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How to use the 123 strategy effectively

  • #441
  • Dec 20, 2010 8:03pm Dec 20, 2010 8:03pm
Here is the news that apparently caused the spike
This was a pretty timely announcement especially in these thin markets.


FX NOW! EUR/USD, EUR/JPY Flows - China VP Wang pledges "Concrete action" to help EU; EUR up

December 20, 2010 5:26:00 PM PST
* 21 Dec 10: 01:26(SGA) - FX NOW! EUR/USD, EUR/JPY Flows - China VP Wang pledges "Concrete action" to help EU; EUR up

Chinese Vice Premier Wang Qishan pledges "concrete action" to help EU with its debt problems. China supports efforts by Europeans officials to stabilise global markets. China will implement prudent monetary policy. China and EU should work together to push forward G20 decisions. Vice Premier Wang is speaking at opening of trade dialogue between China-EU. On FX, EUR/USD spikes to day highs of 1.3174, up from 1.3125-30 in thin markets, helped by positive comments from VP Wang on support for EU, in the midst of eurozone debt crisis. EUR/JPY hit highs of 110.20, up from 109.85-90, while AUD spikes to 0.9962 from 0.9920-25 on return of some risk appetite in thin markets. But EUR, EUR/JPY still vulnerable to downside. WL
  • #442
  • Dec 20, 2010 8:10pm Dec 20, 2010 8:10pm
Quoting pres78
I removed my post since you say they are not 123 trades and I agree that they aren't prefect, pretty set ups but I had a low point 1, high point 2, retrace and breakout which is what I traded.

Guess it may have been more of a range breakout from between 68.2 and 100 fib levels.
You need not to remove it, we all learning and helping each other, for better view so you will understand more of 123 you should read the book..that is not 123 count on your chart it;s called trading range and you need to wait for the breakout if real or fake, it sometime form a new high and proceed downward so you need to be wise on using the Ross Hook i dont know if you know that..
MY OPINION NOT FINANCIAL ADVISE
  • #443
  • Dec 20, 2010 8:18pm Dec 20, 2010 8:18pm
Quoting sidefx
I agree with Paulus, been stung too many times over-trading. GU and EU shorts similar to Paulus today, which set themselves up after the asian session long trendline breaks.

here is the count i edited, the candle made new low from point 2 1.5544 on your fibo so that is when 123count completed. Sl @point1 will still be in nice profit down with 2nd entry at RH 1.5525
Attached Image (click to enlarge)
Click to Enlarge Name: 20th Dec GU 5m short.PNG Size: 36 KB
MY OPINION NOT FINANCIAL ADVISE
  • #444
  • Dec 20, 2010 8:19pm Dec 20, 2010 8:19pm
This trade took forever to fire off but closed quickly. The 2 and 3 could have been move around to the right based upon one's viewpoint. I just left them where I originally saw them. I had set my tp at +22.
Attached Image (click to enlarge)
Click to Enlarge Name: Screen shot 2010-12-20 at 7.13.21 PM.png Size: 37 KB
  • #445
  • Dec 21, 2010 3:05am Dec 21, 2010 3:05am
Quoting donfriday
here is the count i edited, the candle made new low from point 2 1.5544 on your fibo so that is when 123count completed. Sl @point1 will still be in nice profit down with 2nd entry at RH 1.5525
OK, I understand what you are saying now. Like Paulus, I feel more comfortable trading 123 reversals but to qualify as a valid setup, I look for a trendline to be broken first. In this short, your point 2 @5544 didn't qualify (using my rules) as it didn't break the trendline.....lots of ways to trade 123s and as long as we're all using a method that achieves our individual financial goals, it doesn't matter which variant is used
  • #446
  • Dec 21, 2010 3:42am Dec 21, 2010 3:42am
short GU

at 1.5526 tried to post but couldnt get into site !

TP is 1.5488

SL is 1.5567

EU has a 123 but no trigger yet

P
Attached Image (click to enlarge)
Click to Enlarge Name: Tuesday 21st.jpg Size: 98 KB
  • #447
  • Dec 21, 2010 3:46am Dec 21, 2010 3:46am
Quoting Paulus
short GU

at 1.5526 tried to post but couldnt get into site !

TP is 1.5488

SL is 1.5567

EU has a 123 but no trigger yet

P
Your GU doesn't qualify under your rules mate, does it...less than 2 candles between 2 & 3?
  • #448
  • Dec 21, 2010 3:52am Dec 21, 2010 3:52am
Quoting sidefx
OK, I understand what you are saying now. Like Paulus, I feel more comfortable trading 123 reversals but to qualify as a valid setup, I look for a trendline to be broken first. In this short, your point 2 @5544 didn't qualify (using my rules) as it didn't break the trendline.....lots of ways to trade 123s and as long as we're all using a method that achieves our individual financial goals, it doesn't matter which variant is used


I am glad you have your own rule from the original 123 that i have known for years..
I am just a newbie
Attached Image
MY OPINION NOT FINANCIAL ADVISE
  • #449
  • Dec 21, 2010 4:02am Dec 21, 2010 4:02am
Quoting donfriday
I am glad you have your own rule from the original 123 that i have known for years..
I am just a newbie
You subscribe to Ross 123s which is great, as i said before, there are several 123 methods traded on this thread. I'll continue to trade the method that works for me
  • #450
  • Dec 21, 2010 4:06am Dec 21, 2010 4:06am
sorry to ask dont know if you already said that.. but please can you explain you rules ? maybe with a chart to see clearly

thanks by the way catch the same GU as paulus and waiting the e/u to triger.

update trigered one on E/J
1- 109,95
2 - 110.18
3 - 110.05

TP - 110.29
  • #451
  • Dec 21, 2010 4:09am Dec 21, 2010 4:09am
Quoting lmgp00
sorry to ask dont know if you already said that.. but please can you explain you rules ? maybe with a chart to see clearly

thanks by the way catch the same GU as paulus and waiting the e/u to triger.
...sure, i'll post a chart later on. I'm also in the GU short, as i don't use the >1 candle rule between points 1 to 2 and 2 to 3. Great to see these moves in a 'thin' market
  • #452
  • Dec 21, 2010 4:28am Dec 21, 2010 4:28am
Quoting lmgp00
sorry to ask dont know if you already said that.. but please can you explain you rules ? maybe with a chart to see clearly
I check which direction price was moving prior to Frankfurt open (so before 7am UK time) and determine the trend using the last 2 swing highs/lows before 7am...i then trade a reversal 123 from a break of that trendline, where (in the case of this morning's short) the setup's point 2 has broken lower than the trendline.
Attached Image (click to enlarge)
Click to Enlarge Name: 21st Dec GU 5m short.PNG Size: 40 KB
  • #453
  • Dec 21, 2010 4:37am Dec 21, 2010 4:37am
thanks for the time

it's similar to what i do ... i'm in europe so i wake at 7am GMT (8am UK), and see where the market as gone in asian if trends up i look to shorts (reversal) or vice versa... but as said i'm to fresh on this markets :S so much things to learn ...


by the way do you recomend some books to improve this methodology i have now and still reading it : trading in the zone by mark douglas.

thans for the time to help a newbie trader.
  • #454
  • Dec 21, 2010 4:48am Dec 21, 2010 4:48am
Quoting lmgp00
thanks for the time

it's similar to what i do ... i'm in europe so i wake at 7am GMT (8am UK), and see where the market as gone in asian if trends up i look to shorts (reversal) or vice versa... but as said i'm to fresh on this markets :S so much things to learn ...


by the way do recomend some books to improve this methodology i have now and still reading it : trading in the zone by mark douglas.

thans for the time to help a newbie trader.
Us Brits are GMT now our clocks have been put back. We're GMT+1 in the spring

If you stick at what you're doing with 123s on a couple of liquid pairs and compound your account(s), you'll do fine Trading in the zone is one of the better texts, although no substitute for screentime and testing your own ideas to be comfortable trading an edge that works for you.
  • #455
  • Dec 21, 2010 4:48am Dec 21, 2010 4:48am
Quoting sidefx
You subscribe to Ross 123s which is great, as i said before, there are several 123 methods traded on this thread. I'll continue to trade the method that works for me
I think Donfriday is a voice we want to keep on this thread.
It seems he is trading significant amounts of real money.

The thing about forexfactory is that not all voices are equal.
Those that are trading significant amounts of real money should really be listened to.

IMHO

PGPB
  • #456
  • Dec 21, 2010 4:58am Dec 21, 2010 4:58am
[quote=sidefx;4256597]Us Brits are GMT now our clocks have been put back. We're GMT+1 in the spring

i'm from portugal we to put 1hour less in winter ...

that's why i said 1 hour in front didnt knew that UK also had DST...

well i for now am trading low amount as should be expected very low amounts, but i prefer to play with it in real mode to have a better feeling...

i was gone to other systems but i love this pattern 123 so i'll invest my time in it to try to performe well... let's see how i do this...

thanks for all.
  • #457
  • Dec 21, 2010 5:14am Dec 21, 2010 5:14am
Quoting pgpb
I think Donfriday is a voice we want to keep on this thread.
It seems he is trading significant amounts of real money.

The thing about forexfactory is that not all voices are equal.
Those that are trading significant amounts of real money should really be listened to.

IMHO

PGPB
I'm all ears when it comes to people sharing their own method(s). I'm sure Donfriday is grown up enough to continue posting, if he wants to share his approach for the good of others, along with the many others here posting their approach. It's a great thread because of this diversity. The market humbles all level of trader at some point, regardless of strategy/method/years of experience.
  • #458
  • Dec 21, 2010 6:11am Dec 21, 2010 6:11am
Quoting sidefx
Your GU doesn't qualify under your rules mate, does it...less than 2 candles between 2 & 3?
Yes your right sorry ..but I took the trade this is 2nd time its happened in the last couple months ..

Not trying to fudge any thing it happens...no indicator or ea for this....... saw the pull back was looking at EU also that had at least 5 candles although didn't trigger and put the lmt order in on GU

looking for longs on GU and a trigger for the EU short

p
  • #459
  • Dec 21, 2010 6:19am Dec 21, 2010 6:19am
Quoting Paulus
Yes your right sorry ..but I took the trade this is 2nd time its happened in the last couple months ..

Not trying to fudge any thing it happens...no indicator or ea for this....... saw the pull back was looking at EU also that had at least 5 candles although didn't trigger and put the lmt order in on GU

looking for longs on GU and a trigger for the EU short

p
Cheers P, i thought i'd missed a tweak to your rules somewhere Paid off nicely.
  • #460
  • Dec 21, 2010 6:27am Dec 21, 2010 6:27am
Quoting donfriday
You need not to remove it, we all learning and helping each other, for better view so you will understand more of 123 you should read the book..that is not 123 count on your chart it;s called trading range and you need to wait for the breakout if real or fake, it sometime form a new high and proceed downward so you need to be wise on using the Ross Hook i dont know if you know that..
And do you trade only 123's with the Ross Hook? No one else trading on here seems to mentioned it or wait for it (I may have msised this)... Waiting for the Ross Hook and then a break of this new high or low would seem to lead to many missed trades? I may look into that book...
Today's zone = Tomorrow's opportunity!
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