FXMutant Trade Systems, Doin it Live, Might as well!!

Hi Guys,

Im fairly new to the forex factory forums, so ive decided to jump in with both feet and share what i got. I am a full time trader and have been for about 4 years now. I have been reading the posts and getting to know some of the "senior" traders on the forum and what amazes me is the complexity of the systems put forth by some of the members and the amount of deeeeep thought that goes into making a trade....when it comes down to it do they really think about it that hard just before they push the button??,, who knows!! My approach to trading is very simple. I use a simple set of rules (created by muahh) and a very simple trading system (theres only 2 indicators involved, mainly because they make me feel good teehee).

In addition to those 2 little ole indicators and oh yeah PRICE,,, i do use, pay for, and swear by 2 other things,,, the forex factory calendar,, and the Trade the News credit fx module. They haven not let me down yet. I also do some reading occasionally on the bloomberg and reuters sites, and i must recomend the book "trading in the zone" by Mark Douglas for anyone who has never read it,, or even if you have,, read it again!!! In the next few posts i will get some images, indicators and templates up in case anyone wishes to follow along but i will explain my little system in detail and post new trades daily. I will try to get setups in as i lay them out on my charts , sometimes i have time,, sometimes the markets move to quickly,, ill do my best

DISCLAIMER: I will not be held liable for any losses due to anyone following my system or my posts here. I use very small amounts of money compaired to my account balance, (im not trading a small account). What you do with your account is your business. I am simply putting information in this thread to try and explain a thought process which is very difficult to explain without "live" examples. If you must trade based on the information i have here do it at your own risk and in a DEMO account. DEMO - DEMO - DEMO,,, im not here to give investment advice.

This setup happened on Febuary 26th. It was the latest 4 hour setup ive had. It was a 4 hour setup and i have detailed it out solely for the purpose of explaining my system. Which i will do in the next post

Ive posted both indicators and a template file below (templates only if ya like the green). The indicator Settings are as follows:

PFX Trend Direction Alert -
Inputs:
Period = 36
Method = 0 (Exponential Moving Average)
Price = 0 (No Offset)
Alerts = (True / False) up to you, it will alert you on a directional change.
SoundON = (True / False) once again up to you.

TDTrendline - (These are automatic trendlines that follow most of the Tom Demark rules for creating and placing triangular trendlines)
Inputs:
showbars = 200
LevDP = 2
qSteps = 1
BackSteps = 0
startBar = 0
TrendLine = True
HorizontLine = False
ChannelLine = False
TakeLines = False
Comments = False
Trend = 0

Hi FXMutant,

Good to have you on the forum here. I'm looking forward to seeing some of the trades you do.

By the way, I agree with you that some of the systems here are super complex, but I don't think they do much better than the simple ones.

Well there are a few variations of this exact same system that i use to place trades.

The big one (not to mention boring) is a 4 hour break of the TL's in the same direction of the trendline after one to two 1 hour closes above the trendline. I will try and show this visually with images in just a bit but here are the things i look for to make me "Feel Good" about taking a trade.

1. The trend lines MUST form an almost symetrical triangle around a good period of consolidation. This means i dont like sharp angles, i like to see a calm market with definate tops and bottoms forming around a pretty stable channel.

2. Generally i watch for breaks of a trendline in the same direction of the moving average line. If the line is blue, im looking at the top trendline, if the line is red im looking at the bottom trendline.

3. Once we get a break, i will physically draw the 4 hour trendline on the chart, i will then change the period of the chart to 1 hour (sometimes 15 minutes) and look for shorter term closes on the opposite side of the trendline from the break.

4. A trade is placed in the direction of the break once i see sufficient support around the trendline area. A stop is placed between 20 and 50 pips out or just below (or above) the opposite trendline.

Its as simple as that!!,, heh,, i wish,, there is so much that goes into watching ANY system that cannot be written,, it is "Felt" for the most part and as i continue this thread i will try and get that information in writing for the benefit of the readers.

I use this system daily, sometimes the trades materialize, sometimes they dont, whats important is what you do with the trade once its in,, i will go into that in the next few posts.

Over the next few hours i will be looking at this 4 hour setup. A few things have to happen for me to place a trade based on the information im looking at.

1. We have a 4 hour channel, its a very tight channel and i dont necessarily like them this tight. I will be looking for a break AND just enough price activity (a solid 1 hour close would be nice) below the lower trendline for a sell on the GBPUSD.

2. The short term moving average is down (Red) meaning i am ONLY looking at a possible sell if the upper TL continues to reject price.

3. Price has been rejected for a few days now around 1.9900. This level was breifly retested today and brutally rejected once again.

There are a couple of things i do not want to see that would cause me to hold off of this trade and just wait on the next one, i do not want to see price channel through the center of my trendlines, i would like to see some movement one way or the other during the jpy session. Once again im only looking at a possible sell trade so a break of the top trendline will result in a no trade as well.

The images of this setup are posted below, i will post another if i place the trade or i will give the reason i did not.

Just for illustrative purposes ive drawn in what i would consider a good trade opportunity for the March 3rd possibility posted above. Whether or not it plays out who knows but its good for illustration.

Ok, The chart below shows the latest 4 hour trendlines (in blue) plotted on a 1 hour candle chart.

The 4 Hour Moving average is Red meaning im looking for possible clean breaks of the lower 4 hour trendline. While my moving average is red,, i will not take a trade on a upper trend line break.

I have "drawn in" a few candles that would represent future 1 hour candles. We have 1 clean break AND a close well below the lower trendline, On the line dosent count as a trend lines' primary role in life is to identify support or resistance. My MA is red so this is Standby Time, there is a great chance that a trade will be going in at some point in the near future.

The second candle i have drawn in moves us back a little but dosent break the line. At this point im looking to place a sell once we breach or reach the low of the first candle that broke the lower trendline originally.

Once the trade is in, the Profit Target is manually managed, i will discuss how i like to handle profit taking in the next post. The Stop Loss is immediately placed 20 to 50 pips away from entry. This is to prevent catestropic damage in case the market surprises us very quickly (as it sometimes does). Normally i will adjust my stops either way depending on price and near levels of support or resistance.

For example, i will look for short term areas of resistance for this hypothetical sell visually. There appears to be some resistance at around 1.9860, so i will place my stop for this sell at around 1.9865 or so. Give or take a few pips, i always hate getting wicked out on the spread so i usually give a few extra.

Heh,, well a stop loss for me is exactly that. A Stop Loss!! it is there to protect you from psychological damage and your account from monetary damage. There are a few different strats for handling loosing positions including hedging (not getting into that here) but all in all stops in relation to this system should be hard stops and used without a second thought.

What i want to devote this entire post to is profit targets. Well i dont like using profit targets, my BIG thing with this system is to enter a few of the smaller cycle breaks so that i have positions in, and PROTECTED, when the market actually MOVES. A few pips up or down isnt a "Market Movement",, its more like a ,,, uhhh,,,, hiccup!!

So,, lets say that the market did in fact actually move as the above drawing depicts. I would have a sell in on the GBPUSD at around 1.9830. My stop would be somewhere around 1.9865. If i get stopped out upon entry i would loose 35 pips. That would suck, sure, BUT,, lets say i didnt hit my stop and the Cable moves in my favor.

Im immediately going to start looking to move the stop loss to my entry point. Say im up 25 pips or so on the sell,, i would have no problem moving my Stop to entry. If the trade is going to work out it will ,, if its not i am no longer at risk in any way shape or form. I still would not put a profit target in at this point, as a matter of fact, would it hurt anything at all if i just forgot about this trade and went hunting for the next setup???

Well i have to admit, this is going to result in you getting out of more trades at 0 (or +1,, i usually take a pip ) than not and some people may have a problem with that. Personally i do not, had i employed this same mentality a few years ago on the EURUSD or just about any other USD pegged pair,,,,, well go back and look at a daily chart and lets say i only caught 1,,, ONLY 1 break on 2 or 3 of those pairs,, hmmmmm

Hi FXMutant, Well done! Look forward to see new post from you. Anyway, could you reattach the chart seems like it won't show the whole picture. -Semi-

Still new to this, seems like my images are getting resized when i post them, ill try to make them bigger,, working on the last post to replace that example image

Well, this is why i said this 4 hour system is boring. Its been over 10 hours now since i first posted a possible 4 hour setup on the GBPUSD. We have pierced support (the lower trendline) now several times but have consistantly failed to close below that level and seem to be "riding the line". Heres an updated Image of the setup. Notice we have maintained price below a short term resistance level and move sideways across the upper trendline. A break of the upper trendline was not taken because the MA is RED.

This trade setup may get discarded, its not playing out like i like to see them play out. We shall see in the coming hours.

Ok, its done, it may work out later on but i dont make money by taking every single "possible" opportunity, only the ones that give me that warm and fuzzy. This setup does not BUT it has given me an opportunity to try and explain some of the situations that i do not like to see and that usually cause this system trouble.

I do trade this strat on more than one pair but the process of creating and editing images for explanation purposes would get confusing i think. I will post the next opportunity on the GBPUSD that i see come up.

In addition to other pairs i also trade it on other timeframes, shorter ones that give me more opportunities to "play". Usually 1 hour, sometimes if im feeling froggy 30 minute. BUT stops are tighter, profits are taken shorter AND lot sizes are waaaay smaller. There is one other system i employ on medium to long timeframes as well but i consider this system to be the core of my trading success. Perhaps if this thread works out i will have an opportunity to share the other systems.

In addition there is obviously more to my decisions to make a trade than just watching for a simple break. I will try to detail how i incorporate news schedules and stay out of potentially damaging news spikes and things like that in upcoming posts.

I am currently looking at another possible setup for a short entry on the GBPUSD. This is the same chart as in the previous post, price has progressed tightly for some time now maintaining short term support and resistance. I will be looking for 1 hour closes below the lower trendline for a possible entry point.

Its been a pretty boring day as far as this pair is concerned mabey she will wake up as the JPY session progresses.

The 1 hour is lining up pretty tight around the 4hr TL's, this is a potential great opportunity coming up over the next few hours.

If i do get a clean move like im looking for i will post it with comments.

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AHahAHHAha great

The fundamental information that will be coming out starting in the early US session tomorrow through friday morning is normally pretty tough to trade in, especially if you havent been around long enough to see a lot of fundamentally driven price action occur. If you have been around that long and are not a scalper, your probably sitting on the sidelines for the remainder of the week anyway.

What this means for my little technical system is that i will probably sit more trades out than not for the remainder of this week.

Reguarding my current opportunity on the GBPUSD that im watching my hope would be for a little movement this JPY session so as to get a position in and get it protected.

One big rule i stick to is i never trade the breaks that happen exactly on a fundamental news release. Most brokers will not fill entry orders (or exit orders for that matter) during volital news releases. Only if a release causes slow controlled movement with the current MA direction will i consider putting a break position in. I will try and capture one of those scenarios if it happens during the remaining fundamental releases this week.

I did take the trade on this opportunity (defined earlier, a few posts back) although it was taken late and had i not been sleeping there was ample opportunity to get in around 1.9800 or higher. Soooo i missed a few pips,, gotta sleep sometime.

Most of this happened while i was semi sleeping (im on EST) and i only awoke to put in more alerts and make sure that my trade was protected. The 4 hour situation posted earlier did play out pretty nicely for +31 pips. Although i dont have the images for all of it ive got the trade and the reason i manually closed the trade when i did.

The images is of the 4 hour chart just after the market order was placed. The Cutaway is several hours later and shows the area i was looking to possibly exit the trade as price was creating at least at that time a temporary bottom.

Well this one did not play out like i like em,, BUT very few do and im happy to have squeezed a few pips out of the earlier opportunity.

Like i stated earlier for the purposes of this thread i will only concentrate onthe GBPUSD, done with that one, on to the next one

Sometimes it hurts to follow the rules, thats trading though, it may have worked out this time to trade a top break with a down MA but what about the next 10 times.