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Ken's Continuing Successes with EO's system

  • #2,061
  • Oct 18, 2010 11:30pm Oct 18, 2010 11:30pm
Kenneth,

I am just about finished reading your pdf and checking out charts on the thread. Thank you very much for opening our eyes to seeing things in a new light!! I am very excited to get practicing and will post some findings and such as I continue.

Mike
  • #2,062
  • Oct 18, 2010 11:37pm Oct 18, 2010 11:37pm
Welcome Mike ..


Anyone see the almost identical gump trading on e/j ? I have a daily s/r ppa line at 113.211 hat being the bottom and 50 ema the top , not great trades but they do add up.. EO posted in his thread he liked to gump trade the late Asian and you can see why there.
Good Trading To All ; Ken Lee
  • #2,063
  • Oct 18, 2010 11:48pm Oct 18, 2010 11:48pm
Just goes to show that no matter what time of the day you have to trade there is something to trade you may have to adjust your thinking a bit to capture the gains but they are there.

Just look for the setups and take the profits when you get a setup going the other way. If it breaks out of a range which it will sooner or later try and stay with it if your in going the right way . if not take the small loss and be ready to change direction when and if it retests the breakout.

It isn't rocket science ,, just have to get use to being flexiable and not carry a bias to much trade what you see was the the thread,,
Good Trading To All ; Ken Lee
  • #2,064
  • Oct 18, 2010 11:54pm Oct 18, 2010 11:54pm
Quoting Kenneth Lee
Welcome Mike ..


Anyone see the almost identical gump trading on e/j ? I have a daily s/r ppa line at 113.211 hat being the bottom and 50 ema the top , not great trades but they do add up.. EO posted in his thread he liked to gump trade the late Asian and you can see why there.
Yes, its been for hrs like this, and now we should wait for a good direction when London open, trade what we will see some mins later!!
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  • #2,065
  • Oct 19, 2010 12:07am Oct 19, 2010 12:07am
Should get a break soon. leaning short again but I was wrong on the gbp yesterday so always better to let it show it's hand first then take a trade.
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Good Trading To All ; Ken Lee
  • #2,066
  • Oct 19, 2010 12:10am Oct 19, 2010 12:10am
the dotted green line is a 248 ema which gives me a quick visual on my 15 min where the 62 ema 1 hr is . Plus the 200 ma was right there as well. confluence is always a plus .
Good Trading To All ; Ken Lee
  • #2,067
  • Oct 19, 2010 12:15am Oct 19, 2010 12:15am
Gump trades are normally the forming of a flag or pendant so look over your patterns to learn in which direction it is safest to take those trades. Bu as a rule of thumb price normally continues in the same direction it enters consolidation . so a short will go out the bottom and a long will exit the top. Doesn't always happen but it is above average .

Also why they happen between sessions during times of low volume consolidation
Good Trading To All ; Ken Lee
  • #2,068
  • Oct 19, 2010 9:25am Oct 19, 2010 9:25am
Hey Ken,

Hope your trading and work are going well.

I wondered what your view was on trading a retracement or possible reversal in a strong trend. For example, Cable fell all day today with not a single large retracement. In these sorts of trends, even If you get a lovely candle formation at a key S+R point, the sellers can still take over any attempt that the buyers might want to have to reverse things.

If the MAs have the sort of accute angle that we've seen today, do you forget trying to find the bottom and just take the 5/10 o'clock trades?

I reckon we've found the bottom on cable now but it's a braver or better man than me that stakes his hard earned on it. Be great to get your thoughts Ken.

Cheers

Trotty
  • #2,069
  • Oct 19, 2010 10:22am Oct 19, 2010 10:22am
I'm interested in hearing Ken's response to the above question as well..

In regards to GU I'm taking a long here -- It's a risky trade but the risk:reward is very favorable
  • #2,070
  • Oct 19, 2010 10:32am Oct 19, 2010 10:32am
Another question for Ken -- I thought of this after attempting the GU reversal:

Do you have any insight as to how Pippinole from EO/Infinity's thread trades? I get the impression that most of his pips come from trades like this GU reversal -- use a tight stop to limit risk, but use a large take profit goal.

I was just thinking about it, and it makes a lot of sense to take tight stop / high reward trades off the 15M when you know the likely turning points on a HTF chart. Your going to get some losing trades, but the winners will be huge.
  • #2,071
  • Oct 19, 2010 10:52am Oct 19, 2010 10:52am
i have and I can sit here and watch many a trader take loss after loss trying to turn price. It is another one of those things that if you do it once it successfull you try all the time. if it isna true trend reversal as the techincals support the fundamentals and a nice run the other way is in hand. then your the type trader that can stay in the trade Might be for you to try.

But the question is more where I think and when . Then if it should be doen. If you have read much of EO's thread you will see where many newer traders try to mimic the more exprienced at taking the opposite trade right off a touch of a s/r -ppa line.

The ones that seem to be magic for the exprienced are based off higher time frame analysis, Trading zones daily or even weekly levels , trendlines etc..

Plus you will see in a counter trend move they cover pretty quicklly as should you and this is a counter trend trade until it breaks the previous swing. back to 1.59240 at the very least anything else is a retracement.


With moves this strong it is prudent to wait for a minor swing back up a higher high followed by a higher low . we did get a minor swing at the bottom but the low is equal to previous . I am looking for a small trading zone for a long here. I have daily lines at these levels though

1.5805 and 1.5707 as you can see price played it's part at both those levels and a 30 or 40 pip trade could have been gotten.

If you try to turn price without any signals at all . do so with the mindset it will turn or not. Be prepared for it to continue . people lose their accounts being stubborn more than anything else. Like if you took a long off the first hammer ( red by the way ) and then it camoes back against you be willing to get out and get a better entry . There are at least two good trades here for a total of about 80 pips what are you looking for ?

Nevr try turning price without confluence unless you get a pattern signal. If it isn't a higher trading zone level with some ppa to support and your just trying to reverse it , I will PM you my Pay pal account and just send me your nickles and dimes. I wil put them to better use.

Cheers Ken
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Good Trading To All ; Ken Lee
  • #2,072
  • Oct 19, 2010 10:58am Oct 19, 2010 10:58am
Quoting dr mongolia
Another question for Ken -- I thought of this after attempting the GU reversal:

Do you have any insight as to how Pippinole from EO/Infinity's thread trades? I get the impression that most of his pips come from trades like this GU reversal -- use a tight stop to limit risk, but use a large take profit goal.

I was just thinking about it, and it makes a lot of sense to take tight stop / high reward trades off the 15M when you know the likely turning points on a HTF chart. Your going to get some losing trades, but the winners will be huge.
The answer is in the previous post mostly , When Pippin takes this reversal it would be a counter trend sclp at this point. The higher time frames are saying BEARISH yes loudlly.

But as you surmazise (msp) they are mainly looking for the higher levels for big trades EO' last post was a chart setup they were using to catch just areas off a 4hr chart then switching to a 15 woth the same MA's for entries . Wacth it long enopugh to cover it then let it be. They were watching about 6 or 8 pairs that way.

Here is EO's chart and post .

But be forwarned it is in the averages that they succeed and the ability to hold the runners. That gets easier as our accounts grow and we prove to ourselves that it is true , but a begginner may find it hard to stay ahead doing this or not marking the levels properlly.
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Good Trading To All ; Ken Lee
  • #2,073
  • Oct 19, 2010 11:22am Oct 19, 2010 11:22am
Awesome post, thanks Ken. I'm going to reread those again, might have some more detailed comments after that.

Here's my daily on the GU which is why I'm taking the long here -- we've got a sturdy TL intersecting with the daily 35 and the daily 50. I took the fib off when I posted it because it cluttered up the chart but we're also right between the 50 and 61.8 when drawn from the sept 7-14th to oct 15th swing.
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  • #2,074
  • Oct 19, 2010 11:25am Oct 19, 2010 11:25am
Forgot this, say it so often .. In big moves the fast MA's cna really come into their won by helping to mange a long term trade just like any indicator , when pointing down and spread wide apart we are in over bought territory. So when price and the ma's start to close on each other and price starts to close above each one in order , which by the way are good for quick scalps , ( Step Trades) Then price will show it is running out of pressure and may be getting ready to turn .

But if you want to trade longer time frames watch your higher time frame MA;'s at the very least the hrly 10 ma. It is used by mant traders on the hrly and the 4 hrly as a guide to remain in the trades ( see Ponsi's book )

Nad it is true just look back at your charts the huge moves stayed on one side of the fast ma's .For huge gains we will have to allow for some decent size reversals. Those we cna either manage our trades at or hedge ina seperate account to preven drawdown of our accounts to close and re-enter never seems to be the play most take not sure why ..

I guess it is easier to mangee a winner than open a whole new one plus as shown by the chart of today at those s/r=ppa levels adding on could have happened and a truelly big trade could be on ..

Sorry no chart ,, off to work Cheers Ken
Good Trading To All ; Ken Lee
  • #2,075
  • Oct 19, 2010 11:29am Oct 19, 2010 11:29am
Quoting dr mongolia
Awesome post, thanks Ken. I'm going to reread those again, might have some more detailed comments after that.

Here's my daily on the GU which is why I'm taking the long here -- we've got a sturdy TL intersecting with the daily 35 and the daily 50. I took the fib off when I posted it because it cluttered up the chart but we're also right between the 50 and 61.8 when drawn from the sept 7-14th to oct 15th swing.

Comming of a double top , so beware if it breaks your tendline MY S/R Horizontal line . hehe, It can do what double tops are suppose too. it would have to then break the neck. A double top can run the distance from the neck (V) to the peaks x 2 . A classic pattern..

Might look it up Ken
Good Trading To All ; Ken Lee
  • #2,076
  • Oct 19, 2010 11:39am Oct 19, 2010 11:39am
Quoting Kenneth Lee
Comming of a double top , so beware if it breaks your tendline MY S/R Horizontal line . hehe, It can do what double tops are suppose too. it would have to then break the neck. A double top can run the distance from the neck (V) to the peaks x 2 . A classic pattern..

Might look it up Ken
Thanks, yeah if it breaks the trendline I'm bailing. I took the trade with a reduced lot size so I'm not too worried about it. At first I thought it was a double top but then I figured that since the August price had been exceeded on oct 15th (~100 pips or so) that it would classify as a higher high? I guess on the daily 100 pips is a marginal higher high at best, though. Is there any rule of thumb for deciding what's considered a double top and what's a higher high? Now that I think about it, I run into this problem all the time.
  • #2,077
  • Oct 19, 2010 12:19pm Oct 19, 2010 12:19pm
Just to add my two cents to the discussion on taking reversals, I know for me personally my results improved a lot when I tightened up that part of my trading. When you go through the eo thread and read about the 2k pips weeks and the huge trades they get when they pick the top or bottom perfectly its very easy to get a little blindsided, and start to see and expect big reversals trades everywhere and expect that each week should bring in pips by the thousands. At least that has been the case for me in the beginning and I'v always struggled with it.

I'v changed alot and now i'd say that over 80% of my trades are with the trend, mostly quick gains so I almost never see a profit on a single trade for over 30 pips, but thats fine because as a trader I would rather be average consistently then occasionally brilliant. And for me to be consistent I would rather look for 10 trades at 10 pips then try to hold on to 1 trade for 100 pips, and trading with the trend creates plenty of opportunities to do just that.

But as I said thats just how I view it
  • #2,078
  • Oct 19, 2010 12:32pm Oct 19, 2010 12:32pm
Quoting Kenneth Lee
i have and I can sit here and watch many a trader take loss after loss trying to turn price. It is another one of those things that if you do it once it successfull you try all the time. if it isna true trend reversal as the techincals support the fundamentals and a nice run the other way is in hand. then your the type trader that can stay in the trade Might be for you to try.

But the question is more where I think and when . Then if it should be doen. If you have read much of EO's thread you will see where many newer traders try to mimic the...
Terrific stuff, cheers Ken.

In summary, if we have a strong angle and spread on the mas, look for a heavy confluence area before even considering looking for a bottom/top?
  • #2,079
  • Oct 19, 2010 12:41pm Oct 19, 2010 12:41pm
If anyone is trading right now might want to take a peek at AUD/CAD, it's retesting the parity level right now which is a huge S/R area on the daily. It's also the touch of a TL on the 4H and the 50MA. If it breaks, it'll probably run down pretty good.. I don't think I'm comfortable trading the break though but I will take a reversal if it closes abov ethe 10EMA on the 15m..
  • #2,080
  • Oct 19, 2010 12:51pm Oct 19, 2010 12:51pm
Quoting Kenneth Lee
But as you surmazise (msp) they are mainly looking for the higher levels for big trades EO' last post was a chart setup they were using to catch just areas off a...
Yeah I think someone would have to be really fluent with the HTFs before pulling that off. That's my main weakness right now, so it's definitely not a style for me.

I'm at a strange crossroads with my trading. I'm profitable but I'm struggling to get to the point where I'm returning 10% a week (which is my goal). I'm also finding that the more I learn, the more I realize that I need to learn (as in, I learn that there's a lot left to learn).

As I mentioned yesterday I've been doing better during the low volume hours after the London close and even the US close than I do during the US/London overlap. I'm trying to understand what this means so that I can get better during US/London. I figure it's something to do with my HTF reading, or that I am simply not being patient enough at HTF zones during the US/London. I have noticed that during low volume times price is a lot more likely to stop dead in its tracks at a HTF zone vs a high volume time. Sorry for the rambling!
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