THE JOY OF CANDLESTICK TRADING - a Learning Experience

[tymen1]

Right now I have a lot of material to post but I cannot get thro to Image Shack (traffic too heavy), especially when transmitting from Australia.

So I will leave it till tomorrow.

[Jimmy Jones]

I just finished up my third run through the thread, becoming a tad bit clearer each time I run through it. Looking forward to the upcoming posts.

I am putting together a perma link document that points to the posts I find important to myself for quick access, it will really help cut down on the time needed to review the material. Running through 70+ pages of posts looking for the nuggets of info is wearing me out!

[VulcanClassic]

Tymen,

Thanks, I just needed some clarification. You were talking about taking the settings from Dinapoli and inverting them within the standard MACD.

I missed that the first time around.

[tymen1]

To Jimmy Jones:

You could, if you wanted to, print the whole thread.
Then you would have a permanent hardcopy and could easily refer to it.

It might wear out your printer though!

To VulcanClassic :

No problems! Soldier on!!

[tymen1]

OK, new material.

We are about to trade long with an engulfer!

We have a good entry method and we now have to set up the UM for long trading.

After that, we will look again at the starc bands and retracements (pullbacks).

What I am doing, is setting up a foundation first.

Then we will look at a trade...........
first the traditional way,
then with the 5 minute KC method for better entries,
then with multiple amounts,
then with the retracements.

You will see, not only how the trading works, but also notice the big increase in pips gained as we progress towards the UM.

Next post - the UM for longs.

[tymen1]

To trade long effectively, we simply invert the UM >>>


By tymen1 at 2008-07-23




Hmmmmmmmmmmmm.

That did not work.




So lets redraw the diagram.

Here we are !!


By tymen1 at 2008-07-23


Explanations next post.

[tymen1]

Explanations of the UM for long trading.


The retracements are as before.
We will have more to say about retracements later. It is important that you get your entry close to the retracement point, if not at the very point.

To enter far from the retracement point means that you could well hit the stop loss that you set.
More on all this later.

I feel very excited about what I am going to reveal!!

There are great things to come!!

Now, back to the retracements................

They go in 2 amounts,
You exit all at once, or in stages if you so wish,
The stop loss is moved to break even as the price goes in your favour.
Watch the number of candles you trade on the main chart - don't go beyond about 7 of them unless the price has rocketed in your favour.

Next post - a full explanation of that confusing pips first drawing.

[tymen1]

Now, whats going on with that pips first drawing?

This is an improvement to the UM.

Procedure :

We enter long, using the 5 minute KC chart to get a good entry.
Part of this action is that we set a stop loss 10 pips away. (correct direction of course!! )

If the price action goes against us - a retrace first trade - then we will hit the stop loss and lose 1 amount of 10 pips.

But if the price action is in our favour, then..........

after gaining 5 pips we :
1) enter a 2nd amount.
2) remove our 10 pips stop loss.
3) place a 2 amount or double stop loss at the black horizontal line (the base or entry point).

I can now see that I will need a clear diagram to help explain this - I will do so in the next post.

If the price action now reverses, we will break even with our 1st amount and lose 5 pips with our 2nd amount.
If the price action continues to go in our favour, we move the double stop loss 5 pips every time the price action moves 5 pips.
Eventually, the price action will reverse (point E in the diagram) and hit the double stop loss at point D.
That is the end of it.

Next post - diagram for clarity.

[tymen1]

This diagram should help explain the prevous post.

The procedure is much easier to understand in picture form >>>


By tymen1 at 2008-07-23


You can now see how to enter.

You can now see that the exit is automatically determined by the stop loss.

With only 1 amount you would make previously on pips first = 10 pips.
With this improvement with 1 amount only in this example = 15 pips.
With this improvement with 2 amounts only in this example = 25 pips.

Two amounts definitely makes a difference, even if only for a small price movement.
This should improve confidence at the outset.

This new improvement I have developed after some research.
You can read about it here :

[Jimmy Jones]

Very interesting, can't wait to try it out on the demo account... nothing else to add really, just letting you know I'm still listening