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Ken's Continuing Successes with EO's system

  • #2,081
  • Oct 19, 2010 3:03pm Oct 19, 2010 3:03pm
Quoting Storeball
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...
Yeah, in regards to the other thread, another thing I've considered is that the number of pips they are discussing is usually the MOST that they took off of a trade that they entered. So if they enter a move with 20 pips equal to 1% account size and they take half off at 20 pips, they've booked 0.5%. Then if they take another half off (a quarter of the original trade) at 40 pips they've booked an additional 1% (1.5% total now). From that point, even if the rest of the trade (now a quarter of the original size) runs to 160 pips, it's only a net of an additional 2% (3.5% total). Obviously this isn't exactly how the trade is managed, my point is just that if they are trading 1% = 20 pips then a 200 pip gain doesn't mean a 10% accont gain.

This isn't taking anything away from the enormous pip totals, but I think it just helps to put it in perspective -- if you're willing to let a small portion of the trade run, you will tend to get a huge amount of pips. We are obviously after the account growth not the pips.
  • #2,082
  • Oct 19, 2010 3:07pm Oct 19, 2010 3:07pm
Quoting dr mongolia
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...
You sound as if you are in a similar place to me right now. Looking to push on and get the 10-20% a week growth that 90% of traders will tell you can't be done but every one of the experienced guys from the EO thread knows is comfortably doable.

I've spent so much time looking at M5 and M15 charts that sometimes the perspective of H4 and D1 throws me a little. I was looking at H4 today and it struck me how few cadle formations tell lies like they do on M15. A pin at an important point very often plays out. An engulfing bar usually spells reversal etc. You have to just look at them as a more reliable version of the smaller TF's. You mentioned that the 100 pip difference on the GU D1 chart made you question whether of not it was a true double top. If you think about an intraday time frame, an 7/8 pip difference would be considered a double top/bottom well that's about the same as a 100 pip difference on D1, comparitively speaking (assume a 120 pip or so ADR for the pair).

The thing I still struggle to get my head around is that you will often see a great candle formation on H4 and switch to M15 thinking you'll get a great entry, only for the price action to be going against the direction you thought it would go with no obvious entry. After 2 hours of waiting, you've forgotten all about the great entry and actually, it was just 2 hours of a retrace up the setup candle and it's now giving you that entry you were looking for.

Ken has talked about the day you "get it". I think there are a whole series of mini "gets" before a big "IT" arrives! Time, patience and screen time.....
  • #2,083
  • Oct 19, 2010 3:13pm Oct 19, 2010 3:13pm
Quoting dr mongolia
We are obviously after the account growth not the pips.
So few people get this.

Pips are irrelevant. Tell me you got 1000 pips last week? Awesome but it's quite possible I did 200 pips last week but grew my account 3 times as much as you did.

Equity growth is the only thing that matters in trading, pip totals are just there for penis waving purposes.
  • #2,084
  • Oct 19, 2010 3:35pm Oct 19, 2010 3:35pm
Quoting Trotty

The thing I still struggle to get my head around is that you will often see a great candle formation on H4 and switch to M15 thinking you'll get a great entry, only for the price action to be going against the direction you thought it would go with no obvious entry. After 2 hours of waiting, you've forgotten all about the great entry and actually, it was just 2 hours of a retrace up the setup candle and it's now giving you that entry you were looking for.
Hey man!

Something i'm using on htf pins and candlestick triggers, and Kodziro is great at this and is where I got it from, is that if you were to catch a nice 4h pin and you see further left the pin has closed below the rejection area or ppa area that is a good sign that the level will hold. So one way to play it is to wait for the pullback or put up a pending order with a small stop directly on the ppa line. Will more often then not be a great place to enter.
  • #2,085
  • Oct 19, 2010 3:41pm Oct 19, 2010 3:41pm
Quoting Storeball
Hey man!

Something i'm using on htf pins and candlestick triggers, and Kodziro is great at this and is where I got it from, is that if you were to catch a nice 4h pin and you see further left the pin has closed below the rejection area or ppa area that is a good sign that the level will hold. So one way to play it is to wait for the pullback or put up a pending order with a small stop directly on the ppa line. Will more often then not be a great place to enter.
Cheers for that Storeball, sounds pretty sensible to me.
  • #2,086
  • Oct 19, 2010 3:45pm Oct 19, 2010 3:45pm
Quoting Trotty
Pips are irrelevant. Tell me you got 1000 pips last week? Awesome but it's quite possible I did 200 pips last week but grew my account 3 times as much as you did.
Definitely -- you could be 100 pips up in a day and still lose money, or even down 100 pips in a day and still make money.

Quoting Trotty
Equity growth is the only thing that matters in trading, pip totals are just there for penis waving purposes.
  • #2,087
  • Oct 19, 2010 5:42pm Oct 19, 2010 5:42pm
Hi Ken and everyone,

I am just getting started with this very comprehensive approach to trading and I would appreciate any input based on my chart and the accompanying notes.
Thanks and looking forward to contributing here.
Mike
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  • #2,088
  • Oct 19, 2010 7:08pm Oct 19, 2010 7:08pm
Quoting dr mongolia
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.
Bailed after a loss; the GMT daily candle just opened on the other side of the trendline and the MA's but I'm no good on the continuation trades so I'm sitting on the sidelines
  • #2,089
  • Oct 19, 2010 11:08pm Oct 19, 2010 11:08pm
Yes trying to do what others do is , a good way to chieve without trully learning better to learn the basic price act6ion and then put together a plan of action based off what you have and do trully understand.

see lots of mention of EO and Pippin, The majority of Pippins trades were taken off entry signals , Not till the end of the thread did he start trying the s/r entries , He was a ctually a very conservative trader in the begining which we should all be . Until we are truely exprienced and trading with our gains.

His intial goal was just 40 pips a day , Which was normally just one trade using EO's entry signals but he preffered the retracement entries . as this was part of a previous idea we had watched. using fib levles Trading zone then a cnadlestick entry.

So he looked for 35/50 and 62 ema trades the most in the begining then the double tops and bottoms and shampoos Head and shoulders , Which if the truth is written in Ponsi's book is just huge orders being filled and that is what froms those patterns.

I haven't said this in a while but if your just starting out and need to build confidence in yourself and this style trading , Always remember to trade away from the MA's They are the middle of the price action an the 1 and 5 o'clock trades are great entries that can get you in the right direction. They are the first retest trades after price has broken out of a consolidation area .

Take some time look at your charts and see for yourself . It is not hard to trade . It is hard to control ourselves and that is the key. If ou let winners run and cut losers quick , You can't fail. the rest will come. The best traders find trading very boring as at the point of expert it is no different than driving a car. see this do that see the other do soemthing else.

Mike I will look at your chart later . Going to bed.. Cheers.
Good Trading To All ; Ken Lee
  • #2,090
  • Edited 2:10am Oct 20, 2010 1:41am | Edited 2:10am
Morning all!

Nice setup on gu. In on the hammer when it retraced to 50 ema. Also got 4h support, the rejection twice from from 50 ema as well as trend is up on 15min. Out on the top red line.

Looking forward to a good day of trading!
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  • #2,091
  • Oct 20, 2010 2:13am Oct 20, 2010 2:13am
Some more thoughts about the confusion of working higher TF's into your intraday trading.

Taking the Euro as we stand, the weekly chart shows that overall, the trend is down but in a very roller-coaster sort of way. Hard to pin an overall direction from this. The current candle is very bearish but far, far from being closed. It could still quite easily be bullish by the end of the week.

So I move to D1 and it clearly shows that the immediate trend is obviously bullish but, there is evidentally a retracement underway. It may even be an absolute reversal of direction but to me, the candle formation doesn't suggest so.

Wiggle down to H4 and it show a lower high, as we would probably now expect having seen D1. But, recent candles shows that a bottom seems to have formed. We don't know whether this is another retracement before a further lower high is formed or whether it is the end of bearish retracement of the longer TF trend and we are now back with a bullish move.

This is a classic example of how the higher TF's can throw as mush darkness on to my trading as they can light.

Perhaps I just think about it all too much
  • #2,092
  • Oct 20, 2010 4:34am Oct 20, 2010 4:34am
1.The most important thing about HTF trading is how htf candles responds on S/R levels ( where they close ). If you are trading intraday let 1h candles be you guide.

2.About picking top/bottom - if price is not in the fibo zone or is creating possible double/tripple top/bottom with confluence of other thing I will NEVER try to pick them. I wait for htf pa instead. If htf candle holds price there i wait for pullback.

So lets look at GU then
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  • #2,093
  • Edited 5:42am Oct 20, 2010 4:38am | Edited 5:42am
Holding short at EU now , enter after 1h candle reject ppa line


edit. After 1h close beyond it, long at pullback, went by PO there but 15m pin seems to be good entry also
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  • #2,094
  • Oct 20, 2010 9:55am Oct 20, 2010 9:55am
Quoting kodziro
Holding short at EU now , enter after 1h candle reject ppa line


edit. After 1h close beyond it, long at pullback, went by PO there but 15m pin seems to be good entry also
Well hard luck buddy but you're not the only one a bit bemused by this price action at the moment.
  • #2,095
  • Oct 20, 2010 10:01am Oct 20, 2010 10:01am
Quoting Kenneth Lee
Yes trying to do what others do is , a good way to chieve without trully learning better to learn the basic price action and then put together a plan of action based off what you have and do trully understand.
Thanks Ken, that really hit home with me because I think that may be what my real problem is here. I'm getting frustrating not getting the returns that I see others getting so I try and trade like they do, and to noone's surprise it doesn't work out. Personally I do best when I sacrifice pips to gain confirmation instead of taking touch trades.
  • #2,096
  • Oct 20, 2010 10:19am Oct 20, 2010 10:19am
Quoting kodziro
2.About picking top/bottom - if price is not in the fibo zone or is creating possible double/tripple top/bottom with confluence of other thing I will NEVER try to pick them.
I wanted to post a quick note about this in case it helps anyone as this has been about the only thing that I've been doing really well lately. After a long downward move I'll look for price to hit a confluence zone like a weekly pivot combined with a HTF MA or TL. Then I'll look for price on the 15M to CLOSE back across the 10EMA and enter on the open of the following candle. This isn't anything original on my part, it's just something that I picked up from Infinity on the other thread that has resonated with me because as I mentioned above I do like the confirmation.

My jumper on GU yesterday was a rare exception where I took it before I had confluence from the 10EMA close. If I would have taken that trade correctly, I would have gotten stopped out once, re-entered a second time and then had a big day today.

I'll post some charts in a second..
  • #2,097
  • Oct 20, 2010 10:26am Oct 20, 2010 10:26am
Here's one of the trades from yesterday:

Quoting dr mongolia
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..
I've got two charts attached -- the 4H first and the 15M second. My entry was at the green area on the 15M, where the candle closed over the 10EMA. I just closed this one out after the double tops on the 1H for around +80, but obviously that wasn't all the original position since I've been taking profit along the way. Now that the second 1H candle is halfway up the wick of the first double top pin I'm looking for a short signal and a close below the 10EMA to short.
Attached Image(s) (click to enlarge)
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  • #2,098
  • Oct 20, 2010 10:36am Oct 20, 2010 10:36am
Here's another one from last night, basically the same trade except that I was using the daily MAs instead of the 4H MAs (like I tried to do with GU last night but failed due to jumping). Entry is the green arrow on close past the 15M 10EMA. I'm still holding on to this one. The 4H chart is first, 15M second.

I also took another trade like this last night on CHF/JPY. It was the exact same setup but I closed it after about 40 instead of leaving it to run.

EDIT: I didn't post the daily on this one so you can't really see why I didn't take the first close past the 10EMA. It was because the PA was still on the wrong side of the daily MAs.
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  • #2,099
  • Oct 20, 2010 1:31pm Oct 20, 2010 1:31pm
Quoting Trotty
Well hard luck buddy but you're not the only one a bit bemused by this price action at the moment.
That is why I trade directly at s/r, that give me some advantage -got plenty time and room here about +20 positive pips for cover my position. Either way I`m happy that I go opposite later with pulbak to this level.
  • #2,100
  • Oct 20, 2010 11:11pm Oct 20, 2010 11:11pm
Quoting dr mongolia
Now that the second 1H candle is halfway up the wick of the first double top pin I'm looking for a short signal and a close below the 10EMA to short.
Reversed this one a while ago along with a couple of other pairs (E/U, E/J).. taken half off, covered, letting the rest run after a failure to make a higher high (on A/C that is, got a pin followed by a close below the 10EMA on the others.. and all of these are being taken at very obvious turning points). This type of trade definitely isn't as "sexy" as the others but they are very consistent and you can get several good sized trades per 24 hours. I wish I could take the touch trades/scalps profitably, I know I'm missing out on good returns, but I'm just not there yet. I'm going to stick to what's been working consistently for me, and then add in other setups later.
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