The System II (Yes with irony)

Hey Feb,

I thought I was the only one that curses/talks to the market! I rather be a jerk to a non-human entity!

Salud.

Guys, I work at a umm larger bank, was just speaking to the spot guys and they have no idea what is going on. That is how little liquidity there is in the market at the moment, therefore if you gonna trade during this silly season, BE VERY VERY careful. I am with dave on waiting until 05/1/2009. Funny enough, our head traders come back around then

FEB,

That #759 is an outstanding post that is to the point & simple to understand. Everything that needed to be said. You have to step out & pull the trigger & forget the indicators, levels & line. Price is all that matters.

YOUR TAKE NO PRISONERS STYLE IS WHAT MAKE THIS THREAD SO INTERESTING. THANKS & KEEP THE INFO FLOWING. THIS CAN BE A BITTER PILL FOR SOME TO SWOLLOW, BUT ITS SO TRUE.

Thanks for your willingness to share your wisdom, views & comments.

_________________________

Best Trades

PistolDave,

Post #759 spelled out real clear the course of action to take. I would adhere to that advice. I too @ times find myself getting absorbed in levels, hence fibs, logical levels & such thereby losing site of PRICE ACTION & WHAT IT IS DOING.

This is for sure a quick style of trading & you have to get in, get it & get out.

I'll give the chart posting a go over the next several days. Thanks for the instructions on posting them.

____________________________

I have to say, my hats off to you Mr. Feb2865.

This thread is to me, the best there is around FF. You really tell it like it is. This “system” is very consistent and easy to follow. I’ve been around looking all over the place and judging in a crude and skeptical way, almost everything I see. I have to say, the wisdom you have poured on this thread has no match around.

I am scalper as well. I know indirectly (and by confession) you have hinted a lot on scalping. Would you mind gives us some pointers?.

No intentions to deviate the main subject on this thread.

Your post #759 it's a true classic. Keep them coming.



Thanks in advance.

Feb, acetrader, moneda...

Thanks for the explanation and advice.

You might wonder why I have so much to question about this method, since it may seem real simple to some people. But ever since I started trading in forex I have used some type of indicator. Maybe that has been some kind of crutch for me. I haven't learned that much about PA yet.

Now maybe I'm having "indicator" withdrawl symptoms. I'll get over it.

I had another question. After taking a trade I usually set a stop 25-50 pips or more away from the entry price to be sure it is behind the latest swing high/low on the 5min chart. I have been setting a profit target 2x the stop. Understandably, sometimes it makes it and sometimes it gets stopped out.

I may be setting the target too far away.

What I need to know: Is it is better to take smaller profits -- or to wait and hope for the price to move 50-100 pips or more to reach the target. I don't see that it's the best to take 10 pips while risking 30 pips every time, unless you are sure you are taking very high probability setups, and like Feb said, on the 5m charts most of the movement is noise.

So, would you say the highest probability way to trade is to quickly take the very small profits after the price breaks through s/r levels, or hang in there with it and get the stop to b/e as quickly as possible and try to trail it until it stops out, or reaches the target?

I know these may sound like a lot of newbie questions, but I want to try to avoid repeating some of the same mistakes that have been made before that don't work.

Anyone's advice on this would be appreciated very much,
Dave

Well, I just finished reading this thread and Feb's original The System thread and learned a lot. Haven't taken any trades yet with either as I needed to understand them.

Also, not really comfortable trading during the holidays so I will demo the technique until Jan. Great thread.

Hi friends,

Here's a video called "The Whipsaw Song" by trading legend Ed Seykota. It's not new -- but it's funny and interesting.

http://br.youtube.com/watch?v=LiE1VgWdcQM

Combined with the lack of liquidity it is going to shoot around I would guess.
Take a look at the options calendar here, and if you have the time go back and look at the charts on option expiration days (the green see thru square on fridays)-tends to be a steep move in GB session, followed by equally steep move in the afternoon with US session. Combined with lack of liquidity could be an interesting day. Oh lord please may EUR/GBP take a dive I'd like a holiday at some point
http://www.cboe.com/AboutCBOE/xcal2008.pdf

Exited at 49pips+ , way too early as usual

PistolDave,

Always remember in this business there are NO BAD questions. If its important to YOU, that what matters.

Indicators......withdrawal is expected, but keep moving ahead & they will be a tool of the past.

Taking Profits........forget the word hope. FEB will give you a better call on this, but I'll explain what I do & it works for me, but my winning level can be poor @ times. Each trade will be different.........I don't have this set in stone & the parameters will be different on each trade based on what I preceive as the probable end results of the trade. If I seek 30 pips gain, then I'll use 15 pips sl............50 pip gain 25 sl. I risk less than I'm seeking to gain is the best way to state this. I was taught that by my mentor yrs ago & have adhered to that method since. It just keeps me in balance on the P&L side on things.

Profit Target...........I always have one in mind that I'd like to hit, but will take what I can & get out. Refrering back to FEB'S post #759 & quoting
"This is a quick style trading ala scalping," hence get in, get it & get out is what I try to do. Only be married to your wife & NOT THE TRADES.

Going into each trade my risk level is predetermined & I trade accordingly.
I never SET a sl, but I will always be setting with the baby & should I need to leave the baby then the sl is activated. Baby = the trade.

For me I'll take the smaller profits anytime over the loss, but there will be loss & the way to deal with that is except it, move on & learn from that loss.......KEEP CHARGING ON. Loss........I hate them, but they happen.

Keep referring back to Post #759........It a classic full of wisdom with few words.

Dave......this is just what works for me & I know FEB can give you a much better take on it. The is a GREAT SYSTEM & the teacher is the best I've seen in a long time & he is willing to share. In the mean time this is just what I do & nothing more.

I hope it helps.
________________________________
Best Trades

Bootsy,

Are we swinginng & chopping yet???? Now you got the picture. There are some that will trade this CHOAS & do well, but its not for me. I'm on the side for now. I know my limitations & trade accordingly.

I like the options calender.......gives you something to ponder.

Those +49 PIPS are better than a loss. Nice going. Get in, get it & get out.

I want be watching, but I'm sure today will be another wild day.

_______________________

But mainly swinging which is good Just bagged another 30 points but trading on MT4 is a nightmare with this system-got into the trade at least 10-12 pips too late. MT4 is great for opening and closing orders using set stops, but totally useless for entering manually at market price.

But thanks to this thread I know that on an options day, with the lack of liquidity around at this time of year, a break should continue further as it appears no-one is around to stop it (I get the feeling my fx naivety my have reared it's head), but have also based this theory on price action over the last 2 days.

Ace, v interesting advice about stops, think I might play with stop levels a bit, reduce to 15 pips and see what happens. And thanks for the advice to look at post #759 again, and of course thanks to Feb for posting such good advice! That ranks on the same level as a much earlier one when Feb was talking about swearing at the markets, and daring the price to show him that he was wrong when re-entering a trade that went his way, retraced back for a small loss, and he then re-entered at the resumption of the down trend.
I've been blinded by science/indicators etc-this thread, and the pieces of advice that are given by everyone, especially Feb, with a sometimes blunt message are really helping to blow away the cobwebs of a few years of meandering

feb, thank's your system, you have opened my mind. JBU

Thanks, Ace.

I appreciate your helping me understand the system.

I'm trying to get a feel for what to expect from the price movement when it breaks through the resistance and about how far to expect it to go.

I have done pretty well so far, like I said -- but I have made a lot of errors too. Mainly by holding on to the trades too long and letting them go back into losing territory because I didn't have a feel for how much they would move. I am starting to see that many times price will only break through by a very small amount (0-10 pips) then quickly retrace. It seems that the skill (and profitability) of this system is to learn to tell what kind of action usually leads to a strong breakthrough on some trades and what makes price "peek" through and quickly fall back on others, and get good at grabbing some quick pips or hang in there and ride the wave.

Make sense?

I suppose that "feel" for the market conditions will come with time and experience trading the system. It's probably not something that can be easily explained by one person to another. But I still want as much input from you other traders as possible.

Have a great holiday season,
Dave

PistolDave & Everyone,


FEB....May Better Health & Prosperity Rain Down on You in 2009.

Merry Christmas & A Happy & Prosperous New Year To All.

____________________
AceTrader

Thank you Feb for your time and teachings, have a great xmas.

A

I wanted to wish everyone here a blessed and safe holiday season -- and a very profitable new year.

I'm looking forward to having success trading the System II in the upcoming year.

Thanks to everyone's help here, I am beginning to understand more about how to profit from it, and more about trading in general.

You are all a great group of guys.

Best of success to you,
PistolDave

Thank you Alexfx for your kind words.

I am not posting here as much due the current nature of the markets. At least for me, it's not worth it.

Anyway I wish you all happy holidays and 2009 will bring you the best on health and prosperity.

Blessings and good karma to all of you.

Happy holidays with good health to everybody .