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Sonic R. System

  • #30,581
  • Feb 11, 2012 12:51am Feb 11, 2012 12:51am
Quoting traderathome
First computers.
Then the internet.
Then chat rooms.
Then FaceBook and whatnots.
Now "trade explorer"?

I am overwhelmed!

My focus is on the Sonic R. Thread. Sonicdeejay has selflessly endeavored to encourage and guide all to success in a dog-eat-dog marketplace. I want to contribute something back. So my efforts shall remain directed only to this thread.

The Sonic R. System thread is primary. Anything else is secondary. And I am too busy to take on anything additional that is secondary.

-tah

Well said,,,

Respect

Sonic
  • #30,582
  • Feb 11, 2012 4:15am Feb 11, 2012 4:15am
Quoting sonicdeejay
Well said,,,

Respect

Sonic
Inserted Video


<iframe width="420" height="315" src="http://www.youtube.com/embed/z0XAI-PFQcA" frameborder="0" allowfullscreen></iframe>

(what's the trick to making a video display here properly?)

  • #30,583
  • Edited 6:31am Feb 11, 2012 6:20am | Edited 6:31am
Quoting traderathome
EU:

Manually close trade for 87 pips gain from EP= 1.3251 to close= 1.3164.
TAH, I have a question. Wouldn't it be better to set a stop loss, get stopped out, and re-enter the trade a little later? That appeared to be a sizable back-trace on the PA that MIGHT have kept on going in the bullish direction.

You could have just bitten the bullet, taken the loss, and then regained it all and more without risking the trade continuing against you.

Just a thought.

  • #30,584
  • Feb 11, 2012 7:00am Feb 11, 2012 7:00am
Quoting mahimahi
in his case 0.01Lot in a $1000 a/c, you could do the math there!
I hear ya on the amount being risked, but the point is to develop good habits if at all possible. Doesn't matter if it is $1 or $1,000.
  • #30,585
  • Edited 11:59am Feb 11, 2012 10:00am | Edited 11:59am
Quoting ArtfulDodger
TAH, I have a question. Wouldn't it be better to set a stop loss, get stopped out, and re-enter the trade a little later? That appeared to be a sizable back-trace on the PA that MIGHT have kept on going in the bullish direction.

You could have just bitten the bullet, taken the loss, and then regained it all and more without risking the trade continuing against you.

Just a thought.

Just a thought? Yes, you are absolutely, unequivacably right! It would be better! The SL is one of my two nemeses. My trades, whatever else they are, are not good examples of SL management; not for anyone to follow, please!

I soooooo........ look forward to Sonicdeejay expounding, instructing, encouraging, and even challanging us on to better SL management!

-tah
  • #30,586
  • Feb 11, 2012 12:06pm Feb 11, 2012 12:06pm
Dear Sonickers,

Looking back on the past three days, I want to express to you all my gratitude for a good lesson.

I'm a newbie on the Forex market. I came here to learn the SonicR System, but I see that I'm learning first of all how to behave on the market. I'm learning to be patient and confident, to manage my emotions and to make conscious decisions. To be strong and move in chosen direction up to the end. These are more important things for trader than any system (even such excellent as SonicR is ).
And all of you are teachers here. Those who are more experiensed - give lessons how we should do, others - how we shouldn't. That is why I want to thank all of you.

Thank you very much!

Yours sincerely,
ad4x.

PS: I'm not good in English, hope you will understand everything correctly.
  • #30,587
  • Feb 11, 2012 3:29pm Feb 11, 2012 3:29pm
Hi Tah,

Looks like you have been doing well! Congrats!

I follow your remarks and postings religiously, but in the past month or so you have removed the dragon. Even though I understand some of the expert sonic traders have done this because they recognize it without it, for beginnings following your examples I cannot explain the importance of it. I really enjoy sonic's postings because it still includes how he originally trades and the dragon and you were doing that up to about a month ago seems about. Would you be able to post with dragon going forward for us non-experts?

Thanks and hope you are having a good weekend!
  • #30,588
  • Feb 11, 2012 4:50pm Feb 11, 2012 4:50pm
Quoting jdtrader
Hi Tah,

Looks like you have been doing well! Congrats!

I follow your remarks and postings religiously, but in the past month or so you have removed the dragon. Even though I understand some of the expert sonic traders have done this because they recognize it without it, for beginnings following your examples I cannot explain the importance of it. I really enjoy sonic's postings because it still includes how he originally trades and the dragon and you were doing that up to about a month ago seems about. Would you be able to post with dragon going...
jdtrader, I do not comprehend how you got the idea I have removed the Dragon. Every trade I posted includes the Dragon. Recently I have used primarily two different templates and both include the Dragon (see pics.). I have even updated the Sonic R. System brief manual recently, which also clearly shows the Dragon:
http://www.forexfactory.com/showthre...57#post5360357

Yes, there are some here that do not display the Dragon, but that is not abiding by the Sonic R. System. Please do not group me with such wayward heretics!
Attached Image(s) (click to enlarge)
Click to Enlarge Name: feb 2012 - 101.gif Size: 32 KB
Click to Enlarge Name: feb 2012 - 102.gif Size: 31 KB
  • #30,589
  • Edited Feb 12, 2012 8:24am Feb 11, 2012 5:30pm | Edited Feb 12, 2012 8:24am
Here is the Sonic R System Summary:
The Sonic R. System is a method of trading price movements between areas of support and resistance. It trades on the M15 chart. It uses a price activity WAVE at an S&R area to validate a trade setup, and technical indicators called the DRAGON and the TREND. The DRAGON is used for picking the trade entry. The TREND is used to confirm the correct trade direction. Historic S&R is used for picking the trade exit.

WAVE
L-H-HL starting below Dragon for longs, H-L-LH starting above Dragon for shorts, showing "bounce" or “breakthrough” at S&R. Best if WAVE leg #1 crosses thru the Dragon.

DRAGON
Must be angled up with PA above it for longs, and angled down with PA below it for shorts.

TREND
This is a market bias indicator and it is best if PA is above it for longs and below it for shorts.

TIMING
Prefer not to open trade during asian session. Recommend London session for best momentum. Trade can be closed anytime.

PAIRS
Prefer to trade the pair EUR/USD. Lowest spread. Usually a wide range. Most important is it is most traded pair, which means better volume and better momentum for the trade.


Placement of EP
Wait for a WAVE leg #3 candle to break out of the DRAGON, and place your entry order at least several pips beyond it. It is better if there is no strong S&R area just beyond the entry. Remember also, it is best if PA is above TREND for longs, below TREND for shorts.

Placement of Re-entry
It is best to let PA clear the most recent high, or low, and if there is no strong S&R area just beyond this re-entry.

Placement Of TP
Select a historic S&R level. Such levels can include whole/half/quarter numbers and the middle of consolidation areas.

Placement of SL
These are the rules for placement of the SL (see picture below that illustrates):
1. The SL must be beyond the H/L (for shorts/longs) of the recent large scale price swing.
2. The SL must not be more than 100-120 pips from the EP (for EUR/USD).

Example
Below are an example of a Sonic R. System short setup and trade, and of the rules for placement of the SL. The key elements of the Sonic R. System are clearly labeled and illustrated.

Conclusion
To start with the Sonic R. System, read all of Post #1 and the linked material. Read the first 25-50 of Sonicdeejay's posts. Read at least the last month of all posts. Please do not ask any questions for the first month of studying this system, because as you read, reflect, and read more, all of your questions will become answered thru your own efforts.

The purpose of this thread is to be a "text book" on the Sonic R. System, which learners can read thru and grow. So, the fewer posts that ask/answer the same elementary questions from newcomers, the better for all to have fewer posts to read to progress! The Sonic R. System is elegantly simple. Believe me, any lingering questions you have will be answered as you read the thread and diligently study the trades and other information already posted here.


Regards,
-traderathome
Attached Image(s) (click to enlarge)
Click to Enlarge Name: sonicr short setup and trade.gif Size: 41 KB
Click to Enlarge Name: sonicr stop loss placement rules.gif Size: 41 KB
  • #30,590
  • Feb 11, 2012 7:35pm Feb 11, 2012 7:35pm
Quoting traderathome
jdtrader, I do not comprehend how you got the idea I have removed the Dragon. Every trade I posted includes the Dragon. Recently I have used primarily two different templates and both include the Dragon (see pics.). I have even updated the Sonic R. System brief manual recently, which also clearly shows the Dragon:
http://www.forexfactory.com/showthre...57#post5360357

Yes, there are some here that do not display the Dragon, but that is not abiding by the Sonic R. System. Please do not group me with such wayward heretics!...
That was a very stupid question. You are right tah. I just assumed it wasn't because the middle line is removed but now compared to mine and see it's the same. sorry for posting a confusing question.
  • #30,591
  • Edited 9:16pm Feb 11, 2012 9:04pm | Edited 9:16pm
Quoting jdtrader
That was a very stupid question. You are right tah. I just assumed it wasn't because the middle line is removed but now compared to mine and see it's the same. sorry for posting a confusing question.
You focused on the absence of a Dragon middle line, the single difference, and saw nothing else. You didn't even notice that everything else was the same! Remarkable. Especially since the Dragon middle line has absolutely no consequence in the Sonic R. System. It is used for nothing! You have flunked Sherlock Holmes 101.

You see, Sonikers, this is what comes of not paying attention and not.......
Reading and Reflecting!

(Anger the TAH oracle, and your trades will go sour for a whole year!)
  • #30,592
  • Feb 11, 2012 11:41pm Feb 11, 2012 11:41pm
Quoting traderathome
Here is the Sonic R System Summary:
The Sonic R. System is a method of trading price movements between areas of support and resistance. It trades on the M15 chart. It uses a price activity WAVE at an S&R area to validate a trade setup, and technical indicators called the DRAGON and the TREND. The DRAGON is used for picking the trade entry. The TREND is used to confirm the correct trade direction. Historic S&R is used for picking the trade exit.

WAVE
[font=Verdana][color=black]L-H-HL...
The summary is added in page1 post 1..

Sonic
  • #30,593
  • Feb 12, 2012 5:07am Feb 12, 2012 5:07am
Ok,..Gents.. Here we go..

First Of All.. I need you to know that as long as you are in trading. Be it you trade forex and your local stock markets, you are in the risky business. There is no such thing as risk free trade or 100% winning rate... These are just Bull&"*t..

So, what we can do is try to trade with minimal risk, by following systems (e.g Sonic R or whatever) with Stop loss imposed...

Having a Stoploss is a must, since it can prevent you from losing all your money with single trade, when the trade turns against you.

But it also can drain your account unexpectedly by hitting it frequently thus pushing you into losing spiral.

http://www.forexfactory.com/attachme...1&d=1328796523

Here is how I take on SL. To me, SL should be put on the place that the price most unlikely to go, while the money lose if it hit is not exceeding more than I can afford to lose..

If I see a possible set up forming, I will be looking at the place where I will place SL using the following criteria..

1. It must be Lower than the previous significant Low (for Long) or must be higher than previous significant High (for Short). Let's call that region the place.

2. The pips between the trade entry price and the place must not be more than 100-120 pips for EUR/USD... If it is above 120 pips, I will not take it...

But doing so, the maximum pips that I can lose from a trade is 120 pips and I have a good set up..

In my last trade, I entries was near 1.325x with SL was near 1.320x (later changed to 1.325x)...

http://www.forexfactory.com/attachme...1&d=1328710891

I was hoping I was able to ride on the immediate down slide.I was wrong. It went on whipsawing high and low with fake breakouts, instead.. The trade turned profitable only near 45 hrs later... The only thing that saved my trade was having a SL placed in proper place... Now I am in profit locked position and the trade will sure be a winning trade when it closed...

http://www.forexfactory.com/attachme...1&d=1328876268

To summaries, SL is a must be but do not put so close. It should be in tolerable position so that it withstand fake breakouts...


Hope you learn one or two from my writing...


Sonic
Attached Image (click to enlarge)
Click to Enlarge Name: place.gif Size: 77 KB
  • #30,594
  • Edited 7:31am Feb 12, 2012 6:52am | Edited 7:31am
Dear Sonicdeejay,

Thank you for your advice and detailed explanation.
The risk management, and particulary the SL, is the most difficult subject to study.

Could you please answer me on two questions?

1 - When you are planning the SL level (distance from entry) do you plan also the TP level?

2 - If so, is there any corellation between SL and TP levels and what is it?

I know some traders, for example, give advices to put TP level 3 times higher than SL level to remain without loss after series of two SL.
3 - What is your opinion about such advice?

Thank you in advance!

Kind regards,
ad4x.
  • #30,595
  • Edited 8:26am Feb 12, 2012 6:59am | Edited 8:26am
Master Sonicdeejay, thank you for exlaining how you place the necessary SL, your rules being:

1. The Place must be lower than the previous significant low (for Long), and must be higher than previous significant high (for Short).
2. The Place must not be more than 100-120 pips from the trade entry price (for EUR/USD).

In order to avoid confusion regarding rule #1, I have looked for another recent example of a Sonic R. System setup wherein The Place is not the same as a previous significant H/L created by the PA Wave itself.


Sonikers, look at the attached picture. Here, clearly the PA Wave has it's own "previous significant low". But that is not the same as Master Sonicdeejay is referring to. The Place is the H/L of the recent large scale price swing and not the PA Wave, unless of course the PA wave happens to be at the top or bottom of the large scale price swing.

Master Sonicdeejay, I hope I have understood this correctly because I do not want to lead anyone astray. If I do understand your rules correctly, then a more brief statement of them could be:

1. The Place must be beyond the H/L (for shorts/longs) of the recent large scale price swing.
2. The Place must not be more than 100-120 pips from the EP (for EUR/USD).
Attached Image (click to enlarge)
Click to Enlarge Name: sonicr stop loss placement rules.gif Size: 41 KB
  • #30,596
  • Feb 12, 2012 7:42am Feb 12, 2012 7:42am
Quoting traderathome

Master Sonicdeejay, I hope I have understood this correctly because I do not want to lead anyone astray. If I do understand your rules correctly, then a more brief statement of them could be:

1. The Place must be beyond the H/L (for shorts/longs) of the recent large scale price swing.
2. The Place must not be more than 100-120 pips from the EP (for EUR/USD).

Yea, right..

Sonic
  • #30,597
  • Edited 8:35am Feb 12, 2012 8:12am | Edited 8:35am
Quoting sonicdeejay
Yea, right..

Sonic
Ok, thanks for confirming my understanding. I have revised the Sonic R. System Summary post above to have full accordance with your SL placement rules.
  • #30,598
  • Edited 9:35am Feb 12, 2012 8:52am | Edited 9:35am
Quoting ad4x
Dear Sonicdeejay,

Thank you for your advice and detailed explanation.

The risk management, and particulary the SL, is the most difficult subject to study. Could you please answer me on two questions?

1 - When you are planning the SL level (distance from entry) do you plan also the TP level?
2 - If so, is there any corellation between SL and TP levels and what is it?

Kind regards,
ad4x.
I know you addressed this post to Sonicdeejay, but in case he is busy I'll also attempt a meaningful, but interpretive answer.

First of all, in the Sonic R. System TP levels are selected based on historic S&R levels, period! You can use other data (range H/L marks, pivots, fib retracements, fib extensions, whole number divisions, etc.) to see what also aligns with what historic S&R levels in order to help you select which S&R level(s) to use for your TP(s).

Your questions seem to stem from a concern about the risk to reward ratio. What if the SL at a swing H/L is so far from EP that the risk to reward ratio is greater than "1"?

Master Sonicdeejay has seldom, if ever, even mentioned risk to reward ratios. I doubt he cares so long as his SL is not more than the 100-120 pips away from EP (for EU). This is probably because he is looking to make decent enough pips profit, regardless of the R:R ratio, on enough trades overall such that an occasional hit of a wide SL is not catastrophic.

I am convinced one of the reasons the "market" whipsaws prices is to put traders on notice that it might do so again, and that would make a pending (and otherwise good) trade undesirable so far as R:R is concerned if the trader is considering a SL placed wide enough to avoid being hit by whipsawing. Sure, the whipsawing nets the market the extra liquidity (hitting stops of other traders and triggering into the market "wrong side" pending orders) needed to build a position, but it also intimidates "right side" traders from taking the trade due to an "unfavorable" R:R ratio. And the fewer "right side" traders there are, the less competition the "market" has for that much needed liquidity!

So the bottom line is, trade a good trade with a SL (and everything else) per the Sonic R. System rules, and forget about letting such R:R foolishness force you into putting on too tight a SL, or staying out of the trade, either of which will benefit the "market".

I do hope Master Sonicdeejay will also reply, because I'm sure there are facets to his thinking on the SL that are yet unknown or unclear to us.


Regards,
-tah
  • #30,599
  • Feb 12, 2012 10:00am Feb 12, 2012 10:00am
Dear Traderathome,

When I addressed my questions to Master Sonicdeejay I expected to receive the answers from you instead of Master. Thank you very much for your help!

I've got the general idea of your post, but I still need a good translation and more time to understand it for sure.

Thanks and best regards,
ad4x.
  • #30,600
  • Feb 12, 2012 11:55am Feb 12, 2012 11:55am
Quoting traderathome
I know you addressed this post to Sonicdeejay, but in case he is busy I'll also attempt a meaningful, but interpretive answer.

First of all, in the Sonic R. System TP levels are selected based on historic S&R levels, period! You can use other data (range H/L marks, pivots, fib retracements, fib extensions, whole number divisions, etc.) to see what also aligns with what historic S&R levels in order to help you select which S&R level(s) to use for your TP(s).

Your questions seem to stem from a concern about the risk to reward ratio. What if the...
Mmmh, i don't really agree. A good risk reward it's needed to survive and become profitable... the "pip" it's nothing, we give a value to that. If i take a risk of 100-120 pips (and make it 2% of my account) i should target at least 100-120+ pips (to have a 2% profit) if not 200 pips (4% profit, maybe to cover a loss and keep a positive balance). If the position don't allow us that move, we should not take it.
For exemple, if we have a hit rate of 60-70% (as this system has, noticed myself) we cannot risk a % if we can't, at least, target the same amount of earning, otherwise we'll end in margin call, sooner or later. Filter the signals it's important, but probably this is more about the discipline.
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