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Trade what you see NOT what you expect

  • #28,501
  • Jan 9, 2010 4:48pm Jan 9, 2010 4:48pm
Quoting KENNETH lEE
MCFly;Ken nice chart again but I have a question regarding entry B. I think the optimal entry point is when the price comes back to the 5 ema. It would be a textbook 1 o'clock trade when there wouldn't be the previous candle (shooting star) and the 1 hr 62 ema. When the price comes down to the 5 ema after the shooting star which has tested the 1 hr 62 ema it looks very bearish to me.

[color=blue]Yes you are right, and I know a few people that took a short off that shooting star. But think a minute what is a 62 ema trade it is a retracement trade,...
Hello Ken,

your answer helped me a lot. I think one of my mistakes or problems is that I take trades too late because often it's hard to trust the set up which occur at the beginning of a move. But like you said I hope I will learn it sooner or later. I doubt that I'll learn it as fast as you did. I have red the thread from the beginning and it was impressive how fast you have absorbed all the ideas.
  • #28,502
  • Jan 9, 2010 6:11pm Jan 9, 2010 6:11pm
Quoting PippiNole


"Geritol on the rocks. Tried and true pick me up!"
That was a saying from my grandfather. He loved the stuff.

I remember reading that it had a very high alcohol content. That's probably why he liked it so much.
Hi, my name is Barry and you can keep your doctor...
  • #28,503
  • Jan 9, 2010 6:14pm Jan 9, 2010 6:14pm
Hey Ken, You may have to get an ice pick to get your boat free before this freeze is over. This is brutal.

When I went to get the newspaper this morning it was sleeting here. It's ridiculous! Parts of Alaska are warmer than it is here.
Hi, my name is Barry and you can keep your doctor...
  • #28,504
  • Jan 9, 2010 6:21pm Jan 9, 2010 6:21pm
Quoting cisco
Hey Ken, You may have to get an ice pick to get your boat free before this freeze is over. This is brutal.

When I went to get the newspaper this morning it was sleeting here. It's ridiculous! Parts of Alaska are warmer than it is here.

Yeah Maybe the world is turning upside down or inside out. Better find someone to huttle with ,, Hint Hint...
Good Trading To All ; Ken Lee
  • #28,505
  • Jan 9, 2010 11:11pm Jan 9, 2010 11:11pm
Hi, Ken
Thanks for your helpful training and explaination. I learn a lot from you!
I feel 1/5 O'clock is the most difficult setup in EO's fantastic setups. I have read some of your posts regarding 1/5 o'clock entry point with PA/ppA confirmation, that was excellent posts. And I also understand that 1/5 o'clock is not 100% working. But in the following picture, I have some questions.
1, Is the entry point when price is touching 5ema or 10 ema, or wait till that candle is closed?
2, why left side entry point is touching 10ema but right side 5ema? I mean when will we enter from touching 5ema and when 10ema.
3. in your mind, how much is 1/5 o'clock sucess percentage according to your experience? I ask this is because I have never got a sucessful 1/5 o'clock trading, although I can see a lot of chance when I review history.

Thanks

http://www.forexfactory.com/attachme...2&d=1262968971
Dancing with Candlesticks
  • #28,506
  • Jan 10, 2010 12:12am Jan 10, 2010 12:12am
Hi, Ken and all
I have one more question if you do not mind, you can help me when you have time from your busy schedule.
1. How did you get the S/R from daily or 1h chart? can you use the folloing picture as an example if possible.
2. regarding the follong picture, will the shooting star before B affect our confidence to enter at B?

http://www.forexfactory.com/attachme...0&d=1263059992
Dancing with Candlesticks
  • #28,507
  • Jan 10, 2010 3:03am Jan 10, 2010 3:03am
Quoting eohater
Trade what you see and NOT what you expect
Hello,
So you are saying that it's not a good idea to have a bias in the market?
if yes... then imo, this is plain wrong.
  • #28,508
  • Jan 10, 2010 3:20am Jan 10, 2010 3:20am
Quoting VonTrader
Hello,
So you are saying that it's not a good idea to have a bias in the market?
if yes... then imo, this is plain wrong.
Well all I can say to that, is I would just love to be as wrong as the traders on this thread on a daily basis What a ridiculous thing to say coming into a thread where they pick up huge amounts of pips on a weekly basis - week in week out.
  • #28,509
  • Jan 10, 2010 3:48am Jan 10, 2010 3:48am
Quoting luckylady
Well all I can say to that, is I would just love to be as wrong as the traders on this thread on a daily basis What a ridiculous thing to say coming into a thread where they pick up huge amounts of pips on a weekly basis - week in week out.
I love being as wrong as EO
" When the ship starts to sink, don't just pray. JUMP "
  • #28,510
  • Jan 10, 2010 6:02am Jan 10, 2010 6:02am
Quoting VonTrader
Hello,
So you are saying that it's not a good idea to have a bias in the market?
if yes... then imo, this is plain wrong.
Plain wrong is a strong statement!

Go read the the thread from start to finish then ask yourself if you have the same view.
It's a dirty job but someone's gotta do it!
  • #28,511
  • Jan 10, 2010 6:17am Jan 10, 2010 6:17am
Quoting VonTrader
Hello,
So you are saying that it's not a good idea to have a bias in the market?
if yes... then imo, this is plain wrong.
The Bias is very strong with this method, but it is not a preconcieved bias. All trades are biased by what PA is telling us, not by what we think should happen.
" When the ship starts to sink, don't just pray. JUMP "
  • #28,512
  • Jan 10, 2010 7:44am Jan 10, 2010 7:44am
Quoting iForex
Hi, Ken and all
I have one more question if you do not mind, you can help me when you have time from your busy schedule.
1. How did you get the S/R from daily or 1h chart? can you use the folloing picture as an example if possible.
2. regarding the follong picture, will the shooting star before B affect our confidence to enter at B?
Hi iForex,

you should read Kens previous posts because most of your questions are answered in these posts.
  • #28,513
  • Jan 10, 2010 9:57am Jan 10, 2010 9:57am
Quoting luckylady
Well all I can say to that, is I would just love to be as wrong as the traders on this thread on a daily basis What a ridiculous thing to say coming into a thread where they pick up huge amounts of pips on a weekly basis - week in week out.
I find ridiculous that you are talking about pips. The pips amount are useless, what count is the %.


Quoting Gladis Night
The Bias is very strong with this method, but it is not a preconcieved bias. All trades are biased by what PA is telling us, not by what we think should happen.
so the edge comes from PA? interesting...


Don't take me wrong guys and girls, I agree that we need to trade what we see but also what we expect, because if we don't expect anything then probably it's called gambling.
And I agree that the market is random but sometimes the market have a bias!
For instance I take my edge from my analysis and I expect a scenario, but if it's not working as planed then I take action based on what I see!
At least this is my plan developed in more than 3 years.
And I don't want to start a debate but... the title of the topic is incorrect.(at least imo)
But if you can extract pips(funny) on a weekly basis then, congratz.
Have a wonderful week!
  • #28,514
  • Jan 10, 2010 10:19am Jan 10, 2010 10:19am
iForex
Member
Member Since Jul 2009
60 Posts

http://cdn.forexfactory.com/images/icons/icon1.gif
Hi, Ken
Thanks for your helpful training and explaination. I learn a lot from you!
I feel 1/5 O'clock is the most difficult setup in EO's fantastic setups. I have read some of your posts regarding 1/5 o'clock entry point with PA/ppA confirmation, that was excellent posts. And I also understand that 1/5 o'clock is not 100% working. But in the following picture, I have some questions.
1, Is the entry point when price is touching 5ema or 10 ema, or wait till that candle is closed?

The 1 and 5 O'oclock traded refer to the direction the MA's are pointing in a uptrend towards the 1:00 on a clock face and in a downtrend 5:00 on a clock face. The trade can be taken off any of the MA's but normally the faster ones. The 5 ,10,or 21 ema as these are the fastest to react to price movement. Remeber the M in MA standing for Moving So price and your Moving Averages are always struggling to come together.

When price breaks form consolidation the 5 ema starts after price the fisrt and the fastest as it has to wait the least because it's price is from only the last 5 candle closes. And in a strong trend the closes are all near the ends of the candle.

So think of the small ema's as the bigger the number the longer they have to wait at the starting line. Like in a rally race the 5 ema waits 5 seconds the 10 ema 10 seconds.. Then the strength of the trend by how long the candles are and how far down the candle price closes no wicks as the accelerator how fast the MA's will move.

So in real time you see in a fast break the MA's turn and head in the direction of the price movement. If the price continues to move fast and the others follow as it conitnues the MA's start to spread apart because the lower one's got a head start and are moving fast.

This gives us our trading field. It is also why during a pullback why price will hit a 5 ema on one price movement and the 21 ema on another. I personally like the EMA's to be pointing and seperated to take the trades. That gives me a better place to be able to place my stop behind the next MA.



2, why left side entry point is touching 10ema but right side 5ema? I mean when will we enter from touching 5ema and when 10ema.

The reason for taking the trade is as with all our trades a combination of factors. The trade itself is designed to let us get into a trend and not be left behind. Think a minute about what is happening in the beggining of a move price is moving from a consolidation area.

Within that area we could have traders thinking it would go short and others think it would go long. Once the price start moving one group will have to decide they were wrong. One by their stops being hit which effedts price and Two by reversing ordeers and changing direction. There maybe even another less exprienced group that are happy for the small gains and take profit.

All these factors effect the Price Action and they normally happen at areas you can see with Previous Price Action. They will be where price was held back during the consolidation period the grouping of candles we just moved from, it can be the last sessions high or low point. It could also be the high or low of the previous day and of course our main Support and Resistance areas.

So our job is first to see that it is retracing pulling back. Then while you price is moving back watch your price line to the left. When you see it starting to hit the tops or bottoms of the wicks of one of any of those areas get ready. That can be at any of the MA's 5,10 or 21 even the 35 rarelly. When you see price start to turn and pullback in the direction of the trend this is your sign to enter.

But one thing to watch for if in it's retrce a candle has CLOSED below one of the MA's this could be a sign that we are starting to get a reversal in our trend. That is also why when trading towards the MA's we take profit at the MA levels.

Your stop on a 1 and 5 O'oclok trade is the otherside of the next MA if they have a decent spread between them. If they are very tight I will use the Main MA's the 35 or 50. But normally less than 15.

That is why this is a good trade the risk to reward can be very high if you get it right. Look at that post of Fridays trade 1:00 O'clock Entry. 15 pip risk for a 70 pip gain.

Your Profit Target is the same as if you entered the trade right of the bottom, Which is always a S/R area off ahigher time frame chart. And as seen by Fridays landed right on that Daily resistance area. Then PA started and we got a retracement. You could have taken partial profits then added back at the 35/50and 62 and 200 sma area. See with the bigger values and the longer delay they hadn't had time to move very far and are all still bunched together. So that was vry strong area and if you had nice profits locked in and a stop placed even with the Noise (News) coming out may have been safe.

3. in your mind, how much is 1/5 o'clock sucess percentage according to your experience? I ask this is because I have never got a sucessful 1/5 o'clock trading, although I can see a lot of chance when I review history.

I see a lot of comments and entries of 1 and 5 O'clock trades right at the curve of the extremes of price with no PPA confirmation. It is more just a entry because they feel they got left behind and are jumping on.

Most people see price move 30 ,40 or even 50 pips and they get anxious. The retracemnet or pullback that gives the 1 and 5 O'clock entry can also be 20,30,or 40 pips. So you can gain most of those back. But at anytime trying to force a trade is pointless and will cost you money in the long run, Better to wait for the price to turn back and get a little to late a entry on the 1 and 5 O'clock trades than to jump early and find yourself in a reversal trade the wrong way.

In my exprience if you follow the above criteria they are at least 90% the key is to see the PPA of a area if you can't see a point where price has pushed through and is now on the otherside. I would be very carefull. Take the time everyday to go back on all the entries we have and look for what the others are seeing to enter trades safelly. Run your cross hairs across your chart and see the PPA in action this is the only way you will start to see it in real time. Then when you first start taking these trades go in with a minor $$ amount until your confident your picking them right. Then scale up your risk.

Good Luck Ken



Thanks
Good Trading To All ; Ken Lee
  • #28,515
  • Jan 10, 2010 10:20am Jan 10, 2010 10:20am
Quoting VonTrader
I find ridiculous that you are talking about pips. The pips amount are useless, what count is the %.



so the edge comes from PA? interesting...


Don't take me wrong guys and girls, I agree that we need to trade what we see but also what we expect, because if we don't expect anything then probably it's called gambling.
And I agree that the market is random but sometimes the market have a bias!
For instance I take my edge from my analysis and I expect a scenario, but if it's not working as planed then I take action based...
Ok pips on their own mean absolutely nothing I agree, but they don't just get pips they get a high percentage weekly on their account, whichever way you word it, they do this week in and week out. If your analysis gives you that week in and week out also, without taking a break because the market doesn't seem to be moving the way you think it should, then congratz to you too, we would be excited to see it.
  • #28,516
  • Jan 10, 2010 10:24am Jan 10, 2010 10:24am
Quoting VonTrader
I find ridiculous that you are talking about pips. The pips amount are useless, what count is the %.



so the edge comes from PA? interesting...


Don't take me wrong guys and girls, I agree that we need to trade what we see but also what we expect, because if we don't expect anything then probably it's called gambling.
And I agree that the market is random but sometimes the market have a bias!
For instance I take my edge from my analysis and I expect a scenario, but if it's not working as planed then I take action...

I am very interested in your point of view. Please share with us a bit of how you trade sucessfully as maybe we can learn something from you to add to our tool box of trading tools. And if by some chance there is a slight bit of information here that could improve something of yours. We would be glad to explain in more detail.

Wishing You Well and Many $$$ Ken
Good Trading To All ; Ken Lee
  • #28,517
  • Jan 10, 2010 11:28am Jan 10, 2010 11:28am
I'm not real bright so I have to confess to being perfectly content to get an average return of 40% weekly on my account using price action with no particular bias. But hey, that's just me!
Hi, my name is Barry and you can keep your doctor...
  • #28,518
  • Jan 10, 2010 11:32am Jan 10, 2010 11:32am
iForex;Hi, Ken and all
I have one more question if you do not mind, you can help me when you have time from your busy schedule.
1. How did you get the S/R from daily or 1h chart? can you use the folloing picture as an example if possible.

Trying to pull 4 Hr and Daily S/R line off a 15 Min chart is not a reality I did use the same chart to show you the process But I would never do this in real life. I covered getting our S/R levels in the PDF pretty well.

The way I get the areas on my 15 MIN chhart is by chnaging the time onthe chart during the weekend I change my 15 minute chart first to a daily chart then by makine the canldes as small as possible I pick the highs and lows just as you see on the posted chart circled areas. Some of those wicks may cross over the line so you have to average the area. That is why a S/R Line is a AREA.

I know a lot of people that use software to draw thier lines it just averages all the lows and highs. I personally like looking myself Then you can see how many times it has turned price also if it was stronger as support than it was at resistance. I then Mark those lines in RED. I then Change the same 15 Min chart to a 4 Hour chart and pick the areas off it. Those lines are White.

Once that is done I change it pack to my 15 Minute chart and I have all the areas marked onmy 15 minute chart. I never remove lines but may add some. They are always good that is what Price Action is all about.

I still use my longer time frame charts to show Trendlins, Channels Cnadlestick Patterns and where those and any S/R line intersect.

I marked some areas with yellow arrows. To show that on a higher time frame chart those spikes could just be wicks that is why you have to change to the proper time frame chart.

I don't personnally mark any s/R off the 1n Hr or 15 Min charts because with wide screen monitors the amount of information is good enough to see what I need. Just like the PPA line one that chart.

Hope this helps. Ken

2. regarding the follong picture, will the shooting star before B affect our confidence to enter at B?

Yes it could I know at least 3 people that took a Short off i. But that doesn't mean you couldn't have taken the 1:00 also . Maybe the late entry after the close above the 62 ema. We have to remember that the location of MA's in reference to where price is also is a factor. With this trade or any trade I try and pay attention to the large value MA's as well as any off higher time frame charts The 200 sma 15 Min is also the 50 sma 1 Hr. So Those closes above that MA would effect my thinking on this trade. Making a retest or 1:00 look more likelly.

But this was one of the hardest trades to see. with all the major MA's consolidated like that. But it does show how a lot of inforamtion if used correctlly can help to take the trade. Both trades could have worked out for positive pips if your a quick thinker.

Couls have closed the short when it failed to make a new low . Then entered the long either off the 5 ema or late after the close.
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Good Trading To All ; Ken Lee
  • #28,519
  • Jan 10, 2010 11:44am Jan 10, 2010 11:44am
I know everyone has noticed this on the 15 Min and the 1 Hour.
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Good Trading To All ; Ken Lee
  • #28,520
  • Jan 10, 2010 1:28pm Jan 10, 2010 1:28pm
Quoting eohater
We all are still learning! Don't ever stop!
How true. This rings of something i read early on in my trading experience..."you can never master the markets, only yourself. When you can master yourself, then you can masterfully enter the markets."
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