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  • #501
  • Feb 21, 2006 9:33am Feb 21, 2006 9:33am
Quoting bhale
vegas,

In your VWB document, you don't mention NZDUSD. I used the same settings as AUSUSD, and it seems to look like it would work, what are your thoughts? I entered a long yesterday, but it's way down today. Am looking for another entry based upon
1. 50% retracement of today
2. reversal candle
3. RSI and MACD divergence on 2hr and 4 hr chart.

According to your rules, I should see at least 2 of these.
bhale,
I don't trade NZD because there are other pairs that I believe trade better. However, if this is your pair of choice, then by all means trade it. You have to figure out which fib model to use, but I would think it would be either model #1 or #2.

When you went long was it at the exreme fib level?

Also, when you mention my rules, I don't use RSI and/or MACD in any way. These are purely your choices, and aren't bundled with my parameters for a trade.
vegas
  • #502
  • Feb 21, 2006 9:47am Feb 21, 2006 9:47am
Quoting HeavyJ
Hi Vegas,

I entered on a 4hr Tunnel (Long) signal yesterday on the USDJPY. Presently I am Covered at BE for a free trade. P1 Came off at the 144 fib for a quick profit. I am thimking about taking profit at the Daily "Take notice fib as I am bouncing around there now. Seem like trying to hang around for P2 when I am wedged against the VWB Outer bands is a low probability scenario.

Any Thoughts.

BTW -- I understand I could get smacked down by FOMC minutes - But Hey..Its a free trade!

HeavyJ
Heavy J,

When I first released the 1 hour and then the 4 hour [about 2 months later] practically everybody ignored the risk model part of the equation. These are trading models to catch shorter [time-frame] market moves.

Now, when things are rock-and-roll and the market is going up big and then down big, price tends to hit the outer fib numbers with uncanny abiity in the 1 and 4 hour. Take this volatility away and now the vast majority of traders will start to get chopped. Losing trades will outnumber winners and you can get hurt in a hurry [and nothing is really happening price wise].

In less volatile markets, like we have now, the concept of the free trade takes on added importance because of the chop. You are trading it the right way.
vegas
  • #503
  • Feb 21, 2006 10:35am Feb 21, 2006 10:35am
Vegas:

The current 4 hour shows a nice looking Pin Bar, not that big but nicely formed.
Was just reading stuff on the James site on how to read price action.

Do you ever consider these price action bars in you analysis.
The 8 ema is flat right now.
  • #504
  • Feb 21, 2006 10:41am Feb 21, 2006 10:41am
Quoting lambrechtj
Vegas:

The current 4 hour shows a nice looking Pin Bar, not that big but nicely formed.
Was just reading stuff on the James site on how to read price action.

Do you ever consider these price action bars in you analysis.
The 8 ema is flat right now.
lambrechtj,
No. However, see my posts above [re: volatility] for using 1 hour price action.
vegas
  • #505
  • Feb 21, 2006 10:45am Feb 21, 2006 10:45am
I posted a question a couple days ago and it pulled zero replies. Since then I found the answer to one of them and continue to seek out the answer to the other so here it is again...

I am used to trading the fib retracement method of buying and selling 76.8%, 86%, etc. with limited success. However, I do not see how the 50% fib value that is so often mentioned is calculated. Is it from the current day's daily candle? I wonder about this because the candle is not completely developed until the next day's candle begins. I read every post on this thread and both Word documents looking for the answer to this. Please post what time and time frame candle is used to pull the fib range to get the 50% value. I currently have the fibs for MT4 1 Hr. chart for GBP/USD pulled at:

A=1.7407
B=1.7474

Does the 50% value come from this? I have other questions but some of them will be answered when this one is put to rest.

Thank you.
  • #506
  • Feb 21, 2006 11:09am Feb 21, 2006 11:09am
Quoting MrMajik
I posted a question a couple days ago and it pulled zero replies. Since then I found the answer to one of them and continue to seek out the answer to the other so here it is again...

I am used to trading the fib retracement method of buying and selling 76.8%, 86%, etc. with limited success. However, I do not see how the 50% fib value that is so often mentioned is calculated. Is it from the current day's daily candle? I wonder about this because the candle is not completely developed until the next day's candle begins. I read every post on this thread and both Word documents looking for the answer to this. Please post what time and time frame candle is used to pull the fib range to get the 50% value. I currently have the fibs for MT4 1 Hr. chart for GBP/USD pulled at:

A=1.7407
B=1.7474

Does the 50% value come from this? I have other questions but some of them will be answered when this one is put to rest.

Thank you.
Mr. Majik,

I am assuming you are referring to the 50% retracement rule. First you take todays range [high-low]. The trading day starts at 5:00 p.m. Chicago time [6:00 p.m. for daylight savings time]. Range needs to be at least 60 pips in cable to have any meaning.
vegas
  • #507
  • Feb 21, 2006 11:54am Feb 21, 2006 11:54am
Hi Vegas,

Your unselfish sharing of this trading method is appreciated by many. Your generous support is rare these days. Thank you.

Your answer is what eluded me. So the 50% retracement rule is for the 1 Hr candle for the current day and we must wait for at least a 60-pip range before considering entering the market.

Somehow this got past me in all the text I read.

MrMajik
  • #508
  • Feb 21, 2006 12:14pm Feb 21, 2006 12:14pm
Quoting MrMajik
Hi Vegas,

Your unselfish sharing of this trading method is appreciated by many. Your generous support is rare these days. Thank you.

Your answer is what eluded me. So the 50% retracement rule is for the 1 Hr candle for the current day and we must wait for at least a 60-pip range before considering entering the market.

Somehow this got past me in all the text I read.

MrMajik
Mr.Majik,

I want to make sure you are clear on the 50% retracement rule. It is critical for 2 trading concepts.

1) If you have a day-trading model [no matter what it is], anytime the market comes back, when the range is greater than 60 pips [GBP], the probability of the move continuing in the direction opposite the retracement is low.

2) In 'Vegas Wealth Builder' the model is interested in reversal days at the outer fib numbers. Obviously, on a reversal day that 50% level will get taken out, thus signaling a high probability of exhaustion.
vegas
  • #509
  • Feb 21, 2006 12:22pm Feb 21, 2006 12:22pm
  •  MikeG
  • | Joined Aug 2005 | Status: Empowered to Profit by James16.com | 59 Posts
Hi Vegas,

Resident bad girl here! Hugs and kisses to to your for ALL you do!

Help me out here with this trading from strength thingy.

I see it this way. Please guide/correct me:

As soon as a trade becomes a winner, stop should be moved to BE.

As soon as a trade becomes a loser, trade should be closed.

QUESTION!!: What is the minimal definition of a "winner" and a "loser"?

I have to know this before I can BE it or kill it?

I a losing trade like a cockroach? You want to squash it before it can crawl another inch? I ask because I've always heard that killing trades too quickly or having stops set to tight can be detrimental, but I'm understanding from your "trading from strength" that you would endorse small stops and quick kills.

Help this dumb blonde understand please!

XOXOX

Michele UU
I am an extremely satisfied customer of the James16 Group!!!
  • #510
  • Feb 21, 2006 12:29pm Feb 21, 2006 12:29pm
Hi Vegas,

How many VWB trade entries do you get in a month on average for the list of currencies you mentioned..Just checking whether we would push the button couple of times a week..

Thanks,
Shan
  • #511
  • Feb 21, 2006 12:44pm Feb 21, 2006 12:44pm
Vegas,

Thanks for the reply. NZDUSD looks to work nicely, and it is a 4 pip vs 5 pip spread (AUSUSD) with my broker. I think NZDUSD and AUSUSD are highly correlated. Attached is a chart showing where I went long. I don't trade with stops, just get in at extremes and divergences. I use a very small pct of capital on a trade, so I can stand the drawdowns. You just have to hold on longer, but it will eventually come back. That is not to say I don't have losers, but will add on and average out most of the time. I have taken losses when I have had a trade on for more than 3 weeks. Your methods are very good for this type of trading because of the extremes, and I feell if I follow those rules first, then look for divergences to enter, then I won't have as many of those times of being on the wrong side of a long trend.
Attached Image
  • #512
  • Feb 21, 2006 12:58pm Feb 21, 2006 12:58pm
Quoting MikeG
Hi Vegas,

Resident bad girl here! Hugs and kisses to to your for ALL you do!

Help me out here with this trading from strength thingy.

I see it this way. Please guide/correct me:

As soon as a trade becomes a winner, stop should be moved to BE.

As soon as a trade becomes a loser, trade should be closed.

QUESTION!!: What is the minimal definition of a "winner" and a "loser"?

I have to know this before I can BE it or kill it?

I a losing trade like a cockroach? You want to squash it before it can crawl another inch? I ask because I've always heard that killing trades too quickly or having stops set to tight can be detrimental, but I'm understanding from your "trading from strength" that you would endorse small stops and quick kills.

Help this dumb blonde understand please!

XOXOX

Michele UU
Michele,

Worse than a newbie? Is this possible? HAHAHA

Trading from strength is a concept ingrained in successful floor traders. Before I explain this, though, let me first mention that no matter the method, the use and number of filters, the number of news feeds, chatter from a bank desk, 25 technical indicators, etc., etc., at some point the market is going to get you. It's going to take your stop out, or it's going to force you out with a loss [hopefully small]. It's just part of the process of a trading market.

Having said that, everybody should operate from a position of letting your profits run and cutting losses to a minimum. But not everybody does that. Most new traders do just the opposite. Ten trades; 9 winners, 1 loser and down $1000. Now the key is [obviously] how do you know when a winner is a winner and to let it run, and when is a loser a loser so I know to get rid of it.

It has everyting to do with equating price action = to information. I said in VWB that when I trade I want very small variances in price to yield me information that is more valuable than the number of pips over a short period of time is worth. When I get this, I know what type of situation I am in regarding my position. Is it always right? No, of course not [see first paragraph], but most of the time it is. This is why I tell new traders and those having a hard time making money to concentrate ALL their efforts on their method BEFORE they trade. It erases doubt about what's going on and allows you to concentrate on implementing your method.

In GBP this usually means somewhere in the 20 -50 pip range from an exhaustion fib level. It's trickier at the lower fib extreme [233] and much more powerful at the outer two fib levels [377 and 610].

This is how I define winners and losers. 2 things are important here. 1) My risk/reward is very large because I operate at exhaustion extremes, and 2) my losers [or not being in a trade, the opportunity cost] are low [20-50 pis] and my winners are much larger [200 -1000 pips]. Would you like to play the marble game?

So in this context, trading from strength is identifying, through your method, those trading situations where you enter the market with an advantage, get up on the trade [20-50 pips] and then come in with the breakeven stop. This is also called the free trade.

Hope this helps.
vegas
  • #513
  • Edited 1:36pm Feb 21, 2006 1:00pm | Edited 1:36pm
Quoting vishalshan
Hi Vegas,

How many VWB trade entries do you get in a month on average for the list of currencies you mentioned..Just checking whether we would push the button couple of times a week..

Thanks,
Shan
Shan,

In the last 24 months, the total number of trades for the 6 curreny pairs and the S&P 500 futures contract [as tracked on C2] was 220.

In VWB the total number of currency pairs is 8. I don't trade EUR/USD or USD/CHF because they correlate highly with GBP. If you add these 2 pairs in it would probably be about 280 trades.
vegas
  • #514
  • Feb 21, 2006 1:15pm Feb 21, 2006 1:15pm
Quoting bhale
Vegas,

Thanks for the reply. NZDUSD looks to work nicely, and it is a 4 pip vs 5 pip spread (AUSUSD) with my broker. I think NZDUSD and AUSUSD are highly correlated. Attached is a chart showing where I went long. I don't trade with stops, just get in at extremes and divergences. I use a very small pct of capital on a trade, so I can stand the drawdowns. You just have to hold on longer, but it will eventually come back. That is not to say I don't have losers, but will add on and average out most of the time. I have taken losses when I have had a trade on for more than 3 weeks. Your methods are very good for this type of trading because of the extremes, and I feell if I follow those rules first, then look for divergences to enter, then I won't have as many of those times of being on the wrong side of a long trend.
bhale,
I agree with everything you say except one very important thing. I would NOT carry a loser for 3 weeks or average down.

I know this is the way you trade, and I respect that. But let me be the first one [having traded for 26 years] to tell you your ticket on the Titanic is in the mail. I don't have a clue when, how, where, or what the circumstances will be when it happens, but it SURELY will happen in time.

Go back to the fall of 1992 in GBP. One day gbp/usd is at 2.00 and 4 days later it's at 1.40. I could pick any currency, it's just a matter of time and history. It only took 13 years for the market to come back.

I would ask that you implement some kind of emergency stop-safegaurd to protect your account when sailing without a lifejacket.
vegas
  • #515
  • Feb 21, 2006 1:53pm Feb 21, 2006 1:53pm
Quoting vegas
Go back to the fall of 1992 in GBP. One day gbp/usd is at 2.00 and 4 days later it's at 1.40. .
Oh, now that was a move. I don't think there are many of us around on boards these days that still remember this move. Thanks for the trip down memory lane.
  • #516
  • Feb 21, 2006 2:04pm Feb 21, 2006 2:04pm
Quoting RogueTrader
Oh, now that was a move. I don't think there are many of us around on boards these days that still remember this move. Thanks for the trip down memory lane.
RogueTrader,
In fact, the first four days went from about 2.00 to about 1.70, then in the next 5 - 6 weeks it went to 1.40.

Here's an interesting fact. Almost all the way down it hugged the 987 fib number. It did this until it bottomed.

Oh do I remember George Soros and this trade!
vegas
  • #517
  • Feb 21, 2006 2:26pm Feb 21, 2006 2:26pm
Indeed, eleven days to 1.6800 if memory serves. But I was trading DEM at the time.
  • #518
  • Feb 21, 2006 2:29pm Feb 21, 2006 2:29pm
Great day today, I finally understand how the BE, free trade thing and the 50% retracement works, much more clearly today due to your posts, it has made things clear to me.

The SL thing scares me been there done that.
Account "poof gone" no money to trade. I read about George Soros in a book did not get to experience it perhaps you could tell us about that day and what was happening during this time with traders and yourself.

My question is about the VWB and Momentum, how/where do you do you define Momentum.

Is it on the 50% retracement up to the 50% point. Or do you define it as how powerfull the rocket lifts off after the 50% retracement point, in general what do you look for.

Thanks.
  • #519
  • Feb 21, 2006 2:48pm Feb 21, 2006 2:48pm
Quoting lambrechtj
Great day today, I finally understand how the BE, free trade thing and the 50% retracement works, much more clearly today due to your posts, it has made things clear to me.

The SL thing scares me been there done that.
Account "poof gone" no money to trade. I read about George Soros in a book did not get to experience it perhaps you could tell us about that day and what was happening during this time with traders and yourself.

My question is about the VWB and Momentum, how/where do you do you define Momentum.

Is it on the 50% retracement up to the 50% point. Or do you define it as how powerfull the rocket lifts off after the 50% retracement point, in general what do you look for.

Thanks.
lambrechtj,
2 things 1) How powerful off the bottom, and 2) how fast can the 50% retracement area be taken out. If they both happen fast, you have a full-fledged reversal day on your hands. You can get it with one of the two, but when you have both it is very powerful.

Ah yes, the fall of '92. Well, here's the set-up. Soros is buying D-Marks and selling GBP in the cross to the tune of about 7 - 10 billion. He's selling so much Cable, the Chancellor of the Exchequer in Britain is pleading with him to stop. Suddenly, Britain announces they are pulling out of the EMU. Cable tanks and Soros eventually covers and makes about $3 billion. Of course, it's now an open secret that he had somebody in the gov't feeding him the scoop on EMU entry. No insider trading rules in forex.

It's a good thing he made it on this trade because in 1987 he was one of the big reasons for the market meltdown with his huge bet long Japan equities [Nikkie at 40,000 area] and short the S&P 500 [around 280]. he needed the $3 billion gain from Cable.
vegas
  • #520
  • Edited 3:56pm Feb 21, 2006 3:50pm | Edited 3:56pm
Mr. Vegas, sir,

I just read the post, quoted below, where you are generously allowing the private forum here at forex factory to send out your signals.

When I read what is below, I was left speechless by your magnanimity, when I realized how much lost revenue it meant for you! I wasn't sure about the private forum thing until now, but your endorsement makes choosing the private forum seem like a no brainer.

Many thanks to you Vegas, from a growing trader, who is totally inspired by your giving!

Fryes

Quoting diallist
I am pleased to announce that the James16 Group is now sharing the Vegas PAP (Passionate About Profits) signals with our subscribers!

There will be no additional charge for these signals. The subscription price remains at $99. So if you were planning on subscribing to the PAP signals anyway, this represents a savings of $51, plus you will also get the full content of the James16 Group private forum.

Before making this announcement, I checked with Vegas to make absolutely certain it was OK with him for us to do this. Here is the reply I received from Vegas, posted here with his permission:

Quoting email from Vegas
Dial,

Yes, by all means you have my permission. In fact, you guys were the ones I was thinking of when I put that paragraph in the file. Here's the deal: I know people are going to share anyway, so they might as well have my blessing. Besides, I'm not doing it for the money anyway. It's good for everybody if you guys can build your business base. I'm only too glad to help you out. you put a lot of work into the forum, and I respect and appreciate your efforts. Your forum allows a person like me to share his knowledge and experience with others. I hope you guys get a million subscribers!!

-Vegas


We wish to express our heartfelt appreciation to Vegas for his generousity in allowing us to provide this new service to subscribers of the Private Forum.

Thank you Vegas!!!

Disclaimer: Currently I am mirroring the PAP signals manually. That is, when I receive a PAP signal on my cell phone, I then post it to a special thread in the Private Forum. Our members who are subscribed to that thread receive an Instant Notification to their cell phones. Because of my schedule, there may be times that I will be delayed in mirroring the signal (meetings, commuting, etc.) Therefore, at this time I have recommended to our subscribers that they do not trade with these signals, but only use tham as confirmation of their own analysis of the VWB method, and to gain insight into Vegas' thought processes. Jim and I are working on getting the mirroring of these signals automated to eliminate any such delays.
You want Fryes with that?
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