The Daily Fozzy Method

Nice work, Mike.

My thoughts exactly. I also thought about adding more weight or at least an incremental weight as the time frame increases. Any ideas here ?

Attached this mornings pip results since opening them. Again these were entered long / short depending on whether the RSI was above the MA or not and not on crosses.

Good trading to all.

Mike 85,

My previous post wasn’t to challenge you. I know that trading is not about “who is better etc. etc.” and if it was - I am quite sure you are better trader than I am . (disciplined trading is definitely not my virtue ). Your system looks very interesting and I see that you know your stuff very well.

Nevertheless I would like to comment on some issues.

quote:
"You mention that you use a BE of 50 pips. What will happen if your BE gets hit a couple of times in a row ? Then you sit with an average RR of 1.4 Risk for 1 reward (1.4:1). Have you done some calculations to see how much it would take to get that average back up to 1:2 or 1:3 ? "

Let’s separate apples from oranges this is %win from R/R ratio. If my BE get hits a couple of times in a row (which happens quite often) it reduces my % of wins. This is because BE trades are generally considered losing trades. I play defense so actually I feel pretty comfortable with BE trades - not losing any money and ready for the next trade. So this has nothing to do with my R/R ratio. I do not calculate BE in my R/R - they doesn’t exist for this purpose. If it was looser or winner – even 20 pips than this is considered in R/R calculation. Is this correct or am I missing something?

My system is (as it’s designer ) very simple. Basically I am looking for a fozzy cross or very close to the cross and for hammers or falling stars candles. When there is the “right” setup I place buy stop / sell stop orders 30pips above/below the close price at the end of a day. By using buy/sell stop orders I am “loosing” 30 pips on every winner but on the other hand they keep me out from some bad trades. SL 70 pips, BE after 50 pips in my direction. I am giving space to my trades, which means that I do not close my trades below 140 pips in green (I have mentioned that earlier). For me it is quite 2 dimensional – either you give some space and have chance for big winners or you give less space and get smaller profits. (as far as I am concerned it is really rare to get many pips on a trade with tight trailing stop). That is why I raised this issue in my previous post. I can’t imagine how anyone can have big R/R ratio taking 30-50 pips profits trading on dailes/4h candles. (that was general remark - I know that you have higher R/R).

Your EA looks very promising and I would really like to see it. Yet this seems far to complicated for me (I am an active member of new Zen – keep your charts clean - sect ).
I see that you use 4 different indicators (fozzy, dinapoli, CCI, MA5/13) + Vegas while I am having trouble with just one indicator J.
I like those red and green squares (not sarcastic here) I wouldn’t only name them Probabilities. I know that this is only conventional name cause 100% "probability" resulting from 100% green/red squares doesn’t mean that this trade will go our way (and if not this is 0% probability trade). In forex no matter what we have 50/50 chance on every single day. So calling it Probability might be little bit confusing.

quote:
"Following is how the trades turned out:

usdjpy S 93.39-93.08 +31
usdchf S 1.1572-1.1531 +41
usdcad S 1.2506- 1.2442 +64
nzdusd S 0.5087-0.5144 -57
gbpusd B 1.4412-1.4543 +131
gbpjpy B 134.65-135.31 +66
eurusd B 1.2820-1.2920 +100
eurgbp B 0.8905-0.8880 -25
audusd B 0.6461-0.6512 +51

Total 402 pips for today."

Other thing is trading so many pairs. In the above trades you actually made pips selling $ (usdjpy S, usdchf S, usdcad S, gbpusd B, eurusd B, audusd B) and hedging it little bit by nzdusd trade. You could as well only buy gbpusd with increased size. This is the reason why I trade only 4 pairs (which for many it is still too much J ). O I will stop here – this was discussed so many times before J

These are just my loose thoughts. Nothing personal.

Good luck to all.

(sorry for my English)

betterave........I would like to see a chart showing what you have described.

BB

Right now I do not have the access to my MT4 platform so I will try to explain some issues on the attached simple chart (i do not know how to paste it in the text). This is GBP/USD, daily, CET (Europe).

Trade #1 – nice/easy one

I do not remember what was the close price at that day so let’s assume it was 1.5150. I should have set the sell stop order at 1.5120 (30 pips below close). Sometimes it’s little more than 30 pips (I like to set it at round numbers, highest/lowest price, etc.). But it was Friday.
I love Fridays (not only because of Saturdays after them J ) because when there is a good setup on Friday - market often opens on Monday with the gap in the direction of Fridays move.
From that reason I have opened the trade at the end of a day without setting sell stop order. I open trades without buy/sell stop orders only on Fridays (because of the gaps).

On Monday market opened with the gap in my direction.
BE after 50 and waiting till the end of a day. I could actually close half of my position during the day because the move was big at the first day.
I have moved SL to around 1.4940 (I wanted to have 210pips banked). And again I was waiting (one of the greatest said that he is making money by sitting not by taking actions J).
In this particular situation I have closed my trade at the end of Tuesday (over 600 pips). It was enough for me and I didn’t believe in a third consecutive big black candle (but that could have happened and it would be my mistake exiting to early).

Ah where is Fozzy. I use Fozzy RSI lines as an additional guide in which direction market is heading. If there is a proper candle (hammer/star) and a fozzy signal then I take a trade without hesitation (but still this does not guarantee a positive trade).
If the Fozzy cross was like 5 days ago and the gap in the indicator (between the RSI and it’s MA) is getting bigger I do not want to take a trade in this direction anymore. I am waiting for the candle in the opposite direction. In this situation I am assuming that the market is little overheated and I want to go opposite. But of course you have to wait for the proper candle. This is quite similar to the Vegas method.
I am also looking at Vegas fibs especially when it comes to taking profits.

Trade #2 – BE

It was BE trade.
I should have close half of a position during a day. But that didn’t happened.
Nothing more to explain here.

Trade #3 – BUY stop

Saved by buy stop. I have set up the buy stop order 30 pips from the close. Order wasn’t activated, Markets went down.

Trade #4 – looser

I do not remember if I took this trade. Rather not because the market was quite exhausted. But if I would have taken it I would place the sell stop. Order would be activated and it would be a loser (70 pips lose). That is nasty situation.


I am not sure if I made myself clear and explained what you wanted to know. There are some more nuances. As you can see this “system” is quite discretional. The more rigid rules apply to MM (70 pips SL, BE after 50 pips, R/R more than 1/2, etc.).
Maybe you will find something interesting in it.

Good luck.

Thanks for the detailed answer !

If I understand you correctly; you are primarily PA trading, using candle/bar patterns on the Daily chart. A "traditional" Fozzy signal is a secondary indicator for you.

If the Fozzy agrees with a Pin Bar or similar strong candle configuration, you will most likely use this as an additional reason to enter the trade. If the Fozzy signal is "old" and dissipating, you will use this as the basis for NOT entering a trade, and if you are already in a trade, consideration is given to an exit.

Do I understand you correctly?

BB
correct

if I had your writing talent i would describe my strategy in one paragraph

Thanks for the confirmation........and the compliment.

Mike,

I would to get a copy of the Fozzy indicator you are working on. Any chance you might make it available to all us Fozzy Fans

mitch

Hi guys,

Been running around a bit this week, helping building stage props at kid's school for upcoming concert. The joys of being a parent.

Betterave
No problem with your comments and no offense or grudges taken. We are all on here to speak our minds giving other insight into our thought processes etc.. and I welcome your comments and even though you might think your comments are just that, others learn from it. I don't think there are better traders than others...for me a better trader is one that can be consistent over a period and it seems that you have found this 'comfort zone' already.

Agreed on trading all those pairs vs. trading just majors. I did that to test outcome on others. I in actual fact only trade gbp/usd and now and then will take a position on chf or eur. Almost 90% of trades on g/u.

I think our trading may be more similar than you think. I only have the fozzy rsi, dinapoli (for trend confirmation) and vegas daily for levels on my charts. PA however is most important. As BB commented (from your post) that PA needs to confirm indi's before I go into a trade.

Mitch,

I just want to clean it up a bit and improve the code. Currently it puts a bit of strain on a PC when updating. Just need to change some of the code i.e. only to update if price has changed or maybe add setting only to update on close of candle etc..

Once done I will post it here for all. I have a rather busy weekend coming up i.e. bit of garden work, cleaning my koi pond filters, Super 14 rugby match (Stormers vs. Blues) etc... I will however see if I can have a decent copy available by latest Tuesday for starters.

I want to thank here for posting the Dynamic RSI indicator.

Those dots really save my eyes!

Thanks,

r.

How to get the indicator that shown here??

Mike-85 where can I find the file for the probabilities display

Hi all

Well I'm about as new to this as you can get (<5 weeks demo trading). I have been reading this thread with quite a bit of interest. One of my problems is that the broker I use doesn't use metatrader or any of the platforms mentioned here so I have had to try and recreate the chart from scratch.

Can you guys check out my chart and let me know if I'mon the right track for recreating the chart. If the chart is correct then I'll happily publish the code.
I have also marked the points at which I think I should have gone long or short, I'm still unsure as to what signals indicate an exit (apart from the "I'm happy with this profit" option).

MrK,

Just sign up for IBFX, Interbank FX
Or any other broker which uses the MT-4 platform.
It's free & there's no time limit as long as you use it once in a while.
When the time comes, you can go live with them too, if you want.

Your agravation factor will be held to a reasonable level with the MT-4.
Just Google IBFX & it'll take it from there.

Best of luck with your new adventure in Forex.
And welcome to FF. You are gonna love this site!

Here MrK,

Go to those threads & you'll find whatever you need for Fozzy Method.
I think I've seen a template, but I did mine manually from the e-book, which leads you through all of the set-up step by step.

E-mail me with any questions. I use this for last couple of years.
Though I don't trade with it, I don't like indicators, I use it to give me a real quick sense of whats happening in the market.

thebhoy & beachbum did a LOT of work collecting the Fozzy stuff & putting it in a central directory.


http://www.forexfactory.com/showpost...34&postcount=1

http://www.forexfactory.com/showthread.php?t=26389

Hello Mike
How can we get this indicator?
Thank you

Thanks for the info.

Just downloading MetaTrader now.

Quick question about it, I'm about to go on holiday for a couple of weeks, is there a way to "download" stock/forex history so I can work on it while offline? (yes I have permission to do this;-) )

Yeah, MrK, there's a "history center" and you can download in Excel, and one other format, I think. But I have to interject my opinion here.

There is a downloadable user manual in the"Help" section on the toolbar. I'd suggest download & print that and actually read it. It's a great guide to everything available to you and things you can do with the MT-4.

I did things the other way around & only went to the manual when I was stumped, which was often. Frustrating. Had I read first, I'd have learned the platform much sooner that I did & with a lot less swearing at the screen.

About the vacation.....I'd save the crash course in MT-4 for dedicated chunks of significant amounts of time. So, I'd enjoy the vacation & save the MT-4 till my return. Just me!

Best of luck to you, sir.