Islander and Medici trade the European open | Page 107 | Forex Factory

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Islander and Medici trade the European open

  • #2,121
  • Aug 20, 2010 1:12am Aug 20, 2010 1:12am
Quoting medici
I usually use a 15 pip stop but sometimes 10. It depends on setup - as I typically enter at 'levels' 10-15 pips in the red is a sign that I misjudged my entry.



Tomorrow or Monday. Fridays are usually "risk-off" days so there may be a sell-off tomorrow...or not. But the direction of the break I have no doubt about - down. That move up to 1.29 today was pure fake out to pick up orders up there.
GM - sell-off indeed
  • #2,122
  • Aug 20, 2010 1:13am Aug 20, 2010 1:13am
Quoting medici
Well....I wouldn't have entered there... If you enter in a range, as you are aware you did, you would have to place your stop above the range, say at 5675 as you say.

I don't know why you entered there, news or not? I thought you were a student of Dave V, who says that the first pullback is the best?

I haven't studied his thread in detail but to me that means that you wait for the first impulse move down (in this case) , and then enter on the first pullback. Then it's a matter of reading the PA to see when that pullback turns down again. See...
Thanks for the help. I'm pretty sure the 1st one is a LH setup but it shouldn't have been done anyway because of the news. The 2nd one I'm not sure whether V would see this one as a LH set up or not I'd have to ask him to take a look.

I think I was making a few stupid mistakes yesterday and missed the LH entry I really should have done at 15.25pm. Thanks for showing the 1min examples I'm still not trading that at the moment just watching it still.
  • #2,123
  • Aug 20, 2010 1:19am Aug 20, 2010 1:19am
Quoting reflex
Thanks for the help. I'm pretty sure the 1st one is a LH setup but it shouldn't have been done anyway because of the news. The 2nd one I'm not sure whether V would see this one as a LH set up or not I'd have to ask him to take a look.

I think I was making a few stupid mistakes yesterday and missed the LH entry I really should have done at 15.25pm. Thanks for showing the 1min examples I'm still not trading that at the moment just watching it still.
You're welcome, and thanks for sharing.

I'd like to have explained how your first setup could be a LH...
  • #2,124
  • Aug 20, 2010 1:33am Aug 20, 2010 1:33am
Quoting medici
GM - sell-off indeed
Closed when the re-test of the bottom failed.
  • #2,125
  • Aug 20, 2010 1:36am Aug 20, 2010 1:36am
Quoting medici
You're welcome, and thanks for sharing.

I'd like to have explained how your first setup could be a LH...
This is how I see it might be wrong though

No.1 is the 1st candle to go above the prior candle but not take out the previous swing high and close bearish.

No.2 is the LH entry that I missed.

I'm not sure about No.3 and No.4 becasue I think No.3 is also a LH just had no bear bar to enter on and once the high of bar no.3 was took out I think the LH run might be considered over so No.4 enrty was probs a mistake.

If only I remembered the news and did the No.2 entry things could have been so different.

Thanks for your time and my mistakes being pointed out tend to teach me more than anything else so look forward to your reply.
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  • #2,126
  • Aug 20, 2010 1:38am Aug 20, 2010 1:38am
Note the pullback to the session 76.2% level before take-off. Old trick of theirs...
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  • #2,127
  • Aug 20, 2010 1:50am Aug 20, 2010 1:50am
This is a very good thread medici, thank you.
  • #2,128
  • Aug 20, 2010 1:58am Aug 20, 2010 1:58am
Quoting medici
Note the pullback to the session 76.2% level before take-off. Old trick of theirs...
Great work Medici, as always.

EJ was my trade using your m5 divergence again.
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  • #2,129
  • Edited 2:20am Aug 20, 2010 2:07am | Edited 2:20am
Quoting reflex
This is how I see it might be wrong though

No.1 is the 1st candle to go above the prior candle but not take out the previous swing high and close bearish.

No.2 is the LH entry that I missed.

I'm not sure about No.3 and No.4 becasue I think No.3 is also a LH just had no bear bar to enter on and once the high of bar no.3 was took out I think the LH run might be considered over so No.4 enrty was probs a mistake.

If only I remembered the news and did the No.2 entry things could have been so different.

Thanks for your time and my...
Thanks for explaining. To me, for a LH to qualify for a short entry, there would first have to be a LL. Otherwise, the LH may simply be a sell order digested on the way up, whereas a LL would indicate that people are no longer buying at higher and higher levels.

So for entry look for the first pullback after the first impulse move down, or alternatively, the first LH after the first LL, and nothing else. OK?

Makes sense?
  • #2,130
  • Aug 20, 2010 2:14am Aug 20, 2010 2:14am
Quoting CoffeeDrinke
This is a very good thread medici, thank you.
Thanks Your welcome! Glad that another long-time visitor is speaking up! And feel free to joint he discussion.
  • #2,131
  • Aug 20, 2010 2:17am Aug 20, 2010 2:17am
Quoting jag1966
Great work Medici, as always.

EJ was my trade using your m5 divergence again.
Thanks. Now that was a beautiful one! Well done I noticed the divergence which was present in Euro and cable too. Contributed to me closing the short.

Divergence rules, it seems...
  • #2,132
  • Aug 20, 2010 2:18am Aug 20, 2010 2:18am
Quoting medici
Thanks for explaining. To me, for a LH to qualify for a short entry, there would first have to be a LL. Otherwise, the LH may simply be a sell order digested on the way up, whereas a LL would indicate that people are no longer buying at higher and higher levels.

Makes sense?
Yep that makes sense.
Would you call the No.2 bar a LH after making a low lower than the 2.30pm bar?
No.2 was also after a bear flag breakout then a pullback to the breakout zone off the lower TL of the flag so perfect entry for me what you think about it?
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  • #2,133
  • Aug 20, 2010 2:23am Aug 20, 2010 2:23am
Quoting medici
Thanks. Now that was a beautiful one! Well done I noticed the divergence which was present in Euro and cable too. Contributed to me closing the short.

Divergence rules, it seems...
Rather, CII divergence rules. It seems to be far more accurate than anything else I've ever tested for divergence purposes. Just putting it through the paces in demo right now for the most part but like what I see. Along with jag, I also used it as a nice confirmation of the failure to move lower and took a long up to the daily pivot on EJ. Works well just as that added bit of confirmation.
  • #2,134
  • Aug 20, 2010 2:27am Aug 20, 2010 2:27am
Quoting reflex
Yep that makes sense.
Would you call the No.2 bar a LH after making a low lower than the 2.30pm bar?
No.2 was also after a bear flag breakout then a pullback to the breakout zone off the lower TL of the flag so perfect entry for me what you think about it?
Yes, that would be the perfect LH entry.
  • #2,135
  • Aug 20, 2010 2:28am Aug 20, 2010 2:28am
Quoting medici
Thanks Your welcome! Glad that another long-time visitor is speaking up! And feel free to joint he discussion.
Yeah man this thread really helpd, i always tried to catch 123 pattern on opens but as you know they dont happen often just turn and trade or they form divergence, which really is annoying when you try and trade 123 haha.
I use RSI 7 though, but it gives much the same entrys.
Ill post here from now on more, then we get this thread going.
Well done
  • #2,136
  • Aug 20, 2010 3:29am Aug 20, 2010 3:29am
Auron112,

I hope you don't mind me responding to your PM here as it may be of interest to more people.


Quoting Auron112

1) So when you discuss entering straight off these levels, sometimes without PA confirmation, I have a little trouble figuring out exactly how you manage the trade. In situations such as these divergence trades at S/R or another strong level, what sort of stop placement do you use?
In some cases I'd feel stupid if i didn't take the trade straight off the level.

The short from 1.2827 yesterday morning is a good example of that. First, it's a typical pattern as mentioned yesterday, and the pattern is "up from overnight support to a resistance level, then down to test the support" - happens over and over again. Second, the level was just above the previous day's low. Third, it was around the 8am fix. Fourth, clear CI divergence. Why not enter straight at the level? Those moves down, with that pattern, are swift so I don't want to miss out on good pips.

Stop in that case would be 10 pips or tighter, but I really wouldn't worry about stops.

Makes me think of a story of a friend of mine from when he did his M.Eng. When being taught mechanical construction, the professor told them to double all dimensions arrived at from modelling. Still, being engaged in nuclear power plant design himself, he disclosed he didn't use that safety factor! When a student perplexed asked why, he said "The difference is that I know what I am doing."

The point of the story in our context is that it's a matter of confidence. If you have confidence in the level you take the trade there, if you don't you look for confirmation. And it would only be the levels where I am confident that I take the trade off the level. Often I wait for confirmation one way or another.

Quote
2) I ask because one thing I often saw trading the ryanmcd way was the tendency of price to "ride the rails"....

If price is riding the rails, I'd like to ride the rails with it, not trade counter-trend! To call the end to a strong move takes more than just divergence and varies from situation to situation - so would have to be discussed case by case. But there's a set of heuristic rules that apply depending on the type of move - there are strong news driven moves such as in cable yesterday, fake outs such as the move to 1.29 in Euro yesterday, and order-driven intraday swings, etc - all requiring different handling.

Quote


3) If price does overshoot and stops you out, do you look for re-entries? Sometimes even strong divergence can give a few failed reversals in a strong trend, and if it goes far enough that divergence will sometimes reduce until eventually being gone entirely. Just wondering if there were good ways to keep yourself safe in these situations.

See previous answer. And if stopped out, I'd reconsider my bearings before thinking about entering again.

Quote

P.S. I'm guessing you check out Vantage's HL/LH thread from time to time, so I was wondering - what are your thoughts on these range bars that are all the rage in there?

I do, but haven't read up about those bars.
  • #2,137
  • Aug 20, 2010 3:59am Aug 20, 2010 3:59am
Quoting medici
Auron112,

I hope you don't mind me responding to your PM here as it may be of interest to more people.
Thanks for the detailed reply. I was going to suggest you post the reply in the thread if you thought it would be useful, so that's fine.

Thought I would mention that I've used the CII in conjunction with Vantage's style of HL/LH trading to great effect so far today on EJ. I'll post a chart a little later when I get the chance.
  • #2,138
  • Aug 20, 2010 4:06am Aug 20, 2010 4:06am
Quoting Auron112
Thanks for the detailed reply. I was going to suggest you post the reply in the thread if you thought it would be useful, so that's fine.

Thought I would mention that I've used the CII in conjunction with Vantage's style of HL/LH trading to great effect so far today on EJ. I'll post a chart a little later when I get the chance.
That's great.

I'm done for today, so have a nice weekend all, and see you Monday!
  • #2,139
  • Aug 20, 2010 4:16am Aug 20, 2010 4:16am
As posted in Vantage's thread, a couple trades I took today on EJ that had CII confluence.
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  • #2,140
  • Aug 20, 2010 6:57am Aug 20, 2010 6:57am
Quoting medici
That's great.

I'm done for today, so have a nice weekend all, and see you Monday!
You too, nice work
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