Disliked{quote} Random example - pulled up an H1 AU chart - 8 wins 2 losses, definitely would have made money - {image}Ignored
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- #10,612
- Edited 3:30am Mar 6, 2016 3:07am | Edited 3:30am
- Joined Apr 2011 | Status: NQ eta moi lybov... | 3,030 Posts
It's quite interesting to me that many points are being asked recently about things i've been posting about for ages!
I'm certain that because i don't trade contracts that it's assumed i have a different method!
Here is basically the only set back we come across;
The illustration on the left is what we look for. A pullback within trend, a 123 back to trend, but the one on the right shows a typical loser scenario.
In EW terms, it's when a B wave within a pullback becomes slightly larger and creates a 123, which will be triggered but will fail quickly.
There is not a great deal that can be done about this using 123's but i have tried to filter out the losers and have posted god knows how many charts to show!
Here's a repost of a couple of trades from Friday morning on the Dow;
I'm doing exactly the same principle here. Determining a trend, waiting for a pullback and trading a 123 to get back into trend.
The additions are that i am also looking for other patterns to know when to expect the continuation.
The pullback immediately after a fresh HH creates the C&H. If the retrace to the start of the 123 is a common fib level of the previous move, it is a very strong indicator that the 123 will be safe to trade;
I also look for Hidden Divergence to occur at the start of the 123 (as is the case in the dow trade above).
I did start looking for 123's to occur ONLY after a double legged pullback, thus mostly eliminating the chance of a false trigger, but in all honesty, you end up missing out on so many winners that (imo) it is better to take them all and suffer the losers...
All the above may appear to be complicating matters, especially as my final analysis is that it is probably better to simply take every 123 to get back into trend, but at the same time, no-one likes to take a losing trade, so a few tools to reduce the amount can't hurt.
I'm certain that because i don't trade contracts that it's assumed i have a different method!
Here is basically the only set back we come across;
The illustration on the left is what we look for. A pullback within trend, a 123 back to trend, but the one on the right shows a typical loser scenario.
In EW terms, it's when a B wave within a pullback becomes slightly larger and creates a 123, which will be triggered but will fail quickly.
There is not a great deal that can be done about this using 123's but i have tried to filter out the losers and have posted god knows how many charts to show!
Here's a repost of a couple of trades from Friday morning on the Dow;
I'm doing exactly the same principle here. Determining a trend, waiting for a pullback and trading a 123 to get back into trend.
The additions are that i am also looking for other patterns to know when to expect the continuation.
The pullback immediately after a fresh HH creates the C&H. If the retrace to the start of the 123 is a common fib level of the previous move, it is a very strong indicator that the 123 will be safe to trade;
I also look for Hidden Divergence to occur at the start of the 123 (as is the case in the dow trade above).
I did start looking for 123's to occur ONLY after a double legged pullback, thus mostly eliminating the chance of a false trigger, but in all honesty, you end up missing out on so many winners that (imo) it is better to take them all and suffer the losers...
All the above may appear to be complicating matters, especially as my final analysis is that it is probably better to simply take every 123 to get back into trend, but at the same time, no-one likes to take a losing trade, so a few tools to reduce the amount can't hurt.
GoFundMe -stage-4-glioma-brain-cancer-fighter (link in my profile)
- #10,613
- Mar 6, 2016 3:26am Mar 6, 2016 3:26am
- Joined Apr 2011 | Status: NQ eta moi lybov... | 3,030 Posts
Again, using Regular Divergence, is best coupled with either H&S or C&H reversal patterns. I always now watch out for reg div to form (positive or negative) to know when to exercise caution.
Ignore the EW labelling.
Hidden Divergence always over-rides regular, but this is obviously only possible until we get a fresh HH/LL.
As you can see, we get the C&H again from the low after strong pos div. The retrace thereafter was also 50%.
Again, different chart but exactly the same criteria;
My point here is that by using EW, i was in the belief that the pullback was corrective and would go on to make a HH, thus trading the 123 after the pos div, fresh HH C&H sequence, i felt i could run the position to a fresh HH at a very favourable R:R.
Ok it may be a UK share company, but as was pointed out by JM earlier... a chart is a chart is a chart!
Ignore the EW labelling.
Hidden Divergence always over-rides regular, but this is obviously only possible until we get a fresh HH/LL.
As you can see, we get the C&H again from the low after strong pos div. The retrace thereafter was also 50%.
Again, different chart but exactly the same criteria;
My point here is that by using EW, i was in the belief that the pullback was corrective and would go on to make a HH, thus trading the 123 after the pos div, fresh HH C&H sequence, i felt i could run the position to a fresh HH at a very favourable R:R.
Ok it may be a UK share company, but as was pointed out by JM earlier... a chart is a chart is a chart!
GoFundMe -stage-4-glioma-brain-cancer-fighter (link in my profile)
- #10,614
- Mar 6, 2016 3:56am Mar 6, 2016 3:56am
- Joined Apr 2011 | Status: NQ eta moi lybov... | 3,030 Posts
Just a quick chart to illustrate above Hidden Div over-riding regular;
It is possible, of course, right up until we have a fresh HH, then the Positive div takes over and we get trend change.
It is possible, of course, right up until we have a fresh HH, then the Positive div takes over and we get trend change.
GoFundMe -stage-4-glioma-brain-cancer-fighter (link in my profile)
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- #10,616
- Edited 7:35am Mar 6, 2016 7:15am | Edited 7:35am
- Joined Jul 2010 | Status: Trader | 9,189 Posts
- #10,620
- Mar 6, 2016 8:37am Mar 6, 2016 8:37am
- Joined Apr 2011 | Status: NQ eta moi lybov... | 3,030 Posts
{quote} Is this the reason why you change the target to 30 ticks ?
GoFundMe -stage-4-glioma-brain-cancer-fighter (link in my profile)