Ken's Continuing Successes with EO's system

Yes , reviewing your trades is a key element in improving overall performance. Create a file for your chart pics. then prtsc. and paste to paint so you can add notes on the charts themselves. when you review also use your platform to scroll back to your entry candles not showing what happened after your entry . Also try and thinking about how your entry candle formed the open which way it headed and the close.

You can glean a lot of information by doing this on a regular basis. Then you can even make your own flash cards show your best entries. Try and find the ones you can see the easiest. Not all are easy to understand or see. It is Ok to be a decent trader. don't have to be a expert straight off.

Trade Happy Ken.

I think a lot of people underestimate the importance of all the homework that is necessary to learn this system. Everyone needs to find the handful of setups that work well for them, and ignore the others until you have mastered your main setups-- what times of day to take them, what PA signals to look for prior to entry (swings, etc), what confluence is necessary prior to entry, how to manage each individual setup once you're in it, etc.

Ken has posted many times that in order to learn the quickest, it may be best to just focus on one or two setups at a time-- narrow your focus. EO said this repeatedly in his thread as well. I think everyone wants to learn as fast as possible so they try to learn all the different entries at once, and they just get confused as a result. It's the whole "jack of all trades, master of none" thing.

The problem was I was trying to trade like the flash cards PDF right off the bat. Now I am seeing taking one step at a time seems to be a far better approch for someone who is new to the system. Flash card type trading is for people who have mastered the system and are highly skilled at all the different trades. Working on trades like 1 and 5 o'clock and 35/50 seems like a better option. Had good results this morning just practicing those entrys. Once I have mastered them.. I can move on to being a superstar trader like EO and Infinity.

P.S. thanks to Doc, Store, and Trotty for guiding me in the right direction!

I think one of the most common things a new trader has to overcome is the fact they will miss trade entries. They have limited time to sit in front of the computer and so when they do the NEED to find a entry so they want to know everyone one they have ever heard about, knowing one of them is available right now.

That is not true almost all the systems and trading ideas that WORK, basically look at the same entry levels they just use different types of tools and indicators. Just as we do for each different trade during the cycle that happens for most swings.

I try and get people to use the trades that trade AWAY from the MA"s first as they are the most common and available They also are the ones that if they fail don't do so in the blink of a eye.

If you fight the trend you can see yourself upside down very quickly with no time to think or adjust your emotions to close the trade. Not having time to make a choice can cause a new trader to continue to make bad ones over and over.

That is one reason many systems or strategies like you to start off trading longer term charts as they allow for more analysis between candles.

If you read this thread you will see some of the guys are using P.O. ( Limit Orders) to enter their trades. They may see a good signal on a hrly so set a P.O. at a good level that also WILL HAVE confluence once price reaches that area.

This is also a way for those that don't have screen time to trade better entries , Don't just look for one right this second look for the next one that may happen in a few hours. Then set a P.O. Great traders don have to sit in front of their screens all day . Plus what is fun about that.

If you can learn to see the main levels then read the Price Action , When price is in the neighborhood , then to get in the trade and hold for the profits, A person can trade only looking once or twice a day to adjust his trades stops and maybe TP's, Plus adding a P.O. or two to add on if the trade allows.

That is my ultimate goal to do extremely well with as little time as possible.
It is hard to do for most of us to begin with but does get easier once we succeed with a few good trades . Repetition is the only way to prove to ourselves that WE can do it,

But if we keep trying to find and see all the entries and don't become the master of any one we can doom ourselves to failure.

Thanks for your input as well Doc.

Just some thoughts on flash cards etc:

I think some people have a tendency to be pretty lax in their trading rules. So they'll make a flash card for a 15M hammer, and then start taking every 15M hammer they see. (I'm not saying the hammer is a bad signal, just saying it needs to be taken in the right spot).

I think the flash cards can be really, really effective by setting them up for specific scenarios: Like instead of making yourself one for a 15M hammer, make one for a 15M hammer that occurs during NY/London when price is above yesterday's low and has already formed a higher low prior to the hammer. Find a chart like that, zoom out a bit, mark it up really good, take a screenshot, and then you take every setup that you see like that from now on. That way you can make yourself a few specific scenarios when you know you will take the hammer, and it simplifies things. Maybe you have one for when price breaks the 200SMA and forms a hammer on the retest, maybe you have one for when price forms a hammer off of yesterday's low, or one at a fib level with PPA confluence, etc. Using really specific scenarios as individual setups takes away a lot of the guess work, makes you more mechanical, and lets you rank your setups really easily-- if one isn't working, toss it!

Anyway, just some ideas.

Yeah, they don't want to miss an entry. I think that really kills people's performance. New traders often have the misconception that in order to get a good return, you need to hit every move. I know that's exactly the way I used to think. But it's really not true at all-- you can hit your quota in just 1 or 2 good trades a week. No matter how good you are you will look back over the week and have missed tons of moves.. but it really doesn't matter.

Ken has said a bunch of times in this thread: find the place where you can safely put a stop, and then base your trade on that. You don't need to hit every trade! Not even close to every trade. Just get the ones that you can safely get.

I actually moved my computer desk into the family room a few months ago. It has helped a lot with wanting to take every entry out of boredom. That way If a trade isn't forming I can watch some TV or pet the cat. I can even lay down on the couch if i'm waiting for news to pass, a new session to open, or a tight range to break. (i can see the screen from my couch) It gives me something else to do rather then sitting in my office going crazy just waiting.

Yes , why a alarm is good to have on your computer to see how each new candle prints also alarms at those important levels. You can also attach your computer to your TV very easy these days and just toggle threw the inputs to check your charts during commercials. This mainly good when you already have a plan in mind of where your looking for the next entry. Or monitoring a running trade.

Just like the MA's YOU have to come up with some idea that in your minds eye you can see and look for. It doesn't have to be a 4, it can be anything, But that is what the MA's are all about. They were thought up as a way to quickly see a possibility of a entry.

The always were to be used in conjunction of S/R lines drawn off a 4 hr and daily chart , Because it is those levels that are most important , they are the ones that will pay you the profits you want.

The best traders I know enter at those levels using tight stops 10 to 20 and can hold those trades to the next S/R line plus adding once price has broken a Mid level area on say a 15 min or hrly and retested ( A 4).

But they also know that those areas may be tested a few times before price actually turns in their favor, Stop runs, the other side unwilling to give up their trend. ( Bear,Bull battle) So they also know they may have to re-enter that trade more than once, sometimes waiting for the hrly chart to confirm their choice, before taking another chance.

You have to understand that a lot of those signals in the pdf were taken as counter trend hedged trades while a bigger position was running with the trend. That was dependent on the time available to those traders.

So yes learn some of those entries . but if you don't have major areas of interest on your chart your chances of success maybe greatly diminished.

Just chiming in to reinforce what ken and dr mongolia is talking about. Iv really come to the point where I belive its absolutely vital to be focused on mastering one part at a time, laying one brick after the other so to speak, to truly enjoy the returns possible with this style. Not only will you understand the setups to a much greater extent, but you will also progress at a much quicker rate then trying to take it all in at once.

I said it to Doc as well the other day that im actually suprised by the fact that its taken me such a long time to realize this fact as its been mentioned time and time again.

I'v watched a video course over at forexmentor.com called "how to gain the ultimate trading edge", which just revolves around the aspect of how to define your edge in trading and how to make sure that it is infact an edge at all.

What he is essestially saying in the course and what it comes down to is being as specific as you can about your entries and really knowing the criteria that has to be in place for you to take a trade. If you dont have a set of criterias and your trading is going poorly, how can you even begin to analyze what the issue is?

Once that is done he will do some proper backtesting. He recommends a minimum of 20 trades, but does like 80+ trades before he even considers taking it live. If you use softwares such as the vHands or forex tester 2 to go through past data it wont take you alot of time either.

Further more he has a really neat spreadsheet he uses to collect alot of statistics on the trades, like what was the max drawdown, max profit available etc. He will then take the time to calculate what sl and tp would yield him the highest returns with the least variance. A neat way to take the subjectivity out of your trade management.

He will then also use a lot of the statistics gathered to help him monitor the trade when it goes live, as a check up if market conditions perhaps has changed and the setup needs tweaking. So he knows what his average win/loss percentage should be, and if the biggest run of losers he had during the backtesting stage was 3 trades, and trading it live he suddenly gets 4, that will be a sign that things mightve changed and some further testing will be required.

One have to put in some actual work to do this properly which is probably why alot of people shy away. But really thinking through the setups you take, analyzing all the different aspects of it, getting the criterias you want for it to be a valid setup in writing and then doing the proper testing to see if its profitable, is invaluable. You just cant read through the pdf or glance through the thread and belive you will automaticaly be making 20% a week, definitely don't work like that.

Im in this process myself right now and have actually put on hold a lot the trades I would normally take until they've been methodically tested.

And you want to know what the kicker is?
Im coming to a point where im doing just as well trading 1-2 setups that im beginning to truly understand then I was trying to trade all thats presented in eos thread and here. The process is also much more mechanical and makes it easier to shy away from emotion based trading, I know what I want to see and I take a trade when its presented.

Its good stuff

we talk a lot about once you get the good entry, to switch to a higher chart even a 1 hr and try and manage the trade of it . Yes you will have to put up with some retraces. but if you use the 10 ema as a line to have to close past you can clearly see that if you had taken a long off the shampoo (head and shoulders) on the 1hr at the London open on the 31st you could still be in this trade. 300 pips later a few weeks worth of gains.

So instead of trying to catch every entry most of which are scalp small trades. Look for the best entries then maybe look to try and add on and learn to manage your trades instead of so many entries.

If we could take anything away from that market makers video , take that away to add to winning trades. Because that is the fast way to great gains. Not trying to trade every entry. Then scalping entries on pull backs to be add on entries instead of new trades.

Study Ed Ponsi's book on his daily system using the 10ema and the daily ATR , to hold trades as well, a version of that could be adapted to the 1 hr I am sure . But just watching for a close the other side of the 10 and then a continuation in the opposite direction on the next candle.

Just make sure you don't close on a false break.

Hi Ken,

Is that one is your mentioned ebook from Ed Ponsi,

"Forex Patterns and Probabilities"

Eric

Yes a good book on price action and sensible trading

10 ema on which TF ? 1H or 15M ?

Every so often this thread takes a while to pause, suck in a big, deep lung full of air, take a metaphorical step back from the market and takes a little while to gaze into it's navel.

It's one of the things that separates it from most of the other threads on the forums. This stuff matters as much as learning any entry and too little time is taken on the "system" threads to reflect and assess these areas of self-development.

I've been pretty busy with work travel recently so have had little time to trade and contribute here. This is all part of the plan though, I trade when I can whilst working and grow my equity, my savings that can become equity and develop my skills in the meantime. When I’m good and ready, I’ll go FT again and it should be with the equity and the honed entries to take a great deal of the risk out of it.

What I have done, in similar vein to Storeball and Doc, is taken some time to see where I need to improve recently. Whilst i'm in a busy period with work, I have very limited time to trade and rather than risking being lured into dodgy setups because of the limited time available, I’ve chosen to take 2 weeks out to test my favourite entries on a simulator. I don't need the trading profits to live right now and I am sure the stress-free practice will pay for any lost equity growth over time. I have used V-hands for a good while now and although it is free and useful, the lack of ease in which you can flip between timeframes makes testing this approach hard to do. I invested in another commercial product which does allow multi-TF testing and it's been a really big help. I've began to document all my entry types and am building up a nice picture about what works well and what works less well for me. At the end of the two weeks, I’ll number crunch the lot and draw up a fresh trading plan based on these results, their expected gains and loss percentage with average stops needed. I really would recommend this approach to anyone, especially new or intermediate traders. It's one thing that will help you remove a lot of the emotion you may be feeling whilst trading as you've essentially proven the concept over time.

It's natural to want instant results in trading because we can all see the massive potential in compounded gains. What we know is that only a small fraction of retail traders turn the concept of compounded gains into their dream lifestyle and 7 figure bank accounts. There's a very good reason for that and I’d wager a million pips that the one common characteristic which bonds all the few that have truly made it is not necessarily being a great trader but that they are great planners. Very few people get anything in life without putting the hard miles in and this business is certainly no different. If you aren’t prepared to slog your guts out and commit masses of your free time to succeeding in trading, you simply won’t.

It is 1 Hr. I mentioned it at least 3 times in that post , hehe,

But also Ponsi uses the 10 ema on the daily in conjunction with the daily atr (Trading Range) It, as always is what you find the easiest to use . The three charts I posted are 1 hr charts though and if we can use just those , It would improve most of our trades.

Hi everyone,

I have a question about candles with a relative long body and flat close. How important are those and how willing are you to trade them. I know EO took them often but I am always hesitating to take them. I mean they don't speak to me as much a hammer or hangmen at a good spot.

But there were a lot of entries that you could have taken of those candles. As an exemple I've attached a chart of the EU from yesterday half an hour after Londen open. We're in an uptrend, and there is a trendline but besides that not a great deal of confluence. How do you look at this possible trade? Would you take the trade?

Good post. What's the multi-time frame simulator you are using? I think simulator training is an amazingly good idea in principle, but I can't bring myself to use the MT4 simulator for very long because it doesn't seem to simulate all that well.

I didn't mention it because I don't want to seem as if I am promoting one service over another.

The one I used is the same as Storeball and Dr Mongolia are using, called Forex Tester. It's around £100 to buy but that's as much as you ever need to pay. There are additional subsription services available for tick data but I suspect most people will never need it. I am sure that there are other worthy products out there too.

It's the first time i've ever really been able to hammer simulator testing because V-Hands was so clunky and frustrating to use. £100 to some people is a great deal of money but if it isn't to you, I doubt you will be disappointed with the investment.

Whatever way you find to try and prove to yourself the consistency and potential of your learned setups, it's a huge step toward being able to trade without the panic and twitchy finger that uncertainty introduces.

I think in most instances of FLATTIE candle entries, it is more the level than the actual signal , I tend to agree with you on why would that be better than any other candle. If you are watching price at that moment and have seen that candle run down and maybe make a attempt to push lower but get held back right on that spot once or twice , Then it is the price action your trading not the candle itself.

The example your showing if you combine the two candles the red and the blue you will get a nice pin then the following third candle would be a deep retest into the wick a very good rejection trade as is any pin,

The two candles together could be called a DBLHC although the second is a bit lower than the first. But the main focus is where things happen not always what the charts print. It is the same wiht the PO's EO set all the time if you don't have confidence in your levels you have chosen you can never feel comfortable doing that .

To have missed that Flattie was not a big deal as the third candle was the best entry with less stress and no draw down and being a spinning top at that level helps confirm that area as a bottom. Even it alone is not a very good signal. being a sign of confusion. But together with a decent area and a DBLHC , worth the small risk a tight stop below there would have been.