Questions on methods!

Because we keep getting the same questions,perhaps P.T.'s post here would be of value to newcomers!

quote:

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Originally posted by vast524

I wonder where I should read about the rules you are using now to trade with please. Seems that you are using several different charts. ie. Min, tick... I sort of get it but need to try and study the fine print. Thanks

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I would start at the beginning by reading Koolblue's method which he was generous enough to write up and archive for us in the following threads:
Kool's Tools for Time
Kool's Tools for Price
Putting it together

Next, you will want to read VO's ABC pattern in the following threads:
ABC part 1
ABC part 2

Also, I suggest you study each chart in the Chart Forum, where there is a treasure of work and examples archived.

It is important to understand we are each individual traders coming from very different training and backgrounds. We are also using different charting packages. One difference you will notice immediately is Kool is using minute charts, VO is primarily using Tick charts, and I am using Volume charts. Each has its strengths and weaknesses, thus all I can suggest is you go with what works best for you.

For the sake of simplicity, I would start with two or at most three chart time frames. For example, Kool primarily uses the 15, 5 and 1 minute charts, and will incorporate the 60 minute chart ( as we saw today). VO uses the 610 Tick chart and some longer term charts.

Great idea koolblue. I've made this topic sticky so it will remain at the top of the list of topics in this forum and should be easier to find. Thanks to pt_emini for collecting the links together and doing the summary.

Thanks for putting the references all in one place. For someone just starting out and using the 1 min chart as the primary trade chart would you recommend placing buy/sell orders at the 1.618 or 2.168 projection before these areas are hit or is it better to wait for some kind of reversal like a mini abc before entering. From watching over the last week or so it seems that kool usually puts his orders in before the projection bounce actually happens anticipating that it will work more often than not. Any clarification would be greatly appreciated. Thanks.

Here is the link to download the free PDF "The Harmonic Trader" from Scott Carney: http://harmonictrader.com/harmonictraderpdf.htm
Scott's book covers the 5 point harmonic patterns. There is also very good information about the Fibonacci ratios and their role in the patterns.

http://www.esignallearning.com/education/marketmaster/archive/0403/040403.asp

Thank you for making this a sticky Mods. Very much appreciated.
Regards also to Kool, VO, PT, DT and others for there contributions.

quote:

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Originally posted by einstein

Thanks for putting the references all in one place. For someone just starting out and using the 1 min chart as the primary trade chart would you recommend placing buy/sell orders at the 1.618 or 2.168 projection before these areas are hit or is it better to wait for some kind of reversal like a mini abc before entering. From watching over the last week or so it seems that kool usually puts his orders in before the projection bounce actually happens anticipating that it will work more often than not. Any clarification would be greatly appreciated. Thanks.

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Speaking only for myself, this is what I am doing. I am using the ABC pattern as the trade initiation pattern/setup, and it's associated Fibonacci 1.618 and 2.168 extensions as profit taking targets. In addition I prefer to have some additional confluence line up with the ABC, rather than just an ABC forming out in space all by itself. So for example, I keep an eye on the MP levels, so If I have a well formed ABC off an MP level, I will feel pretty confident about initiating a trade on that setup. There are other levels you can use, such as the floor pivot points, Bruce's high volume zones, and of course the projections off KB's infamous "deadly 15 minute" chart.

Price touching a level, any price level, in and of itself is never going to be enough reason for me to initiate a new position. I need a price structure or pattern to work with at that price level. Also, I am not concerned at all, in any way, with catching the exact high or low tick of any pattern or trend. I have no problem waiting for a clean pattern to form and entering after the new trend direction is established, as long as my profit targets are still reasonable. The nice thing about ABC pattern is, it provides a well defined risk:reward structure to work with. You know going in, exactly where your stop needs to be and profit targets are.

PT, could you explain these comments from the 1-09 thread in relation to your above post? I understand the failed cycle but will your failed cycle ALSO need to fail because a key number gets in the way opposite of your 1.62 and 2.62 projection? Let me know if I'm unclear on that...thanks

"I will also add a little hint in reading the market: for an ABC to "trigger", one of my cycles must fail.

The chart I posted above is a perfect example of the case in point.


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Edited by - pt_emini on 01/09/2009 12:04:04 "

hey PT I'm bumping this up and expanding my comments to see if I'm understanding you. Lets suppose you take an a-b-c pattern that forms off the VA low for that day. You go long as you have a pattern entry at a key number/area. You will target the 1.62 and the 2.62. What happens if the pattern fails and there is no key number at the failure zone to trade off of and you get an a-b-c in the opposite direction..in this case to the downside......will you just exit the trade without reversing short?

If there is a key number and you get an a-b-c short then I assume you will reverse at that to the short side. I'm just trying to incorporate the "hint" you gave with your other comments.

How did the echat go today? Hope it went well

Bruce

Is the volume weighted macd a good study for the ES? And if so what are the best inputs for it? macd length, fast length, slow length

Hi Kool.

Please comment on my application of your method.

BR,
LordAlfa

quote:

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Originally posted by wirechild

The examples from this post use 1.618

http://www.mypivots.com/forum/topic.asp?TOPIC_ID=3877

So what is the difference? I am even more confused now.

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wirechild if you use 2.618 then you need to use it from the start of the move (which is what koolio does). If you use 1.618 you would use it from the end of the move. Do both and you will find that they give you the same number.