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Congratulation Simba on the thread, there is always something good and useful to learn from you, I am happier that Oily was banned “even though it’s for one week "
I am looking forwards to see your comments on the patterns
Thanks Minime,
Please find a completed pattern with 100% target in GBPUSD H1,although its hump goes to the 61.8% level ,so,it is slightly out of the norm.
My comments:Pattern seems to work better if..
1-H1 or higher tf
2-Next higher tf trend goes in the direction of the pattern
I have forward tested an m5 pattern for the moment,on GBPJPY,with a loss of 36 pips.I will forward test during the rest of the week the dragon patterns that comply at least with one of the 2 "hypothesis" above.
Then ,end of this week,I will explain the next pattern..and next week will forward test both of them,before going ahead to the third one.
Prasxz,yes,I believe that to be so,I think that above h1 for Forex is ok.
For futures,indexes and bonds,specially the highly volatile contracts,the higher the tf,less noise level,so,very probably,they will work better.
Please feel free to post any of your 123 trades...if you feel like doing so.
I advance the second pattern explanation ,since there is one just made and being currently forward tested.
SECOND PATTERN:Market Structure High(MSH)
1-Near Resistance,or key moving average levels.
2-Defined by:New high+higher high+lower high of the CLOSE(for Forex)...can be done with 3 or more candles...sometimes the last candle is an engulfing candle.
3-ENTRY:2 options..either or A-A close below the low of the third candle...or(the one I used)B-Price goes below previous candle low,if it is the low of an insideor a very small candle.
4-Stop:Above the MSH pattern`s high
5-Target:2 options either or..A-TRAILING STOP USING THE PREVIOUS BAR HIGH AS THE STOP..When price CLOSES above previous bar high..exit
B-When prices form an opposite MSL(Market Structure Low) near a key or significant level,I will try to explain the MSL later today but conceptually it is just the opposite of MSH.
See attached pic,with the trade working..will update.
Another MSH..this time for GBPUSD H1..Trade is being forward tested too...will update.As an additional comment would like to mention that there has been a penetration and then a rejection of the top at 199.59 done on the 30 of January.
I advance the second pattern explanation ,since there is one just made and being currently forward tested.
SECOND PATTERN:Market Structure High(MSH)
1-Near Resistance,or key moving average levels.
2-Defined by:New high+higher high+lower high of the CLOSE(for Forex)...can be done with 3 or more candles...sometimes the last candle is an engulfing candle.
3-ENTRY:2 options..either or A-A close below the low of the third candle...or(the one I used)B-Price goes below previous candle low,if it is the low of an insideor a very small candle.
4-Stop:Above the MSH pattern`s high
5-Target:2 options either or..A-TRAILING STOP USING THE PREVIOUS BAR HIGH AS THE STOP..When price CLOSES above previous bar high..exit
B-When prices form an opposite MSL(Market Structure Low) near a key or significant level,I will try to explain the MSL later today but conceptually it is just the opposite of MSH.
See attached pic,with the trade working..will update.
GBPJPY Trade closed at a profit of +101 pips..GBPUSD still open.For the moment we have 2 trades closed one at a 36 pips loss(Dragon m5) and another at 101 pips profit...
gbp/usd doing fine so far(+70 now, looks like everything that i traded today worked):-)
I would digress here for just a second. One thing that I agree with Mr. Oily/Shady character is the relation of one currency and its crosses to another. I always have up eur/jpy, gbp/jpy, eur/gbp, eur/usd, usd/jpy, gbp/usd. If one of the 2 pairs that i trade mainly e/j and g/j, sometimes i trade g/u and e/u like today, move in opposite directions, I check the crosses, it helps me see the light through the tunnel of this FX mumbo jumbo, sometimes it seems really confusing and it is actually not.....
Just wanted to give you heads up at what I look to when I am confused, sorry Simba for the distraction. Otherwise, I look forward to the next patterns. I am also waiting to recieve the book, like a kid in a candy store
gbp/usd doing fine so far(+70 now, looks like everything that i traded today worked):-)
I would digress here for just a second. One thing that I agree with Mr. Oily/Shady character is the relation of one currency and its crosses to another. I always have up eur/jpy, gbp/jpy, eur/gbp, eur/usd, usd/jpy, gbp/usd. If one of the 2 pairs that i trade mainly e/j and g/j, sometimes i trade g/u and e/u like today, move in opposite directions, I check the crosses, it helps me see the light through the tunnel of this FX mumbo jumbo, sometimes it seems really confusing and it is actually not.....
Just wanted to give you heads up at what I look to when I am confused, sorry Simba for the distraction. Otherwise, I look forward to the next patterns. I am also waiting to recieve the book, like a kid in a candy store
1-GBPUSD TRADE CLOSED:+71 pips.....number 3(by hand) at the statement attached
2-mpower..no problem,just the opposite ..your opinions are always appreciated and very often taken into account ,yes currencies,have a different volatility than some Futures..and one of the tricks with them is to take care to check several pairs and pair combos...and look for the strongest and the weakest currencies...ie:if your system tells you that gbpusd up,gbpjpy up,gbpchf up,eurgbp down...we have a strong one :gbp...then if eurjpy up usdjpy up chfjpy up...we have a weak one jpy...so we look to go long gbpjpy...more often than not things are not so clear,but a few times they are.
3-There are no more open trades left,see second pic,I had some nq(nasdaq) and es(sp500) open trades but they are now closed..so,starting account of 25k usd,at 20 Jan 2008, is now,26 Feb 2008, at 102.9k$..I will use this account to show the trades taken,and since there are going to be other trades there too,besides the patterns,I will mark the ones I take according to the patterns.
4-some of the exits I take here are not "according to the rules"..my rule is that if I can not monitor a trade(I have to go to sleep now),I close it unless I can use a clear stop point...the rules of MSH require constant monitoring, h1,h4 closes in the 2 cases traded.
Good night my friends
__________________
Equo ne credite,Teucri.
Last edited by SIMBA; 02-27-2008 at 09:59 PM.
Reason: add attachment
I advance the second pattern explanation ,since there is one just made and being currently forward tested.
SECOND PATTERN:Market Structure High(MSH)
1-Near Resistance,or key moving average levels.
2-Defined by:New high+higher high+lower high of the CLOSE(for Forex)...can be done with 3 or more candles...sometimes the last candle is an engulfing candle.
3-ENTRY:2 options..either or A-A close below the low of the third candle...or(the one I used)B-Price goes below previous candle low,if it is the low of an insideor a very small candle.
4-Stop:Above the MSH pattern`s high
5-Target:2 options either or..A-TRAILING STOP USING THE PREVIOUS BAR HIGH AS THE STOP..When price CLOSES above previous bar high..exit
B-When prices form an opposite MSL(Market Structure Low) near a key or significant level,I will try to explain the MSL later today but conceptually it is just the opposite of MSH.
See attached pic,with the trade working..will update.
For this pattern what is meant by a lower high of the close...do the bars that make higher highs have to have higher closes as well?
For this pattern what is meant by a lower high of the close...do the bars that make higher highs have to have higher closes as well?
Thanks for your question:
A new High,higher high,lower high of CLOSE...though IMHO,I will personally require the highs(at least the first 2) to be higher.
For forex,we are trading one pair against the other,in stocks,indexes,etc,the actual definition of MSH,doesn`t specify the close,the definition is "new high followed by higher high followed by lower high"...you will understand in a moment ,when I explain the definition of MSL(Market Structure Low) that we have to take a symmetric view,for Forex,to use MSH
MSL:"A new Low,lower Low,higher Low of CLOSE,please see the word in caps,MSL is based on CLOSE values,not lows or highs".
A MSL based long is triggered when prices close above the highest high value of the MSL pattern .A stop is placed below the lowest low of the MSL structure to protect the trade..and the targets and trade management are target for exit either a reversal MSH formation or a previous Resistance area or a close of a bar below the previous bar low .
Since Forex is symmetric,I believe that in this case MSL and MSH must have the same requirements...I will check with Suri to seek his opinion..additionally ,I prefer the highs and lows to be higher and lower respectively too..and I will check this too
A-A close below the low of the third candle...or(the one I used)B-Price goes below previous candle low,if it is the low of an insideor a very small candle.
Linear Mode
