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Hilary,

Didn't have much time yesterday but just wanted to comment (if you don't mind) on closing your position when an opposing target is produced by the system. I know you have not read the book yet so I hope the following might help:

Targets are not a recognised stop loss and in fact many targets generated by the system are not valid until certain conditions apply so it would be erroneous to use them other than that for which they were intended.

Technically buy and sell signals are given on double and triple top breaks but forex is so volatile I have effectively abandoned using them in that manner. These signals should (technically) also be used when considering whether or not a trend line break is valid. Briefly, if a double or triple top or bottom occurs at or near to a trend line then the line can be considered broken and no longer of any significance. Some trend lines are more important than others however. Those that have been touched previously and from which the price has reversed are clearly of more significance than those that have not yet done so.

So, if an internal trend line (those nearest to the current price action) is broken by a double or triple buy or sell signal then that line is removed. If it was a significant line i.e. one which had been touched previously then the break of that line may also be significant. Depending on your time frame and risk profile you could, in theory, stay in the trade until all but the final exterior (i.e. the very first trend line in that move) has been broken. At that point it is time to get out IMHO. In practice, I think you would be out much earlier perhaps at one of the internal trend lines but even then you could give up a lot of points depending on how far away the price is from your first internal line. You will however, stay in a trade much longer this way so I suppose it is a little swings and roundabouts.

Alternatively a recognised P&F stop method would be to change your chart to logarithmic once in a trade. If you wanted to apply a 6% stop loss for example, adjust the chart size to a 2% x 3 which would provide a 6% stop on as soon as a 3 box reversal occurs. 10% stop would be 2% x 5 of course.

It sounds very complex perhaps but it is really simple I promise you, if I have made myself clear that is. :-))

Hope it helps a little at least.

H,

Many thanks for taking the time to post.

As you know, I haven't read the book and so didn't really know if I was reading the P&F charts right or wrong. In truth the real reasons for not buying the book have got something to do with old dogs and new tricks and I'm concerned that I might overly complicate something which I believe works best when kept simple.

As an example, you may recall that Powercharts changed their URL a few weeks ago resulting in a loss of the stored settings. When I re-inputted everything I saw it as an opportunity to leave out all of the unecessary garbage which I had previously had but which was probably just clouding the issue.

Similarly I had my reservations about downloading Updata and decided to only use it if it could be worked on some very basic principles which I was familiar with.

In short, I will only trade in the direction of the (external) trend and will not reverse a position until it breaks that trend. If a price target prints which is contrary to the trend, I will draw a fresh (internal) trend line and use a break of that line as a stop loss to exit an existing position. Also, if a price target prints which is contrary to the trend, I will draw a new 45 deg trend line in the direction of the price target (thereby forming a pennant) and will only re-enter the market on a break of that pennant.

The net effect of those 3 rules today have been to exit me from my medium term cable position based on the 5-minute chart (will re-enter long above c.1.8650) and to trade the 1-minute short and now long. It has also kept me out of XTA completely and I am still short UKX from yesterday pm and currently about flat.

As I've said, that might be all wrong but it's been working. Long may it continue.

I'm now going to unecessarily complicate matters by looking at the log charts.

:o)

LOL Hilary, if it works then who am I to tell you otherwise :-))

I assure you though, it isn't as complicated as it sounds.

Nothing like a bit of volatility to wake one up in the morning. :-))

Merv's doing Q & A now, Harlosh.

Story so far

BoE sees UK CPI inflation above 2 pct in near-term, then drops to target

Thanks Hilary, Choc.

He's talking about the Aston Villa team and England winning the World Cup now.

:o)

And we still have FOMC and Bernanke this evening.

Oh blimey we're doomed ......... he's gone on to the weather.

Blow Bernanke, Choccie, it's Boro v Sevilla then The Apprentice tonight. Far more important.

Well there's always plenty of that.

Edit - oh I know Hils. I'm going out :)

rpaco - sorry for not replying the other day, I got sidetracked and then forgot :S
I use 19,39,9 MACDs and they work pretty well for me. RSI 10 and PKS 5,5,5 are fairly standard.

Choc
Many thanks will try them. I had been using all fib sequence numbers.

Or maybe the numbers from LOST would be better! :)

Anyway to important things, I think Ruth is just too pushy to win.

Hilary,

I complained to Updata again yesterday re the jumping charts - Thankfully they say the problem will be resolved in the next software upgrade though they haven't said when that will be - experience suggests it won't be too long.

I look forward to that day very much :-)

Thanks, H. I'm currently on my 2nd free trial, but the jumping has been driving me nuts and I certainly wouldn't consider it long term unless that problem was fixed. It irritated me that they kept coming back to me and suggesting that it was something to do with my settings.

Interestingly, I've been using it more to trade XTA than cable.

It has been driving me crazy too Hilary. I don't know why they have suddenly come to the decision the fault is at their end but the sooner the better. Don't think I can stand it much longer.

It only happens on P&F forex charts too for some reason.

Well I managed 100 points on Monday and a little over 100 this morning before closing my position when it first peaked around 11.30. I closed because I had to collect someone from the station and just returned to find it has risen a further 150 pips. What a week it would have been - though 200 points in three days is still a great achievement for me.

Had it been anyone else other than a favourite uncle visiting from Canada I would send them the bill for the opportunity lost. :-((.

:-))

Well done Harlosh

Relatives eh?

Nice trading Harlosh.

Well, Its a very nice feeling cos I managed to grab just over a ton too. My first 100+ pip trade since starting forex. Could have let it run further as cable ended yesterday 200+ but more than happy to take the profit. Hopefully, there'll be lots more to come in the future.