Forex Factory (https://www.forexfactory.com/forum.php)
-   Trading Systems (https://www.forexfactory.com/forumdisplay.php?f=71)
-   -   Open Price and Engulfing Bars (https://www.forexfactory.com/showthread.php?t=899487)

trader1234 Mar 21, 2019 1:19pm | Post# 1

Open Price and Engulfing Bars
 
10 Attachment(s)
Open Pivot Price Action System

Intro:

  1. It’s pretty straight-forward system as I like to keep it simple.
  2. Use proper risk:reward / money management when trading and don’t over leverage yourself.
  3. I always look at the bigger picture from 4hr/Daily/Weekly/Monthly Charts before making any decisions to trade.
  4. I trade 28 Pairs, on the 4hr to Daily Charts. This is just my preference which suits my schedule.(But this system works on lower timeframes as well. Just adjust your takeprofit / stoploss accordingly)
  5. Trading market hours (24hrs). I don’t limit myself to certain market hours.
  6. I don’t use an EA or any indicators. You are more than welcomed to put this into an EA to test for yourself.


Note:
- Please don’t ask me about trade results, win/loss ratios, etc... Because not everyone is going to trade the exact same system with the same results. Do your due dilligence, and test it out for yourself.

System:

- Open Price
- Engulfing Bars

The general idea is to look for Engulfing Bars above or below the Open Price Pivot. Above the open price look for buys, Below the open price look for sells.

Open Price (Pivot)
- I use this similar to a pivot point.

  1. The Open Price is dynamic and moves based on the outcome of the current candles high/low/ and close.
  2. If the current candle (let’s call it Bar2) makes a higher high or lower low than previous candle (let’s call it Bar1), then once the Bar2 closes, the Pivot gets moved to the “Open Price” of Bar2.


Example as candles move up
Click to Enlarge

Name: buy1.png
Size: 6 KBName:  buy2.png
Views: 6869
Size:  2 KBClick to Enlarge

Name: buy3.png
Size: 2 KBClick to Enlarge

Name: buy4.png
Size: 2 KB

So for this example, let’s say our Open Price begins on Bar1.
Bar2 makes a higher high, once Bar2 closes, the Open Price Pivot moves to Bar2’s Open.
Bar3 makes a higher high, once Bar3 closes, the Open Price Pivot moves to Bar3’s Open.
Bar4 doesn’t make a higher high, the Open Price Pivot stays at Bar3.
Bar5 makes a higher high over Bar3, once Bar5 closes, the Open Price Pivot moves to Bar5.

This is the same process of moving the Open Price Pivot when price is moving down as each candle is making lower lows compared to the previous candle.


- Looking for Buy Setups (reverse when looking for sell setups):

  1. Price is above the Pivot & has an Engulfing candle

or

  1. Candle opens below Pivot, and closes above Pivot with an engulfing pattern.

Attachment 3278740

Example of a sell setup, Bar1 opens above Open Price Pivot and closes below the pivot, and engulfs the previous candle. Also it doesn’t matter how many previous candles it engulfs as well.

Sell on the open of Bar2
Stop loss is the size of Bar1
Take Profit is the size of Bar1


Just like any system, I always look at the bigger timeframes to get an overall direction of the market before making any decisions. Ie. If trend is up I avoid looking to sell, vice versa.

EDIT: Added some more examples below.

There are 2 options I use to trade.
1) Entries for BUY/SELL condition & adjusting the Open Price Pivot on one time-frame chart (ie. either 4hr, Daily, shorter timeframe is O.K too, but i prefer longer time frame)

2) Entries for BUY/SELL on shorter timeframe but using the Open Price Pivot on a higher time-frame.
- 4hr entries / Daily Open Price Pivot
or
- 15min entries / 1hr Open Price Pivot


Click to Enlarge

Name: 1-edited.png
Size: 54 KB
Click to Enlarge

Name: 2-edited.png
Size: 125 KB
Click to Enlarge

Name: 3-edited.png
Size: 94 KB
Click to Enlarge

Name: 4-edited.png
Size: 81 KB
Click to Enlarge

Name: 6-edited.png
Size: 112 KB
Click to Enlarge

Name: 8-edited.png
Size: 67 KB


acetrader Mar 21, 2019 2:21pm | Post# 2

Simple, chart clean & concise way to trade. I wish you the best with your thread.
___________________________________________________________________

ola08 Mar 22, 2019 7:24am | Post# 3

Simple and unambiguous. Hopefully it brings lots of good results. Kudos.

ChicagoRob Mar 23, 2019 4:58am | Post# 4

I am intrigued by your strategy, since I prefer to trade the daily, one candle at a time. Please continue posting setups per your method.

ChicagoRob Mar 23, 2019 6:10am | Post# 5

Are you including wicks for the engulfing bars?

trader1234 Mar 23, 2019 8:54am | Post# 6

Just the body, wicks do not need to be included.

trader1234 Mar 23, 2019 8:55am | Post# 7

Will try to post setups when I can

laksior Mar 23, 2019 10:07am | Post# 8

1 Attachment(s)
Hi trader1234, in Your example bars 1, 2, 3, 4 and 5 are all bullish. What about the situation below?

Name:  1.png
Views: 6116
Size:  7 KB

1. Bar 1 is bullish and let's asumme the pivot is on the open price of bar 1
2. Bar 2 is bearish and not makes a HH or LL, so Pivot stays at bar 1
3. Bar 3 closes abowe high of bar 1, so pivot goes to open of bar 3
4. Bar 4 is bearish and closes below pivot and we have sell setup

Is that explanation is ok or i've made mistakes?

Sry for poor english

jorgeng Mar 23, 2019 6:15pm | Post# 9

1 Attachment(s)
Trader1234, is this a valid sell since candle 3 didn't had open above pivot on candle1?
Name:  omxs30-190323.png
Views: 6007
Size:  9 KB

trader1234 Mar 24, 2019 12:06am | Post# 10

Hi trader1234, in Your example bars 1, 2, 3, 4 and 5 are all bullish. What about the situation below? {image} 1. Bar 1 is bullish and let's asumme the pivot is on the open price of bar 1 2. Bar 2 is bearish and not makes a HH or LL, so Pivot stays at bar 1 3. Bar 3 closes abowe high of bar 1, so pivot goes to open of bar 3 4. Bar 4 is bearish and closes below pivot and we have sell setup Is that explanation is ok or i've made mistakes? Sry for poor english
Yes, your explanation is spot on! Great job. So once bar 4 closes, we take the sell position with:
Stop loss = Bar 4
Take Profit = Bar 4

The stop loss and take profit aren't hard rules, because when looking at the overall direction of the market and looking for any key support or resistance areas that may come into play. Just another thing to take notice.

trader1234 Mar 24, 2019 12:09am | Post# 11

Trader1234, is this a valid sell since candle 3 didn't had open above pivot on candle1? {image}
Yes it is a valid sell. But the open pivot would have been moved to Bar 3 Open, because bar 3 made a lower low than Bar 1. So once Bar 4 closes below that pivot, the entry would be on Bar 5.

trader1234 Mar 24, 2019 12:36am | Post# 12

1 Attachment(s)
Example Buy setup on the Daily Chart.

My apologies for the bad drawing, but the green line representing the Open Pivot on Bar 3 should be drawn on the open price of Bar3. I know in the image it appears that it is slightly below the open price. Click to Enlarge

Name: examplebuydaily1.png
Size: 10 KB

trader1234 Mar 24, 2019 12:37am | Post# 13

1 Attachment(s)
Another Buy example on the Daily Chart


Name:  examplebuydaily2.png
Views: 5852
Size:  9 KB

trader1234 Mar 24, 2019 12:39am | Post# 14

1 Attachment(s)
Example Sell setup on the Daily Chart.

Here, Bar3 made a lower low than Bar2, so the OpenPivot moves to Bar3. Next is a engulfing bearish candle. Entry on the Open of the Candle after the Engulfing pattern.

Click to Enlarge

Name: exmpledailysell.png
Size: 10 KB

goodways100 Mar 24, 2019 1:05am | Post# 15

You said 28 curr. pairs. Does it have better results on a particular curr pair. Thanks and
Regards

trader1234 Mar 24, 2019 10:56am | Post# 16

I don't have any specific pair that I look at the most. Because I mainly trade on the 4hr and daily time frames, so the setups take time to develop. And I find it to be manageable looking across 28 pairs to look for ideal setups.

If I were trading the shorter time frames ie. 5,15,30min or even 1hr charts then I would probably only stick to 4-6 pairs. Because there will be many setups available.

But I always look for setups that go with the trend and/or be aware of support and resistance levels.

I use very basic trend lines to view the trend, nothing fancy. Like to keep it simple. But I'm sure most ppl would be able to incorporate it into their own trading and the way they gauge trends/support/resistance.

Hope that helps

tidal Mar 24, 2019 10:59am | Post# 17

Engulfing bars is old and legendary strategy to trade. If you can keep with your MM and dicipline. Then compound it. You will get good result. Try to combine it with pivot to see where the trend.

trader1234 Mar 24, 2019 11:07am | Post# 18

I agree. MM and discipline are key. Just keep it consistent and simple.

MCFly Mar 24, 2019 1:36pm | Post# 19

On 4H TF you can use different broker data feeds so that you'll get more set ups.

Arturke Mar 24, 2019 7:26pm | Post# 20

looks very good and understandable simple system. can you show please live example with open entry would like to see how it goes? subscribe looking forward for more examples


© Forex Factory