10.4 Advanced and Counter

[mjws00]

I look for confluence. I will sell into a pivot, wait for a test, and return, watch for price action. Take momentum on a lower timeframe. A bounce or breakdown of a session high, a stall into daily ATR. Or in a perfect scenario take a pending ala 10.4.

Let your creativity flow, or keep it simple. 10.4 has shown a potential move based on OB/OS and well known SR (pivots). We need good entries and tight stops if we are trading counter trend. But sometimes countertrend 4H lines up nicely with trends in other timeframes. Above or below 240 is a very simple definition of trend. There are waves everywhere.

Mike

[rebyte2]

Very very nice, rebyte. I'll take 100+ instant pips with a tight stop all day long.

Stoch addition on your chart looks nice too. Gonna play with that as a pending trigger, I'm fussy and what the tightest entry possible even if it means I have to monitor trades a bit more.

Mike

Hi Mike

The stoch is just to see what differences there is between it and the RSI(2) indy.

Maybe there might be an advantage in having both... but more for seeing discrepancies between the two.

Cheers... Roscoe

[nanningbob]

Just thought I let you guys know I love this thread. I cant teach everything because I will confuse the heck out of everyone. I tried to do that with 10.0 and simply could not keep up with it. So my appreciation and ability to see others adapt is great. I also get to learn because you guys are seeing stuff I am not even looking for. Anyway keep it up and I will lurk in the back ground an absorb your teaching.

[fxozgirl]

I've started to dabble in some CT trades, trying to keep it simple...took 16 trades in 2 days, 13 winners & 3 SL +2.5% increase in account.


I'm looking for exhaustion into the trend with RSI flat lined at the top (where price is above 240ma) with price closing above WMR1 and looking to ride back 1 level. I'm setting a sell pending at WMR1 and setting a hard TP at WP. SL is at WMR2

Example of a nice Eurgbp retrace last night picked up a handy 52 pips

eurgbph4.png

[rosst]

I've started to dabble in some CT trades, trying to keep it simple...took 16 trades in 2 days, 13 winners & 3 SL +2.5% increase in account.


I'm looking for exhaustion into the trend with RSI flat lined at the top (where price is above 240ma) with price closing above WMR1 and looking to ride back 1 level. I'm setting a sell pending at WMR1 and setting a hard TP at WP. SL is at WMR2

Example of a nice Eurgbp retrace last night picked up a handy 52 pips

eurgbph4.png

Sweet! Thanks for the example...

[fxozgirl]

so you guys don't wait for a close .. you just set your pending at the "line" when you see flat lined RSI

In my example above, I got the close above wmr1, pending triggered in the next bar on the way back down.

[mjws00]

the thing is.. i'll be sitting waiting for setup's.. for days i won't see anything at all.. yet everyone i hear from has got trades open left and right, making like 700 pips a week.. i'm thinking.. where are all these setups coming from ? ! lol.. i just don't get it.. when there is no setup from what you guys can see, you just completely stop trading for the entire week until something shows up ? i made 40 pips this week...that was it.. no other trades. i'm not complaining about that.. but you can see what type of setup's i see.. just 1 for the week. ... " ?! " what am i missing here lol

Everyone has different styles. Gertje and Bob are shotgunning his 10.4 setups, I haven't analyzed all the trades, but a LOT of them will be highly correlated. I see them on the setups and often skip 2 of 3 to keep my exposure somewhat uniform. So you have EURJPY, CADJPY, AUDJPY running and they do an addon... so it looks like 6 trades. BUT it is the same trade.

Put the charts up and watch them on a small timeframe. One pair might lead or lag a tiny bit, but the charts are nearly identical. YEN is driving the moves. You get an inflated pip count, but your exposure to YEN is not 1% it is 3%. It's nice when you are right, but equally bad when it runs against.

It is no different when USD, or GBP is moving hard... guys might show 3 trades on the tape, but they are so highly correlated the net effect is the same as tripling the size. Don't let the pip count and numbers fool you. Sometimes the crosses decouple and present unique or more refined set ups within them, but 10.4 doesn't really exploit this.

There may be some advantages to taking all the correlated trades as you are assured to be in the fastest moving cross. The downside is there is no opportunity to truly analyze the individual pairs behaviour and see the subtle things happening. Kind of like buying an index vs. an individual stock. You are also allocating margin to the underperforming crosses and pairs.

I certainly wait for trades to form up. Forcing a trade that is not really there will get you crushed. I'll also focus on the fastest moving crosses, vs taking a ton of correlated B trades. I want to snipe it and kill it. The opposite would be basket trading. Both have their place, each trader is suited to certain things.

Something to think about. We each have to find our way. The simplicity and results the shotguns are seeing is impressive, the bad weeks will be the same.

Mike

[mjws00]

cool, but say you just pinned above the pivot or resistance level with no close, would you be looking to jump in before the body closed ?

I don't wait for any kind of close. If I see a setup and trigger I will jump down many timeframes to see how the market makers are building out the waves, price, and patterns. When I sense weakness I sell. It is perfectly acceptable to wait for a close, or a candle print. But since we get to color outside the lines here, we don't have too. Pendings set are entries at the touch of a level, and will never depend on a close.

If you are reading a particular candle... remember they will often have it display a strong pattern right until switching it at the last possible second. That is why some styles require you to wait for the "print". It will always be a tradeoff between confirmation and limiting your risk i.e waiting for the close vs. fine-tuning your entry to maximize your gain. The masters aren't waiting around, they see and feel the move intuitively and just react and flow.

One of my favorite ways to think about it:

Don't get set into one form, adapt it and build your own, and let it grow, be like water. Empty your mind, be formless, shapeless — like water. Now you put water in a cup, it becomes the cup; You put water into a bottle it becomes the bottle; You put it in a teapot it becomes the teapot. Now water can flow or it can crash. Be water, my friend. --Bruce Lee

Sometimes this stuff consumes me.

Mike

[fxozgirl]

so you guys don't wait for a close .. you just set your pending at the "line" when you see flat lined RSI

In my example above, I got the close above wmr1, pending triggered in the next bar on the way back down.

cool, but say you just pinned above the pivot or resistance level with no close, would you be looking to jump in before the body closed ?

Generally speaking I prefer to wait until a close above pivot or resistance level, however if it looks as though a retrace has commenced and I haven't got a close above, I may either enter at market or place a limit order.

[f451]

I've started to dabble in some CT trades, trying to keep it simple...took 16 trades in 2 days, 13 winners & 3 SL +2.5% increase in account.


I'm looking for exhaustion into the trend with RSI flat lined at the top (where price is above 240ma) with price closing above WMR1 and looking to ride back 1 level. I'm setting a sell pending at WMR1 and setting a hard TP at WP. SL is at WMR2

Example of a nice Eurgbp retrace last night picked up a handy 52 pips

eurgbph4.png

I think that's fantastic trading. 13/3. One thing I will say, is that both Mike's work here and Captain Jack's thread at the moment are showing the one aspect of Bob 10.4 that has huge scope for improvement - placing stops back at the 240 LWMA and position sizing on that basis is absurdly conservative. One's stop should be placed on the chart at a level where if price gets there, you know the premise behind your trade was wrong. No further. For 13 wins and 3 losses you should be looking at a 20-50% account increase if you are risking 2% a trade. I suggest experimenting in demo with positioning stops behind a sensible recent swing, not the 240 MA.

Yes there is a an inverse correlation between distance from the MA and likelihood of an exhausted trend reversing, but this thread is for advanced trading of 10.4 and I think it's time we started to address the biggest limitation of the method as it stands.