the simplest strategy that works

[padutrader]

using a 1:1 R:R and setting the stop loss just beyond the 2-point.

i think 1:1 is a good point: because you are getting in after the breakout is 'confirmed ' ,you have to accept a little less reward so 1:2 is not advisable

 

[DeltaRisk]

“Historical records indicate purchasing the S&P 500 has generally produced positive returns on a long enough time frame.”

That’s what your Edward Jones advisor would say *wink wink*

 

[kj5159]

“Historical records indicate purchasing the S&P 500 has generally produced positive returns on a long enough time frame.”

That’s what your Edward Jones advisor would say *wink wink*

Just buy the American Funds you can't go wrong

 

[1a2b3cppp]

I've found 1-2-3 formations particularly helpful; they're the only "reversal trades" I ever take - all the rest of my trading is with-the-trend (and of course it's possible to trade 1-2-3 reversals only "with-the-longer-trend" for increased reliability, albeit at the cost of a reduced trading frequency).

With care and experience, and careful money management, and patience and discipline, it's not terribly difficult to achieve a 70-75% win rate with these trades, using a 1:1 R:R and setting the stop loss just beyond the 2-point.

I don't really accept, in principle, that "strategies work": I always think that "traders work" (or not), but given the care and experience, and careful money management, and patience and discipline, this is certainly a pretty good and reliable strategy, I must agree. It's based on something real.

Please excuse my mentioning that that AdmiralMarkets "explanation" of them, above, really sucks, IMO. I'm not saying it's "all wrong" ... it's just confused and confusing and very badly written, IMO.

For anyone interested, this link downloads a 24-page PDF on the same subject, by Mark Crisp (not breaching the author's copyright, here: the link is to a download from the "Trading Naked" site, which the author has allowed to share the PDF ... and it does advertise one of his own websites ... but it's also a clear, good, well-explained account of 1-2-3 formations).

Person forgot to draw on their charts where it didn't work.

 

[bone]

I've become a big believer in "Occam's Razor" over the years. The fewer variables the better.

 

[padutrader]

Person forgot to draw on their charts where it didn't work.

why don't you show us? i did not say this was the best ,this is undoubtedly the simplest.
after spending ten years , many more tears and still not understanding many strategies, this is like a breath of fresh air.

 

[padutrader]

yes a up 1-2-3 can, before you can say 123, become a down 1-2-3.

But you can see it, there is no ambiguity, and it takes exactly 10 seconds to learn the strategy.

i am going to teach this strategy to my wife,who is going to retire in 5 years, so she can take care of yourself financially.

 

[padutrader]

Person forgot to draw on their charts where it didn't work.

there is no question of it not working. only it may work for 2 ticks and then the reverse will work!

 

[padutrader]

I've become a big believer in "Occam's Razor" over the years. The fewer variables the better.

Amen
This is absolutely the simplest and it is basic market structure
I knew of this strategy ten years ago.But i did not recognise it's versatility.
now i put entry orders, both on the buy and sell, very often,because if the market is swinging the market has to go in one direction!

 

[padutrader]

Person forgot to draw on their charts where it didn't work.

in the entire yellow box, the yellow arrow shows the only place where the strategy "does not work", where a sell 1-2-3 triggers. but it gives a rr of 1:1 and then a buy 1-2-3 triggers.

in the yellow box there is NO FAILURE OF THE SETUP,THERE IS NO PLACE WHERE IT DOES NOT WORK.

more importantly there is no ambiguity about what your trade should be.
in my 25 years of trading i have not see a better less ambiguous strategy.
In trading this is huge:because in trading, confidence in your trade is everything;
i knew this strategy 25 years ago but i did not realise the diamond in my hand.so i am not surprised when there are many who are making the same mistake