Quad Candle System

GBP/JPY - Sell 0.02 @ 147.931, TP: 145.40 SL: 150.25. Stop Loss won't be further adjusted but TP might be adjusted based on price action

Total Risk ~ 50 EUR

Reasons to enter:

1) Price action: The bars in the rectangles shown on the map: an outside bar, a pinbar and an engulfing on a pinbar
2) The resistance @148.90 seems to hold plus close to a round number 149.00
3) 61.8 Fibonacci in the area also serving as a resistance
4) AB=CD movement completed
5) On weekly, the 150.00 is the 4/8 MML line that could also prove as additional resistance. The trendline is now being tested so it should serve as another reason for confluence to push price down
6) On monthly we're at the 4/8 MML area that could provide resistance. The price looks in a range but we can also notice that the price is at 38.2 retracement from previous monthly swing so that should try to provide resistance as well and push the price down in an attempt to complete AB=CD movement.

Reasons not to enter:

1) Today GBP important news are coming, but as we can see on the chart: https://www.forexfactory.com/#graph=85863 , Oct hasn't been most of the times meeting its forecast.
2) There is a channel up on the daily formed but it seems to have stopped, either to consolidate ( bad for us ) or to switch direction ( good for us ).
3) Not on the MML extreme zone

Due to all these reasons, I've entered only half of the usual stop loss. As mentioned before I plan 100 EUR stop losses. An additional position might be added or not depending on the price action.

USD/CHF still on the lookout

Nice post.

Exactly what I'd hoped others would do but they missed the mark.

Logical and progressive analysis.

Great work!

Masterrmind............

Thank you for the appreciation Masterrmind, whenever I start analysis the outcome must be only one: confluence. I am still amazed by the concept, I somewhat applied it unknowingly in daily tasks but since you spelled it out in the thread it's taking things to a new level.
One flaw I noticed in my trading studies: I shouldn't skip steps. I should have first started backtesting to gain confidence in my analysis then go to demo and then to small live.
I postponed backtesting since I wanted to find a better solution, but I guess I'll start with what I have. I'll begin with EURUSD.
I am using the visual jforex platform to build a blank strategy and then input it in the historical tester. This would allow me to analyze charts like being in real-time. The downside is that it starts with 2004 not sooner (actually it begins in 2003 but we need to leave some candles as visible history).
If possible Masterrmind please review my analysis so me and everyone reading could see the flaws in my planning.
Thank you and we'll start tonight with the first chart.

I wish good trading to everyone!

Yes JForex is a good platform to use.

I actually dislike MT4 but as most traders here use it, I was 'forced' to trade with it so chart analysis etc was a smoother learning process.

If I started using another platform I think most of the questions might have been about how to use it etc etc and this is a rather time consuming process.

When I start critiquing your setups in more detail please note that I do not hold back and will tell it as I see it, expressing the good and the bad and whether it fits within the QCS Method or not.

My commentary should never be taken out of context, in other words it should be treated as constructive criticism with the sole aim of improving your trading over the longer term.

Your trade setup above appears to be rather solid so all good in my opinion.

Be aware that the 'best' setups at times can also fail and we need to understand that this is part of the business of doing trading, there will be winners and there will be losers.

However, over the longer term if we apply the techniques as outlined in Post 1 of the QCS thread then our probability of success is rather high.

This is the reason why I attach a fully transparent real trading account so that traders may use it as a 'real' guide showing the good and the bad at times and the curve balls that the market can throw at us.

The approach I take in this thread is to remain consistent over the longer term and I certainly would like to see other traders produce a real TE account with at least a year of trading history.

When I first started the account I am sure many traders thought about how slow the gain would be trading small positions on a 1K account on a high TF (D1).

But now having reached almost 50% Gain in Equity and remained within my self assigned risk settings perhaps they are thinking rather differently about it.

To be honest I have been trading it rather modestly and certainly not aggressive.

As time goes on I will apply more frequent shorter term cycles within the larger cycles to give a boost to the equity curve.

Lets hope that other traders join the group and make success stories out of their own trading accounts as I'm sure you will if you stick with it.

Masterrmind.............

Thank you for the answer. I really appreciate your input and I know it's made only for the sole purpose of improving thread participants. This is why I'm always going to be asking for your review. Providing transparency in the thread, including a sample account is a big plus. There is a saying in Romania: "You're putting your facts where your words are" and this is highly appreciated.
I know not all trades will end with positive outcome but confluence should provide the edge and that's more than enough. I just strive to learn analysis at a proficient level.
In backtesting I'll make mention of where it's a quad, mml, price action as readers can see the exact reasons.
My first conclusion: not backtesting made me nervous when trading and getting out to early and actually not knowing how to behave after entering the trade. I realized you're in a trade not at the entry point, but until you either TP,SL or manual close. Without backtesting I don't really know how to act, but starting tonight I'll get a better understanding.
Sorry for my long posts, I'm trying to include as much details as possible for further readers as i'm just a newbie learning Masterrmind method.

Your posts are welcome and if you want to post long ones thats all the better.

Masterrmind............

Ok, some steps prior to actually posting the charts and trading analysis.

1) I will be keeping on the chart in posting only 8/8 to + 2/8 , 4/8 and 0/8 to -2/8. The reason I'm doing this is to keep visible space on the chart for drawing: harmonics, price action, Fibonacci and whatever must be taken into consideration.
*I've attached a template of how the charts would look.
2) I'm using Jforex platform as it's easier to draw and I kind of like it better than MT4. One thing visible on charts is the MML lines history (it's called MURRCH2 in Jforex). You can show/hide this based on your preferences. Just click the right mouse button on any of the lines visible in the chart ( in my case, blue, light blue and red ) and select edit.
You'll then be shown a menu. N Period is the one advised in the thread: 64, Step Back is 0 and then you have Show Historical Levels.
I have checked and using these settings we match the template made by Masterrmind for MT4. You can use the templates he provides as they're perfectly set up for that platform.
3) To have access to backtesting in the Jforex platform click on the Services then Visual Jforex. If required click on the Adobe logo to allow it to run. You will see something like in the picture attached when it opens. Then you need to drag an if box from the side an put it in the work area. Then in the Default variables, you'll find the defaultPeriod. Use it to fill the boxes as shown in the picture. Then right click in the Default Area on the defaultPeriod and switch Start VAlue to Daily.
4) Click on the File/Export/.Java and save the file using the name it is provided, usually: untitledStrategy1.java.

5) Then you have to return to the Jforex platform. You must have a strategies box available. If not select it from View/Strategies as shown in the picture. Click to open the file you have just created or the one attached to this post. Then you have to right click on the file and select compile. Wait a few seconds. Then click on test.
REMEMBER: First you click compile ( only one time is required to do this ), then you can click test.

6) Then in the Historical Tester box, we have the following settings:

- visual mode because we want to see what we're trading
- the date is set to 05.05.2004 to current day because the broker stared operations in 05.05.2003 and we need some candles as history
- instead of ticks, I've used 1 hour - this shows the testing accuracy, but since we're going to be using it only for daily trades it's ok
- test speed - select it as you wish, the whole purpose is not seeing "the future" so you pretend to be trading in real time

7) That's it, the last step is to press the green button. Then the testing will start. Pause it and load the MURRCH2 ( this is how the indicator is called in Jforex ) as instructed at step 2.

Trading rules:

1) Stop loss always = 100 EUR / split among the required pips. That's equal to about 20 Large 5 Crispy Strips Menus
2) Take profit = It must be at least equal to SL, but I'll try to make it 1.5 -2
3) Will try to learn to add positions along the way, as this would make a real difference in the trading
4) Trades won't go lower than 1 Day candle. I'm not looking for many trades a month. If I get 2-3 it'll be awesome ( I mean on more currency pairs not just EURUSD )
5) We start with EURUSD and we will move further to other currencies as well. Shares indices and commodities will not be considered for the near future
6) My money management rules are simple: I have 300 EUR to spend monthly on daily candle trades. This will be fixed for the entire period of backtesting as we're just trying to understand the method. Once this is completed analysis on increasing position sizes will be taken.
7) Will do my best to explain clearly the thought process and then we wait for validation from Masterrmind and the market.

Masterrmind please review if the rules above comply with the thread requirements also for visual settings

Ok as mentioned, we begin backtesting. We're starting from 05-2004 on EUR/USD first

1) The first available trade with a quad at an extreme MML is on 27-oct-2004. It's a Wednesday so we can open a trade.

Entry: SELL @ 1.2711 / SL: 1.2863 ( equivalent to a 100 EUR trade ) and TP: 1.2520 ( but we must look at 1.26 price behaviour )

Daily outlook. The red line just above the quad is a resistance and it seems to be the place where the price has stopped. It can be just a correction at 38.2 Fibonacci or hopefully to the 61.8 Fibonacci

2) On weekly, the price looks bullish and we have just gotten out of a range at 1.20 - 1.25 . Not too much history as we miss bars on it.

3) The monthly chart is not available clearly due to a lack of history.


The SL has been taken out. Results until now: -150 pips = 100 EUR

Although this has been a perfect quad located in extreme MML the results haven't been favorable.

The only possible warning ( based on my limited experience ): Weekly charts that showed a price increase hasn't ended.

Second trade:

SELL @ 1.3262 ; SL: 1.3475 ( 100 EUR ) ; TP: 1.3030 - 1 DEC 2004

1) Daily Chart : Engufling bar after showing some signs of price exhaustion or consolidation
AB - CD pattern completion
Price in extreme MML area
Price showing signs of exhaustion around 161.8 Fibonacci area


2) Weekly looks like a doji ( candle still in progress )

3) Monthly looks like a shooting star ( candle still in progress )


Trade Result: + 20 pips ( since after 100 pips in profit the price is moved to trailing stop ) It went to a high profit of 120 pips and - 100 = 20 pips left
Overall: - 130 pips

Third trade:

BUY @ 1.2590, SL: 1.2430 ( 100 EUR ) , TP: 1.2774

Daily outlook:

Quad into extreme MML
Downtrend into channel
AB=CD pattern completed
Support at 1.2454 (the equivalent of -2/8 MML )


Weekly & Monthly outlook = Bearish

Stop loss: - 163 pips
Overall: - 293 pips

Looks good.

Be careful about taking entries from the 4/8 MML zone.

Quite often price will move within the pipe zone for some time in a ranging type PA.

The pipe zone is simply the area between the 3/8 MML and 5/8 MML price lines.

If you do want to enter trades from the 4/8 MML area either apply lower risk to your entry(s) or use only 1 octive gap as your SL.
Due to the reversals likely at the 3/8 or 5/8 price levels it is wise to apply a stricter trailing stop approach and potentially look for a smaller target of say 1 to 2 octives (usually just 1 octive though; say a long from 4/8 to 5/8 or a short from 4/8 to 3/8 providing an almost 1 RR).

If price manages to breakout of the pipe zone look for targets of closer to 4 octive gaps but start relaxing the trailing stop approach (keep stops wider so you don't strangle your trades progress).

Alternatively you might like to consider entries as breakouts from either the 3/8 or 5/8 or trade within the pipe say 5/8 back to 3/8 or 3/8 up to 5/8.

Its a bit of an art form getting this right on average over the longer term meaning that there will be times when you get it wrong, bad news hits the market unexpectedly or someone tweets something 'interesting' or any other number of factors some you know of in advance and some you don't.

The trader simply needs experience in this space and an appreciation of what can, might or is likely to occur in the market.

What makes QCS shine is the ability of the trader to manage all positions and orders and achieve greater than 1 RR on average with a strike rate greater than 50% and the benefit of using relatively wide stops on a D1 TF giving your trade plenty of breathing space and at low relative risk per trade and then carefully adding in extra positions at opportune times.

QCS appears rather simple from a charting perspective but there is quite a lot going on in the background.

How much goes on in the background is up to the trader to decide but its all layed out in Post 1.

Good trading,

Masterrmind.............

Thank you for the input Masterrmind. The first lesson learned: I wanted to start taking trades in the extreme MML preferably with quads but as you previously mentioned, that's not enough, we need confluence as well.
I was curious of the outcome if we take a mechanical approach and disregard the trading environment if we are in extreme MML + quad but the lesson is learned: it's not enough, we need confluence.

2 of the trades took stop loss because they were in large contradiction with the weekly and monthly trends. The other trade with the small profit was in a neutral large context, this is why it moved a little favorable.

From now on I'll post only considering confluence, mechanical trading in this case ( not sure in other cases, as I have no experience ) seems not to work.

At times you might need to take more than one bite at the cherry to make a trade stick !

In other words the 1st entry might get stopped out due to many easily understood reasons and some not easily understood reasons.

This is reason enough to always try to shoot for more than a 1 RRR in the hope that eventually say a 4 RRR target gets hit.

Building up a confluent entry is the way to go but its not the end of the story ... then you need to actively manage the position and seek to add in 'mini short term cycles' (Equity permitting) as I've recently posted for example the GU cycles of trades.

You need to crawl first, then walk and then you can start to run.

Masterrmind............

Thank you again for your guidance. I will have to reassess a little and will resume with the backtesting and posting charts. I'm aiming to filter bad trades by removing the "easily understood reasons" and I think that when I placed those trades it was done in a more mechanical way than I'm doing in the demo account. Inside my head I told myself, it's just backtesting and I'm curious to what happens if I do it more mechanically.
What I still have to grasp is the idea of mini short-term cycles. I'm going to look more on price action and will try to consider additional lots at support/resistance + price action. Might use that also in connection with MML as main entry points into trades.

Still learning to crawl, but there's plenty of time to walk and run after that

Finding a good setup is proving to be rather elusive at the moment.

Indices are falling through the floor while numerous currency pairs are no where near the zones I would want them to be for an entry.

Commodities are also not aligned for a setup.

Well unless some trader finds a worthy candidate as a potential setup it will be on the sidelines for the time being as far as the Quad account goes.

Please post some charts of any potential currencies if you do happen to find any.

ps. I also revisited the EN setup for a re-entry but its not too favorable either although I might be tempted to drop a few entries if nothing else materializes.

Masterrmind..............

What about shorting GA or GN ?

Both exhibit Quad Short patterns.

But is the entry level of either pair worthy of an attempt ?

GA [D1]

GN [D1]

What are the risks versus potential rewards.

Are any of these pairs worth a go ?

Masterrmind.............

Notice how 1.5 octives used as the SL (risk per trade) the account can only just handle it.

This is one potential issue with a relatively small 1K+ account.

I would certainly at least initially want to have my stop somewhere up near the swing highs of either pair.

Do not be phased by the 4 RR targets as these deep zones projected off the bottom of each chart are unlikely to be hit anytime soon however, certainly possible to hit 1 to 1 or a 2 to 1 level down lower.

Question is though, how likely is it under current market conditions that a 2to1 RR would get hit and which of these pairs is the likely candidate ?

Masterrmind...........

XAUEUR [D1; Short Cycle]

Now short.

Octives 78.1 pips.

Targets all align at the current 4/8 Central Pivot.

Initial risk is ~ 1.1%.

Commodity time !

Masterrmind............

Good luck with the trade. If you don't mind could you please advise the reason for entry, as it was not a quad? The Pair still looks bullish to me?

This setup was not a Quad pattern.

Note that entries may be taken that are Quad patterns or MML or a combination of both.

The XAUEUR short was an MML setup attempting to get into the pair from near the 8/8 MML level and trade it down to the 4/8 MML zone.

Please refer to the screenshot for a general guide as to the technical considerations.

1. Resistance zone;
2. 8/8 MML;
3. Harmonic 1 to 1 completion near entry level;
4. Stops just above the 127.2 Fib Expansion level (since price does not usually reverse on a dime, it takes time to lose momentum);
5. Target zone falls just within the 61.8 pullback of the entire AD leg (since price has pushed up higher some adjustments are in order);
6. Low risk applied in case I am wrong (about 1% only).

I have now moved the stop of Entry 1 up to the +2/8 MML (1078.13) area where it shall remain so risk is now slightly higher than 1% at 1.3%.

I have also added in a Sell Stop order at the MML level just below current price such that a drop would increase the final gain on this cycle.

At worst if I am wrong the account takes about a 1.3% hit.

Note that the fundamental considerations should also be addressed.

Masterrmind.........