2009.09.10 DRAIN THE BANKS - LIKE A RAT

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tfg
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Postby tfg » Tue Jun 29, 2010 9:15 am

Hi, Avery,

I 've been a green rat doing ok outside the 20 pips daily high/low. However, when I tried green rat trade within the 20 pips daily low, the price kept breaking to a new low and killed the green rat, like catching a falling knife. Clearly, I seem to miss something quite key here but don't know what...?

I trade cable and euroyen on M15. Any suggestions that it can help me to better identifying a true reversal of daily low? Appreciate it.

tfg

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TheRumpledOne
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Postby TheRumpledOne » Tue Jun 29, 2010 11:33 am

Image

"Now, 2 patterns of market behavior happen on a regular basis:

1) the price breaks to new high's (or low's)

2) the price reverses from new high's (or low's)

They happen regardless of time frame (with the obvious limitations explained above)

They are phenomena that can be exploited without the fear if found out by others, that they might cease to exist." - H. Rearden


1) price within 20 pips of the daily low - that is OPPORTUNITY

2) red candle closes

3) green candle closes - note the high price of the green candle.

4) enter long at the green candle's high price

5) STOP LOSS IS 10 PIPS

6) Take whatever profit you can.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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Postby TheRumpledOne » Tue Jun 29, 2010 11:38 am

tfg wrote:Hi, Avery,

I 've been a green rat doing ok outside the 20 pips daily high/low. However, when I tried green rat trade within the 20 pips daily low, the price kept breaking to a new low and killed the green rat, like catching a falling knife. Clearly, I seem to miss something quite key here but don't know what...?

I trade cable and euroyen on M15. Any suggestions that it can help me to better identifying a true reversal of daily low? Appreciate it.

tfg


Post a chart and mark your entries so I can SEE what you saw.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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flex
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Postby flex » Tue Jun 29, 2010 11:51 am

yes, i'm sure my entries were correct. i posted a couple of charts several weeks ago.
and i only "hopped" to rat trading since mo recommended this to improve my zline trading. but somehow for me it feels like catching a falling knive as well.

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Postby TheRumpledOne » Tue Jun 29, 2010 12:08 pm

Image

RESULTS.

"The technique is so simple that just several lessons (or a few pages of explanations) cover it all. Now what? Now the student has to practice, practice and practice again to understand what he had been taught. The teacher DOES know much more than the student, but his understanding can't be "passed", "transferred" or taught in any way -- not even by reading books."
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Postby TheRumpledOne » Tue Jun 29, 2010 12:27 pm

if price moves in your favor 2 pips and then stops...

if you do not take 2 pips and lose 10

who is to blame?

here's what happens...

first trade...

price moves up 2 and stops

trader takes 2 pips and then price zooms up another 20 + pips

trader gets mad

second trade

price moves up 2 pips and stops

trader THINKS and decides NOT to take the 2 pips

price drops and stops trader out

so... 2 + 2 = 4 (RAT)

or

2 - 10 = -8 (YALE STUDENT)

YOU DECIDE

WHEN PRICE STOPS MOVING... DO YOU KNOW WHAT WILL HAPPEN NEXT?

the idea is to be PROFITABLE PERIOD
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Postby Soondoock » Tue Jun 29, 2010 12:51 pm

Hello everyone,
I have been following this thread for a while and decided to register today. The approach to trade RAT rev. seems to be good but only one thing bothers me. It is that our Sl of 10 pips is higher than our TP according to the example above. Also I think many people trading brokers with spreads so it is even more complex.

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Postby TheRumpledOne » Tue Jun 29, 2010 2:06 pm

SL may be higher than REALIZED TP and that is why you set a reasonable daily pip goal and QUIT TRADING once you reach it.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Soondoock
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Postby Soondoock » Tue Jun 29, 2010 2:21 pm

TheRumpledOne wrote:SL may be higher than REALIZED TP and that is why you set a reasonable daily pip goal and QUIT TRADING once you reach it.


Ok I understand. I have daily goal of 25 pips and weekly 100 pips.
So if I would take about 2-4 pips per trade (average 3 pips) I need approx. 8 trades to achieve my goal.

Also I have question about 20 pips range of daily hi/Low. I am GR. For example I have setup. Bear candle closes near daily low, next candle is green it is also closed but it's high is outside of the 20 pips range, should I open trade then when next candle break it's high?

Soondoock
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Postby Soondoock » Tue Jun 29, 2010 2:22 pm

duplicate
Last edited by Soondoock on Tue Jun 29, 2010 2:30 pm, edited 1 time in total.

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