THE JOY OF CANDLESTICK TRADING - a Learning Experience

Beginner Questions
1645

[B]Chart 8 [/B] >>>


By tymen3 at 2008-11-03

Yay!! :slight_smile: :slight_smile:

The price action wasted no time in going thro our 1st profit target of 10 pips.

We had better now set the 2nd target promptly or else, before we know it, the price action will be already there!!

So where do we put T2 ???

The mid Bollinger seems a good idea!! :smiley:

But to be conservative, I will use a risk = reward ratio.

Not counting our profit so far, with risk = 47 pips, as stated earlier, we will add 47 pips to our entry.

That is entry (0.6685) + 47 = 0.6732

So T2 will be set at 0.6736 plus a spread of 4 pips.

[U]T2 then is 0.6736[/U]

[B]We will see this on the next chart.[/B]

1646

[B]Chart 9[/B] >>>


By tymen3 at 2008-11-03

Here you can see the 2nd target profit, T2.

The entry line can also be seen.

We have moved the PCI stop loss to break even by setting it at exactly the entry point.

You can see this with the 2 tags, red and blue, attached to the entry line.

Just as well we move quickly here, because the price action is going up fast. :smiley:

1647

[B]Chart 10[/B] >>>


By tymen3 at 2008-11-03

Oh come on!!

Hit it…Hit it…Hit it !!! :stuck_out_tongue: :stuck_out_tongue: :smiley:

1648

[B]Chart 11 [/B] >>>


By tymen3 at 2008-11-03

[B]Yes!![/B]

[B]Done!![/B] :slight_smile: :slight_smile:

We now have all our profits. :slight_smile:

That is, 10 pips + 47 pips.

Total = 57 pips.

[B]Not bad for an hours work!![/B]

1649

[B]Chart 12[/B] >>>


By tymen3 at 2008-11-03

We must now remove all remaining lines from the chart, in this case the PCI stop loss.
This is the last operation.

[B]If we forget to do this, we will eventually enter a short trade we do not want!![/B]

1650

[B]Chart 13 - Final[/B] >>>


By tymen3 at 2008-11-03

Just a couple of finishing points here.

Firstly, the line you now see is only the mouse cursor cross hair line.

I have set it at the top of the wick of the last candle.

Interestingly enough, the very top here is also the value of our T2, that is 0.6736.

I must have known beforehand!! :smiley: :smiley: :smiley:

Secondly, note the floating profit/loss window.
It is marked with the blue arrow.
It has been returned to zero.

Note also the unrealized profit/loss window.
This now shows our current profit.
It is large.

1651

[B]STATISTICS[/B]

[U]The Strategy[/U]

Intermediate level
Starc band assisted multiple amount trade.
1st amount - 5 mini lots.
2nd amount - 5 mini lots.

[U]The trade[/U]

AUD/USD
25 minute candlestick main chart with Bollinger bands added.
5 minute Starc band chart with Bollinger bands added.
Morning doji star pattern.
Program used - GFT Dealbook.
Magnification - 40
Long trade.

[U]Times[/U]

London open.
New York closed.

Traded at…
Perth � 6.30 pm.
GMT � 10.30 am.
New York � 6.30 am.
Los Angeles � 3.30 am.
Sydney � 8.30 pm.

[U]The Figures[/U]

Entry - 0.6685
Exit 1 - 0.6699
Exit 2 - 0.6736
PCI - 0.6638
1st profit 10 pips.
2nd profit 47 pips.
Total 57 pips.
Reward = 57 pips.

Maximum price action before reversing 0.6736
Maximum profit potential 2nd amount 47 pips.
Maximum profit obtainable 57 pips.

Distance from entry to PCI - 47 pips
Risk 47 pips

Risk/Reward = 47/57 = 1.2
Maximum Risk/Reward = 47/57 = 1.2
Average Risk/Reward expectancy = 1.0

1652

Plan on posting an advanced example?

1653

Hey Tymen,

I’m having a difficult time assessing some retracement entries. More than twice, I’ve found myself in a situation where I’m down 70+ pips. Luckily for two of those times it was able to climb itself out with minimal profits. However, I’m fighting through such a time at the current moment and a couple questions are going through my head.

I’m trading what I consider to be an advanced style of your method. So I’ve been adjusting profit targets, based on the fluctuation of the Starc band to even lock in losses if need be to get out of the mess I’m in. Also, I can’t stop thinking that perhaps I should be hedging. If it keeps sinking, should I short? When I see it retrace, should I add another position to go long?

What do you do in these difficult situations?

I’m clearly either mismanaging this system, or not making best use of my entries and exits.

Other than waiting out 7 candles to stop trading, what are some other signs of reversals to look out for? Also, lets assume you have an open position and see on the main chart the price is possibly reversing, what do you do?

I’ve been wildly successful nabbing up 10-20 pips here and there with your method. However, if once or twice a week I have to battle these huge drawdowns and lose, then all the other work is for nothing.

1654

I have read your private message and it is indeed a message of dispair.

I will give you advice now, but I do await a post with full charting and details from you to help you further.

[B]This is what I suggest now…[/B]

  1. I think you are running ahead of yourself at this point of time.

  2. Trade the Basic level and get accustomed to it.
    Get some good profits form it.

  3. Graduate only to the next level (Intermediate) when you feel you have competancy at the Basic level.

  4. When you have become competant at the Intermediate level, [U]then and [/U][U]only then[/U], go to the Advanced level.

  5. From what you say, it appears that you are making alterations to the levels.
    If you are doing this, [U]I counsel you not to do so.[/U]

An enormous amount of work has gone into designing the 4 levels.
Matters taken into account were simplicity, speed of operation, overcoming the house edge, correct risk/reward ratios, a positve win/loss ratio, ease of charting, use of the very best probability indicators in existence, to name just a few.

The levels are very finely calibrated.

If you alter the method just even a little, you set yourself up for a loss, if not immediately, then certainly over a period of time.

[B]So stick to the levels by the letter, and start with the Basic level, because I think you are trying to run before you can walk.[/B]

1655

thanks tymen1.
emailed Jay Pace but he hasn’t replied. i emailed A. Taylor of gft but he said that i need to open a live account so i can keep the demo account as long as my live account is active…oh well…
are ther any brokers out there that also have the dealbook 360 as the fx platform ? i intend to keep on practicing till am confident then ill open a live account.
thanks for this great thread and to the man who started it…

1656

I also had to open a live account to be able to use the demo account.
This is no problem, because you don’t have to put in any money at the beginning.

1657

Keep up the good work Tymen

1658

Phone him!!

The number is on the website!!

The small inconvenience of a different time zone should not be a bother, considering what you are getting.

You should get immediate service then. :slight_smile: :slight_smile:

1659

ok folks, i have a quick question reguarding an earlier post , i have about 70 or so pages left and im on the start of the long trades with the engulfers…

I have dealbook demo and  i cant seem to figure out how to change the settings to invert the DiNapoli MACD ... when i go to setup indicators i get only two options , Inputs and Style , style only dosnt seem to have any options to it and inputs only lets me change price option , and style lets me change the color ... I tried to change the regular MACD and it dosnt seem to work like yours does either ...

I dont want to get ahead of myself again , and i dont see it explained idfferently anywhere , so if anyone could help me out a little here I would appreciate it !

1660

Keep reading mate, the MACD has been removed for ease and simplicity. The new method works awesome.

1661

I think I have said it before. :stuck_out_tongue:

There is only one post you need - it is on page 140.

Post #1393.

It is a PDF file containing everything you now need to trade successfully.

You are dealing with old, deleted stuff.
Forget it.

Once you have read this PDF file, you can start on the Basic level. :smiley: :smiley:

1662

[B]Intermediate trade 3 - Final[/B]

This is the last of the Intermediate level trades I am going to do.
After this I go to the Advanced level trades and keep posting them till close to 15 November when I call it end of year.

The trade I am going to do is USD/CHF, completed only minutes ago!! :slight_smile:

It is an evening star pattern in a 25 minute chart.

The price action moved extremely fast in this trade and instead of setting the profit lines, I was forced to use the Direct Deal ticket on one occasion as you will see.

[B]Here we go :[/B]

[B]EPISODE 1[/B] >>>


By tymen4 at 2008-11-06

Here we have the main chart of 25 minutes.
You can see the [U]3 candles of the evening star [/U]and the 4th candle just opening.

I was all ready to screen print this one!! :smiley:

At the top left you can see a blue tag - that is the PCI stop loss.
It is just out of reach of the chart.
I set the PCI up beforehand this time as I was watching the evening star develop.

1663

[B]EPISODE 2[/B] >>>


By tymen4 at 2008-11-06

We now quickly move to the 5 minute starc band chart.
I got this picture about 30 seconds after the 1st one so the times on the charts are the same.

It is a dramatic price action with the starc going down sharply and the price action now going green (up).
Remember, with an evening star pattern, we are going [U]short[/U]. so we are looking to [U]enter as high as possible[/U].
That is, close to the upper starc band.

You can now see the PCI stop loss as a blue dashed line at 744

1664

[B]EPISODE 3 [/B] >>>


By tymen4 at 2008-11-06

Here you can see my [U]Direct Deal ticket[/U] ready to click an entry at any moment.
I will enter 2 amount at 5 minilots each. (10 minilots total).

The PCI is already set at 10 minilots (2 amounts total).

You can see that the price action is going up - the green candle is longer and reaching into the mid starc band.

An entry is only seconds away!! :slight_smile: :slight_smile: