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  • Post #181
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  • Sep 25, 2006 7:09pm Sep 25, 2006 7:09pm
  •  weghio
  • | Joined Aug 2006 | Status: Member | 91 Posts
Quoting heriyadi
Disliked
Hi, I know GBP/JPY is not major, but the daily range is quite high, so I like to play this pair.

From what I see, the daily Fozzy Method work for this pair too. My question is if you look G/J chart today (sorry I can't display a picture in here) the rsi already cross MA. Did we wait until today chart confirm, and open position tomorrow or we can open position today?

Thanks in advance.

Heriyadi
Ignored
Although I wouldn't presume to speak on op's behalf, if you look at the very first post it says entry occurs on the next bar after cross occurred.
  • Post #182
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  • Sep 25, 2006 7:19pm Sep 25, 2006 7:19pm
  •  miscon777
  • | Joined Aug 2006 | Status: Member | 33 Posts
Great thread... been testing various daily trading systems since I got a day job, and this one looks to have some good potential.

I've attached a zip with three indicators I built for this system:

AO_Fozzy shows the same information that the template posted earlier in this thread does, but does so an indicator rather than a complete template.

AO_FozzySignal adds a Signal line (green by default) that shows when to enter trades, and in which direction. If it spikes up to 100, enter long at the open of the following day. If it spikes down to 0, enter short at the open of the following day.

AO_FozzySignal_BT is the same as AO_FozzySignal, but the spikes appear on the day you should enter the trade rather than the day before. This can be handy for backtesting, and works just as well as AO_FozzySignal if you can wait for the 0:00gmt bar to set your trades.

I've also attached an image to show the three indicators, plus the original template version at the top so they can be compared. If values look slightly different between them it is only due to the difference in vertical scaling - I've checked the exact values being produced by all, and they line up perfectly (as far as I have seen, anyway).

I've got a few points to make regarding this system, but I'll make those comments in a separate post.

Enjoy!
Attached Image
Attached File
File Type: zip fozzy_indicators.zip   3 KB | 1,682 download
Et ecce equus pallidus...
  • Post #183
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  • Sep 25, 2006 8:40pm Sep 25, 2006 8:40pm
  •  fozzy
  • | Joined Apr 2005 | Status: Member | 62 Posts
Hi all,

Thought I'd drop in to post a new trade that I have entered this morning. I am expanding my horizons a little and looking at additional pairs to trade. I've recently been doing some backtesting at it would appear that this method works with most pairs.

The trade I entered this morning was AUD/USD. I have also entered with 2 lots. I will exit one at 50 pips (hopefully) and move the other lot to breakeven at that point. This is using some of the ideas that have been posted here. For all those who have posted their ideas on how to improve this method I am very grateful.

Cheers

Fozzy
Attached Image
  • Post #184
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  • Edited at 10:11pm Sep 25, 2006 9:31pm | Edited at 10:11pm
  •  miscon777
  • | Joined Aug 2006 | Status: Member | 33 Posts
The one big issue I'm seeing with this system is the lack of focus on risk to reward ratio - by no means is this a dis on Fozzy or the system, which I already have stated seems quite promising... but R:R is a very important aspect of trading, and I thought I'd mention it as a food for thought for this group.

I did a recent study, available on ForexFactory here, about how important R:R is in trading systems. Lots of others chimed in on other aspects of money management in that thread. I highly recommend researching the topic of money management if you haven't yet... even before looking for good technical trading systems.

Basically the upshot is this: as it stands, this Fozzy approach sets an SL of the previous day's low - whatever that may be - with the hope of gaining whatever pips happen to develop. Moving the SL to break even at 40 pips (or taking some profit at 50, as has been proposed), is a good thing, and instituting a trailing stop above that level is a good idea as well. But these latter-day manuevers don't deal with risk to reward in a true sense.

Think of it this way - if the low of the previous day is more than 40 or 50 pips below your entry price, you are risking more than you plan on profitting... and in the long run, one bad trade could wipe out several good trades. Keep it up, and in the long run chances are fair that you will be broke, even with a 75% or higher success on your individual trades.

A simple example is setting your SL 150 pips below your entry because that's where the previous day's low happened to be, and then losing... you've just wiped out 3 trades that succeeded in achieving 50 pips profit. What would happen if the previous day's low was 300 pips below entry, or more? I'm not saying that the technical side of the system isn't good... I'm just saying that it needs to be paired with good money management, and R:R is one part of that equation.

In the end, the core idea is this: know what your target is (TP), and set your SL based on a fraction of that TP. It could be 1:1, 1:2, 1:3, whatever - but know where you plan to lock in profit and make sure there's a good relation between that amount and the amount your are risking. Stepped approaches, such as locking in break even at 40 pips, or taking profit at 50, are applicable here - but again, look at those levels in relation to the amount of risk that is on the table, and find a healthy relation between them.

My proposal: At dead minimum, set a final Take Profit (all entries closed) equal to the amount you are risking (better would be double or triple, but that can change based on daily action). If this final TP seems large, divide it in halves, thirds, or quarters, and play multiple staged lots (2, 3, or 4 staged TPs) that get closed out as the various sub-levels of your final TP are reached. Not far off from the 'set one order at 50 pip TP and another with a trailing stop of 50 pips' - but understood through the light of how much is being risked to attempt to achieve those levels.

Don't wait for the price just to rocket up (or down) forever. Know your goal, reach it, and get out. Pigs get fat... hogs get slaughtered.


-miscon777
Et ecce equus pallidus...
  • Post #185
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  • Sep 25, 2006 9:46pm Sep 25, 2006 9:46pm
  •  jlowder
  • | Joined Jul 2006 | Status: Member | 225 Posts
Quoting miscon777
Disliked
Great thread... been testing various daily trading systems since I got a day job, and this one looks to have some good potential.

I've attached a zip with three indicators I built for this system:

AO_Fozzy shows the same information that the template posted earlier in this thread does, but does so an indicator rather than a complete template.

AO_FozzySignal adds a Signal line (green by default) that shows when to enter trades, and in which direction. If it spikes up to 100, enter long at the open of the following day. If it spikes down to 0, enter short at the open of the following day.

AO_FozzySignal_BT is the same as AO_FozzySignal, but the spikes appear on the day you should enter the trade rather than the day before. This can be handy for backtesting, and works just as well as AO_FozzySignal if you can wait for the 0:00gmt bar to set your trades.

I've also attached an image to show the three indicators, plus the original template version at the top so they can be compared. If values look slightly different between them it is only due to the difference in vertical scaling - I've checked the exact values being produced by all, and they line up perfectly (as far as I have seen, anyway).

I've got a few points to make regarding this system, but I'll make those comments in a separate post.

Enjoy!
Ignored
Thanks for the indicator, that makes it easier to toss together the charts.

The one thing I find visually confusing are the signal indicators. I was wondering if it would be possible to somehow indicate the buy or sell position on the actual chart, say a green (or blue) up arrow on the bar for a buy and red down arrow for a sell. Having it point on the bar that buy/sell is taken on would eliminate the need for two indicators on the indicator window. This would also help in clearly viewing historical entries.

What do you think? Either way, thanks for the work, I'm using the first indicator now.

Jason
  • Post #186
  • Quote
  • Sep 25, 2006 10:06pm Sep 25, 2006 10:06pm
  •  miscon777
  • | Joined Aug 2006 | Status: Member | 33 Posts
Quoting jlowder
Disliked
I was wondering if it would be possible to somehow indicate the buy or sell position on the actual chart, say a green (or blue) up arrow on the bar for a buy and red down arrow for a sell. Having it point on the bar that buy/sell is taken on would eliminate the need for two indicators on the indicator window. This would also help in clearly viewing historical entries.
Ignored
Definitely a good idea, jlowder. I'm still cutting my teeth with MQL4, and haven't yet attempted to build such an indicator yet. I've seen them though, and know they exist... now if I can just find the time.

-miscon777
Et ecce equus pallidus...
  • Post #187
  • Quote
  • Sep 25, 2006 10:20pm Sep 25, 2006 10:20pm
  •  jsh01
  • | Joined May 2006 | Status: Member | 100 Posts
Quoting fozzy
Disliked
Hi all,

............

The trade I entered this morning was AUD/USD. I have also entered with 2 lots. I will exit one at 50 pips (hopefully) and move the other lot to breakeven at that point. This is using some of the ideas that have been posted here. For all those who have posted their ideas on how to improve this method I am very grateful.
Cheers

Fozzy
Ignored
Morning Fozzy,
I am running a test with accrete's indicator in parallel with your Fozzy's on your aud/usd call as both have some subtle differences that may be valuable to review as time unfolds.
best
john
melbourne
  • Post #188
  • Quote
  • Sep 26, 2006 8:22am Sep 26, 2006 8:22am
  •  stockwet
  • Joined Mar 2006 | Status: Member | 723 Posts
Just as an FYI, TRADEIGEL and I are working jointly on an EA for this. It will be forthcoming. I'm trying to clear some things off my calendar to finish it up. I'd say we're about 80% complete.

Regards,

stockwet
  • Post #189
  • Quote
  • Sep 26, 2006 8:49am Sep 26, 2006 8:49am
  •  BeachBum
  • Joined Oct 2005 | Status: Trade the MAX System with me... | 1,995 Posts
miscon777.....thanks for the new indicators and the MM observations!

stockwet.....looking forward to the EA.

fozzy.....we appreciate your starting this thread for us.

everyone.....I have been working on using the daily ATR as a basis for setting an initial S/L instead of always using the previous day's high or low as S/L. Also have been trading 18 pairs with excellent results by simply following the original fozzy rules with one exception...I will trade regardless of whether the RSI line crosses the MA above or below the BB center line. For my trading purposes: a cross is a cross anywhere in the indicator window.

Looking forward to more good things on this topic.
  • Post #190
  • Quote
  • Sep 26, 2006 9:42am Sep 26, 2006 9:42am
  •  jlowder
  • | Joined Jul 2006 | Status: Member | 225 Posts
Quoting fozzy
Disliked
Hi all,

Thought I'd drop in to post a new trade that I have entered this morning. I am expanding my horizons a little and looking at additional pairs to trade. I've recently been doing some backtesting at it would appear that this method works with most pairs.

The trade I entered this morning was AUD/USD. I have also entered with 2 lots. I will exit one at 50 pips (hopefully) and move the other lot to breakeven at that point. This is using some of the ideas that have been posted here. For all those who have posted their ideas on how to improve this method I am very grateful.

Cheers

Fozzy
Ignored
This trade isn't looking so hot this morning, but it's only down by 23. One thing I've been doing lately is basing my stops on the perceived average range of the bars from open. I take a look at how many grid "blocks" the price has been moving and then use that as an estimate as to when to cut my losses. I'm not sure that's the brightest way to do it, but hopefully we'll come up with something more concrete here..

Fortunately though, the GBJ/JPY trade is starting to come down. I've been in that beast all week (last).. It's finally starting to slowly come back down...

Jason
  • Post #191
  • Quote
  • Sep 26, 2006 10:02am Sep 26, 2006 10:02am
  •  BeachBum
  • Joined Oct 2005 | Status: Trade the MAX System with me... | 1,995 Posts
Right now I'm trading:

eur/cad +70

aud/nzd -20

cad/jpy +10

eur/aud +40

Good day at this point: +100
  • Post #192
  • Quote
  • Sep 26, 2006 12:41pm Sep 26, 2006 12:41pm
  •  heriyadi
  • | Joined Jul 2006 | Status: Member | 54 Posts
The day is not over yet, but looking from the chart right know, I don't think it's gonna much different.

Need you confirmation from reading the chart I have.
Sell in e/u and g/u.
Buy in usd/chf and usd/jpy.

In all US will go bullish
  • Post #193
  • Quote
  • Sep 26, 2006 2:35pm Sep 26, 2006 2:35pm
  •  stricko108
  • | Joined Oct 2005 | Status: Member | 97 Posts
Hi Beachbum

I remember you from dailyfx forum

I'm wondering if you trade off the gmt daily close, or the -3 gmt daily close

thanks
  • Post #194
  • Quote
  • Sep 26, 2006 2:43pm Sep 26, 2006 2:43pm
  •  tradeigel
  • | Joined Jun 2006 | Status: Trader and Programmer | 393 Posts
Hi BeachBum,

how do you exactly use ATR for setting your S/L's ? Could you post a screenshot? The only idea I had is that you might use the 'ATR levels' indicator which is drawing like 3 lines - one could use that as S/L.

BTW, don't get too excited about the EA...we still have to change a lot for making it profitable on the long run :/

Quoting BeachBum
Disliked
stockwet.....looking forward to the EA.

fozzy.....we appreciate your starting this thread for us.

everyone.....I have been working on using the daily ATR as a basis for setting an initial S/L instead of always using the previous day's high or low as S/L. Also have been trading 18 pairs with excellent results by simply following the original fozzy rules with one exception...I will trade regardless of whether the RSI line crosses the MA above or below the BB center line. For my trading purposes: a cross is a cross anywhere in the indicator window.

Looking forward to more good things on this topic.
Ignored
  • Post #195
  • Quote
  • Edited at 4:07pm Sep 26, 2006 3:16pm | Edited at 4:07pm
  •  tradeigel
  • | Joined Jun 2006 | Status: Trader and Programmer | 393 Posts
hi miscon,

thanks for creating the indicator... I found a little bug. It's not relevant for the system but for the visualization of the system...
You compute the BB on the smoothed RSI (i.e. on the MA of the RSI) that's not what fozzy posted. He said 'compute the BB on the values of the RSI'. Please change that.
And it's kinda strange to write BBMid = iMAOnArray()... . Why don't you use iBandsOnArray(..MODE_MAIN) => that's the acutal MidLine! However, maybe you meant to take an SMA not the BBMid (maybe to get a var for shifting?), if so, please tell me.
The following lines would have to be changed:

PHP Code:
i=Bars-BandsPeriod;
   while(
i>=0) {
     
BBMid[i] = BandsOnArray(RSI,0,BandsPeriod,BandsDeviations,BandsShift,MODE_MAIN,i);
     
BBUp[i] = iBandsOnArray(RSI,0,BandsPeriod,BandsDeviations,BandsShift,MODE_UPPER,i);
     
BBDn[i] = iBandsOnArray(RSI,0,BandsPeriod,BandsDeviations,BandsShift,MODE_LOWER,i);
   
i--; 
Thanks again. I really apreciate anybody putting effort in programming any piece of a system. I know, it's always a lot of work
  • Post #196
  • Quote
  • Sep 26, 2006 4:22pm Sep 26, 2006 4:22pm
  •  miscon777
  • | Joined Aug 2006 | Status: Member | 33 Posts
Quoting tradeigel
Disliked
You compute the BB on the smoothed RSI (i.e. on the MA of the RSI) that's not what fozzy posted. He said 'compute the BB on the values of the RSI'. Please change that.
And it's kinda strange to write BBMid = iMAOnArray()... . Why don't you use iBandsOnArray(..MODE_MAIN) => that's the acutal MidLine! However, maybe you meant to take an SMA not the BBMid (maybe to get a var for shifting?), if so, please tell me.
Ignored
You know, the strange thing is that I set the the BB to compute on the straight RSI (instead of its MA), and the results looked totally different than those produced in the earlier template. When I switched it over to the RSI-MA (smoothed RSI), the values lined up perfectly... so I figured I must have misunderstood something and went with that.

Regarding the BBMid, the middle BB line on any standard BB set is just a SMA. Look in the code for BB indicators (mine is called 'Bands.mq4' in StrategyBuilderFX), and you'll see something like this:

PHP Code:
MovingBuffer[i]=iMA(NULL,0,BandsPeriod,BandsShift,MODE_SMA,PRICE_CLOSE,i); 

But thanks for pointing out the MODE_MAIN option... I went in search of this when building the indicator, but only found references to MODE_UPPER and MODE_LOWER, so I just built the middle line directly by using an MA.

I did check the values that were being produced against the original template, and found them to match exactly, to the pip, for every line. Possibly the original template was wrong in using the smoothed RSI?

Apologies in advance if I'm just misunderstanding, and thanks for the comments.


-miscon777
Et ecce equus pallidus...
  • Post #197
  • Quote
  • Sep 26, 2006 4:38pm Sep 26, 2006 4:38pm
  •  tihomir
  • | Joined Sep 2006 | Status: Member | 1 Post
Great work guys!

Is it possible to trade this system on smaller time frame?.

Thanks !

Happy Trading!
  • Post #198
  • Quote
  • Sep 26, 2006 4:49pm Sep 26, 2006 4:49pm
  •  tradeigel
  • | Joined Jun 2006 | Status: Trader and Programmer | 393 Posts
Fozzy stated in his first post:
Quote
Disliked
"(...)On each chart I have an 8 period RSI. I also have an 8 period MA of the RSI and Bollinger Bands with a 20 period setting, also on the RSI.(...) "

So it's not REALLY clear but probably he meant it like I thought - "and BB, also on the RSI..". Well, I will try both and put the better performing into this EA, ok? And btw, in his first post the first line of his indicator window which says "RSI() ... => Bands() ... => MA() .." . That's clear!
The '=>' tells the indicator to computer on the FIRST indicator (Bands & MA would be calculated from RSI);
'->' would tell him to computer on the previous indicator (Bands would be calculated from RSI, MA from Bands).
I it's written comprehensibly, if not, feel free to ask me!


Quoting miscon777
Disliked
You know, the strange thing is that I set the the BB to compute on the straight RSI (instead of its MA), and the results looked totally different than those produced in the earlier template. When I switched it over to the RSI-MA (smoothed RSI), the values lined up perfectly... so I figured I must have misunderstood something and went with that.
Ignored
About BB-MID: Ok, well, I thought it would yield to different values. So it it doesn't then: who cares ...

Quoting miscon777
Disliked
Regarding the BBMid, the middle BB line on any standard BB set is just a SMA. Look in the code for BB indicators (mine is called 'Bands.mq4' in StrategyBuilderFX), and you'll see something like this:

PHP Code:
MovingBuffer[i]=iMA(NULL,0,BandsPeriod,BandsShift,MODE_SMA,PRICE_CLOSE,i); 
Ignored

Yeah, you're right. I didn't know it either until stockwet used it in the first version of FOZZY EA. It doesn't say in the doc. :/. it works, though.

Quoting miscon777
Disliked
But thanks for pointing out the MODE_MAIN option... I went in search of this when building the indicator, but only found references to MODE_UPPER and MODE_LOWER, so I just built the middle line directly by using an MA.
Ignored
  • Post #199
  • Quote
  • Sep 26, 2006 4:59pm Sep 26, 2006 4:59pm
  •  stockwet
  • Joined Mar 2006 | Status: Member | 723 Posts
Hey,

I probably missed this somewhere, but, does timezone matter with this system? Fozzy mentioned that he checks his chart at 00 GMT. However, my candles are not on GMT time, but GMT +3. Is the system valid with these minor hour differences, or, do we need to do some sort of time adjustment to get it to 00 GMT?

stockwet
  • Post #200
  • Quote
  • Sep 26, 2006 5:01pm Sep 26, 2006 5:01pm
  •  BeachBum
  • Joined Oct 2005 | Status: Trade the MAX System with me... | 1,995 Posts
Hello stricko.............I remember you too. It's a lot friendlier here at FF!

I have been using FXDD's MT4 platform which is GMT +3. I get a new "daily" candle at 5 PM EST, which is very convenient for me (and it corresponds to the NY close) and so far seems to work well. Stay tuned!


Quoting stricko108
Disliked
Hi Beachbum

I remember you from dailyfx forum

I'm wondering if you trade off the gmt daily close, or the -3 gmt daily close

thanks
Ignored
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