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How to use the 123 strategy effectively

  • #1,241
  • Edited 5:12pm Feb 12, 2011 4:45pm | Edited 5:12pm
I like the idea of near naked trading but wouldn't a camarilla be useful for finding support/resistance and pivot points and maybe filtering out too risky trades?
One other question how are we defining a high or low I was always told a high has to be a higher than the previous candle with 2 subsequent lower candles and vice versa for low, but I know people have dfferent ideas?
Attached Image
  • #1,242
  • Feb 13, 2011 11:53am Feb 13, 2011 11:53am
Quoting forex1962
I like the idea of near naked trading but wouldn't a camarilla be useful for finding support/resistance and pivot points and maybe filtering out too risky trades?
One other question how are we defining a high or low I was always told a high has to be a higher than the previous candle with 2 subsequent lower candles and vice versa for low, but I know people have dfferent ideas?

Rule #5 mentioned by paulus covers this aspect; it requires at least 2 bars between points 1-2 and points 2-3 :

5. I must have more than 1 candle in between 1 and 2 and 2 and 3
Regards
  • #1,243
  • Feb 13, 2011 12:11pm Feb 13, 2011 12:11pm
Quoting Paulus
if you mean this which is the only 1 I can find .... 1and 3 are the same 3 needs to be lower

P
how many pips are considered 'lower'? since point 3 technically is 1 pip lower than point 1 on the chart. (it was a Dec 8 gbpusd chart)
  • #1,244
  • Feb 13, 2011 12:40pm Feb 13, 2011 12:40pm
Hi

Yes its only 1 pip thats all it has to be we do not want 1 and 3 the same 1 full pip min between the 2..

Count 1 I have 5802
Count 3 I have 5802

Therethe same..I dont use the 5th digit ..we need a proper lower high on 3 for a 123 short

cheers
P
  • #1,245
  • Feb 13, 2011 2:16pm Feb 13, 2011 2:16pm
Quoting Paulus
Hi

Yes its only 1 pip thats all it has to be we do not want 1 and 3 the same 1 full pip min between the 2..

Count 1 I have 5802
Count 3 I have 5802

Therethe same..I dont use the 5th digit ..we need a proper lower high on 3 for a 123 short

cheers
P
thank you. i didnt know if the 5th was rounded up, down or just ignored because i know fxdd uses 4, but alpari uses 5.
  • #1,246
  • Feb 13, 2011 2:47pm Feb 13, 2011 2:47pm
Quoting Paulus
Hi

cheers
P
which of the 2 bars is the correct point 2? the green upbar or red but even higher downbar?
If it is the first (2a) then there will be 2 bars to point 3 but if its 2b then there is only 1 bar to point 3 so point 2 is not valid.
Please also answer if point 1 remains valid even if 2 is considered not to be a valid 2.
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  • #1,247
  • Feb 13, 2011 3:03pm Feb 13, 2011 3:03pm
Hello simpletrades
I think the correct one is 2b. But how to you count 1 bar between 2 and 3 if the 2b is the correct point 2. I only see that after the 2b is point 3 so there is no bar between 2 and 3.

Best wishes,

D.
  • #1,248
  • Feb 13, 2011 3:10pm Feb 13, 2011 3:10pm
I was browsing around fxstreet today and discovered a few webinars on "The Law of Charts" by Marco Mayer. This probably doesn't contain any new information for Paulus, Vantage and other seasoned traders but here's the link for those that have some catching up to do: link to webinars.

PS. There are more free webinar recordings available on fxstreet. Browse around but don't get carried away.
If you don't risk, you don't ever have to lose.
  • #1,249
  • Edited 4:53pm Feb 13, 2011 3:57pm | Edited 4:53pm
Quoting danel
Hello simpletrades
I think the correct one is 2b. But how to you count 1 bar between 2 and 3 if the 2b is the correct point 2. I only see that after the 2b is point 3 so there is no bar between 2 and 3.

Best wishes,

D.
thats my question is 2 the green lower 2a that closed up or the higher but closing lower 2b? bcause 2b if it is the bar that counts is not a valid 2 but only because its too close to 3. i need to know how to correctly find a 2 before i care if it gets invalidated by the location of a 3.

Equally important is does point 1 remain valid even if 2 is considered not to be a valid 2 because of too tight proximity to the higher low at 3? Does the count start with a new 1 or just seek a new 2?
  • #1,250
  • Feb 14, 2011 4:23am Feb 14, 2011 4:23am
Quoting simpletrades
which of the 2 bars is the correct point 2? the green upbar or red but even higher downbar?
If it is the first (2a) then there will be 2 bars to point 3 but if its 2b then there is only 1 bar to point 3 so point 2 is not valid.
Please also answer if point 1 remains valid even if 2 is considered not to be a valid 2.
2a had been a valid 2 before 2b was formed, then 2a was invalidated and 2b became a valid 2, your point 3 is not a valid 3 as there are not a minimum of 2 bars between 2 and 3 in either case.

The above are according to the rules set out by P

Point 1 remains valid unless it is broken by 3 when a new point 1 will be creared
Regards
  • #1,251
  • Feb 14, 2011 4:51am Feb 14, 2011 4:51am
Wasn't this a good set up, got stopped out........
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  • #1,252
  • Feb 14, 2011 7:35am Feb 14, 2011 7:35am
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Larger 1 2 3 is 15 min chart which I have been short from low of 2, now at +2.
  • #1,253
  • Feb 14, 2011 12:01pm Feb 14, 2011 12:01pm
Quoting forex1962
Wasn't this a good set up, got stopped out........
No, it is not because there is only 1 bar between 2 and 3. IslandFX gives you a good setup - the first one. The second one is CT and the rulsa are others.
  • #1,254
  • Edited 8:10pm Feb 14, 2011 7:33pm | Edited 8:10pm
took this trade about 8:15 pm est.

it just reversed hard just short of the wkly pivot so i moved my stop to b/e and got taken out.
maybe not the wisest decision since its moving up again.
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  • #1,255
  • Feb 15, 2011 6:03am Feb 15, 2011 6:03am
Hi Simpletrades, My belief is that you need to stick to one timeframe with your trades. I use 15 min charts as I find 5 min whipsaws too much for my liking. The market is giving me a hard time this week after having a great 4 weeks prior. IMHO it is best to wait for the ideal trade setup and not over trade. I was short GU today and stopped out then long EJ and AU which both look average at the moment, sometimes you cannot do anything right..Just my observations ;-)
  • #1,256
  • Feb 15, 2011 7:40am Feb 15, 2011 7:40am
final chart of audusd last nite. my hasty exit was on the way down from the bounce off wkly pivot after 9 pm est.
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  • #1,257
  • Feb 15, 2011 8:47am Feb 15, 2011 8:47am
5 min short EU if price does not make a new high - never had such success with this.

Are these the patterns we should be looking for
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  • #1,258
  • Edited 6:02pm Feb 15, 2011 5:47pm | Edited 6:02pm
Quoting puntalara
5 min short EU if price does not make a new high - never had such success with this.

Are these the patterns we should be looking for
without times and prices its really hard to match up to charts.
  • #1,259
  • Feb 16, 2011 2:44am Feb 16, 2011 2:44am
Went nicely down put did not hit my PT ended up at BE - there is one setting up now on the 5min EU I have a low order in place.

GL
  • #1,260
  • Feb 16, 2011 4:53am Feb 16, 2011 4:53am
longer time frame and double top confirmation
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