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Why did you start trading and what do you expect from it? 19 replies

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Trade what you see NOT what you expect

  • #36,381
  • Jun 25, 2012 7:12am Jun 25, 2012 7:12am
Quoting Trader131
Thanks, Trotty, you too!

Now thinking about the reasons that I see for it:

I would say that EO had the 15min 50ema as a key ma, so we take notice of price in relation to it. He often talked about if one ma broke, price would move through and test the next one, bounce a bit and then may break through to test the next ma and so on. In the 35/50 trade, I suppose price has broken straight through two ma's without even testing them, and the chances are that then it will at least return to the ma's from the other side to test them. Combine that...
Hey guys, it basically a mean reversion trade, the elastic band gets stretched to far to quick from the mean and then has to snap back. Hence why eo says the candle must close with little or no wick ( a wick implies the move has already slowed) the fact it crosses both the 35 and 50 means its moved enough and fast enough for the band to have to snap back again.
  • #36,382
  • Jun 25, 2012 8:03am Jun 25, 2012 8:03am
Quoting lazyboy
Hey guys, it basically a mean reversion trade, the elastic band gets stretched to far to quick from the mean and then has to snap back. Hence why eo says the candle must close with little or no wick ( a wick implies the move has already slowed) the fact it crosses both the 35 and 50 means its moved enough and fast enough for the band to have to snap back again.
So what is the likely outcome if one were to take a trade based on this reasoning, say a couple of full lots, 15 pips tp/sl? Would that person come out on top 2/3 times?
  • #36,383
  • Jun 25, 2012 8:42am Jun 25, 2012 8:42am
Quoting chiba_san
So what is the likely outcome if one were to take a trade based on this reasoning, say a couple of full lots, 15 pips tp/sl? Would that person come out on top 2/3 times?
Not sure your position size will affect the outcome mate, unless you have a very dodgy broker

There are no realiable stats. if you've read the PDF, you'll recall that EO said something like "i've not tested it but it works 90% of the time or something close".

Now i've not found that but i'm sure he's better at spotting the good ones from the bad. Best way to find out? Do your own back testing.
  • #36,384
  • Jun 25, 2012 10:29am Jun 25, 2012 10:29am
hey guys, been busy most of the day, but still in my euro long and the 4hr's shaping up nicely.
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There is no top. There are always further heights to reach. Jascha Heifetz
  • #36,385
  • Jun 25, 2012 3:32pm Jun 25, 2012 3:32pm
Chop....chop...chop....today.

Let's see what tomorrow brings.

HOLLA
  • #36,386
  • Jun 25, 2012 8:17pm Jun 25, 2012 8:17pm
I'm sure that this candle pattern series has always been there but I have been noticing it more and more and thought that I would point it out...

 

  1. Reverse hangman
  2. Hammer
  3. Decent counter trend movement
  4. Retracement of 3rd candle but usually doesn't go past the open. Good entry point during this retracement.

Attached Image
  • #36,387
  • Jun 25, 2012 11:32pm Jun 25, 2012 11:32pm
Thanks for sharing, Dharma. An inverted hangman, followed by a hammer (reverse for short) is a decent long signal, notice how many times the 1.5541 level was tested- the level is important as it's the tip of the wick of the pin to the left, so a retrace to that level is a decent trade.

I've just closed another 1/4 of my euro long at the previous highs on the 15min +35pips.
There is no top. There are always further heights to reach. Jascha Heifetz
  • #36,388
  • Jun 25, 2012 11:41pm Jun 25, 2012 11:41pm
How's everyone doing??

131....looks like you trading the flow of the market.....SWEET!!!

HOLLA
  • #36,389
  • Jun 25, 2012 11:45pm Jun 25, 2012 11:45pm
Hey, Turtle, doing good! Yes, going in the right direction, and that's what matters! Time for some breakfast.
There is no top. There are always further heights to reach. Jascha Heifetz
  • #36,390
  • Jun 25, 2012 11:48pm Jun 25, 2012 11:48pm
Quoting Trader131
Hey, Turtle, doing good! Yes, going in the right direction, and that's what matters! Time for some breakfast.
Now that sounds like a plan, going to grab me something.

HOLLA
  • #36,391
  • Jun 26, 2012 12:26am Jun 26, 2012 12:26am
Just back and checking charts, and saw the inverted hammer on euro at previous low, and round no., so bought straight away (slightly late) got filled at 03
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There is no top. There are always further heights to reach. Jascha Heifetz
  • #36,392
  • Jun 26, 2012 12:27am Jun 26, 2012 12:27am
Quoting DharmaTrader
I'm sure that this candle pattern series has always been there but I have been noticing it more and more and thought that I would point it out...

 

  1. Reverse hangman
  2. Hammer
  3. Decent counter trend movement
  4. Retracement of 3rd candle but usually doesn't go past the open. Good entry point during this retracement.

Attachment

Top post Dharma and agree with your take on this. Also, you probably noticed that the hammer failed to close below the wick of the previous larger hammer to the left. Extra confirmation that a turn was forming.
  • #36,393
  • Jun 26, 2012 12:32am Jun 26, 2012 12:32am
Quoting Trader131
Just back and checking charts, and saw the inverted hammer on euro at previous low, and round no., so bought straight away (slightly late) got filled at 03
Morning mate. Looks like you got a great entry but I do have one question about that trade.

The signal candle that you entered on close bearish and slightly lower than the close of the previous candle which to me would be a warning that the bears could still have the market. Did this not give you any cause for concern taking the trade? I do realise that the longer TFs were suggesting more upside though....

Not trying to be a smart arse btw, just trying to see understand your rationale because it looks like a belting entry
  • #36,394
  • Jun 26, 2012 12:33am Jun 26, 2012 12:33am
I love it when a when you sit down in front of the pc and the trade is just there screaming "take me!". Taking 1/2 off the new long at previous highs +17pips
Attached Image (click to enlarge)
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There is no top. There are always further heights to reach. Jascha Heifetz
  • #36,395
  • Jun 26, 2012 12:48am Jun 26, 2012 12:48am
Quoting Trotty
Morning mate. Looks like you got a great entry but I do have one question about that trade.

The signal candle that you entered on close bearish and slightly lower than the close of the previous candle which to me would be a warning that the bears could still have the market. Did this not give you any cause for concern taking the trade? I do realise that the longer TFs were suggesting more upside though....

Not trying to be a smart arse btw, just trying to see understand your rationale because it looks like a belting entry
No problem, Trotty. I take your point, no offence taken, but the location was perfect in my eyes. We've been in a range since yesterday evening, bounced off the lows just before Frankfurt opening (notice the green hammer about 4 bars before the check mark on the chart). At the check mark, we failed to close below the wick of the hammer and then went up to the high of the range. We then came down again and had an inverted hangman (ok it has a bearish body, but look at length of the wick, and slightly off topic, the volume too!). The inverted hangman closed bang on the level of the previous lows' (check mark) close. I would take that trade anytime without hesitation on the open of the next candle. I was in fact finishing breakfast then, but still got in with a decent R:R despite being a little late to the party.
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There is no top. There are always further heights to reach. Jascha Heifetz
  • #36,396
  • Jun 26, 2012 12:55am Jun 26, 2012 12:55am
Quoting Trader131
No problem, Trotty. I take your point, no offence taken, but the location was perfect in my eyes. We've been in a range since yesterday evening, bounced off the lows just before Frankfurt opening (notice the green hammer about 4 bars before the check mark on the chart). At the check mark, we failed to close below the wick of the hammer and then went up to the high of the range. We then came down again and had an inverted hangman (ok it has a bearish body, but look at length of the wick, and slightly off topic, the volume too!). The inverted hangman...
Thanks 131, great to get your insight on that because it really was a picture perfect trade (albeit a little higher than you wated). Can't believe how quick you went green.
  • #36,397
  • Jun 26, 2012 1:08am Jun 26, 2012 1:08am
Quoting Trotty
Thanks 131, great to get your insight on that because it really was a picture perfect trade (albeit a little higher than you wated). Can't believe how quick you went green.
No problem, mate. It also carries on from what you mentioned about Dharma's setup about the close of the candles. Something I realise more and more is that the close is very important, even more so on the 1 hour charts, but when you fail to get a close below a previous lows close, that's a very strong signal. Then combine it with any other confluence for a good trade opportunity.
There is no top. There are always further heights to reach. Jascha Heifetz
  • #36,398
  • Jun 26, 2012 1:33am Jun 26, 2012 1:33am
Closing another 1/4 of the new long +11 pips, as it's not looking so good on the 15min anymore. Could have taken 27 pips on it if I was lucky, but I wasn't around the pc then. Sl at 95 (-8) on last quarter
There is no top. There are always further heights to reach. Jascha Heifetz
  • #36,399
  • Jun 26, 2012 1:42am Jun 26, 2012 1:42am
Quoting Trader131
No problem, mate. It also carries on from what you mentioned about Dharma's setup about the close of the candles. Something I realise more and more is that the close is very important, even more so on the 1 hour charts, but when you fail to get a close below a previous lows close, that's a very strong signal. Then combine it with any other confluence for a good trade opportunity.
Yep, dead right. It's the subtelties and nauances I think that are missed by most that either help you see entries that others won't and keep you out of entries that others will take and shouldn't.

As much as i've sort of known this for a long time, it's only that last 6 months or so that i've begun to see it more and more. Every day is a learning day in trading!
  • #36,400
  • Jun 26, 2012 1:48am Jun 26, 2012 1:48am
Quoting Trotty
Yep, dead right. It's the subtelties and nauances I think that are missed by most that either help you see entries that others won't and keep you out of entries that others will take and shouldn't.

As much as i've sort of known this for a long time, it's only that last 6 months or so that i've begun to see it more and more. Every day is a learning day in trading!
Couldn't have put it better!
There is no top. There are always further heights to reach. Jascha Heifetz
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