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How to use the 123 strategy effectively

  • #301
  • Dec 16, 2010 6:12am Dec 16, 2010 6:12am
yes if a caught the first signal that would be better... but I_ was a sleep

so still in around -5/10 pips for now
  • #302
  • Dec 16, 2010 6:39am Dec 16, 2010 6:39am
Quoting ChinaWombat
keep up the good work,

You don't need to count the pips, unless they are standardised per R:R.
All you need is 60.5% with R:R = 1 and you have a pretty profitable system. Net 8 trades (23 winners - 15 losers) * risk capital% gives you a raw 16% return for the month if you risk 2% per trade, or a nice 40% if you're following Paulus risk allocation less slippage. I know a few fund managers that would be happy with that for the year, not just a month!
Thanks ChinaWombat

Indeed, as you say, the results so far are "pretty profitable"...the three months I (and my wife) have analyzed so far have exactly a 60% hitrate (roughly 110 trades for Feb., Mar., and Oct. 2010)...add compounding and the method can reap even more profit!

Regards,

Jeff
  • #303
  • Dec 16, 2010 7:23am Dec 16, 2010 7:23am
well risky ground news trade time but positio9n still open... and i'll risk let it ride the news... let's see maybe some lesson will be teached on me this day....
  • #304
  • Dec 16, 2010 9:01am Dec 16, 2010 9:01am
from the off I was looking for shorts as this is the most effective way I have found trading the 123..ie counter trend

only 1 trade for me today so far GU short from 1.5599 ,SL 1.5632, TP 1.5569


EU nowt yet but have a 123 short in place pending order is 1.3224

Again thanks jeff for all the work ..60% is good for a manual system but with mechanical rules

Cheers

paulus
  • #305
  • Dec 16, 2010 9:10am Dec 16, 2010 9:10am
yep, with you on the GU short - 1:1 target is not too far off the weekly S2 also.
Attached Image (click to enlarge)
Click to Enlarge Name: 16th Dec EU 5m short.PNG Size: 35 KB
  • #306
  • Dec 16, 2010 9:17am Dec 16, 2010 9:17am
Didn't trade this as it was too close to news for me but a sell around 9875 a perfect lh set up IMHO, as opposed to waiting for 9867 to break.
Attached Image (click to enlarge)
Click to Enlarge Name: 3.gif Size: 16 KB
  • #307
  • Dec 16, 2010 9:25am Dec 16, 2010 9:25am
nice profits there and well worth waiting for 17pips on GU waiting for Eu still need a few pips

P
  • #308
  • Dec 16, 2010 9:27am Dec 16, 2010 9:27am
scrub that my spread betting account was sh
oing +17 but not closed lols
  • #309
  • Dec 16, 2010 9:37am Dec 16, 2010 9:37am
Out now both with nice pips

P
Attached Image (click to enlarge)
Click to Enlarge Name: eu gu t.gif Size: 38 KB
  • #310
  • Dec 16, 2010 9:49am Dec 16, 2010 9:49am
Quoting pgpb
Hi Donfriday

It would be great if you could post on the thread. Those following this thread are very interested in the 123 method.

We have Paulus who trades 123 on reversal....we have Vantage who trades 123 with the trend (correct me if I am wrong here guys).......so any other input is hugely welcomed.

PGPB
I HAVE SEEN DIFFERENT THREAD ABOUT 123 METHOD AND NOT ALL TRADE IT LIKE JOE ROSS BUT HERE IS THE THREAD YOU WILL FIND THE BOOK LAW OF CHART.
http://www.forexfactory.com/showpost...15&postcount=1
MY OPINION NOT FINANCIAL ADVISE
  • #311
  • Dec 16, 2010 9:54am Dec 16, 2010 9:54am
Quoting sidefx
I like Paulus' idea of trading 123 reversals rather than continuation. To help qualify this, i'm experimenting with the use of trendlines pulled from the previous 2 swings.

Looking at the current EU 5min, the trendline supporting longs has now been breached so we're now waiting for a valid 123 short.

Just some food for thought.
Hello everyone....did anybody see this as a 1-2-3? It seemed to fit the rules, but nobody is talking about it (lol probably a good thing as it was a loser...I almost thought about placing a trade at the 0.0 as I had multiple chances to do so....

http://i13.photobucket.com/albums/a2...1620100001.jpg

....and thanks Paulus for the kind words..we'll keep on analyzing and post the results here...

Regards,

Jeff
  • #312
  • Dec 16, 2010 9:58am Dec 16, 2010 9:58am
Hi Jeff

market was trending up from the off therefore we look for a short........ the trade you show is a trade continuation of the current trend and therefore would not be taken

Cheers

Paulus
  • #313
  • Dec 16, 2010 10:04am Dec 16, 2010 10:04am
Hi Paulus
I'm hoping you might comment on Pipster's chart on post #286. When I saw the 2 trades I wasn't sure what I would do.

I thought maybe I should:

(1) Wait for the first trade (buy) to trigger only because it came first and ignore the second trade (sell)

(2) Ignore the first trade (buy) and wait for the second trade (sell) to trigger because it is the "newest" one

(3) Take either trade - whichever triggers first

(4) Wait for the first trade (buy) to trigger because the trend for the past day or so has been down

Thanks
Tom
  • #314
  • Dec 16, 2010 10:25am Dec 16, 2010 10:25am
Quoting Paulus
Hi Jeff

market was trending up from the off therefore we look for a short........ the trade you show is a trade continuation of the current trend and therefore would not be taken

Cheers

Paulus
Hmm....then it is possible a scant couple of the trades I included may be incorrect...when you say "I start looking for 123 at 7am uk time on...not before" I take that to mean all other trends are irrelevant...

Included is a picture of the action before 7am UK time:

http://i13.photobucket.com/albums/a2...1620100002.jpg

It seems to me there is a downtrend until 0615 Alpari Demo time (so I guess that is 0515 UK time, eh?), and then indeed the trend is up with some long downward wicks at 0810 and 0815 (where I had also drawn a 1-2-3 that seemed to qualify except perhaps for direction)....

OK, so I think now I get it...when 7am your time (Paulus) comes around, you see what trend establishes itself, then you trade counter to that trend (ha ha as you have said)....do you ever have and point ones start right at 7am? I guess this is the important question: Do you use the direction established in the Asia session just before 7am to dictate your 1-2-3 positioning?

Thanks,

Jeff
  • #315
  • Dec 16, 2010 10:27am Dec 16, 2010 10:27am
Quoting pipfirst
Hi,

Would like to ask.. if this EUR/USD ... setup of 123... it is correct ? since I found got 2 possible setup.. either its buy or sell..


http://i55.tinypic.com/2v1ahyw.gif


waiting for comment...

Thanks,
Set them both up...... but move your BUY down to the high just below it.
  • #316
  • Dec 16, 2010 10:43am Dec 16, 2010 10:43am
Quoting tomd
Hi Paulus...
Hi Tom..blimey er let me think lols

this was a 15min chart not a 5min so out of my focus really but trying to be black and white yes or no abd rules based

the market was trending down so id look for the long and set up my 1 2 3 as it was done..however at A a lower high was put in and so the bracketed count is now viable

2 conclusions only here

With money management and a risk no greater of 5% the short could of been set up and traded

or

Ignore the short leave the buy order and monitor..no trade triggered but no loss would of incurred which is the cautious way to trade this predicament

cheers

P
  • #317
  • Dec 16, 2010 11:27am Dec 16, 2010 11:27am
I am now long both EU and GU

cheers
P
Attached Image(s) (click to enlarge)
Click to Enlarge Name: gut.gif Size: 15 KB
Click to Enlarge Name: uet.gif Size: 14 KB
  • #318
  • Dec 16, 2010 12:40pm Dec 16, 2010 12:40pm
Quoting Paulus
I am now long both EU and GU

cheers
P
Took the same trade on the inverse (UJ). The 1-2-3 entry method is quite relaxing at key levels.
  • #319
  • Dec 16, 2010 1:09pm Dec 16, 2010 1:09pm
no volatility though all the big bang boys are in the wine bars ....!

P
  • #320
  • Dec 16, 2010 1:17pm Dec 16, 2010 1:17pm
Quoting Paulus
no volatility though all the big bang boys are in the wine bars ....!

P
Paulus... I just want to say Thank you, for giving us this system.
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