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Does this simple system by Richard Donchian really work?

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  • Post #1
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  • First Post: Edited Dec 14, 2011 1:18am Dec 4, 2011 1:50am | Edited Dec 14, 2011 1:18am
  •  mrhb30jr
  • Joined May 2010 | Status: Member | 2,416 Posts
The 4 Week Rule
The 4 week trading rule system has been at the
heart of many successful trading systems and is
one of the simplest, easiest and most profitable
ways to trade trending markets.
The Rules
The original rules were used for trading
commodities and can be summarized by:
1) Close short positions and go long whenever the price exceeds the highs of the previous 4
calendar weeks.
2) Close long positions and go short whenever the price falls below the lows of the previous 4
calendar weeks.
If run with a SAR (stop and reverse), the above system will always maintain a position in the
market (either long or short).

Filter : 5SMA, Apply for Open and 5 SMA Apply for Close

@ Entry 2PO, SL > 5 SMA line SELL and above 5 SMA line BUY, TP1 = SL/Risk and TP 2 the new 2 week low for short entry and 2 new week high for Long.....

This simple system can working for all trading?????
Please provide your feedback about this system that is packed with as simple and could also with these simple systems can be run and managed well in trading currencies today, give your feedback and your opinion in a forum to exchange opinions. before and after I thank you,
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  • Post #2
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  • Dec 4, 2011 3:35am Dec 4, 2011 3:35am
  •  enivid
  • Joined Aug 2009 | Status: Member | 461 Posts
It will work in trending markets, but will get whipsawed by the ranging markets.
  • Post #3
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  • Edited Dec 14, 2011 12:38am Dec 13, 2011 9:31pm | Edited Dec 14, 2011 12:38am
  •  mrhb30jr
  • Joined May 2010 | Status: Member | 2,416 Posts
Quoting enivid
Disliked
It will work in trending markets, but will get whipsawed by the ranging markets.
Ignored
hi enivid,

thanks for your advised,
i have put 5sma open price and close price as the filter for two week observation by using RD 4 week Rule
and the result very interesting, for GU and EU, all of SL above/Below this 2 line 5SMA open/close, enclosure the sample of the chart of EU and GU , just have the look at the SL point and the entry point ..
and i don't see any whipsawed if we using on the weekly TF ....

@ Entry 2PO, SL > 5 SMA line, TP1 = SL/Risk and TP 2 the new 2 week low for short entry and 2 new week high for Long.....


cheers
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  • Post #4
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  • Dec 14, 2011 12:33am Dec 14, 2011 12:33am
  •  mrhb30jr
  • Joined May 2010 | Status: Member | 2,416 Posts
Here another sample buy entry on USDCHF .....
simple to using the RD 4week rule ....

cheers
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  • Post #5
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  • Dec 14, 2011 12:38am Dec 14, 2011 12:38am
  •  errich fx
  • | Commercial Member | Joined Mar 2009 | 778 Posts
check this chart , ... is it right ?
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easy robot
  • Post #6
  • Quote
  • Dec 14, 2011 12:47am Dec 14, 2011 12:47am
  •  mrhb30jr
  • Joined May 2010 | Status: Member | 2,416 Posts
Quoting errich fx
Disliked
check this chart , ... is it right ?
Attachment 855757

-------
easy robot
Ignored
here 4 week calender, 4week Previous Low ..... Rule No 2
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  • Post #7
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  • Dec 14, 2011 1:43am Dec 14, 2011 1:43am
  •  mrhb30jr
  • Joined May 2010 | Status: Member | 2,416 Posts
Enclosure Chart
USDLFX, since 3 week ago that i have been posting a sample chart of rule no 1 till now still valid to going long, interesting RD is only two rule of long and short ...

cheers
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  • Post #8
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  • Dec 14, 2011 2:05am Dec 14, 2011 2:05am
  •  mrhb30jr
  • Joined May 2010 | Status: Member | 2,416 Posts
another sample of rule no 2 RD
Currency GBPAUD SELL set up
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  • Post #9
  • Quote
  • Dec 14, 2011 2:36am Dec 14, 2011 2:36am
  •  tetis
  • Joined Sep 2007 | Status: LION HEART | 810 Posts
could you please put another chart for buy position?
  • Post #10
  • Quote
  • Dec 14, 2011 2:54am Dec 14, 2011 2:54am
  •  mrhb30jr
  • Joined May 2010 | Status: Member | 2,416 Posts
Quoting tetis
Disliked
could you please put another chart for buy position?
Ignored
hi tetis,

Here the sample this week set up for BUY
USDCAD - SL/Risk 64 pips ....

Cheers
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  • Post #11
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  • Dec 14, 2011 3:06am Dec 14, 2011 3:06am
  •  tetis
  • Joined Sep 2007 | Status: LION HEART | 810 Posts
thank you mrhb30jr
  • Post #12
  • Quote
  • Dec 14, 2011 3:18am Dec 14, 2011 3:18am
  •  tetis
  • Joined Sep 2007 | Status: LION HEART | 810 Posts
is this a right setup for selling after break the 4 week low in aud ?
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  • Post #13
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  • Dec 14, 2011 3:19am Dec 14, 2011 3:19am
  •  mrhb30jr
  • Joined May 2010 | Status: Member | 2,416 Posts
Quoting tetis
Disliked
thank you mrhb30jr
Ignored
hi tetis u welcome

usdnok ... buy set up.....
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  • Post #14
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  • Dec 14, 2011 3:24am Dec 14, 2011 3:24am
  •  mrhb30jr
  • Joined May 2010 | Status: Member | 2,416 Posts
Quoting tetis
Disliked
is this a right setup for selling after break the 4 week low in aud ?
Ignored
Hi tetis,

Pending PO SELL set up, on break out SL > 5SMA

cheers
  • Post #15
  • Quote
  • Edited at 6:21am Dec 14, 2011 5:55am | Edited at 6:21am
  •  tetis
  • Joined Sep 2007 | Status: LION HEART | 810 Posts
thanks a lot
  • Post #16
  • Quote
  • Dec 14, 2011 11:06am Dec 14, 2011 11:06am
  •  mrhb30jr
  • Joined May 2010 | Status: Member | 2,416 Posts
Quoting tetis
Disliked
thanks a lot
Ignored
hi tetis,
audusd .. short +50 pips
  • Post #17
  • Quote
  • Dec 14, 2011 12:32pm Dec 14, 2011 12:32pm
  •  tetis
  • Joined Sep 2007 | Status: LION HEART | 810 Posts
Hi
yes but i took only 30 pips
whats about Nzd/usd?
  • Post #18
  • Quote
  • Dec 14, 2011 6:36pm Dec 14, 2011 6:36pm
  •  mrhb30jr
  • Joined May 2010 | Status: Member | 2,416 Posts
Quoting tetis
Disliked
Hi
yes but i took only 30 pips
whats about Nzd/usd?
Ignored
NU also same when we in TP1 = SL, and TP 2 hold for 2 week new low
good luck
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  • Post #19
  • Quote
  • Dec 14, 2011 6:44pm Dec 14, 2011 6:44pm
  •  mrhb30jr
  • Joined May 2010 | Status: Member | 2,416 Posts
Quoting tetis
Disliked
is this a right setup for selling after break the 4 week low in aud ?
Ignored
hi tetis aud up dated ..... tp1 hit now tp2 = 2WNLow
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  • Post #20
  • Quote
  • Dec 14, 2011 10:09pm Dec 14, 2011 10:09pm
  •  mrhb30jr
  • Joined May 2010 | Status: Member | 2,416 Posts
Hi all,

GBPJPY - SELL Entry
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