AHG - Profitable Strategy for Struggling Traders

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I was thinking about 123's and what they would look like at the atomic level, thinking that if price traces through a pattern as it makes a 123, maybe that same pattern could be tradeable on a larger scale.

It turns out 123's and AHG have been bedfellows for quite a while =]

Bullish 123's trace out W's (and sometimes inverted HnS's,) and Bearish 123's trace out M's (and sometimes regular HnS's.)

This is consistent with what Anek and Piscuy have said before, calling them mini-reversal patterns, but I thought it was interesting.

Also interesting, the entry point on the pattern within the 123 matches the entry point on our charts as we play the 123.
 

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Bmwhendrix and fellow traders:
Every single trend is a trend within a trend. Therefore you have to think in more dimensions than one. What you are seing as support on this chart may be just one bar on another. In terms of what you are looking at on this charts is another example or an expanded way of viewing a 123. The fact that you are zoomed in allows you to do more with it than you would normally be able to. So if you think the way a downtrend works (this case what you posted on the chart) it moves down, retraces, moves down and retraces and will keep doing the same thing for as long as the trend is valid.
Now, the entry you marked on your charts is a very valid entry, this requires the confirmation of the break of the low of the last leg down. You can enter on the spot when you see price action starting to move in the direction of the original move. For this you can follow some simple rules. In the case of your chart, since you are using HA you can wait for a red bar, then on the next bar you can buy on the low +1 tick of that first red candle. This allows you to do three things, first you are aiming at catching the more of the move, and second you can also keep a smaller stop in most cases and third it will usually give you an earlier entry than the other method.
There are some people who dedicate their time to hunting for what they call the second wave. This is based on the idea that on the first move of any trend few will participate, once it retraces and confirms itself big boys will come in creating a bigger move and confirming the new trend. You would want to get in at the earliest possible stage of this “wave”. This is how I play it when I spot one of these, adapt it to your risk tolerance and you might get a few points more. Hope this helps you and if you get any more questions let me know.


P.


Quote from bmwhendrix:

Anek, etal. I'd like your thoughts on a setup I have been watching. It probably has a name already that I am not aware of. I like plays where support is broken and price returns to test it, or visa versa. When price does not make it all the way back, it seems to suggest enough pressure that a break out of the last low may be a good play. Attached is a couple from friday.

For myself I call them S/R gap failures.
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Quote from herbertdotcom:

I was thinking about 123's and what they would look like at the atomic level, thinking that if price traces through a pattern as it makes a 123, maybe that same pattern could be tradeable on a larger scale.

It turns out 123's and AHG have been bedfellows for quite a while =]

Bullish 123's trace out W's (and sometimes inverted HnS's,) and Bearish 123's trace out M's (and sometimes regular HnS's.)

This is consistent with what Anek and Piscuy have said before, calling them mini-reversal patterns, but I thought it was interesting.

Also interesting, the entry point on the pattern within the 123 matches the entry point on our charts as we play the 123.
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Herbert, excellent post and graph.

Well done.

Anek
 
Herbert, right on. In fact I was just explaining this to BMWHendrix on a post I just uploaded.

P.
"Give me a chart and I'll Trade it"


Quote from herbertdotcom:

I was thinking about 123's and what they would look like at the atomic level, thinking that if price traces through a pattern as it makes a 123, maybe that same pattern could be tradeable on a larger scale.

It turns out 123's and AHG have been bedfellows for quite a while =]

Bullish 123's trace out W's (and sometimes inverted HnS's,) and Bearish 123's trace out M's (and sometimes regular HnS's.)

This is consistent with what Anek and Piscuy have said before, calling them mini-reversal patterns, but I thought it was interesting.

Also interesting, the entry point on the pattern within the 123 matches the entry point on our charts as we play the 123.
More...
 
Quote from Piscuy:

Find anything of use so far BMW?

P.
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Hey P, sorry couldn't make it today.
This method is freakingly similar to the method I posted and was testing a couple of weeks ago (the one with the red/green dot and the trend bars).

You are not trying to steal my ideas, aren't you :D

Jokes aside, thanks for your great posts.

ps. Anek tell your friend I' ve already reverse engineered
, your oooooohhh soooo secret paint bars ...mmmmmmmbuuaaahahahaha :D :D :D

pps. I'm long 1 lot ES at close, gonna be killed or make a killing on this one :eek: :p
 
Piscuy, Yes I am, Every man is my teacher. I tend to make entries as you suggested on most trades with the 2nd bar after HA color change. On the support becoming resistance type trades i have been hesitant to enter them unless the pullback is almost 100%, for fear of getting stopped with small stops. I guess waiting for the confirmation of breaking to a new low carries a cost. The thing I am struggling with a bit is if that lack of a full return is in some way a measure of the trend strength, so that for example, forming a channel and exhibiting very little pullback would suggest a stronger trend to continue than one that exhibited a full pullback. I think I am chasing my tail on this one, but I'll obsese over it for a while longer I think.

Thanks,
Don
 
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