Indicator Free Trading - Skunny

Quoting RBing

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There has been one thing that I've noticed while using this method. I enter on the penetration, the 38 and 61 if it retraces back that far. What I see more than not is that once it penetrates it has a very good chance of going back to the 38 and a lot of time the 61. I'm spending my weekend trading vhands and instead of entering on the penetration and having the big drawdown, I'm going to go counter the penetration with a target of the 38 and using a very tight sl. I'm going to be testing it on the 1 hour. The consistent drawdown of the initial entry of the penetration is what got me thinking about this, I have no problem with drawdown but if it's consistent than why not take advantage of it.

I hope I made sense with what I just said.

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Quoting RBing

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Thexder, I've already been trading that way. I'm not looking to offset the drawdown, I'm just looking for the best trades. If after the penetration 50% of the time it goes back down to the next fib level before it goes to the extension then why not make that a standard trade? If you can have a 15 pip sl but a 45 pip tp and it hits 50% of the time then that's a good profit. Of course I've only traded the 1hr thru 2 months so far with this but so far it has been very effective.

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Quoting dagoods

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all i know is skunny is a saint i personally am going to be writing the pope and setting up the petition...

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Quoting RBing

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There has been one thing that I've noticed while using this method. I enter on the penetration, the 38 and 61 if it retraces back that far. What I see more than not is that once it penetrates it has a very good chance of going back to the 38 and a lot of time the 61. I'm spending my weekend trading vhands and instead of entering on the penetration and having the big drawdown, I'm going to go counter the penetration with a target of the 38 and using a very tight sl. I'm going to be testing it on the 1 hour. The consistent drawdown of the initial entry of the penetration is what got me thinking about this, I have no problem with drawdown but if it's consistent than why not take advantage of it.

I hope I made sense with what I just said.

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Quoting 4X4EVER

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I certainly hope that no one thinks that I do not appreciate what master Skunny has done here. I certainly do with true sincerety. I guess I just feel like the karate kid who wants to learn how to fight and skunny is telling me to sand the floor LOL. I am parital to that movie anyway since my name is Daniel. Skunny, and everyone else, if I have appeared to be ungrateful, forgive me!!! I just want to learn and sometimes become impatient.

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Quoting dagoods

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sorry skunny hope i'm not steppin on toes but...just wanted to mention that brokers do in fact allow advance orders (anyone remeber john w's moley quail thread that started all this here stuff?) so maybe a stop buy or a stop sell in anticipation of the posssible direction(a instead of market ordres) would be a little bitty wee idea that might help? hhhhmmmmmmmmmmm all i know is skunny is a saint i personally am going to be writing the pope and setting up the petition...

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Quoting Skunny

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Now your talking. Let's see more of this.

I haven't told anyone how to trade this sequence of ranges/cycles, but I've offered a few examples. What you say is true and has been mentioned before (I think). There are many different ways to use the information I've given (that's the beauty of it). Once you realize what you can do, then you need to realize why you can do it. When you realize why you are able to do it, you will have your own ATM machine at your disposal. But don't expect to learn all this overnight. Anxiousness will turn to ignorance in no time.

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Quoting Pip Hunter

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I've also found some very interesting happenings aswell. Like RBing I've noticed that once penetration fails to reach 138, the PB can be substantial. I've monitored a dailey happening that if penetrated, but not hitting the 138, it revearses to the 162 mark on the opposite end almost 80% of the time. That's backtesting the entire year of 2007. Not only that, but success rate for the entire year (manually) was 85.9%. Now I will look more closely at riding the revearsals for some pips!

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Quoting Pip Hunter

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I've also found some very interesting happenings aswell. Like RBing I've noticed that once penetration fails to reach 138, the PB can be substantial. I've monitored a dailey happening that if penetrated, but not hitting the 138, it revearses to the 162 mark on the opposite end almost 80% of the time. That's backtesting the entire year of 2007. Not only that, but success rate for the entire year (manually) was 85.9%. Now I will look more closely at riding the revearsals for some pips!

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Quoting 24HourTrader

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Now this is very interesting indeed! Again we are seeing some relevance of the 162 level. Should we have that level on our custom fib tools as well Skunny, or should we continue sticking with the 138 only? A lot of us are under the impression that you don't watch the 162 level.

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Quoting blueruby

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I feel like I'm in the dark as much as anyone, and the more I play with these, the less I believe regarding prediction. They look useful for setting targets, when integrated with what I already do. Sometimes I think I just need lines on the chart to make me feel good about what I'm doing.

I started Bo's thread last night, and made it to about the 4th or 5th applied fib before closing the thread. Once you get 30 or 40 lines on a chart, there's too much discretion at that point to call it a system, the lines become less and less meaningful. Maybe I should have persevered through the 75 pages, but I feel my time would be better spent hitting the charts myself and seeing what I can see, for myself.

So, with all the above in mind, I'll take my best guess.

Dagoods, I am sure you need to back out farther, get more time on your chart. I do see your yellow fibs from earlier, so you're probably already doing that.

I've fibbed a major downmove, and a minor downmove. Price has stayed in range of both, without breaking 0 or 100 in either.

Price penetrated, but did not close across the 76 retracement of the smaller move. Fib basics say that a close across the 76 retracement would mean a reversal of the move/trend that was fibbed. Instead, it bounced, and we have a bearish engulfing candle, so if I had to trade it, I'd say price will move back down to the major support at 221.25. That orange line is support from 11/23 and 3/5/07. Also be sure to note the test on 8/16 and 8/17, as well as the heavy consolidation around this level during 9/2006.

There's also a head and shoulders here on the daily chart, and price will usually test support more than once, IMO, so an aggressive trader might be looking for a short entry point right now, or wait for a neckline break.

If price breaks (close below, or next entire closed candle body below, depending on your style) this support at 221.25, then the 138 at 213.60 would be a fair target, but I would probably shoot for the more conservative target, the 162 at 214.50. These lines are not shown on the attached, if you put your fibs like mine you can look at them.

I'm going to set an audible alert now for 221, at which time I will look at price action, including that on lower timeframes, possibly take 1/2 position and maybe wait and see how far it pulls back for the other half.

My ideal entry on a short would be to see a 4 hr. candle close below support, then an entire body (ignore wicks) below the support, then a pullback to support and a reversal on 1 hr. or even maybe 15 minute chart, that way there is good confirmation PLUS a great entry price. Usually it's a compromise between the two.

If I did this, I'd probably be using just about everything I know about trading. And by "know", I mean that little bit which I've found useful after thousands of hours study and weeding out almost everything else.

Comments, anyone? Sizz, I'd like to hear your thoughts.

Edit: If you look at a weekly chart going back to around 3/2004, you'd probably agree that there's going to be a lot of action at this 221.26 level or thereabouts. If the neckline of the weekly h&s is broken, there will be a lot of opportunity. I still would take profit at the levels I mentioned above, then see what the chart says.

Edit again: I've been away from the charts for a week or so and things do look different after all that rest. Be sure to put the trendline on your daily from 9/12/2000 to 7/21/2005. It stands between the breakout and the targets I mentioned. However, I feel the break below ~221 will be stronger than the support the trendline offers. I'd expect wild price action in that area ("wild" is always a safe prediction on the G/J!).

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Quoting 24HourTrader

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Now this is very interesting indeed! Again we are seeing some relevance of the 162 level. Should we have that level on our custom fib tools as well Skunny, or should we continue sticking with the 138 only? A lot of us are under the impression that you don't watch the 162 level.

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Quoting lowell

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Blueruby,
I was rereading the thread and came across this post and chart of yours from Dec. 30th (page 55).

WOW, WOW, WOW!!!

Just take a look at the 2 daily bars that have nailed the 138 short target of your yellow fib as of end of trading friday Jan. 4th!!

Incredible!

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Quoting lowell

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Blueruby,
I was rereading the thread and came across this post and chart of yours from Dec. 30th (page 55).

WOW, WOW, WOW!!!

Just take a look at the 2 daily bars that have nailed the 138 short target of your yellow fib as of end of trading friday Jan. 4th!!

Incredible!

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Quoting webfoot

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skunny told piphitman he was covering too many movements. Does this mean we should cover only
so many candles back from current PA when making
our fib. Like on a 1hr, should we count back say 4
candles, 6 or 12...?

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Quoting dagoods

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I was rereading as well and found this little nugget that i missed the first time

skunny wrote: "make sure you fib the closest resistance as the high if you are going short and the closest support if you go long"


BTW Sunny i'm working on the saint thing but apparently they ahve some silly procedure whereby it takes years and years and you won't be sainted until after you see them peraly gates.....but:

here are the steps:
The Steps of Canonization

Here are the steps that must be followed in the process of canonization:

1. A local bishop investigates the candidate's life and writings for evidence of heroic virtue. The information uncovered by the bishop is sent to the Vatican.
2. A panel of theologians and the cardinals of the Congregation for Cause of Saints evaluate the candidate's life.
3. If the panel approves, the pope proclaims that the candidate is venerable, which means that the person is a role model of Catholic virtues.
4. The next step toward sainthood is beatification, which allows a person to be honored by a particular group or region. In order to beatify a candidate, it must be shown that the person is responsible for a posthumous miracle. Martyrs -- those who died for their religious cause -- can be beatified without evidence of a miracle. On Oct. 20, 2003, Mother Teresa was beatified. She is now known as Blessed Mother Teresa of Kolkata.
5. In order for the candidate to be considered a saint, there must be proof of a second posthumous miracle. If there is, the person is canonized.

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