Yes your correct, the majority of the patterns we have traded this week where not symmetrical at all! The way the market has been behaving for the past 2 months has been extremely irregular which is why their has been this lack of symmetry. This is the reason why a lot of the patterns have not been reaching their usual 50-60% retracement which you would see in normal market behavior. So what do I look for when the market is "wack"? Well instead of symmetry within the ABCD I look for symmetry between the "zig zags". To clarify, I make sure that the pair I am trading has a history of patterns. This means that I would go back about 5-10 days into the chart and make sure that one pattern turns into an other and in to an another and eventually end up towards my current time. Which is similar to what I did in the tutorial posted up on you tube. As a result, all the trades I had made last week except for the last EURO/USD trade where on the EURO/JPY. This is because of the fact that I found it to be the pair moving with the most "symmetry" this month. But even as that you notice as well that a lot of fake outs have been occurring. In effect leading to another reason why I try to only "steal" 30 pips from the market and not go for that tempting 100-150 pips that the pattern potentially gives me.
Oh and to quote: wrtm_19
Looks easy and pretty effective. Thanks for sharing!
Heh yeah it looks easy, but to be able to trade like this and to see the patterns the way I see them (which just pops out like an image in any chart I open) will take you a lot of practice. The most difficult part about this form of trading is greed IMO. This is because of the fact that if you trade to target 1 as indicated in the book (.618 fib level) you will have an 80% chance of being correct and reaching 70-150+ pip goals for every pattern in normal market conditions. Which in effect give you a "god like" complex believing that you in the end know it all and know exactly where price is going! Which is wrong and the number 1 mistake every one will make... and believe me you will make this mistake once you get used to it. As I stated before this is the reason why I restrict my self to 30 pips and restrict my self from feeling any emotions what so ever when trading the market (based on 30 min trades). In addition, finding the correct D and the right pattern to trade will also be difficult. But atlas once you do get the hang of it and learned it to the point where you see butterfly patterns and gartley patterns in any zig zag you see in life, then you will master it and it will all be easy as pie. :cool:
A friend of mine asked me a question today:
… One question I dont see mentioned. You mention leveraging high for the 30 pips only. What % of your account are you risking per individual trade. I am guessing with a higher level of experience and education one can tolerate risking 10% or so of equity (this seems extremely high to me though) if they know that they have an average win % of 65+ over 100’s of trades. I notice that you close out a trade for ~10 pip loss. Thanks again.
Throughout my progress I am risking an average of 5-10% of my account as I increase my balance and move on to the next leverage increase. I do not intend to risk more then 10% of my account at any given time (90% margin available at all times). As for the win ratio of 65%… well this weeks trades actually averaged out to a 75% positive trade ratio. 12/16 possitive trades (this is not counting a full 30 pip gain but the fact that the account did not go negative more then 4 trades this week). As for pip loss, in trading this method [U]I should[/U] be placing stops close enough to my entry to at least cover the spread as soon as I reach a positive range of 10-15 pips. This is something I typically do when trading any pair other then the yen pairs. The reason why I much rather wait for a close “bellow” my entry (fib level on a bullish trade) is because the Yen pairs tend to “whipsaw” frequently and would stop me out in 2 seconds then return to its base price immediate. Waiting for a close on these pairs makes me as a trader more comfortable. In addition knowing that every pattern has an 80% chance of completing to the .618 in normal market conditions, greatly increases my odds as I only choose patterns which have good “convergence” and in markets that are symmetrical. Now as for showing a full win/loss ratio, lets wait until I show you all a months worth of trading patterns before judging the percentage completely and not just base it off the few trades that have been shown so far.