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123PatternsV6 revisited

  • #101
  • Nov 28, 2011 11:44am Nov 28, 2011 11:44am
EURUSD
London session opened near the 50 fibo, no candles closed below 50.
Bulls took price up 100 pips.
Bears defended 1.34 at a price lower than last week's defense.

Attached Image (click to enlarge)
Click to Enlarge Name: eurusd-2011-11-28-m5-london.gif Size: 16 KB


I am liking that 50 fibo following a break.
  • #102
  • Nov 28, 2011 4:49pm Nov 28, 2011 4:49pm
Quoting robdee

I am liking that 50 fibo following a break.
hello robdee, your indicator works great with the current method im using, and i like its simplicity compared to what i currently use that draws lines instead of dots. can you help me on this, how or where can i adjust the parameters so that only the latest signals will be seen on the chart and the old plots will automatically erased?
thank you in advance and more power to you.
frank
  • #103
  • Nov 28, 2011 6:04pm Nov 28, 2011 6:04pm
Quoting alrightfrank
i like its simplicity compared to what i currently use that draws lines instead of dots. can you help me on this, how or where can i adjust the parameters
Mabuhay frank

My charts are what I call Basic Setup

 

  1. ShowAllLines = False
  2. ShowAllBreaks = False
  3. ShowTargets = False

You will also notice in my recent posts I have removed ZigZag (training wheels) from my charts.

Anyone starting as a beginner with 123PatternsV6 should be using ZigZag to train your eyes to see the patterns rather than relying totally on my indicator.

Robdee

  • #104
  • Nov 29, 2011 4:10am Nov 29, 2011 4:10am
First of all, a very big thankyou to Robdee for starting this thread and holding our hands to guide us through the strategy.

I like this strategy based on price action using fibs as a confirmation tool.

Is there any reason or restrictions, why this strategy (aggressive break of point 2 representing support or resistance) could not work on a 4 hour timeframe?

I would like to incorporate the strategy with the CCI (for which I am very fond of). Any suggestions?

BTW I am from NSW and just came back a month ago from my first trip to New Zealand on a cruise. Absolutely beautiful country! Dunedin was my favourite. I even took a photo of the stock exchange in Windy Welly. :-))
  • #105
  • Edited 6:51am Nov 29, 2011 6:40am | Edited 6:51am
Quoting amochoc
I would like to incorporate the strategy with the CCI (for which I am very fond of). Any suggestions?
hey and welcome. i asked a similar question and got the answer that a cci is not part of this method. but i personally do want to use it in this setup. if you ask me it looks like often when the price is breaking or trying to break point 2 in a 123 pattern we will have a move in the cci(200)'s direction. as long as the cci is stronger then 100 that is.

thoughts ?
  • #106
  • Edited 7:08am Nov 29, 2011 6:48am | Edited 7:08am
Quoting robdee
Mabuhay frank

My charts are what I call Basic Setup


Robdee
good morning robdee, i hope somebody got this setup this morning could have given nice pips. anyway, if you look at the M15 chart is it possible that those plots will auto erase coz the one i use has a parameter that can be adjusted to show just the recent plots but it paints lines instead of dots? if not possible then no worries i think i just have to live with it

i missed this coz i was sleeping, darn! its really hard to trade in caribbean we are on eastern time.

thanks alot my friend
frank
Attached Image (click to enlarge)
Click to Enlarge Name: m15.gif Size: 35 KB
  • #107
  • Nov 29, 2011 7:22am Nov 29, 2011 7:22am
hey alrightfrank, can i ask you. is it true that you always take those aggressive breaks on the point 2 or is there some other criteria that you use? i do see these trades but i am reluctant to get in because i want to see the 123 and enter on the rh. as discussed in this thread in this week.

can you explain please?
  • #108
  • Nov 29, 2011 8:40am Nov 29, 2011 8:40am
Quoting evilmeatball
hey alrightfrank, can i ask you. is it true that you always take those aggressive breaks on the point 2 or is there some other criteria that you use? i do see these trades but i am reluctant to get in because i want to see the 123 and enter on the rh. as discussed in this thread in this week.

can you explain please?
yes i do. it depends on your risk tolerance my friend dont take my opinion on this i could be wrong but this is how i operate. as i type this i entered an aggressive buy position, see the post.
the thing is i hunt this setup on M5, though my chart is on M15. i can see clear setups happening on M5 and also considering the risk and reward ratio risk is smaller in M5.
first thing, i belive in the system, it works most of the time not all the time. i know loosing is part of the game, ive learned to love it. so i enter the market without emotion once i see the setup and then let the market decide.

F
Attached Image (click to enlarge)
Click to Enlarge Name: m5.gif Size: 23 KB
  • #109
  • Nov 29, 2011 8:49am Nov 29, 2011 8:49am
i see. can i ask then, what is your target. distance from 2 to 3 doubled or? i might have asked this before.. getting the feeling you draw fibb from 1 to 2 right?
  • #110
  • Nov 29, 2011 9:01am Nov 29, 2011 9:01am
Quoting evilmeatball
i see. can i ask then, what is your target. distance from 2 to 3 doubled or? i might have asked this before.. getting the feeling you draw fibb from 1 to 2 right?
i always trade london sessions my friend, with this trade i just target for 10-15 pips.
when i open a trade i always secure it to SL at breakeven +1 once it hit 25+ pips, i get out of trade if it hit .61, SR area or whenever i feel it needs to be closed.

F

i dont use fib to assist me on my entries, i just use it to calculate my targets.
  • #111
  • Nov 29, 2011 9:43am Nov 29, 2011 9:43am
thank you for your quick reply alrightfrank. i am happy to hear that somebody else is using similar methods with targets and stops like me. this makes me happy, sort of. hope you have a good one. will post later or cya next london session :-)
  • #112
  • Nov 29, 2011 12:24pm Nov 29, 2011 12:24pm
Quoting amochoc
I am from NSW and just came back a month ago from my first trip to New Zealand on a cruise. Absolutely beautiful country! Dunedin was my favourite.
G'day amochoc and welcome to the thread, glad you had a great cruise around NZ. The number of cruise ships visiting Tauranga increases every year. I was a university student in Dunedin back in the 80's, great Scottish region.

Quote
Is there any reason or restrictions, why this strategy (aggressive break of point 2 representing support or resistance) could not work on a 4 hour timeframe?
There is no technical limitation, the indicator is designed to work the same on all timeframes. The 123 break is a well known pattern. It is observed and interesting to many big players in the 4 hour and daily charts. Of course you have to scale out your stops, targets, trade durations accordingly to trade on that level.

Quote
I would like to incorporate the strategy with the CCI. Any suggestions?
I also like CCI for overbought/oversold/divergent conditions on my 4H chart. I use CCI(14) with level markers pulled out to +/- 125.

I am using 4H chart only for big picture overview, not for placing trades. 4H fibo areas are also very interesting, to observe price action at those levels.

Look forward to your input.

Robdee
  • #113
  • Edited 12:42pm Nov 29, 2011 12:34pm | Edited 12:42pm
EURUSD
Bulls had another attack on 1.34, reaching 1.3440 before falling.
123Patterns did not show a bullish break, hard to find an entry.

Attached Image (click to enlarge)
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  • #114
  • Nov 29, 2011 2:08pm Nov 29, 2011 2:08pm
Quoting robdee
EURUSD
Bulls had another attack on 1.34, reaching 1.3440 before falling.
123Patterns did not show a bullish break, hard to find an entry.

Attachment
i would be careful to go CT long my friend, theres still strong SR 1.34xx area, overall im still bearish. i only guess that theres still a chance for the market to visit 1.32xx level, as well as shoulder formation on near supply area. just my two cents

frank
Attached Image (click to enlarge)
Click to Enlarge Name: m15.gif Size: 34 KB
  • #115
  • Nov 30, 2011 2:16am Nov 30, 2011 2:16am
Quoting alrightfrank
i would be careful to go CT long my friend, theres still strong SR 1.34xx area, overall im still bearish. i only guess that theres still a chance for the market to visit 1.32xx level, as well as shoulder formation on near supply area. just my two cents

frank
LO session at 1.32xx level:
Attached Image (click to enlarge)
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  • #116
  • Nov 30, 2011 10:11am Nov 30, 2011 10:11am
Hi Robdee,

Your indicator 123PatternsV6 is very usefull
But i think if you could coding add email alert if arrow give a signal, will become a complete usefull indicator.
Thank you
  • #117
  • Nov 30, 2011 11:20am Nov 30, 2011 11:20am
Quoting robdee
Second, those patterns where 3 is located beyond 1. Some would say this second category breaks the pattern and is therefore not a valid 123 anymore.

I prefer to call these two categories ideal patterns and distorted patterns.

PS Something to think about - How does the 123-break pattern relate to the popular higher-high higher-low concept, is it the same thing ?
Hi Rob

First of all best of luck with the thread.

The distorted pattern is a 2b trade, just google that and you'll see them clearly. They are the same general concept as double tops/bottoms and 1 2 3 trades i.e. a sign of test and failure at a key level. I don't trade all 2b i.e. distorted pattern trades, much more selective.

Personally I feel once you have had the first 1 2 3 to change direction then you have a series of HH, Hl's and they are the same as 1 2 3's.

Paulus I think it was did some great work re 1 2 3's coming out of Asian session into London. The idea of only taking trades counter to the direction from Asian session. This would take into account the notorious London open head fake concept avoid some losing trades and hopefully get into the main move of London session.

Trading 1 2 3's at your zone prices is a very important concept, perhaps easily explained as support becomes resistance and vice versa.

What else, I am very wary of taking (what I describe as) weak 1 2 3 moves very early in US session that counter the London direction. Often those small 1 2 3 patterns will fail and US session moves back into the London direction (often with a distorted pattern).

All the best.
  • #118
  • Nov 30, 2011 11:32am Nov 30, 2011 11:32am
Quoting robdee

In other words

 

  1. what market conditions are best
  2. what times are best
  3. what other study do we combine with it
  4. and so on...

OK your other comments about not bogging down the thread with nice to have indi's.

The trend is your friend, that old adage applies for a reason, well because it works. The consideration then becomes what do you use to describe as your trend. A very personal decision for many.

MTF analysis then becomes important. One of the prolific EA writers at FF includes a standard option to take signals when the D RSI is below the 50 level. Thats a pretty good rule of thumb.

Will this mean that some trades are missed when the D chart is turning, of course but should save many losing trades going against the D trend.

How you get by avoiding losing trades on the odd counter daily trend days I have never figured out (as far as an EA goes), manually you can just avoid selling as an example on 5 min chart after a strong D hammer.
  • #119
  • Nov 30, 2011 11:47am Nov 30, 2011 11:47am
Quoting robdee
How do we describe and recognise these ideal conditions - as they are happening ?
That is the challenge, that is the goal of this thread.

Robdee
There are various indi's around that highlight SR levels, drawing lines at the identified levels. I've never used them but I'm sure they would assist.

I almost hate to say it but its so simple. An 8 lwma after a retrace gives an easy visual of a 1 2 3. The red line is the clear buy zone/resistance became support. A positive close candle moving through the 8 lwma with little/no upper wick (for a buy) avoiding candles that are overly large (15 pips or so) is a method I've used for years.


Also in this case the D has had a nice positive close and approaching (but not above its 50 RSI). Interestingly to put above posts into context. Price came out of Asian session lower so after a positive D close look for buys.

How you code this goodness only knows.
Attached Image (click to enlarge)
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  • #120
  • Nov 30, 2011 12:05pm Nov 30, 2011 12:05pm
Quoting robdee

And now from yesterday's NY session, one sell pattern was successful, followed by three buy patterns that fail, what makes the difference ?

Attachment

Any ideas?

Robdee
If you were following the idea of going with D trend then on this day none of the buys would be tradeable as you are running against the D chart. More specifically the buy at 3530 has no clear buy zone for me, its run 50 pips to generate a buy (counter trend day) thats not a good idea.

Interestingly enough the London close reversal played out like a charm, so you wouldn't be looking to sell at that time no matter how good the set up.

The 1 2 3 buys in Asian session failed simply as Asian session just didn't want to buck the trend when volumes were light. Hindsight is a wonderful thing though.
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