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The Buy Low and Sell High System, the best way to make money

  • #41
  • Nov 21, 2014 8:38am Nov 21, 2014 8:38am
Quoting Traffex
{quote} GBPJPY, H4, Oct 15th
Looks like it was a great trading opportunity to Buy Low.

The overall trend was (is) pretty UP, as we can see in daily charts, now where to buy..
Low of course.

Market reached the lows of the previous week, and as soon as it did get there, it has been bought heavily again!

On the 4h chart we can see it more clearly, a down move straight to the lows, with some exhaustion bars just at the bottom (and one before reach the previous week lows), and then 16 hours (four 4h bars) of choppy market (down momentum dried up).

Edit:
To be clear, exhaustion bars and momentum dry up are just confirmations, the point where we want to buy or sell is below/above previous relevant lows/highs, only after price reach such levels we watch for confirmations, and enter our trades.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: GBPJPYDaily.png Size: 41 KB
Click to Enlarge Name: GBPJPYH4.png Size: 32 KB
  • #42
  • Nov 21, 2014 9:09am Nov 21, 2014 9:09am
Many thanks.
  • #43
  • Nov 21, 2014 10:58am Nov 21, 2014 10:58am
Tunera,

Very good thinking outside the box thread.
  • #44
  • Nov 21, 2014 11:29am Nov 21, 2014 11:29am
Quoting acetrader
Tunera, Very good thinking outside the box thread.
Thanks pal, really appreciated!
  • #45
  • Nov 21, 2014 11:48am Nov 21, 2014 11:48am
Excelent thread. This is how i'm trying to trade. Good to have your input. Thanks.

Excellent thread. This is how i'm trying to trade. Good to have your input. Thanks.
  • #46
  • Nov 21, 2014 12:28pm Nov 21, 2014 12:28pm
Great thread Tunera you have took me back to the basics of trading. This style just can't be beat. I took 7 trades today on Demo for 726 dollars all wins.
  • #47
  • Nov 21, 2014 12:59pm Nov 21, 2014 12:59pm
Hi Tunera,
If you created this method from your own observations, congratulations, you are in great company.
Your method was first published over a 100 years ago by Richard D Wycoff when he described market tops and market bottoms. Your buy low double, Wycoff called a spring
http://stockcharts.com/school/doku.p...ps_and_bottoms.
His methodology was picked up by Hill,Pruit and Hill in their book The Ultimate trader , published in January 2000. ( the book can be obtained free on the internet)
They called:
Your buy low double: a spring reversal Pattern and
Your sell high double pattern: an up-thrust reversal pattern.
They described very specific entry, stop and exit rules for both patterns to create a system that was as mechanical as possible.
So your buy low/sell high double would appear to be both a method and a system
The 2 attached charts (Daily and 60 mins) on the GBP-AUD shows both pattern entry signals.
(The black and white dashed lines are hand drawn monthly and weekly support/resistance levels)
The Double happens regularly and is, as you describe, a favourite market ploy of the smart money to run the stops or as a fake out to sucker in the breakout traders.
However in strong trends the pattern is prone to failure.
I like and use these patterns a lot. Keep up the good work
Tonkar
Attached Image(s) (click to enlarge)
Click to Enlarge Name: GBP-AUD1.png Size: 48 KB
Click to Enlarge Name: GBP-AUD2.png Size: 51 KB
  • #48
  • Nov 21, 2014 2:37pm Nov 21, 2014 2:37pm
Quoting Tonkar
Hi Tunera, If you created this method from your own observations, congratulations, you are in great company. Your method was first published over a 100 years ago by Richard D Wycoff when he described market tops and market bottoms. Your buy low double, Wycoff called a spring http://stockcharts.com/school/doku.p...ps_and_bottoms. His methodology was picked up by Hill,Pruit and Hill in their book The Ultimate trader , published in January 2000. ( the book can be obtained free...
Thanks Tonkar!
Yes this double bottom and double top pattern is very well known in the trading industry from so many years, i've not invented it

However, we use it as a merely confirmation or if we want as a "trigger", a final "signal", we give them importance ONLY when they happen soon after price reached a previous High or Low relevant level.

This, the idea of Buy after a previous relevant Low has been reached and Sell after a previous relevant High has been reached also of course is nothing new, in fact most of big investors and market makers looks out for these situations in order to enter their trades, and this is why the system actually make sense.
Not only because it is used among the "Big boys", but simple because it is how the market work!

It is however something "new" or perhaps uncommon among retail traders though, and it is a pity because it is such a simple and profitable way of trading.

And what is it all about, Buy Low and Sell High, actually every single trader every of us, at the very beginning of our "career", we naturally used to trade this way, trying to simply Buy Low and Sell High, without indicators (what are them? sounds complicated, i don't need them) .
Then after a few mistakes and losses, we abandoned this concept and started the eternal journey of searching for a "trading system" (holy grail!), a never ending journal, a Trap!
  • #49
  • Nov 21, 2014 2:39pm Nov 21, 2014 2:39pm
Quoting tunera
{quote} It work in all timeframes, for intraday trading i use to buy/sell on breakouts of previous highs of the current or previous day, mostly getting 30pips on average each time (safe exits). About eurusd, seems like we have some kind of confirmation that a small bottom is in place. {image}
You still holding this trade or close for a loss?
  • #50
  • Nov 21, 2014 3:01pm Nov 21, 2014 3:01pm
Quoting publicjud
{quote} You still holding this trade or close for a loss?
That was an ugly one, i closed for a loss then make it back quickly, the eurusd of today was really a free-fall, not really the ideal market to buy.

But ok i gave it a try, after 150 pips i initially expected some retrace instead it went for 190 pips :O

It happen..
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSDM1.png Size: 23 KB
  • #51
  • Nov 21, 2014 3:26pm Nov 21, 2014 3:26pm
Tunera from what I see there is little new information here. I know you mentioned being careful in trending pairs. This is correct. If you tried this method of 'Selling the High' on any JPY pair your account would be wiped out. Many small doubles etc. and trying to guess when momentum is running out in a strong trend can be suicide, that trend has been cause by countless bits of economic data, which continues to come (look at Euro today..)

Instead I suggest to trade the fake-out in trend direction and ALSO trade the breakout in trend direction. I have done this for a long time now and it's been ages since i had a loosing week. I call it 'fake or break' trading. I don't claim to have invented the wheel and pay homage to 'ghous' thread. Here's a journal I started with the concept, real trade situations and results
http://www.forexfactory.com/showthread.php?t=500860

good luck with your trading.
  • #52
  • Edited Nov 23, 2014 3:31am Nov 22, 2014 3:39am | Edited Nov 23, 2014 3:31am
Quoting kraven
Tunera from what I see there is little new information here. I know you mentioned being careful in trending pairs. This is correct. If you tried this method of 'Selling the High' on any JPY pair your account would be wiped out. Many small doubles etc. and trying to guess when momentum is running out in a strong trend can be suicide, that trend has been cause by countless bits of economic data, which continues to come (look at Euro today..) Instead I suggest to trade the fake-out in trend direction and ALSO trade the breakout in trend direction....


There is something fundamental in this thread. That is why I will give it my 2 cents...


"The Buy Low and Sell High System, the best way to make money"

Now, I am not sure if it's the best way to make money, however if we just consider a "Buy Low and Sell High System" then you realize you cannot apply or refer to any popular methodology on something that is so "anti-establishment"; it just won't work.
  • #53
  • Nov 23, 2014 6:55am Nov 23, 2014 6:55am
Quoting kraven
...Instead I suggest to trade the fake-out in trend direction and ALSO trade the breakout in trend direction...
Eheh... Buy "ALSO" High... No No No No

This whole system is about Buy Low and Only Low and Sell High and Only High!
The Purpose of this thread is help all the people who are struggling in being successful, and remember them that the only (ehn.. the "best") way to have success is Buy Low and Sell High.

I know that eventually during a strong trend even Buying High and Selling Low can sometime bring a profit, but...
but in the long run it is not going to work.

So.. thanks, but no thanks.

Hey very nice Journal you have, congratulations.
Good luck to you too
  • #54
  • Edited Nov 24, 2014 12:31am Nov 23, 2014 11:01pm | Edited Nov 24, 2014 12:31am
Talking about Buy Low..

Warning: It is really against the trend!

Edit:
I would wait this one just under 1.2350 though, it is a good one but we must wait a little bit more
Attached Image (click to enlarge)
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  • #55
  • Nov 24, 2014 12:38am Nov 24, 2014 12:38am
This one is more short-term, nzdusd.

Sell High.

We had also a nice exhaustion bar on friday, levels to watch for take profits or secure the position (stops at +1) are friday lows and last week lows.
With a small eye also on 0.7875 lows.
Attached Image (click to enlarge)
Click to Enlarge Name: NZDUSDH1.png Size: 24 KB
  • #56
  • Nov 24, 2014 12:57am Nov 24, 2014 12:57am
Quoting tunera
This one is more short-term, nzdusd. Sell High. We had also a nice exhaustion bar on friday, levels to watch for take profits or secure the position (stops at +1) are friday lows and last week lows. With a small eye also on 0.7875 lows. {image}

Dear Tunera, do you have any "fix" time frame to trade with this method ?
IF 27
  • #57
  • Nov 24, 2014 1:11am Nov 24, 2014 1:11am
Quoting if27
{quote} Dear Tunera, do you have any "fix" time frame to trade with this method ?
Not really, mostly i look the peaks and troughs of the chart, and they are the same on every timeframe.

But if you mean time-frame in the sense of the word, time frame, i usually look the peaks and troughs of the past few days, trading these give us trades that are somehow intraday, with expected profits/losses of 20-100 pips range, so we don't have to wait too long before a trade develop.

Of course if you trade the peaks and troughs of the last few weeks or months, your trades would last for weeks, with expected profits/losses of hundreds of pips (100-300 on average), that would be considered medium/long-term trading, and also is a very good way of trading, much more profitable than intraday.
However, we may have to wait weeks before a medium/long-term good trade signal comes, i mean timing is very much important when trading long-term, if you make a timing mistake on intraday you may face a 20-50 pips drawdown, if you made a timing mistake trading long-term you may face a 300pips drawdown (and depending on the leverage you use, it may not be a very good thing).

So, my time-frame is short-term, eventually when it happen that a good long-term trade signal present itself and the timing is absolutely good, i would take it.

Speaking about medium/long term signals, the eurusd bottom is a very good one, but buying it now can be riskious, as it is still too early (timing!).
We keep that one on our radar, any small interesting pattern that develop below 1.2350 would call for a 300pips buy trade.
I will keep this thread updated on such particular "signal", just for the sake of show how the "system" work.
  • #58
  • Nov 24, 2014 1:31am Nov 24, 2014 1:31am
Eurusd 1min chart.

Sell High, price reached a previous high, we had a slow down of momentum, then an exhaustion pattern, down expected from here.

The ideal plan: secure the position (stop at +1) once the low of last hour (1.2388) has been reached, with a bit of luck we'll ride it untill 1.2350 and below.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSDM1.png Size: 24 KB
  • #59
  • Nov 24, 2014 2:40am Nov 24, 2014 2:40am
Quoting tunera
Eurusd 1min chart. Sell High, price reached a previous high, we had a slow down of momentum, then an exhaustion pattern, down expected from here. The ideal plan: secure the position (stop at +1) once the low of last hour (1.2388) has been reached, with a bit of luck we'll ride it untill 1.2350 and below. {image}
Here it comes, stops at +1.

It is always tricky to put stops at +1 because most of the time they get caught, however the eur in the medium term is already very low, so we must be cautious.

With the german news coming out in 20min, there is some potentials.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSDM1.png Size: 23 KB
  • #60
  • Nov 24, 2014 2:48am Nov 24, 2014 2:48am
Quoting tunera
This one is more short-term, nzdusd. Sell High. We had also a nice exhaustion bar on friday, levels to watch for take profits or secure the position (stops at +1) are friday lows and last week lows. With a small eye also on 0.7875 lows. {image}
Nzdusd:

0.7875 has been touched, our eyes have seen that.

Stops at +1 here too.

Let's see if they run down!
Attached Image (click to enlarge)
Click to Enlarge Name: NZDUSDM15.png Size: 24 KB
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