Indicator Free Trading - Skunny

Thank you galaxymom

HH

Hi HH - manual trades using vHands market simulator, and it looks as if you have already found the link via Galaxymom's post. Have Fun

This is a follow up article to the last one I posted by Sam Seiden pointing to the common mistakes of novice traders. They are talking about stocks and options but the rules still apply. Good article. Again don't get into the supply demand thing, it is the thinking we need to understand.

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Last week, I was in Dallas instructing an options class. Even though I told students not to trade personal accounts in class, some were set on doing it anyway so for me, it was very important that they did it the right way which means LOW risk and high reward trading. As I was covering market direction for the class, one student pointed out that RIMM was moving strong to the upside and that we should take a look at it. When we did, it was clear that RIMM was flying, up over $8.00 from the morning low (see the chart above).
As price rallied into the prior days highs which are resistance, I asked the class who was buying here. We had covered this extensively at this point so they all knew the answer: The buyer who is buying is buying RIMM after a large move up in price AND at price resistance. Not only was price at resistance but CCI was very overbought and we were looking at a potential double top. This buyer could not be a consistently profitable buyer because a consistently profitable buyer and seller of anything would never do that. This must be a novice buyer who always buys when the risk is high and reward is low. The student simply looked at the objective reality of all this and took the other side of the novice buyer's trade. He took it in the options in his own account which meant buying a put option when they were VERY cheap and about to become expensive and sold the put when the put was very expensive and about to become cheap - this my friends is trading.
The numbers above are screen shots of the student's real trading account. Could price have gone higher and stopped him out? Of course it could and that is why our goal is to keep trading low risk. This is why we focus on direction and always zoom in on the basics of how and why prices move and turn. While he took this trade and made lots of money on it in two days, the benefit of a low risk entry is the only reason he was able to enjoy that gain.
There is major risk of loss when you trade in the markets. It is well known that most people that attempt to trade fail. While this may seem depressing when thinking about taking a trading class or getting involved in the trading markets, think again. What is great about that statistic is that if you just look at the main two reasons why most people fail, all you have to do is the opposite of what they do, when they do it which is clear as day on a chart. When you see someone buy after a significant advance in price and at resistance, you may want to consider selling to that buyer. When you see someone selling after a decline in price and at support, you may want to consider buying from that seller.
Almost every trade we found in class worked out as planned which made this look easy to some of the students. While learning the information and rules is easy, emotion will make applying the rules one of the hardest things you will ever attempt to do. Emotion and faulty trading education is why the novice trader is a novice trader in the first place.
Lastly, if you think the student made a nice profit on that trade, he took the same trade in two other stocks at just about the same time and exited those around the same time as RIMM, all in his real trading account. The key is not to be impressed with the gains but to be impressed with the low risk he took on to get that gain. In other words, all the answers to trading are not going to be found by focusing on what the student did. The real key is to focus on the trader who was on the other side of the student's trades, that is where all the answers to profitable trading are.

Hi Seb123 - most of us have studied that chart - why don't you put up a few screen shots to explain your fib progression and how you believe Skunny arrived at those points?

Saturday and the tradestation

hehe For sharing and stuff I want to post a visual representation of an AHA moment for me. Looking at things like this REALLY helped grow (even if in the wrong direction possibly) with fibs.

Hopefully this Helps someone else or stimulates convo or helps me fix an error I may have. as always IMO and grain of salt.

Right or wrong this has stopped me from walking fibs "per se" since I feel there are little tfs that cause slop and everything may be a fib but not on that tf.

I now draw complete wait, watch and redraw if necessary. or scale around.

This is the immediate "good" example I found so I will pull if people freak about the aussie dollar. This is what I was talking about Dagoods.

These are chronological as to how I would look at them all teh same fib
. if people are not cool with AUD, I will look for one on a different pair all criticism is welcomed as to why or why not this would be a way you would do it. this is a visual representation and not analysis and most likely wrong.

as always if Skunny can comment that is the whip
Sizz.

Here would be my initial chart set up. I would not use the low you've chosen as it was a failed daily extension completion. The completion happened on the low I have drawn. Although yours could work, it wouldn't be where I would start at this point.

Many thanks to everyone who post here and to Skunny for starting this thread!!!!

Has anyone else noticed when you fib a doji candle it always hits its 138 target?

I have been backtesting on vhands and so far its always hit. Please post if someone sees anything different.

I saw that on this fib that completed for me didn't think about that..spur of the moment..hm.
..good looking Skunny!!!

Can you see what I am doing? it is holding up really well BUT I am missing out on full extensions. Like my testing says (so far ) this will complete almost pipperfect but go a little farther. not complete accurately measure the WHOLE range. or TRUE major S/R



Using that methodology I would wait until I had completion and rock it out.MUy interesante my blue fib upon looking is draw using the same trigger as the little fibber

Skunny thank you, thank you. you sir are an amazing trader.
and thank you for your chart I likes!

Sizz.

Doji's find support and resistance all in one little candle

Very interesting............I believe PiprPro had briefly mentioned something about this on one his charts but never came back to discuss further.....
http://www.forexfactory.com/showpost...postcount=2293

Quote: "I know some guys that only fib daily and hourly candles, here is the perfect example from the last 24 hours, and I will discuss further the ellipse later. Note the open and closing value on the Doji. Doji's are a AHA moment."


Skunny......PiprPro......are you guys holding out on us?? sometimes I feel like Chester Copperpot looking for One Eyed Willy?

By my count there have been 38.2 "aha moments" and 61.8 "eye opening posts" so far.

Wait a minute... as I look at those numbers I think I'm having an eye opening aha moment!! :surprised

maybe i overcomplicate...who knows... but maybe some might find this fun...

chart below shows a possible future fib (black)

In this matter of a VALID FIB, if the last fib completed while moving up, does the retrace need to be to the 61 or to the 38 level?

Thank you?

Oh man oh man...

Babbbby Ruuuuthhh!!! hahaha love that movie. Those Fratelli's... sheesh.
and of course the truffle shuffle.

I am sure they are holding out I hope so. The fun (FOR ME) is finding things BUT BUT it is nice to have someone who has it on lockdown to help you or hint you when you are in a corner. I have phoned a friend and used 50/50 already

LIke imagine how crushing it would be if you had put in xyz hours a day since the thread started and then one day Skunny was like soo prise here is exactly how you do it! plus by stumbling around we get to figure out a bunch of new stuff that even the instructor may not have thought of . we don;t have a box really

Every mistake gets ya closer to figuring it out . I love em. I kinda have to or I would go nuts and/or start drinking...er..wait uh oh hehehe
We have only been doing this 1.5 months I would spend 15 years to learn it best thing ever great crowd , good food, open bar I am loving it.

Sizz

Sizz.

DOJI - yes - mentioned here http://www.forexfactory.com/showpost...postcount=2293

I wrote an indicator that places the name Doji on the chart where each one meets certain criteria. The indicator allows me to adjust the pip height (example - those greater than 30 pips) and open/close distance (example - less than 3 pips). During consolidation periods you must be careful or too many losses in a row. I can place some simple guidelines here if there is interest or ?

my answer is yes....and no....or in other words... it depends.. first, how do u define a valid fib? I know how to define a retracement fib based on certain authors objective rules.... but as we have seen many people draw fibs everywhere without any objective rules and find justifications for them in hindsight .... I presume that you mean a valid SKUNNY fib when you say valid fib? how to draw a valid skunny fib is still a mystery to me and many others..... the more charts skunny and others post and the more things introduced without objective rules...the more of a mystery it becomes.... now i am going to be having dojis gremlin nightmares i am sure.....

But to answer your question YES retracement is always to the at least 38 or 61 level from a fib drawn in the correct place as a retracement type fib.... at least my research suggests this is true... my research also suggests that a break of 0 or 100 of these "retracement" fibs ALWAYS 100% of the time reach 138(-138) ext at least and furthermore...if they pierce the 138 they go on to at least the 161....

I think if u have done your homework time on vvhands and demo u will find the 38 and 61 levels very interesting


still havent figured out how to walk a fib skunny style or draw a valid skunny fib though before it is too late to matter much...


so the vision quest continues!!!! march on all!

dagoods - would you care to expand on this please? I have seen many times the 138.2 is pierced and yet PA fails and doesn't reach the 161.8 before retracing.

Hello PiPr

Yes please go ahead I think I am speaking here for the majority as we are stagnated and need some more info so we can proceed or asses and correct our ways of drawing fibos. re indicator any chance to get my hands on it?

Maybe I am over thinking things, I do that, but most importantly, I'm trying to understand this, especially what Skunny is saying in his posts. I've been told that the retrace should be to the far level - and maybe I misunderstood that person, but in doing my year and a half of vhands and daily live fibbing on 7 pairs, I don't always find that to be the case, so am I drawing fibs in micro, I can fib a GJ 150+ pip candle and it will hit T2 to the pip 99% of the time, so there are tons or nuances here, and I just am looking for clues, hints, answers, and an absolute or close to it would be great! And I understand no one may have an idea, yet either, just hoping!

again i am still researching...but if can u post an example of a failed retracement fib breaking 138 and not making 161... then I can post my thoughts as well as others as this is an interesting point to study... and like sizzler says we may discover more on our own than even originally hoped for