thalestrader

6B sell stop 1.6277 targeting 1.6202, but I'll be watchful at about 1.6247 or so. Best Wishes, Thales

Try posting at Ninja support under the "connecting" forum: NinjaTrader Support Forum You might want to try to repair the database first: tools - Options - Misc - Repair database (you have to disconnect all connections first). Best Wishes, Thales

You and me both, brother! In the end, I found back testing to be quite useless for me. But I chalk that up to me not knowing what I'm doing. Best Wishes, Thales

I've never been very proficient at back testing anything other than systems that somehow reduce price to a product/sum/quotient/difference and assign a value based upon the calculation of said equation, e.g. a simple MA crossover system, an OB/OS system using an oscillator. I have no idea how you back test for this [other than to define a 123 by saying if price makes an nBar high, followed by an (n-3) bar low, followed by a (n+m) bar high </= nBarHigh and makes a Low<(n-3) then sell]. In other words, how are you defining a 123 for back testing purposes? I make no claims to be a systems/testing expert, and I really am simply asking the question. Otherwise, I do not see how this approach cannot provide an edge. Certainly, context will sharpen the edge. But even on its own, so long as it is uniformly applied as respect to the degree of the swings, how can it not provide an edge? Every trend change starts with one. And the risk/trade is narrowly defined, so even when one does get the ABC correction that sucks him or her into what turns out to be a mere counter trend correction rather than a reversal, the MM should keep one form any catastrophic loss. Best Wishes, Thales

That is exactly where you are likely to find them, given the logic of the price action, right? The better ones will be at the extremes of recent ranges, while those that occur within the range are not as likely to run favorably, unless it is at the midpoint of the range and follows a test of the midpoint as support/resistance. For example, if price makes of high, falls and breaks below the midpoint of the range, and then rallies back to or just above/below the midpoint, then a short there might be a good one. Best Wishes, Thales

Hi Blowfish, As far as specific context - anywhere within that red rectangle, I am willing to get short if given the opportunity. Best Wishes, Thales

I am glad you asked that question, because it is a great way to let me make some general points that I think may help clear some things up for folks regarding this approach. First, I did not think it would fail. I simply noted that price was doing the things it needs to do to get me short. Specifically, in the case of this trade, if you were to look at a 240 minute chart, you might see where the area between just under 1.4500- just under.4600 should be some tough sledding for the EURUSD, especially if it is sledding uphill. So anywhere a rally stalls within that zone I will take seriously, provided price gives me the proper indications that a short try is a worthwhile risk. As far as the "re-test," of resistance turned support, I fully agree with you. And, had the sell stop been just a few ticks above that level, I would have been very wary too. As it was, there was a 10 tick cushion (I refer 15, but I can work with 10). Now, on this trade, I did miss my first chance to enter on a sell stop at 1.4556, price had dropped to the previous breakout level (1.4445) and bounced hard. Once price traded back up through what would have been my original sell stop (1.4556) I placed a sell stop at 1.4556, and once filled, I placed my stop loss above the 1.4564 reaction high from that initial bounce. Of course, you still may ask why I took the second opportunity to short, right? Well, we had a 1-2-3 within the context of a larger potential 2B, and that leads me right to where I wanted to go with this post. Here is the way I think about price and S/R (none of the following is at all original with me): 1) When price arrives at an anticipated S/R level, there are two, and only two things that can happen subsequently - price reverses, or price continues. That is it. Now, some may say that price can go sideways also. Yes, it can, but that is only a precursor to reversal or continuation. It is going to reverse, or it is going to continue. And sooner, rather than later. 2) I trade breakouts of these areas. Do you remember that some time ago I wrote that not every breakout is a reversal, but every reversal can be traded as a breakout. Trader Vic's 123's define the breakout trade for me. Even when it looks as though I am simply buying or selling a break out of a specific level, you can bet that somewhere, somehow, and without any tricks, I am playing a 123, but some of them are only visible if you zoom out far enough to include the data I am considering. So, a 123 is the manner in which for me, price indicates its intentions - continue or reverse. 3) Trader Vic also amends the 123 with what he calls a 2B trade (I believe he uses the term "criterion," and not trade). In order truly to understand what the 3B is, we must set ourselves straight as to what, exactly, Trader Vic refers when he speaks of a 1-2-3. Here is what a 1-2-3- is (do not skip this, because it may surprise you): The "1" refers, in this case, to the high of an uptrend, the "2" refers not to the pullback low (which we all, following Joe Ross, mistakenly lapse into thinking) but rather the "2" refers to the retest of the high, i.e. the retest of the "1", and it is the "3", the break of the pullback low that triggers the trade. So 1 (uptrend high) - 2 (test of high) - 3 (break to lower low). 3) Sometimes (as our friend kiwi has pointed out) the "2" exceeds the high to which the "1" refers. Hence, the "2B". Now, I am not a fan of trading the 2B on its own, effectively fading the immediate trend. I always want to see price make a 1-2-3 where price makes a high, a pullback low, and a retest of the high that is equal to or lower than the "1" high (remember also that when doing the exercise I mentioned some months ago about labeling the highs and lows that one should consider a high/low that equals the previous high low to be a lower high/higher low). So, while following Joe Ross's nomenclature makes discussion somewhat easier, e.g. I sold the break of the "2" point, it is not following Trader Vic's understanding, and thus it may occlude the meaning of the "2B." Again, I do not trade 2B's on their own (typically), but I will always trade a 1-2-3 within a larger 2B. I hope that helps explain myself a bit better than I have done in the past. Best Wishes, Thales

Current look at the EURJPY and the 6J ... Best Wishes, Thales

I favor USDJPY down and 6J up from here, but whether it pans out that way or not, I do think that the DollarYen is going to move out of this contracting range soon. Best Wishes, Thales

I didn't mean to imply I was in a long gold trade as I am not. I was simply commenting on your chart. When you posted it, I thought to myself that I see what he's seeing, but I would rather have gotten long of gold on the 123 below, and I thought I'd point it out to you in case you hadn't seen it. Certainly you are correct - if I had traded this I'd likely have kept have the position for a higher profit target. Best Wishes, Thales

Hi Motion, Thanks for sharing! I see what you are seeing, but how about this: Your entry would have been an excellent place to be taking profits on a much more favorable long entry 123 reversal off the lows, don't you think? Best Wishes, Thales

If you are looking short, sell the weaker of the two (6B/6E). If you are looking long, buy the stronger of the two. If they both look equally enticing, pick your favorite. I was late getting into the 6E today. I was watching the 6B make its way to my target from last night's long, and I entered an order to reverse long to short. I should have chcked the 6E first, but i didn't. Today I got lucky. The 6E retraced and let me in, and I felt better cutting the 6B loose, Also, do not assume that the Yen crosses are as correlated to the dollar rates as you imply. I have seen plenty of days where long EJ/short EU or vice versa was a very nice combination of trades. Also, do not be dismiss ot of hand a simultaneous short EU/long GU or vice versa. If two correlated currencies are moving in opposite directions, you may have a pair of good trades on your hands - not always, but often enough. Best Wishes, Thales

As I was getting ready to get out of here, I heard my chimes going off - sweet music to my ears. Both PT's hit on the 6E ... Best Wishes, Thales

I took the 6B trade out back and shot it for break even. With the lower low, my 6E stop is breakeven. Limit orders are in, and I have to run out for a bit, so what happens happens. I'll be back in an hour or so. Best Wishes, Thales

Kiwi, I think that if you were to consider the logic of each example, and the desired outcomes, in each case, it is the exit, not the entry, that provides the participant with that for which he or she is hoping. Best Wishes, Thales

6E/EURUSD has been the weak sister to the 6B/GBPUSD, so 6E would be a better short candidate given the same opportunity. Best Wishes, Thales

A lower high means nothing without a subsequent lower low - when short, trail your stops above lower highs, but wait for a lower low before you call it a lower high. Without a lower low, you do not know if you have a lower high, right? Best Wishes, Thales

Yours looks good too ... and how could you have taken a hit on it? Your stop should have been safe as the reaction printed a lower high than the high off of which you should have placed your stop. Best Wishes, Thales EDIT: You may still take a loss on, as might I, but whther you entered where you did or waited for where I enetered, the stop should be 1.6295: (1.6296 high + 1.8 avg spread then round up to nearest whole number on FXCM micro platform (for a long, you would take the Low - avg spread and round down to the nearest whole number).

When it comes to stocks, I am mostly "long only," and if I short, it is usually by being long puts. I look for stocks breaking to new highs, preferably all time highs. I do like to buy pullbacks to prior breakout levels as well. Best Wishes, Thales

And by soon you meant before Brownie starts the Trader P/L 2011 thread, right? Best Wishes, Thales

GBPUSD has a decent look for a potential short opportunity. Best Wishes, Thales

The "Cup with Handle" played out as one would have anticipated it to do.

Current look (7:34 AM EST) at the ES Best Wishes, Thales

Can you name that pattern? Best Wishes, Thales

EURUSD current look ... perhaps ready to make another leg down off the today's high. Best Wishes, Thales