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How to use the 123 strategy effectively

  • #481
  • Dec 21, 2010 10:57am Dec 21, 2010 10:57am
Quoting sidefx
Jeff, as you know, Paulus looks at price action prior to 7am (UK time). Price (5min) was printing higher highs and higher lows in the run up to 7am, so the Paulus method is then on watch for a short 123 as the first trade of the day. A straight forward, simple approach.
Thanks sidefx.....yeah, I'm probably "overcomplicating" things....lol, doesn't surprise me one bit...good trading to you...

Regards,

Jeff
  • #482
  • Dec 21, 2010 11:24am Dec 21, 2010 11:24am
Quoting stljeffbb
@ Ha ha, I know some of you might be getting tired of this, but I'm going to keep on pressing.....



Jeff
Jeff....please keep on "pressing"....your questions are creating answers for more than just yourself.

Thanks to sidefx and tradestar1 for your participation....this is really the only thread I follow these days

PGPB
  • #483
  • Dec 21, 2010 11:28am Dec 21, 2010 11:28am
I looked at this thread. This method is very simple, and it is what I use the majority of the time. I use 1H the majority of the time although I may use the 2H or 4H some. The 1H gives me a good picture of the what is happening. I do not use indicators, but I do use trendlines or lines at support or resistance. Inaddition to a stop loss order, I use a limit order to take my profit. I place the limit order where I expect the price to move such as the area of previous congestion (support or resistance).

I have placed two screen shots from this morning's trade.
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  • #484
  • Dec 21, 2010 11:43am Dec 21, 2010 11:43am
I took a trade on EURUSD per pic 1... My TP is set at -100 fib at 3067. Then price retraced back to 0 fib level breakout (is this a Ross Hook?) so I created a new point 2 and am now in a second trade at the breakout of this new level at 3114 with a target at this -100 fib at 3031. I am still a little worried about the stiff resistance at 3100 which has proven tough since it's last break and hold in November. If it is broken I see no issues getting to my 3031 target.
Attached Images
Today's zone = Tomorrow's opportunity!
  • #485
  • Dec 21, 2010 11:50am Dec 21, 2010 11:50am
I know I have sent this to some of you in our correspondences, But I figured it was worth sharing here in the thread since I believe it is pertinent to every traders success.


This is from Joe Ross, and very pertinent to your trip to becoming a successful trader.






SETUPS


You only need to master one setup to be a consistently profitable trader.

Screen Time will allow you to master one setup.

After you have mastered one setup "OWN IT" you can add another setup later.

This can be an ongoing process developing your own style.

The best setup to begin with is the one that you see and understand easiest. If you are forcing yourself to learn a setup because you believe another person is successful using it you may be taking the longer route to profitability.

We are all different . Our brains and personalities will gravitate to different setups. This is also true of exit techniques.

Most traders I hear from lengthen their road to profitability by trying to apply too many concepts before owning the first one.

They have studied a myriad of techniques but have yet to master any. This allows them to talk about trading but unable to consistently trade profitably.

The first decision to make is; do you desire to be a counter trend trader? or a with the trend trader? Eventually, you can be both.
At the beginning, or a new beginning perhaps, you will do best choosing to Master setup and follow the trend.

If you have been at this game for awhile and are not yet consistently profitable you know what I am saying is correct.

My personal trading style is a combination of many styles and setups. I trust this website will be an exercise in my personal understanding of my own style allowing all to benefit.

PICK ONE, MASTER IT, AND BECOME CONSISTENTLY PROFITABLE

  • #486
  • Dec 21, 2010 12:12pm Dec 21, 2010 12:12pm
Quoting tradestar1
Guess I'm still asleep..... I don't see this one, can you post a chart?

the 1 was in place in the 1st hour as my 1st post todays states 123 in place but no trigger the 2 was easy and the 3 followed at point A..but no trigger and then a higher high then A was made so 3 gets moves

I then got the trigger at the arrow as per the post currently up 20 odd pips

cheers

P
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  • #487
  • Dec 21, 2010 12:18pm Dec 21, 2010 12:18pm
Thank's Paulus, I later changed the TF and you trades became apparent, I hadn't finished my morning coffee before posting...LOL
  • #488
  • Dec 21, 2010 12:21pm Dec 21, 2010 12:21pm
Had I been marking my chart like Paulus I'd gone short for a win but marking it as I did my sl was hit. So it goes. Any comments on my interpretation are always appreciated. Lynn
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  • #489
  • Dec 21, 2010 12:33pm Dec 21, 2010 12:33pm
Quoting stljeffbb
Thanks sidefx.....yeah, I'm probably "overcomplicating" things....lol, doesn't surprise me one bit...good trading to you...

Regards,

Jeff
My thinking on trends..I have studied trends untill I see them in my sleep..I have used all kinds of indicators to help me identify trends..

Thats fine if you need an EA as a piece of logical code needs a number crunched piece of data to determine direction

I want to trade indicator free..this way Im using price action or if you like the price and movement of price reflects the average sentiment of the masses.

What does my 1st initial look at my EU chart tell me ?

Price moved up from A to B in the Asian session
When we came out of the grey and Frankfurt started I was looking for a 1 as I take signals opposite to the current trend

1 was placed easily
We then moved down and rallied by more than 1 bar so 2 was placed easily
Price moved to my fib retracement at C and so 3 was placed easily

the low at A had not broken the hi at B had not broken
At D we made a higher 3 and so the number 3 was moved to its new position and the short was triggered at the arrow

Hope that helps cheers

P
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  • #490
  • Dec 21, 2010 12:38pm Dec 21, 2010 12:38pm
Quoting lbhales
Had I been marking my chart like Paulus I'd gone short for a win but marking it as I did my sl was hit. So it goes. Any comments on my interpretation are always appreciated. Lynn
Agree this went bust but only 5% of your bank went with it

And I understand your play but we look for inital direction from Asian and mark from there.

Hope that helps

paulus
  • #491
  • Dec 21, 2010 12:40pm Dec 21, 2010 12:40pm
Quoting pres78
I took a trade on EURUSD per pic 1... My TP is set at -100 fib at 3067. Then price retraced back to 0 fib level breakout (is this a Ross Hook?) so I created a new point 2 and am now in a second trade at the breakout of this new level at 3114 with a target at this -100 fib at 3031. I am still a little worried about the stiff resistance at 3100 which has proven tough since it's last break and hold in November. If it is broken I see no issues getting to my 3031 target.
Trade 1 is closing in on TP at -200 (3067). Price struggled a bit with the DS1 level but has now broken down through. Let's see if it holds with a close below on the 5m or 15m.
Attached Image
Today's zone = Tomorrow's opportunity!
  • #492
  • Dec 21, 2010 12:43pm Dec 21, 2010 12:43pm
This one took some time but finally broke down through the point 2. I am not in this trade as I missed the break.
Attached Image
Today's zone = Tomorrow's opportunity!
  • #493
  • Dec 21, 2010 1:00pm Dec 21, 2010 1:00pm
Quoting pres78
Trade 1 is closing in on TP at -200 (3067). Price struggled a bit with the DS1 level but has now broken down through. Let's see if it holds with a close below on the 5m or 15m.
3 - 15m candles since break of DS1 and still no close below... and TP 1 is so close. Holding firm with my trading plan even though closing for 50pips would be nice. To get 1:1 I need to hold for my TP which 70pips that matches my SL. If price keeps struggling I may close before hitting TP. Price bounced hard at DS1 yesterday and I would hate to give back all 50.
Today's zone = Tomorrow's opportunity!
  • #494
  • Dec 21, 2010 1:50pm Dec 21, 2010 1:50pm
Quoting pres78
3 - 15m candles since break of DS1 and still no close below... and TP 1 is so close. Holding firm with my trading plan even though closing for 50pips would be nice. To get 1:1 I need to hold for my TP which 70pips that matches my SL. If price keeps struggling I may close before hitting TP. Price bounced hard at DS1 yesterday and I would hate to give back all 50.
DS1 (3081) falls just above the daily trend line (see below) drawn from previous low to today's low. TP sits just below this level and could be tough to get to. Will watch a little longer and may lean toward closing rather than risking giving it all back.
Attached Image
Today's zone = Tomorrow's opportunity!
  • #495
  • Dec 21, 2010 1:51pm Dec 21, 2010 1:51pm
Quoting pres78
3 - 15m candles since break of DS1 and still no close below... and TP 1 is so close. Holding firm with my trading plan even though closing for 50pips would be nice. To get 1:1 I need to hold for my TP which 70pips that matches my SL. If price keeps struggling I may close before hitting TP. Price bounced hard at DS1 yesterday and I would hate to give back all 50.
Its tough I know but try to be mechanical black and white

Closed at 50 today instead of TP and in 1month you will be closing at 40 eventually you will close when you get a gut feeling to do so and will be risking 70 to get 30

If you lose you lose ..go make a coffee .. if this wins it will go in the memory bank and your comfort zone will have increased for the next time

I see 2 conclusions as Im in the same boat as you Im up 40 but I win or lose based on mt SL and TP and my money management

You want to build to 100 contracts you have to have a clear cut unemotional view of trading

cheers

P
  • #496
  • Edited 2:04pm Dec 21, 2010 1:53pm | Edited 2:04pm
Quoting Paulus
Its tough I know but try to be mechanical black and white

Closed at 50 today instead of TP and in 1month you will be closing at 40 eventually you will close when you get a gut feeling to do so and will be risking 70 to get 30

If you lose you lose ..go make a coffee .. if this wins it will go in the memory bank and your comfort zone will have increased for the next time

I see 2 conclusions as Im in the same boat as you Im up 40 but I win or lose based on mt SL and TP and my money management

You want to build to 100 contracts you have to have...
Well said... TP it is. Do you ever move a trade to breakeven to save any chance of getting stopped out and to attain a "free ride" so to speak (on trades with larger TP/pip counts to travel)? I know you use the same MM on each by adjusting lot sizes but I was just curious. If you get to BE then it's like the trade had no risk if you do get stopped out.
Today's zone = Tomorrow's opportunity!
  • #497
  • Dec 21, 2010 3:02pm Dec 21, 2010 3:02pm
Quoting pres78
Well said... TP it is. Do you ever move a trade to breakeven to save any chance of getting stopped out and to attain a "free ride" so to speak (on trades with larger TP/pip counts to travel)? I know you use the same MM on each by adjusting lot sizes but I was just curious. If you get to BE then it's like the trade had no risk if you do get stopped out.
Never

P
  • #498
  • Dec 21, 2010 3:21pm Dec 21, 2010 3:21pm
Quoting Paulus
Never

P
Solid as a rock! Keep it coming!
  • #499
  • Dec 21, 2010 4:36pm Dec 21, 2010 4:36pm
Quoting pres78
This one took some time but finally broke down through the point 2. I am not in this trade as I missed the break.
No criticism here just trying to learn the setup---but because of the 2 candle rule isnt this an invalid trade?
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We are all One. Be present. Be the Observer
  • #500
  • Edited 5:23pm Dec 21, 2010 5:05pm | Edited 5:23pm
Quoting Iamfx
No criticism here just trying to learn the setup---but because of the 2 candle rule isnt this an invalid trade?
I am not totally sure as I do not trade 123 the exact same way as others here. There seems to be a few methods / interpretations. I have been succesful with this method (whether 100% right or wrong in the way I trade it).

Paulus can you respond to this?

I have looked back at some of Paulus trades and have seen times when there have been more than 2 candles in the opposing direction while moving from point 1 to point 2 so I do not know how to clarify this.
Today's zone = Tomorrow's opportunity!
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