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How to use the 123 strategy effectively

  • #981
  • Jan 15, 2011 11:36am Jan 15, 2011 11:36am
Quoting Paulus
I use the distance from c to the actual entry point

so if c to entry is 20 pips then my TP is 20 pips

Stop is 1 pip below c

and each trade is 5% of account so 2 pip TP or 100 pip TP I win or lose the same

P
Curious...on the 2nd trade, what is your rationale for marking the 2nd wave the 2- and 3, as opposed to the first one?
  • #982
  • Jan 15, 2011 12:30pm Jan 15, 2011 12:30pm
Quoting Paulus
I use the distance from c to the actual entry point

so if c to entry is 20 pips then my TP is 20 pips

Stop is 1 pip below c

and each trade is 5% of account so 2 pip TP or 100 pip TP I win or lose the same

P
On 2B trades I also use the SL distance as the TP for most trades giving a 1:1. SL is at the the second high or low and enrty is at the high or low of the candle the broke the previous high or low. I also have a second method of setting TP for some 2B trades but to keep things simple in this thread I will not go into it.
Today's zone = Tomorrow's opportunity!
  • #983
  • Jan 15, 2011 1:17pm Jan 15, 2011 1:17pm
Pres78,
Your great results are very encouraging. You set your SL at various places. When you are about to enter a 123 trade what determines whether you put your SL at point 1 or 50 or 61.8? Thanks!
  • #984
  • Edited 2:47pm Jan 15, 2011 2:32pm | Edited 2:47pm
Quoting tomd
Pres78,
Your great results are very encouraging. You set your SL at various places. When you are about to enter a 123 trade what determines whether you put your SL at point 1 or 50 or 61.8? Thanks!
I trade 123's a little different than some others on here since I do not trade bare charts only looking at the 123 set-ups. I rely on and make refernce to support and resistance lines, trend lines, supply and demand zones, ADR readings, news and volume. In a nutshell here is what I look for and how I set up my 123 trades.

1. I determine if I am looking at a trend reversal trade or trend continuation. Actually at times I will have both a long and short count in place watching in both directions. I will attach a chart for a EURUSD short that I took and posted on here back on Dec 28th.

2. See on the chart for my reasonings for setting my SL and TP on this trade. If I am taking a trade with a smaller point 1-2 I will use it regardless of the retrace to give the trade some more breathing room. On this trade since I go for % there was no point in waiting for price to move then entire 72 point when I could grab my 5% with only a 28 point move.

3. If I am taking a trend continuation trade I look at the same things as above however I become much more aware of support and resistance areas and ADR to ensure I am not jumping into a trade right against a possible bounce point or after PA has already moved it average daily limits.

I may have gone a little more into detail than what you were looking for but this gives some idea on how I take my trades and why / how I set them up.

I am not going to go into any detail on how I use VSA (volume spread analysis) in taking my trades as it is a very complicated system that I am only just learning myself but it has proven to be a good tool in use with my pattern trades (and is actually the reason I took the second short).

You can look back at Dec 28th for the second short trade I took as a continuation trade of the above described short... I am sure just looking at the chart you can see the new set-up that formed right below...
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd 1.jpg Size: 133 KB
Today's zone = Tomorrow's opportunity!
  • #985
  • Jan 16, 2011 9:26pm Jan 16, 2011 9:26pm
Quoting scchamp
I am clear on the entry and SL for a 2B (even though I still miss them from time to time in real time) but I have always been mystified by the exits. Sometimes they are huge winners and at other times you should take whatever you can. What is the best way to exit? I am posting this here because I noticed a lot of people trade the 2B as a compliment to 123.

Thanks
You can also use the original 123 1:1 RR target. This will always give you a nicer RR if it's a fake out of the 1 point and in just about every trade I've seen (which hasn't been stopped out) it has always exceeded the original price target of the 123.
Catching a falling knife, no, I'm just trading the Gartley!
  • #986
  • Jan 17, 2011 12:39am Jan 17, 2011 12:39am
here is a long that I am taking. 1.5851 is entry.
Attached Image (click to enlarge)
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PIP'N
  • #987
  • Jan 17, 2011 12:52am Jan 17, 2011 12:52am
Trade now at +1. Take profit is at 1.5894.
PIP'N
  • #988
  • Jan 17, 2011 1:16am Jan 17, 2011 1:16am
Stop hit. out for +1. We will see what happens tomorrow.
PIP'N
  • #989
  • Jan 17, 2011 1:19am Jan 17, 2011 1:19am
i took this h4 2B short...1/2 position will be out at 1:1, rest trailed to lows. currently @ +66 pips
Attached Image (click to enlarge)
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  • #990
  • Jan 17, 2011 1:26am Jan 17, 2011 1:26am
Took this trend continuation trade for +31

Attached Image (click to enlarge)
Click to Enlarge Name: eu 17.01.11 short.gif Size: 11 KB
  • #991
  • Edited 5:48am Jan 17, 2011 4:25am | Edited 5:48am
I have taken a EURUSD short, a EURJPY short and then a EURUSD long.

I have 2 full wins and 1 partial win. I closed the EURUSD short on the close of that nice reversal pinbar (reverse upthrust) that just missed my TP level. Around 14% gain for the day.
Attached Images
Today's zone = Tomorrow's opportunity!
  • #992
  • Jan 17, 2011 5:35am Jan 17, 2011 5:35am
Quoting pres78
I have take a EURUSD short, a EURJPY short and then a EURUSD long.

I have 2 full wins and 1 partial win. I closed the EURUSD short on the close of that nice reversal pinbar (reverse upthrust) that just missed my TP level. Around 14 gain for the day.
Nice trading pres, I also got a eur short this am for +30 and then had bad internet connection and went out.

Shouldn't complain too loud though as I'm not logged into the internet yet here I am posting. Thats wierd!!!
  • #993
  • Jan 17, 2011 5:37am Jan 17, 2011 5:37am
Quoting Vantage
Nice trading pres, I also got a eur short this am for +30 and then had bad internet connection and went out.

Shouldn't complain too loud though as I'm not logged into the internet yet here I am posting. Thats wierd!!!
Very strange...
Today's zone = Tomorrow's opportunity!
  • #994
  • Jan 17, 2011 6:48am Jan 17, 2011 6:48am
hard day for me...first, it's not easy to see +80 evaporate on my e/u h4 short, but i'm trying to be as stoic as paulus is, not touching anything....i had 4 losers today, stubbornly trying to get better entries and tighter sl...i'm also long on u/j 5mn 123 which is like pulling teeth, sl at BE...only winner is g/u 5mn short
Attached Image (click to enlarge)
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  • #995
  • Jan 17, 2011 6:59am Jan 17, 2011 6:59am
Quoting bubola
hard day for me...first, it's not easy to see +80 evaporate on my e/u h4 short, but i'm trying to be as stoic as paulus is, not touching anything....i had 4 losers today, stubbornly trying to get better entries and tighter sl...i'm also long on u/j 5mn 123 which is like pulling teeth, sl at BE...only winner is g/u 5mn short
We have all had those days... Hopefully tommorow will be better. If you don't mind me asking can you post the 4hr trade you took as I can't see it on my charts.
Today's zone = Tomorrow's opportunity!
  • #996
  • Jan 17, 2011 7:01am Jan 17, 2011 7:01am
Quoting pres78
We have all had those days... Hopefully tommorow will be better. If you don't mind me asking can you post the 4hr trade you took as I can't see it on my charts.
here it is: http://www.forexfactory.com/showpost...&postcount=989
  • #997
  • Jan 17, 2011 7:05am Jan 17, 2011 7:05am
Quoting bubola
hard day for me...first, it's not easy to see +80 evaporate on my e/u h4 short, but i'm trying to be as stoic as paulus is, not touching anything....i had 4 losers today, stubbornly trying to get better entries and tighter sl...i'm also long on u/j 5mn 123 which is like pulling teeth, sl at BE...only winner is g/u 5mn short
Hi bubola
As hard as it may be care to share the losing trades?
  • #998
  • Jan 17, 2011 7:12am Jan 17, 2011 7:12am
Quoting bubola
here it is: http://www.forexfactory.com/showpost...&postcount=989

Sorry was looking for a 123... I remember that 2B post now.
Today's zone = Tomorrow's opportunity!
  • #999
  • Jan 17, 2011 7:14am Jan 17, 2011 7:14am
Quoting Vantage
Hi bubola
As hard as it may be care to share the losing trades?
more coming...
Attached Image (click to enlarge)
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  • #1,000
  • Jan 17, 2011 7:19am Jan 17, 2011 7:19am
tried to add a position to the h4 E/U short on Heiken Ashi rotation

edited: better chart, perhaps, vantage?
Attached Image
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