The Captains Chest - Naked Trading & Other Stuff

[kwanann]

I.m skipping all nzd and aud primarily cos the long term trend is down, and I hate shorting them, the swap sucks

[HannesJoubert]

Hi All, looking at the charts yesterday, did you also find that there were mostly straight line moves instead of M's & W's?

(Specifically GBP pairs...)

Yay it's Friday

H

[HannesJoubert]

BTW, I am assuming that W's and M's do not appear every day across every pair, therefore we have to scan all pairs everyday to find the best setup? And to confirm, entries on the W's and M's are on the second leg only?

Cheers

H

[HannesJoubert]

Another question on M's & W's...

During periods of consolidation, when the Fox is busy accumulating his positions, is it possible for the M's and W's to "flow into" one another? I am reading through the thread after reading the PDF, and on Page 28 CJ shows a chart asking a poster why that poster thought CJ would take that specific trade.

A response was that there was a W (among other replies) formation. CJ agreed, but also asked if the M formation was seen...When I saw CJ's answer, I went back and I actually saw to M's and one W.

What this means to me at the moment, is that when an M or W has formed, the second move of that specific formation could be seen as the first move of the opposite.. ie. the first \ of the M could also turn out to be the first \ of a W formation...meaning that in theory these moves could indefinately flow into one another (I realise in practice that they won't), but, if what I am asking is indeed possible, then, I could have missed out on one more potential trade...

Any ideas comments?

H

[pips400]

Generally speaking an M or W is a topping or bottoming formation, even though they can occur elsewhere, it's important to not trade a pattern in isolation, just because it's a pattern, but understand the context. An M or W is a reversal pattern, and the idea is to get into a trade at the beginning of a new price move, that means by definition that the previous price move is over, and for that to happen there needs to be evidence of price exhaustion. Another rule, if in doubt don't take the trade, if it's not clear.

[HannesJoubert]

Thanks Pips400.

I appreciate your comments, much like staying on the right side of the trend etc. But looking at a 15 minute chart where the TP is a max 50 pips on those patterns(as far as I can tell so far...) Is it really that important?

Taking the above into consideration, why would there be suggestions to trade from RRT to RRT in the form of swing trading? Price does not change that often, nor does it reach exhaustion that often (i.e. per swing)

My original question still stands though, is it possible to have both an M and a W in four/five legs? Or do they ideally only appear after a full M or W pattern has completed?

3-11-2013 7-57-18 PM.png

Looking at the above chart, I can see an "M" that starts on 8 March at 8am and ends on 11 March at 11 (more or less), but I also see a "W" that starts on 8 March at 16 (4pm) and that ends on 12 March 01 am. But, there is also yet another M that starts on 8 March at around 22 (10 pm) and that leads to the end of the 2nd leg which is the sell position that was opened by CJ as it was culminated in a pin at the last swing high.

Please do not misunderstand, I am not trying to find fault, but rather I am trying to find out if there are more opportunities than those that I would normally see. In the case of this chart, if I take the above into account, I could have taken 3 trades instead of 2...(taking pins and RRT's into account.)

If I remember correctly (and this is possibly the reason for this question) CJ posted a closed position that was a buy (closed in profit) that took place before the open of the sell position shown in the above chart.

So, CJ only took 2 trades, but, is it possible / advisable to take 3 trades?

?

H

[Dagu]

OK I will try to help you

1. 50 pip it's not max TP, it's depend on TF also witch pair do you trade
Check an ADR, it could tell you more how far they will push price

50 pips it's for inside trade (Inside 3day cycle)
When you enter on PH or PL your TP should be 3x ADR or 3x 50 pips or take what is given or exit on third level ; ) your choice ; )
BUT if you miss trade (PH or PL) you can enter on 1 level
also on 2 and 3 level, that's why 50 pip is the target
Remeber fact that trading inside 3 day cycle is not recomended
The best trade's is from PH to PL

and your next question
EVERY M or W pattern is build by many smaller M and W : ) Just check lower TF's : )

On your screen I see second level and a W pattern what means they could push price one more level UP
But I'm green at the moment so don't trust me, observe and learn yourself ; )

best reegards

[kwanann]

, why would there be suggestions to trade from RRT to RRT in the form of swing trading? Price does not change that often, nor does it reach exhaustion that often (i.e. per swing)

My original question still stands though, is it possible to have both an M and a W in four/five legs? Or do they ideally only appear after a full M or W pattern has completed?
H

It seriously depends on the TF you are playing, if u can afford the screen time and m15, swing trade it both ways, that was a pin on the 2nd leg of the w, small loss if hit, high rewards (buy the dips), to would have been at the top or more if it decided to move on. Pins forms again, forming a possible m, again u can swing trade it down with even better r:r than the previous trade.

Just take the m15 of gj and zoom out, u will see loads of m and w all over the place forming the higher tf m and w, it's up to u which one you going to risk

Of course the age old rule applies, if you are not clear, don take it or else take it on demo

[HannesJoubert]

Hi there Kwanaan, thanks for the reply.

I am looking exclusively at the 15 min time frame (see earlier post) whilst I am forward testing due to quicker moves (to speed up learning curve) and the relatively smaller DD and possible loss when compared to 4H & D1

But your explanation above is exactly what I was getting at, that one can swing trade on the 15 m timeframe whilst the M flows into the W and vice versa. Will all trades work out? No, but if you are playing tight stops and you are achieving a decent W:L ratio then you should be okay...you could even try to scalp the swings no? Will a W always follow an M? No, there is not always enough time in the session for that to happen (i.e. speed of the swings).

But, for me it is good to know that it is possible.

H

[HannesJoubert]

Hi there Guys, I'd like your take on the large short pin and then the large long pin during the European session in the attached chart. Would this classify as a stop hunt that allows the Fox to stop out the weak longs & shorts in order for him to get a better price when the true direction takes off?

Sorry if these questions have been asked before, but I am new at this and trying to learn...

H