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  • #41
  • Dec 12, 2012 9:29pm Dec 12, 2012 9:29pm
hello Max,

somebody mentioned fractals and you wanted to have a higher rate of success in trading the pattern.

maybe have a look at "the system" by feb2865, a very simple plan without any indicators, just price action.

he gets a higher succes rate by:

trading on the daily charts
trading with the trend
after the fractal, he wants a 2nd candle in the direction of the trend and he enters if the high breaks of the second candle. stop loss under the second candle.
add-ons after retraces and consolidations

not a lot of trades, so you got to be patient. in the meantime the trades earlier in the trend are making you a lot of money.

Pringle is another way to go: price action - no indicators - good for 4H and up.
set-up example also in feb`s thread.
  • #42
  • Dec 12, 2012 10:48pm Dec 12, 2012 10:48pm
Quoting iulli
spot on - An edge can be delivered by momentum
at the beginning of my voyage in forex world I was paying attention to so most strongest and fastest trends following all pairs available time frame m15 and I was going in the same direction as of the candle developing picking up 5 -10 pips. it works 90% of the time and results were very fast and amazing...
The only problems is the stop loss. Where do you put it? Where do you realize that actually it was a fake momentum, wrong direction? Solve this problem and you have a system.
Sounds like a great scalping system there. What are your ideas for stop. What about using last 2 candle low? Then making your target 1:1?
Winners add to winning trades!
  • #43
  • Dec 12, 2012 10:48pm Dec 12, 2012 10:48pm
Quoting dare123
You are not a constructive contributor.
HA!

Excuse me Mister/Miss, but what exactly is your definition of a "constructive contributor"? Then please tell me precisely why you don't consider me a constructive contributor? Are you looking for someone to hand you a set of rules on how to trade profitably? Would that satisfy your criteria for a constructive contributor? Well there are no rules that will entirely eliminate risk. So go gain experience as I already suggested. How's that for a contribution!
  • #44
  • Dec 12, 2012 11:03pm Dec 12, 2012 11:03pm
Quoting ozpips
Yes I'm in Melbourne, your concept is just plain trend following. Now don't take this the wrong way but your chart which looks to me like a FXCM chart is wrong in your interpretation.
I was born and raised in Melbourne. Moved to Brisbane when I was 13.
Okay willing to learn. Open to new interpretations. I dont consider myself a trend follower as I rarely get the big ones. But I can get a lot of the smaller ones. Thats why I refer to it as wave following. I may not have mentioned this but most I know I taught myself so I am open to the realisation that my reading may be totally off. Usually I go with probability so it what I read leads to good things them I assume I am reading it correct. Even though it may just be a fluke.

Quoting ozpips
1) Long signal is wrong ( price is trapped between 2 ma's, candle is weak, price can do anything at that stage)
I see this a lot though so I look for something a little more common but reliable. Again I could be wrong but looking back at GBPUSD to 1/1/12 the number of times price moved above or below 6MA and then formed on opposite side to move in that direction enough to make some pips was a good percentage of times.

Quoting ozpips
2)1st retrace new trend confirm wrong. ( The candle that broke through both MA's was the signal for higher prices ( commonly called break out )
In pure early trend following a buy stop would be placed above that candle for entry.
I have tried using that entry technique but found it rarely went the way I wanted.

Quoting ozpips
New trend confirm would be the second bullish candle that punched through the consolidation.
Which candle is that? Was it the 2nd large blue candle around 4/12?

Quoting ozpips
3) 2nd retrace short- This is wrong and actually this is classic noob rules. short the 1st sign of weakness at support.
That is really where Institutional buying begins on that red candle you circled. If people were happy with that being a new trend they buy there.
sorry I dont understand this section. Do you mean me reading it as short signal is wrong and big boys go long here or that I did go long here was wrong?

Quoting ozpips
As you know trends occur only 30% of time. Range is the rest of time. As you may or may not be aware also trend followers have worst win loss ratio. They make money by letting winners run.
I agree with this which is why I try to ride the waves of price action rather than catching trends. I figure most see a trend as a few hundred pip move. I am happy to ride a 100p move. I believe in todays market the 30% trending will decline. The regular too and fro is where to be I think.

Quoting ozpips
I prefer to find setup, measure risk, put in stop and tgt. If tgt hits I make money if stop hits I lose. I don't need or want to be watching once I'm in the trade candle by candle like a trend follower does.
Micro managing your trade as a non professional will just lead to big trouble and emotional decisions. I've been through that roller coaster too often i'm trying to escape it.
Thats why I use Daily charts. I check once or twice a day. If I am uneasy about the trade I will drill into hourly chart and keep an eye on it. But I do agree with what you are saying. Just really don't have alternative that seems to work right now.
Winners add to winning trades!
  • #45
  • Dec 13, 2012 12:25am Dec 13, 2012 12:25am
Quote
Quote:
Originally Posted by ozpips
New trend confirm would be the second bullish candle that punched through the consolidation.
Which candle is that? Was it the 2nd large blue candle around 4/12?

YES because the following 5 candles were defeated. A cluster of sell and buy stops would have been resting there and the bulls won the battle.


Quote
Originally Posted by ozpips
3) 2nd retrace short- This is wrong and actually this is classic noob rules. short the 1st sign of weakness at support.
That is really where Institutional buying begins on that red candle you circled. If people were happy with that being a new trend they buy there.
sorry I dont understand this section. Do you mean me reading it as short signal is wrong and big boys go long here or that I did go long here was wrong?

Yes reading that as a short signal is wrong. A candle bouncing off a MA with a wick in a new up trend is a sign of institutional buying. To buy the next candle is fine but it is still a a late entry. Maybe you don't notice but your buying straight into resistance.
Smart money buys those red candles as they are forming eg buy off the MA not 2 days later after it confirms anything.
This way your stop is tiny and you would be almost 100 pips in profit by the time most people bought the following blue candle.

The thing with human psychology is we want confirmation, we want to be sure, we need to know we are probably right. Nobody buys that red candle except the smart money. If you pursue trend following you need to muster the courage to buy that red candle. That will keep you one or 2 candles ahead of the pack. You'll be in profit earlier and if it all turns nasty you bail quicker too.

I'm a contrarian by nature so as personality plays a big part I prefer to fade then trend continuation. Also this is the game the market makers play especially in our early quiet boring Asian session which is my preferred trading time.
  • #46
  • Dec 13, 2012 2:37am Dec 13, 2012 2:37am
Quoting ozpips
A candle bouncing off a MA with a wick in a new up trend is a sign of institutional buying. To buy the next candle is fine but it is still a a late entry. Maybe you don't notice but your buying straight into resistance.
Smart money buys those red candles as they are forming eg buy off the MA not 2 days later after it confirms anything.
This way your stop is tiny and you would be almost 100 pips in profit by the time most people bought the following blue candle.

The thing with human psychology is we want confirmation, we want to be sure, we...
http://www.breaktheillusion.com/wp-c..._pill-copy.jpg
  • #47
  • Dec 13, 2012 5:04am Dec 13, 2012 5:04am
Quoting 2+2=4ex
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  • #48
  • Dec 13, 2012 6:01am Dec 13, 2012 6:01am
Quoting ozpips
YES because the following 5 candles were defeated. A cluster of sell and buy stops would have been resting there and the bulls won the battle.
I get this now and am downloading some material on these clusters. Will be looking into this now.

Quoting ozpips
Yes reading that as a short signal is wrong. A candle bouncing off a MA with a wick in a new up trend is a sign of institutional buying. To buy the next candle is fine but it is still a a late entry. Maybe you don't notice but your buying straight into resistance.
Smart money buys those red candles as they are forming eg buy off the MA not 2 days later after it confirms anything.
This way your stop is tiny and you would be almost 100 pips in profit by the time most people bought the following blue candle.
The thing with human psychology is we want...
So you are saying big guys have order sitting on the MA constantly? or are they watching for price to penetrate below MA and then they place their BUY order?
Winners add to winning trades!
  • #49
  • Dec 13, 2012 5:24pm Dec 13, 2012 5:24pm
Ok Oz. I had 2 trades long on GBPUSD and a large retrace candle yesterday stopped them out for a small win overall of +36p. I had my stops too tight I think.

Anyway based on what you said about retrace candles not closed below MAs and big money using them to jump in, I placed a new BUY order on MA and it triggered this morning and is currently +6p. Am I getting this right according to your understanding now?

https://lh5.googleusercontent.com/-x...14ridingGU.jpg
Winners add to winning trades!
  • #50
  • Last Post: Dec 13, 2012 5:40pm Dec 13, 2012 5:40pm
Quoting marshalmax
I get this now and am downloading some material on these clusters. Will be looking into this now.


So you are saying big guys have order sitting on the MA constantly? or are they watching for price to penetrate below MA and then they place their BUY order?

Mate, nothing is constant in this game. All I'm doing is reading the chart of historical price behavior as you displayed on your chart. You need to read, study and observe more and understand when price is moving what is actually going on.

I DO NOT agree with your latest trade and I definitely don't encourage you to be gambling on thoughts alone. Your latest chart shows a potential reversal setting up not a buy. Even though you have bought on support this is not a high probability trade on a long time frame. Yes on a small time frame for sure but not on the daily. Remember its Friday too so it could be a big sell off considering we had a rally for most of the week and began running out of steam yesterday.
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