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The Daily Fozzy Method

  • #421
  • Oct 13, 2006 7:05pm Oct 13, 2006 7:05pm
Quoting cisco
Looking back at my charts for the trades you have listed, I show all the pairs bouncing off the MA, with the exception of USD/JPY. This was at 5 pm EST. Does anyone else's charts look like mine? I'm beginning to think something is wrong with the charts I've got.
I'm using InterbankFX and my MA actually crossed. It's too bad there isn't a single standard time for all charts...

Jason
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  • #422
  • Oct 14, 2006 12:40am Oct 14, 2006 12:40am
Hi all

Thanks, Fozzy, for sharing your interesting system. I too have a job, and I happen to love it, so I'm always looking for good, simple, fire-and-forget systems on daily bars. I'm not sure how you make this work, though. Having coded it in Metastock Pro FX and looking over the years of data, the juicy trades are few and far apart. It seems you're always battling either trends or chop where you get either run over or in too late.

The good news is that you get 3 systems in 1 so to speak.

There's the Fozzy Classic (blue and red arrows). Pring's ST Filtering system (overbought and oversold = 8-period SMA of RSI(8) enters >70 or <30 respectively - bars painted green or yellow) & an old RSI system I read about in a Krutsinger book (blue bulls and purple bears in the image below).

I might be underestimating the initial thrust of your position that nets you, say, 50% of an ATR(30) with half your postion and allowing you to move the other half to BE, so that you're often getting small, positive results while waiting for the homerun with the risky half.

In any case, my hat's off to you Fozzy. Very interesting thread.

Cheers,

dsl
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  • #423
  • Oct 14, 2006 9:09am Oct 14, 2006 9:09am
Not the best of weeks for the "fozzy" method, in part because I take all trades without regard to the BB center line filter.

Sun-Mon 10/8-9
eur/cad......................B/E
aud/nzd.....................+52
cad/jpy......................B/E
usd/jpy......................+80

Mon-Tues 10/9-10
No trades

Tues-Wed 10/10-11
eur/cad....................still open (currently +28)
eur/jpy.....................still open (currently +32)
gbp/jpy(F)................still open (currently -14)
aud/nzd....................B/E

Wed-Thurs 10/11-12
cad/jpy.....................still open (currently even)

Thurs-Fri 10/12-13
eur/usd.....................still open (currently -49)
gbp/usd....................still open (currently -29)
usd/chf.....................still open (currently -49)
usd/jpy(F).................still open (currently -31)
aud/usd(F)................still open (currently even)
usd/cad(F)................still open (currently -36)
nzd/usd(F)................still open (currently -34)

Booked for the week:...................132 pips
Open trades:..............................(-182 pips)

Week ending 9/30.................+202
Week ending 10/6.................+462
Week ending 10/13...............-50

Three week total:.................+614
  • #424
  • Edited 10:04am Oct 14, 2006 9:19am | Edited 10:04am
Hello,

My motivation was to find a way to determine a stop/loss strategy as a foundation for trading the Fozzy with the euro/dollar pair. So this is what I did:

1. I put vertical lines on the daily candle right on or after the crossing of RSI and the MA. I used the middle band of the Bollinger to determine the trade.

2. I looked to the next daily and recorded the o/h/l/c data.

3. I looked to the daily candle right before the next cross and recorded the lowest or the highest(depending on wether it was a buy or a sell) and calculated the most you could have profited from the trade.

4. Calculated the retracement by taking the lowest or highest point(again, depending on wether the trade was a buy or a sell) and subtracted the result.

Here are the results...please I am only sharing this in the hope that it can help someone. I make no claims and some or most of you may find this post not very helpful or can add/correct my findings. :
Attached File(s)
File Type: doc Fozzy stop loss.doc   44 KB | 888 downloads
All 4 1 and 1 4 All
  • #425
  • Oct 14, 2006 9:59am Oct 14, 2006 9:59am
Quoting BeachBum
Not the best of weeks for the "fozzy" method, in part because I take all trades without regard to the BB center line filter.

Sun-Mon 10/8-9
eur/cad......................B/E
aud/nzd.....................+52
cad/jpy......................B/E
usd/jpy......................+80

Mon-Tues 10/9-10
No trades

Tues-Wed 10/10-11
eur/cad....................still open (currently +28)
eur/jpy.....................still open (currently +32)
gbp/jpy(F)................still open (currently -14)
aud/nzd....................B/E

Wed-Thurs 10/11-12
cad/jpy.....................still open (currently even)

Thurs-Fri 10/12-13
eur/usd.....................still open (currently -49)
gbp/usd....................still open (currently -29)
usd/chf.....................still open (currently -49)
usd/jpy(F).................still open (currently -31)
aud/usd(F)................still open (currently even)
usd/cad(F)................still open (currently -36)
nzd/usd(F)................still open (currently -34)

Booked for the week:...................132 pips
Open trades:..............................(-182 pips)

Week ending 9/30.................+202
Week ending 10/6.................+462
Week ending 10/13...............-50

Three week total:.................+614
Are you trading with a real account or a demo account?
  • #426
  • Oct 14, 2006 10:06am Oct 14, 2006 10:06am
I'm trading a real account. However, because this is a forward test, I am trading micro lots. It's pin money............more fun than a slot machine!



Quoting saaedb
Are you trading with a real account or a demo account?
  • #427
  • Oct 15, 2006 8:13am Oct 15, 2006 8:13am
Quoting smjones
If you had 2,000 and you lost 400, that means you risked at least 20% on all of your trades combined. I would never risk more than 10%. In addition to that, I would be very careful to make sure I am not just placing the same trade with different currencies. (correlation is king)

Sound like you may need to read up on Money managemnt...

Gosh, that sounded a bit harsh. I did not mean it that way... I just meant that maybe you could adjust your position size to reflect your stop distance so you would not be risking so much of your capital.
What currencies would you not trade together? Are you talking directly related or inversely related? Would that not imply that you only trade one USD pair?

I'm trying to find information on this now... And no, that's not harsh. I have a thick skin anyway (or head). :-)

Jason
  • #428
  • Oct 15, 2006 8:29am Oct 15, 2006 8:29am
It is not that I would not trade them together. I would trade them together. However, Knowing that for example EURUSD and USDCHF are almost 100% inversely correlated, I would adjust my postion size as though they were one trade, in realtion to how much I am willing to risk. So In other words for me If I was willing to risk say 3% on the move, I would risk 1.5% on EUR and 1.5% on CHF. Or If you really think about it what you are really trading is EURCHF. Why not just trade this one directly? Less spread cost anyway.

Scott



Quoting jlowder
What currencies would you not trade together? Are you talking directly related or inversely related? Would that not imply that you only trade one USD pair?

I'm trying to find information on this now... And no, that's not harsh. I have a thick skin anyway (or head). :-)

Jason
  • #429
  • Oct 15, 2006 10:54am Oct 15, 2006 10:54am

BB get burned....LOL
basic is beautifull...




Quoting BeachBum
Not the best of weeks for the "fozzy" method, in part because I take all trades without regard to the BB center line filter.

Quoting BeachBum

Sun-Mon 10/8-9
eur/cad......................B/E
aud/nzd.....................+52
cad/jpy......................B/E
usd/jpy......................+80

Mon-Tues 10/9-10
No trades

Tues-Wed 10/10-11
eur/cad....................still open (currently +28)
eur/jpy.....................still open (currently +32)
gbp/jpy(F)................still open (currently -14)
aud/nzd....................B/E

Wed-Thurs 10/11-12
cad/jpy.....................still open (currently even)

Thurs-Fri 10/12-13
eur/usd.....................still open (currently -49)
gbp/usd....................still open (currently -29)
usd/chf.....................still open (currently -49)
usd/jpy(F).................still open (currently -31)
aud/usd(F)................still open (currently even)
usd/cad(F)................still open (currently -36)
nzd/usd(F)................still open (currently -34)

Booked for the week:...................132 pips
Open trades:..............................(-182 pips)

Week ending 9/30.................+202
Week ending 10/6.................+462
Week ending 10/13...............-50

Three week total:.................+614
"Analysis Is Hard But Trade Is Easy"
  • #430
  • Oct 15, 2006 11:25am Oct 15, 2006 11:25am
Hey Se[V]eN............

Thanks for the kind words...........

Oh....by the way, if you consider 614 pips profit in three weeks getting burned, then I will quote a Louis Armstrong song: "Burn me!".....


Quoting Se[V]eN
[left]BB get burned....LOL
basic is beautifull...
  • #431
  • Oct 15, 2006 3:20pm Oct 15, 2006 3:20pm

come on man...
im expecting something speacial from u....
u true bout middle bb principle...
i only open trade with basic fozzy...
u know what happen...
the fire r even bigger in my a**..lol





Quoting BeachBum
Hey Se[V]eN............

Quoting BeachBum

Thanks for the kind words...........

Oh....by the way, if you consider 614 pips profit in three weeks getting burned, then I will quote a Louis Armstrong song: "Burn me!".....
"Analysis Is Hard But Trade Is Easy"
  • #432
  • Oct 16, 2006 4:52am Oct 16, 2006 4:52am
If you're expecting a system to have no loosing weeks, then you're in for a big surprise.

Quoting Se[V]eN
[left]come on man...
im expecting something speacial from u....
u true bout middle bb principle...
i only open trade with basic fozzy...
u know what happen...
the fire r even bigger in my a**..lol
So far so good.
  • #433
  • Oct 16, 2006 2:17pm Oct 16, 2006 2:17pm
Was yesterday a valid signal to enter the EUR/USD?
Attached Image
  • #434
  • Oct 16, 2006 2:28pm Oct 16, 2006 2:28pm
If you consult the original "fozzy" trade rules, it was indeed a BUY signal.



Quoting Palmer
Was yesterday a valid signal to enter the EUR/USD?
  • #435
  • Oct 16, 2006 2:33pm Oct 16, 2006 2:33pm
Since yesterday's close and today's open are 2 pips apart, would it be wise to still get in?
  • #436
  • Oct 16, 2006 3:12pm Oct 16, 2006 3:12pm
Wait a minute...since yesterday's close was about half an hour ago which is when today's open starts at 5PM est then it's all good.
  • #437
  • Oct 16, 2006 3:20pm Oct 16, 2006 3:20pm
I'm not sure I entirely understand your question, but this is where discretion enters into this and any trading method. Will you stick to the rules 100% or not? Again......the original "fozzy" rules say nothing about open and close prices. So, if you are trading his method as he described it, you would take the signal and buy eur/usd. If you want to modify his method for some reason and employ discretion, then you have now made it your trading method because you have modified to fit your trading style. I've already made it clear that I have modified fozzy's method to suit my trading style and I like the results. I'm "comfortable" with it and it works for me. Any way you slice it, the most experienced traders here at FF (especially those who teach in the PF) will advise you to develop a system and trade it 100% faithfully until you have a "proven" reason to change it. I've learned that the hard way, so this is just my opinion based on somewhat painful experiences.



Quoting Palmer
Since yesterday's close and today's open are 2 pips apart, would it be wise to still get in?
  • #438
  • Oct 16, 2006 3:37pm Oct 16, 2006 3:37pm
Quoting BeachBum
If you consult the original "fozzy" trade rules, it was indeed a BUY signal.
Fozzy indicated that he didn't take trades on Sunday nights (Monday Open - see his first post - though, this is discretionary.)

Also, as I mentioned earlier, unless you look at the charts at precisely the open of the next bar, you could be viewing a false signal.

I see a signal on EURUSD that developed yesterday (through today) and am waiting for 00 GMT to confirm the trade and place the order. My other platform, which uses 5PM EST has confirmed the cross for today, but not yesterday. I guess we're running into the problem of inconsistent signals across brokers.
  • #439
  • Oct 16, 2006 4:05pm Oct 16, 2006 4:05pm
OK...let me clear up this can of worms. I'm not trying to modify anything, I'm just double checking that what I see coincides with the rules stated.

The RSI and its MA are below the middle BB.
I use FXDD and there day starts at 1700 EST USA which is 0000 GMT. With FXDD's data on 10/13 the RSI was at 27 and the MA was at 31 on the close.

On 10/16 the RSI was at 34 and the MA was at 32 on the close at 0000 GMT; the RSI crossed above the MA for a long signal.

On 10/17 (Today according to FXDD) you would enter long on the open of the 0000 GMT bar.

Just double checking...
  • #440
  • Oct 16, 2006 4:40pm Oct 16, 2006 4:40pm
Quoting Palmer
The RSI and its MA are below the middle BB.
I use FXDD and there day starts at 1700 EST USA which is 0000 GMT. With FXDD's data on 10/13 the RSI was at 27 and the MA was at 31 on the close.
I think this is where broker differences make things confusing.

Just to be clear, 1700 EST USA is NOT 00 GMT. EST is 5 hours behind GMT time. EDT is 4 hours behind, making 2000 EDT equal to 00 GMT. It may say GMT on your chart because FXDD is on GMT+3 time, I believe.

So, we're all kind of talking around each other because we're all looking at different times. I'm going by my IBFX demo account because IBFX's server time is on GMT time with no adjustments. So, I know that a new bar is showing me GMT 00 time.

For that reason, Palmer, I can't say whether or not you have a valid signal on your platform. I'm waiting for 00 GMT time (8:00 PM EDT) and suspect that I will have some signals fire off. Others, I know, are using 5PM EDT because they are on platforms that use GMT +3.
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