Hello.
Could you be so kind and answer my question about today`s trade that I took ?
( see picture )
Thanks for the reply. It helped me.
Hi Ken.
I have some questions about today’s trade that I took on G\U. If you find some free time I will be glad to heard what you thinking about this.
Cheers.
Thanks for help. And you are right about MA.I was sure that my 200 MA is SMA until I check it.
Thanks for your comments. It really helped me. Next time I will post text directly on the tread. I notice that pictures is being resized because of forum size attachment limit.
Good Morning Everyone, Hope you are all having a great Weekend, Resting up for the week ahead…
I would like to discuss a couple of things today, Hope I just don’t ramble but probably will. LOL… First thing I would like to talk about why we are taking these big losses. You may say what big losses my stop is always the same . 15 20 pips. That is what I am saying why are our stops always 15 or 20 or whatever magical number we came up with. In the rewriting of the thread information I told everyone that stops are no different than entries. You should have different stops depending on the entry and how well you got in…
So I thought about this a while and after watching myself and others trade. Came up with a thought that could help two fold. Better entries with less loss. Instead of looking for entry signals. Why don’t we start searching for the best places to put our stops. Then our goal will be to enter as close or even past that point as we can.
Like looking at gbp Thursday and Friday. it was ranging between 1.6340 and 1.6213. If you wanted to take a entry near one of those lines . You would put your stop the other side of it. So your new goal is to enter as close to our even on the other side of that line when it turns back in our direction. Then if it crosses our entry we can take a very minor loss.
This is why you you hear EO or Pippin say they took a 6 or 8 pip loss. They Knew where their stop was not just a entry. This doesn’t mean just start jumping in everywhere. It requires you to do your pretrade work and even a bit more , Deciding on possible trades before hand but shouldn’t we be doing that anyway.
This should not be as hard as we think price only moves in 3 directions. up,down and right. So knowing our system we should have a better than 50% idea as to what the next possible entry will be. If you have been actually studying the system every entry leads into the next one. So it should become clear as to your next possibility, So you then look for where you would place your stop on those two choices . One if it goes up and one if it goes down. Now common sense should prevail. We still watch PA and PPA for entries but we now have already decided where we think the trade has failed, If it breaks right through our chosen stop location we look for the next one. Just like picking entries but instead we are deciding when the trades are no longer a possibility.
This is important as too many of us aren't deciding to end bad trades we are just letting the clock run out. By letting some magical number of pips get hit. That isn't a choice it is not using our skills and it is not teaching us how to pick better entries. I see time and again people getting stopped out because they moved their stop to soon but in 90% of the cases they moved it to where it shouldn't have been anyway. Not yet any how.
So instead of just looking for a entry signal also look for a stop location then using them together should help improve your net pips count.
People that know a little about me know I live on the island of Key West a 2 mile by 4 mile island. I don’t own a car and try and ride my bicycle around the island everyday to keep stress down. This is also when I have a lot of eureka moments… Or something finally sinks through this thick skull. I had been watching some guys trade and been listening to their entries and when they were getting stopped and also my own failures. I then started to actually mark on my charts when they entered and got stopped. The reasoning being that their was a lot of break even trades happening as they moved their stops after 10 pips or so.
Then after marking those entries for a while I saw the pattern. Then during one of my think tank sessions riding my bike. It dawned on me. That every entry we take is a retest entry not one or two but every one if not we stand a very good chance of being stopped. Lets quantify that.
Our reversal trades are signals off a S/R area normally a retest or PPA of that area . The signals themselves our best entries are up or down the wicks of our shooting star or hammer. Which is a retest of that high or low.
Using our higher time frame charts we are looking for a retracement or retest up or down the wick of the previous 4 Hr or day candle . The 35/50 cross or 62 ema. They are retesting those areas where our MA’a are sitting. So if you really look even if your not using retest for your entries see if a retest would give you a better safer entry.
But back to our string of failures, What was happening was simple they were getting into trades once a area had been broken. But then moving their stops after 10 or so pips getting stopped out by the RETEST, If you follow EO’s trades he normally doesn’t move stops before 30 or 40 pips. Unless it is a gump or counter trend trade. which then usually some profits are taken at the ma levels. Also studying the system and in particular the 35/50 cross trade. He uses a 35 pip move past a line as a sign that it may be broken for good. Less than 35 pips and it could still reverse. Just a thought nothing works all the time. But if you have to put a value on it then maybe 35 to 40 pips past a line you can say it has broken.
But if you just look at your charts you rarely see a candle without a retrace on the next candle. So when you think a area has broken wait a minute for the next candles then enter when it pulls back and retest. Again this doesn't replace the rules if your trading off one of the signals you enter straight away or you could miss the trade. This was normally happening when price just broke through a major S/R or Ma line. Not using our entry signals. That is also a way to not get caught wait for a signal.
They do work. But everyone wants to be the guy with the best entry.
Well Hope I didn't bore anyone to bad. Ken
But if you just look at your charts you rarely see a candle without a retrace on the next candle. So when you think a area has broken wait a minute for the next candles then enter when it pulls back and retest. Again this doesn’t replace the rules if your trading off one of the signals you enter straight away or you could miss the trade. This was normally happening when price just broke through a major S/R or Ma line. Not using our entry signals. That is also a way to not get caught wait for a signal.
I have to admit I haven’t read this entire thread. I just looked at the last chart you posted. It made me go back and read a few posts. The chart and quote above describe a scalping method I have been using/developing with very good success. I call it the vertical line method. I look for big red or green vertical lines on my chart at or around S/R:D Their is a little more than that but you get the point. Its nice to see another successful method giving similar signals.
I will now go back and look over your thread see what I can learn:)
Here is a link to download the whole pdf… easier to read
4shared - free file sharing and storage - share folder - EO New Notebook by Ken
This is also on the second post …
Hey Ken,
Here is a copy of my 1h and 15m charts on my trades tonight.
I feel like I’m starting to get it…but then I ended up giving back about 28 pips. I have notes on my 15m on what I was thinking as I traded. I’m thinking I missed a pretty obvious reversal signal on the 15m. Let me know
if my entries are close to correct and what I should have done differently on my last entry. I had my stop right over the brown MA.
Thanks for your help
Jack
Nice Trade Jack . Not a thing wrong but maybe some suggestions… If you had noticed the 4 Hr. PPA you might have moved that stop closer or a complete close .
Hint: you may want to add a 248 ema dotted green line to your 15 min. This will alert you to possible 62 ema trades off the 1 Hr.
Hello.
Jack notice also that there was a bullish divergence ( check MACD or Stoch ) in area of your concern.
Ken I really like this 62 ema 1h touch trade that you had spotted .
Cheers.
Yes the 62 ema is one of the better trade entry when it is in the right spot usually good for a nice gain… Again this is just showing all the possiblities not a recomondation to take them all. But depending on your style scalper longer term. They may ibterest different people different ways. Actually 4 great trades. Up before the news down off the IB up from the support and hyammer then down off the 62 ema. consevative 290 pips on those 4 trades.
Now If you are great at managing your trades taking profits and adding on. Or possiblly hedging at different points and taking the gains a lot more pips can be had.
Thanks for your feedback.
Here are a couple of other trades from last night
Question - on the last yellow arrow on right. What’s the confirmation that
this would be a short trade at the brown MA vs. waiting till the 50ema or 35ma?
Thanks
Jack
If you look now that red candle printed as a dragonfly doji same as a hangman but better. then short off the next candle.good for 15 so far. You can take the trades off the ma’s but you have to understand that your taking more risk. It is with the trend and if you throw your cross hairs on it you have PPA right there also Turned twice on the 15 min chart .
another nice 62 ema trade gbp…