Law Of Chart

I made my picture of the law of the charts. It is not very beautiful but I will use it, because the market is giving text books examples only occasionally.

Here I notice the entry places according to the Law of the Charts. When I read for the first time I found it a little bit confusing but when you plot everything together is it much, much simpler.

OK. First we have 1-2-3 formation. This is when we have a down trend and how it transforms into an up trend. The market makes a low (1), then it goes higher (3) and then it fails to go lower than 1 (3).

There is a small concern with that conception. The problem is that it is not casual. Look at the 1-2-3 formation when it develops it is analysed as a Ross hook (Rh) but when the Ross hook failes it is analysed as 1-2-3 formation. And that is repainting. Anyway it is still usefull.

After that the market goes higher and makes a small correction. This correction is the central concern in the Law of the chart conceptions. The correction is called a Ross hook. And it is something in between trending and quit and trending and volatile in the market states conception.

OK. We have one little correction and then another. After that we have exactly the opposite 1-2-3 formation in the opposite formation. The market makes a new high (1), then it corrects (2), and then fails to go higher than 1 (3). After that we have new shallow Ross hooks.

You may ask how it is possible a man to call a simple correction in the market by his name. Really?

And even more he tells you if the market is not doing the structure you call it by your name it is not your time (or it was something like that). Now please pay a close attention. Yes it is possible to call this correction a Ross Hook because not every correction is a Ross Hook. He defines the rules in his law of the charts in a precise way but what I would like to point is different and it is connected with the market state analysis.

You have this kind of analysis when the market overall has the same structure. You need something in between trending and quiet and trending and volatile. This conceptions excludes the stable market states.

However look again at the first picture. Yes globally we can say that on a bigger frame it looks like stable and volatile (Anchor) and we have trending and volatile within (Trigger). The anchor and trigger is a very original conception that goes beyond the classical concept of triple screen analysis.

The key of the success using this i the correct interpreation of the current market state.

For Forex it is imporant to try to make your entry when you are in a period of increased volatility, Eurpean and London open and the New York open. The idea of Joe Ross for Forex is that you do not have to stay in front of your monitors all day. Just try to grab some pips for two hours and get out and do something else. You do not have to spent many hours at the fron of your screan to be a day trader.

There is however something more. Sometimes and occasionally the market is giving some big opportunities. And it is important to be there and cash in. I remember the particular moments from the bear market in the Euro. This kind of market is very well trades with the Joe Ross conception. And that is why when I hear for major problems in the Euro zone the speculator within me is happy. What I mean that in my experience the approariate conditions for the law of the charts is when we have a bear market in the Euro. The bull market is much more jagged.

And finally the Hurst Exponent is determing the probability of success of the Law of the charts trading method. The larger the exponent the probability of success is bigger.

http://fxhackers.blogspot.com/2011/1...-analysis.html

I just read your post and i would like to say i love it...its very interesting and thanks for posting it...much regards..Don

busy with life .sorry i havent post in a while..

Thank you for the comments. I had some mistakes at the numbering but still it is possible to correct.

The idea is that the fractal dimension can be a market state indicator for the Law of the Charts. That is due to the fact that the Law of the charts is not a fundamental market pattern. But it is a specific market condition that allows you to cash in.

There is another indicator. It is market sentiment indicator. In fact look if the big price action threads are busy. If they are really busy that means that the market conditions are good for them. If they are quit that means that ... nobody is making money being proud to post about.

No it is not a joke. I am currently testing that as a pattern.

For me the Law of the Charts is the most comprehensible and structured approach for price action.

wow..you are thinking like me...yes i did studied bill williams method how he uses the fractal and ao..i think the both work perfect..The indicator that i have added to my chart is macd and alligator which is moving average to view the market momentum, i will update later when i have time...i watch 1.2.3 combine with the macd and where it was form on the alligator including timing of when market was opened which should be 1hr after open of london or NY...they are often a fake entries when you trade at the first open market..

This is not base on the indicator but indicator is used to confirm if the 1-2-3 high or low is good to be taking at where they are formed..

It is an interesting idea to combine the Bill Williams trading ideas with price action. I mean the price action is really nice to time in the entry. And it is nice to have a slow filter. As far as I know Joe Ross in his most recent papers about Forex recommends only the Stochastic for filtering his patterns.

Here I allow me to show an Oscillator of a new type. Unfortunately I cannot share here for copyright reasons. I have been banned already for thinks like that.It is my mod but depending on the work of others. In fact this is my mod that combines end - pointed Singular spectrum analysis and the double smoothed jurik filter.

As you see it allows to see some divergences that are not observed with the normal MACD.

It is just a tool but a good tool. I can share of course but only peer to peer.
PM if someone is interested.

...Joe ross state if he's in a trade he enter for a rules and his risk and he exit with same rules and believe opportunity will come again.

He has some course for only Forex (Day Trading Forex). It looks like for Forex he uses somewhat different rules.
I agree with his idea to trade only the most volatile moments of the day.


"Some traders are comfortable risking
$100/contract. Others have no problem with $1,000, or $5,000, etc. For the
examples that follow, I use $150/contract as the minimum I am willing to
risk, and $210/contract as my maximum personal risk tolerance.
The second kind of risk you must be aware of is the risk in the market. To
assess that risk, I use an indicator called “Average True Range (ATR).”
There are a number of variations of ATR around, but the one I use is the
original study developed by Welles Wilder. It has worked for me for years,
and I’m not one to fix what “ain’t broke.” The number of bars I use for the
ATR is 20. The ATR tells me how much money I can expect to get from a
move in prices. It also dictates where I place my stop. Furthermore, ATR
guides me in choosing the time frame from which I will trade EUR/USD. In
summary, ATR is used to:
�� Set my stop
�� Set my objective (s)
�� Dictate my time frame
I set my objective and stop based on the highest ATR of the last 24 hours. I
will not trade any time frame over 15 minutes/bar.
I believe I have to see at least $150 of risk (volatility) in order to make my
minimum objective of $100/contract on 15 lots. If risk is higher than $200,
my objective will be ½ my risk."

citation from Joe Ross Trading Forex

However the 15 lots seems too much for me.

For example if the higher reading of the ATR is .0016000.
Multiplying .0016000 by the size of the EUR/USD contract ($100,000), I get
$160.00. That amount fits within the Joe Ross risk tolerance. He will risk $160 on the
trade for 1 lot.

There are two shots explaining his approach

first 1-2-3 high was in london..this is 1-2-3low at formed after london closed..
nice trade ..EU 15TF...
CLOSE FOR THE DAY..

nice trade it looks like i have mirrored it

Good afternoon. Are there still people who use this profitable way?

EUR/USD M1
This method is perfect. without the headache earned 8 pips.




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for some it's mischief, but quite in keeping with Ross take profit that provides market and come up with it. And it works. His 3 pips I took profit :-)


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It was a simple trade, the evening put the order on the next day took profits.

first order closed on take profit 10 pips, the second order was no take profit, the price reached the level of 50% springback, manually close the part of the lot and translate without loss.

Total: +10pips, +76pips. nor any nerves :-)

And just yesterday were exhibited warrant for U / J and A / U at all H4 since it went on the second night orders were also exhibited TA ATP utrechka looked U / J has fulfilled two objectives 5 and 12, but on A / U has fulfilled only the primary warrant for five second hang out in paragraphs 2-4 of the moose, but if and elk will still be a small profit) as a result of the second order is fulfilled to +10

anyone trading this strategy ?

After 8 years I don't think so

learn to read the candles ...