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How to use the 123 strategy effectively

  • #341
  • Dec 17, 2010 7:42am Dec 17, 2010 7:42am
my daily trade on EU still looks ok ..

Went to +480 pips in 5 days pulled back tested old break of 2 level and now siting at around 185 pips


P
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  • #342
  • Dec 17, 2010 8:22am Dec 17, 2010 8:22am
Quoting pres78
First post to this thread but I have been following for some time as I trade this as one of my methods... See attached chart for possible upcoming trade with break of point 2. Nice bear 15m candle off of 38.2 fib.

Have to be careful with TP though as the 1.5500 level is very close and has proven to be strong support every time we have attempted to break since end of November.
TP1 hit for 1:1 since I place my SL at point 3... If I am trading a 50% retrace than I set my TP 1 accordingly. I trade 3 lots and move lot 2 and 3 to BE once TP 1 is hit etc...
Attached Image
Today's zone = Tomorrow's opportunity!
  • #343
  • Edited 9:29am Dec 17, 2010 8:44am | Edited 9:29am
Quoting pres78
And a possible EURUSD also...
EURUSD trade hit TP1 for 1:1... remaining to BE.

TP 2 now hit... Lot 1 = 28 pips, Lot 2 = 45 pips (total 73 so far)
Attached Image
Today's zone = Tomorrow's opportunity!
  • #344
  • Dec 17, 2010 9:30am Dec 17, 2010 9:30am
Quoting pres78
TP1 hit for 1:1 since I place my SL at point 3... If I am trading a 50% retrace than I set my TP 1 accordingly. I trade 3 lots and move lot 2 and 3 to BE once TP 1 is hit etc...
Scaling out is OK but you have effectively increased your risk reward to 3 - 1 by setting up this way.
Just a thought.
  • #345
  • Dec 17, 2010 9:40am Dec 17, 2010 9:40am
Quoting tradestar1
Scaling out is OK but you have effectively increased your risk reward to 3 - 1 by setting up this way.
Just a thought.
Agreed... If I had one lot only I would lock in my 1:1 and be done. I have been more successful and have made more pips this way by allowing the other 2 lots to now run free trades trying for more pips. If they do not hit then I have still made profit on the first trade. If all 3 hit SL then I look for another trade. My extra pips gained have outweighed the times when my SL gets hit on all 3. My trade starts out as 1:1 risk since I trade 1 full lot ($10/pip) broken into 3 smaller / equal lots so when I start I have the same risk as someone trading 1 lot to close in full at the same spot.
Today's zone = Tomorrow's opportunity!
  • #346
  • Dec 17, 2010 9:44am Dec 17, 2010 9:44am
TP3 hit on EUR and TP 2 hit on GBP trades.
Today's zone = Tomorrow's opportunity!
  • #347
  • Dec 17, 2010 9:55am Dec 17, 2010 9:55am
Quoting pres78
Agreed......
Agreed, I on the other hand have used a scale in method. Unlike Paulus I think catching the additional retracements on the way up or down and adding at each retracement with a trailing SL is my chosen poison. I did however have a target TP set up on this one as well as trailing my SL.

The TP was hit just moments after this screen shot..... 47 and 64 pips profit respectively.

Risk was 12 and 14 pips respectively.

Better than 4 to 1 return.......Ya gotta love this system.
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  • #348
  • Dec 17, 2010 9:57am Dec 17, 2010 9:57am
Quoting pres78
TP3 hit on EUR and TP 2 hit on GBP trades.
Yeah this has been a sweet run hasn't it..... WoooHooo.
  • #349
  • Dec 17, 2010 10:23am Dec 17, 2010 10:23am
Quoting pres78
EURUSD trade hit TP1 for 1:1... remaining to BE.

TP 2 now hit... Lot 1 = 28 pips, Lot 2 = 45 pips (total 73 so far)

the longer the time frame the larger the potential TP ...thats the theory we are always told any way..

All I know is longer the time frame less noise.... The blips that take you out of a trade on a 5min chart are not seen on a 15 min chart the blips that take you out on a 15min chart are not seen on a 1hr chart etc etc..

So your scaling out waiting on bigger Tp's is possible on a longer time frame chart .. just be wary days like this that rally and keep going up or drop and keep going are rare and are usually followed by 2-3 days of correction also known as chop side ways move etc etc then your scaled exit out will struggle.

1st TP may hit move 2 others to break even .. they get taken out you made 20 pips but risked 3 x 20 ( 60 pips) pips getting it.If you closed out all 3 at 20 pips you gained 60 pips for 60pips risk a better RR

Just an observation hope you dont mind me saying so

Well done today on the positive pips Iv only had 1 trade but Im long past beating myself up when seeing big moves pass me by... I can sit all day without a trade doesnt matter to me I havnt lost and that the secret I belive in the trading business ...cut down on sesnless losers.. but increase contracts so on winners you win bigger by the number of contracts you trade not the number of pips you get

cheers all

Paulus
  • #350
  • Dec 17, 2010 11:06am Dec 17, 2010 11:06am
Hi Paulus,

I'm very much enjoying your excellent contributions to the thread. I was looking at this chart and noticed that the pullback to the 61.8 is in fact 38.2 for the rally between the 1 and 2 points. I believe that earlier you said that you wait for about a 61.8 pullback to confirm your 3 point, which I agree is a good idea. In this case, there is an error. The trade worked out fine as per price action and reached your target. There are no absolute rules in trading so I'm not looking for you to admit any mistake or anything like that. My question is, if you had seen this in the first place would you have still taken that trade, or would you have passed?

Thanks,

Joe

http://cdn.forexfactory.com/attachme...7&d=1292536857

Quoting Paulus
Signals looking good..will close in 1hour come what may

cheers

P
  • #351
  • Dec 17, 2010 11:09am Dec 17, 2010 11:09am
Quoting Paulus
the longer the time frame the larger the potential TP ...thats the theory we are always told any way..

All I know is longer the time frame less noise.... The blips that take you out of a trade on a 5min chart are not seen on a 15 min chart the blips that take you out on a 15min chart are not seen on a 1hr chart etc etc..

So your scaling out waiting on bigger Tp's is possible on a longer time frame chart .. just be wary days like this that rally and keep going up or drop and keep going are rare and are usually followed by 2-3 days of correction...
I appreciate all feedback and advice... in this business one never stops learning or thinking about ways to improve on their trading. While I was gone to lunch my GBP trade hit TP3 bringing that runs total to TP1 = 34, TP2 = 54 and TP3 = 88 (176 pips).

Best of luck in your trading for the remainder of this year and into next.
Today's zone = Tomorrow's opportunity!
  • #352
  • Dec 17, 2010 11:24am Dec 17, 2010 11:24am
Quoting jsmanuse
Hi Paulus,

I'm very much enjoying your excellent contributions to the thread. My question is, if you had seen this in the first place would you have still taken that trade, or would you have passed?

Thanks,

Joe

http://cdn.forexfactory.com/attachme...7&d=1292536857
Hi Joe

I use the fib tool in the following way

For a long I start from the 1 count and 0.0 .............and drag to the 2 count at 100 with the fib tool

This gives me a projected 200 level above my entry ( my TP) and projects my 61.8 fib line

This is how I use the fib tool others pull from 2 to 1 for a long and so the 61.8% level is at a different place but then minus values are projected into the future

Ive always used my fib tool like this...if Im doing it wrong it seems then that the 38.2% fib line is also excellent lols

Cheers

paulus
  • #353
  • Dec 17, 2010 11:29am Dec 17, 2010 11:29am
Quoting pres78
I appreciate all feedback and advice... in this business one never stops learning or thinking about ways to improve on their trading. While I was gone to lunch my GBP trade hit TP3 bringing that runs total to TP1 = 34, TP2 = 54 and TP3 = 88 (176 pips).

Best of luck in your trading for the remainder of this year and into next.
Nice pips there you are in fact doing every thing they tell us to do

Cut losses let winners run and try for a 3:1 risk reward....very nice

Good luck to you also

P
  • #354
  • Dec 17, 2010 12:03pm Dec 17, 2010 12:03pm
Quoting Paulus
Hi Joe

I use the fib tool in the following way

For a long I start from the 1 count and 0.0 .............and drag to the 2 count at 100 with the fib tool

This gives me a projected 200 level above my entry ( my TP) and projects my 61.8 fib line

This is how I use the fib tool others pull from 2 to 1 for a long and so the 61.8% level is at a different place but then minus values are projected into the future

Ive always used my fib tool like this...if Im doing it wrong it seems then that the 38.2% fib line is also excellent...
Thanks for the answer Paulus. I understand what you are doing with the Fib tool. Basically at the end of the day, you like to see a 1/3 pullback prior to your no. 3 point and also a couple of bars in the direction of the 3 point - which I think is a good idea.
  • #355
  • Dec 17, 2010 12:24pm Dec 17, 2010 12:24pm
I have a 123 in place for both Eu and GU

Entry for EU is 1.3166
Entry for GU is 1.5491

I will post my week end stats later this evening

Cheers

P
  • #356
  • Dec 17, 2010 12:46pm Dec 17, 2010 12:46pm
I am now long GU at 1.5492

SL is set at 1.5452
TP is set at 1.5527

I know its late I know its Friday but the weeks been good to me and up 162 pips on EU and 150 on GU

P
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  • #357
  • Dec 17, 2010 12:50pm Dec 17, 2010 12:50pm
I am now long EU from

1.3167

SL 1.3131
TP 13198

P
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  • #358
  • Dec 17, 2010 12:52pm Dec 17, 2010 12:52pm
Quoting Paulus
I am now long EU from

1.3167

SL 1.3131
TP 13198

P
Nice end of week trades... I missed both but many more to come in the weeks ahead. That's what I love aboue FX... always another pip train leaving the station if you miss the first.
Today's zone = Tomorrow's opportunity!
  • #359
  • Dec 17, 2010 2:06pm Dec 17, 2010 2:06pm
Im tempted to close as both are in profit but I will set an alarm and if no tp or sl hit i will close around an hour from now


stats for my week

EU

+30
+15+30+22
+22-59+41
+33+28

GU

+14
+48+29
-45+25
+26+25
+28

and 2 open trades 1 each on the above

P
  • #360
  • Dec 17, 2010 3:30pm Dec 17, 2010 3:30pm
Nice week Paulus! Congrats and thank you for all your posts and ideas! Are you still gonna trade this year? Or how do you see the coming weeks? Isn't volume going down drastically?
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