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  • #41
  • Dec 28, 2013 12:17am Dec 28, 2013 12:17am
Here is a more detailed look at stacking. Entries and exits were rounded to the nearest 5 pips for example's sake. All signals closed up on their respective days, and all triggered on the next bar. There would be no reason to exit any of these positions yet.

Although this move happened over the holiday period, these patterns repeat themselves over and over and over again. Of course, you're not going to get a stacking opportunity like this on every single engulfing bar that goes with the daily trend. Some will be stopped out. Some will be flatted. This is just an example of what it's supposed to look like when you're doing it right. Ultimately the market will decide the frequency and length of the signals. The best we can do is consistently be on the right side of the probabilities.

One very important thing to note. Take into context the 'playing field' in which these signals came into being. Price had recently broken its previous monthly high, and then consecutively broke previous weekly high two times in a row. Look at the candle that broke monthly high: solid. The candle that broke weekly high the first time: dominant. The candle that broke weekly high the second time: dominant. This market is screaming long at the moment. Context has a huge impact on how a single engulfing bar can be interpreted.

Attached Image (click to enlarge)
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  • #42
  • Dec 28, 2013 2:49am Dec 28, 2013 2:49am
it can be applied with 30m TF too?
  • #43
  • Dec 28, 2013 4:02am Dec 28, 2013 4:02am
Quoting faststare08
it can be applied with 30m TF too?
Nope, H1 and up only please.
  • #44
  • Dec 30, 2013 4:28am Dec 30, 2013 4:28am
Hi AP3,

I just needed some advice on the Gbp/Cad 4hr trade....the trend was down on 4hr and daily time frame, the size of the bearish engulfing candle was also significant and it also closed below the daily open and the previous monthly high...the trade was triggered on the next candle but it was a big loser...couls u please have a look and advice how i could have stayed out of this 1.

Chart attached

Regards

Dennis
Attached Image (click to enlarge)
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  • #45
  • Dec 30, 2013 5:00am Dec 30, 2013 5:00am
Quoting Ap3
{quote} Trade whatever pairs you want. Doesn't matter the chart, these signals 'mean' the same thing. A dominant H4 engulf means that for essentially half of a trading session, one side completely swallowed previous price action in the opposite direction. This carries weight. This is why anything below H1 is irrelevant. Team that with directional bias (above or below previous monthly, weekly, daily high/low), and you're in business.
I like your thread, method of trading and rules. This is very similar to the way I trade.

I wish you all the best with your thread and I will be following with interest.
Gone to a better place
  • #46
  • Dec 30, 2013 7:28am Dec 30, 2013 7:28am
AP3,
As relation to post #22-1, would you be kind enough to clarify a bit. What do you mean by size of the engulfing bars?
Could you you give us a few examples of "good" and not so good setups.

Thanks,

Insider
  • #47
  • Dec 30, 2013 12:58pm Dec 30, 2013 12:58pm
Quoting dennis4u15
Hi AP3, I just needed some advice on the Gbp/Cad 4hr trade....the trend was down on 4hr and daily time frame, the size of the bearish engulfing candle was also significant and it also closed below the daily open and the previous monthly high...the trade was triggered on the next candle but it was a big loser...couls u please have a look and advice how i could have stayed out of this 1. Chart attached Regards Dennis {image}
My answer is multifaceted, but I will try to keep each one as simple as possible.

1. This has already been mentioned multiple times so far in the thread, but I will elaborate. The market is in holiday season. Big players are on the sidelines. Volume is thin. Price action is prone to choppiness and unprovoked spikes. Just because volume is thin doesn't mean the market won't move. It just means that the 'implications' behind such moves are far less significant because there are significantly less participants in the market.

2. There were two comments in your post that threw up red flags in my head concerning losing. The first was that the signal turned out to be a 'big loser.' This implies that you have no control over how much you risk on any single trade. Obviously this is not true. Regardless of how many pips the signal candle is or how wide your stop, you ALWAYS have control over percentage loss. Whether your stop is 10 pips or 100 pips, risk the same amount of capital per trade. All 'losers' will be equal.

The second comment was about how to 'avoid this loss.' Let's get one thing straight people. You can't 'avoid' losses. Accept this fact. Make peace with it. Look forward to it. I look forward to my losses. Want to know why? Because I know they are so small compared to the winners that they don't make a difference in the long run. Small losses are easily recoverable. Remember the 50%/2:1RR baseline. You can lose half the time and still make money. Contemplate this idea for awhile. Losses are inevitable. It is your job as a trader to limit them.

3. Were the H4 and D1 in downtrends?

Attached Image (click to enlarge)
Click to Enlarge Name: gbpcadh4 trend.png Size: 39 KB


Attached Image (click to enlarge)
Click to Enlarge Name: gbpcaddaily trend.png Size: 38 KB
  • #48
  • Dec 30, 2013 1:08pm Dec 30, 2013 1:08pm
Quoting smikester
{quote} I like your thread, method of trading and rules. This is very similar to the way I trade. I wish you all the best with your thread and I will be following with interest.
Thank you smikester, your comments are much appreciated.
  • #49
  • Dec 30, 2013 7:34pm Dec 30, 2013 7:34pm
Thanks for the reply AP3....i try to set profit at 2:1 ratio and the stop loss at the previous swing high or low...so in terms of pips it depends on the size of the swing or the size of the engulfing candle...so my stop loss is always different..please advice if im missing somethg
  • #50
  • Dec 30, 2013 8:49pm Dec 30, 2013 8:49pm
Quoting dennis4u15
.so my stop loss is always different..please advice if im missing somethg
Different SLs doesn't mean that your loss will be different. That's why you must adjust your lot size to fit your risk.

You must define your lot size so doesn't mater if your SL is 10 pips or 100 pips ... your loss in $ will always be the same.
MT4/MT5 EAs/Indicators/Alerts coder
  • #51
  • Dec 31, 2013 12:09am Dec 31, 2013 12:09am
thank you for the great thread. Will give it a go after the bank hols. Merry Christmas and a happy and prosperous new year
  • #52
  • Dec 31, 2013 3:12am Dec 31, 2013 3:12am
Quoting dennis4u15
Thanks for the reply AP3....i try to set profit at 2:1 ratio and the stop loss at the previous swing high or low...so in terms of pips it depends on the size of the swing or the size of the engulfing candle...so my stop loss is always different..please advice if im missing somethg
Try this link.

http://www.babypips.com/tools/forex-...sitionsize.php
  • #53
  • Dec 31, 2013 3:26am Dec 31, 2013 3:26am
Quoting kingcrab
thank you for the great thread. Will give it a go after the bank hols. Merry Christmas and a happy and prosperous new year
Thanks kingcrab, same to you. Look forward to your participation.
  • #54
  • Dec 31, 2013 4:00am Dec 31, 2013 4:00am
Quoting dennis4u15
Thanks for the reply AP3....i try to set profit at 2:1 ratio and the stop loss at the previous swing high or low...so in terms of pips it depends on the size of the swing or the size of the engulfing candle...so my stop loss is always different..please advice if im missing somethg
One more thing to add. Don't set your take profit at 2:1RR. I set stops but no take profits. Remember, 2:1RR is the BARE MINIMUM you should be taking on profitable trades. Let the market go past your 2:1RR point a little ways, then move your stop to 2:1RR. Never willingly take yourself out of the market when you are in profit. Keep moving your stops, and let the market prove your positions wrong.
  • #55
  • Dec 31, 2013 4:20am Dec 31, 2013 4:20am
Quoting dennis4u15
Thanks for the reply AP3....i try to set profit at 2:1 ratio and the stop loss at the previous swing high or low...so in terms of pips it depends on the size of the swing or the size of the engulfing candle...so my stop loss is always different..please advice if im missing somethg
Hi;

This is a great tool to work with the risk of each entry.

http://www.forexfactory.com/showthread.php?t=281772

Regards
  • #56
  • Dec 31, 2013 7:00am Dec 31, 2013 7:00am
Quoting FerruFx
{quote} Different SLs doesn't mean that your loss will be different. That's why you must adjust your lot size to fit your risk. You must define your lot size so doesn't mater if your SL is 10 pips or 100 pips ... your loss in $ will always be the same.
Hi FerruFx;

Do you think this would be a good system, to apply it with "Rags to Riches in 10 or 20 Trades"...... ? .

Regards and Happy New Year
  • #57
  • Dec 31, 2013 6:01pm Dec 31, 2013 6:01pm
Quoting chaveznqoos
{quote} Hi FerruFx; Do you think this would be a good system, to apply it with "Rags to Riches in 10 or 20 Trades"...... ? . Regards and Happy New Year
If you can achieve 75% win rate with a 1:2 risk/reward ratio, so yes ...
MT4/MT5 EAs/Indicators/Alerts coder
  • #58
  • Edited 6:39pm Dec 31, 2013 6:16pm | Edited 6:39pm
If you prefer, stacking can also be done on D1 charts. Again, all numbers were rounded to the nearest 5 pips for ease of example's sake.

Same concept as H4 and H1. No reason to stop stacking until you get a trade that fully stops you out (and even then you don't necessarily have to exit all positions). Then it might be time to reassess direction. But otherwise, don't try and predict how far the market will go. Just keep following it until it shows you differently.

The purple lines on the chart = Previous weekly high/lows
The gray lines on the chart = Previous monthly high/lows

For D1 charts, your directional bias is up or down on the week. Only buy daily engulfs if price is up on the week. Only sell daily engulfs if price is down on the week.

You can see in the chart example, all entries opened down relative to weekly opens, and all triggered on the next candle. The only exception is the 2-bar engulf entry. In this example, all positions were exited after the first loss in the direction of stacking.

Attached Image (click to enlarge)
Click to Enlarge Name: audusddaily stacking.png Size: 49 KB


Attached Image (click to enlarge)
Click to Enlarge Name: audusddaily dominant candles.png Size: 37 KB
  • #59
  • Dec 31, 2013 6:49pm Dec 31, 2013 6:49pm
hi Ap3,

yeh i am learning ur method...it takes some time to absorb all the infobut i am willing to learn...i am now mostly looking at weekly and mothly highs and lows and how price breaks them i.e if it is dominant or no...also i am looking at the size of engulfers and its position...the big issue i get or where i hesitate to pull the trigger is i am not really able to clearly confirm if the trend is up or down on the higer time frames...i mean that is really important part of this method...yeh i will definitely just set stop loss and try to extract as much profit as possible once i am able to clearly identify a trend.

Regards
  • #60
  • Jan 1, 2014 7:21am Jan 1, 2014 7:21am
Quoting Ap3
If you prefer, stacking can also be done on D1 charts. Again, all numbers were rounded to the nearest 5 pips for ease of example's sake. Same concept as H4 and H1. No reason to stop stacking until you get a trade that fully stops you out (and even then you don't necessarily have to exit all positions). Then it might be time to reassess direction. But otherwise, don't try and predict how far the market will go. Just keep following it until it shows you differently. The purple lines on the chart = Previous weekly high/lows The gray lines on the chart...
.

Thanks Ap3.............. !!!!!!!
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