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We all need pivots to win..yes or not? 13 replies

The System (Irony included) 1,175 replies

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The System II (Yes with irony)

  • #1,701
  • May 4, 2009 11:07am May 4, 2009 11:07am
Quoting matte
-the violet line is the new relative high or low
-the two orange lines are -30 and -40 pips from the new relative high or low
-the thin red line is the entry of the trade

I wait for the price to go down (or high) till reach the zone between the two orange lines
then
If the price come up (or down) i'll enter the trade at the thin red line level.

it's ok?
Hi matte,

You do not need to wait for it to pull back 30-40 pips. It can pull back 10 pips and be valid. The important thing is to ensure you have a swing of 30 pips or more.
  • #1,702
  • May 4, 2009 11:14am May 4, 2009 11:14am
ok. the better rules are 20 pips and out immediatly or 20 pips traling stop?
  • #1,703
  • Edited 11:53am May 4, 2009 11:52am | Edited 11:53am
Quoting matte
ok. the better rules are 20 pips and out immediatly or 20 pips traling stop?
Matte,

Nothing is set in stone, there is no better or worse. With a trailing stop, you will probably have more losers, but larger winners when you catch a nice runner, but it may also get frustrating to watch a 20 pip winner stop you out at breakeven.

On the other hand, if you aim for 1:1 risk reward e.g. 20 pip stop and 20 pip target, you will have to ensure your win ratio is above 50%, or you will have to manage your trades closely and cut your losses quickly.

It all depends on what you prefer, both will work if managed properly.
  • #1,704
  • May 4, 2009 11:55am May 4, 2009 11:55am
thank you, really clear.
i've got another question: well, you trade almost all new relative highs or lows with this method, isn't it? let's say...about 70-80% of all new relative highs or lows are tradeble. is it right?
  • #1,705
  • May 4, 2009 12:07pm May 4, 2009 12:07pm
Quoting matte
thank you, really clear.
i've got another question: well, you trade almost all new relative highs or lows with this method, isn't it? let's say...about 70-80% of all new relative highs or lows are tradeble. is it right?
Not sure I understand what you are asking. We are buying high and selling low on a 5 min chart if that is what you mean.
  • #1,706
  • May 4, 2009 12:13pm May 4, 2009 12:13pm
i know, my english is not good..
let's try with some pictures.
colored in green you can see a 24 pips swing on USD/JPY.
in my opinion we could enter long 2-3 pips above 98,97
or enter short 2-3 pips under 98,70
right or not?
Attached Image (click to enlarge)
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  • #1,707
  • May 4, 2009 12:17pm May 4, 2009 12:17pm
another one, EUR/USD
in green you see 62 pips swing. this may be a correction from the top, so we could enter long few pips over the top, 1,3423; or we could enter short few pips over the bottom, because the price had fallen 1,3361, then it had a correction upwards, and now it could go down, so we could enter short.
is it right?
Attached Image (click to enlarge)
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  • #1,708
  • May 4, 2009 12:27pm May 4, 2009 12:27pm
matte, in my opinion, now is not a good time to enter new trade, better wait for london open tomorrow
  • #1,709
  • May 4, 2009 12:30pm May 4, 2009 12:30pm
Quoting matte
i know, my english is not good..
let's try with some pictures.
colored in green you can see a 24 pips swing on USD/JPY.
in my opinion we could enter long 2-3 pips above 98,97
or enter short 2-3 pips under 98,70
right or not?
I've drawn over your chart to illustrate.

I would consider a 24 pip swing too small even for my aggressive tastes, but let's just assume that it is a qualified swing over 30 pips. The swing direction is up (blue arrow), so you would only take longs on a break above the high.

The only reason you would go short is because there has been a large swing down (orange arrow), the 24 pip up move could then be interpreted as the pull back, but I would be careful of selling short here because the pull back is a bit deep, maybe go in with a reduced load.
Attached Image (click to enlarge)
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  • #1,710
  • May 4, 2009 12:38pm May 4, 2009 12:38pm
Quoting matte
another one, EUR/USD
in green you see 62 pips swing. this may be a correction from the top, so we could enter long few pips over the top, 1,3423; or we could enter short few pips over the bottom, because the price had fallen 1,3361, then it had a correction upwards, and now it could go down, so we could enter short.
is it right?
I would consider the "correction" to be too deep for me to consider going long. Instead I would be looking for shorts. See chart.
Attached Image (click to enlarge)
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  • #1,711
  • May 4, 2009 12:51pm May 4, 2009 12:51pm
Hi... I am new comer here would like to learn and find the best fit of trading style and strategy.

Let me introduce my blog just to share my point of view in stock market of indonesia. I am really newbie but fast learner

regards,

Trading Indicator
  • #1,712
  • May 4, 2009 12:59pm May 4, 2009 12:59pm
ok, really clear another time, thank you.

-"swing" is a movement of at least 40 pips

-"pullback" is a movement in the opposite direction of the swing, of at most 40 pips

i must only trade in the direction of the swing, the main movement, the strongest one

what look like a pullback may become a swing if it moves up (or down) for more than 40 pips (better don't trade, or trade in the direction of this new swing)

everything ok?
  • #1,713
  • May 4, 2009 1:00pm May 4, 2009 1:00pm
Quoting Canni
matte, in my opinion, now is not a good time to enter new trade, better wait for london open tomorrow

yeah, thank you Canni :-)
  • #1,714
  • May 4, 2009 1:29pm May 4, 2009 1:29pm
Any comment about DJI ..? It seems strong rally ya..?

Rgds,

Trading Indicator
  • #1,715
  • May 4, 2009 1:42pm May 4, 2009 1:42pm
Quoting matte
ok, really clear another time, thank you.

-"swing" is a movement of at least 40 pips

-"pullback" is a movement in the opposite direction of the swing, of at most 40 pips

i must only trade in the direction of the swing, the main movement, the strongest one

what look like a pullback may become a swing if it moves up (or down) for more than 40 pips (better don't trade, or trade in the direction of this new swing)

everything ok?
IMHO, draw Fibo Retracement on swing, pullback candles must be not bigger 50% better 61,8.
  • #1,716
  • May 4, 2009 1:56pm May 4, 2009 1:56pm
so this is on the edge, no more than this. if it goes lower it'n not a pullback anymore, right?


(what IMHO means?)
Attached Image (click to enlarge)
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  • #1,717
  • May 4, 2009 2:17pm May 4, 2009 2:17pm
Quoting matte
so this is on the edge, no more than this. if it goes lower it'n not a pullback anymore, right?


(what IMHO means?)

IMHO - In My Humble Opinion,
and i got you wrong levels , in right setup pulback candles not bigger 50% better 38,2.
and yes, if it goes lower its not a pullback, its a new swing i think.
  • #1,718
  • May 4, 2009 2:20pm May 4, 2009 2:20pm
ok, thankyouthankyou :-)
  • #1,719
  • May 4, 2009 10:29pm May 4, 2009 10:29pm
Quoting Canni

IMHO - In My Humble Opinion,
and i got you wrong levels , in right setup pulback candles not bigger 50% better 38,2.
and yes, if it goes lower its not a pullback, its a new swing i think.
Hi Canni,

One aspect of the method that had confused me previously was "When does a pullback become a swing in itself"?

Thanks for what you wrote "if it goes lower its not a pullback, its a new swing". This has cleared up my confusion and now I know if the pullback is more than 50%, then it is more proper to look at this pullback as being not a pullback but a swing.

I have another question: "Where is the start of a pullback"?

Let me illustrate my question by referring to following chart that Feb2865 posted on message #10 of the thread.

On hindsight, I can easily identify the bar whose top touches the horizontal line labelled "Point B" as the high of the swing. However, in real time trading (without the benefit of hindsight), when the 2nd bar before Point B is completed, or the 5th bar before Point B is completed, I would have said "Ok, the previous bar (3rd/6th before B) is the high of the swing, and this bar (2nd/5th before B) that has just closed is the pullbak. I will put in Stop Buy orders 2-3 Pips above the (3rd/6th) bars." Of course, placing those orders would result in them being filled and their Stoploss subsequently hit (if we do not trail the Stoploss Pip by Pip).

So, in real time trading, how do we know that 3rd/6th bars before B are not the high of the swing, i.e. the swing move has not completed yet?

Thanks.

http://www.forexfactory.com/attachme...1&d=1207754545
  • #1,720
  • May 5, 2009 12:21am May 5, 2009 12:21am
Hi everyone,
G/U setup, should be a good one.
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