One does not simply buy low and sell high

Are you looking for a system that:

1. Requires NO indicators

2. Can be traded on any time frame

3. Has pre-defined entry/stop prices

4. High risk/reward ratio

5. Easily defined profit targets


The best trading systems are the ones most simple to understand (PA only), are based on sound principals and have attractive R/R ratios.

I'm going to show you a very very simple method that is based on the "buy low, sell high" & "short high, cover low" concept using a 50% and 70% retracement levels and measured moves for profit targets. This system is NOT Fibonacci.

I've spent 8+ long years trading. I took about a year away from the markets to finish school and now I'm back to make my latest attempt at becoming consistently profitable.

In those 8 years, I've spent most my time trying to trade breakouts, and trade Fibonacci. I struggled hard with each one - for a very long time!.

Breakouts are hard to trade because most of them fail. Fibs are a pain in the ass because if you trade fibs like all the books and youtube videos suggest, you have three different levels that price may potentially bounce at. Fibs look great in hindsight tho! lol.

I created a method using the fib tool, but I took away all the levels except for the 50% and I added a 70% (which is technically not a fib level)

I welcome everyone to give this a try and help me back-test it with your support. If you have questions, please ask. I'll be paper trading this until I am profitable

for 5 months straight.

If this is you when trading -->

http://i41.tinypic.com/2ns05xj.jpg

then keep watching as I show you how easy money is made!

Lets get started.

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UPDATE JUNE 5TH / 2015

I will be reducing or possibly eliminating my usage of the 50% price level, and instead focusing my attention to Support/ Resistance zones aka Supply/ Demand areas aka "VSA" (volume spread analysis) aka "VPA" (volume price analysis), along with trend lines, median lines (see "Andrews Pitchfork (Median Line)" ), channels, and other common price formations like triangles and wedges etc to form an educated guess on market direction.

I also haven't traded range bars in quite a while. I think I'll stick to my time-based candlesticks. I look primarily at the 30min/4hr/daily/weekly/ monthly charts.

I am by no means an authority on trading (YET!). here are some of the other threads I have found on the subject. Unfortunately, many of the OP's have vanished off their own threads, leaving those like myself stranded to make sense of the scraps:

PIE Chat Room... rebooted by Winston Reed

Low Volume Candles by abokwaik

Price is everything by Redsword11 (OP long gone)

B.S. Trading with Kenneth Lee (not active)

VSA with Clifton (OP long gone after just 21 pages)

JoeNY's Price Action Thoughts (Dead after 8 pages)

Like most people, I have no problem identifying key swing areas. I have no problem with RR, or placing stops. In fact my win ratio is 45%!!!.

Where I struggle is where and how these zones are placed, as there seems to be a logic to it, that I don't yet understand.

For now my zones are based off nothing more than intuition.

Entry for longs / shorts

Go long or sell short when price reaches the 50% level

Here is an example of usd/jpy that I took this morning on the 15min

http://i41.tinypic.com/x513x1.png

Stops

Place stops at the 70%

Taking profits off the table

There are two ways to take profits. Use your best judgement, based on volatility, where the best place to take profits are.

http://i43.tinypic.com/27wum34.png

Targets

As seen in the above chart, we use measured moves from the first swing to estimate the continued momentum of the trend

Simple huh?

Few more rules coming later tonight about re-entry

Hi Big Pipin

Thank You very much for sharing your method. That's funny but right now i'm trying to trade very similar way like you. Your idea with putting stop lose on 70% level is very interesting, because this way, we can avoid whipsawing moves which often targeting in 61.8% fibo users
Please continue sharing your ideas i will follow your thread with interest

All the best !

Gorbi

Thanks.

Here is g/u on a daily that I also took short, but it will take several weeks to play out probably. Getting a nice pullback after g/u broke its descending triangle pattern. I expect a continuation of the down move.

Rules for re-entry or changing direction

Nothing sucks more than being stopped out at the highs or lows, RIGHT BEFORE a move. If you get stopped and wish to re-enter the market, or trade the other direction, you can do that simply by going down in time frame.

By going to a smaller time frame, you will see more noise and volatility, providing more opportunity to act fast and get in before a big move occurs.

If you're trading the 15min for example, then go to a 5min. Here's what that looks like.


Once you shift down in time frame, that means you have to use that TF for the rest of your trade. So your scale out points and targets are then based on the 5min chart.

...

That concludes how to trade this system.

Monday can't get here fast enough!, I wanna make some freakin pips already

u mad?. G/U's gonna be a killer trade, just watch.

So unsure how you are drawing your lines to get the entry point for long or short. Where are you measuring from inorder to get your 50% and 70%?
Thanks

You need to use a fib tool, but delete all the levels except for the 50 and 70. Just like trading fibs, you need to draw from the top and bottom of a swing.

I guess what I was looking at was if it was daily high and low used , instead of just any swing

You can do it that way. The way the lines are drawn can be a bit subjective depending on the person trading them.

Thats the issue with fib lines :~))

I agree, but unless I want to add indicators to this (which I don't this is necessary), there will always be a little bit of guess work involved as to where the top and bottom of a swing should be drawn.

Just like any other form of TA, such as trend lines, triangles, wedges, channels etc... each trader will draw them a bit differently. Doesn't mean he's wrong, just means he/she sees the market from a different perspective.

I have more looser then winners my account is still growing for last one year. Getting stooped out is not a problem if your method is good.

Looks almost like what Dave Halsey has been teaching for futures trading

Can you give a link?

There are no truly original systems any more. They're all just modifications of what's already out there.

Aud markets open in a few minutes but I'm not liking these charts too much.

Over all I think we head lower. Here is weekly and 15min along with the measured move profit targets.

Got buy order in on usd/cad daily chart.