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  • #41
  • Feb 8, 2008 8:08am Feb 8, 2008 8:08am
Zones,

Have you read Morge's stuff? He's the only one of the few sources that goes into great detail on entries, targets, and stop placements.

You really should still be in this trade.
  • #42
  • Feb 9, 2008 2:51am Feb 9, 2008 2:51am
Quoting Dopey

You really should still be in this trade.
I did send you an email after your first post. Perhaps you have not received it. Yes i have read and studied Morge. I have gone over every chart on the median line archives as well as all the charts on the Naked site. I have seen all his webinair collection on the CBOT, traders expo. In essence i am trying to emulate his entry strategies. I know i have a long way to go. But its ok, no matter how arduous this journey is, i am committed to succeed as failure is not an option for me.
Back to if i should still be in this trade. On this one i will humbly disagree with you. Here is my reasoning.
The market has fallen almost 400 pips this week without any significant retracement. I took the trade in the European session, after the first couple of hours of the US session, the market failed to breach the 23% fib of yesterdays high/low, suggesting not too much downward pressure. Baring in mind in the London open session it found strong support at the 1.9400 level.
Thats the official reason..now if you ask me did i as an amature see some profits after an indifferent couple of trading days and decided like all pseudo professionals to grab them....perhaps there is some truth in that as well.http://www.forexfactory.com/images/icons/icon12.gif
  • #43
  • Feb 9, 2008 4:26am Feb 9, 2008 4:26am
Quoting zones
I did send you an email after your first post. If you sent it to my yahoo account, i didn't see it, it probably ended up in the spam folder. The subject line is what will catch my eye, it has to be something distinct like, "Hey you moron, open this damn email".


Perhaps you have not received it. Yes i have read and studied Morge. I have gone over every chart on the median line archives as well as all the charts on the Naked site. I have seen all his webinair collection on the CBOT, traders expo. In essence i am trying to emulate his entry strategies. I know i have a long way to go. But its ok, no matter how arduous this journey is, i am committed to succeed as failure is not an option for me.

Good. Morge's approach is to wait for the high probability setups. There was a beautiful one on the GBP yesterday going long. If you don't see, I'll post the chart.

Back to if i should still be in this trade. On this one i will humbly disagree with you. Here is my reasoning.
The market has fallen almost 400 pips this week without any significant retracement. I took the trade in the European session, after the first couple of hours of the US session, the market failed to breach the 23% fib of yesterdays high/low, suggesting not too much downward pressure. Baring in mind in the London open session it found strong support at the 1.9400 level.

On one level, this is all very valid and logical reasoning.


Thats the official reason..now if you ask me did i as an amature see some profits after an indifferent couple of trading days and decided like all pseudo professionals to grab them....perhaps there is some truth in that as well.http://www.forexfactory.com/images/icons/icon12.gif
I'm impressed with your honesty.

Now here's the issue.

You're trading PFs as designed by Andrews and disseminated by people like Morge, Mikula, et al. You stated earlier that according to Andrews, the ML will be hit 80% of the time. The first point is, is this true? Have you tested this out yourself. I spent over a year testing both back and forwards. I know what my answer is, what's yours?

If you believe that the ML is hit 80% of the time, then why would you ever close a profitable trade before it hits the ML? It makes no sense. The numbers are so greatly in your favor it's astounding. I understand closing out when you go negative, but in the last trade you were positive from the start. You should have gone to BE and then let it head for ML. Sure you would have been stopped out at BE on this particular trade, but that's the way it goes.

On these forums you see post after post talking about risk-reward ratios. People seem a bit confused. They come up with trades that before they're put on have a good r-r, but once in the trade, they close earlier, not letting the trade run to their predetermined target. Therefore, all the pre-trade talk about r-r is verbal masturbation if one consistently closes the trades before giving it a chance to play out.

Now this point is especially germane to PF trading because it always calls for predetermined profit targets, unlike other types of trading. So it's so much more important to let the trade work itself out. Sure you can trail it, but you don't want to get too close and get taken out by normal up-down movement. To add to the problem, you're trading GBP, a currency known to make some strong counter-moves during the day due to it's lower liquidity levels. You'd find the Eur is better in this aspect.

In my experience, a person can drive themselves mad trading. Have you read Jacko's thread here at FF? His system is so simple, particularly with the exits. Now some have criticized it, but the beauty of it is that it eliminates the guessing. Because in the end, it's all guessing.

Sure we make the right decisions at times and it makes us feel good and competent. But then the next time we screw up big time. When you make a subjective decision to close a trade, you're mentally screwed either way.

If it continues going your way, you're going to beat yourself up. If it turns around and you walked away at the top/bottom of your move, you start to get too confident in your abilities to make these calls and this will lead to ruin. Sure some overcome this problem, but these forums are a living testament that the majority don't. That's why a mechanical exit system is superior (in my opinion, of course---there's always morons who want to argue as if I'm stating an irrefutable truth of the universe). And that's the beauty of PFs. Morge has a very mechanical system of trailing and exiting. Take another look at it.

Btw, I don't normally write this much for anyone, it hurts my brain, lol.
  • #44
  • Feb 9, 2008 10:05am Feb 9, 2008 10:05am
Quoting Dopey
I'm impressed with your honesty.
Is that all...Gosh..theres no pleasing some is there...joking apart the only buy setup that i can see after going over the charts again and again is the following one on the 4 hr. Its a classic Morge test retest setup...am i right or am i barking up the wrong tree as per usual.
Dopey, publicly thanks once again for your input. Most grateful.
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  • #45
  • Feb 9, 2008 10:26am Feb 9, 2008 10:26am
Here you go. Here's the first chart showing the zoomed out view.

Measure the Fib retracement from the low at 9402 to the high at 9510.

One of the things I've found is that confluence of PFs and Fibs work very well. Morge is a fan of DiNapoli's work, particularly his price extensions, and so am I. What I've also found is that when you see price ride a ML for some time, it's trying to reach a Fib Extension. Iow, it'll hit the ML at say 110% extension, bounce then hit the line again and again until it hits a number such as 1.272 (especially for Cable) or 1.618.
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  • #46
  • Feb 9, 2008 10:34am Feb 9, 2008 10:34am
Here's the second chart showing the bounces on the LML. Any three pivots will suffice to draw a PF. However it doesn't mean the PF will describe price. What we need is for price to respect the PF as this one did.

Once price shot up after the fourth test, it consolidated. There was no logical place to move your initial stop, except to BE. Even the bar before the ML was hit closed at the top of the range. Normally if it had closed above the range, then you would move your stop below the range bottom of 9465. However, this one hit the ML before you could move it.

The R-R on this trade was excellent as long as one allowed the ML to be hit. It would have been easy to close out after the zoom up and price went into consolidation. This is what I was referring to in my earlier post. Price will usually do this and you just have to let it work and resolve itself either by hitting the ML or getting out at BE (or if you're able to trail at a logical spot).
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  • #47
  • Feb 9, 2008 10:46am Feb 9, 2008 10:46am
Quoting Dopey
Morge is a fan of DiNapoli's work, particularly his price extensions.
Its odd that you should say that because i attended a webinar by Morge 3 days ago(it was rather pricey). He made a passing reference to Fibs, not once did he give an example of either extensions or retracements. It does make you wonder though. I believe in your thread of last year Akuma 99 made a point that one gets the feeling that they (Morge, Mikula) are holding something back.
Thanks for the chart.
  • #48
  • Feb 9, 2008 11:03am Feb 9, 2008 11:03am
Quoting Dopey
Here's the second chart showing the bounces on the LML. Any three pivots will suffice to draw a PF. However it doesn't mean the PF will describe price. What we need is for price to respect the PF as this one did.

Once price shot up after the fourth test, it consolidated. There was no logical place to move your initial stop, except to BE. Even the bar before the ML was hit closed at the top of the range. Normally if it had closed above the range, then you would move your stop below the range bottom of 9465. However, this one hit the ML before you could move it.

The R-R on this trade was excellent as long as one allowed the ML to be hit. It would have been easy to close out after the zoom up and price went into consolidation. This is what I was referring to in my earlier post. Price will usually do this and you just have to let it work and resolve itself either by hitting the ML or getting out at BE (or if you're able to trail at a logical spot).
Excellent analysis and very well explained too....I think it was that great Irish playright George B Shaw who remarked ,"it is difficult to see the picture when you are inside the frame". As you will recall my post #39, I was already short and all i was focussing on was to where it should fall to.
  • #49
  • Feb 9, 2008 11:31am Feb 9, 2008 11:31am
Hi Dopey,
Whenever you have a spare few moments, could you please clarify why you would choose bar B as your pivot instead of bar A. B has not taken out the high of C and A is lower than B. I have sent an email to Tim as well asking him for his views.
Thanks
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  • #50
  • Feb 9, 2008 10:55pm Feb 9, 2008 10:55pm
Quoting zones
Hi Dopey,
Whenever you have a spare few moments, could you please clarify why you would choose bar B as your pivot instead of bar A. B has not taken out the high of C and A is lower than B. I have sent an email to Tim as well asking him for his views.
Thanks
Ignore this question...after a good nights sleep my sight is slightly sharper and in your chart due to broker price difference,B is higher than C.
  • #51
  • Edited 10:58am Feb 10, 2008 9:06am | Edited 10:58am
They say a wise man is he who learns from the mistakes of others. Well, i will be only too happy to learn from my own mistakes.
Last weekend i posted a chart and stated that my outlook was bearish. Of course the market fell almost 400 pips but not before rising sharply on monday to dish out a healthy dosage of losses to start the week. This week i am hoping to learn from that mistake. I am mildly bullish on Cable. I should rephrase that as i expect some retracements upto the 1.9550 to 1.9600 area. I am hoping to ride it higher if it decided to go higher. However, i will be watching like a hawk should it decide to retest the lows of last week first.
Wishing you all a profitable week.
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  • #52
  • Edited 2:06am Feb 11, 2008 12:24am | Edited 2:06am
long of 1.9422, stop 1.9398..Profit target 1.9500. This is more of a punt rather than a trade based on my ideal setup pattern.

Because the trade is a punt, i am trailing it with a tight stoploss..the market is now 32 bid and i have moved my stop to beakeven.
My offer of 1.9500 was never filled. Got stopped out on the retracement at 1.9479.
  • #53
  • Feb 11, 2008 1:48am Feb 11, 2008 1:48am
Who's a clever boy then.. definately not me...http://www.forexfactory.com/images/icons/icon13.gif
Although i made a fare few pips this morning. But, the fact remains that i took a position based on emotions. I know from experience that in the long run trades based on hunches are doomed for failure. I will learn from this and i have made a wow to never ever again take a trade on a hunch.
  • #54
  • Feb 11, 2008 8:28am Feb 11, 2008 8:28am
Quoting zones
Its odd that you should say that because i attended a webinar by Morge 3 days ago(it was rather pricey). He made a passing reference to Fibs, not once did he give an example of either extensions or retracements. It does make you wonder though. I believe in your thread of last year Akuma 99 made a point that one gets the feeling that they (Morge, Mikula) are holding something back.
Thanks for the chart.
I agree with Akuma on that point. The reason being is if you backtest PFs, how do you know which one is the appropriate pivot?

I suggest you use vhands. Blueruby has a thread in which he does a great job explaining how to use it. Once you get it running, then try just drawing pivots. It doesn't work very well. You need something else. I use Fibs and S/R.

You asked why I used that bar I did for the third pivot. It had nothing to do with the high, it was that the bar had good separation from the previous bars and hit a fib. When the following bar penetrated but closed well above the LML, I knew that the PF might be valid. When the second test landed exactly on the LML, the PF is valid. You trade the third touch.

I've been using Fibs since the day I got interested in trading. I know that as a rule, price doesn't stop very often between them. It may push through a Fib, but if it closes back above, the fib will probably hold.
  • #55
  • Feb 11, 2008 8:33am Feb 11, 2008 8:33am
Quoting zones
Excellent analysis and very well explained too....I think it was that great Irish playright George B Shaw who remarked ,"it is difficult to see the picture when you are inside the frame". As you will recall my post #39, I was already short and all i was focussing on was to where it should fall to.
Thanks, I'm glad it made sense.

I wasn't suggesting you should have taken the long trade. I think you got it at the right spot for the short as it had hit the 50% ret of the last thrust. I was simply showing you what a high probability set up looks like.

Now, these three touch setups don't happen all the time. Again, use vhands and see for yourself. But when they do, they're very high probability trades. Most of the time it'll only touch twice before taking off, or it'll come close on the third try without touching.
  • #56
  • Feb 11, 2008 8:43am Feb 11, 2008 8:43am
Quoting zones
Who's a clever boy then.. definately not me...http://www.forexfactory.com/images/icons/icon13.gif
Although i made a fare few pips this morning. But, the fact remains that i took a position based on emotions. I know from experience that in the long run trades based on hunches are doomed for failure.
I'm sure there are some guys that could argue this point very well that intuition is the most crucial part of trading. I suspect it's a huge part of successful trading. I don't want to get into it here, but intuition is nothing mysterious. Trusting it is hard, but necessary.


Quote
I will learn from this and i have made a wow to never ever again take a trade on a hunch.

Bullshit! All screw-ups come after the trade is on.
  • #57
  • Feb 11, 2008 8:52am Feb 11, 2008 8:52am
Here's another three touch on the Eur today.

First the hourly. Notice where the retracement stopped.
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  • #58
  • Feb 11, 2008 8:59am Feb 11, 2008 8:59am
Now the 15 min. You should know of the symmetry not only of the PFs themselves, but also all the other things, such as the MLHs, SHs, WLs, MMLs, etc. This shows up here with the second touch missing by two pips and the third following suit.

And yes, I'm short right now. My initial stop was above the pivot and once the thrust was made I went to BE. I'm still at BE and if price moves below and stays below the low of 4481, I'll move my stop above the congestion of the 4512 high. My target is the ML. And if I get stopped out at BE, it's ok with me.
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  • #59
  • Feb 11, 2008 11:13am Feb 11, 2008 11:13am
Hi Dopey,
Many thanks for your various posts, each one of them is a real gem. Your comments regarding seperation of a bar for pivot selection is particularly insightful. This only comes from experience as i have not seen it explained so well in any of the books. I am truly grateful to you for taking the time and posting a trade and the accompanying charts for our better understanding.
As they say in your part of the world.
Shukran Kabeeran.
  • #60
  • Feb 11, 2008 11:33am Feb 11, 2008 11:33am
Quoting Dopey
Bullshit! All screw-ups come after the trade is on.
I don't mind a screw-up or two, as long as i take the trade for the right reasons. However, when a trade is taken on a hunch as i did this morning, what can you learn from it. If you are stopped out you call yourself all sorts of names for not following your plan. If its profitable( which for me is a very rare occurence)you are grateful for the pips but no real psychological benefit is derived.
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