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  • #201
  • May 2, 2011 3:05am May 2, 2011 3:05am
Quoting belekas
Happened to me like a gazillion times so it's always good to enter a few pips above the level, in this case the ascending TL. It hurts me as a trader when my limit orders gets missed by a mm and price takes off in the expected direction. I also had a plan to buy @ 120.13 but since it was late Friday I decided to skip the idea, so might come out a good trade. But half a pip is really painful. I know the feeling to the bone, trust me. Seen too many times not to make adjustments to my entries.
yeah its not a good feeling. i did give my enrty price a small buffer as i see the level extending a little lower also. I might get another entry yet with this wedge formation?? do you like it Belekas?

jon
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PATIENCE... DISCIPLINE
  • #202
  • May 2, 2011 3:09am May 2, 2011 3:09am
Quoting g_j_hook@yah
yeah its not a good feeling. i did give my enrty price a small buffer as i see the level extending a little lower also. I might get another entry yet with this wedge formation?? do you like it Belekas?

jon
You can easily draw a bearish one too. Or a narrowing ascending channel...Check 4hr chart...So it's anyones guess as of now...
  • #203
  • May 2, 2011 3:17am May 2, 2011 3:17am
Quoting belekas
You can easily draw a bearish one too. Or a narrowing ascending channel...Check 4hr chart...So it's anyones guess as of now...


cheers

jon
PATIENCE... DISCIPLINE
  • #204
  • May 2, 2011 4:23am May 2, 2011 4:23am
Quoting johoma
Thanks for the webinar. Whats the reasoning behind favouring 46.21 (1h bar highs) over the 44.60 ish bar lows? Deeper retrace or?
Thanks,
John
It wasn't down through 44.62 when I wrote the post (although it was falling so hard that it was by the time I hit "Submit")
  • #205
  • May 2, 2011 5:01am May 2, 2011 5:01am
Morning guys.

Tom, thanks for the webinar last night, great stuff.

Guys, I am being a bit dim here but a couple of things I am struggling with are:-

Quote - I enter when it hits the level for the first time. I do not wait for it to go through and then come back up.

If I was expecting it to go through the level, I wouldn't be entering at the level... Quote.

Last night we talked about a rounded re-test of the bounce which I like. Looking at what Tom said in the above quote I dont understand when you decide to either :-

1. Wait for price to hit the level , then do a rounded re-test and enter then, or

2. Just have an order waiting and it gets triggered once price hits the level for the first time and not wait for the re-test.

The other thing I was unsure of was when we looked at the BEOB that formed on the daily and Tom showed how by dropping down to the hourly and putting up a fib you can get a better entry on the retrace and get a much tighter stop. Thats great and makes perfect sense. What I did'nt get was that if we wait for the BEOB to have formed using PA and then enter on the retrace we have way missed the start of the move (ie as the BEOB was forming) and getting in early. Am I missing something here guys ?.

Any help very much appreciated.

Many thanks
  • #206
  • May 2, 2011 5:04am May 2, 2011 5:04am
Quoting the_wizard
It wasn't down through 44.62 when I wrote the post (although it was falling so hard that it was by the time I hit "Submit")
Ah OK. That was a massive fall that you predicted. At the moment its retracement (45.42) is near the middle of the 2 previously mentioned levels, maybe just getting back into a more sensible daily range(?)
Thanks.
  • #207
  • Edited 6:21am May 2, 2011 6:08am | Edited 6:21am
Quoting Malarky
Last night we talked about a rounded re-test of the bounce which I like. Looking at what Tom said in the above quote I dont understand when you decide to either :-

1. Wait for price to hit the level , then do a rounded re-test and enter then, or

2. Just have an order waiting and it gets triggered once price hits the level for the first time and not wait for the re-test.
Malarky,

I think the reason people get confused is they think the retest is price retesting the level for the second time. E.g. They think it has to hit a level and then come back for a rounded retest before they can enter.

This is wrong.

The retest is simply price testing an area of support or resistance or the trigger point of a price pattern (e.g. the neckline of a head and shoulders) from the other side.

You do not need to wait for price to hit a level and THEN do a rounded retest. You simply need to wait for a key resistance or a support level to get broken and then take action when it trades back into that area from the other side.

The "rounded" pattern is what I look for when a market is retesting that level from the other side for the first time.

See chart 1 below which is the D1 chart for Coca-Cola stock. The price breaks out of former resistance at 65.86 and we are waiting with a buy limit on the return as long as price is "rounding back" to the level.

Quoting Malarky
The other thing I was unsure of was when we looked at the BEOB that formed on the daily and Tom showed how by dropping down to the hourly and putting up a fib you can get a better entry on the retrace and get a much tighter stop. Thats great and makes perfect sense. What I did'nt get was that if we wait for the BEOB to have formed using PA and then enter on the retrace we have way missed the start of the move (ie as the BEOB was forming) and getting in early. Am I missing something here guys ?.
Most of the time, our intention is to enter at the start of the move e.g. off the level which marks the turning point.

However, there are some opportunities (e.g. the FTSE trade we went over in the Webinar) where the play may evolve from what you first expect.

Take a look at the chart below of the FTSE (chart 2) on the D1 timeframe. When price is trading into the resistance marked in yellow, my initial aim is to try and get LONG. The plan is;

- To wait for the breakout and then enter in long on the rounded retest with a limit buy order at the level.

What happens?

Price breaks out, probably hits a fair few buy stops, comes straight back within the range and then forms a huge BEOB. (chart 3)

Since I wasn't planning to go short here (note the spider into the level) then I would NOT have got an entry at the source.

In my opinion, it is only at the end of the day that the market has tipped its hand.

I can then use this BEOB to guage the directional play (in this case, a short position) and drop down a time frame to the H1 to find my entry.
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  • #208
  • May 2, 2011 6:15am May 2, 2011 6:15am
Quoting the_wizard
Malarky,

I think the reason people get confused is they think the retest is price retesting the level for the second time. E.g. They think it has to hit a level and then come back for a rounded retest before they can enter.

This is wrong.

The retest is simply price testing an area of support or resistance or the trigger point of a price pattern (e.g. the neckline of a head and shoulders) from the other side.

You do not need to wait for price to hit a level and THEN do a rounded retest. You simply need to wait for a key resistance or a support...

Tom

Many thanks for that clear explanation, thats cleared things up greatly for me.

Kind regards
  • #209
  • May 2, 2011 6:58am May 2, 2011 6:58am
Firstly, a deep thankyou for your webinars. It makes things so much clearer compared to reading.

I am not necessarily a news trader but do keep major events in mind. Maybe this is hypocritical.

In your last webinar, you discussed a possible similar view within regards of the news, ie the Royal Wedding.

With this in mind, would you factor in more of a risk play based on the killing of Osama and the US stock market possible surging higher while usd pairs dropping? Of course still keeping in mind key S/R levels.

Regards,

Bill
  • #210
  • May 2, 2011 9:47am May 2, 2011 9:47am
Quoting Atc
Firstly, a deep thankyou for your webinars. It makes things so much clearer compared to reading.

I am not necessarily a news trader but do keep major events in mind. Maybe this is hypocritical.

In your last webinar, you discussed a possible similar view within regards of the news, ie the Royal Wedding.

With this in mind, would you factor in more of a risk play based on the killing of Osama and the US stock market possible surging higher while usd pairs dropping? Of course still keeping in mind key S/R levels.

Regards,

Bill
Has the situation just got better or worse?

Killing Osama has just made him a martyr and will more than likely serve as the inspiration for thousands of people to attack our loved ones.

I would have thought the last thing we wanted was to make people more determined than ever to attack us.

An eye for an eye just perpetuates the hatred and in the end we all go blind....

Anyway, onto the charts.

Chart 1 is the S&P at the aforementioned 1371 level which is a fantastic S/R pivot.

Chart 2 clearly shows the acceleration into the level on the news and the subsequent reaction. This is exactly what I look for.
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  • #211
  • May 2, 2011 10:44am May 2, 2011 10:44am
Hi Tom,

Good webinar yesterday, thanks.
Could you review please how you are using ATR indicator?

Thanks
Den
  • #212
  • May 2, 2011 10:45am May 2, 2011 10:45am
Quoting the_wizard
Has the situation just got better or worse?

Killing Osama has just made him a martyr and will more than likely serve as the inspiration for thousands of people to attack our loved ones.

I would have thought the last thing we wanted was to make people more determined than ever to attack us.

An eye for an eye just perpetuates the hatred and in the end we all go blind....

Anyway, onto the charts.

Chart 1 is the S&P at the aforementioned 1371 level which is a fantastic S/R pivot.

Chart 2 clearly shows the acceleration into the level...
A beauty ....great reaction to that pivot....appears like there was a wall of orders just waiting to be fired off there.
  • #213
  • May 2, 2011 11:45am May 2, 2011 11:45am
Completely missed this GBP/CHF short, with the trend, of 1.4500 level. Still sad a bit...XeX..There was 100 nice pips all the way down to the daily support, and perhaps even lower. One thing bothering me is the RR. Wiz, from my experience observing charts through years I see that market tends to bounce quite nicely of the S/R levels IF they are identified correctly. Could you elaborate a bit more about your experience with lets say 20-30 pip static stops, if possible. I know they make no technical sense and breakeven ones, but would be cool to hear some more insight, if there is any.)

Regards.
Bel.
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  • #214
  • May 2, 2011 12:09pm May 2, 2011 12:09pm
Beautiful setup, completely missed it as I don't watch this pair very often. On H4 is visible how fast it fell in the SR. Closed the last day of the week hard down - who would have thought to buy it?
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Trading = a mirror to your human flaws. Fix them or be fixed.
  • #215
  • May 2, 2011 12:13pm May 2, 2011 12:13pm
Quoting belekas
Completely missed this GBP/CHF short, with the trend, of 1.4500 level. Still sad a bit...XeX..There was 100 nice pips all the way down to the daily support, and perhaps even lower. One thing bothering me is the RR. Wiz, from my experience observing charts through years I see that market tends to bounce quite nicely of the S/R levels IF they are identified correctly. Could you elaborate a bit more about your experience with lets say 20-30 pip static stops, if possible. I know they make no technical sense and breakeven ones, but would be cool...
When I was a prop trader, I sat next to another trader who made a great deal of money trading S/R and nothing else in the EuroStoxx. (a stock index)

His stops were around 8 - 10 ticks. They were what I would call, tight.

His stops were always the same and were placed in no area that made any technical sense to me.

One day I thought I would question him on this arbitrary stop placement so I said to him: "Can you explain the reasoning behind your stop placement?"

And he replied: "Sure, it's simple. If I am right on the trade, it shouldn't go more than a maximum of 8 ticks through the level."

"Right," I shot back. "But how do you know that?"

And he looked at me as if I was a complete moron and said: "Because I've noted down the average drawdown when entering at key levels over the last couple of years and my stats tell me that the drawdown shoudn't be more than 8 ticks".
  • #216
  • May 2, 2011 12:22pm May 2, 2011 12:22pm
The point I am trying to make in the post above is that, once again, it all comes back to your journal or record.

And don't start thinking that you can use a stop of 8 ticks. This was market and entry/exit specific.

But the key point is:

This trader was a net loser for a a couple of years. But on his trades he had recorded the outcome under different variables.

What he wanted to find out was simple: "Was there a better way of doing things?"

The simple fact of the matter is, it was not the strategy that made the trader profitable, it was the record.
  • #217
  • May 2, 2011 12:24pm May 2, 2011 12:24pm
Quoting the_wizard
When I was a prop trader, I sat next to another trader who made a great deal of money trading S/R and nothing else in the EuroStoxx. (a stock index)

His stops were around 8 - 10 ticks. They were what I would call, tight.

His stops were always the same and were placed in no area that made any technical sense to me.

One day I thought I would question him on this arbitrary stop placement so I said to him: "Can you explain the reasoning behind your stop placement?"

And he replied: "Sure, it's simple. If I am right on the trade,...
And what win rate he had? I know that he had surely a high R...but...as a professional....he had also a high win rate? Maybe due to experience?
Market is like a puzzle, YOU have to fit the pieces!!
  • #218
  • May 2, 2011 12:29pm May 2, 2011 12:29pm
Quoting Chris_B
And what win rate he had? I know that he had surely a high R...but...as a professional....he had also a high win rate? Maybe due to experience?
I don't know his exact stats but he was making money consistently in the time I was there and is still making money to this day.

Off the top of my head I would say he had around a little over 1 R and a strike rate of maybe 75%.
  • #219
  • May 2, 2011 12:33pm May 2, 2011 12:33pm
Quoting the_wizard
I don't know his exact stats but he was making money consistently in the time I was there and is still making money to this day.

Off the top of my head I would say he had around a little over 1 R and a strike rate of maybe 75%.
So it was some kind of scalper....with a stop of 10 pips and a profit of 10/15 pips...
Market is like a puzzle, YOU have to fit the pieces!!
  • #220
  • May 2, 2011 12:38pm May 2, 2011 12:38pm
Yes Chris but his strategy doesn't matter.

Your journal will show you what you need to do to get profitable.
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