The System II (Yes with irony)

Hi Sedonapipper

Good question
I think my sell signal was correct. Please let me know what you think about my entry point.
My big error IMHO was I let my stoploss be hit. I very rarely let a stoploss be hit. I normally cover my position earlier and hence limit my losses. On smaller time frames, I was getting a buy signal at 4942, so I would have covered around 4942 to 4944 but I was busy posting or reading posts so I paid the price.
Also it is possible that I should have been adjusting my sl in 1 pip increments as advised by feb2865 and this involves intensive screen time and not posting etc. The market moved in my favour by 7 pips so I should have lowered my sl from 51 to 44 anyway and turned a 14 pip loss into a 7 pip loss.
I look forward to your comments
regards
emtee

Welcome to the club emtee..

A lesson you should learn is to stay put in a market like this. Unlce Ben's is talking and he has the uncanny ability to put everybody on hold. I don't advocate trading based on fundamentals but it pays to keep an ear on the ground. Whenever you see on the calendar any of this fed's clowns talking, they do screw the market. Today, we have the biggest of them all....

This is why you see the motion on the bars so slowly - that's is called lack of volatility....something that for us is necessary in order to keep our trading short and sweet.

Back to my hole..

Good luck

[quote=emtee;3159064]Hi Sedonapipper

Good question
I think my sell signal was correct. Please let me know what you think about my entry point.
My big error IMHO was I let my stoploss be hit. I very rarely let a stoploss be hit. I normally cover my position earlier and hence limit my losses. On smaller time frames, I was getting a buy signal at 4942, so I would have covered around 4942 to 4944 but I was busy posting or reading posts so I paid the price.
Also it is possible that I should have been adjusting my sl in 1 pip increments as advised by feb2865 and this involves intensive screen time and not posting etc. The market moved in my favour by 7 pips so I should have lowered my sl from 51 to 44 anyway and turned a 14 pip loss into a 7 pip loss.
I look forward to your comments
regards
emtee[/quote

Honestly, it depends of what you were basing your entry on. I looked at that entry as a possible FCR because it wasn't a good 123 entry and chose to stay out. I am trying to ressurect what I was thinking at the time and can't do it right now. The fact I stayed out is not a sign of being a good trader as much as its the fact that I am still struggling with the FCR setup part of this system. Now I am really nervous to share that because I would like to be part of FX's new group and sense that not having a firm grasp of the FCR setup, is a limitation that prevents me from going to the next level of being the trader I expect to become.

A lesson I learned from experience: when I begin looking at different time frames to justify the trade I am in, I am out of integrity with my trading plan. Today, when I do that, (old habit), I use it as a clue to say "I am really in doubt about the trade I am in and I had better shorten my expectations." Just one of the ways I remind myself to stop forcing trades and get back to the basics.

Hi Sedonapipper
I am not sure what a fcr is as I have only read 134 pages, however for me, on the sell side, when the market breaks a HL or a LL, this is a valid entry point. If you only wait for a breaking of a LL, then you can miss out on a good downmove. Anyway, I got caught. The market is the market and losses are okay as long as they are not large.

Hi Feb2865.
Thanks for your kind words. I repeat. I think you are a brilliant trader as you recognise that it is an art as well as a ( science ???? ) and that is what I like when I read your insights on this thread. You have a simple as well as a great understanding of the markets. A difficult thing to impart to others but you suceed in doing so.
regards
emtee

Hi

Here are my trades from today:

Trade 1 - Closed 50% on the fail of the double top, held the other 50% for the normal break of an FCR

Trade 2 - BE

If I may I will mention that david4u asked me a question about trade number 2 here from 16 October -see chart below - and why I did not close at BE on this one. I don`t really have an answer other than - and I have mentioned this before - I have a downside bias, I prefer to go short than long and am better at holding through upside movement against me rather than downside movement against me. Having said that today I didn`t.

Coupled with this, I do always feel so confident about holding when the market is going against me, meaning some days it is easier than others, soe days I have more pips so am probably more likely to hold than not. Not sure if that helps or answers the question.

technicall change..

I am pulling out the #2 play and replacing it with BB exit.. going back to quick expectancy play to counter nasty fakeouts..
so..
fakeout = BB exit.. with reentery inplace..
the Idea is to cut the losers short as quickly as possible and not be at the mercy of the market when in the loss column..
the benfit are:
A) max loss is 5-10 pips.. so the most we ever should lose on any of are trades are no more than 10pips and our hard sl never to be hit when we get dealt a fakeout.. and the worst result when we get dealt a semi fakeout should be no worst than BE or -5 in rare cases..
B) free of mind to play if and then.. see the field with ease of mind..

ok now..
important stats: (it based on my own trades for the last five months.. i have taken 90% of all potential trade enteries in london and NY sessions only)..
when we enter based on one of our entery options:
1/3 are fakeouts.. 2/3 are semi fakeouts..
1/2 of the semi fakouts are combinations of small winners/BE/small losers.. and other 1/2 are 20+ winners ..
1/2 of the the winners are 20-30 pips gains.. the other 1/2 are runners. whats the runners precentage here now? who can answer that first?

are u guyz with me!!!.. so basilcally when i enter i face with two possibilities..>>>>>>> fakeout & semi fakeout <<<<<<<<
semi fakeout can not hurt me too much if correct #1 play is applied.. i might lose money on the table but thats about it, so it can't really hurt too bad there..
but nasty quick fakeouts can hurt and it could be rather severe at times.. my intentions with this change is to limit that to as smallest possible.. it will lead to increased profitability by far.. and it will eliminate hope, wish, pray factors..

how do i do that ?
as i said already, i throw out the #2 play.. it don't exist anymore.. you simply apply the BB exit for all fakouts and for all of are entery options..
there is a catch.. and that is to get decived by the price and lose out on the chance of a runner.. so to avoid that we keep a reentery option open when price breaks the new HH/LL to assure not missing
a possible runner.
battle must be won or lost at the level line (entery line).. your first battle starts right from the get go when your order is filled whether u like it or not.. then your next battles comes when normall hurdels arrive further up or down and u handel that with the ur best #1 play..

the name of the new exit play is #2G+... hahahahah.. don't u just love how i come up with these names.. G stands for Aggressive.. I picked out G insted of A bcz it just sounds better.. lol

recap..
the key to wining in our style of trading is:
-take every valid shot.. (must be in it to win it.. otherwise your just an audiance.. lol)
-play the fakouts aggressivley with #2G+.. (cut losers short.. for least damage.. 5-10 pips max..)
-play the semi fakeouts by sticking to #1 play.. (let winners run.. to take max advantage)..

now important point..
bcz we deal with low hit ratio and with this new exit play it will experience even lower hit ratios..
It makes it more vital to play the #1 on every semi fakouts and runners... if you got a semi fakeout/runner in hand you should not never ever exit the trade without playing a proper #1.. this is a must inorder to be successful.. nice and simple cut and dry.. period.
if you don't belive in this then forget everything that i have said above.. and don't follow this at all..
the idea is to trap the market to test and try to win the battle at the level line with the least amount of give away and postions ourselves in a semi fakeout/possible runner situation and go for a kill or a paulie..

in a nutshell.. you test test test test and test to catch the big one.. if you test test test test and test and baile the big one half way or too soon you be waisting ur time with this style..
you got to ride a possible run to as much as price allows you to based on correct #1 play and HL/LH or fcr as a designation stops trail..

I hope its clear enough.. I am sure some people will have questions.. but please do ur studies and diging before asking.. make sure u know how the BB exit works that now we call it #2G+.. we do not use a 10pips hard sl
here, your hard sl is still away from the heat.. everything is done manually.. there is nothing automated about anything that we do here..
I hope I have covered it.. I use my trades of the day for further explanation of this new exit #2G+ play and #1 plays..

oh don't forget to answer my question above about runner %..

Thank you..
http://cdn.forexfactory.com/images/attach/gif.gif

Hello people,

I've been reading this thread for quite a while and I really appreciate Feb for getting it started and for you later folks for keeping it on track and progressing. I have found the basic trading discipline advice of Feb and FX to be especially helpful.

I have a question for FX or others:

Is an entry based upon a broken FCR just as valid as an entry from a successful 123? What I mean is, let's assume you have what appears to be a 123 long entry forming, but 3 turns out to be an FCR that breaks down. Would taking that short signal be just as valid as taking the 123 long signal would have been had it succeeded?

I guess I am wondering if broken FCRs should be looked at more as "close your position" signals or if it is just as appropriate to open a new position (in the direction of the break) given the same situation. I recall instances where FX mentioned opening a position in the direction of the FCR break, as well as using it as a closing signal. Perhaps broken FCRs could be used as "stop and reverse" signals as well, fulfilling both closing and opening functions.

The answer is that 1/6th of the trades are runners, or 16.5%.

I think it's 16.6 %

Hi Elizo,

Maybe you don't consider yourself an expert, but without any doubt you are an active member of this family and that's why I appreciate your comments.

Regarding my discipline, I battle everyday with my own demons: take profit early, wait a little more on losers, and all those things that we have to avoid.

Again, thanks for your comments.

Hey FX,

I like it, I like it, I like it.

You have done mountains of work developing this much further - the family will love you for it.

And they`ll like the 16.66% runner ratio

Hi Fx,

Awesome man, your are always available for helping others!

When I play #1, I wait the pullback to develop and after the price is on the original swing direction, I watch the price close to HH or LL. If the price stalls, goes back quickly, or as you say "acts funny", I close the trade. Otherwise, I hold it. I take into account that sometimes the price doesn't reach the HH or LL, so I use #1 as a guide and not as a rule set in stone.

In the case of my "Trade 1": I thought to close it at price A and B (see chart) but finally I exited at the break of the FCR. Sometimes, it's difficult to play #1 for exiting at price A or B when maybe the trade is a runner or a paulie in development that will profit 100 pips. The more I trade, the more I use FCRs for exiting in order to milk every single pip of a potential runner.

In brief, during the trades I wonder if I exit the trade "early" playing #1 or wait to the end closing it at the break of the FCR.

Thanks for your comments.

Hi Paul,

Thanks for posting your charts everyday. It helps me a lot to improve and simplify my trading.

Very interesting stats:

33.33% fakeouts: with BB exit, #2G+, ..., max loss 5-10 pips.
33.33% semi fakeouts: combinations of small winners / BEs / small losers.
16.66% semi fakeouts: 20-30 pips winners.
16.66% semi fakeouts: runners.

It looks like playing it properly is a clear edge for the trader. Another great fx's "reference post" of this thread!!!

Good Morning all from the Asia camp of traders.

Red levels are the break areas I am watching, yellow level is the danger.

Will play the new #2g breakout and see how it performs during asia time

After reading the overnight posts, I have this to say. Why is everyone hang up on the entries in this system? The entries are pretty simple stuff, they are not complicated unless you are complicating them. Dont use higher time frames.

People focus sooo much on entries yet entries isnt what makes this method (or ANY system in that matter) successful, its the exits.

Sed, what part of FCR's are you confusing? When to get in our using them to get out?

If you using them to get in, understand that a large portion of them are fakeouts. Our objective as traders is to manage that risk of a fakeout. The market is a real tough teacher, its a sloppy one, a horrible one and one you wouldnt want teaching your children, why? It rewards you for doing the wrong things and punishes you for doing the right. Always remember that. That means you might have taken a valid FCR and it will punish you by stopping out, did you take the wrong FCR? No you didn't, you actually did the right thing by sticking to the plan.

Start posting some charts today and lets see what they show?

Emetee, this goes for you too. The entries in this method are actually very simple, the exits are the important part. We do not trail by 1 pip , if you read further into your 134 pages you will notice Feb says that he does not do this and repeats this post a number of times. He does the 1 trail pip on his hyperscalping on Futures but not how it is traded here but that being said, at the end of the day if what you are doign works for you great but please please dont deviate from the plan here if you are posting. There is a reason for this, and you will experiance it, when you get days when you are whipsawed to all buggery. It just happens, try losing 30 pips before NYC even opens. so then you take ONE more trade during NYC and it happens to be the runner, as you know, trades BREATH. They go up, then pullback, up then pullback up then pullback. That is what they do in MOST cases. So lets say you then take this and go oh my must get out at +17 or +20.. what is your net gain at the end of the day? -10 -13? And what if price sky rocketed to another 50 pips?

I know this to be the case because just last week thursday it happened to me. I took a number of trades amounting to a loss of -25, then I caught a runner and closed for +46. My net gain was + for the day... just remember that.. we here for the bottom line NOT pips on each trade.

You will just confuse other less experianced people. If you really want to comment on your trades, feel free to open up a new thread but keep to the core of this method. We are trying to maintain a like minded group of traders here trading the same method, almost thinking the same. Then on your own (without posting ) you can apply what ever method you deem suits you and works for you (or blows you out the water, what ever makes you happy)

Anyways, let asia begin

Trade long, its actually a high risk trade (very high) as the safer bet would be above 1.4980. So this might bite me in the bum big time. will play #2g if it doesnt continue north. Be nice to get some practise on #2g.

Heh, closed at -7. ANyways, order placed for long at 4984 now. the proper order. at least I am trying this #2g+ out and gaining experiance.


It was a high risk and I took it and closed it. Mistake yes, problem no. Move on, learn and move on.

common bull/bears. Wake up.

hey fx, welcome back mate,
thanks for the update with the stats & the new exit.
its amazing how this thread just continues to grow & develop, i have never learnt so much in my life , as we all keep saying this is a family & its awesome to be apart of it. the best bit about it that we are all improving in our trading & u can actually see that everyday.
thanks again mate
cheers andrew.

Long entered in eur @ 1.4983.

Chart attached, first hurdle is the blue highlight.