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  • #841
  • Aug 14, 2010 11:36am Aug 14, 2010 11:36am
Wondering if someone can help me out here as to what I am doing wrong or maybe what I am trying to do is not the right style for me. I am struggling with making and stacking entries. How in the world are some of you guys (including Graeme of course) making up to 8 entries per day? I am hard pressed to make one per day. Either I do not see a proper mechanical trigger or the market is acting wierd or it just does not meet any requirements for entry based on several methods presented here. I used to just focus on making one or two good entries a week so this is a hard transition for me.

Maybe I am hitting some sort of psychological barrier. Can someone give some actual examples of multiple entries they took last week? I guess I am still searching for that one thing and it would be nice if it was something that occurs several times a day each and every day.

PS: Thanks for the flying buddha entry method Graeme. Another tool for the toolbox.
  • #842
  • Aug 14, 2010 11:38am Aug 14, 2010 11:38am
God i love this thread. so much wisdom...
  • #843
  • Aug 14, 2010 12:58pm Aug 14, 2010 12:58pm
Quoting willhuang
God i love this thread. so much wisdom...
True.
  • #844
  • Aug 14, 2010 1:10pm Aug 14, 2010 1:10pm
Good morning, all

fluke - thank you for the compliment its greatly appreciated

mcornbill - yes, you are correct. Flying buddhas do most times trend change but not always. I have a habit of not re-attempting after first failed attempt however I will keep this in mind and when the trend does change I most often re-attempt knowing the hindsight that trend has changed.

pip_daddy - good question. Somedays I often have no entries. However, when I know a pair of currency is trending strongly than normal this week or a scout on higher timeframe has survived or a good price pattern or a strong wick signal or a flying buddha; I would use all this as hindsight and make the most out of it. May I please ask for the benefit of your understanding if you have a technique to signal you such hindsight? When your entry method dictates an entry im assuming its part of a trend and its the best place/time to enter. This opportunity does not usually just vanish but this information can be used further in a different angle.

willhuang - thank you very much

knukk - thank you very much, I read your answer 2 pages back which was very thought provoking. Your answer is on this post http://www.forexfactory.com/showpost...&postcount=824

Sincerely,

Graeme
  • #845
  • Aug 14, 2010 1:31pm Aug 14, 2010 1:31pm
My next entry method is volatility breakout. I prefer price to be in an area that needs to breakout. Not wants to but needs to.

Does all traders know that most succssful breakouts are the volatile ones which means when the price does break out of range it moves very fast and hard. Im personally not interested in breakouts that are weak.

With this entry method, im planning to provide everyone a 2 hit combo. Knowing when to enter and how to stack positions. This is just my personal version but you can definitely contribute your personal touch into making it into your own.

On the 4 hr charts or 1 hr chart (preferably 4), I look for a candle that will completely engulf the next 2, 3 candles. The first big candle is the range that needs to be broken out. Please see below

http://img834.imageshack.us/img834/7070/aa1.png
  • #846
  • Aug 14, 2010 1:34pm Aug 14, 2010 1:34pm
http://img829.imageshack.us/img829/5396/aa1v.png

I place buy and sell limit orders just 5 pips below and above the first big candle. When price does breakout, I expect all the other traders pushing the price very hard and fast. If it doesnt, its failed.
  • #847
  • Aug 14, 2010 1:38pm Aug 14, 2010 1:38pm
Joe waits for a certain candle to finish forming above the 5ema 'without' any of its body or wick touching the 5ema. He calls them flying buddha.



Seems to me there is much better signals if we use 3 EMA.
  • #848
  • Edited 2:01pm Aug 14, 2010 1:43pm | Edited 2:01pm
http://img826.imageshack.us/img826/9844/aa1q.png

When a volatile breakout does happen make sure you maximize your profit taking by zooming into 5min chart and stacking positions.

Please allow me to show you mini-stalls.

When you enter positions on 5min chart, prepare to lose few positions but since its on 5min timeframe it will be very small losses compared to the amount of pips you will reap from multiple positions at the end.

When stacking positions right after volatile breakout it is important to try stack positions early on in the move. I use mini s/r in my focal interpretation and once a new position SL is moved to BE, I will enter again at the next mini stall until I lose a position or two and then I will stop adding.

http://img824.imageshack.us/img824/4333/aa2e.png
  • #849
  • Aug 14, 2010 1:47pm Aug 14, 2010 1:47pm
Quoting xman
Joe waits for a certain candle to finish forming above the 5ema 'without' any of its body or wick touching the 5ema. He calls them flying buddha.



Seems to me there is much better signals if we use 3 EMA.

Good morning, xman

Joe personally believes 5ema gives him enough opportunties.

You will find some opportunities that are available on 5ema are not showing on 3ema and vice versa. Its all relative. Good question.

Sincerely,

Graeme
  • #850
  • Aug 14, 2010 1:47pm Aug 14, 2010 1:47pm
Good Morning Graeme.

A while ago you asked several readers a question about "How do you tell a pair is trending?"

For me, this is the biggest obstacle to successful trading. How to avoid whipsaws (ranging markets).

I don't believe that there are any indicators to help and all you can use is your eyes, common sense and experience.

The different time frames are also important.
A pair may be obviously trending on the weekly or daily but when you go to a small time frame it appears to be ranging. I guess this is where you incorporate you breakout trading entries.

Thank you for your continued input.
I found your post #823 to be particularly useful as a broad overview of all that you have said before.

Regards,
Michael
  • #851
  • Edited 4:56pm Aug 14, 2010 1:53pm | Edited 4:56pm
Quoting wooli
Good Morning Graeme.

A while ago you asked several readers a question about "How do you tell a pair is trending?"

For me, this is the biggest obstacle to successful trading. How to avoid whipsaws (ranging markets).

I don't believe that there are any indicators to help and all you can use is your eyes, common sense and experience.

The different time frames are also important.
A pair may be obviously trending on the weekly or daily but when you go to a small time frame it appears to be ranging. I guess this is where you incorporate you breakout...

Good morning, Michael

Correct. Unfortunately, many traders cannot distinguish ranging to trending.

You know the market is ranging when a range is not broken with volatile force.

You know the market is trending when a range is broken out extremely fast and hard.

This is range breakout in force. This is trending.

http://img197.imageshack.us/img197/1274/aa1j.png

This is range without the breakout. You should stay away from this pair of currency, for now

http://img36.imageshack.us/img36/9836/aa1w.png
  • #852
  • Aug 14, 2010 1:55pm Aug 14, 2010 1:55pm
This is a breakout that I wouldnt touch but move on. There are no other traders pushing.

http://img833.imageshack.us/img833/5286/aa1o.png
  • #853
  • Edited 5:11pm Aug 14, 2010 2:00pm | Edited 5:11pm
When my buy / sell limit order gets executed but the price doesnt close 'far' below/above the range then I will close it if price moves back into range and the candle close is inside the range.

Breakout with price closed just outside range. I will move SL to BE and look for oppotunrities on lower timeframe but im cautious as this is not a volatile breakout

http://img689.imageshack.us/img689/9844/aa1q.png

Breakout with price closed back inside the range. I will close this position with loss and move on. Loss will always be small as it will go back inside the range and usually ranges are not large.

http://img714.imageshack.us/img714/7701/aa1t.png

Can you see the difference?

Can you see the potential big rewards for a small loss?

Always 'donate' small losses for potential big wins.
  • #854
  • Aug 14, 2010 3:19pm Aug 14, 2010 3:19pm
Quoting pipEASY
And he would only stack positions at 50% fib of the 'previous candle' mostly from buy/sell limit orders. Stop loss for the new position is set at above the high of the previous candle (including the wick) with little bit more space.

http://img801.imageshack.us/img801/7070/aa1.png

Circles are entries, lines are his hard stop loss. X is loss from entering 50% fib and hitting the hard stop loss above.

Joe stacks positions very heavily.
Graeme thx very much for teaching us this flying buddha entry method.

you said

Quote
And he would only stack positions at 50% fib of the 'previous candle' mostly from buy/sell limit orders.

From the chart you posted shows he doesn't attempt to stack positions at the 50% fib of every subsequent candle after his inital entry, could you please tell us how he selects which candles should be considered for possible additional entries at th 50% retracement.
  • #855
  • Edited 5:12pm Aug 14, 2010 4:33pm | Edited 5:12pm
Quoting fugly
Graeme thx very much for teaching us this flying buddha entry method.

you said



From the chart you posted shows he doesn't attempt to stack positions at the 50% fib of every subsequent candle after his inital entry, could you please tell us how he selects which candles should be considered for possible additional entries at th 50% retracement.
Good morning, fugly

Apologies for the poor quality of the charts.

Sometimes the new candle opens at 50% of the previous candle - then he would enter with SL just above the high of the previous candle

Sometimes the new candle opens above 50% of the previous candle - then Joe would enter at open again and place SL just above the high of the previous candle. This is a bargain trade for him

Sometimes the new candle opens below 50% of the previous candle - then he would place a buy/sell limit order at 50% of the previous candle and stop loss again at the top of the previous candle

If you see that the next candle is too close to the previous then use 50% fib of the larger candle before the previous candle. But this is to your discretion and risk taking appetite.

When a candle closes above the previous down candle or below the previous up candle, then Joe would close a mix of larger and smaller positions and keep the largest 2 positions till the very end when he closes all positions.

All traders must understand that this method works:

1. Not because of 'flying buddha' but because maximizing the profit taking on a given golden opportunity.

2. Potential loss is very small compared to the potential profit.
  • #856
  • Aug 14, 2010 4:48pm Aug 14, 2010 4:48pm
Good morning, all

Having explained few of the methods I personally use:

1. Wick interpretaion
2. Flying buddhas
3. Volatility breakouts

All traders must acknowledge that all methods that are sensible works because of the amount of risk is small compared to the potential profit (reason why inside bar trading is so popular but unfortunately most traders dont know exactly why it is). However, this alone does not guarantee profit in the long run. It is imperative for a trader to extract as much profit/growth from a given opportunity. This will swing the odds to your favour.

I cannot stress how important the above info is.

Allow me to tell you something that happens to all modestly successful traders.

It takes a good amount of time for a learning trader who is bleeding his/her capital everyday to stop the damage and be in a grey zone in profits. Trader didnt know what he/she was doing wrong but it seems that the bleeding has stopped. However, trader also notices that his/her capital balance is not growing to his/her her expectations. Its more or less just fluctuating just above/below the breakeven mark.

This is where the trader either gains a valuable lesson and advance to next stage or blow the capital.

1. Trader noticing he has stopped bleeding believes he can still be very profitable by raising his lot size dramatically. Sooner or later due to random nature of the market this trader will suffer a drawdown far greater than he anticipated and this will ruin his capital balance or his emotion or both. He has failed.

OR

2. Trader notices that he is roughly winning 50% of the time. Sometimes row of wins but sometimes rows of losses as well. He admits that he can stay in the game because of the r:r he has implemented. Traders keeps the lot size same however 'increases his exposure' in the markets by adding further positions into the trading opportunity currently happening. At the first sign of weakness he will exit portion of his positions and keep the rest for further profiting and continue to scale out if the condition worsens or scale back in if the condition gets better.

Which one are you?

Sincerely,

Graeme
  • #857
  • Aug 14, 2010 5:13pm Aug 14, 2010 5:13pm
Hi Graeme,

On the flying buddha entry do you first determine the trend direction. For example, trend is down and we get a pullback above the 5 EMA and a flying buddha forms. This would be a short signal.
  • #858
  • Aug 14, 2010 5:18pm Aug 14, 2010 5:18pm
Quoting ozziedave
Hi Graeme,

On the flying buddha entry do you first determine the trend direction. For example, trend is down and we get a pullback above the 5 EMA and a flying buddha forms. This would be a short signal.

Good morning, Dave

Apologies, i have left that out and it is important.

Joe only takes sells and looks for flying buddhas when 5ema is above 10ema. He is a swing trader.

If you scan the charts you will notice flying buddhas quiet often. Please note that the success rate of the initial open position of flying buddhas are only marginally better than 40%.

Edit: Some of the larger countertrends often start with flying buddhas followed by momentum. Usually the next candle right after the flying buddhas will be a breakout.

Sincerely,

Graeme
  • #859
  • Edited 7:28pm Aug 14, 2010 7:12pm | Edited 7:28pm
Quoting pipEASY
Good morning, Dave

Apologies, i have left that out and it is important.

Joe only takes sells and looks for flying buddhas when 5ema is above 10ema. He is a swing trader.

If you scan the charts you will notice flying buddhas quiet often. Please note that the success rate of the initial open position of flying buddhas are only marginally better than 40%.

Edit: Some of the larger countertrends often start with flying buddhas followed by momentum. Usually the next candle right after the flying buddhas will be a breakout.

Sincerely,...
Hi Graeme, yet again you give us diamonds in your words.
i find this very interesting and wonder, if we where only to look and find the flying buddahs, but hold off on acting on them, until we are more certain it was a successful flying buddah, and enter and add to the position as you would normally???, the premise is we are still looking for the possible entry in the same way, but are not just blindly entering because of it???, and we are adding to the position with the momentum of the trend???

anyway just something that came to mind when i was reading your great post's.

cheers
Geoff

Edit;
im not sugessting trying to improve something that quite obviously works, i was more or less stating the obvious that the entry doesn't have to be taken blindly, but if it is in the right place,eg with momentum, then the important thing is getting in on it.
  • #860
  • Aug 14, 2010 7:24pm Aug 14, 2010 7:24pm
Quoting pipEASY
...........................................When stacking positions right after volatile breakout it is important to try stack positions early on in the move. I use mini s/r in my focal interpretation and once a new position SL is moved to BE, I will enter again at the next mini stall until I lose a position or two and then I will stop adding.

http://img824.imageshack.us/img824/4333/aa2e.png
Dear Graeme,

Thanks for your latest posts on entry methods. They are very much appreciated.
With regards to the early stacking of positions after a volatility breakout, am I right to assume that you stack by trading the breakouts of these mini SR in the 5 mins or do you do it differently?

Many thanks.
Bak
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