I've been trading for two years, I am a newbie and like a lot of people I've explored many ways to make money in the forex market. I've been reading posts here, for some time now and while there is a lot of good information, I see a lot of people who trade without strategies. If you can't make money in this market after reading the James16 thread or twoblink's thread (some of it) then you're not trusting yourself or your strat. I know a lot of people have tried to turn $100 inot $1,000,000 but they seldom posts their strategies. I'm probably not going to be a millionarie tomorrow but I have a plan to get their 10 years from today. I have an account balance of very little and well I will use my trading system as leverage to turn it into a lot. Some people will bypass this, I may not get any looks whatsoever but I don't care.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o
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The strat is a method taught to me by Phil Newton and Buk called the <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" /><st1:date Month="1" Day="2" Year="2003">1-2-3</st1:date>. I cannot post a link to his website but he has one with several trading videos where he teaches his strat. This method is approximately 70% effective if used on pairs all accross the board. <o></o>
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The money management aspect of the strat is a fixed equity percentage strat.<o></o>
If I have 5k in my account I will be using 3% of my account equity to trade with. Furthermore position size (i.e.) number of contracts is based on the size of my stoploss. If I have a stoploss of 50pips with an account size of 5k and a risk of 3%, then I will be risking $150 for THIS trade in monetary value and my stoploss of 50 pips determines that I will be able to make or lose $3 per trade. This is not a daredevil system and you could probably maximize this even further but this is a marathon, and besides I don't have the heart for big drawdowns.<o></o>
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In addition to <st1:date Month="1" Day="2" Year="2003">1-2-3s</st1:date> I will be using some of James16 methods for trading, but my main source of income is through the use of <st1:date Month="1" Day="2" Year="2003">1-2-3</st1:date> patterns.<o></o>
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Now for the system:<o></o>
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There comes a point where price treandline break. A trendline is not always a diagonal line, it is a point of support and resistance. and so In come cases I'd consider things other people consider to be S/R, to be a trendline. When a trendline is ready to be broken, the market may sometimes signal this by a pattern called a <st1:date Month="1" Day="2" Year="2003">1-2-3</st1:date>. Basically a higher low followed by a breach in the trendline (T/L) or S/R.<o></o>
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If you look at the attachment, (can someone tell me how to get my pictures in the post?) You'll see what I am refering to. I'm adding more images so you see its a re-occurring pattern. The next image shows another, clearly labelled and herin lies the must follow features of the strat.<o></o>
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1. There MUST, absolutely must be a breach of a trendline! If you don't follow this, it may work out but you won't have a win/loss ration even near to what is possible.<o></o>
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2. This WAS a filter but it became apparent that it was an integral part of the strat that I made it mandatory. You should be trading near to a round number or psychological resistance. Round numbers are points of decision and basically you need to look at numbers like 1.3000, 1.2500 even 1.2550. These are points people naturally look for.<o></o>
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3. The two aspect of the pattern should land on an area of previous resistance and be at or near to a round number.<o></o>
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4. The 3 aspect of the pattern should be equal to or greater than a 50% retracement of the one aspect of the pattern. I prefer if the 3 aspect bounces directly off a fib retracement, but this is too strict a filter but it does instill CONFIDENCE.<o></o>
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So that’s the pattern rules:<o></o>
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Fib retracements are drawn from the one aspect of the pattern to the 2, with a target of 161.8%. I enter with 4 lots and then once my target is reached I remove 3 lots, move my stop to breakeven and let the other lot fly…it can increase profits dramatically.<o></o>
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One thing to remember. Don’t cheat on your trendlines. I know it sounds stupid but I’ve lost many trades trying to put a trendline where there isn’t one. Better stay out if you’re unsure. And remember this is a counter trend trade and you don’t want to run this trade without a stoploss it could cause devastation to your equity. I hope that I have the time and resources to post my trades here and some people can learn from it and I can too.<o></o>
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></o>The strat is a method taught to me by Phil Newton and Buk called the <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" /><st1:date Month="1" Day="2" Year="2003">1-2-3</st1:date>. I cannot post a link to his website but he has one with several trading videos where he teaches his strat. This method is approximately 70% effective if used on pairs all accross the board. <o
></o><o
></o>The money management aspect of the strat is a fixed equity percentage strat.<o
></o>If I have 5k in my account I will be using 3% of my account equity to trade with. Furthermore position size (i.e.) number of contracts is based on the size of my stoploss. If I have a stoploss of 50pips with an account size of 5k and a risk of 3%, then I will be risking $150 for THIS trade in monetary value and my stoploss of 50 pips determines that I will be able to make or lose $3 per trade. This is not a daredevil system and you could probably maximize this even further but this is a marathon, and besides I don't have the heart for big drawdowns.<o
></o><o
></o>In addition to <st1:date Month="1" Day="2" Year="2003">1-2-3s</st1:date> I will be using some of James16 methods for trading, but my main source of income is through the use of <st1:date Month="1" Day="2" Year="2003">1-2-3</st1:date> patterns.<o
></o><o
></o>Now for the system:<o
></o><o
></o>There comes a point where price treandline break. A trendline is not always a diagonal line, it is a point of support and resistance. and so In come cases I'd consider things other people consider to be S/R, to be a trendline. When a trendline is ready to be broken, the market may sometimes signal this by a pattern called a <st1:date Month="1" Day="2" Year="2003">1-2-3</st1:date>. Basically a higher low followed by a breach in the trendline (T/L) or S/R.<o
></o><o
></o>If you look at the attachment, (can someone tell me how to get my pictures in the post?) You'll see what I am refering to. I'm adding more images so you see its a re-occurring pattern. The next image shows another, clearly labelled and herin lies the must follow features of the strat.<o
></o><o
></o>1. There MUST, absolutely must be a breach of a trendline! If you don't follow this, it may work out but you won't have a win/loss ration even near to what is possible.<o
></o><o
></o>2. This WAS a filter but it became apparent that it was an integral part of the strat that I made it mandatory. You should be trading near to a round number or psychological resistance. Round numbers are points of decision and basically you need to look at numbers like 1.3000, 1.2500 even 1.2550. These are points people naturally look for.<o
></o><o
> </o>3. The two aspect of the pattern should land on an area of previous resistance and be at or near to a round number.<o
></o><o
> </o>4. The 3 aspect of the pattern should be equal to or greater than a 50% retracement of the one aspect of the pattern. I prefer if the 3 aspect bounces directly off a fib retracement, but this is too strict a filter but it does instill CONFIDENCE.<o
></o><o
> </o>So that’s the pattern rules:<o
></o><o
> </o>Fib retracements are drawn from the one aspect of the pattern to the 2, with a target of 161.8%. I enter with 4 lots and then once my target is reached I remove 3 lots, move my stop to breakeven and let the other lot fly…it can increase profits dramatically.<o
></o><o
> </o>One thing to remember. Don’t cheat on your trendlines. I know it sounds stupid but I’ve lost many trades trying to put a trendline where there isn’t one. Better stay out if you’re unsure. And remember this is a counter trend trade and you don’t want to run this trade without a stoploss it could cause devastation to your equity. I hope that I have the time and resources to post my trades here and some people can learn from it and I can too.<o
></o> 
