@ 2ndSkiesForex
It’s one thing if you actually wanted to ask a question but a completely different thing if the question is merely a very thinly vieled excuse to advertise yourself.
This is a cool thread with reasoning very clearly explained right at the start of which you have violated most of the instructions.
As such I have reported your post as spam.
Hello Slippery,
First off, no worries mate, mea culpa and I have removed the link. This wasn’t some thinly veiled attempt to advertise myself. I wouldn’t have spent so much time on it if I was doing that and just posted a link.
I take this topic very seriously and also helping other traders learn how to trade successfully very seriously.
I have never said anything about this being a cool thread or not, I think it is definitely interesting without a doubt. I am merely challenging the assumptions of one of the persons in the thread. Is it not workable to challenge people’s assumptions about what is a high quality signal or about price action in general?
If not, then it seems very close minded and I’d be curious how one can advance their trading with such a closed mind.
I am happy to engage in a healthy debate about the subject with anyone at length, and that is really the goal here isn’t it - to explore ideas about trading so we can constantly take our trading to new levels?
Looking forward to your response.
Kind Regards,
Chris
This particular thread was started with a very specific objective.
There is a whole forum to debate if one time frame is better than another, what the best time frame is, whether the stars or the side of the bed you got out of this morning can predict the future of the market.
Salim can correct me if I’m wrong and is of course perfectly entitled to block me from the thread if he wants as it’s his thread.
But that’s the point, it’s his thread, and he’s laid out the rules quite clearly.
I even feel bad posting this as I don’t really feel it’s on topic enough to warrant and as such will not be responding on this particular inapproriate debate anymore. If you want to address me personally on this further please feel free to PM me.
Cheers,
Slip
I agree with you to some extent but the truth is PA is a lot more reliable on higher TFs, now I trade the 4h also quite a bit but the signals are never as strong as in the daily TF.
Hello Ecerejo,
When you say PA is more reliable on higher TF’s, what do you mean? Do you mean in terms of accuracy? Reason I ask is a) my accuracy is relatively the same regardless of time frame, and b) this is the same for my students who are not as experienced as I am.
I am still wondering what the time frame has to do with accuracy?
The reason I say this is when you are trading say pin bars on the daily time frame, are you just trading any old pin bar? My guess is you are not. You are likely trading with trend more often then counter-trend correct? And when you are trading counter-trend, you are doing so with additional confirmation and a confluence of signals correct?
If the answer to the above questions are yes, and you are not just trading every and any old pin bar, then you are really trading price action with a confluence of signals to confirm or strengthen the trade.
If so, then this is my point - that this is no different on the 4hr, or 1hr or lower time frames. You are not just trading any old pin bar on a 4hr or 1hr time frame as well, and you are doing so with a confluence of signals (i.e. trading with trend more often then counter-trend, doing so at key S/R levels, looking for low risk-high reward scenarios, etc).
This is what I’m trying to discuss or really tease out, that the same methodology of looking for and trading a high quality pin bar on the daily TF is the same on a 4hr chart, or a 1hr chart. And when you do this and do it well, high quality signals no longer become time frame dependent, but really based upon your ability to read price action in real time.
Does this make sense?
Looking forward to your response.
Kind Regards,
Chris Capre
Hello Slip,
First off, I just re-read (or read fully) all the rules of this thread. I noticed the part about wanting to talk about high quality signals, but I missed the part about daily charts only.
I made a mistake according to the rules of this thread, and I openly apologize. My mistake and I meant no dis-respect, just didn’t read all the rules of this thread. So I will not be posting any charts other than the daily charts in the future.
I am curious as to salim’s response as his main goal of the thread was to find high quality setups, so I’m curious as to what his thoughts are on my questions about high quality signals and statements about them not being time frame dependent.
I’d be interested in engaging in an open-minded debate about this with him, as I’m interested in hearing his perspective, with the goal in mind that we are open to seeing the others point of view, while challenging our own points of view.
Looking forward to salim’s response, but I appreciate you pointing our my discrepancy regarding the rules of this thread. Again - my mistake.
Kind Regards,
Chris Capre
You get a lot more fakes on lower time frames but again I like to enter the game when when price is going against my intended target, another words on retracements. But a quick search on you revealed me that you like to enter on breakouts of a certain s/r level, it’s not my style to do that (it doesn’t mean that I don’t once in a while). For example on strong daily trend price tends to respect the 10ema and 20ema so I use these as dynamic support and resistance. Using lower time frames could be a killer (doesn’t mean that will fell all the time) but it does fail a lot more often then on the 4h or Daily. If a candle fails to break through one of the emas I enter on the retest put the stop just under the 20 ema and it’s about it and of course I also use “fixed” s/r levels, it’s simple and effective another words it works for me.
Hi guys :60: Very nice debate indeed.
Chris, I agree with you some and disagree with some points…
I’m not going to quote everyone’s post. I just posting my opinion.
As I mentioned in first post of the thread, I made the thread for a learning purpose for all new traders as well as me too. I have been trading last two years. First one year I tried to learn everything about Forex. I tried almost all indicators and all time frames to trade. let me conclude it here, all of them was completely a disaster.
Let me say about the time frame. What I learned from my two years of trading experience (that’s not much, I agree), the lower time frames are utter noise resulted from intraday trading. Everyone know that a pair move in systematic way, which are called Trends, Waves or Higher high higher low etc. They said the TREND is your friend until it bends. How can we find the friend? You can spot the prevailing trends clearly only on higher time frames such as monthly, weekly or daily.
What is happening right now in the chart on all lower time frame is based on the higher time frame. I already mentioned these terms in a wonderful thread called http://forums.babypips.com/newbie-island/39634-pure-price-action-dummies-237.html This is where my system explained.
Most of the traders losing their money due to their lack of knowledge, fear and greed. They tend to make quick money from the market (as I did earlier) trade from the lower time frame. Lower times frames give us false signals. Lower time frame charts such as 5 minute, 15 minutes, 30 minues and 1H move randomly, as noise. If we are not aware of what is on the daily or higher time frame then higher probability to loss the trade.
After blow up their one or two account they will realize that there is no holy grail and a 100% sure winning system.
Zakuthimdlethe simply told the truth. He is right. Without knowing the trend and the levels they will lose the money. Trading should be hell simple as stupid. I recommend all newbies trade off the daily chart from their start of trading.
If anyone master the trading from the higher time frame such as daily or weekly, I’m damn sure they will trade from the tick chart when they open the trade station. Because they know where is the price and where it will go.
Yes, I can trade from the lower time frame. But I’m not looking at them because I have a job of 8 hours and it eat my 11 hours per day. Every morning I check the chart on daily to spot any sweet setup. It take me only 5 or 10 minutes. If anything there I will enter or place a order and close the trade station. Everyone’s trading life should be like that. There is no need for staring at charts all day. As I mentioned earlier what is happening in lower time frame is… Go to your job or go to the pub or beach. Enjoy your life.
Chris, I have no offence to your charts. That’s was good trades. I checked the chart and double checked it on my chart and find something interesting. I know you have different strategies based on the price action and it may definitely work for you and some of your students but not everyone. I don’t know what is your strategies and how you trade. But here we trade in a simple way based on Pin bar and S/R levels.
So what I find from your chart is given below.
USD/JPY
See the daily chart. I draw a red block on the chart it includes five daily candle from 17 december to 24 december. It consist your students 15 minutes charts consolidation.
The 83.80 level was a previous resistance. It broke above the level and consolidated five days. It tried to break below the previous resistance turned support and eventually print two pin bar at the support. It seems your student put an order break of the pin bar nose. It was a nice trade based on the PIN BAR at daily chart.
I don’t understand why he draw a line above his entry. Is it what ecerejo told right now? I have no idea what is that. It is easy to manipulate a chart to confuse or wonder the traders. Whatever.
EUR/USD
The reason behind the trade is purely price action, a trend following strategy. If yesterday a buy then today a buy (I refer again the thread of Nikita). But his exit is clear there in my chart which I again draw a block in red colour. A HUGE PIN BAR at resistance. Again that was a great trade based on DAILY CHART. Anyway my both charts showing a clear signals. But I think both of your charts manipulated for some strange reason.
I apologies if my post hurt anyone who believe lower time is alone reliable to trade. But that not true my friends. Any way trust in your system.
Chris, Don’t take the post as serious. Just take as joke or fun. Please I already explained my idea clearly. So, no arguments again. 
Happy trading.
Thanks for your support Slipp.
Happy pipping.
Hello ecerejo,
Hmm, i think there is a small confusion here. I do not just trade breakouts, they are only one of my strategies. I trade with trend pin bars, as well as counter trend with greater confluence. I trade with trend pullbacks, as well as countertrend plays. I trade transitions in trends, breakouts, reversals, all kinds - not just breakouts.
But an interesting thing is in regards to accuracy. I have quantitatively tested pin bars, inside bars, engulfing bars, etc on multiple time frames, and some times the performance is actually better on h 4h or 1h than it is on the daily tf. And that also changes based on server time. Sometimes the ny daily close works well with one pair, but badly underperforms on another pair.
Also something never talked about. Did you know that if you trade a strategy say 8x a month at 70% accuracy (hard to achieve consistently for most traders), that your profit and performance is actually less profitable then trading a system with 55% accuracy and trading say 22x a month with both having reward to risk ratios of 2:1?
Food for thought, but profit is not just about accuracy alone. Profit is from accuracy, profit potential or rr ratios, along with how many times you execute your edge.
Anyways, a good discussion indeed, and ill respond to salim soon.
Kind regards,
Chris
Perhaps you should start your own thread giving some examples of your trade setups, it might be a good way of promoting what you have to offer! Post some of your videos like some guys like yourself have done. Johnathon Fox from Forex School Online has done it.
I seriously doubt that!
Well, usually I trade for 3,4,5 and even 6:1 ratios, and that is the good thing about daily charts. Can you imagine doing that on a 15 minute chart? Like I said before on a strong trend has been formed I just stay in as long as price stays above the 10ema and these things tend to happen quite often on daily charts and that is why one good trade on a daily chart will wipe out all bad trades.
cheers,
Ed
Hmmm this article contradicts what you are now saying… Trading the 4hr Charts | 2nd Skies Forex
There is a few things in that article that go directly against what you are saying here such as:
“The 1hr, 4hr and daily time frames will have a greater communicative value about direction, clear support/resistance levels, what is a key rejection, who’s in control, while filtering out noise and meaningless order flow and price action. This will give you less confusing signals, teach you how to be patient with your trading, along with reading 1, 2 and 3 bar patterns.”
and
“Time is a critical component when reading price action and representing order flow. The longer price reacts/rejects off a key level, the longer it holds from that rejection, the stronger it can be. Furthermore, if it can sustain the directional move for 4hrs as opposed to 5mins, then it had to do so through increased order flow and participation from the market. That communicates there were more players and more money behind this move.”.
Kinda odd.
Hey Everyone,
Sorry for the delay in getting back as I’ve been traveling internationally.
I’ll respond in full to each person after today’s trading.
Until then - good hunting!
Kind Regards,
Chris Capre
Weekly Chart analysis:
EUR/USD
The pin bar which was formed two days ago went off down through the near term support 1.3130. Yesterday it break the second 1.3020 support, then retrace back and print a Pin bar at the support. The pair is evidently in uptrend and it is going up as HL, HL patterns. If you are a fibo fan, then check it on the previous swings.
We could see a move higher from here next week but there is a resistance between 1.3130-3160. I think the resistance will break soon and the pair may move to 1.3250 then 1.3350.
GBP/USD
As EU, GU move south very nicely through the near term support (1.6175) and struggled the second support at 1.6030 and print as a some what Pin bar.
We could see a move here to north to 1.6300 soon.
AUD/USD
We discussed the support area at 1.0460 in last post. Yesterday it break below and closed again above the support area. Right now the chart showing an inside bar and a huge pin bar. Next resistance is the 1.0550 area. We could see a move beyond the level soon. (may be 
)
NZD/USD
Like last post the pair also break down and later closed slightly above the support. Like AU we can consider it as an Inside bar and pin bar. There is nothing to wonder if it move higher from here.
I hope we can catch some trades from next week.
Happy weekend.
According to my calculations this is not true. Actually 8X a month with 70% winrate is slightly better profitable.
First I calculate the % of your account that has to be risked according to kelly criterion.
The kelly criterion tells you what fraction of your bankroll to bet to maximize bankroll growth. This is somewhat aggressive for some people so they will sometimes use a fraction of the result of the KC, i.e. “fractional kelly”.
The KC is
f = (bp - q) / b
where b is the payout in b:1 format, p is the chance to win, q is the chance to lose (1-p usually)
f for the strategy with 55% winrate is = (2 * 0,55 - 0,45) /2 which means 32,5%
f for the strategy with 70% winrate is = (2* 0,70 - 0,30) /2 which means 55%
Now let’s say for simplicity that both traders have an account of $100.
The calculations below suppose you win and lose the same amount every time which is true only if you bet fixed amounts every time (the kelly criterion is not for fixed amounts, however even if you use fixed amounts you can risk a bigger % of your account with 70% winrate than with a 55% winrate). Those who want to bet fixed amounts can use this calculator: Risk of Drawdown and Ruin Calculator - Wisdom Trading
55% X 65$ - 45% X 32,5$ =21,125$ on average
70% X 110$ - 30% X 55$ = 60,5$ on average
Now to calculate the monthly profit:
for the strategy with 55% winrate: 21,125 X 22 = 464,75$
for the strategy with 70% winrate: 60,5 X 8 = 484$
You can replace the % according to Kelly Criterion with other %. The trader with 70% winrate can always risk more than the trader with 55% for the risk of ruin to be close to 0, so the results will be slightly the same.
Wow… What I just read, man. Awesome post. But I have no idea about the maths.
But I have a simple maths to a reasonable ROI.
Actually the last bearish pin bar failed to make a new high, but there’s room for a buy but I’m holding back for now, we have stronger trends with UJ, EJ and GJ, I think we’ll be safer to look for buy within these.
What trade management do you use with the strategy from this thread?
There are some traders that take partial profits. However there are others who never scale out. What do you think is better? Instead of scaling out wouldn’t it be a beter idea to move the stop loss in order to assure a profit?
Do you move your stops to certain levels when the price reach a certain level?
Do you use trailing stops?
Without a proper trading management we can’t survive in this market.
Usually my trades (explained in this thread) needs large stops, 75-100 pips. Because I’m trading off the daily chart. My aim in every trade is a minimum 1.5-2.0:1 reward to risk ratio. I move stop BE or lock some pips when my trades reach 1:1 R:R and let it run up to the full target. There is a term discretionary trading. Discretionary trading is important here. When you see a support or resistance near and if the pair is showing support or resistance then we should consider lock some profit and trial the stop.
What I have seen in charts was usually pairs move from one event area to another area. So until it hits the important areas we can hold the trade and wait for one of our exit point kick us out.
It’s important to stick with the plan and be patience. I didn’t tried scaling out strategy. Scaling out coming from fear. Like above said, if there is a important support and resistance then scaling out a reasonable idea. Otherwise it reduce our profits. If any trader is found a signal and decided to enter a trade, he should accept the losses and consequences of the trade. If he accept the losses then he should wait to hit one of his target. After entering a trade, moving stops too far and too close is bad idea. If he has still emotion after entering a trade then Forex trading not suitable to him.
Everyone know a better reward risk ratio is must for trading. Without a good R/R we will not earn money from Trading. I believe scaling out will affect the R/R when most of the trades we lose.
No. I didn’t use trialing stop till date.
I hope it helps.
I hope you enjoyed your journey.
I’m curious what you have to say about the replys to you. Last two days I’m lurking in this thread for your reply. Do you have anything to say then let it come out. I hope we can learn something from it.
Happy weekend.
