Fozzy-style trading techniques

This project has been on my mind for a while; it's time to get started AND organized.

Here's the mission:

If, and only if, you are presently a "Fozzy-style" trader; I ask that you briefly share with us the important aspects of your trading that makes it 'work for you'. That is to say; besides the basic 8 crossing 8 signal, what do you use to make trade decisions?

My goal: to complile the information provided into a summary for anyone who wants to Fozzy-style trade successfully. The original thread is daunting; and I think there are techniques that can be added to the excellent e-book prepared by thebhoy. Posted charts will also be welcome.

Please share what you will, and I'll work on the compilation.

No questions about the method; post those in the original thread please! This thread is for posting proven techniques only!

Thanks!

Hey BB-

Here are my variations that I added...albiet small. haven't read the ebook, nor even looked at the Fozzy thread since way back....so if I am off on this, just delete my thoughts...Hell, for all I know....this IS the fozzy and I just thought I made a few minor changes!! LOL

OK
I overlaid a standard Boll Band on price, along with a 3/8/21 ema's

When the Fozzy "crosses", it seems to come at a time when the Boll Band has gone flat ( in a trend ) I take 1 lot at this time.....as the 3ema crosses the 8ema I avg up and add another lot on a pull back to the 8ema, than as the 3/8 cross's over the 21ema, I add 1 more lot at a pull back to the 8, and than....if lucky, add another lot if price pulls back to test the 21 ema.

If All goes as planned above....I have 400k working ( avg'd up )and I hold til a fozzy cross or my trailing stop is triggered.

This should go without saying....lots are added "BECAUSE" the fozzy is trending and the ema's are also. The Boll Band over price just seems to give me "perspective"....I'm visual.

P.S.- While I know this is a DAILY type method.....it really does work well intra day on the hourly and even the 15 for scalping.

Hope that helped....it is pretty simple/uncomplicated for myself

Great, thanks for the observations; interested in adding a posted chart or two?

I believe we should add a little discretion and chart analysis to our Fozzy trading. By chart analysis I mean review of support/resistance/trend lines. Take a look on the Fozzy crosses of usdcad for the past two months. The pair is in a consolidation period. Should we take Fozzy crosses during this period?

Of course it is difficult (impossible?) to define "objective rules" for a discretionary trading, that depends on the individual trader.

just my 2 pips

SHR

OK, here are three charts which show my humble opinion:

1) 2007.06.28
We have a long bearish candle breaking the up trendline, and we have a Fozzy cross. Next day which is Friday, the pair moves about 120 pips down and then moves up to re-test the trendline. Bearish movement resumes next week.
In this case, the break of trendline gives a confirmation for a Fozzy trade.


2) 2007.07.25
We have a Fozzy cross, but we also have a down trendline (resistance) against our trade. Should we take the trade? That depends on trader decision. Of course the trade was a winner, trendline broken by a long bullish candle.
A conservative trader could place a buy stop above trendline around 1.0495 (high of 2007.07.20, …. oooohhh that’s near a round number).


3) During August pair remains within consolidation range. There were good crosses as well as bad ones. I’ve shown two unsuccessful crosses in the third chart. For this pair I will not take any cross until price comes out of the consolidation range. Of course this is my opinion and I’m just a newbie

Hope that helps

SHR


P.S. BeachBum, let me take this opportunity to thank you for your greats efforts in Fozzy sub-forum.

I took SHR's first screenshot and added a few comments; this scenario happens regularly. Look for these and take only the very best ones......."A" trades.

BB,

I'd love to post a few charts. Though I have to admit my ignorance in my ability to actually post the charts. If you could Explain the process in Layman terms, remember I'm a trader...not a scholar!!

It won't be a cherry picked chart either....it was the usd/jpy 1 hour move from the mid 116 area to the high 113 area, and than the rebound back to the high 115 area posed about 24 hours ago +/- an hour or 2. Just this past week.

It would be from a metaTrader chart if that helps.....any help would be appreciated

Thx

EDIT: The things I'd have to add to the chart would be where I made my entrances and exits

Thx for the help BB...

Going to post this "shot" as a test, see how it works out live...Than I'll edit my thoughts.

EDIT: Here is the chart I spoke of in Post #9. While I KNOW the fozzy is a DAILY method, I have also found it great in the smaller time frames also. This is the same chart style that I use for DAILY as well as even the 15min. This just happens to be my one hour chart I was working off of. My apologies if words YELLOW are a little tough to see, they were never on my chart, nor the arrows, red/green -dash- lines neither. I added these for "instructional" purposes. The blue vertical -dashes- are on the original chart....so as to denote to myself, when I saw the cross and marked it. Red arrows are Shorts, green arrows are Longs. From red dashes to red dashes was the time/price zone I was short. The green dashes to green dashes were Long.

I did forget to mention in my first post...that when a pair appears to reverse...S to L / or L to S....from a strong trend....my limit order is placed for retracement or 3ema. NOW, if I do not GET that retracement...I make a "GUT" call and hop on board the train before it really takes off and I am left standing at the station. That is Purely MY judgement call....for me, having many hours of face time, I will and often do, bend my rules....
As you can see, This move just happened recently...it was NOT cherry picked, and was Live traded by myself.
Also in the move up, only 3 lots were traded due to the fact that a retrace to the 21ema never occured.

Hope this helps....Hope the shot is clear ( my first attachment )
Now that I know how to post these.....WATCH OUT!!!
Thx again for the help BB......Feed back always appreciated, and I really do not want to give the new traders using this any wrong ideas.....you'll do great with "sticking" to the original plan....my gut trades are my own based on alot of trades and experience (and not a FOOLPROOF way to trade...gut that is!!!)

Hi All,

Here is a 15 min scalp.

Please note...my RSI is set for 80/20 vs the 70/30....

ALSO note....when I went flat...I missed a great scalp for a long!!!

Hi all...

Hope this enlargement is a bit clearer....

You'll notice that I have white X's in the RSI box....I mark this area when the 8/8 hits OB/OS and keeps me alert for a crossover.

Also note that price did come back and hit my 3ema limit order after the cross....while price may have bounced a bit and stayed relatively flat for a few bars....the 8/8 trend remained intact.

I closed the trade soon after the OS (X) and then an 8/8 cross.

WHY did I not go long on that great cross???......asleep at the switch? , never drink and trade?, watching too much Porn at the time? , did i get distracted? .....I have no answer for ya.....all I can say is I MISSED IT!!!!

I don't trade news, yet if one were to look at the news on Friday morn.edt, the fozzy on the 15 was GREAT calling the reversal from around the 3715 area ( not sure where the exact entry would have been )....though if interested, I could pull that chart pic, and show what I would have done had I been trading at the time. EDUCATIONAL ONLY, I DID NOT TAKE THE NEWS TRADE FRIDAY MORN.

BTW...because this was a planned SCALP....I did not avg up as I would have on a larger time frame.

Hope this helps.....I will work on the Hourly soon.....

OK..

Here is the 15 minute Fozzy that I use, and how it would have looked on my chart.

THIS IS FOR EDUCATIONAL PURPOSES ONLY....I did not trade this....I did attempt, in the space available, to add what my thoughts would have been.....as you can see...NOT MANY!!!

Hope it helps

BTW, once again, as this is a 15 min chart...it would be a scalp for me, so I would not have avg'd into the trade.......though it would have been nice....but also I keep in the back of my mind..."IT'S FRIDAY"

Here is a daily chart I used soon after learning this strategy.

Even though you may notice 4 entry points, I count this as one trade.

1st notice the (X)...RSI is OS...I prefer 80/20....next comes a reversal day, than a doji. Next day a break out which gave an 8/8 cross. I placed my 1st entry after the Sunday close as a Market order ( to be on board )

6/19/07...price came back to my 3ema limit order as the 3/8 ema had crossed on the 18th. 2 lots open

6/27..3/8/21 ema's aligned and price hits my 8ema limit order....3 lots open

6/28...price Tests the 21 ema, fills my 4th lot/order.

This was a choppy time....notice a Yellow (X) in RSI...denotes warning, and I move up my T/S (fundies more + than - on eur at time ) plus 8/8 had not crossed from 80.

Few Days later...8/8 goes OB with the second white (X) and T/S moved tighten.....along comes about a week of consolidation....T/S was being moved up 10 pips per day, as 8/8 dropped back into Boll Band and a cross at second yellow (x).

Than a nice B/O day with both 8/8's rising past 80...close to 90....I than had to choose to close positions or tighten T/S. I Tightened T/S to just below the 3 ema and was taken out on 7/13/07.

FYI...while one might note this chart is from a NF MT4 chart, I traded this with Oanda.

My hope is I made myself clear on how this trade was managed, and the chart is clear.

Fxj

Hey all....

Here is another eur/usd fozzy trade from end of Aug07.

Some may be noticing a trend here for me. I prefer to look for trades when an 8/8 has touched or breached an 80 OB zone or a 20 OS zone, usually out of my Bol Band overlay, than crosses.

On this trade, I bent one of my rules.....can anyone spot it?

HINT: It's an entry....


BB....I screwed up my 1 hour shots, so I've added these dailies. Hopefully the Hourlies posted earlier will be of help. For myself, the charts all look the same in each time frame.....it is only my lot size that I change for the time frame.

Feed Back always apreciated
Fxj

Fxj, really interesting the way u trade Fozzy, i like it...Please keep it up.

Can i ask you to post your templeate please?

Many thanks in adavce and Thanks also to BB who started this thread

Matty

Thanks Matty,

Hope I'm clear with my thoughts.

Ok, A tech guy I am not....BB just "learned" me how to post charts just last week. So if you let me know how to post that template, I'd be more than happy too.

Maybe I better look to see if it is saved!!! I don't trade off of MT4 or with a MT Broker. That is a North Finance MT4 chart.....very close to Oanda in the B/A department, plus the Demo seems to never end.

I trade off of Oanda charts, yet for some reason haven't been able to save/post those. With Oanda, I just hit "save lay out",.... I just read a post for downloading some software for this thou...I'd prefer to post those in the future as it plots the Lmt orders, entries, exits, position size, etc...Hard to fake those on Oanda

If you could tell me....what time frame/frames do you trade....I have different RSI levels for a few, nothing drastic....just a tweak in the OB/OS levels.

Fxj

Thanks for the answer Fxj...

Let me see if i can explain you how to...
To post the template u need to save it first, so u rigth click over the chart then go to template and save template then u select the folder and thats it. To post it here u go to manage attachements then the browse buttom and select the template file that u have save and press upload. Thats it.
I trade daily and 4h mostly

Let me see if i can also help u to post Oanda charts... U can use some software to take screens (let me know if u want one) or u can just take a screen shot from your screen with the "PrtSc" buttom in your keyboard, then u can open the Paint program that comes with windows go to edit and paste and it will paste your screen shot of oanda charts or anything u want.

Hope i made my self clear, english its not my native language

Have a good weekend and thanks again

Matty

FxJ........thanks for the info & charts. I've set-up a template that is a copy of your charts (I think) and attached it for those who would like to test this strategy.............

I will post my approach to Fozzy, maybe it can also be of help for someone. It is a mixture of ideas I got from different people.

My setup:
5sma - black - its currently under testing, got it from Auslanco thread; I intend to use it mainly on the 4H as a place to enter the trade because the price usually retraces to it before charging further.
28 ema blue - proves to be a wonderful support/resistance for many pairs. For example, in the GY chart below, it provided some good entrance opportunities in the direction of the prevailing trend.
89 ema orange - for the overall direction.
Fozzy 8/8 with 20/40/60/80 levels for RSI - I got this from a book about using RSI in trending markets; the general idea is that when the pair is an uptrend, RSI has level 40 as support and 80 as resistance, while in a downtrend, RSI moves between 20 and 60. If the trend changes from down to up, first RSI stays above 40 and then it will make a conclusive break above the 60 level. In the current GY chart, RSI is constantly staying above 40 level, while price fluctuates in the range of 229-235. This makes me consider that the pair is actually more prone to go up than down from here. I will wait for a break of either 229/ RSI break of 40 or 235/ RSI break of 60 to get confirmation of the new prevailing trend.

As a second indicator for confirming Fozzy Trades, I use standard MT4 Macd with settings 5,13,1 and a 5 ema over it (blue). If not sure of the Fozzy cross, I wait for the MACD/ema cross which might put me a little late in the trade, but can also save me of some fake Fozzies.

Of course, besides all these, I use the good old S/R and TL lines, plus Fibonacci which are vital for chart analysis in my opinion.

Until now, I traded with 2 lots on each pair, one with TP at the stop size (which is 70% of the ATR), and one trailing at the end of day. If not sure of the setup, I will go with only 1 lot. I plan to hold on this until I recover all my losses previous to start using Fozzy. After that, I will move to 3 lots, TP 1 at 70 % ATR, TP 2 at TP1*1.5, third lot trail at the end of day.

Since I started using Fozzy, in July, I got only positive months and I am very happy about it. Of course, the markets have been trading like crazy and this may be a reason for my recent success.

My next goals are to refine my trading skills and MM which is still a problem for me.

Hi Gagiul,

I'm attaching a Daily chart if you care to look it over.

EDUCATIONAL ONLY - I DID NOT TRADE THESE SET-UPS

It took me about 15-20 minutes to find these set up trades after reading your post.

I rarely trade this pair, yet I have.... & my daily target would be 50 pips +/- due to this pairs volatility.
With this pair, I would never enter on the opening of the next bar ( day )...I'd have to go into a smaller time frame to look for an entry and my exit. Which is listed here.
In case you don't know, I am NOT a position trader....day scalper would be a better term for me. That will be why you will notice Shorts in the middle of an uptrend.....I don't wait for pull backs, I trade them. Only making you aware of where I "come from".
Keep your own style that fits you best.....Take the trades you are comfortable with.
When I think LONG TERM....I think cherry pick
When I day scalp.....I think hit an git!

Now none of these were cherry picked, and I can see that a few would have been losers....probably 3 of the 12, if they had gotten filled.....

My main focus though is to give you another option with a daily perspective.

Hope it helps
Fxj

gagiul and FxJarhead...

Great posts with excellent TA info! As always, thanks for sharing with the rest of us............