GBP/USD 123's

[Pipmaster1]

Lightning McQueen,

Thanks for letting me know. I appreciate the work you moderators do for the rest us. Thanks!

Pipmaster

 

[deankenny]

i can see pretty much whats going on here in this 123 business, but have you got a ebook, or anything explaining it in detail, like once u get 1 and 2 where should 3 be for a valid entry?

 

[hokid]

I learn somethings new in this post, thanks.

 

[Pipmaster1]

i can see pretty much whats going on here in this 123 business, but have you got a ebook, or anything explaining it in detail, like once u get 1 and 2 where should 3 be for a valid entry?

I'm glad you are getting the 123's. This system produced about 40% in 2010, and thats only trading about half the time. I don't have an ebook, I guess I've never thought of selling my system. Perhaps because I never thought anybody would care to buy it.

I do have wrote down my rules in a 6 page word document. I go into every detail from the 123's, to every indicator on the charts and where they should be. And also every detail about the 5 min and 1 min trigger charts are laid completely out. Nothing is left out.

I've always been kinda protective of my rules, since its represents my life's work...HA! At least the last 8 years are wrapped up into those 6 pages! When I started on this trading journey I thought the system I came up with would generate more than 40% a year, but I wanted to be consistent and I wanted a solid system. So 40% is all I could come up with.

As far as your #3 point. I like to see it retrace 61.8% - 76.4% from the #2 point. That is on the 123 chart. On the 30 min context chart I want to see the RSI 3 and RSI 14 in extreme positions. At this point I would move to the 5 min trigger chart and look for my trigger candle, with Stoch, and CCI in the correct positions.

I hope this helps, as always I'd be happy to offer any further help.

 

[Pipmaster1]

Not a bad 30 min 123. I had some computer problems recently. I put in a new motherboard and CPU this week. Finally feel back on top of trading with my system running smooth again and the holidays behind me! Good to be back. :clap:

 

[Pipmaster1]

I turn on my charts and saw this 60 min 123. I'm a little late on this one, about 10 or so pips late. And to be honest I spent about 2 minutes looking at this one before i got in. So I did enter it on my demo account. Never know what price will do. :cheesy:

 

[Pipmaster1]

Another 60 min 123, maybe price will head down this time?? This trade in also in my demo.

 

[Pipmaster1]

I'm still in this 60min 123. Price pushed up to the 76.4% line and gave a better #3 point. Still waiting for price to come down to break the #2 point.

 

[Pipmaster1]

Price broke the #2 a while ago, looks like it'll continue to move down. We'll see if it hits the 200% line.

 

[Pipmaster1]

Look at how pretty this formation turned out to be. That is such a text book retrace, it simply don't get any better than that! I was sadly not at the charts, or I would've jumped in again and moved the stop down just a few pips above the new entry point.

 

[Pipmaster1]

Price hit my limit!

 

[Pipmaster1]

Thought I'd post one pic of this formation. Love it! Patterns that are high probability are a beautiful thing.

 

[Pipmaster1]

Here is a new 20 min 123 trying to set up. Very clean #2 point. Just waiting for the #3 to set up.

 

[Pipmaster1]

We had another 60 min 123 set up last night. I got tired of waiting for it so I wasn't at the charts when the #3 formed up. But the #3 gave a very nice 76.4% failure, and there was a great 5 min trigger at the 4:50 candle. I just hope that these formations keep coming. They usually are a 3:1 formation and I risk 5% per trade, so if you had at least one winner a week it would very profitable.

 

[Pipmaster1]

I've been watching the silver market since the beginning of the year. At least from a technical point of view. I'm trading options and using just the basic RSI's 3 and 14 on a 12 hour chart. However every once in awhile a text book 123 forms up. Pretty cool how this formation seems to work in many different markets. At least I think this will work. Because we are trading options on a 12 hr chart I don't have to be as precise on my entries at trading price action on the GU on a short term chart like the 30 min.

 

[forexkunta]

That is very interesting. The formation that you are dealing with is wave 5 and the a-b-c correction of the overall elliott wave formation. It is something that happens in all financial markets, at every degree of the trend, so you would be able to see them form on every t/f you want to trade. I made 150 pips on the 1m chart last week on the gbp/jpy cross with a simular trade as what you do on a regular basis. I don't trade the 1M t/f often, but when a setup presents itself, you just have to go with it. The 1M t/f is great for watching for the end of a trend.

I've been watching the silver market since the beginning of the year. At least from a technical point of view. I'm trading options and using just the basic RSI's 3 and 14 on a 12 hour chart. However every once in awhile a text book 123 forms up. Pretty cool how this formation seems to work in many different markets. At least I think this will work. Because we are trading options on a 12 hr chart I don't have to be as precise on my entries at trading price action on the GU on a short term chart like the 30 min.

 

[Pipmaster1]

Hey very good job on catching what the 123's really are, thats exactly what it is. Nobody has seen that its the a-b-c correction before, at least nobody has mentioned it on T2W. When I first was learning the 123 system is was with the elliott wave, however I was never all that good trading the whole elliott wave. Also the 123's seem to have a really high probability all by themselves regardless if the elliott was looked good or not, so I disregarded everything and ended up with the 123's system I trade now.

The 123's in the GBP/USD pair seems to have the highest probability, at least in the currencies I've traded. I traded about 6 months last year and the system generated about 40%. Its just too bad it doesn't setup once a week!

I am impressed that you were able to put that trade in the GBP/JPY. I spent about 2 years trading price action in that pair. But I'm a systems trader, I need something like the 123's to give me price direction. I also tried my 123's but it seemed that that pair is just too loose and fast moving for my 123's, perhaps my criterion was too tight.

That is very interesting. The formation that you are dealing with is wave 5 and the a-b-c correction of the overall elliott wave formation. It is something that happens in all financial markets, at every degree of the trend, so you would be able to see them form on every t/f you want to trade. I made 150 pips on the 1m chart last week on the gbp/jpy cross with a simular trade as what you do on a regular basis. I don't trade the 1M t/f often, but when a setup presents itself, you just have to go with it. The 1M t/f is great for watching for the end of a trend.

 

[forexkunta]

I just happened to be on the right side of the move down and the move back up. I traded the flash crash last year on this pair and did really well on the move down, but got my butt handed to me on a platter trying to time the bottom and going long several times, so when it happened, I waited a bit on the long, and was able to get it right. but I was using the 1M t/f to make sure the turn was in place. I use a system that I customized as a result of some of Elliott Waves courses that I call the Triple 5, which is nothting more than a 55sma price channel with a 5sma on price action, and I take the signals it generates, which so far over the last couple of months, has done well. It is tradeable on all t/f's. I will attach a screen shot. Good luck with your 123's. I have really been watching with interest since you started this thread, but I just don't have the patience to wait for your setups.
Kent

Hey very good job on catching what the 123's really are, thats exactly what it is. Nobody has seen that its the a-b-c correction before, at least nobody has mentioned it on T2W. When I first was learning the 123 system is was with the elliott wave, however I was never all that good trading the whole elliott wave. Also the 123's seem to have a really high probability all by themselves regardless if the elliott was looked good or not, so I disregarded everything and ended up with the 123's system I trade now.

The 123's in the GBP/USD pair seems to have the highest probability, at least in the currencies I've traded. I traded about 6 months last year and the system generated about 40%. Its just too bad it doesn't setup once a week!

I am impressed that you were able to put that trade in the GBP/JPY. I spent about 2 years trading price action in that pair. But I'm a systems trader, I need something like the 123's to give me price direction. I also tried my 123's but it seemed that that pair is just too loose and fast moving for my 123's, perhaps my criterion was too tight.

 

[Pipmaster1]

Here are a 2 more pictures as this Silver trade unfolds. One picture is from last night and the other from a few minutes ago. Notice how the buyers were not able to push price through the #3 point. This was very good to see the sellers hold that ground. Also between the #3 point and where we are at now there is RSI 3 (white line) divergence, all in all I think this is showing exhaustion for the buyers and the sellers will soon be in charge as more and more buyers decided to take their profit. This is just a system, not a crystal ball, I honestly would not be surprised if silver was $1.00 higher by tomorrow morning.

 

[Pipmaster1]

I haven't been able to trade the 123's much this year. But I have been able to do a few Silver trades. I bought silver options at both of these arrows. My options expire in Jan 2013...should do pretty good on this one. :clap: