***Dragon II***

GREETINGS


I offer my respects to countless number of traders from so many different parts of the world who have so generously shared their knowledge, techniques and struggles in these forums.

Thank you Forex Forum for a great place to learn, exchange ideas and progress along the path of successful trading.


The reasons for starting DRAGON II

1. The trading system from the original DRAGON thread has evolved significantly as to warrant a whole separate thread.

2. So that those who may be trying to assimilate the techniques presented in the original Dragon thread may not be overwhelmed or confused by the transition to DRAGON II.

3. The Original DRAGON thread is a valid trading system. DRAGON II is a refined, condensed version.

note: It would be helpful for a new person to study the original dragon thread. There are many good ideas and techniques presented there.
http://www.forexfactory.com/showthread.php?t=217245
Although it is not necessary in order to benefit from DRAGON II.

All that being said here were go.

http://t1.gstatic.com/images?q=tbn:Q...rum-Roll_1.jpg

Drum roll


DRAGON II

http://t2.gstatic.com/images?q=tbn:d...ese_dragon.jpg

There are two basic crosses we look for.
We use two time frames. I like to use the 5 min and 1 min. But this system is good along any consecutive two.

The landscape shows support and resistance, pivot points and the 200 ema.

On the higher time frame we look for osma cross of zero. (Which is a macd cross). Wait until the first bar closes. Consider looking for an entrance after that.

We look for the actual entry on the lower time frame. Look for a cross of the 5ema open/5ema close (shift 2). After a bar closes in the direction of osma on the higher time frame and on the corresponding side of the ma cross enter.

We keep in mind other factors like proximity to support and resistance, the 200 ema.

Screen shots will help to illustrate this.

The basics:

Two charts are open.

For ease of discussion we will use 30 min and 15 min.
(I use a forward running simulator to test and it moves too fast on the 5m and 1m to be practical, hence the 30 m and the 15m for discussion purposes, screenshots, etc but the techniques holds true for 5m and 1m also which are my preferred time frames)

Practice session:
Put 2 30 min charts on the screen if using the simulator. (Live demo could use 5m and 1m)
Locate the osma crosses on both charts and mark them with vertical lines on both charts.(red for down/green for up) The charts should be exactly the same at this point.

turn the chart on the right into a 15 min.
On the 15 min wait for a cross of 5ema open/close (shift 2).
After the 1st candle closes in the direction of the osma marker
enter long if osma marker is green and candle closes above mas.
Place stop below swing lo on 15 min.

Enter short if osma marker is red and closes below mas.
Place stop above swing hi on 15 min.

(If an entry signal has not occurred on the 15m after 5 or 6 bars on the 30 min it may be that the 30 m osma cross has lost its momentum and it would be better to wait for a fresh 30 m osma cross.)

We should be able to catch at least 5 pips pretty much every time.
Of course there is more to this strategy and many more pips to be had. This is practice. Let's see if we can get the entrance right...

Practice this as much as possible. So that the pattern becomes second nature. So that we know what we are looking for almost with having to think about it. A familiar pattern.

Practice. Practice. Practice.

The screen shot shows a bit more than we have discussed in this post but the entrance can be seen. The osma cross on the 30m and the candle closing below the 5ema cross (shift 2) on the 15m.

This is the simulator program.
To place a buy order click on the word buy and drag the word "buy" up, to close the trade click on the word "buy" and drag it down.
Same for sell. Click on word "sell".
set simulator on visual for days desired.

To prepare for using the simulator to test this strategy.
Open an offline 30m chart of the pair to be tested. Mark the osma crosses.
Save as template x. Note what days the osma marks are appearing.

Open the simulator and set for 15m test run for the pair on the days that osma marking appear. When simulator starts to run click on template x.

The osma markings from the 30m, should be there and the testing and practice can begin.

Load the files into "experts" folder..

simulator study
good targets are 200ema, and the woodie pivots and supp and resist...levels.
Institutional investors very often place orders at the levels and the dragon will go there to gobble them up..

Hello Jiva,

Could you please supply more information on how to activate the simulator, ie how to make it function?

Thanks,
Herty

The simulator is a good tool.
put the files in the experts folder. Close mt4. then reopen mt4. click on strategy tester in the menu. (Has a magnifying glass on it, next to the new order tab)
When the strategy tester window opens on the bottom of the screen click on training.
choose currency pair and time frame etc to test.
Sometimes the data for a pair may not be available for a certain time frame, keep choosing a time frame or pair until it starts to run.
There you go...

this is another indi I keep running. shi_channel...
It automatically identifies immediate trends and channels.
The dragon tends to change direction at the outer lines and show hesitation at the median, sometimes reversing and sometimes crossing.
The channels will shift if the dragon makes a significant move and defines a new path.
I find shi_channels helpful.

practice trades on simulator
looking for 5 pips only on cross of emas.
practice practice practice..........
There is an entry in my journal that expresses a little more about some of the psychological issues involved in trading...
http://www.forexfactory.com/showpost...&postcount=684

I Want to continue from Dragon to DragonII.

jiva34, thanks for keeping on keeping on.

Ron

Welcome friend,

Only some of the externals have changed. Japanese candles instead of heiken ashi, just 1 indi - macd with osma (no dss), and use of a 5ema open/close cross (shift 2). The basic idea is the same. The landscape is the same. the dragon is still the dragon.

This version of "senor dragon" gives us a little better control over entries. The emphasis on price action is more pronounced with indis playing a supporting role. After all what he is actually doing is much more significant than simply what he may be thinking of doing... He changes his mind a lot!

There are some interesting things we can do with Japanese candles that we can't do with ashi candles.

I will post a technique that supplements the technique for entries based on the ema cross.

Hang on for the ride. We are on our way.

http://t3.gstatic.com/images?q=tbn:i...ster-thumb.jpg

This technique complements the entries based on the 5ema open/close shift 2 cross. It is taken from a short thread posted some time ago called "base candle entry system".

If OSMA marker and a cross are in agreement, an entry can be considered on the opening of the second candle after a fresh candle appears and closes on the appropriate side of the emas in the direction of the move. Areas of support and resistance always need to be taken into consideration. The dragon is creature of appetites and he really enjoys hanging out around these places.
We are never really sure which direction he will taken when he goes.

In the screenshot I have identified 2 trades using the base candle idea.
This entry system can be helpful to enter a trade in the middle of a move.
after slight pullback.

For a quick over view of the basic idea visit:
http://www.forexfactory.com/showthre...ht=base+candle

Hello Jiva,

Thank you for the reply

Herty

Up and running?

Changed my mind..
(Maybe I am a lot like the dragon..)
going back to the original template.

To know how sweet a thing maybe,
just go away and you will see...

Going back to the original is great.
Maybe I just need a break every now and then...

I justlike everything about the original dragon template.
The colors, the way the dragon's body looks, how he roams through the landscape.
How the dss reveals his inner thoughts and macd traces his movements and points to his possible next moves.

It's love...http://t1.gstatic.com/images?q=tbn<i...ve%2520web.jpg

So back to original dragon thread.

I definately like the original dragon. Ive been testing it and so far its been great on the m5 and m15 timeframes

I agree. The beautiful original dragon is superb.

I'm shameful. Unfaithful to a good friend who has been very generous to me.
Ah, but I am a creature full of faults. Silly frivolous easily distracted.

The dragon is such a good friend he has overlooked it all.
And let me have 5 good trades today. +51 pips. Not one loser!
How could I ever leave again?
Madness....