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A,B,C,D - 1,2,3,4 System

  • #1,201
  • Dec 13, 2008 9:52am Dec 13, 2008 9:52am
Quoting soyabean
I had a short discussion with my dear mentor Dra last week and one of the key lessons I took away was the use of protective stops. Dra taught me to place stops with S&R in consideration so they will be "protected".

Below is a trade on CADJPY which I took earlier this week. Notice it was insufficient to place the SL just slightly above my entry of the bearish engulfing. Instead, I placed a wider SL which was protected. The result? price breathed as much as 200 pips against my position before resuming its downtrend.

Presumably, the further away from your entry your stops are, the further away your targets would have to be, so as not to skew your RR?

How would you know when to do, or not do, this? Would it depend on the proximity of S/R from previous swing highs/lows to the highs/lows of your entry candles?
All flesh is as grass
  • #1,202
  • Dec 13, 2008 12:31pm Dec 13, 2008 12:31pm
Quote
Presumably, the further away from your entry your stops are, the further away your targets would have to be, so as not to skew your RR?

How would you know when to do, or not do, this? Would it depend on the proximity of S/R from previous swing highs/lows to the highs/lows of your entry candles?

Nice question dod, good one.

dra's advice as taken by soya is the best form of placing stop in this bizness. I do it alwayz, at the sametime, we all know that this bizness is a probability 'thing', hence you consider R:R(that school of thought i belong)

How do u balance this?

if u r going to short a position, ur stop will be preferably at a resistance level and ur tgt at next support level, if the number of stop loss will be farther than the number of projected target why risk it?

lol, another school of thought that believes in taking wot the mkt can only give, will risk it..............

all depend on doing your home work, doing ur statistics and factor a lot to determine the probability of success..... which ever one, but i prefer the former than the later.

nice question dod, very intelligent question

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  • #1,203
  • Dec 13, 2008 6:54pm Dec 13, 2008 6:54pm
Yup, I agree with Mike's answer and maybe I would like to add on just a little. This was mentioned by Dra at the beginning of the thread.

Basically my conclusion is if I find that my TP (usually a S&R or fib extension) giving me less than 1:1.5 due to the widened SL, I will just pass the trade.

Also, protective stops should also be used as trailing stops after closing part of your position!
  • #1,204
  • Dec 13, 2008 7:55pm Dec 13, 2008 7:55pm
Hi guys..

Can somebody look at my GJ chart..
Do you think I should SELL ??

Price haved retrace 61.8 Fib and close below LTL
Attached Image (click to enlarge)
Click to Enlarge Name: re.gif Size: 20 KB
  • #1,205
  • Dec 13, 2008 10:56pm Dec 13, 2008 10:56pm
Quoting CarbureTor
Hi guys..

Can somebody look at my GJ chart..
Do you think I should SELL ??

Price haved retrace 61.8 Fib and close below LTL
Hey, the 2 down trendlines shouldnt cross, the up TL is not valid since there was no HH and the trade looks like a DAZ setup.
  • #1,206
  • Dec 14, 2008 12:49am Dec 14, 2008 12:49am
Attached herewith EURGBP weekly, daily and 4H charts. Please comments.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eg weekly 081214.gif Size: 25 KB
Click to Enlarge Name: eg daily 081214.gif Size: 29 KB
Click to Enlarge Name: eg 4h 081214.gif Size: 32 KB
  • #1,207
  • Dec 14, 2008 2:36am Dec 14, 2008 2:36am
Quoting wltien
Attached herewith EURGBP weekly, daily and 4H charts. Please comments.
hello wltien, I feel those are nice charts you have.

But your fib retracement is pulled wrongly. That area should be 38.2 instead of 61.8. 61.8 is a deeper retracement. Not an issue though, nomenclature problem i presume.
  • #1,208
  • Dec 14, 2008 7:05am Dec 14, 2008 7:05am
Quoting soyabean
Yup, I agree with Mike's answer and maybe I would like to add on just a little. This was mentioned by Dra at the beginning of the thread.

Basically my conclusion is if I find that my TP (usually a S&R or fib extension) giving me less than 1:1.5 due to the widened SL, I will just pass the trade.

Also, protective stops should also be used as trailing stops after closing part of your position!
Hi Soyabean:

Regarding the statement about protective stops should also be used as trailing stops, are you saying the following:

If protective stop is 200 pips, then would trailing stop be 200 pips?

How many pips in your favour do you wait for before closing part of your position and setting trailing stop?

Thanks for all the help.
  • #1,209
  • Dec 14, 2008 7:19am Dec 14, 2008 7:19am
Quoting forexgenius
Hi Soyabean:

Regarding the statement about protective stops should also be used as trailing stops, are you saying the following:

If protective stop is 200 pips, then would trailing stop be 200 pips?

How many pips in your favour do you wait for before closing part of your position and setting trailing stop?

Thanks for all the help.
Nope, I do not mean that you should trail your stops by the same no. of pips. As you let your trade run for free, you should also set stops along the way, and these stops should be "protected" by S&R.

And there is no specific no. of pips before I close part of my position. I used to have the habit of closing part at 1:1 but thaat is hurting my R:R. At the moment I am using alot of discretion, but mostly at 1:1.5 or a S&R.
  • #1,210
  • Dec 14, 2008 8:42am Dec 14, 2008 8:42am
Quoting soyabean
hello wltien, I feel those are nice charts you have.

But your fib retracement is pulled wrongly. That area should be 38.2 instead of 61.8. 61.8 is a deeper retracement. Not an issue though, nomenclature problem i presume.
Thank you pointing out my problem!
  • #1,211
  • Dec 14, 2008 8:49am Dec 14, 2008 8:49am
Quoting soyabean
Nope, I do not mean that you should trail your stops by the same no. of pips. As you let your trade run for free, you should also set stops along the way, and these stops should be "protected" by S&R.

And there is no specific no. of pips before I close part of my position. I used to have the habit of closing part at 1:1 but thaat is hurting my R:R. At the moment I am using alot of discretion, but mostly at 1:1.5 or a S&R.
Hey Soyabean:

Thank you so much for the clarification.

Thanks for the quick response.
  • #1,212
  • Dec 15, 2008 3:15am Dec 15, 2008 3:15am
Quoting soyabean
hello wltien, I feel those are nice charts you have.

But your fib retracement is pulled wrongly. That area should be 38.2 instead of 61.8. 61.8 is a deeper retracement. Not an issue though, nomenclature problem i presume.
Good morning

Hope you all had a nice weekend. I'll like to know if 50% retracement is considered and how its handled.

Took Ucad from Friday afternoon and its just getting green now.

also here's Uj 4hr, can this be a good set up and entry if the present candle gives a good signal?

Thanks for your help
Attached Image (click to enlarge)
Click to Enlarge Name: uj 4hr.gif Size: 17 KB
God's Love For You Is Sure Never You Doubt It
  • #1,213
  • Dec 15, 2008 3:28am Dec 15, 2008 3:28am
Hi D-lib,

I'm taking UCAD short too since friday. It's green now though making a retracement now. Hope it'll go down heavily soon

I do like trade fibo retracement of 50, 61.8, and 76.8. I trade those three retracements, as long as it coincides with trendlines and perfect candle formation. However, i dont like 23.6 or 31.8 retracement much, dunno why, maybe because i think that if the retracement is small, then the power to continue main direction is small too..

About UJ, i'm paying attention too.. But i dont see any good candle formation there.. Be patient..

Happy pipping..
  • #1,214
  • Dec 15, 2008 3:29am Dec 15, 2008 3:29am
Quoting D liberators
Good morning

Hope you all had a nice weekend. I'll like to know if 50% retracement is considered and how its handled.

Took Ucad from Friday afternoon and its just getting green now.

also here's Uj 4hr, can this be a good set up and entry if the present candle gives a good signal?

Thanks for your help
Hi D liberators,

That is a nice chart. Fib retracement of 50% is definitely considered and handled just as the same with other ratios. There is no specific rule on the fibs, main rules are in the trendline and candlestick formations.

I am glad you rode on UCAD too.

I have marked the area in blue where I feel it will be most ideal to get a setup. But the down arrow at the bearish engulfing is also possible to enter a short position.

Edit: Just realized we have different data feeds so you will not get the candlestick formation on your chart.
Attached Image (click to enlarge)
Click to Enlarge Name: usdjpy.gif Size: 15 KB
  • #1,215
  • Dec 15, 2008 3:35am Dec 15, 2008 3:35am
Quoting tanyasiapa
Hi D-lib,

I'm taking UCAD short too since friday. It's green now though making a retracement now. Hope it'll go down heavily soon

I do like trade fibo retracement of 50, 61.8, and 76.8. I trade those three retracements, as long as it coincides with trendlines and perfect candle formation. However, i dont like 23.6 or 31.8 retracement much, dunno why, maybe because i think that if the retracement is small, then the power to continue main direction is small too..

About UJ, i'm paying attention too.. But i dont see any good candle formation...
Yep, agreed. We had good reasons when we took the trade so just wait for it to run it out on the UCAD.
  • #1,216
  • Dec 15, 2008 3:46am Dec 15, 2008 3:46am
Quoting soyabean
Hi D liberators,

That is a nice chart. Fib retracement of 50% is definitely considered and handled just as the same with other ratios. There is no specific rule on the fibs, main rules are in the trendline and candlestick formations.

I am glad you rode on UCAD too.

I have marked the area in blue where I feel it will be most ideal to get a setup. But the down arrow at the bearish engulfing is also possible to enter a short position.

Edit: Just realized we have different data feeds so you will not get the candlestick formation on...
Now all actively discuss in this thread, very good.........
  • #1,217
  • Edited 5:36am Dec 15, 2008 5:32am | Edited 5:36am
Quoting wltien
Now all actively discuss in this thread, very good.........

Which other pair(s) is anyone/everyone looking at?

I see ECHF but on my feed, price is close to the monthly TL and seems to be struggling with 1.5798 level, so am deciding to neglect it

Any comment?

Been trying to post chat but.........
God's Love For You Is Sure Never You Doubt It
  • #1,218
  • Dec 15, 2008 6:18am Dec 15, 2008 6:18am
Quote
When trading this system first draw all TLs(Inner, Outer and Long Term) to determine the current trend. After which you will find and draw your latest A.B. Spread fibs from A - B to project a C bounce off the TL which will be a retracement(38.2, 61.8, 78.6).
After the market retraces to TL / C ? / Fib retracement look to enter on a bounce. Place Stop Loss below C/TL in an Uptrend and above C/TL in a downtrend. Profit will be set 10-20 pips before projected D ? / Fib extension. Or use a Risk/Reward of 1:1.5 or greater.
If the market bounce at a 38.2...

The rule states 38.2/61.8 and 78.6 but honestly speaking i have seen 50% fibo winning several trades, the last GY signal that i saw was on 50% and it worked well.

Now this is where personal discretion comes to play, like tanya said somewhere in the thread that he doesnt like 38.2 retracement, if u feel confident trading 50% fibo retracement, cool and good.

presently, am looking at EU, gush! my TA chart is down, i would have posted my chart, but i think price is at TL on both 4hr and daily.

its a nice place to short if we have CF reason
Bearish gartley completed at 1.618
Fibo retracement at 61.8

i will be shorting if i get good CF to 1.3100 where we have next support.

guyz, u r pipping so great, i know soya must be pip drunk now

anyway, I think santa claus FX his giving so much pips for christmas gift.

Remain blessed
Mike
  • #1,219
  • Dec 15, 2008 6:41am Dec 15, 2008 6:41am
closed for a 1:1, at 100pips.

Scanning for other set ups. Anyone watchng any pair? My eyes are getting blurred.

Suffering from greenpipnia!!!!!
God's Love For You Is Sure Never You Doubt It
  • #1,220
  • Dec 15, 2008 7:20am Dec 15, 2008 7:20am
Hi all,
Congratz everyone! You all are doing great! Congratz on UCAD short trade, still going on and targeting 1.2175 as next support area.

About EU, i don't think it will be a setup soon mike. It's on daily trendline now, and on 61.8, but it didnt make any correct CF. But we still get some times to let the daily candle closed.

UJ has potential to go short too, but it's too crowded to me and i got no good CF. Right now, i think we should go back to our hiding place, waiting the market goes to us, and catch it at perfect moment. Maybe the US news an hour again will do something.

Still, congratz to everyone !
Happy pipping..

Hoedha
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