The System II (Yes with irony)

I moved my stop on this long position at 1.4349 which would result in 6 pips loss. I am going to let it do whatever its gonna do now regardles of price action because of four things

1. The price was strongly rejected from the downside.
2. This is is the first long entry , so I am early in the possible long move and RR is on my side.
3. It is making higher lows.
4. I have to go and pick up my son from school.

See you all later.

And stopped out there, for trying to be such a smart ass

2 trades so far this morning. Bracket orders @ 4408 and 4374.

nice trades ready, well done.

Cheers

Hey, I can do this from my PHONE - teknollojeeee man!
Beautifully held exit for the long - right bang next to 400 - #1 at its best.

Short from 4373, stop moved to BE. Will preserve for max amount if this turns into consolidation bracket.

Stop moved to 4365.

Thanks Mac

Stop moved to 4356, first two hurdles passed.

Stop moved to 4343, hanging on in there.

Out at 4343, +30.

Mac..any advice on the exit strategy would be welcome, I used FCR's. No problem leaving money on the table but is there a different exit strategy you might have used to max profits lower down the range?

Ready, just curious..what kept you in the trade when price broke above the FCR at 1.4358?

Hi Drob,

I presume you mean the FCR at 12:25. Several reasons, all connected with the plan:

1) Above all else, I always aim to catch the runners and am willing to forsake pips in every trade I do - particularly in the early stages.
2) I don't preserve on the first or second retracement but allow time for the runner to develop.
3) I had the appropriate defence in mind had price moved towards the level line

I'm fairly new to trading this method so kindly passed to us by Feb and Fxachilies but one of the most important things I have learnt is not to take profit too early through fear that this is the best I'm going to get and I could lose out by aiming for more.

ALWAYS aim for the runners and STICK TO THE PLAN - it's painful, it's buttock clenching, it goes against the grain, etc, etc. But trust me, the number of times I have closed a trade for 15/20 pips and then seen the price retrace past my entry point me (telling myself smart move, job well done!) have been many times outnumbered by the number of times I've closed similar trades through fear/safety and off the plan for 20 or so pips only to see runners of 80++ pips develop immediately after.

Hope this helps.

Great response!!
So much truth in what you just said.

I am not actively trading at moment due to time constraints and work but I am always here when I can and it's really great to see you and others like corona being successful. Hope to join you soon.

Have a good weekend!

[quote=ready;3317217]Hi Drob,

I presume you mean the FCR at 12:25. Several reasons, all connected with the plan:

Ready,
Thanks for the response.
Congratulations on the successful run. Obviously that worked out for you. The reason for my question was that (as I understood it), exits are determined by price breaking above or below a new FCR in the opposite direction. Of course this can be discretionary and it certainly worked out for you. It just seemed contray to FX's plan.

Hi Ready,

Snowed in - cancelled meetings - luxury - and I haven't been trading EU today - I've been elsewhere trading my favourite pair who has been very very kind to me when I've watched her today, but we do not talk about it on this thread...ahem......so I didn't watch this as it happened - regret it slightly looking at it!

I think you did great - but I may as well run through #1 exit strategy in the context of this trade for my own benefit (we're all learning, reinforcing and growing) and the benefit of anyone else who wants a refresher - we can always do with going over this one - especially newbies ...so bear with me....and DROB....even if you only read the bold writing to avoid the psychological story...which I think is probably 90% of the issues in a #1 situation.

Now, your entry IMHO was faultless - splendid - and the PA went just where you wanted it without hanging about too much. You got about +33 pips in the first drop and then a retracement to form and fcr at about 62 with only +11 pips left in the kitty (where did the other 22 go?????). Who cares? In this case greed is sooooooooooo goooooooooooooooooooood!

We do the abnormal thing and stick around for more than that unless a candle moving like a freight train on speed comes at us - so in your trade you know at this point you're in a very handsome #1 exit position.

So the price drops again forming a new Low Low - oooooh it's Christmas come early!!! - the urge to bank is placed on ice, because we use the Force unlike mere mortals - and we wait for the next retrace to form an fcr which in this case it does...at about 52 ish (only 21 pips left!!!! - Holy Cow, why doesn't this guy BANK - can he be serious?????? argggghhhhhh- Ahhh, a little Zen please....what is the sound of one candle retracing???) So we wait - (because we're all a bit eccentric like that here...loveable...but very very odd)....to see if we get a new lower low (or higher high if we bought the market) and after dicking around a bit on this occasion she does the polite thing and takes a nose dive to about 13.....oooooh +60 pips at this point...ultra twitchy on the button at this point if you are a Mudblood.....but, my preciousssssssss (spoken in that funny voice)....we wait because she might just deliver some more and we like this...WE wait for another FCR to form at this point watching the price action like a hawk - (stinging eyes from not blinking, finger riding the button man)....we watch to see if she's going to test that new LL one more time. (Jaws music playing)....when do we strike????

Inthis trade the PA starts back towards the LL but then (Oh mercy on the poor child Mr Bumble), we get a couple of green ones and then personally I would have bailed on the third green candle before the FCR got hit and come away with maybe 5 or 6 more pips in the bag. Now, you waited for a break of the fcr and that is reasonable too. Both your strategy and mine are credible #1 exits. In the long run I am finding that the proper #1 is as much about feeeeeeeeel after you observe the central tenet that you wait for the new fcr and watch the PA and how it behaves around the most recent LL or HH.As Fx says "If the PA fails to make a lower low or higher high or acts funny then bank for the max" In this case the PA (bearing in mind I wasn't watching this one) seems to return towards the FCR a bit too soon after its formation... - It might have bounced off it for more and you could have been laughing all the way to PayPal. But there is just one more thing to consider that sits hovering in my mind - alongside all the other voices and garbage I have rattling around in there - THESE NEW MEDS ARE JUST NOT WORKING.

That final retracement is way beyond 50% of the most recent drop in price - and as Feb says that suggests that any bounce back in your direction is likely to be weak - not always, but the probabilities are against one more breach of the LL - probably not far at any rate. Couple that with the longish tail on that final candle that makes the LL which then goes Pamplona (running with the bulls) - all adds up in my mind to this being the weakest low in the swing (there's more to say about that but it isn't really a system II thought - so I won't write it).

But for my money buddy, you held through some significant hurdles and I think that you exited in a level-headed, professional and objective manner - the few pips between our differing preferences for the live exit in the long run and using this exit would be negligible. The difference between +60 and +33 or +38 will get repaid over and over again through the resistance to bailing before it's all over - cos sometimes having a set TP just isn't all there is! Now it's OK to bail for 50 or 60 - and you could always justify that as it is a decent profit from one trade in anybody's book - but that ain't a #1 exit, is it?

Number 1 exit strategy - the gift that just keeps on giving!!!!

Hi Mac,

Friday night...beer night...and you took the trouble to give such a thorough response. You're a star and demonstrate the true heart of this thread.

All you say rings true and I'll do your post the respect of reading it in more detail without the influence of several pints of the black stuff.

Many thanks and have a great weekend.

[quote=drob;3317288] Hi Drob,

Strictly speaking, on the technical side of this system, you're right and I should have exited on the FCR you mention. However, all other things came into play including my overiding aim for runners, I wasn't convinced by the strength of the retraction, the trend had been down, the position hadn't developed enough in my mind and I had pips in my favour to play with.

IMHO the system gives us a great framework to work with and the flexibility on such things as exits to adapt it to suit our own personality and trading preference....that's what I love about it. I like this...it gives me a sense of empowerment and ownership. But hell, what do I know.. I'm a novice, there are far better people out there who generously contribute their advice to this thread and therefore please take what I say at your own risk. Government health warning and all that.

That is not an FCR. It is part of the formation of the fcr that follows and that Ready observed quite correctly in my opinion and led to a superior play on his part. Fx says that an FCR has a loopiness about it. You could argue that three failures to penetrate the FCR short was a reason to bail and that could be quite reasonable - but the PA never provided a clear pullback and new FCR level line until 64...U showed nerves of steel Ready. For a novice this was a creditable trade and I think my colleagues in crime will agree with me; unless I'm wildly wrong - in which case they'll kick my butt!