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Ken's Continuing Successes with EO's system

  • #2,321
  • Edited 2:25pm Nov 1, 2010 10:52am | Edited 2:25pm
Here is a equity building idea I have come up with for my own use. Somebody asked me a question about it so had to make it real instead of in my head. LOL

It starts out pretty risky but with the small amounts we are trading , It is ok plus most new traders are going to try that anyway ,, So a good lesson if they crash and burn for a few $$ . But once you hit step ( proper risk is in place. This is similar to the Forex fredom plan, But i suggest a loss prevention and I am not counting pips but $ levels. Also I recomend staying with minis so you can scale in smaller amounts as large jumps can trigger bad emotions and keep you from pushing the button.


Trade well ken
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Good Trading To All ; Ken Lee
  • #2,322
  • Nov 1, 2010 10:59am Nov 1, 2010 10:59am
Quoting shr5
Hi Ken

I have been a silent observer for a bit now....and have been trading on the demo as well with few profits but which out weigh the losses....so am a satisfied thread follower...for which thanks for bringing into attention an excellent strategy....You've mentioned about 1 and 5...can you please lemme know if that's est or gmt....looking forward to your reply...

Regards

Ali Raza
Hey I'm not Ken but I've seen him answer this question before so I figure I'll help save him some time -- when you hear him talk about 5 o'clock trades he is referring to the angle of the 5 and 10 EMA's on the chart. Check the PDF (on the first page), it's all there. Also if you do a quick thread search on "clock" or "5 o'clock" you'll find some great posts that go into depth.
  • #2,323
  • Nov 1, 2010 11:03am Nov 1, 2010 11:03am
Quoting shr5
Hi Ken

I have been a silent observer for a bit now....and have been trading on the demo as well with few profits but which out weigh the losses....so am a satisfied thread follower...for which thanks for bringing into attention an excellent strategy....You've mentioned about 1 and 5...can you please lemme know if that's est or gmt....looking forward to your reply...

Regards

Ali Raza
We aren't reading the PDF ...
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Good Trading To All ; Ken Lee
  • #2,324
  • Nov 1, 2010 11:08am Nov 1, 2010 11:08am
Quoting Trotty
Do you take many?

I like a confluence touch at the 10 ema into the trend but that's as a holder.

These sorts of touches I do do often and they still make my bum twitch a little!
Perhaps thats why some people love to take touch trades

I'll take a touch trade when when things get stacked on top of each other on a nicely defined area, like a 50 fib at a previous swing high/low as an example usually gives enough of a first reaction to have a quick scalp. Another one that i will look for on a touch trade is the 200ema on 15min, especially if it hasnt been touched for awhile. Pretty much the same as the 1h 62ema but for some reason i look more to the 200 which is always important to keep an eye on in my book.

But as you said as well, touch trades is not the part of my trading im the most comfortable doing
  • #2,325
  • Nov 1, 2010 11:13am Nov 1, 2010 11:13am
Quoting Kenneth Lee
Here is a equity building idea I have come up with for my own use. Somebody asked me a question about it so had to make it real instead of in my head. LOL

It starts out pretty risky but with the small amounts we are trading , It is ok plus most new traders are going to try that anyway ,, So a good lesson if they crash and burn for a few $$ . But once you hit step ( proper risk is in place. This is similar to the Forex fredom plan, But i suggest a loss prevention and I am not counting pips but $ levels. Also I recomend staying with minis so you...
Hey Ken,

Much better way than the original document.

Cheers
Eric
  • #2,326
  • Nov 1, 2010 11:13am Nov 1, 2010 11:13am
Quoting Storeball
Perhaps thats why some people love to take touch trades
LOL!

Quoting Storeball
Perhaps thats why some people love to take
I'll take a touch trade when when things get stacked on top of each other on a nicely defined area, like a 50 fib at a previous swing high/low as an example usually gives enough of a first reaction to have a quick scalp. Another one that i will look for on a touch trade is the 200ema on 15min, especially if it hasnt been touched for awhile. Pretty much the same as the 1h 62ema but for some reason i look more to the 200 which is always important to keep an eye on in my book.

But as you said as well, touch...
Near enough the same as me then I think.

Can must have balls of granite to take the touches off his lines the way he does, unfortunately mine are made of tissue paper
  • #2,327
  • Nov 1, 2010 11:35am Nov 1, 2010 11:35am
Quoting Trotty
These sorts of touches I do do often and they still make my bum twitch a little!
I just finished reading today's discussion on stops and touches and I had a couple things to add that may help:

As Ken said, EO originally came from a longer-term trading strategy. Unless he's scalping, he's always looking at "areas" first and foremost. Him and Infinity are always saying "you can see buyers at ... area", "you can see previous sellers at ... area but they were exhausted" etc. Here's an EO quote from page 1222: "The exact pip is too damn hard to nail. When I get within 20 pips, I'm looking for some action".

We know that in this system the 15M candle signal is simply meant as additional confluence that there is an extreme amount of support or resistance at a HTF level that we were already looking at. If EO was trading based off of the candle, he'd place his stop directly above/below the candle. But since he's always trading first and foremost off of an area, he'll place his stop based on the resistance/support area that he sees.

There are a lot of times when he tightens his stop OR is ready to close the trade quickly if it goes against him before it even comes close to his stop. On some trades you'll see him take a 5-10 pip loss because he doesn't like the PA, even though his stop may well have been at 30+ pips. He seems to like tighter stops on the touch trades. And also I do believe the "25 pips below the wick of the candle" thing was simply a blanket recommendation for when people aren't sure where to put their stop -- if he sees a tight area, he uses a tight stop.

Now all that being said, I think stop placement for EO was almost academic -- he is so incredibly good at recognizing areas, knowing where to enter, and knowing when to close early that stop placement isn't going to change his performance much. So, even though EO is an expert trader he's not going to be the best authority for YOUR stop placement. Pippinole obviously had incredible success with tight stops of 20 pips max. Ken uses much tighter stops then EO as well, and Kodrizo seems to regularly use 10 pip stops. I think it all depends on the individual trader and what they typically trade off of -- some people may see 20-40 pip areas, others may see 10-20 pip areas, and others may see touches. Of course it's also possible for the same trader to see all of those at different times/setups and I think that's what we saw EO doing in his thread.
  • #2,328
  • Nov 1, 2010 11:56am Nov 1, 2010 11:56am
Quoting Kenneth Lee
Here is a equity building idea I have come up with for my own use. Somebody asked me a question about it so had to make it real instead of in my head....
Very interesting Ken. It looks like anyone could have a reasonable chance of getting from step 1 to 10 in under 2 months (and that's being quite conservative). After I get a little more comfortable with the system, and gain a little more consistency, I plan on trying something like this out mainly to build confidence but obviously the equity growth would be great as well. (EDIT: I figure, if you can learn to trade well when you've got the pressure of using a high percentage of risk, then when you drop back down to risking 1-2% per trade it'll feel like taking ankle weights off)
  • #2,329
  • Nov 2, 2010 2:39am Nov 2, 2010 2:39am
Going to be interesting to see how the us elections effect price today, some choppiness wouldnt be surprising

This is the long term trendline that held price all day yesterday on gu, lets see how it plays out today.
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  • #2,330
  • Nov 2, 2010 3:05am Nov 2, 2010 3:05am
Still in play on this. Had a quick look at the other TF's but I was able to take this mainly on M15. It's now impossible not to take these trades, especially if the pullback is swift like this two bar pullback. Taking these now is the most natural thing in the world, i don't even have to think about it.
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  • #2,331
  • Nov 2, 2010 3:47am Nov 2, 2010 3:47am
Quoting Trotty
Still in play on this. Had a quick look at the other TF's but I was able to take this mainly on M15. It's now impossible not to take these trades, especially if the pullback is swift like this two bar pullback. Taking these now is the most natural thing in the world, i don't even have to think about it.
Good job there. Dont know how i missed it. Was watching GU. Some choppy action ther. Guess thats how it goes before major data
Making money is easy- Just dont take losing trades
  • #2,332
  • Nov 2, 2010 4:07am Nov 2, 2010 4:07am
Quoting Survivor
Good job there. Dont know how i missed it. Was watching GU. Some choppy action ther. Guess thats how it goes before major data
Thanks mate. Checked GU out this morning and quickly got rid of the screen - urgh!

I trade 5 pairs and it means that there is usually at least one pair that is behaving in a nice way.

Stop on this was only 12 pips so stop is now locked in at 1:1

My next major resistance area is some way off so I will let a candle formation end this trade. If it looks like the end, i'll let it be so.
  • #2,333
  • Nov 2, 2010 4:35am Nov 2, 2010 4:35am
Oh wow. Somehow I missed that 15M hangman setup on GU, right off of yesterday's US high because I was busy watching AU . I hope someone got a piece of that
  • #2,334
  • Nov 2, 2010 4:44am Nov 2, 2010 4:44am
Quoting dr mongolia
Oh wow. Somehow I missed that 15M hangman setup on GU, right off of yesterday's US high because I was busy watching AU . I hope someone got a piece of that
I saw that too mate but didn't want to touch it because I am still in my EU trade and GU is ugly today.

I have a weird thing about the hanging man trades. I know they are good setups at key areas but there is something about the look of them that messes with my small brain. I am used to looking at long, rejected wicks as an indication to be prepared to trade in the direction of the wick, you know follow the path of the rejection. It's taken some time to get my head around the hanging man formation being the absolute reverse signal and I still have this weird sense of doing the wrong thing if I trade them.

not sure if this is common or just my peculiar mind.
  • #2,335
  • Nov 2, 2010 4:58am Nov 2, 2010 4:58am
EU closed for 55 pips, probably closed too early but there was some strong rejection off R1 and with over 4:1 R/R on this, i'm more than happy.
  • #2,336
  • Nov 2, 2010 9:04am Nov 2, 2010 9:04am
Quoting Trotty
I saw that too mate but didn't want to touch it because I am still in my EU trade and GU is ugly today.

I have a weird thing about the hanging man trades....
Yeah I know what you mean, because a hanging man in the wrong place can be a definite bullish signal. I've learned that first hand

I waited until G/U retracted to 1.6040 to enter, got the touch of the 50SMA on the 15M which was also the 61.8% fib level of the move, the 50 on the 1H, and Friday's US session high. I wish I would have beenable to play this move from the top AND from the retracement, though. Missed a ton of pips
  • #2,337
  • Nov 2, 2010 9:07am Nov 2, 2010 9:07am
I feel i'm dominating your thread at the moment Ken, please PM me to tell me to ease off it's it's getting on your wick...pun intended!

Sorry if it is but I get bored between trades and at the moment, this is the one place I feel that my thought's or questions actually have any relevance to anyone (nobody is reading the EO hater thread now).

I've noticed that seeing how EO traded/trades, if price was trading under the 10 ema, he (counter trend trading), he would would use the 10 ema as a profit target if he felt it was just a retrace he was catching. Obviously it's a sensible approach but very, very often he would have the candle's length + 25 pips stop and the target could be as little as 15 pips. I think I started to see some of the reasons behind his monster pip hauls per week. He would be getting nowhere near 1:1 on these trades but is happy enough to risk enough to get a little it would seem.

I have spent a while trying to get my head around how he trades and makes it work for him but I couldn't quite understand some of these trades. I am obsessional about getting 1:1 as the idea of seeing less profit than I risked seems a dangerous one in the long term to me. To EO though, it seems this was much less of an obsession, thus allowing him to rack the pip totals up at some rate.

Did/does this seem the case to anyone else or have I missed something?
  • #2,338
  • Nov 2, 2010 9:18am Nov 2, 2010 9:18am
Quoting Trotty
Obviously it's a sensible approach but very, very often he would have the candle's length + 25 pips stop and the target could be as little as 15 pips. I think I started to see some of the reasons behind his monster pip hauls per week. He would be getting nowhere near 1:1 on these trades but is happy enough to risk enough to get a little it would seem.
On those quick countertrend scalps his stop is always much tighter then the +25 number from what I have seen. I'm not sure if you saw my post from yesterday on it, but often times on those he will close out if it goes more then a few pips against him regardless of what his stop is at. For him the automatic stop is really a last resort.
  • #2,339
  • Nov 2, 2010 9:30am Nov 2, 2010 9:30am
Quoting dr mongolia
On those quick countertrend scalps his stop is always much tighter then the +25 number from what I have seen. I'm not sure if you saw my post from yesterday on it, but often times on those he will close out if it goes more then a few pips against him regardless of what his stop is at. For him the automatic stop is really a last resort.

Did I not thank you for it? I didn't, did I? Um.....I meant to, sorry Doc [IMG]file:///C:/Users/Neil/AppData/Local/Temp/msohtml1/01/clip_image001.gif[/IMG]

Yeah, I did read it and it made a lot of sense. Thanks for responding! I think his use of stops is the one thing I can't get my head around really. If you are almost always likely to close out if it goes against you, why not just have your stop at the maximum amount you are willing for the trade to go against you to determine that it’s a dead trade, rather than some arbitrary number? For me, my size of stop governs my £ per pip so the smaller the stop, the quicker profit comes.

In amongst the brilliant information, there's some damn random stuff on that thread There was one trade he took off a line that seemed to connect a few candles at their tops but hack through the middle of a load more, which lay between two trendiness connecting the tops and bottoms of a channel and EO informed us that this was the reason for his long. A withering, squidgy part of my brain waved a flag of surrender at that point…..

Well done on your GU trade btw, hard luck on missing the big move though.
  • #2,340
  • Nov 2, 2010 9:35am Nov 2, 2010 9:35am
Quoting Trotty
Did/does this seem the case to anyone else or have I missed something?
I also forgot to add -- I think his massive pip totals are really a result of taking profit along the way. I'm pretty sure the pip totals that get quoted in that thread are the maximum amount of pips made on the trade, not the average gain of all partial positions closed. If you're always taking partial profits off at key areas then the amount of pips you're pulling in will always be very large -- even if you only take 1/5th of your position off at 100 pips and it then turns against you, it's still a 100 pip trade. If it turned against you at say 95 pips but you had taken profit at 80 pips, then it still would have been an 80 pip trade.

He's trading several full sized lots at a time so this works very well for him -- each lot is a lot of money at 50+ pips. He is also a master of adding back to positions at key areas, which is difficult to pull off. And since he is so good at entering he rarely loses pips. I guess what I'm trying to say is that he's ridiculously good and thats why he makes a lot of money
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