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The System (Irony included)

  • #901
  • Dec 5, 2007 6:33pm Dec 5, 2007 6:33pm
Quoting zhkzhk
Hi Feb:
Waiting for you puuting something on futures trading, thanks

Zee
Hey

I am visiting my daughter in Texas for Christmas . I am so sorry I haven't got around lately but you know how kids are. I am putting together some stuff very soon in another thread and will cover not only futures but I will include forex as well. I am not actively watching the market as this time is kinda slow for me.

I'll keep you guys posted


Peace
Peace
  • #902
  • Dec 5, 2007 7:04pm Dec 5, 2007 7:04pm
Quoting piphitman
Regarding the E/U trade

If there was a bullish "V" pattern established on the third leg of that candle it just barley made it higher than the previous high of 12/04 by only three pips.

Ok, I'm a bit confused. My trade decision was based on the 12/04 (bullish) candle which had just closed a little bit before. That last candle was just forming and was still slightly bullish. Are you saying that in order for a proper V pattern, I should have waited one more day until the close of the 12/05 candle to see if it was bullish and took out the close of the 12/04 candle?

That's when you go to the 4hr chart and try to "get a better price" as feb says and enter on the retrace. If you went to the 4hr charts you would see that we had a strong 4hr bearish "V" pattern that retraced all the way down to 1.4591. looking at the 4hr charts I would have forgotten all about the Daily at that point and looked for a 4hr chart bearish entry point at around the lower low of the 3rd candle there at around the 1.4698 area and then waited for it to retrace a bit to 1.4720 and then rode it all the way down from there.

Attached is what the 4H chart looked like for me. The blue area is what was visible at the time I was looking to trade. The bearish V you are talking about had not formed yet. I saw that the last candle had already been lower and was slightly bullish when I was looking at it. My thinking was that either I take the trade now and just figure I missed the discount, or wait for another 4 hours to see if it would go lower.

Right now were looking at a daily bar that looks like a DBHLC to me which in James16 lingo signals a down trend coming for tomorrow (after the retrace of course).

Yup, the interest rate statement might help that DBHLC come into play.
My further questions above in blue.

Bruce
Attached Image
  • #903
  • Dec 5, 2007 7:29pm Dec 5, 2007 7:29pm
Quoting ownshook
Hey Bruce -

From what I understand (and from a previous post by the author of this thread), to keep things on the safe side, you are really looking for a picture perfect 3 candle setup. The btm V candle being candle one......the second candle breaking the high...and the third candle continuing the momentum by breaking the high of the second candle therefore giving you an entry.
Ok, that seems to be my general misunderstanding. I'm one candle short in my analysis.

Thanks for the feedback people.

Bruce
  • #904
  • Dec 5, 2007 7:48pm Dec 5, 2007 7:48pm
Quoting brucehvn
Ok, that seems to be my general misunderstanding. I'm one candle short in my analysis.

Thanks for the feedback people.

Bruce
Bruce,

I don't want to speak on his behalf but......I think Trader V will sometimes play those 2 candle breakouts as it seems in some places throughout this thread that his style is a little more aggressive on his entries. But he is very particular on when he will enter after two candles.

feb doesn't like the "false" breakouts that's why he prefers the confirmation of the higher high of the third candle.
trading naked.......
  • #905
  • Dec 6, 2007 3:33am Dec 6, 2007 3:33am
Quoting brucehvn
...

First trade was EUR/USD. It looked to me like this pair had maybe started out of it's funk of the last couple weeks. We had a short bullish candle followed by a longer bullish candle that took out the high of the previous candle forming the V pattern. I entered at 1.4757 with the SL set to the bottom of the previous bullish candle (not the wick but the body).
...

Second trade was USD/CHF.
...

Bruce
Hello Bruce,

I took exactly the same trade in EURUSD.
Here is my post-analysis of the trade and why I think now I would not have taken it.
1. As piphitman pointed out, the bullish bar high was only 3 pips higher than the bearish bar of 12/04.
2. I you go down to 4 hours chart, you can see that this bar lacks of momentum in the last hours.
3. We are entering the asian session, volumes decrease, the odds that momentum sets out again with the rise are low. (I think I will never open a position again after 20.00 GMT).
4. I was afraid to miss another long bullish bar, and still more important, I was afraid to have to set up a too large stop, so I let my emotions pull the trigger. (I still have a problem with daily "large" stops as my account is quity tiny :-), in those conditions the "cut your losses quick" rule is hard to implement)

With regards to USDCHF I would have not taken the trade because its just another USD reserve currency pair and not a commodity pair like USDCAD or AUDUSD. Moves are exactly the same with more or less volatility.

This was my first trade since I have read tons on trend following and price action. Before that, I was trading indicators in a hope mode. And I'm glad it was a loosing one, not to fall into an non-relevant euphoria.

Can experienced traders comments my thoughts here above ?


Have a nice day,

Fabrice


PS. it's a boy :-)
  • #906
  • Dec 6, 2007 4:04am Dec 6, 2007 4:04am
Quoting feb2865
Hey

I am visiting my daughter in Texas for Christmas . I am so sorry I haven't got around lately but you know how kids are. I am putting together some stuff very soon in another thread and will cover not only futures but I will include forex as well. I am not actively watching the market as this time is kinda slow for me.

I'll keep you guys posted


Peace
Have good time with your daughter. That is more important.

David
  • #907
  • Dec 6, 2007 4:16am Dec 6, 2007 4:16am
Quoting Fab
Hello Bruce,

I took exactly the same trade in EURUSD.
Here is my post-analysis of the trade and why I think now I would not have taken it.
1. As piphitman pointed out, the bullish bar high was only 3 pips higher than the bearish bar of 12/04.
2. I you go down to 4 hours chart, you can see that this bar lacks of momentum in the last hours.
3. We are entering the asian session, volumes decrease, the odds that momentum sets out again with the rise are low. (I think I will never open a position again after 20.00 GMT).
4. I was afraid to miss another long bullish bar, and still more important, I was afraid to have to set up a too large stop, so I let my emotions pull the trigger. (I still have a problem with daily "large" stops as my account is quity tiny :-), in those conditions the "cut your losses quick" rule is hard to implement)

With regards to USDCHF I would have not taken the trade because its just another USD reserve currency pair and not a commodity pair like USDCAD or AUDUSD. Moves are exactly the same with more or less volatility.

This was my first trade since I have read tons on trend following and price action. Before that, I was trading indicators in a hope mode. And I'm glad it was a loosing one, not to fall into an non-relevant euphoria.

Can experienced traders comments my thoughts here above ?


Have a nice day,

Fabrice


PS. it's a boy :-)
Well, if you weren't making the mistake I was and actually you were trying to use the last candle which was just forming as your basis, then you have to remember what Feb said about waiting for the close of the candle. That's so important in any system. Never trade based on a candle in the middle because they can change a lot before close. My problem was I only thought I needed 2 candles so I was just basing my decision on the two bullish candles that had already closed. Either way, looks like we had the same result

Better luck to us next time

Bruce
  • #908
  • Dec 7, 2007 6:14am Dec 7, 2007 6:14am
Hi all,

thanks for this great thread. I want to discuss another issue: The stops. Maybe it's worth an extra thread...

The most simple stop would be to just set it below the last recent low in an uptrend or the last recent high in a downtrend.

Let's take an example, the EUR/USD: We are in an uptrend. See my charts below. Imagine you've just entered using a stop-buy order above the last high.

If you place the stop below the last days low, you will be stopped out very soon.

There is another way to trail a stop. Just place it again below the last days low, BUT: If the last candle closes inside of the range of the day before, set the stop back to the day before (before that outside bar - marked with blue lines in my chart). This might sound strange, but if you have an inside bar, things might become choppy. The price may breakout on both sides of the outside bar. As long it doesn't close outside of that range, the stop will be still in place on the low before the outside bar. Just have a look at the 2nd chart...

That way you'll stay longer in your trade...

Regards - Xaron
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eurusd_classic_trailing.png Size: 19 KB
Click to Enlarge Name: eurusd_advanced_trailing.PNG Size: 19 KB
  • #909
  • Dec 7, 2007 9:55am Dec 7, 2007 9:55am
Quoting feb2865
Hey

I am visiting my daughter in Texas for Christmas . I am so sorry I haven't got around lately but you know how kids are. I am putting together some stuff very soon in another thread and will cover not only futures but I will include forex as well. I am not actively watching the market as this time is kinda slow for me.

I'll keep you guys posted


Peace
Hi feb2865:

Welcome to the great state of TX, I live in the Dallas/fort worth area.

Have a great time

Regards
Zee
ZHK
  • #910
  • Dec 9, 2007 1:52pm Dec 9, 2007 1:52pm
Hi all,

Thanks for this great thread. I have read it all from start to finish this week and seek clarification about the entry process.

Please correct me if I am wrong - entry is when pullback (fractal, V formation) is confirmed by candle no.3 when it goes higher (uptrend) than candle no.2.
Now, feb says that "every trade must be done at the close", so does this mean that a trade is made at the close of candle no.3, or at he close of candle no. 2 at the point when candle no.3 moves higher than candle no.2? If the latter, then the trader places a stop buy just above candle no2 close or can drop to H4 and seek a discount at that level? Still not quite clear either about the H4 approach but primarily I would appreciate clarification about the daily entry. (I need to take things one step at a time, having been far too impulsive in the past).

I am relatively new at forex, have traded for several months earlier in the year and have the scars to prove it! Taking your advice to focus on and perfect ONE approach - and, having studied a range of methods the past 6 months, this "system (irony included)" appeals to me in its "simplicity" (not zillions of indicators to confuse) of application.

Thanks in advance (from one about to trade naked)
  • #911
  • Edited 2:37pm Dec 9, 2007 2:35pm | Edited 2:37pm
I attach an example - usdcad Friday 7 Nov

We see the third candle in the V formation on Friday - as I think I understand feb's approach,
If I was trading this pair I would either already be in the trade, entering at the point where Friday's candle went higher than Thursday's candle OR I would be looking to enter tomorrow (Monday) using H4 to get a discount on Friday's candle???

Thanks again
Attached File(s)
File Type: doc eurusd7dec.doc   86 KB | 654 downloads
  • #912
  • Dec 9, 2007 4:08pm Dec 9, 2007 4:08pm
I would go short only after a daily close below the previous weekly low at
.9974 However, I would go long on a daily close above the previous days high.

BabeFX
Attached Image (click to enlarge)
Click to Enlarge Name: usdcadweekly120907.gif Size: 12 KB
  • #913
  • Dec 9, 2007 5:29pm Dec 9, 2007 5:29pm
Quoting Xaron
Hi all,

thanks for this great thread. I want to discuss another issue: The stops. Maybe it's worth an extra thread...

The most simple stop would be to just set it below the last recent low in an uptrend or the last recent high in a downtrend.

Let's take an example, the EUR/USD: We are in an uptrend. See my charts below. Imagine you've just entered using a stop-buy order above the last high.

If you place the stop below the last days low, you will be stopped out very soon.

There is another way to trail a stop. Just place it again below the last days low, BUT: If the last candle closes inside of the range of the day before, set the stop back to the day before (before that outside bar - marked with blue lines in my chart). This might sound strange, but if you have an inside bar, things might become choppy. The price may breakout on both sides of the outside bar. As long it doesn't close outside of that range, the stop will be still in place on the low before the outside bar. Just have a look at the 2nd chart...

That way you'll stay longer in your trade...

Regards - Xaron

Xaron, this is a great tip. It is simple, and fits feb's system perfectly.

On another completely different topic. Is anyone else having problem with their metatrader platform? Mine is from NorthFinance and is crashing all the time. i have deleted it and dowloaded it again several times but the problem continues. Is there another MT4 broker that offers a demo version that does not expires?
  • #914
  • Dec 9, 2007 8:59pm Dec 9, 2007 8:59pm
Quoting alcastro
Xaron, this is a great tip. It is simple, and fits feb's system perfectly.

On another completely different topic. Is anyone else having problem with their metatrader platform? Mine is from NorthFinance and is crashing all the time. i have deleted it and dowloaded it again several times but the problem continues. Is there another MT4 broker that offers a demo version that does not expires?

Hello Dear Alcastro, try either alpari.uk or www.strategybuilderfx.com

Both of them are not expiring and having no issue. My preference goes for alpari though

Hope it help

Sincerely

Shreem
  • #915
  • Dec 10, 2007 2:55am Dec 10, 2007 2:55am
Quoting alcastro
Xaron, this is a great tip. It is simple, and fits feb's system perfectly.

On another completely different topic. Is anyone else having problem with their metatrader platform? Mine is from NorthFinance and is crashing all the time. i have deleted it and dowloaded it again several times but the problem continues. Is there another MT4 broker that offers a demo version that does not expires?
try ODL, it is based on GMT time too.
trading naked.......
  • #916
  • Dec 10, 2007 3:48am Dec 10, 2007 3:48am
Quoting attictrader
I attach an example - usdcad Friday 7 Nov

We see the third candle in the V formation on Friday - as I think I understand feb's approach,
If I was trading this pair I would either already be in the trade, entering at the point where Friday's candle went higher than Thursday's candle OR I would be looking to enter tomorrow (Monday) using H4 to get a discount on Friday's candle???

Thanks again
attictrader,

I went long on the "V"/3rd candle on this pair on 11/09 and chickened out of it because of a bearish candle on 11/16. (made some nice pips though)

There was a nice pin bar on 12/05 for a trend reversal and the two bearish candles after that and the 12/07 candle you mention was a valid "signal" in my opinion, I didn't take it but if I was to consider it I would be looking at the 1.0068 area for my signal and then go down to a 4hr chart and try to get it at a better price. I wouldn't wait for the daily close, just the point in which the price goes lower than the previous candles low then it's "go time". The 4hr 08:00 GMT candle had a nice upward spike for you to get in at a better price.

Attached Image
trading naked.......
  • #917
  • Dec 10, 2007 8:20am Dec 10, 2007 8:20am
Piphitman

Thanks for the clarification example and the chart.....it is as I had thought after rereading the notes I have made from this thread last night. Am dummy trading this week to ease myself back into trading live....hope to participate regularly to this thread.
  • #918
  • Dec 10, 2007 1:12pm Dec 10, 2007 1:12pm
Cable "V" trade
Attached Image
trading naked.......
  • #919
  • Dec 10, 2007 10:14pm Dec 10, 2007 10:14pm
Quoting shreem
Hello Dear Alcastro, try either alpari.uk or www.strategybuilderfx.com

Both of them are not expiring and having no issue. My preference goes for alpari though

Hope it help

Sincerely

Shreem


Thanks Shreem. i will give alpari a try.
  • #920
  • Dec 12, 2007 12:26pm Dec 12, 2007 12:26pm
Quoting Xaron
Hi all,

thanks for this great thread. I want to discuss another issue: The stops. Maybe it's worth an extra thread...

The most simple stop would be to just set it below the last recent low in an uptrend or the last recent high in a downtrend.

Let's take an example, the EUR/USD: We are in an uptrend. See my charts below. Imagine you've just entered using a stop-buy order above the last high.

If you place the stop below the last days low, you will be stopped out very soon.

There is another way to trail a stop. Just place it again below the last days low, BUT: If the last candle closes inside of the range of the day before, set the stop back to the day before (before that outside bar - marked with blue lines in my chart). This might sound strange, but if you have an inside bar, things might become choppy. The price may breakout on both sides of the outside bar. As long it doesn't close outside of that range, the stop will be still in place on the low before the outside bar. Just have a look at the 2nd chart...

That way you'll stay longer in your trade...

Regards - Xaron
Hi Xaron!

I also use the same stops. Did you read, Das große Buch der Markttechnik, von M. Voigt. It is one of the best books I have ever read.

Regards Erkro
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