4 hour....to look for a retrace to a support area (taken from a line chart of the daily) and wait for a "V" formation to add to the position.

I will admit.....this is where being a novice comes into play as I see 120+pips just ready for the taking and it is hard to not cash that out!!

Looking forward to a critique of my thoughts....ALL charts posted are 4hr

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Quoting leighsww

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Ah, I see that the 4hr dictates more for you then. You also know when to take your profits by the 4hr, so your logic makes much good sense!!

I have been watching the 4hr this past week while waiting patiently for a bus, lol, but had been committed to sticking to the V-Formation criteria on the Daily, even when I knew I would have been able to take 4hr profits at 50+ pips due to the Fractal formations, lol.

Your logic and reasoning makes such good sense, so I will be adding to my experiment.

I will still implement the original V-Formation criteria whenever it presents itself, but I will also implement your 4hr version, as well. Haha, that's gonna be a little closer to the card counting strategy, because it will not be mechanical, but hey, a lot of us here have really come a long way already, so we graduate from grade school to intermediate, no?

* edited - Thank you soooo much for your contributions to us in this thread!!!!

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