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Trade What You See - Almost Naked Trading
- #17,186
- Aug 4, 2011 11:57am Aug 4, 2011 11:57am
- Joined Feb 2011 | Status: Probabilities, Not Absolutes | 1,246 Posts
- #17,188
- Aug 4, 2011 3:14pm Aug 4, 2011 3:14pm
- Joined Feb 2011 | Status: Probabilities, Not Absolutes | 1,246 Posts
I can not thank you enough for this explanation, TSD. I have reached a point where I don't know how to further explain the BOs. Your explanation is excellent and right on. The ability to read PA is what I believe traders who are having so many problems here are missing. Please continue your comments.
If you would like I can post some additional charts "AUDUSD" that might illustrate this concept a little better ? They would show the macro view of were the S/Rs are and how they related to this most recent AUDUSD short trade post #17172. I did not take that trade but the (looking left/looking back) would still be the same. It will bring a picture to my previous statements.
TSD
- #17,189
- Aug 4, 2011 3:36pm Aug 4, 2011 3:36pm
- Joined Dec 2009 | Status: Trader | 6,603 Posts
You are most welcome
If you would like I can post some additional charts "AUDUSD" that might illustrate this concept a little better ? They would show the macro view of were the S/Rs are and how they related to this most recent AUDUSD short trade post #17172. I did not take that trade but the (looking left/looking back) would still be the same. It will bring a picture to my previous statements.
TSD
Thanks LG and everyone else for this great thread.
I had been trading last year but stopped for a few months because I just didn’t seem to get it right. Ready to give it a fresh start now and following this thread will hopefully lead me in the right direction.
I have some very basic questions to the different systems discussed here. Please help, because I have the feeling I am doing something fundamentally wrong. I hope not to offend anyone with too stupid questions - I'm really very new to all this.
4H 3 tap: How to draw TL’s
I saw on various charts posted here that TL’s for the 3Tap4H system are drawn different from how I would draw. Connect the candle bottoms for up trend and candle tops for downtrend – so much is clear.
But firstly I’m not sure if to use bottoms/tops of wicks or just of the candle body. This might make a big difference if two candles are close to each other.
Also in order to draw a TL I need 2 fixed points – then I’ll wait for the third tap. But I could draw a multitude of different TL’s on any chart that will look totally different. This will even get worse if I can use 2 adjacent candles to draw TL’s (I read somewhere in this thread that adjacent candles could be used).
Also I’m not sure what constitutes a tap. In particular if the third tap can also pierce the candle and it can be next to or in the vicinity of the second tap, then I can almost always create a TL that gets a third tap right this moment.
I have attached a chart below to illustrate (I hope i can work out how to attach files...)
What am I doing wrong? Please help.
I had been trading last year but stopped for a few months because I just didn’t seem to get it right. Ready to give it a fresh start now and following this thread will hopefully lead me in the right direction.
I have some very basic questions to the different systems discussed here. Please help, because I have the feeling I am doing something fundamentally wrong. I hope not to offend anyone with too stupid questions - I'm really very new to all this.
4H 3 tap: How to draw TL’s
I saw on various charts posted here that TL’s for the 3Tap4H system are drawn different from how I would draw. Connect the candle bottoms for up trend and candle tops for downtrend – so much is clear.
But firstly I’m not sure if to use bottoms/tops of wicks or just of the candle body. This might make a big difference if two candles are close to each other.
Also in order to draw a TL I need 2 fixed points – then I’ll wait for the third tap. But I could draw a multitude of different TL’s on any chart that will look totally different. This will even get worse if I can use 2 adjacent candles to draw TL’s (I read somewhere in this thread that adjacent candles could be used).
Also I’m not sure what constitutes a tap. In particular if the third tap can also pierce the candle and it can be next to or in the vicinity of the second tap, then I can almost always create a TL that gets a third tap right this moment.
I have attached a chart below to illustrate (I hope i can work out how to attach files...)
What am I doing wrong? Please help.
- #17,191
- Aug 5, 2011 12:00am Aug 5, 2011 12:00am
- Joined Feb 2011 | Status: Probabilities, Not Absolutes | 1,246 Posts
This was my earlier post today regarding a post from degournay to LG.
I added the charts this evening..
If I may add to LG's resent statement: “H1 BOs are PA trades and not necessarily trend trades"
Something that might make this a bit easy regarding PA trading.. Yes, the H1 BOs are not always a trend trade but if you concentrate on the ones that are such as AUDUSD and AUDCAD post # 17172... As you will see, looking at the LG indicator, 90% of the arrows are red... trend is definitely down. Both trades taken short. Having said that.. Look left...see the price congestion that took place on Aug 3... Now look at the preceding price action from the beginning of Aug... See how the market/price has been in a downward trend. Odds are good ( not that it is certain ) that the break will be with the trend.
AUDUSD... See the area 1.0800 around July 24/25... This became a resistance for the upper part of the congestion prior to the break down for this trade short. Yes this is a macro view but it illustrates how looking at PA can help you with LG’s trades. Add this to the LG indicator..odds a little more in your favor.. Again, not every trade is a trend trade but staying with the obvious trend trades (getting a macro view / larger view, may help you over the hurdle that you are having)
This is an excellent method, very consistent but your ability to read PA is critical.
One last thing. LG uses a method of determining support and resistance on the H1 BO that is different than the conventional thinking. That of drawing her S/R lines based on the bodies of the candles (opens and closes) not the top and bottom of the wicks. The wicks are probes... Ropes hanging from the ledge ( the ledge is the real support ). If you begin to see S/R in this manner throughout you charts, this will take you to a new level of understanding of PA and S/R.
See how the dotted blue line shows support based on the bodies of the candles. Price breaks short , retraces back up to the support now resistance.. The purple line is support drawn in the traditional way. price broke through as well but retrace back through the purple line.. I have also found that taking the most recent S/R vs. a S/R farther way in the same area tends to be the nmore accurate of the 2.
My point in all this .. Look from were you came.. look left .. get a good macro view. Helps to see the trend. Use LG inidactor.. Learn to see and draw S/R lines.. They will become your road maps in PA trading. As you begining to see the S/R levels you will notice whether you are trading trend , or counter trend.
Hope this helps
TSD
I added the charts this evening..
If I may add to LG's resent statement: “H1 BOs are PA trades and not necessarily trend trades"
Something that might make this a bit easy regarding PA trading.. Yes, the H1 BOs are not always a trend trade but if you concentrate on the ones that are such as AUDUSD and AUDCAD post # 17172... As you will see, looking at the LG indicator, 90% of the arrows are red... trend is definitely down. Both trades taken short. Having said that.. Look left...see the price congestion that took place on Aug 3... Now look at the preceding price action from the beginning of Aug... See how the market/price has been in a downward trend. Odds are good ( not that it is certain ) that the break will be with the trend.
AUDUSD... See the area 1.0800 around July 24/25... This became a resistance for the upper part of the congestion prior to the break down for this trade short. Yes this is a macro view but it illustrates how looking at PA can help you with LG’s trades. Add this to the LG indicator..odds a little more in your favor.. Again, not every trade is a trend trade but staying with the obvious trend trades (getting a macro view / larger view, may help you over the hurdle that you are having)
This is an excellent method, very consistent but your ability to read PA is critical.
One last thing. LG uses a method of determining support and resistance on the H1 BO that is different than the conventional thinking. That of drawing her S/R lines based on the bodies of the candles (opens and closes) not the top and bottom of the wicks. The wicks are probes... Ropes hanging from the ledge ( the ledge is the real support ). If you begin to see S/R in this manner throughout you charts, this will take you to a new level of understanding of PA and S/R.
See how the dotted blue line shows support based on the bodies of the candles. Price breaks short , retraces back up to the support now resistance.. The purple line is support drawn in the traditional way. price broke through as well but retrace back through the purple line.. I have also found that taking the most recent S/R vs. a S/R farther way in the same area tends to be the nmore accurate of the 2.
My point in all this .. Look from were you came.. look left .. get a good macro view. Helps to see the trend. Use LG inidactor.. Learn to see and draw S/R lines.. They will become your road maps in PA trading. As you begining to see the S/R levels you will notice whether you are trading trend , or counter trend.
Hope this helps
TSD
- #17,192
- Aug 5, 2011 12:24am Aug 5, 2011 12:24am
This was my earlier post today regarding a post from degournay to LG.
I added the charts this evening..
If I may add to LG's resent statement: “H1 BOs are PA trades and not necessarily trend trades"
[color=black][font=Verdana]Something that might make this a bit easy regarding PA trading.. Yes, the H1 BOs are not always a trend trade but if you concentrate on the ones that are such as [b]AUDUSD and AUDCAD post # 17172... As you will see, looking at the LG indicator, 90% of the arrows are red... trend is definitely down. Both...
Fall seven times, stand up Eight! #GGMU
- #17,193
- Aug 5, 2011 7:18am Aug 5, 2011 7:18am
- Joined Dec 2009 | Status: Trader | 6,603 Posts
Great explaination TSD.
- #17,194
- Aug 5, 2011 7:21am Aug 5, 2011 7:21am
- Joined Dec 2009 | Status: Trader | 6,603 Posts
This is the best trading week I have had all year. I hope it was for all of you too. Happy weekend everyone.
- #17,196
- Aug 5, 2011 8:38am Aug 5, 2011 8:38am
This was my earlier post today regarding a post from degournay to LG.
I added the charts this evening..
Hope this helps
TSD
Thanks as well to all of you who participate here
- #17,197
- Aug 5, 2011 10:02am Aug 5, 2011 10:02am
- Joined Feb 2011 | Status: Probabilities, Not Absolutes | 1,246 Posts
Thank you all for the kinds words..You are most welcome !
I was glad that LG allowed me to offer something that might be helpful.
I forgot to add one other item that will ( I think ) speak very directly to degournay's having some difficulty.
If you look at the first chart I posted.. The one with all the arrows on it. Notice how price trends.. Then ranges... Then trends.. Nothing new here right....
But when you apply it to the contex of LG's statement “H1 BOs are PA trades and not necessarily trend trades"
1)Trading within range bound PA as shown, there may be little follow through.. A high degree of trade management is in order here.. Else you might get chopped up... or ... maybe just stay out.
2) Is the trade at the top or bottom of the range? Do you take the trade back into the range or hope for the break out? I prefer to take the trade back into the range ( if that's the set up ) as there is no conformation of a break out. Think of it this way..
I know I'm in range therefore I trade range..
3) I will not hesitate to take a trade in the direction of the trend. How do we know? Look back/Look left.. It becomes easier to see when looking at the macro view.. PA is ranging.. PA is trending.. Especially when looking a H1 TF. The market moves slower, easier to see.
I know I'm in trend, therefore I trade trend
If you do not know if you are trending or ranging.. Please dont take the trade.
This is not the perfect way, but hopefully it will help.
Hey LG.. CONGATS on a great week.. Its a great method !!
TSD
I was glad that LG allowed me to offer something that might be helpful.
I forgot to add one other item that will ( I think ) speak very directly to degournay's having some difficulty.
If you look at the first chart I posted.. The one with all the arrows on it. Notice how price trends.. Then ranges... Then trends.. Nothing new here right....
But when you apply it to the contex of LG's statement “H1 BOs are PA trades and not necessarily trend trades"
1)Trading within range bound PA as shown, there may be little follow through.. A high degree of trade management is in order here.. Else you might get chopped up... or ... maybe just stay out.
2) Is the trade at the top or bottom of the range? Do you take the trade back into the range or hope for the break out? I prefer to take the trade back into the range ( if that's the set up ) as there is no conformation of a break out. Think of it this way..
I know I'm in range therefore I trade range..
3) I will not hesitate to take a trade in the direction of the trend. How do we know? Look back/Look left.. It becomes easier to see when looking at the macro view.. PA is ranging.. PA is trending.. Especially when looking a H1 TF. The market moves slower, easier to see.
I know I'm in trend, therefore I trade trend
If you do not know if you are trending or ranging.. Please dont take the trade.
This is not the perfect way, but hopefully it will help.
Hey LG.. CONGATS on a great week.. Its a great method !!
TSD