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Trade What You See - Almost Naked Trading

  • #5,381
  • Nov 23, 2010 3:01pm Nov 23, 2010 3:01pm
I don't know if anyone caught this one...I didn't. A 3 Tap H4 trade set up--twice. Very nice trade even though it has a spread of 8 pips on FXDD.
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  • #5,382
  • Nov 23, 2010 3:04pm Nov 23, 2010 3:04pm
Quoting leelar
sorry, I should of made myself more clear, I meant any additional materials, like books, what are the theory behind it, etc... But thanks for the reply.
The basic theory behind the system is simple: follow the trend. There are lots of books (Trend Following and Trend Trading for a Living come to mind) about trend following that employ other methods, but the basic idea is typically the same. First, you have to identify the trend, and then you have to find a way to jump on board.

Take three tap trades:

First step is to identify the trend by looking to the RSIs. If the RSIs on the two higher time frames are pointing strongly in the same direction then its a pair worth watching. But finding the trend is not enough. Next step is to find a good way to jump on board.

Within a trend price tends to bob up and down. The three tap idea is based on the observation that, on a pullback, price has a tendency to bounce off of a trendline. If price has recently bounced twice off of a line, then it will likely bounce off a third time. So the second step is to find spots on the pairs worth watching where the price either has recently bounced for the third time, or looks like it is about to make the third tap.

Finally, this system looks for confirmation. Lawgirl calls this a trigger. With three taps, the confirmation comes when the time frame you are looking at (typically H4) and the two higher time frames all have their RSI's pointing in the same direction. This confirmation will coincide with price already moving in the direction of your trade.

So, three elements to a three tap trade: trend identification via RSIs, signal of a likely pullback and retracement via the third tap, and confirmation of price action by having full accord between the three RSIs.

Other systems will use other tools to look for the same things. The really heartening thing about this system is that it is not magic at all. It's a sound application of some basic principles that seem to work over time. Lawgirl's unique contribution, I believe, is the use of the RSI(3) over three time frames as the means for identifying the trend. Lots of trend identification ideas seem either to identify the trends too late, or too often, both leading to bad results. It may be that LG's approach, like the little bear's porridge, is "just right."
  • #5,383
  • Nov 23, 2010 3:05pm Nov 23, 2010 3:05pm
Quoting CollectPIPS
Hi LG, just to understand. Why were you still looking for bo here (post #5341)? Counting backward, I thought candle #5 made a bo downward & closed outside of the band, though the next candle took price back into the band?
Because that pair had been trading a narrow range over quite a period of time. Sooner or later it would head in a discernible direction.
  • #5,384
  • Nov 23, 2010 3:08pm Nov 23, 2010 3:08pm
Quoting oradba
Lawgirl, I have been practicing your method the last month with generally good results. I am not used to trading the longer timeframe, however, and am struggling with setting a proper SL to start and then how much to move it up as the trade hits profit.

For now I initially set a 200 pip SL; once the trade hits 100 pips profit I move to a 50 pip trailing stop. Does that make sense to you? Do you have any guidance to offer in this area?

Thanks!
Maybe worth a read to help you. Good luck.

http://www.fx360.com/commentary/brad...ding-plan.aspx
  • #5,385
  • Nov 23, 2010 3:25pm Nov 23, 2010 3:25pm
Quoting Forexcube
Have put USDCAD at my watchlist and wait for confirmation with the Daily and H4.

Try to trade the box and will wait of any breakouts in the future.
see , #5003 please.

Reading with MTFA

Profit: see chart.
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  • #5,386
  • Nov 23, 2010 3:42pm Nov 23, 2010 3:42pm
Quoting lawgirl21
Looking for a BO here soon.
Missed the H1 BO on this pair, but may be able to catch the H4 BO!
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  • #5,387
  • Nov 23, 2010 3:55pm Nov 23, 2010 3:55pm
Quoting lawgirl21
Missed the H1 BO on this pair, but may be able to catch the H4 BO!
i m waiting for this pair to break 1.00,everything is pointing towards huge move up

last month pin bar
weekly W
daily W

if it brakes 1.00 its 1000 pip move up
  • #5,388
  • Nov 23, 2010 4:20pm Nov 23, 2010 4:20pm
Quoting LolCat
i m waiting for this pair to break 1.00,everything is pointing towards huge move up

last month pin bar
weekly W
daily W

if it brakes 1.00 its 1000 pip move up
Wow...from your keyboard to the market's ears!
  • #5,389
  • Nov 23, 2010 4:24pm Nov 23, 2010 4:24pm
Quoting duffypratt
The basic theory behind the system is simple: follow the trend. There are lots of books (Trend Following and Trend Trading for a Living come to mind) about trend following that employ other methods, but the basic idea is typically the same. First, you have to identify the trend, and then you have to find a way to jump on board.

Take three tap trades:

First step is to identify the trend by looking to the RSIs. If the RSIs on the two higher time frames are pointing strongly in the same direction then its a pair worth watching. But finding the...
I love this DP..very concise and clear. Thanks for responding.
  • #5,390
  • Nov 23, 2010 4:26pm Nov 23, 2010 4:26pm
Quoting Forexcube
see , #5003 please.

Reading with MTFA

Profit: see chart.
Good for you FC...
  • #5,391
  • Nov 23, 2010 4:33pm Nov 23, 2010 4:33pm
One for the BO List
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Always Learning
  • #5,392
  • Nov 23, 2010 4:43pm Nov 23, 2010 4:43pm
3 Tap waiting on RSI's also AUDUSD starting a BO up

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Always Learning
  • #5,393
  • Nov 23, 2010 4:45pm Nov 23, 2010 4:45pm
Quoting mary4x
Good for you, Ph!
Thanks mary, hope u resolved your rsi problem.
  • #5,394
  • Nov 23, 2010 4:46pm Nov 23, 2010 4:46pm
Quoting lawgirl21
I came back to my office with a 150 pip short trade on my office account. Nice surprise because I had forgotten about it.
I like those kinda surprises
  • #5,395
  • Nov 23, 2010 4:47pm Nov 23, 2010 4:47pm
Looks like the calm after the storm is setting up some nice consolidations - and we LOVE what consolidations lead to don't we?
  • #5,396
  • Nov 23, 2010 5:24pm Nov 23, 2010 5:24pm
Trying to come out of ditch

Attachment
Always Learning
  • #5,397
  • Nov 23, 2010 5:29pm Nov 23, 2010 5:29pm
Quoting Ph22
Looks like the calm after the storm is setting up some nice consolidations - and we LOVE what consolidations lead to don't we?
Yes, indeed....we do
  • #5,398
  • Nov 23, 2010 5:42pm Nov 23, 2010 5:42pm
Set everything to auto and calling it a day. Good Luck everyone with your trading this evening, and I hope you all have a good night.
Always Learning
  • #5,399
  • Nov 23, 2010 6:25pm Nov 23, 2010 6:25pm
Just checking to see if after the 15 min. this is good to go? Thanks for the help.
  • #5,400
  • Nov 23, 2010 6:59pm Nov 23, 2010 6:59pm
Quoting lawgirl21
I came back to my office with a 150 pip short trade on my office account. Nice surprise because I had forgotten about it.
Not to name drop or anything, but your comment might inspire some to think you are lucky. I was speaking to Andrew Cardwell a while back (the King of RSI - yes I know him and he is a fine gentleman) and he said he does not believe in luck at all when it comes to trading. He said what some people see as luck is nothing more than the point where preparation meets opportunity. In your case LG, you have prepared well enough!

Joe
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