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  • #1,461
  • Jul 5, 2008 11:36pm Jul 5, 2008 11:36pm
Bro zoopy,

check this out!!!

http://www.forexfactory.com/showpost...&postcount=377


sonic
  • #1,462
  • Jul 6, 2008 10:11am Jul 6, 2008 10:11am
Last week I mentioned that I would post examples of how waves could be used. Keep in mind these are just examples and are not full methods/systems so further exploration will be required.

example one (applying waves to Jacko's method)
Determine how the waves are breaking on the weekly chart and trade in that direction using the 4 hour or daily chart. Basically what you're doing is eliminating the use of trendlines. If the weekly waves break up, enter when waves break up on the 4 hour. I would also use the 50.0% fib retracement, round numbers and the AH. I would do away with the support and trendlines since following the waves will do the work of both.

example two (using PA)
Use waves to determine direction instead of using trendlines. Once you have the direction, wait for the pullback and enter using PA.

 example three (for those who HAVE to use indicators)
Even though I am against most indicators, I will add this for those that want to explore. Not everyone trades the way I do so I have to keep in mind other options. What you could do is find the direction based on how the waves break and enter using an indicator. Don't ask which indicator since I don't use them.

example four (concept based on Steviet's approach)
For those that have visited Steviet's journal and are familiar with his method, here's another concept/idea that could be explored. Use a 1000 pip stop, trade in the direction that the waves break on the 4 hour/daily. If you notice waves breaking up, just buy (doesn't really matter where). Hold the trade until there is a wave collapse then exit. Or... use a take profit of 100-200 pips... maybe more?

example five (using waves as a tool to draw trendlines)
Unlike the other four examples where waves are used to determine direction, waves can also be used to determine which reference points are best for trendlines. Since line charts are clearer visually, the more prominent waves tend to stand out more which will help with drawing trendlines.


The above stated are only a few examples of how waves can be utilized and I'm sure there's many more. Other tools I would definitely recommend with waves would be the following:

1. 50.0% fib retracement
2. round numbers
3. Jacko's Anti-Hedge
4. PA
  • #1,463
  • Jul 7, 2008 9:29pm Jul 7, 2008 9:29pm
Quoting zoopy
Hopefully the markets have settled down a bit after this morning's crazy moves. On my 4 hour chart, we have a collapsed wave that is confirmed for the eurusd. I am now biased to the downside and will be looking for short positions.
This is more of a follow up on post#1448. As stated last week, we had a confirmed 4 hour wave collapse on the eurusd pair. Since then I have been biased to the downside. Today we had a pullback and it seems the market is now turning south. If the wave structures hold, we will start making larger waves to the downside (similar to the Dow Jones charts I have posted in the past).

On another note...
I will be cutting back on posting trade setups based on waves so as to not clutter up my journal too much. Instead future posts may involve other aspects of trading whether they be trading concepts which I find interesting, money management, psychology or just simply "thinking outside the box".
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  • #1,464
  • Jul 7, 2008 10:53pm Jul 7, 2008 10:53pm
Quoting zoopy
This is more of a follow up on post#1448. As stated last week, we had a confirmed 4 hour wave collapse on the eurusd pair. Since then I have been biased to the downside. Today we had a pullback and it seems the market is now turning south. If the wave structures hold, we will start making larger waves to the downside (similar to the Dow Jones charts I have posted in the past).

On another note...
I will be cutting back on posting trade setups based on waves so as to not clutter up my journal too much. Instead future posts may involve other aspects of trading whether they be trading concepts which I find interesting, money management, psychology or just simply "thinking outside the box".
I will miss ur analysis!!

sonic
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  • #1,465
  • Jul 8, 2008 3:56am Jul 8, 2008 3:56am
hi zoopy,
can we count this as one wave? is it valid?
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  • #1,466
  • Jul 8, 2008 6:19am Jul 8, 2008 6:19am
Quoting fanias
hi zoopy,
can we count this as one wave? is it valid?
I see the waves like this. When mapping out the waves, look for those that are fairly well defined. If there's a lot of small "zig-zag" movements, it's probably noise.
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  • #1,467
  • Jul 10, 2008 3:40am Jul 10, 2008 3:40am
Hi Zoopy

Look at my avatar. LOL!

I had an early feast today with the EU ! Hope you had your orders in for a take-away ! LOL!
  • #1,468
  • Jul 10, 2008 4:57am Jul 10, 2008 4:57am
Quoting Bakuli
Hi Zoopy

Look at my avatar. LOL!

I had an early feast today with the EU ! Hope you had your orders in for a take-away ! LOL!
lol.

Wasn't in euro trade. Looking to go long. Waves breaking up.
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  • #1,469
  • Edited 4:45am Jul 11, 2008 4:27am | Edited 4:45am
What happened to the thread?


So I'll post my chart. since i trade only eur/usd i'm posting eur/usd chart. We had a major retracement on the daily and now its seems uptred is resuming and gaining momentum. So we buy on every pullback.
Now I'm posting 30 min chart, because that is my way of trading. I look for waves on smaller timeframes sometimes if I cannot see any waves on larger time frames.
Sometimes I even go to 1 min chart but I don't recommend that.

Price just hit 1.5800 very strong round number on eur/usd. I closed my positions there and waiting for a pullback now to reenter into the market. Once we have a pullback and price turns around north, that's when I will enter.

Here is my chart.
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  • #1,470
  • Jul 11, 2008 11:12am Jul 11, 2008 11:12am
Quoting kaunasny
What happened to the thread?


So I'll post my chart. since i trade only eur/usd i'm posting eur/usd chart. We had a major retracement on the daily and now its seems uptred is resuming and gaining momentum. So we buy on every pullback.
Now I'm posting 30 min chart, because that is my way of trading. I look for waves on smaller timeframes sometimes if I cannot see any waves on larger time frames.
Sometimes I even go to 1 min chart but I don't recommend that.

Price just hit 1.5800 very strong round number on eur/usd. I closed my positions there and waiting for a pullback now to reenter into the market. Once we have a pullback and price turns around north, that's when I will enter.

Here is my chart.
Too busy hauling in the profits lol.

On a serious note though... I stopped posting charts because the ones I have up now, are sufficient enough to illustrate how waves can be helpful in your trading.

I also prefer having a journal where I have ideas/concepts or other things relating to trading to help both myself and other traders. I guess you can say it's more about finding ways to improve your overall trading and confidence by analyzing not only your current method of trading, but also your behaviour (emotion/psychology). Remember, having a method plays a very small part. Trading is based on human emotion so having an edge when it comes to that helps in your overall performance. There's a reason why I don't post trade results/signals and that's because I'm not a signal service (this is not directed to you but for those that have messaged me about it). I know where I stand with wave trading and believe me I've gotten VERY positive results.

My next post, once I have it written down, will be going over some of the things which I changed in my trading. It won't have anything to do with wave trading but just certain things which I think traders are overlooking and should really reconsider.

Anyways, hope your trading went well this week and you managed to catch that eurusd long

  • #1,471
  • Jul 12, 2008 9:42am Jul 12, 2008 9:42am

BASICS
I can’t stress this enough. Before slapping on indicators or even picking up a method from someone, learn the basics. Some of the basics may include:
a) Support + resistance
b) Knowing how the market moves (ie. in waves – this does not mean Elliot waves, just basic waves)
c) Knowing what a peak/valley is and being able to spot it on a naked chart


RESPECT FOR THE MARKET
If there’s one thing I’ve learned, it’s to respect the market. Most importantly, knowing when to admit you’re wrong. This was a very big turning point for me and the waves helped me a great deal with this. Trading is all about probabilities. It’s a numbers game, make sure you ingrain this into your head.


REWARD:RISK RATIO
I picked this up from Peter Crown’s thread on Dibs. I’ve heard it a million times too but I think after hearing it from him, it stuck more. Might have to do with him being a former pit trader.

“Losses are just losses. Make sure they are smaller than your winners in aggregate and you're home free.”


EARNING THE RIGHT TO TRADE BIG
One of the tests I’ve been doing in recent days was comparing trading big versus trading small. I arrived at a very interesting conclusion.


TRADING BIG
ADVANTAGES
a) Potential to make lots of money.

DISADVANTAGES
a) A few losing trades could wipe you out.
b) Emotions run higher and you’re more likely to pull the trade if it goes against you 30 pips since more money is on the table.
c) You’re less likely to let winning trades run giving you poor reward:risk ratio as a result and making your trading method inefficient.


TRADING SMALL
ADVANTAGES
a) Less risk involved per trade.
b) Since you’re trading small, you’re more likely to let winners run and this in turn will give you a higher reward:risk ratio.
c) Less stress and less emotions attached to each trade.
d) Your account not only grows quicker because winners are running more, but it grows at a more consistent rate.
e) Overall you are maximizing profits, minimizing losses and overall performance is more efficient.

DISADVANTAGES
None.

USING LIMIT ORDERS
I found out this past week that whenever I use limit orders instead of market orders my trades seem to do better. Not only am I following a more rigid plan this way but I enter in at better prices. Once the order is triggered, just let the trade play out.


HAVING A TRADING PLAN FOR PROFITS AND LOSSES
This is a biggie for me. One thing that traders should definitely consider is drawing up a plan on how they will handle losses versus profits actually gained. I’m not sure if this has been discussed before on the forums but I regard this as VERY important. It’s all very well once you’ve made profits but what then? Do you withdraw? Do you keep it and compound on that? If you run into a string of losses, do you have a plan to slow down the compounding that will work against you? Careful thought and consideration must be taken because this is all part of both trade and risk management. Make sure you have a plan for both of these scenarios BEFORE you start trading.

  • #1,472
  • Jul 12, 2008 9:53am Jul 12, 2008 9:53am
Hallo zoopy!

Maybe you should ask FF to make a sticky out of this in the Rookie Q&A section! Nicely made!

Have a good weekend!
Ciao!
Matt
  • #1,473
  • Jul 12, 2008 9:58am Jul 12, 2008 9:58am
Quoting zoopy
HAVING A TRADING PLAN FOR PROFITS AND LOSSES
This is a biggie for me. One thing that traders should definitely consider is drawing up a plan on how they will handle losses versus profits actually gained. I’m not sure if this has been discussed before on the forums but I regard this as VERY important. It’s all very well once you’ve made profits but what then? Do you withdraw? Do you keep it and compound on that? If you run into a string of losses, do you have a plan to slow down the compounding that will work against you? Careful thought and consideration must be taken because this is all part of both trade and risk management. Make sure you have a plan for both of these scenarios BEFORE you start trading.

I think we care too much for the entry,
and how to exit is somehow neglected, especially the profits plan.
It may be the most difficult part,
how to stay longer, how to maximal the profit,
a lot of discretion were needed.

Dhalsim
Success is the small sum of efforts, repeated day in and day out.
  • #1,474
  • Jul 12, 2008 10:18am Jul 12, 2008 10:18am
Quoting Gnat
Hallo zoopy!

Maybe you should ask FF to make a sticky out of this in the Rookie Q&A section! Nicely made!

Have a good weekend!
Ciao!
Matt
Hi Matt

Thanks.

Sticky? I'll let them decide. They can do what they want, doesn't matter to me lol.
  • #1,475
  • Jul 12, 2008 10:21am Jul 12, 2008 10:21am
Quoting dhalsim
I think we care too much for the entry,
and how to exit is somehow neglected, especially the profits plan.
It may be the most difficult part,
how to stay longer, how to maximal the profit,
a lot of discretion were needed.

Dhalsim
I think most traders focus so much on money and how much they "could" make, they forget to plan ahead for when they actually get there. I think you also may be misunderstanding that portion of my post. I'll be posting my money/risk management that I'm currently using so you can understand where I'm going with that.
  • #1,476
  • Jul 12, 2008 10:24am Jul 12, 2008 10:24am
Quoting zoopy
I think most traders focus so much on money and how much they "could" make, they forget to plan ahead for when they actually get there. I think you also may be misunderstanding that portion of my post. I'll be posting my money/risk management that I'm currently using so you can understand where I'm going with that.
I am reading through your journal, but still a lot of pages to be finished.
thank you for the reply

Dhalsim
Success is the small sum of efforts, repeated day in and day out.
  • #1,477
  • Jul 12, 2008 10:27am Jul 12, 2008 10:27am
Nice post zoopy, lots of good info and very well thought out.
  • #1,478
  • Jul 12, 2008 10:39am Jul 12, 2008 10:39am
Here's my money/trade management plan that I'm currently using. The risk percentage will vary depending on the trader, it's the plan that I have in place that protects me.

This example will be based on a $500 account.
What I would do in this case is start off trading between 2%-3% of my account first building up my profit until I reach over $1000. Lets say I reach $1200. What do I do when I reach $1200? Two scenarios could happen.

Scenario one
I start trading 5% based on $1000 and use my profits to bounce on. I will keep doing this until I reach to over $2000. Lets say I reach $2400. I then start trading at 5% based on $2000. What I'm doing is compounding incrementally.

Scenario two
I start trading at 5% based on $1000. Lets say I run into a string of losses and I find myself down to $700. What do I do? I start trading 2%-3% based on a $500 account again. I keep doing this until I find myself a footing and my losses subside. What I'm also doing is slowing down the compounding rate working against me. I then continue to claw my way back to $1200 where I will again attempt to bounce.

Understanding scenario two is very important. I have a plan in place for when I start losing and I make sure I slow that compounding down. Learning to execute this and following the plan is crucial. When losses start happening, you HAVE to slow that compounding down because otherwise it will start working against you.
  • #1,479
  • Jul 12, 2008 10:44am Jul 12, 2008 10:44am
Quoting greywolf238
Nice post zoopy, lots of good info and very well thought out.
Thanks greywolf. Hope you find it useful.
  • #1,480
  • Jul 12, 2008 10:51am Jul 12, 2008 10:51am
A disadvantage of trading small: You are more likely to let your losers run because hey...it's not that much money, it will turn around eventually. Whereas trading big you are more likely to cut your losses early. I don't agree with the statement that you cut your winners early with big lots, maybe when you first start off, your scared etc. Get used to trading with big lots and this won't happen. Just my .02
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