My Iced Latte, Sandwich, Beer, and Midnight Randevous Trading Method
The trading method that allows me the freedom to check my charts morning, noon, night, and late night on my schedule, not the markets schedule!
What type of trading system is this?
What time frames does this system work on?Swing Trading.
What indicators do I use and how are they used?This method can be traded on anytime frame that you would like. I trade it using the daily charts, as that is the type of trading I like. I don't like the pressure of having to have to be sitting at my computer at certain times all the time. I want to get to the computer when I get there. That said, even though I trade the daily charts, I still check my charts at least 4 times per day, on my schedule, when I am able. (Thus the name.) As even though it is daily trading, things can happen and adjustmens made intraday.
How long have I been trading this method?FR Channel Indicator: I use this indicator to help me visualize and determine when price may be close to reaching a trough or a crown and might be poised to swing back in the other direction. Also used to used for possible profit targets. It is most useful for helping determine where price might be in space. Another words, keeping price from becoming lost.
FR Root Indicator: This is an indicator a buddy and I made a long time ago. I use it mainly to help my draw trendlines and to help visualiz divergence.
Stochastic: It assists with divergence and catching an entry that is too fast of the FR_Root indie. Mostly used if price has absolutely hit either the red or green trendline.
Counter Trend Lines: Vertical chart lines that I use to help determine entry and exit points of a trade, and possible confirmation that we are at a strong reversal area. These lines are drew of information from the FR Root Indicator.
What is the risk/reward ratio per trade?Not really all that long, however I have been trading for a lot of years and I have yet to go back to anything I have left behind. I am at the strongest point in my trading career that I have ever been at, and I plan to even get better from here. This trading method is the best thing that I have been using to date and the safest.
Is this a Martingale System?There is no preset determined amount that I use. However, it is save to say that most time, any profit targets start of being 5 times greater than the SL. It is a very safe method with small SL settings and larger TP setings. As such, we may take a few small losses as we move to position ourselves for the swing.
What pairs does the system work with?I used it as one, yes. Because the risk/reward ratios for each trade are so much in our favor using this method, it is the smart thing to do. I just keep track of my losses and when I have reached the point to where it makes sense to adjust my lots to recover all my previous losses, I do so. I think this is the best and safest way to trade the system. However, it is not designed as one and does not need to be used as one.
Why am I posting this method?It works with all of them and I trade them all. Just no real exotics as there are enough pairs for me without them. I trade around 24 pairs and also monitor silver.
What is the objective of the trading method?Because I think I am at the point in my trading where I will benefit more from helping others. I have come a long way in my trading career and my life and I wnat to start sharing what I have learned with others and in turn, given this system the best chance to reach its full potential, as I don't forsee myself trading anyother way than this ever in my life. I think that this trading method is home to me and now I just want to smooth out the edges with the help from others. Bottom line is that trading is boring, and so I would like to share it with others
Goals:I would say that the objective is to use solid methods to determine the tops and bottoms of a price run and placing an entry at those points with a very small SL. Then, letting the trade run, trying not to prematurely pick the end of the run, thus closing out our winning trade and open a trade in the opposite direction too soon.
Template:1. Set SL as close as possible, knowing that it is easy to renter without already having lost a bunch of pips in the mean time.
2. To let the trade go for as far as possible and to use chart sense to exit these trades and not emotion
3. To have as much convergence as possible between indicators before making a decision to enter or exit the market.
4. Be able to trade on my schedule, not the markets schedule.
Introcucing the Indicators & the Method
dust.tpl 13 KB | 49 downloads | Uploaded Dec 22, 2012 8:52am
Trend Channel Indicator (Settings 120,4):
Trend_Channel.ex4 7 KB | 62 downloads | Uploaded Dec 22, 2012 7:25am
This indicator is like a static support/resistence indicator to me. Helping me idnetify the current range, trend, swing highs and swing lows. The indicator consists of 5 lines. Basically I am concerned with the line each side of the center line, as most of the time, price will stay between these two lines, However, if price does happen to go beyond either of these two lines, nothing changes. In order for me to start looking for short entry, I want price to get fairly close to or beyond my upper red upper channel line. It doesn't have to touch it, as sometimes it won't, but I do want it to get fairly close. If it doesn't get close enough, I will keep my current open trade and wait for another wave in the current swing to take me closer. As such, before I start looking for long trade. I want price to come failry close to or beyond my lower green channel line. Make sence so far?FR_Root 1.1 Indicator (Setttings 2,13):
FR_Root1.1.ex4 6 KB | 66 downloads | Uploaded Dec 22, 2012 7:05am
This indicator really has multiple purposes. First, I like to use it to help me identify divergence, Second, I use this indicator to assist me in drawing my counter trendlines. These counter trendlines are crucial to the system, and getting them right can make all the differnce.Stochastic (Settings 5,3,3):
SupDem:Used to help me with a little more aggressive entries if needed. It also helps me identify divergence and, on that rare occassion when price action is so strong that FR_Root is not quick enough to help with trendlines. This is a secondary way of exiting one trade and entering another in the opposite direction.
SupDem.ex4 13 KB | 50 downloads | Uploaded Dec 22, 2012 8:57am
Chart Lines:I basically just added this indicator as another tool to help with support and resistence areas, as that is what this whole system is based off of. Buyin of support and selling of resistence. I am just using default settings and despite what it shows me on the screen, I don't know much else about it.
Setting the Stop Loss:I use diaganol counter trend lines to also help me when determining an entrance or exit point. I will use action of the FR_Root indicator to determine which two candlesticks to place my counter trend line through. Once these two points are determined, it does not matter if the line goes through 5 other candles or 20 other candles in placing that counter trend line. Once I place that counter trend line, then wait for price to either go beyond it by the distance of the squared off the "crosshairs". Or, I will wait for price to go beneath the highest low, or the lowest high of the nearest candlestick that is beyond the counter trendline we are working with. At this point I will than exit an open trade, before entering one in the other direction.
Trading Scenarios:Once the trade is entered it is time to enter the stop loss. I am currently trying to decide on the right method for doing this, as I don't like to let the trade go against me too far before closing out, yet we are on the daily chart and I would like to give it room. Perhaps the ATR of the 4H chart, or one thing that I have done is take the distance between the green and red channel lines, and then divice that number by 4.5. This means that we should be close to a 4:1 ratio in our trade which is good odds. As well, the ATR of the 4H chart should but this ration in out favor as well. I have not really decided on anything concrete yet and am currently looking for what may be easy and consistent. Usually then I will cut my SL in half once price reaches the center line, putting the odds even more in my favor of having a winning system. This is also way I use it as a martingale, but not after each loss. I could go many losses in a row before having to calculate in the martingale. That is why I am not afraid of a martingale in this situation.
How to draw countertrend lines:There are four things that I look for when entering a trade. Two of them have to there or I will let my open trade ride.1. Is price close enough to the red or green trendlines for my liking?
2. Do I see divergence anywhere on my chart?
3. Has price crossed my counter trend line.
4. Price hitting support or resistence of the SupDem. (I would most likely look for to supporting scenarios with this)'
Drawing Trend Lines using FR.docx 23 KB | 63 downloads | Uploaded Jan 2, 2013 9:49am
Since there is so much opinion on the best way to draw trendlines, I have from here forward decided to draw all trendlines using primarily my Root Indicator. Using this, there is no more guess work when chosing what points to use. There are a few times when using the root indicator won't work, but there are other ways to deal with those situations, and it doesn't happen very much. Enjoy and Happy New Year -In Conclusion:
I hope you enjoy it!This is a great trading system if you are interested in not spending your whole day at the computer trying to find the right place to enter the market. The set-ups are easy to see at a quick glance and you are back to going about your day. If it is time to enter or place a stop, this as well takes very little of you time. To me, this trading system offers me exactly what I am looking for in a trading system, as it does not eat up my whole life. I have studied charts for many years. Litterally just studied them and have tried many things. 99% of the things out there are not for me. But, every week I have gotten better and more confident, and as such, this is my best work to date.
Live Life Large, Dust