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Trade What You See - Almost Naked Trading

  • #7,481
  • Dec 21, 2010 4:50pm Dec 21, 2010 4:50pm
Quoting duffypratt
Did anyone take this trade? I've been looking at the various charts, and I don't see any way to get into it.

First off, it's not at all clear to me that the RSIs would line up for this trade until most of it was done. It's very hard to tell that in hindsight (and that's one of the things that makes this system dreadfully hard to backtest -- it's almost impossible, at least with the backtesting tools at my disposal, to get a quick read on the H4, D and W RSIs). So I can't look at this chart and know that there was a trade brewing just before the...
I check the actual RSI line direction, not the indicator, "frame by frame" or in this case candle by candle on the H1 chart initially with the vertical line tool. The line is between 4 and 6:00 in each frame. It is impossible to tell what the RSI indicator showed in retrospect, but not the actual RSI line. (Another reason to never rely entirely on an indicator!)

Moving up to the H4 chart, do the same. You will note that the line is dragging the bottom..it can't do anything else as it cannot go lower and PA is not going up. Same is true on the daily chart..dragging the bottom.

PA is also continuing down, PA trumps RSI, at least in the short term. Assuming I had taken notice of this pair at the BO and without the indicator's arrows, I would have entered this trade short on the M15 chart after it cleared the support line. Even getting out after that red candle that cleared the support line..that would be about 60 pips.
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  • #7,482
  • Dec 21, 2010 4:56pm Dec 21, 2010 4:56pm
Quoting lawgirl21
This is truly impressive trading. Keep up the good work!
well thank you! not bad after following your thread for just 2-3 weeks! i still don;t understand entirely all your setup but i think that will come with time, but wat i have learrnt (and give thanks) i seem to have managed to get something out of it, maybe its beginners luck or just my way of understanding ur technique, either way so far so good. I think the main problem i have is that i use a SB account and not a forex account, the main reason is money and also as still a novice (my first year ) i find SB much simpler and easier to follow, although i am missing out probably on a load of indicators, tools etc it suits me so far, am not in it to get rich fast, or at all lol!

keep up ur updates as we all follow them and are learning from you, happy trading all
  • #7,483
  • Dec 21, 2010 6:08pm Dec 21, 2010 6:08pm
Quoting lawgirl21
I check the actual RSI line direction, not the indicator, "frame by frame" or in this case candle by candle on the H1 chart initially with the vertical line tool....

good night..
my opinion.
In this case we have a nice zorro move. We have a break with a large candle ( selling pressure is high), then we have a pull back to the support and finally we´ve a continuation movement. Well, I go to M30 or M15 to fine tune the entry and I enter this trade in the continuation movement when the price broke the breakout low price.
That´s it.
Nice trading.
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  • #7,484
  • Dec 21, 2010 6:36pm Dec 21, 2010 6:36pm
Quoting Wally1953
out -28, boy did I get this one wrong!!
Hi Wally, do not be disappointed. Correct trade execution not necessary equate profit making trades. Hold it there, i give u emotional support and good trades ahead of u!
  • #7,485
  • Dec 21, 2010 6:57pm Dec 21, 2010 6:57pm
I think the confusion I see in some recent posts is that lawgirl is trading the system just like she always has, lining up her trades with the simple RSI without the extra RSI arrows, which came later. They really don't mean all that much most of the time ( the arrows I mean ) as they tend to switch direction very quickly

What is more important is what price is doing. Draw a short term trendline. See that the Weekly, and Daily are in conjunction with the RSI direction. When the hourly or 15min chart breaks in your direction and out of support or resistance, enter the trade. Remember: trade what you see!

I'm not trading this way because I was distracted trading so many crosses but I lurk here from time to time.
  • #7,486
  • Dec 21, 2010 7:15pm Dec 21, 2010 7:15pm
Quoting templario
good night..
my opinion.
In this case we have a nice zorro move. We have a break with a large candle ( selling pressure is high), then we have a pull back to the support and finally we´ve a continuation movement. Well, I go to M30 or M15 to fine tune the entry and I enter this trade in the continuation movement when the price broke the breakout low price.
That´s it.
Nice trading.
Very nice..you looked to the wick as the pullback to the S/R line, then the continuation down...very nice indeed...
  • #7,487
  • Dec 21, 2010 7:18pm Dec 21, 2010 7:18pm
Quoting dfstone32
I think the confusion I see in some recent posts is that lawgirl is trading the system just like she always has, lining up her trades with the simple RSI without the extra RSI arrows, which came later. They really don't mean all that much most of the time ( the arrows I mean ) as they tend to switch direction very quickly

What is more important is what price is doing. Draw a short term trendline. See that the Weekly, and Daily are in conjunction with the RSI direction. When the hourly or 15min chart breaks in your direction and out of support...
Beautifully said, dfstone. Join us more often. I traded this system a very long time without the arrows.
  • #7,488
  • Dec 21, 2010 7:20pm Dec 21, 2010 7:20pm
Out of my short trade with +20 pips.
  • #7,489
  • Dec 21, 2010 7:49pm Dec 21, 2010 7:49pm
Fwiw, posting my first ever mt4 chart. Watching for break Ignore the labels bottom right. Red lines are a parallel channel.
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  • #7,490
  • Dec 21, 2010 7:57pm Dec 21, 2010 7:57pm
Quoting bimmerbob
Fwiw, posting my first ever mt4 chart. Watching for break Ignore the labels bottom right. Red lines are a parallel channel.
But tell us what you are looking for here..there is alot of action between those parallel lines..
  • #7,491
  • Dec 21, 2010 8:06pm Dec 21, 2010 8:06pm
Quoting lawgirl21
But tell us what you are looking for here..there is alot of action between those parallel lines..
Actually only loaded this chart few minutes ago.
Its been rejected at the top of channel. Waiting for RSI to line up, hoperfully with a break through the blue support - which incidentally might have been a 3T candidate earlier.
  • #7,492
  • Dec 21, 2010 8:39pm Dec 21, 2010 8:39pm
Quoting lawgirl21
Out of my short trade with +20 pips.
LG dont u think in weekly chart it is a 3 tap for long trade.

and your entry is right at the tap it self.
  • #7,493
  • Dec 21, 2010 8:45pm Dec 21, 2010 8:45pm
I would like to introduce a new trade set up using a naked chart and the traditional RSI(14) with 70/30 levels. This is not original with me. I first saw it introduced by Kathy Lien, but I am sure it is older than she is.

Basically it is reversal trend trading. Trading from overbought to oversold and vice versa. I am mentioning it now because there is a set up forming that might be interesting to let ride during the holidays. Please, if you are interested in this trade, try it first on a demo account.

It is very simple, but profitable. Here is the set up:

--Daily chart (anything less gives false reads)
--RSI (14) with levels set at 70 (overbought level) and 30 (oversold level)

See EURAUD chart below:

For a long trade (which is setting up here)

--RSI must be less than 30 i.e. under the 30 line
--Wait for a green (up) candle to close (tomorrow at 2:00 p.m. for me).
--If RSI has gone above 30 at the close of the candle, enter long at the open of the next day's candle.
--Place a SL at the lowest point of the green candle.

That's all there is to it. Look at GBPCHF and EURCHF too. They may be setting up soon also.

Managing the trade:

This is what Kathy recommends and is very effective.
--Exit half the position at half (1/2) of the risk i.e. if the SL is at 100 pips, take profit on half of your position at + 50 pips.
--Move the other half to BE.

Exit the other half if:

--BE is hit (duh...)
--PA moves into overbought area (above 70) and heads down out of that zone (below 70). Sell at market as soon as PA moves below the 70 level.

The opposite for short trades.
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  • #7,494
  • Dec 21, 2010 8:49pm Dec 21, 2010 8:49pm
Quoting manojcosmo
LG dont u think in weekly chart it is a 3 tap for long trade.

and your entry is right at the tap it self.
No, I would not enter long on the weekly 3 Tap yet. Wait for good PA and the weekly candle to turn green before entering. That will be the trigger. Remember that setup and trigger are two separate steps.
  • #7,495
  • Dec 21, 2010 9:39pm Dec 21, 2010 9:39pm
[quote=lawgirl21;4258262]I would like to introduce a new trade set up using a naked chart and the traditional RSI(14) with 70/30 levels. This is not original with me. I first saw it introduced by Kathy Lien, but I am sure it is older than she is.

Basically it is reversal trend trading.....quote]

I think you're playing with fire here. This has been done on this forum before. Also you're depending on a lagging indicator. I've attached a chart below to show you where your entries would be and how they would play out in certain markets. This was done quickly so if its not perfect, please forgive me. Dont forget. THE RSI is a momentum indicator. If at 30, 20, or 10, it can contiue to give you buy signals, but the market can just keep going down.
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  • #7,496
  • Dec 21, 2010 9:49pm Dec 21, 2010 9:49pm
hi LG, what would we call this system?

Quoting lawgirl21
I would like to introduce a new trade set up using a naked chart and...
"Trade Until I Come Back" Luke
  • #7,497
  • Dec 21, 2010 9:51pm Dec 21, 2010 9:51pm
mmmmmmmmmm from that chart it looks like hell fire not ordinary fire hence LG's recommendation of demo trading. as with all indicators they cant be trusted 100%. Again trading against the main trend is a killer.


[quote=TheDirtySerb;4258315][quote=lawgirl21;4258262]I would like to introduce a new trade set up using a naked chart and the traditional RSI(14) with 70/30 levels. This is not original with me. I first saw it introduced by Kathy Lien, but I am sure it is older than she is.

Basically it is reversal trend trading.....quote]

I think you're playing with fire here.
Bay The earth is the Lord's and the fullness thereoff.
  • #7,498
  • Dec 21, 2010 10:05pm Dec 21, 2010 10:05pm
[quote=TheDirtySerb;4258315]
Quoting lawgirl21
I would like to introduce a new trade set up using a naked chart and the traditional RSI(14) with 70/30 levels. This is not original with me. I first saw it introduced by Kathy Lien, but I am sure it is older than she is.

Basically it is reversal trend trading.....quote]

I think you're playing with fire here. This has been done on this forum before. Also you're depending on a lagging indicator. I've attached a chart below to show you where your entries would be and how they would play out in certain markets....

Is this a daily chart? What do you mean it has been done on this forum before? Yes, trading overbought/sold is as old as the world of trading probably.
  • #7,499
  • Edited 10:13pm Dec 21, 2010 10:11pm | Edited 10:13pm
[quote=lawgirl21;4258341]
Quoting TheDirtySerb


Is this a daily chart? What do you mean it has been done on this forum before? Yes, trading overbought/sold is as old as the world of rading probably.
I mean RSI overbought/sold threads have come and gone. If I can remember the name of the most popular one that was around for a while, I'll post it for you. If you're really looking to do rsi overbought/sold, then take a look at my chart below. I cant tell you how important I think Risk/Reward ratio is. smaller stop, bigger gain. More losers, fine. As long as your pip count is greater in the end, who cares if you go 1 winner, 3 losers. Take a look and let me know what you think.

BTW, both are daily EURCAD charts. The first is from not that long ago.
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  • #7,500
  • Dec 21, 2010 11:07pm Dec 21, 2010 11:07pm
[quote=TheDirtySerb;4258348]
Quoting lawgirl21

I mean RSI overbought/sold threads have come and gone. If I can remember the name of the most popular one that was around for a while, I'll post it for you. If you're really looking to do rsi overbought/sold, then take a look at my chart below. I cant tell you how important I think Risk/Reward ratio is. smaller stop, bigger gain. More losers, fine. As long as your pip count is greater in the end, who cares if you go 1 winner, 3 losers. Take a look and let me know what you think.

BTW, both are daily EURCAD charts. The...
I have no intention of this being another OB/OS thread. This is just a classic method of trading with a little twist, that is also almost an indicator free method. Just another tool. Anytime we trade a daily or higher chart MM becomes even more important because the high DDs. Thanks for your input.
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