Joe Ross's 1-2-3- pattern - Advice?

[Deuxieme]

Hi guys,

Joe Ross wrote the Law of Charts which is fantastic free PDF about trading 1-2-3 patterns and the "Ross Hook"- Google Law of Charts to get the free PDF - it is fantastic I think.

What Im struggling with is how you know point 1 of the 123 pattern. Following a downtrend is it the absolute bottom before the turn, going up then to point 2 - OR is point 1 the peak after the rise?

Seriously though this is a very intriguing study and I think the "Law of Charts" is the missing piece in my Forex jigsaw puzzle!

 

[elitejets]

The 1 is the low or the high that is not broken and holds as the low or high.
The 2 is the swing that breaks the trend (depending on what tools you use), either by breaking out of a trend channel, trend line break, etc.
The 3 is the lower high that is your short entry or the higher low that is your buy entry. Depending on what trading tools you use that could be a 50% or 61.8% fib retrace or a pullback to a moving average, pivot, or retest of a S&R level.

 

[alfiemal]

Hi, i have been looking at this simple system myself. There is a good thread on Forex Factory about it aswell. There are a couple of different ways to trade it with regards target price and stop position. I follow the same method as Paulus on FF...
People on fxfactory have backtested it and i have also been testing it (not trading it) over the last couple on months and it seems brilliant, hardly any losing days never mind weeks. I have been looking at forex only eurusd & cable, day trading the 5min charts, between 7am & 4.30pm GMT. I am deciding if i should start trading it soon. If i would have traded with a £100k account risking 1% per trade i would not be far off double...
Regards

 

[andycon]

Hi, i have been looking at this simple system myself. There is a good thread on Forex Factory about it aswell. There are a couple of different ways to trade it with regards target price and stop position. I follow the same method as Paulus on FF...
People on fxfactory have backtested it and i have also been testing it (not trading it) over the last couple on months and it seems brilliant, hardly any losing days never mind weeks. I have been looking at forex only eurusd & cable, day trading the 5min charts, between 7am & 4.30pm GMT. I am deciding if i should start trading it soon. If i would have traded with a £100k account risking 1% per trade i would not be far off double...
Regards

I have just read this thread on FF start to finish (took me hours as there were 90 posts), it looks good, I was looking for a system to use on 5 min charts and I like the clear rules. Have you been demo trading it, could you let me know your results.

 

[Hoggums]

 

[Citizen2007]

I see trading has taken its toll on the poor chap.

 

[arabianights]

actually that was him at 3 years old

 

[Chartsy]

a 123 recenty failed on the eurusd daily chart when it slammed into a big swinging dick support level

 

[neil]

I see trading has taken its toll on the poor chap.

Why are you using the photo of Timsk ?

 

[alfiemal]

I have just read this thread on FF start to finish (took me hours as there were 90 posts), it looks good, I was looking for a system to use on 5 min charts and I like the clear rules. Have you been demo trading it, could you let me know your results.

I have not actually been demo trading it as i have been working during the day. But what i do is have a look at the fx pairs eurusd and cable every night and have a look at the trades i would have taken using the 123 with the stops and entry as per the FF thread rules, which i know is not trading but it has been good for confidence with the strategy.
Like i said risking only 1% has still given me a lot of profit over just a couple of months, nearly double. Some people over on the FF thread are risking 5%/trade and making alot more, i personally prefer smaller risk as with 5% a bad run could damage your account too much for my liking...

 

[andycon]

I have not actually been demo trading it as i have been working during the day. But what i do is have a look at the fx pairs eurusd and cable every night and have a look at the trades i would have taken using the 123 with the stops and entry as per the FF thread rules, which i know is not trading but it has been good for confidence with the strategy.
Like i said risking only 1% has still given me a lot of profit over just a couple of months, nearly double. Some people over on the FF thread are risking 5%/trade and making alot more, i personally prefer smaller risk as with 5% a bad run could damage your account too much for my liking...

Ok thanks, I will give it a go and let you know how I get on.

 

[Tritan]

Hi,

Can someone point me to the right thread on FF so I can have a read please?

Thanks

T

 

[swandro]

Hi,

Can someone point me to the right thread on FF so I can have a read please?

Thanks

T

Try this one:

http://www.forexfactory.com/showthread.php?t=232466

In this thread the poster called Paulus is the star of the show and well worth reading.

 

[Tritan]

Try this one:

http://www.forexfactory.com/showthread.php?t=232466

In this thread the poster called Paulus is the star of the show and well worth reading.

Thanks Swandro

 

[nunrgguy]

If you're going to use the hook you have to use a sprat to catch a mackeral.

 

[alfiemal]

Hey, i know this has been closed a while but when trading 123 reversals i know where to place stop and target it can be found easily on the web, but can someone please tell me if there is a 123 reversal and then a ross hook and i was going to trade the ross hook where would i place the stop and target for the rh trade, i cant find anything on it... i presume you place the stop behind the pullback created by the hook but what is the standard target level??

 

[alfiemal]

Ha Ha! I take it you are no big fan...
Only thing i would say is i know someone who is very well known and respected on t2w who uses bias change and RH for entry to his trades, very similar to 123 RH, it is only part of his strategy though. So it cant be that bad?

 

[Cornix]

1-2-3 is a good pattern, but as most chart patterns, requires significant amount of time invested to learn to read the pattern well and distinguish high quality occurrences of it from bad quality setups.

This subjectivity amount is the case with most TA patterns, which is both good and bad. Bad in the sense, that it's really harder to learn to trade them, good in the sense, that it can't be automated, so your edge won't disappear because of some big money bot eating it up completely.