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How to use the 123 strategy effectively

  • #721
  • Jan 4, 2011 2:23pm Jan 4, 2011 2:23pm
sorry Im not using any ea's

EU nearly failing so then need GU to win and just noticed by 1 and 3 on EU was double bottom not higher low so invalid...stupid stupid mistake

P
  • #722
  • Jan 4, 2011 2:26pm Jan 4, 2011 2:26pm
Quoting Paulus
sorry Im not using any ea's

EU nearly failing so then need GU to win and just noticed by 1 and 3 on EU was double bottom not higher low so invalid...stupid stupid mistake

P
They happen, we all make mistakes and it is was keeps us humble and human.

Best of luck.
Today's zone = Tomorrow's opportunity!
  • #723
  • Jan 4, 2011 2:39pm Jan 4, 2011 2:39pm
I don't mind showing my latest loss. I think I executed it correctly. Comments are always welcome. I'm trying to execute exactly as Paulus has outlined along with using his MM exactly also. My biggest problems are not being up during the London session and starting my trading mid-stream. I'm also not always crystal clear on the trend established during the Asian session. Lynn
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  • #724
  • Jan 4, 2011 2:46pm Jan 4, 2011 2:46pm
Hi Lynne

We both took this trade but it was in fact in valid as the 3 needs to be higher than 2 on a long we need a higher low.

Not to the 5th decimal place but 4th.

Your 3 gets moved to the circled position if it makes a low lower than the previous 3 BUT has to be higher than 1

Hope all is ok and hope that makes sense

Cheers

P
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  • #725
  • Jan 4, 2011 2:49pm Jan 4, 2011 2:49pm
On my chart my 3 was a pip or two above my 1 so I assumed it was valid. However, were they identical am I to assume its not a valid setup and move my 1 to the equivalent low which was my 3? Nitpicking details but setting an exact set of rules and then trading them exactly is the Paulus way. My objective is to not try to improve on this Paulus 123 method but to learn to trade it exactly as defined. If I start getting Paulus' results then, and only then, might I consider trying to improve it. However the numbers that Paulus is getting are good enough for me coupled with his MM. Lynn
  • #726
  • Jan 4, 2011 2:54pm Jan 4, 2011 2:54pm
See the image below.

The 1 point is clear.

In retrospect the 2 point is clear, but before it formed, would the point marked "a" be a good 2 and the point "b", be a good 3?

I seem to recall that a good 3 point needs to pull back about two thirds of the distance from 1 to 2....is that correct?

I know this question may have been asked and answered previously, so apologies if this is a dumb question, if so...it will give the self righteous a chance to respond in a very superior way....LOL

PGPB
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  • #727
  • Jan 4, 2011 2:59pm Jan 4, 2011 2:59pm
Quoting lbhales
On my chart my 3 was a pip or two above my 1 so I assumed it was valid. However, were they identical am I to assume its not a valid setup and move my 1 to the equivalent low which was my 3?...
Hi

yes thats correct the 3 represented by the in the circle becomes your new number 1 and the count start again

cheers

P
  • #728
  • Jan 4, 2011 3:00pm Jan 4, 2011 3:00pm
Yup, technically my 1 and 3 were the same to the 4th decimal point. I'll watch that more carefully. So moving the setup numbers along I guess if the price were to climb to above the hight at number 2 we would have a new long. Although we probably would be too near the NY close to open the trade. Lynn
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  • #729
  • Jan 4, 2011 3:04pm Jan 4, 2011 3:04pm
Quoting pgpb
See the image below.

The 1 point is clear.

In retrospect the 2 point is clear, but before it formed, would the point marked "a" be a good 2 and the point "b", be a good 3?

I seem to recall that a good 3 point needs to pull back about two thirds of the distance from 1 to 2....is that correct?

PGPB
Hi

[IMG]file:///C:/Users/Paul/AppData/Local/Temp/moz-screenshot.png[/IMG][IMG]file:///C:/Users/Paul/AppData/Local/Temp/moz-screenshot-1.png[/IMG]I use a fib level as its mechanical and seems to work well
  • #730
  • Jan 4, 2011 3:20pm Jan 4, 2011 3:20pm
Hi all,

Trying to get my head around this, can someone please post a comment if my 1 2 placements are correct, I am just practising here , 3 is still busy forming so I havent placed it, but does this look kinda right?

btw, its audusd on the 5min.

Thanks in advance
Chris
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Survive and Preserve
  • #731
  • Jan 4, 2011 3:24pm Jan 4, 2011 3:24pm
Quoting lbhales
Yup, technically my 1 and 3 were the same to the 4th decimal point. I'll watch that more carefully. So moving the setup numbers along I guess if the price were to climb to above the hight at number 2 we would have a new long. Although we probably would be too near the NY close to open the trade. Lynn
I'm using an Alpari UK demo and it shows the 3 low was still higher than the 1 so the trade was valid. I've just checked my Forex.com and it shows it as being the same level. Maybe one way to make sure is not take anything with a 3 point below the 78.6 fib level
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Dream big, start small. Have it all
  • #732
  • Jan 4, 2011 3:47pm Jan 4, 2011 3:47pm
Quoting Paulus
Hi

[IMG]file:///C:/Users/Paul/AppData/Local/Temp/moz-screenshot.png[/IMG][IMG]file:///C:/Users/Paul/AppData/Local/Temp/moz-screenshot-1.png[/IMG]I use a fib level as its mechanical and seems to work well
Hi Paulus

Which fib level do you use?

(It is unclear from your post)

PGPB
  • #733
  • Jan 4, 2011 4:33pm Jan 4, 2011 4:33pm
Quoting Paulus
Hi

yes thats correct the 3 represented by the in the circle becomes your new number 1 and the count start again

cheers

P
This has actually turned into a triple bottom... hopefully this gives some sign that a bottom is forming for now and the next long trade will be successful.
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Today's zone = Tomorrow's opportunity!
  • #734
  • Edited 8:38pm Jan 4, 2011 7:28pm | Edited 8:38pm
Quoting sean007
Maybe one way to make sure is not take anything with a 3 point below the 78.6 fib level
that doesn't really make sense....(unless your talking about poor performance brokers with wide spreads or deal desks prices then ignore the below)

if price action of point 3 doesn't break point 1, and then goes on to test through point 2 then you have a potential double bottom (double top) trade whether at .786 or whatever so it becomes a valid pattern to execute. Just because the pattern fails doesn't mean the trade is an incorrect one.

Beware of false positives and positive negatives, ie if the pattern fits the rules and the trade is taken and it subsequently fails, whilst denting the p&l, that is a far better result than making a profit from an incorrectly entered trade against the rules. You should be expecting at least every third trade to be a loser.

I personally doubt if the fibs have much effect in a 20 pip move, and are more a visual aid to judge what is a valid looking price retracement.

This eurchf 1-2-3 is taken on the back of a harmonic pattern (hence the extended profit targets, but fits to Paulus rules so it could be easily taken all profit at 1R:R and be square now and looking for a potential buy opportunity when Europe opens) but demonstrates that while the 1 point holds, once 3 is confirmed by the break of 2, then you take the trade.
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Catching a falling knife, no, I'm just trading the Gartley!
  • #735
  • Jan 4, 2011 7:54pm Jan 4, 2011 7:54pm
Saw a nice set-up and couldn't resisit a quick 5%. SL at 38.2 TP at -38.2... Felt safe taking this trend continuation trend since entry was below the triple bottom formed earlier.
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Today's zone = Tomorrow's opportunity!
  • #736
  • Jan 4, 2011 8:08pm Jan 4, 2011 8:08pm
Dang.... just woke up from a nap and missed that one.
  • #737
  • Jan 4, 2011 8:12pm Jan 4, 2011 8:12pm
Quoting tradestar1
Dang.... just woke up from a nap and missed that one.
Almost time for bed... 6AM comes early. Let's see if my personal body alarm wakes me up at 4AM for london open to check out PA...

Have a great night all and see you sometime mid London (once I get to my computer at work)... shhh!!!!
Today's zone = Tomorrow's opportunity!
  • #738
  • Jan 4, 2011 9:01pm Jan 4, 2011 9:01pm
Quoting pgpb
Thanks!!



It would be great if people continued posting charts (losing trades ***AND*** winning trades...

PGPB
audusd loser.... it's an asian session trade but on a longer time frame with previous 2 levels marked in maroon

so now we wait for the next one, still looking for buy trade on 30-60 mins frame

if you break this down to a 5 min chart then there was a nice sell opportunity with quick TP. However I have no interest in asian 5 min charts and will happily wait for europe before dropping time frames
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Catching a falling knife, no, I'm just trading the Gartley!
  • #739
  • Jan 4, 2011 10:13pm Jan 4, 2011 10:13pm
Quoting Paulus
I shut down any trades when US closes..whats time UK ?

Cheers

P
Not sure, my time was 12am pst on Tuesday morning.
PIP'N
  • #740
  • Jan 4, 2011 10:27pm Jan 4, 2011 10:27pm
a stand alone entry based on hourly PA (or supported on the back of a harmonic trade)

the 2.0 TP also is .618 of the rally CD

the slightly better entry level is more from good luck and just trawling through the charts this morning
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Catching a falling knife, no, I'm just trading the Gartley!
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