DislikedSame info for the same time frames so they're the exactly the same, candles are just more visual.
And I still don't get it! it's okay tho, it'll click eventually.Ignored
COT: The precious data ignored
- #21
- Oct 22, 2010 12:33am Oct 22, 2010 12:33am
- Joined Jul 2007 | Status: Trader | 17,796 Posts
COT: The precious data ignored
- #23
- Oct 22, 2010 12:55am Oct 22, 2010 12:55am
- Joined Jul 2007 | Status: Trader | 17,796 Posts
COT: The precious data ignored
- #25
- Oct 22, 2010 1:09am Oct 22, 2010 1:09am
- Joined Oct 2008 | Status: Sentiment and Global Macro | 2,321 Posts
I trade with no indicators.
Indicators are not bad, its just their used incorrectly. To place trading decisions entirely on indicators is the wrong way to use them. Truth is, indicators need s/r level, bar patterns, and an understanding of what moves the market.
I've seen more successful traders who used RSI in conjunction with reversal bars and whole numbers than those who only uses RSI overbought and oversold signals. The chart below makes my point. Its a trading system I've developed years ago that uses an RSI indicator, s/r whole numbers. and reversal bar pattern.
The proper way to use RSI indicator is to use it in conjunction with price action and s/r levels. Check the chart above:
-For every time RSI reaches an overbought/sold region, price action should be near a s/r whole number. That s/r level will be the reversal level.
I placed an 'X for RSI 70/30 overbought/sold levels. I've placed an 'X' at the nearest whole number that should at as a reversal level. Couple reversal bar patterns with whole numbers and RSI to confirm the reversal.
This is an example of the 'proper way to use indicators'. The problem I have with indicator only traders is their laziness. Too lazy to properly study their craft. This is why indicator only trading is not the holy grail to riches in the market. It truly takes an understanding of how/why the market moves and understanding of why certain levels act as reversal levels. This is why traders fail. Putting too much time into one aspect of trading with out learning the rest of the market. Indicators are a small tool set for the market, its a tool thats not really needed if one takes the time to learn about the market. I'm not talking about learning how to trade the market, I'm talking about learning how the market works as a whole.
I left indicators years ago once I learn what makes the market moves and how the market moves. An indicator isn't showing me anything I already don't see with price action only.
Indicators are not bad, its just their used incorrectly. To place trading decisions entirely on indicators is the wrong way to use them. Truth is, indicators need s/r level, bar patterns, and an understanding of what moves the market.
I've seen more successful traders who used RSI in conjunction with reversal bars and whole numbers than those who only uses RSI overbought and oversold signals. The chart below makes my point. Its a trading system I've developed years ago that uses an RSI indicator, s/r whole numbers. and reversal bar pattern.
The proper way to use RSI indicator is to use it in conjunction with price action and s/r levels. Check the chart above:
-For every time RSI reaches an overbought/sold region, price action should be near a s/r whole number. That s/r level will be the reversal level.
I placed an 'X for RSI 70/30 overbought/sold levels. I've placed an 'X' at the nearest whole number that should at as a reversal level. Couple reversal bar patterns with whole numbers and RSI to confirm the reversal.
This is an example of the 'proper way to use indicators'. The problem I have with indicator only traders is their laziness. Too lazy to properly study their craft. This is why indicator only trading is not the holy grail to riches in the market. It truly takes an understanding of how/why the market moves and understanding of why certain levels act as reversal levels. This is why traders fail. Putting too much time into one aspect of trading with out learning the rest of the market. Indicators are a small tool set for the market, its a tool thats not really needed if one takes the time to learn about the market. I'm not talking about learning how to trade the market, I'm talking about learning how the market works as a whole.
I left indicators years ago once I learn what makes the market moves and how the market moves. An indicator isn't showing me anything I already don't see with price action only.
- #26
- Oct 22, 2010 1:12am Oct 22, 2010 1:12am
- Joined Jul 2007 | Status: Trader | 17,796 Posts
I don't think japanese candle formations apply as much in the currency world though, there aren't gap ups and downs as often which many of the strong patterns look to.
You have skype by chance? It would be interesting to discuss.
Taking a trade solely based on a bullish engulfish candle or a so called dark cloud cover is not a good idea (that's why Steve Nison recommend to use something as a confirmation such as RSi...etc..)
For me price action is different than price pattern...i dont look at the patterns, maybe 1 or 2 though, but i look at how the candle behave (new high? new low? new close?) regarding the previous candles
It took me times, and im still learning
And send me your skype if you like
COT: The precious data ignored
- #28
- Oct 22, 2010 2:16am Oct 22, 2010 2:16am
I'm curious to find out how many people out there trade with no indicators.
- #35
- Oct 22, 2010 10:26am Oct 22, 2010 10:26am
So! Like I said, I am not familiar with trading naked, no indicators. So please help me learn, I do not mean this as a defense or offensive strike against price action. I'd figure it'd be better to know both than only one side, after all trades, supports, and resistances are made off of what people see.
I understand supports and resistances can help make decisions on the continuation of a trade, but I do not see how you can make informed decisions on from it other than if a support or resistance is broken (which I would consider continuation or reversal).
Take for instance here, your entry point would be holding that 33% fib line, correct? The break of the previous high, 0 line would tell you the trend will continue. How do you know the trend is over, or how much gas the market has left for the trade? In other words, what is your exit point with no more support/resistance lines (or do you add new ones when it peaks)?
Here the reversal occured when the 66 was broken, and continued when the 33 held and the 0 was broken? Once again, how do you know where the bottom is or how much gas the market has left for it?
A break of the 33 line would say exit and reversal, the hold implies continue, and the break of the 0 implies continue. Where your chart picture was taken was the peak of that run, so would the reversal or exit point be the pivot point?
I often throw up the fibs for major price moves but liked seeing it used on that 5 and working.=) Thanks for teachin that to me!
Attached is the view from an indicator-based standpoint. Much more complicated but yields the same results besides being able to spot the tops and bottoms.
ps 2nd chart is 30m not 1h... it's early over here, haha
I understand supports and resistances can help make decisions on the continuation of a trade, but I do not see how you can make informed decisions on from it other than if a support or resistance is broken (which I would consider continuation or reversal).
Take for instance here, your entry point would be holding that 33% fib line, correct? The break of the previous high, 0 line would tell you the trend will continue. How do you know the trend is over, or how much gas the market has left for the trade? In other words, what is your exit point with no more support/resistance lines (or do you add new ones when it peaks)?
Here the reversal occured when the 66 was broken, and continued when the 33 held and the 0 was broken? Once again, how do you know where the bottom is or how much gas the market has left for it?
A break of the 33 line would say exit and reversal, the hold implies continue, and the break of the 0 implies continue. Where your chart picture was taken was the peak of that run, so would the reversal or exit point be the pivot point?
I often throw up the fibs for major price moves but liked seeing it used on that 5 and working.=) Thanks for teachin that to me!
Attached is the view from an indicator-based standpoint. Much more complicated but yields the same results besides being able to spot the tops and bottoms.
ps 2nd chart is 30m not 1h... it's early over here, haha
- #36
- Oct 22, 2010 10:41am Oct 22, 2010 10:41am
So!...
actually you are overanalyzing the trades...they are simple 1-2-3 trades...
price makes a high, retraces and moves back to break the high...
entry is at the break of high...stoploss is below retracement low, TP is equal to retracement...
personally, I use 20pips SL and 20pips TP (on 5 min charts) with some discretion...that is, I may set the SL below a support if it is nearby...or I may take profit if price is approaching a round number or known S/R...
don't mean to offend you, but just seeing your charts made my stomach churn a little
ps. what I am using aren't actual fib levels as I don't really believe in them...it's just the fib tool with 33, 50 and 66 levels to see how far the retracement went....I don't trade if the retracement is too deep... i.e more than 50-60%
edit: I would suggest you read this thread: http://www.forexfactory.com/showthread.php?t=80290
started by a great individual and is very very close to the way I trade...
- #37
- Oct 22, 2010 11:03am Oct 22, 2010 11:03am
don't mean to offend you, but just seeing your charts made my stomach churn a little
actually you are overanalyzing the trades...they are simple 1-2-3 trades...
price makes a high, retraces and moves back to break the high...
entry is at the break of high...stoploss is below retracement low, TP is equal to retracement...
personally, I use 20pips SL and 20pips TP with some discretion...that is, I may set the SL below a support if it is nearby...or I may take profit if price is approaching a round number...
1. Price oversold: Too many sellers, price is deflated so buyers step in. Shorts covered.
Price overbought: Too many buyers, price is inflated so sellers step in to take profit. Shorts taken.
2. Addition of buying/selling power reverses the trend until the same occurs.
3. The length of the trend is determined by the same economics of the higher time frames. Artificial buy-sell points such as the 20MA hold for all time frames. Ex. EUR/USD play is a weekly chart breakout, this pullback/top comes at the monthly 20MA resistence. This higher time frame explains why the daily chart was able to remain overbought for the last month while the price still increased.
Without oscillators, trading on overbought/oversold, supply and demand wouldn't be possible.
Also, although I trade with about 75% win rate, I still typically go for a 2:1 to 4:1 risk/reward. My SL's come from chart supports (so this little lesson is extremely helpful) and my TP's are calculated based on the risk/reward, I then look to potential resistance lines to see if I think the trade is worth taking.
I think I'll run a sim session today when the day slows down a little more and try trading a month on just s/r's and fibs.=) This whole post was part of a major multi-task hahaha.
- #38
- Oct 22, 2010 11:06am Oct 22, 2010 11:06am
I'm glad my charts evoked some interest and curiosity
- #39
- Oct 22, 2010 12:17pm Oct 22, 2010 12:17pm
hahahahah I saw that change! And don't worry, rationality is my existence. Reason and logic are king... and humbling yourself when you just don't know.
anyway, the problem I face with oscillators is that during a strong trend, they give many false signals...
I do use the RSI sometimes...but I insert a MA of the RSI and look at the crossovers...
by the way, I start trailing the stoploss pip-by pip instantly...so even though I may get stopped out of a few more trades, the R:R is never 1:1...because it is rare for price to reverse exactly at my entry point...
so stoploss may be triggered for anything between -20 to -1 pips...while TP is always 20 pips or more...
having even 50% win rate with this method will give you nice returns in the long run...
