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123PatternsV6 revisited

  • #61
  • Nov 23, 2011 5:51am Nov 23, 2011 5:51am
hey, what other technical aspects are there to this setup. do you use cci 200 like one poster said? or is it only the 123's and volume during trading times? can you please elaborate further on the pure technical "how to find and enter the trade" robdee ?
  • #62
  • Nov 23, 2011 8:58am Nov 23, 2011 8:58am
problem with indicator 123patternsv6

arrow sometimes disappear!

why in line red that I draw there is not arrow long ??
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  • #63
  • Nov 23, 2011 9:32am Nov 23, 2011 9:32am
Quoting evilmeatball
do you use cci 200 like one poster said? or is it only the 123's and volume during trading times? can you please elaborate further on the pure technical "how to find and enter the trade" robdee ?
Sure will do. Remember the reason this thread exists is to develop the ideas further from what we were doing a year ago, hence the title "123PatternsV6 revisited".

Sell zones and buy zones are well described in this thread. That is how I find and enter a trade. It is also becoming clear to me that the 123-break is most reliable during times when there is greater than average liquidity.

No other technical inputs, no use of any oscillators or moving averages. That guy who was using CCI(200) was on H4 charts which doesn't suit what I'm trying to do. I don't understand how he proposed to trade that.

On M5 I'm only looking for small intraday swings so expect to TP at +50 and +100, not much more than that.

This thread is pretty wide open in terms of developing the art of 123 pattern analysis. If you know some technique that improves our ability to make profitable trading decisions (and it's not some other custom indicator or EA) then you're welcome to post it here.

Robdee
  • #64
  • Nov 23, 2011 9:35am Nov 23, 2011 9:35am
Quoting wallstreet03
why in line red that I draw there is not arrow long ??
Welcome wallstreet03,

I suggest you label the three previous price points 1 2 3 and then you may be able to see what is happening. I can see why the blue arrow did not print at that time you highlight.

If you have ShowAllBreaks=true then yes you will get arrows that print and then disappear. There are recent posts on this topic.

Robdee
  • #65
  • Edited 10:13am Nov 23, 2011 9:45am | Edited 10:13am
thank's robdee
now I see !

but if I set ShowAllBreaks=false I don't see the arrows in the charts !!

and thank you for all !






Quoting robdee
Welcome wallstreet03,

I suggest you label the three previous price points 1 2 3 and then you may be able to see what is happening. I can see why the blue arrow did not print at that time you highlight.

If you have ShowAllBreaks=true then yes you will get arrows that print and then disappear. There are recent posts on this topic.

Robdee
  • #66
  • Nov 23, 2011 10:46am Nov 23, 2011 10:46am
Hi Robdee interesting thread, aspects of this are reminding me of Ross Hooks (joe ross traders trick entry), the retrace to your entry zone would be the correcting bars of the traders trick entry, but are you trying to stay totally clear of price bars in your technique?
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  • #67
  • Edited 2:37pm Nov 23, 2011 1:41pm | Edited 2:37pm
Quoting spacePip
Hi Robdee interesting thread, aspects of this are reminding me of Ross Hooks (joe ross traders trick entry), the retrace to your entry zone would be the correcting bars of the traders trick entry, but are you trying to stay totally clear of price bars in your technique?
Nice post spacePip, I'm not sure what you mean about avoiding price bars, do you mean 'constant rangebar charts' which yes I am avoiding those. In a rangebar chart all the bars are the same height but their time durations are variable.

The chart you posted is an 'M5 bar chart' that simply uses bars (instead of candles) to represent the same OHLC values for each time period. In my mind there is no difference between that and an 'M5 candle chart'.

If you are able to explain a brief summary of the Ross Hooks approach (or post a link to an existing summary) that will be appreciated. Looks like it provides a very specific entry criteria which may be useful.

Robdee

Update: I found this posting from Joe Ross the inventor of the Ross Hook.
  • #68
  • Nov 23, 2011 3:30pm Nov 23, 2011 3:30pm
spacepip: nice one, i got the very same trade! :-)

robdee: thank you for the fast answer. i understand the concept of the sellzone/buyzone, however i really did not think about that spot for entries before reading this thread. i usually do trade 123s though. i must add though that i have had a hard time in finding "good" 123s and sorting out the bad ones. that is why i brought up the concept of forceindicators thinking that they somehow would eleiviate this from my trading. i am looking forward to the sollution of this if there is one. lets work this out together eh!
  • #69
  • Nov 23, 2011 4:38pm Nov 23, 2011 4:38pm
Quoting evilmeatball
i must add though that i have had a hard time in finding "good" 123s and sorting out the bad ones.... i am looking forward to the solution of this if there is one. lets work this out together eh!
Emb, I agree with you and I'm glad you're participating in the main goal of this thread. Thanks for your comments.

The last several posts have been sidetracking, that's OK it is useful, but now I need to get back to the main topic of this thread which is...

Quoting robdee
My goal for this thread is to work together on understanding 123 patterns, when are they useful, and when they are not.
The last post I made on the main topic was What data can I ignore ?

In that post I referred to a poll I have been running asking traders to select multiple categories of data which they think are safe to ignore as they evaluate trading setups.

What is the least important data available to us? More than 60% selected Technical analysis 'news' posts on FF news page. Yes, safe to ignore, I certainly agree with that. I don't even read those TA 'news articles' because they distract me and play with my mind.

By contrast the most important data (that cannot safely be ignored) according to traders are these two:

  1. The range of candles (high - low)
  2. Patterns (channels, triangles, waves etc)

Only 15% voted to ignore these two. In other words 85% are saying these two categories of data must be included in the analysis.

OK, patterns I can understand, we use all kinds of patterns. This thread is all about one of the simplest and most common patterns out there. I agree, patterns must not be ignored.

Now what about the range or size of candles. The number of pips from the top of the candle to the bottom. From the highest bid to the lowest bid during that time period. Is a 30 pip candle telling us something different from a 10 pip candle ? No I don't think so.

It is all just OHLC isn't it? Seems to me the Close is the important thing. So why are 85% saying we can't ignore range? Maybe the way I worded the question has biased the answers, I don't know.

The second part of that post What data can I ignore ? showed a chart with one successful pattern and three failed patterns. What makes the difference, any ideas?

I have some ideas but I'm waiting for responses to my question.

Robdee
  • #70
  • Nov 23, 2011 4:55pm Nov 23, 2011 4:55pm
Quoting robdee
The second part of that post What data can I ignore ? showed a chart with one successful pattern and three failed patterns. What makes the difference, any ideas?
Robdee
First buy fails because it hits resistance (old support from point 2 in successful sell 123-break).
Second buy - does it really fail? It appears to be successful for several bars and the amount it moves is small because of low volume.
Third buy fails because of low volume and resistance (same resistance that caused first buy to fail).
  • #71
  • Edited 5:50pm Nov 23, 2011 4:58pm | Edited 5:50pm
im interested to join, this is one setup i use to open up a trade.

this is so widely used and discussed here in FF, and also called in different name according to the starter of the thread. others may find me wrong on how i use this method but this is how i understand this and operate so please just correct me if im wrong. in hope to help new traders like me and by the essence of sharing and caring ill share to you my friends how i use this method along with the other edge that ive learned from generous senior traders out there. thanks and more power to them.
i believe this setup is powerful if done properly, specially if we use this in conjunction with the general trend, S/R areas, divergence, volume or smart money flow, and right session. though these setups always happen the whole trading day i leave the preference to you.
so this is how i do it: i check and plot the S/R on the higher TF H1-H4, then i watch the Price Action on those plotted areas of S/R on M15 down to M5. i prefer to hunt this 123,abc etc. setup on M5 because for me that timeframe is my comfort zone R:R wise.
then if i was lucky to find an entry (mostly aggressive), MM applies. (i leave this to you or you can share us your MM style its up to the owner of this thread if he allows it to be discussed).
the broken 123, 2b or the 2nd type of 123 pattern robdee is telling us, i was adviced to hunt that at the end of the run, so when i saw that pattern after the divergence, that signals that the end of the run is near and tells me to close the trade. and steal for at least another 10-15 pips.
attachment below speaks a thousand words, i hope i was able to relay to you guys what i mean.

again this is not mine, ive just learned this from those senior traders out there who are so generous to assist new traders like us. more power and thanks to them.

hope this helps

regards
frank
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  • #72
  • Nov 23, 2011 5:26pm Nov 23, 2011 5:26pm
Quoting robdee
Nice post spacePip, I'm not sure what you mean about avoiding price bars, do you mean 'constant rangebar charts' which yes I am avoiding those. In a rangebar chart all the bars are the same height but their time durations are variable.
Sorry i rushed the post didn't make it clear, I didn't mean rangebars, I was simply referring to normal chart candles/ bars and whether you are keen to use them with this method, or are you just sticking to the plain chart with only the zigzag indicator?

If you are open to using candles or bars then the Ross Hooks could be of interest as a way of entry when price retraces back into your buy/ sell zones. Basically a ross hook is described as "the first correction following a breakout of a 123 high/ low" so this is similar to what you are looking for. Entry is triggered with a break of one of the correcting (retracing) bars.

There is lots of free info on the internet about this if you google joe ross and im sure a thread on here somewhere, but the following pdf explains it well
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Attached File(s)
File Type: pdf Traders_Trick_Entry.pdf   139 KB | 2,106 downloads
  • #73
  • Nov 23, 2011 5:46pm Nov 23, 2011 5:46pm
[

The second part of that post What data can I ignore ? showed a chart with one successful pattern and three failed patterns. What makes the difference, any ideas?

I have some ideas but I'm waiting for responses to my question.

Robdee[/quote]

The buy and sell zones are reminiscent of Supply /Demand zones and if looked at in this light the buy trades fail because they are still in what could be considered a supply zone that extends from the the first trade.
We are all One. Be present. Be the Observer
  • #74
  • Nov 23, 2011 7:49pm Nov 23, 2011 7:49pm
Quoting spacePip
If you are open to using candles or bars then the Ross Hooks could be of interest as a way of entry when price retraces back into your buy/ sell zones.
Thanks spacePip for bringing this to our attention. Your explanation and the PDF you provided both make good sense to me in the context of what we are trying to achieve. The PDF provides sufficient information without overwhelming detail. I don't think we need to get into any deeper details of Joe Ross's work here. As you say there is plenty more Joe Ross information available on the 'net for those who are interested.

This style of analysis, comparing bar-by-bar is what I call price action. Any chart style, tool, or indicator built into Metatrader is OK in this thread. What I am against is getting wildly off topic discussing various custom indicators and EAs.

Observing the price action within a buy/sell zone using Ross Hooks and TTE gives traders a defined price and time for action. That final prompt, "see price has dropped below the last retracing bar, you are good to sell," may be that small extra edge of confidence needed to take appropriate action.

Not being a chart-watcher I will find it difficult to catch exactly the right TTE moment on a live chart. However I will illustrate past RH/TTE price action in some of my future chart postings.

Robdee
  • #75
  • Nov 23, 2011 10:25pm Nov 23, 2011 10:25pm
Picture perfect structure on London's bearish session yesterday.

Everything I'm looking for including no candles closing above the 50% fibo after the break.

Attached Image (click to enlarge)
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Global markets generally looking oversold now so I'm expecting a bounce today, I'll see what 123 analysis is saying at the London Open. Asia is already up 60 pips from the low.
  • #76
  • Nov 24, 2011 2:09am Nov 24, 2011 2:09am
eur/usd looking like a 123 long atm, if you ask me. whats your guys take on the high impact news in a proximately 50 minutes?
  • #77
  • Nov 24, 2011 10:13am Nov 24, 2011 10:13am
Quoting evilmeatball
eur/usd looking like a 123 long atm, if you ask me
Hi emb, yes I agree at the time you wrote that it was a bullish picture.

Bearish interest was seen in candles below the buy zone. Later, three separate attempts closing below 50% showed persistent bearish interest.

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As a result the bears successfully defended 1.34
Now we'll see what the bulls do at 1.33

Robdee
  • #78
  • Nov 24, 2011 3:41pm Nov 24, 2011 3:41pm
yes i did see that 123 long in the london session and i did take that long. from your "buy zone" i also noted the second 123 short however i did not want to go with that because i am of the understanding that agressive breakouts of 123's do not provide enough wins for me.. or maybe the do but i lack the statistics for them.

what is your take on this? going for the "buy/sell zone" entry vs the agressive entry at point 2.
  • #79
  • Nov 24, 2011 4:01pm Nov 24, 2011 4:01pm
I placed a pending on that London setup but this one failed. I did notice that the 50 fib was quite a few pips below the buy zone so no real confluence.
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We are all One. Be present. Be the Observer
  • #80
  • Nov 24, 2011 4:44pm Nov 24, 2011 4:44pm
Hello Traders!!!

Thank you Robdee for the indicator. It's good visual help for those that are not familiar with 123 pattern.

Atached you will find today's EURUSD M5 chart, where I had highligted #3 at what you call distorted pattern. Do you know why there is no arrow signal?

Thank you
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