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How to use the 123 strategy effectively

  • #101
  • Dec 1, 2010 9:33am Dec 1, 2010 9:33am
Quoting Paulus
yes jeff that just blew all our 1 counts out the window on the 1hour I now have it sitting on top of that spike.....doe !

Although the 1 count on the 5min is still valid and we now have a 2 count

Cheers

P
...i take it you've inadvertently pulled your fib the wrong way around?...we need 3098 or so for the 3.
  • #102
  • Dec 1, 2010 10:05am Dec 1, 2010 10:05am
setup 123 TF 5 min
Trend up

It's right?
Attached Image (click to enlarge)
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  • #103
  • Dec 1, 2010 10:51am Dec 1, 2010 10:51am
Quoting luipie
setup 123 TF 5 min
Trend up

It's right?
Looks good to me!
  • #104
  • Dec 1, 2010 10:52am Dec 1, 2010 10:52am
Quoting sidefx
...i take it you've inadvertently pulled your fib the wrong way around?...we need 3098 or so for the 3.
Hi Side...no I think its right it has to pull back to the 61.8 level

P
  • #105
  • Dec 1, 2010 10:53am Dec 1, 2010 10:53am
Quoting luipie
setup 123 TF 5 min
Trend up

It's right?
Yes Luipie that count and signal is correct

P
  • #106
  • Dec 1, 2010 11:11am Dec 1, 2010 11:11am
using the same principle here is an advanced way of entry..advanced being another word for riskier .. but maybe more production in pips

We wait until our 3 count has gone in..this is determined by

 

  1. Being more than 1 candle from the 2 count

  1. The low of the prospective 3 count is higher than the low of the 1 count


All above is normal with the 123 set up

So once our 3 count has gone in we draw a line along the highs of the candles as shown in the piccy below.When we get a candle that closes above the line ..not breaks it but closes above it we go long

In the case of the 1st example we get 5 extra pips as our TP will be the same .In the 2nd example we get 7 extra pips

On the 1hour trade today an extra 45 pips

Cheers

P

Attached Image(s) (click to enlarge)
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  • #107
  • Edited 11:45am Dec 1, 2010 11:40am | Edited 11:45am
Good stuff Paulus! I'm wondering how much of your equity do you risk with a trade like this (or, what kind of leverage do you use)...

I have signed up for a demo account for MT4 (first time I have used it in about three years...I was using ninjatrader until the GAIN feed went dead) and I have data with Alpari UK going back to July...I plan on doing a manual backtest just for my own information (as I live near Chicago, I do not have the luxury of staying up all night to watch the European markets)...I will look for two things; the overall hitrate of the method using Paulus' rules for both European and US market times (not Asia), and then I will look at just GMT 1200 hrs until the end of US close (GMT 2100 hrs if I'm correct)...I'll post what I come up with this weekend.

Here is a bit of info (a bit old now, from 2002) that discusses the hitrate from Mark Crisp:

" ...they happen all the time and are about 70% accurate in price prediction."

(page 8 of the 123system.pdf found here: http://www.forexfactory.com/showthread.php?t=210023)

Regards,

Jeff
  • #108
  • Dec 1, 2010 2:03pm Dec 1, 2010 2:03pm
What is done when a position (here in U/J) drifts into the Asian markets?

http://i13.photobucket.com/albums/a288/stljeffbb/UJ.jpg
  • #109
  • Dec 1, 2010 4:04pm Dec 1, 2010 4:04pm
Quoting Paulus
Hi Side...no I think its right it has to pull back to the 61.8 level

P
P, just need to clear this up in my head. We had the successful short, so we're then looking for the long...the fib you pulled seems to be for shorts?
Attached Image
  • #110
  • Dec 1, 2010 5:03pm Dec 1, 2010 5:03pm
Quoting sidefx
P, just need to clear this up in my head. We had the successful short, so we're then looking for the long...the fib you pulled seems to be for shorts?
Hi sidefx,

just for share with you enclosure my set up 123s yesterday for the EU on 5MTF

Cheers
Attached Image (click to enlarge)
Click to Enlarge Name: eu 5mtf.gif Size: 29 KB
  • #111
  • Dec 2, 2010 1:36am Dec 2, 2010 1:36am
Quoting mrhb30jr
Hi sidefx,

just for share with you enclosure my set up 123s yesterday for the EU on 5MTF

Cheers
today my set up 123s .... for eu 5MTF ...

Cheers,
Attached Image (click to enlarge)
Click to Enlarge Name: eu 5mtf.gif Size: 32 KB
  • #112
  • Dec 2, 2010 1:44am Dec 2, 2010 1:44am
Quoting stljeffbb
What is done when a position (here in U/J) drifts into the Asian markets?

http://i13.photobucket.com/albums/a288/stljeffbb/UJ.jpg
Try to close at a profit ( even 1 pips) and go to bed if your in the uk...if up on the day and willing to lose some pips set normal TP with SL and go to bed

P
  • #113
  • Dec 2, 2010 1:44am Dec 2, 2010 1:44am
Quoting mrhb30jr
today my set up 123s .... for eu 5MTF ...

Cheers,
Thanks for sharing your chart...have to be honest and say i'm not sure how you're trading it I don't expect you to tell me, by the way
  • #114
  • Dec 2, 2010 1:49am Dec 2, 2010 1:49am
Quoting sidefx
P, just need to clear this up in my head. We had the successful short, so we're then looking for the long...the fib you pulled seems to be for shorts?

We draw from 1 to 2...2 is the level we need to break to go long

if at 1 is 0% and 2 is 100%

Then 61.8% should be in the upper half as price has to pull back from 2 down to the 61.8% level

P
Attached Image
  • #115
  • Dec 2, 2010 1:58am Dec 2, 2010 1:58am
Quoting Paulus
We draw from 1 to 2...2 is the level we need to break to go long

if at 1 is 0% and 2 is 100%

Then 61.8% should be in the upper half as price has to pull back from 2 down to the 61.8% level

P
...if we're pulling a long fib from 1 to 2, then a retracement to the 61.8% price of that swing has to be below the 50% price, surely??...it's semantics, i guess but it makes a big difference in qualifying the setups...i'm not trying to be pedantic, i just want to be completely clear....i'll just use the 38.2% instead as it makes more sense to me, based on how i interpret fib retracements. Thanks for your continued patience
  • #116
  • Dec 2, 2010 2:08am Dec 2, 2010 2:08am
[quote=stljeffbb;4214058]Good stuff Paulus! I'm wondering how much of your equity do you risk with a trade like this (or, what kind of leverage do you use)...





On a 10k account I risk 5% per trade
On a fixed TP you have to calculate money management
A 20pip loss must must be equal to a 100pip loss financially because we have no control of the size of our SL..its set by the distance 1 to 2

In our case we DO NOT work out how much we wish to lose and set our SL accordingly

We have our SL set for us no we have to work out our max loss with our MM

$10,000 x 5% = $500 max loss on each trade

Example 1

50 pips SL
1full contract = $10 per pip
50 pips = 50 x 10$ = $500
This gives us 5% we win $500 or Lose $500

Example 2

100 pips SL
1full contract = $10 per pip
100pips = 100 x 10$ = $1,000
This fails our MM we want a max loss of $500

1 mini contract = $1 per pip
5 mini contracts = 5 x $1 x 100pips SL = $500
This qualifies we win or lose $500

Cheers

paulus
  • #117
  • Dec 2, 2010 2:10am Dec 2, 2010 2:10am
Quoting sidefx
...if we're pulling a long fib from 1 to 2, then a retracement to the 61.8% price of that swing has to be below the 50% price, surely??...it's semantics, i guess but it makes a big difference in qualifying the setups...i'm not trying to be pedantic, i just want to be completely clear....i'll just use the 38.2% instead as it makes more sense to me, based on how i interpret fib retracements. Thanks for your continued patience

hehe...ok no worries..its how I do it other may use other methods to gauge strength of the pull back..important thing is the shape of the 123

Buyers give in and go to sellers 2 is broken
Sellers give in and go to buyers and 2 is broken

cheers

P
  • #118
  • Dec 2, 2010 2:14am Dec 2, 2010 2:14am
Quoting sidefx
Thanks for sharing your chart...have to be honest and say i'm not sure how you're trading it I don't expect you to tell me, by the way
Thank you and apologize if I make a mistake from my post here, good luck be on your success
  • #119
  • Dec 2, 2010 2:17am Dec 2, 2010 2:17am
Quoting Paulus
hehe...ok no worries..its how I do it other may use other methods to gauge strength of the pull back..important thing is the shape of the 123

Buyers give in and go to sellers 2 is broken
Sellers give in and go to buyers and 2 is broken

cheers

P
  • #120
  • Dec 2, 2010 2:18am Dec 2, 2010 2:18am
Quoting mrhb30jr
Thank you and apologize if I make a mistake from my post here, good luck be on your success
No mistake, Sir. You clearly have a method that is working for you...i'm much further back in the learning curve
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