The Grail (a system that is profitable)

How nice would it be to have the Lotto numbers before they have been drawn? Would that be the Grail? This is what this thread is about. We will foresee the next bar. At least the direction of the bar. Size would be nice too and maybe if there will be more bars following in the same direction.

What is the grail. Well it is a biblical phenomen and not a trading phenomen so let me define what i go for. The Grail is for me a system that is profitable. If I can foresee when a strong bar happens and get it right in 80% of the cases, then that is a grail for me.

In this thread I will find the best ways to foresee a strong bar on the Daily. If that can be achieved in more than 70% of the cases, then we have the grail.

When we manage to have the right next bar on the Daily, then we can trade the M15, M30 and M60 in a successful way.

There are some requirements for this thread.

1. Nice behavior. Of cause.
2. Only Metatrader charts and tools are allowed. Threads are these days being floaded by Trading View. The two systems are different and so are the tools. This makes a combined thread irritating to follow. So - this is for Metatrader traders. Preferrable MT4 which is an easy and mature system. But MT5 charts and tools are allowed, as they are much alike.
3. When a chart is published, it must show which instrument it is, the timeframe, the timeline at the bottom of the chart and the price in the right side of the chart.

The method
On this chart we have a nice daily bar. Very small wicks. This is the perfect bar to trade on lower timeframes.

On next chart you see the exact same bar on the M30. For a small risk you get an enormous reward.




The third chart shows the heart of the method. Identify the trending instruments - more on that later. The chart contain the Traffic Light, which is EMA 20, 50 and 100. Green, yellow and red. It is so easy to see in a glance, if the chart is trending. The pink line is the price.Yes - it's a Line chart. Seldom used by we traders, but in this case it is perfect. It gives a clean chart and it is easy to spot pullback and bounce. And here is the secret. After a bounce in a trend, the trend will normally continue. Vupti, we all know that. Nothing new, but this way it is very visuel. I marked 5 nice bounces.


Below is the Template. I want that we use this template to find the charts to trade. We can change it along the road, but in agreement. The chart contain the Traffic Light, which is EMA 20, 50 and 100. Green, yellow and red. Then the Pips29 indicator. (This is the profile Pips29 that had a change to the original indicator. I have the original - just need to find it). This is made of 4 CCI tools. They cover the actual and the next 3 timeframes it is highly effective.

I belive that we need some momentum indicator too. Let me hear from you?


The selection of instruments to trade. The picture below shows 25 FF pairs I follow. Of these I want to find a handfull to follow during the coming day. So I close down pairs that are obviously not trending. The pairs with cluttered traffic Light are the first to go.

I closed 8 charts. Now there are 17 charts left below. The chart size is now bigger, so I can better find some more cluttered traffic lights. Then I judge the CCI. I want a nice long uniform red or blue colour, which show that we are in trend. So I close down pairs that does not confirm this.


Now there is 15 nice trending candidates left on the screen shot below. Then it is time to analyze each of them Top/Down to identify the handful that I will trade.



I have found 8 pairs to watch.


Now put on the indicator I have made. It is just called Alarm. When price cross the Moving Average line you get an alert. Use the 20EMA which is the green line. You can decide if you will have alarm on the screen and to your Iphone - if you have the MT4 App on your Iphone.

Or you can write a price level that you want alarm for.

Trading
We have found the pairs to trade. We get an alert when there is a line cross. Go into the chart and judge if it is a nice bounce. Then go down in lower timeframe to trade it. I like signals at H1 and to trade them at M15. But you might like different.
How do we trade it? That's the next. I have my way, but let me hear from others. I will show my way later.

Note, there has been a development since I started the thread, so please don't take too much notice of posts 2 to 7. It is not possible to delete them.

Maximum attachment has been reached for Post#1. You can find the indicator Pips29 in Post#8.

Hey RiskFighter!

Cool thread! As you know I dabble in coding as well...
Let me tell you about my experience.

First. Using the Daily time-frame for lower timeframe trading is a very good starting point. And in my opinion even a must have for automated trading.

There are 2 ways I usually do my HTF filtering... well maybe 3.

1. Simply using EMAs preferably rather short periods. Such as 9-21 or even shorter 6-14.
2. Use the previous Candle (Daily) direction for the current day. You can make it fancy implementing Candle patterns.. like engulfing etc. but... I have never seen a real benefit from that. Just a time waste.
3. Use both at once

Depending on the System/Entry logic one can be better than the other.

Option 2 is very good when you go purely for momentum plays.

Option 1 is good if you want follow the larger context Trend

Option 3 may give you very little Signals.. but may be "lagging" which is also a "problem" with Option 1.
Lagging.. because it takes larger context.

Nonetheless Depending on the Signals those are the options I find the most profitable, even so they seem stupidly simple.

Cheers

Thanks Cog

I agree in all you say. My latest tools is a mtf triple EA that takes all timeframes from M1 to Weekly. I put it on a lot of instruments and find a few that are trending in the whole spectre. I don't know if that will work, but I test it.

The idea in this thread is not only to be right about the next Daily bar - it is also to identify the strong bars. Momentum as you write. Because in a strong bar, there will be many profittable trades with low risk at the lower timeframes.

Thank you for sharing.

Cog & RiskFighter.. Two great minds working together

Just a thing. Not part of the thread, but I am not sure how many traders know this trick.

I am using 6 accounts on a daily basis. Some using real money and some on demo. And I develop strategies and robots. So I should have a screen arrangement rising up on the wall to overview it all. In stead I use this trick and I can do it all on my 3 screens.

The trick is, that you can have more than one desk on you computer.

Ctrl + Windows + D Create a new desk.
Ctrl + Windows + Arrow left or right shift your screen(s) between the desks.
Ctrl + Windows + F4 close the actual desk.

Try it - it ia a fantastic tool that I use all the time.

Just for the fun - if you dit not know this trick, then give this post a like. Then we can see how many traders got some new tool.

Windows + D - This one i knew about (multi desktop, same as on Linux ;-))

Nice one.

Here is the Pips29 Indicator.

OK. Ready for Monday. Now it is first day in a new month. And dictator Trump has in full public declared that USA is best friend with dictator Putin. That might do something with the market. No problem. Both the traffic light and Pips29 are very fast reacting, so we are not led into mistrading and we will see if we have to make a new analysis as time pass.

These were the 8 pairs I watched monday. A few losers, but overall fine and they all keep the direction.

Hi RF,
Now i see what you are working on.
I'l delve into it and 'report' back .. ;-)

First glance, looking good but i'm doing a bit of a head scratch on the bounce, as in what constitutes a good one.

A good one is when the EMA's are in same direction and the Pips29 is looking good. So easy. We expect the trend to continue after a bounce. Of cause there will be loosers. But a 1:3 RRW should take care of that.

Then we can talk about when to trade and news and what have we. It is to be experienced.

This is really nothing. Trading the cross of EMA 21. The thing that is special here, is that with my method it is easy to identify which pairs has a nice trend and only trade those.

Next thing is to go to lower timeframe to trade, when the HTF gives the signal. There the money lies ---- maybe.

My watchlist for tomorrow.

Good night.

Absolutely, tight entry makes significant more money ..
Too many state entries do not matter but an entry with a SL of 3p is to be preferred to one of 30p!
Always try to enter on the wick of the HTF ;-)

Hello RiskFighter!
Nice thread, can you give a more detailed entry exit explanation please ?
Thanks in advance.

From Post #1: We have found the pairs to trade. We get an alert when there is a line cross. Go into the chart and judge if it is a nice bounce. Then go down in lower timeframe to trade it.

So HTF shows a bounce. We think that the trend will continue.
You can say that the direction of the coming bar in HTF is likely to follow the trend. So you know the direction of the bar and that it has some energy. That is my mission with this thread. This will of cause not always work, but I think that it will be very often.

How you trade it is up to you, but suggestions is very welcome to enlighten others.

My suggestion is to go to lower timeframes and find signals according to your normal strategy.

I have updated the alarm indicator.

The first version gave an alarm at any time when the primary moving average was crossed - no matter the direction.

The new one gives alarm only in the direction of the trend and only if all three moving averages are aligned.

The new is called Alarm2. (In post #1)

I have not tested it. Let me know if there are any problems - it should work fine.

OK. Let me show how I trade it on LTF.

I use Heiken Ashi.
Entry signal is when a bar cross the Primary Moving Average. If you use MA 20, 50 and 100, then the MA20 is the primary.

The HA bar shall have wick only in the trend direction.
Follow the trade as watching that the coming bars have only wicks in the trend direction.
If a bar occure that have wicks in both directions, that is an indecission bar. But if it did not change colour, then do not exit, but be on guard.
Whenever the new bar change colour, then exit the trade immidiately.

This is the normal use of Heiken Ashi. I am always talking about CLOSED BARS.

Remember to watch the HTF to asure that direction is still intact.

Nice, Thanks for your response !