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  • #3,661
  • Dec 16, 2010 9:28am Dec 16, 2010 9:28am
here is a different feeding story..if i was watching my demo broker instead of my live broker..i'd be in this trade with my live account but since i was fed with different data from both brokers i'm in this only with my demo acc...
here is the story..

p.s.don't think i just trade on 5 min without checking things higher timeframes..believe me every trade that i take has to have a good reason and analysis on at least weekly time frame...5min charts are just my final steps when i enter a trade...

good luck all..
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  • #3,662
  • Edited 9:37pm Dec 16, 2010 9:12pm | Edited 9:37pm
Good morning, all

This post is a response to a private message I have received earlier which I found the need to answer in depth.

Thank you for the detailed response.

There is nothing wrong with your approach however please dont focus too much on price pattern setups. They are not the road to riches. Im sure you are aware but the difference in the data between brokers will show a pin bar in one chart while it may show something else in other. This is mainly due to the time difference of the brokers and what the broker choose to have as open time of the day. And there are so many discrepancies in between the information traders look at that a perfect looking pin bar on one platform means nothing to other traders. Then one has to wonder how reliable is a price pattern. Have you ever thought of it like this?

Many traders base their trading decisions solely upon certain indication like price pattern when it should be more of a confirmation than a recommendation. In my explanations throughout the thread, I refer many times to certain price patterns and they are very important tool on my belt however I do not soley rely on them to state that they are main source of my profitability. Hope this provides food for your thoughts.

Increased risk doesnt necessarily increase your reward. There are times in the market to stack positions and there are times in the market to just probe and watch. Unknowingly a trader might be overexposing himself to the market whilst he assumes that he is stacking correctly. Dont we all believe one thing but in reality the opposite is in effect. So when is the correct time to stack? It is time to stack when you are absolutely positive that the direction of the current movement has a purposeful meaning; main monthly trend. It has been a long time since I discussed monthly trends but I assume all traders understand and know the importance of monthly trends as they are the fundamental and technical movements of the market.

I look for buys above open price of monthly candle and sells below open price of monthly candle. Sounds familiar? Yes, my price interpretation doesnt differ inbetween timeframes something I have preached for a long time. Having said that, there are periods when all 3 timeframes allign in one direction; monthly UP, weekly UP, daily UP usually a good indication of major trend that is happening or about to happen.

And it is happening right now in eur/usd.

Monthly eur/usd

http://img838.imageshack.us/img838/1...01020257pm.jpg

Weekly eur/usd

http://img443.imageshack.us/img443/6...01020252pm.jpg



Daily eur/usd


http://img809.imageshack.us/img809/8...01020246pm.jpg

And the breakout I was waiting for just now on 5min chart

http://img340.imageshack.us/img340/1...01020730pm.jpg

Continuing on..
  • #3,663
  • Dec 16, 2010 9:34pm Dec 16, 2010 9:34pm
Just briefly, at the moment in regards to eur/usd I am looking at buys. I have 4 positions near the open of the candle. First was just a probe to test my theory and as the market plays out I will add more.

However, I do not solely focus on buys today as today could be a down day. And if that happens and price retraces down then I would reenter near the open price of the day as it comes back down. Sometimes it will retrace down and then stall and continue on UP, then I would enter more positions as it continues on. Timing of stacking is very important.

I know alot of the readers do not find the necessity of 3x20 exercise but there are 3 main things you learn from it.

1. You will notice stalls very quickly and easily and you will be also able to forecast how soon it will blow out of it. I like to refer to it as an aura. Sometimes a passive aura with the usual ups and downs and then an imminent red aura when I know its going to blow out of its tight range. It is then up to my price interpretation to align my positions preferably/usually before the blow happens. Sometimes I get the direction wrong which I would quickly change and capture the compelling movement.

2. You will also gauge the strength of the buy and sell. And this is very very very very very very important. The skill to gauge the strength of the retrace/dips/continuations. You know a retrace has little strength when it can only make small bold candles and then to have the original momentum overcome it with one single bold candle.

3. Timing. Without timing your stacking will not work. Infact, without timing your whole trading process is in jeopardy. Like falling in love, timing is a critical factor to know when to trade and when not to. You must be able to know when to add positions, subtract positions, aggressive attack, aggresive defend. But obviously timing alone cannot help as you would need the knowledge to gauge the strength of the movement from point 2.

eur/usd is now approaching 1.33000 and my positions are well ahead but this is just the beginning. Depending on the 'style' of the stall at 1.33000 which will show on the shape of the next 4hr candle. If a mini stall appears with less than 2 or 3 1hr retrace candle, I would safely say that we are aiming at 1.34000. If the stall around 1.33000 is somehow prolonged then there will be a retrace and I will watch again near the open price of today @ 1.3238. Until then my positions are SL to breakeven and Im at the mercy of the markets. Im placing 2 alerts to my cell phone, 1.3320 incase of a strong upward movement to stack on or 1.3240 when the retrace is coming back down.

4hr eur/usd 5/10 ema is about to cross. I never base my trading decisions on ema crossovers but I do know that a good movement if it does happen usually happens just after the cross. Not all the times but enough times for me to take advantage of with careful planning.

Sincerely,

Graeme
  • #3,664
  • Dec 16, 2010 9:53pm Dec 16, 2010 9:53pm
Thank you very much Graeme. I realise now that I lost perspective and have been looking too close at the candle patterns and not nearly enough at the big picture.

Kindest Regards,

Cam
  • #3,665
  • Dec 16, 2010 10:16pm Dec 16, 2010 10:16pm
Quoting cameron1st
Thank you very much Graeme. I realise now that I lost perspective and have been looking too close at the candle patterns and not nearly enough at the big picture.

Kindest Regards,

Cam
You are most welcome Cam.

Just like the audnzd you send me earlier, it is best to enter early and anticipate. When your anticipation is slowly confirming to be right, add more positions with valid reasoning. Many traders call it adding on the dips and I agree. However, I am far more aggressive when the market is favouring me and simply walk away when it doesnt. You need to know when to srike. Beginning of the month, beginning of the week, beginning of the day, beginning of a new 4hr candle all means opportunity for myself. Sometimes you get so absorbed in one direction that you forget the opposite and there is a good posibility that the direction you chose is just a retrace before going against you. I cover this by entering on the flipside with valid reasoning. And this works great on some months with 100 or 200 pip retrace before direction changes and I have positions on the retrace with the right direction. Definitely a huge bonus to my profit statement and worth the effort. And I also cover those other months that opens and just continues in one direction. As long as there is a price range withing a given month I know I will profit. And the confidence grows on you until you overlook losses endured to reach the end of the month when you settle your losses. And you evolve to a point where losses mean nothing but just a stepping stone of the greater picture.

Once a monthly direction is set and continuing, I will zoom into all levels of timeframes to add positions mercilessly but with valid reasosn.

I find that many many traders search far and wide when the answers that were overlooked for its simplicity might have been the holy grail after all.

Sincerely,

Graeme
  • #3,666
  • Dec 16, 2010 10:27pm Dec 16, 2010 10:27pm
Quoting pipEASY
However, I am far more aggressive when the market is favouring me and simply walk away when it doesnt.
That's a very good point Graeme, which I know in theory, but in practice I am still working on my timing...sometimes I get it right and it's a beauty to see momentum unfold, but other times (unfortunately quite often) I don't quite get it.

Thank you again for the articles you wrote, I am off to bed now (4:30 AM in UK, but was happy to stay up and read)

Kindest Regards,

Cam
  • #3,667
  • Dec 17, 2010 1:33am Dec 17, 2010 1:33am
Hi Graeme
glad you're back... i know you simply say you buy when its above the open and vice versa but i also remember you considering it up when it only closes above the previous down candle's open...i mean for the daily it has not made a close above the previous down candle yet..
would you explain that more if you don't mind?
thanks...
  • #3,668
  • Dec 17, 2010 2:26am Dec 17, 2010 2:26am
Hey Graeme,
really good to see you back, and hope you are well.
cheers
geoff
  • #3,669
  • Edited 3:12am Dec 17, 2010 2:54am | Edited 3:12am
Quoting nomask
Hi Graeme
glad you're back... i know you simply say you buy when its above the open and vice versa but i also remember you considering it up when it only closes above the previous down candle's open...i mean for the daily it has not made a close above the previous down candle yet..
would you explain that more if you don't mind?
thanks...
Good question, Nomask

And yes, the rule always applies to myself.

Look for buys when price closes above open of the previous down candle

Look for sells when price closes below open of the previous up candle

The above rule ensures that you will remain within the main direction. And I use the above small rule to always guide my focal interpretation.

However, that is not the only tool on my belt and Im worried to say the next as readers might shift their views away from the rule above but I do use probes during asian session to capture days that open on asian session and charge straight forward until end of the day. Something I did mention many times in the thread from the beginning.

Flexibility is key to trading. Sometimes your gut feeling and just the blind following of the market is better than any measure of forecasting.

I have many positions on the retraces of the monthly/weekly/daily candle which means I have gone against the simple rule more than once. It has worked wonders for myself as positions on the retraces/wicks has a higher probability to survive any pullbacks as the trend continues.

When price agrees with the small rule and also the direction of the day, this is the time for a very aggressive positioning.

But what made me go long into eur/usd today was a small single probe that I placed at open which kept on growing. And I just followed.

This chart might look confusing but if you are interested in my thought process before I took the trades this morning on eur/usd.

Daily chart eur/usd this morning without open of todays candle.

http://img593.imageshack.us/img593/6599/76552802.jpg

http://img526.imageshack.us/img526/2115/33223830.jpg

Sincerely,

Graeme
  • #3,670
  • Dec 17, 2010 12:15pm Dec 17, 2010 12:15pm
Quoting pipEASY
Good question, Nomask

And yes, the rule always applies to myself.



Graeme
thank you for clarification..just to make sure i was on the same page...
i'd like to post my latest trades (live) on eurusd as per my hindsight.I too sometimes try going against my hindsight with very small risk but today i was waiting a down move...
i've spent 38 pips total of 7 trades to build those three positions..its around 6 pips per trade...
even if i close the smallest position of those three positions I'd be covering all my losing trades at once...
my intention here is not to show off but assure everybody following this thread about Graeme's method is the only method in this forum that totally works out and its just a piece of treasure...
trust me i have enough experience on every single thread in this forum...
You'll just realize more and more by the time...
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  • #3,671
  • Dec 17, 2010 4:39pm Dec 17, 2010 4:39pm
Quoting nomask
thank you for clarification..just to make sure i was on the same page...
i'd like to post my latest trades (live) on eurusd as per my hindsight.I too sometimes try going against my hindsight with very small risk but today i was waiting a down move...
i've spent 38 pips total of 7 trades to build those three positions..its around 6 pips per trade...
even if i close the smallest position of those three positions I'd be covering all my losing trades at once...
my intention here is not to show off but assure everybody following this thread about Graeme's...
nomask how did u spend 38 pips on 7 trades? wouldnt it have been less stressful to have made only 2 trades by using a larger stop say 20 pips (including spread) instead of 7 trades.


also u went short because of the rule "Look for sells when price closes below open of the previous up candle" do you use this on the weekly and monthly as well?
  • #3,672
  • Edited 11:04pm Dec 17, 2010 9:55pm | Edited 11:04pm
Quoting nomask
thank you for clarification..just to make sure i was on the same page...
i'd like to post my latest trades (live) on eurusd as per my hindsight.I too sometimes try going against my hindsight with very small risk but today i was waiting a down move...
i've spent 38 pips total of 7 trades to build those three positions..its around 6 pips per trade...
even if i close the smallest position of those three positions I'd be covering all my losing trades at once...
my intention here is not to show off but assure everybody following this thread about Graeme's...
Thank you for sharing.

Excellent trade.

This post is very important and also answers to fugly's question as well.

I hope all other readers realize what nomark has achieved here.

Nomask had a hindsight of down for this month of gbpusd. Most likely cause of the large bold candle of the previous monthly candle which was an engulf pattern. The main trend is definitely down.

However, during this month there was no significant sell opportunities as the first two weekly candles of the month was more or less up/retrace.

eurusd weekly

http://img717.imageshack.us/img717/1886/93222143.jpg

It is only this week when gbpusd kicked into gear and started to drop.

eurusd monthly

http://img834.imageshack.us/img834/7952/90077430.jpg

In this drop which is now forming to be the wick of presumably this months down candle, nomask has now positions on the wick. If his hindisght is proven to be correct (and it doesnt matter if it doesnt) his interest is in the best possible place for the maximum profit taking.

http://img256.imageshack.us/img256/1760/62310700.jpg

Few traders ask why I break my own rule of buying when price closes above open price of previous candle and vice versa. I adhere to the rule however I send probes into the market all the time. It is far better to watch a probe either grow or die then watching raw price feed fluctuating. But when the rule is confirmed, I would take stacking to the next level in aggressiveness.

Now I have something that I request all readers to think as there is an important point here.

Nomask, if your hindsight proves to be correct for this month. And now that this weeks candle did close below previous open price of up candle as per our small golden rule. What will you do?

A. Watch your 3 probes grow and bask in the glory?
B. Start designing an excel spreadsheet to tally up your unrealized profits and brag in forums.
C. Spend the next week focusing alot more on gbpusd as it is 'starting' to confirm your 'hindsight' and take maximum profit taking advantage.

Nomask, what will you do if your monthly hindsight doesnt work out?

A. Log into forum and complain
B. Move onto new method and feel angered by -150 pip loss?
C. Look for another good monthly price setups on other pairs and place price alerts to your phone?

Nomask, what will you do if your monthly hindsight does work?

A. Start writing a resignation letter as verbally abusive as possible
B. Close 3 probes and place a huge smile
C. At the end of the month you settle your losses and to your personal discretion close few more to take realized profit now or close few less for potential bigger reward in the future.

Nomask, what do you anticipate from now? Assuming your monthly hindsight does work.

A. 10+ vouchers in forums
B. More positions this week without overexposing risk and valid reasoning.
C. Keeping your hindsight intact however also covering the fact that it might not work out by placing few probes against your hindsight. But also aggressively adding more and more when the price action does play out to your favour in the following weeks and months

I do not know how far the current gbpusd will drop however I can ensure all readers that 1 correct hindsight on a monthly 'scale' would be few thousands of pips profit at the very least. And the profit taking is further amplified with addition of multiple position the longer the trend prevails.

1 correct hindsight on 5min chart means nothing but 1 correct hindsight on a monthly chart (using ofcourse the same price interpretation) means everything. Give me a price range on a month and I will profit from it.

Dont allow the 3x20 exercise on lower timeframes confuse you. That exercise is to learn price action to apply on higher timeframe to gain hindsight. We do the exercise on the lower timeframe as it is much faster for more practice and we know that there is no difference between timeframes except the scale. Everything that works on 5min chart works on other timeframes; weekly, daily, monthly.

This is an interesting fact for most, average price range of all common pairs is more than 1500 pips for a given year. In other words to achieve this average range all pairs do move from one spectrum to other to cover this distance. A professional trader noticing such movement happening will ensure that he captures most of that move from all aspects. Intraday, intraweek, position trading. Perhaps this is just an elaborate version of 'follow the market' but most traders dont.

I hope this is start of something new for nomask and all readers who do take my suggestions seriously. Nomask, if this gbpusd does work out to your favour nothing stops you from doing the same thing over and over again on all pairs.


Sincerely,

Graeme
  • #3,673
  • Edited 6:15am Dec 18, 2010 4:41am | Edited 6:15am
NOW I can see....
Quoting pipEASY
Thank you for sharing......... do the exercise on the lower timeframe as it is much faster for more practice and we know that there is no difference between timeframes except the scale. Everything that works on 5min chart works on other timeframes; weekly, daily, monthly...... nothing stops you from doing the same thing over and over again on all pairs.


Sincerely,

Graeme
  • #3,674
  • Dec 18, 2010 5:48am Dec 18, 2010 5:48am
Quoting nomask
thank you for clarification..just to make sure i was on the same page...
i'd like to post my latest trades (live) on eurusd as per my hindsight.I too sometimes try going against my hindsight with very small risk but today i was waiting a down move...
i've spent 38 pips total of 7 trades to build those three positions..its around 6 pips per trade...
even if i close the smallest position of those three positions I'd be covering all my losing trades at once...
my intention here is not to show off but assure everybody following this thread about Graeme's...
The key with your above comment is IF you closed any position at all then you'd cover losses. Two weeks ago I had a rough week were nothing would stick and as such ended up down some pips. Then Monday happened and I was on the right side of the market for pretty much all of that move up. Six positions were stacked and I was thinking this is great. I could cover all of last weeks losses with a single leg, but instead I will give time a chance to make this work out. Anyhow, we all know what happened on Tuesday. Everything got taken out BE as the week progressed. So yeah, IF I had closed a leg it would have covered my prior losses.....I'm sure you see what I'm getting at here. The market is full of uncertainty.

With kind regards,
MK
  • #3,675
  • Edited 9:31am Dec 18, 2010 6:15am | Edited 9:31am
Quoting MidKnight
The key with your above comment is IF you closed any position at all then you'd cover losses. Two weeks ago I had a rough week were nothing would stick and as such ended up down some pips. Then Monday happened and I was on the right side of the market for pretty much all of that move up. Six positions were stacked and I was thinking this is great. I could cover all of last weeks losses with a single leg, but instead I will give time a chance to make this work out. Anyhow, we all know what happened on Tuesday. Everything got taken out BE as...
If I may step in and explain for the benefit of all.

The only thing certain is that nothing has any certainty.

Im assuming the above post is about your experience from gbpusd? It was wise to follow the initial up movement early in the week (I did) but when it stalled for a prolonged period (more than x2 4 hour candle is uncomfortable for myself) there is a reason. There is always a reason.

Im sure you do but do you consult with monthly and weekly timeframes? Monthly timeframe is both fundamental and technical movement of the markets. gbpusd is definitely a down trend for this month and that thought must always be in your head. When price goes against your thought you still cover it by few positions here and there. But when it stalls and continues as per monthly trend then you know its time to add positions on the new correct direction.

However, your monthly hindsight could have been wrong from the start; gbpusd could be destined to go up from here. Then your 6 positions are at the very best positions for the largest profit taking if you allow it to grow. And ofcourse you wouldnt stop there, you would add positions every day, every week, every month as long as trend prevails. You might look at your current small loss and feel frustrated but soon you hit that golden major trend of the year that does treble your account or more and then notice that all you have to do is just hold on and stay in the game until it does happen. The feeling of '1 leg will cover all my losses for this week' is not what I expect you to encounter. You should be looking for '1 leg covering all my losses for several months or a whole year" and it all starts from 1 correct hindsight on the monthly taken down into all timeframes for maximum profit taking.

Just on related topic, some might wonder if the reward is worth its effort. The juice is definitely worth the sqeeze. All you have to do is find a pair that looks ready to explode on monthly and then filter is down to lower timeframes. How do you find such pair? If you have practiced 3x20 exercise on lower timeframe (like 5min) you just know from experience that such setups need to move. And when it does move you know that it will go at least few candles. And thats all you need to know. Just a hint that it might go few candles. Few candles on 5min worth nothing but a few candles on monthly chart is worth alot of profit, few thousands at the least.

From experience 2 consecutive months of same movement (so 2 same monthly candle) is on average 3000 - 6000 pips gross with few additional positions.

From experiece few positions with the 200 ema on weekly/monthly for a year means a few years paycheck for most.

And in the midst of all uncertainties the only thing certain with forex is that it might not move in the next 4 hours but it will definitely move in a year. Think about it. You would be very foolish not to take advantage of such surety

No disrespect to midknight but I hope this explanation gives you the right nudge.

Sincerely,

Graeme
  • #3,676
  • Dec 18, 2010 6:56am Dec 18, 2010 6:56am
Hi Graeme,

Sorry, but I should have said that my story about last week was for EUR/USD But I get all your points - thanks for the post.

Merry Christmas,
Matt
  • #3,677
  • Dec 18, 2010 7:11am Dec 18, 2010 7:11am
Quoting MidKnight
Hi Graeme,

Sorry, but I should have said that my story about last week was for EUR/USD But I get all your points - thanks for the post.

Merry Christmas,
Matt
Merry Christmas to you too Matt.

eur/usd shared the same fate with gbp/usd.

In regards to eur/usd and gbp/usd, monthly 5/10 ema has just crossed over, 50% retrace of previous monthly candle has been achieved and it came tumbling down. I am however not pleased to see that the retrace was 50% as I always prefer less than 33% as this usually leads to a very bold move down.

I anticipate a good 5/10 ema crossover on monthly and hope it travels far. Im not sure if it will happen but I will always anticipate and participate.

eur/usd and gbp/usd is currently looking to be a bold monthly candle down. I will probe early monday and stack heavily when I know buyers have no strength (usually at dip) or compelling momentum.

I definitely like the current looks of it and have my hindsight as down but will participate on both direction.

One of the common myth is that there are no participants during festive season. I will not disagree publically but I had my best months in December for the last 2 years on all pairs. Infact all months have been good for myself.

Never stop trading cause of general beliefs. Stop trading when there is nothing to trade on.

Merry Christmas to all.

Sincerely,

Graeme
  • #3,678
  • Dec 18, 2010 8:26am Dec 18, 2010 8:26am
Quoting pipEASY
Thank you for sharing.



Now I have something that I request all readers to think as there is an important point here.

Nomask, if your hindsight proves to be correct for this month. And now that this weeks candle did close below previous open price of up candle as per our small golden rule. What will you do?

A. Watch your 3 probes grow and bask in the glory?
[color=#800080]B. Start designing an excel spreadsheet to tally up your unrealized...
great questions with obvious answers in it...
i know what you trying to say by all these questions and I'm well aware of the fact it my not work out after this point per my hindsight..
but when i see that i had my positions on that monthly wick and they're all moved to b.e...It's all i can do for now rest is totally up to the market..if this month closes down as my hindsight i'll close my smallest position to cover my expenses and leave rest to grow..if things get changed not in my favour..i'll just do the same thing but in the opposite direction..i know i can't force market for anything but i can manage my trades..
when i first started demo trading your method i started with 5000 and had 6 positions in eurusd with very close to each other and i closed 5 of them for 100 pips each and i got 500 total and left the first position to grow and when i finally closed my left one 4 more weeks after..
it was almost 1200 pips...so if i kept all my trades alive that would have doubled my account..so I've learnt very good lesson back then..
  • #3,679
  • Dec 18, 2010 8:38am Dec 18, 2010 8:38am
Quoting fugly
nomask how did u spend 38 pips on 7 trades? wouldnt it have been less stressful to have made only 2 trades by using a larger stop say 20 pips (including spread) instead of 7 trades.


also u went short because of the rule "Look for sells when price closes below open of the previous up candle" do you use this on the weekly and monthly as well?
i find the trades very fast to move in my favor if I'm in the right direction..as you can see last trades were in the right direction but with no momentum at that time...i just closed them as they were ranging and making closes above my 5 min entry..and as i got better opportunity i just re-entered..this how i like to do..
but its all up to you.but since i was already "not bad" at low risk entries i implemented this from Graeme's idea easily...
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  • #3,680
  • Dec 18, 2010 8:38am Dec 18, 2010 8:38am
Quoting nomask
great questions with obvious answers in it...
i know what you trying to say by all these questions and I'm well aware of the fact it my not work out after this point per my hindsight..
but when i see that i had my positions on that monthly wick and they're all moved to b.e...It's all i can do for now rest is totally up to the market..if this month closes down as my hindsight i'll close my smallest position to cover my expenses and leave rest to grow..if things get changed not in my favour..i'll just do the same thing but in the opposite direction..i...
Very sound approach and very similar to my approach

Only minor difference is that I cover the opposite side just incase Im wrong with the hindsight.

Im very happy to hear your trading approach as it is logical, sensible and realistic. And im sure within that 4 weeks you would have added more positions as the direction continued on. It is these large chunks of few thousands pip profit that kick starts your capital.

All there is for us to do is to remain in the game and hold on until such move happens on the 'higher' timeframe first.

Rinse Repeat and rest is history.

Well done.

Graeme
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