Akuma99 Not So Squeezy Journal

Hi all,

Well I have been doing this on and off for the last year on my blog, but am finding it hard to maintain 4 websites on various topics all at the same time, so I thought why not move my trades here with the friendly folk of FF.

My system uses a few different indicators, it is one that has been a while in the making, but has proved successful over the last year of trading. Ok first a chart before the explanation:

http://img72.imageshack.us/img72/4368/setup5yh.gif

Ok here is a rundown of each indicator, some other information, a link to download it for MT4 if they don't come standard, as well as how I use them:

Bollinger Squeeze (more information | download)
Settings: 20,2,20,1.5,10

The bollinger squeeze is the foundation of my entry warning system, I enter generally only during blue zones, i.e. when a blue dot appears. I do not however use the common method of waiting for the first red dot after the blue, but attempt to pre-empt the move early on. This makes it more risky but more rewarding, the remaining indicators aid me in reducing risk.

CCI (more information | comes standard to MT4)
Settings: 50 applied to Closing prices

If the bollinger squeeze is my warning a trade is looming, the CCI is my trigger. I use the CCI as a signal when to enter in the direction I have chosen. So, for example if I have chosen to go long based on the rainbow MMA, bollingers and price action, then I wait for the appropriate long signal from the CCI. This could be things like a zero line bounce, a 100 cross, slingshots etc. More on that as I place my trades.

Bollinger Bands (more information | comes standard to MT4)
Settings: 20,2 on Close

In a way I am doubled up as the Bollinger Squeeze also uses the Bollinger bands combined with Keltner channels to give it's signals, however I use it to aid me on picking a correct level to enter a trade, or show where I may have to wait for price to rest before taking a trade if seems exhausted.

Two Simple Moving Averages (more information | comes standard to MT4)
Settings: 200 and 50

I keep two simple moving averages on my chart, and I use them solely to show resistant and support areas. The 50 SMA serves as another possible entry level, the 200 SMA as a warning not to trade long just below it, or short just above. Also used for confirmation of signals. I do not at any time use it as a crossover signal.

Rainbow Multiple Moving Average (download)
Settings: None

This visually attractive indicator is 88 different Exponential Moving Averages, ranging from the 2EMA up to the 200EMA in slowly increasing increments. As I have stated elsewhere I confess wholeheartedly that it is of no more use to me than another MMA indicator called the Guppy Multiple Moving Average (more information | download) but it just looks good, and if I have to look at the screen for so long then bugger it, let's make it attractive to look at.

In terms of use, I use to the MMA's to show me underlying market conditions. If they are scrunched up together, I know we are in ranging conditions and adjust my entries accordingly, if the spread apart and in color sequence then we are in an established trend, if we are in colour sequence but compressed, we could be in a weak trend etc.

Candlesticks

Ultimately in the end candlesticks are what get me in and out of a trade. I look for formations around areas of interest formed by the BB and SMA's and look for them to confirm CCI signals.

Fibonacci Retracements and Extensions

You will find these on my charts, especially the 161.8 extension as a profit target for times I cannot monitor the trade (such as when I am sleeping), and retracements to determin confluence points with the above indicators. The 78.6 retracement is a common stop loss placement area for me.


Ok to finish up for now here is another chart with some entry and exit areas marked, I will give more thorough explanation of entry and exit points as I post my trades in upcoming days. Happy trading!

http://img63.imageshack.us/img63/1279/setup25ir.png

*NOTE IF THE ABOVE DOWNLOADS DO NOT WORK, ATTACHED IS A BUNDLE OF ALL THE INDICATORS, AND MY TEMPLATE.

TRADE TYPE: TRENDING

May 03 | SHORT | USD/CHF @ 1.2373 | SL: 1.2423 | TP: 1.2246

http://img56.imageshack.us/img56/743/trade12ua.gif

Trend
The rainbow MMA shows we are in a solid established down trend with it well spread out and sloping, certainly nothing to fight against, so looking for short triggers.

Momentum
As is the usual for blue zone trades, no real momentum shown for this timeframe from the momentum histogram, so nothing to take from that. The 4H histogram shows some small emerging downside momentum, the dailies maintain strong bearish momentum.

Trigger
A classic zero line bounce, this is where the CCI tests the zero line from below in this case, and turns, i.e. bounces. I have taken this as a trigger for my short trade.

Resistance/Support
Price is sitting just below the 50.0 fibonacci retracement (my favourite), as well as the 50SMA which I use as a replacement for the upper bollinger band when it sneaks in under it like it has this time. It is also right at previous minor support.

Stoploss/Exit Strategy
Stop is 9 pips above the 78.6 retracement of the previous move down, if it moves past that level then my trade idea is clearly wrong and it is time to reset.

My profit target long term is set at the 161.8 extension of the small swing up that I have opened at the top of. I have opened two lots, one of which I will close at the lower bollinger band, the second at the 161.8 extension or +10, whichever is hit first.

Feel free to throw questions my way if I am not making sense.

Happy trading!

I like your logging... Very similar to what I'm planning to keep in my personal logs... Thanks for sharing..

thanks eastmaels, i find logging like this is as much a benefit for me as it is for anyone else reading it, reminds you to make sure your analysis is thorough

As a sidenote the USDJPY is on a watch for a short trigger also, most like a zero line cross.

So true. Plus, it looks very professional and you get to log your thoughts or basis for decisions for reference later.
Anyway, I don't want to mess up your thread now. Keep it up!

BTW, how long have you been trading this? Is it already a complete system? Maybe you could (maybe for reference later for those interested to use/test this system) come up with a complete manual for this system?
Including Entries, Exits, Position sizing, etc.

Anyway, just an idea.

Regards,
East

I have been trading it in various forms for around a year with success, it continues to develop as most things do but the basic fundamentals of using the squeeze as a warning, look at trend and momentum and find a trigger based on that has not changed.

The 50CCI is a recent change for triggers, and the rainbow MMA has replaced the Guppy MMA in the last few months. The 50SMA is a newcomer recently, the 200SMA has always been there. Now and then I go naked for a week or so to remind myself price action is the core of all systems.

If the interest is there I will look into constructing a manual for sure. I am always open for suggestion on improvements though so please feel free to throw them in the mix.

Thanks for the replies. I also agree with the trading naked. Nothing really beats going back to the source..
I am still currently testing a system so I can't promise to be loyally stuck to this thread but you already got my interest piqued. That's why I asked for the manual..

I do very much like the idea/logic behind the "quiet/calm before the storm". (Not sure if I got my idioms right ). So anyway, please do continue your logs. I will be reading them and post from time to time if ever any good idea/suggestion comes up...

Regards,
East

TRADE TYPE: RANGING

May 03 | SHORT | EUR/JPY @ 143.35 | SL: 143.85 | TP: 142.40

http://img530.imageshack.us/img530/9247/trade21av.gif

In the first post I mentioned two market conditions, ranging and trending, I have just opened a more aggressive ranging trade as shown above where I trade at the limits of the bollinger bands if in a blue zone with CCI trigger.

Trend
At the moment we are in sideways, ranging conditions on this pair, as confirmed by the bunched up rainbow MMA. As such I am looking for bounces between the ranges shown by the Bollinger bands.

Momentum
Non-existant on this timeframe, hence the ranging conditions, again nothing to take from that this time. The 4H also are neutral, the daily downside momentum is easing off so the question is if there is enough left to get to that bottom band. As a point of interest but not a reason to trade, we have larger downside histograms than upside.

Trigger
Not a classic CCI method, but the CCI has hit it's head three times at the +100 level (over 100 shows some strength in the move). I have taken this as my CCI short trigger. This is a little less reliable trigger however.

Resistance/Support
We are right at the top of sideways moving bollinger bands. We had a gimme/pin bar two hours ago that is yet to confirm, I suspect this hour or the US open will do that. The 50 and 200 SMA's are far enough away to let it get some steam up.

Stoploss/Exit Strategy
Stop is 9 pips above the previous high, as this is a ranging trade I am only in with 1 lot, looking for the lower bollinger band, where I will tighten my stop just behind that target and hope for a run to the 161.8 fib extension.

thanks eastmaels, and I'm pleased to hear you are working on your own system, this system spawned from bits and pieces from my own research, other trading methods, books etc. etc. etc. so it doesn't hurt to see what else is happening for sure.

http://img525.imageshack.us/img525/9141/trade1b8da.gif

Have closed 1 lot at the bottom bollinger band as planned, while the second lot has now been stopped out at +10. Things are setting up for another trade almost identical, just waiting for a CCI trigger.

Trade Result: +49

TRADE TYPE: TRENDING

May 04 | SHORT | USD/CHF @ 1.2373 | SL: 1.2405 | TP: 1.2291

http://img138.imageshack.us/img138/9960/trade39bo.gif

Almost a carbon copy of last nights trade, in fact the exact same entry price, worked last time so why not again.

Trend
The rainbow MMA shows we are in a solid established down trend with it well spread out and sloping, certainly nothing to fight against, so looking for short triggers.

Momentum
As is the usual for blue zone trades, no real momentum shown for this timeframe from the momentum histogram, so nothing to take from that. The 4H momentum is neutral while bearish daily momentum remains.

Trigger
Another zero line bounce, same as last nights trade, taken again as a trigger to go short.

Resistance/Support
Price failed to break the 78.6 fib (point of no return) of last nights small downside move, trade taken just under this level, which once again coincides with the 50SMA which has proven itself as solid resistance yesterday. We are also once again near the top of the BB.

Stoploss/Exit Strategy
Stop is 9 pips above last nights high that we traded short off, while we are looking for the bottom bollinger band for our first lot, and the 161.8 extension, which coincides with previous support for our second lot (or +10, whichever is hit first).

Happy trading!

Didn't turn out as hoped on this one, stop loss has been hit.

http://img96.imageshack.us/img96/4975/trade2b4fv.gif

TRADE RESULT: -50

Hi akuma,

Maybe you could also post a chart for the point where you got stopped out?
Just a suggestion though and if it's not troublesome..

Happy trading too!
East

P.S.
For the record, the system I'm currently testing is not something I came up with or built.. It's Diallist's..

Good suggestion eastmaels, I have updated the above post with the relavent chart. Best of luck with Diallists method

Thanks for the update akuma..
I also don't like moving my init stop...

Happy trading again.

Regards,
East

TRADE TYPE: TRENDING

May 04 | LONG| EUR/USD @ 1.2373 | SL: 1.2588 | TP: 1.2705

http://img318.imageshack.us/img318/6288/trade40vl.gif

Trend
The rainbow MMA shows we are in a solid established up trend with it well spread out and sloping, very small compression in short term MA's as well confirms strength.

Momentum
Downside momentum is fading off on the 1H charts, 4H momentum is neutral while there is strong bullish momentum on the daily charts. Nothing there to stop the trade.

Trigger
Sitting at the lower bollinger band, even a weak CCI signal will do in the current strong up trend, this was given with a cross back up through the -100, signalling downside momentum may have finished.

Resistance/Support
We are far enough below the 50SMA to get some steam up to push through that, no immediate upside resistance to fight either. The two red horizontal lines are reported areas of stops, while the green horizontal is a reported one touch option level which would provide the main resistance area.

Stoploss/Exit Strategy
My stop sits below the previous stop area that was successfully defended. My only concern on this trade is how long the trend has been in place, and also some impending news from Europe, so a tighter stop and only one lot.

Profit target is just beyond that option level at the 161.8 expansion level, I will see how it goes approaching that option resistance.

Happy trading!

[edit: you can see this post is after the fact and things have moved nicely in my favour, break even is now locked in, as price seeks that option level]

This unfortunately was stopped out at the stop loss level, before making a nice run of 80 pips in the trade direction. That is how it goes sometimes.

There has numerous setups and triggers today in all USD pairs, too many to list here, but check your 1H charts, especially the USD/JPY, turning right on the 200SMA/bollinger confluence.

TRADE RESULT: -32

TRADE TYPE: TRENDING

May 03 | LONG | AUD/USD @ 0.7677 | SL: 0.7627 | TP: 0.7748


http://img504.imageshack.us/img504/507/trade51qy.gif

Short on time at the moment so no big write up on this trade, but note the chart and accompanying bubbles, this is of course posted a fair way into the trade.

Trade was manually closed (both lots) at the upper bollinger bands at first sign of candle weakness, especially as it is 2am in the morning for me and I sleep better with the pips in the bank

TRADE RESULT: +80

http://img264.imageshack.us/img264/1613/trade4b5ui.gif

As per the above trade on the Aussie dollar, this one has been manually closed as I head to bed just below the option strike level which is showing signs of being defended aggresively. There should be another attack at that level while I am asleep and may well get to the profit target, but Ill lock in the profits for a good nights sleep.

TRADE RESULT: +68