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The Daily Fozzy Method

  • #521
  • Oct 21, 2006 9:37pm Oct 21, 2006 9:37pm
Quoting accrete
Hi there, on the RSI i posted it is the exact RSI,MA,BB that are in the original Fozzy method. To quote from post one the settings i have used in the indicator are: I have just placed them all in a simple hack of the Dynamic Zone RSI by Sniper, but all numbers are the same RSI8, (& RSI8dots for visual aid) Signal8, BBs20. Here is a quote/copy/paste of the exact code in the indicator posted. As you can see all settings are identical to those if one were to paste many indicators together:
Hope that clears up any confusion. I had no intention of changing Fozzy's settings, just using a pretty-all-in-one indicator, as this was proven in past testing to be more reliable signals as opposed to plotting an RSI, then plotting BBs on the RSI, then plotting an MA on the RSI...to many things talking to one another...and it is all in one indicator on the DZRSI. If one will do some visual backtesting over the last year(s) with the indicators above/below on another you can see that the "single" indicator style, as opposed to the "many-pasted-together" style will not shift in strange ways as the many pasted together can at times. I'm just trying to work with a tool (with the origianal Fozzy settings) that seems to be more consistent in the signals it yeilds.

: ) Thom
I think Fozzy has stated that he uses EMA
  • #522
  • Oct 21, 2006 9:40pm Oct 21, 2006 9:40pm
Quoting BeachBum
Thom............

While I was writing about this, Jason posted his observations which are the same as mine. Earlier I setup a eur/usd Daily chart with the "fozzy" template provided by minute in post #25 and your most recent template (see post #158). The difference was immediately obvious, so I went back and checked the "signals" from your indicator window and the original "fozzy". In almost all cases your indicator gave the "trade signal" one Daily candle (or bar) later. This means some trades would have been missed, while others would have been entered a day late. Are we missing something here? Or have we drawn the wrong conclusion for some reason? At this point, I will continue to use the original template with the "pasted together indicators" rather than the DZRSI single indicator. So far, this method appears to be very successful.
If you use EMA instead of simple MA you would not be one date late, I believe, at least that is what I saw when I slighted changed the template in post 25 to EMA.
  • #523
  • Oct 22, 2006 3:11am Oct 22, 2006 3:11am

hey beachbum...
since u are a big cat i got question here...
u use ATR for S/L....
is ATR a lagging or leading....
if it lagging do u use previous day ATR???...

"Analysis Is Hard But Trade Is Easy"
  • #524
  • Oct 22, 2006 3:16am Oct 22, 2006 3:16am
Yes, thanks. Did you get the same signal, or earlier than me? As stated i got my signal friday after close.

FT

Quoting BeachBum
That's a beautiful "fozzy" setup...........I would just suggest watching the fib levels carefully. Enjoy your trade!
  • #525
  • Oct 22, 2006 4:37am Oct 22, 2006 4:37am
Hi Guys,

I have overlayed a standard 5,3,3 stochastic over the top of the Fozzy Method to gauge the performance of each indicator, i'd be interested in any feedback on whether there is a great difference in the results!! - just an idea, i was actually looking for an indicator than would help with the exit strategy.

Regards,

Cosmo
Attached File(s)
File Type: doc Fozzy Method with Stoc OverLay.doc   99 KB | 951 downloads
  • #526
  • Oct 22, 2006 4:43am Oct 22, 2006 4:43am
Quoting Cosmo II
Hi Guys,

I have overlayed a standard 5,3,3 stochastic over the top of the Fozzy Method to gauge the performance of each indicator, i'd be interested in any feedback on whether there is a great difference in the results!! - just an idea, i was actually looking for an indicator than would help with the exit strategy.

Regards,

Cosmo
If it works for you...use it. It does give you a bigger upper chart to look at. Interesting way to set up your charts
"To Be A Successful Forex Trader, You Need A Successful Forex Mentor."
  • #527
  • Oct 22, 2006 7:26am Oct 22, 2006 7:26am
Hi all.

Just finished reading the thread for the second time trying to find some ideas for my own daily system I have been trading.

As it turns out this system is slightly more profitable as a entry signal than my old method which was stochastics set to 9 3 3 and triggered crossing the 20-80 lines so I have decided to spend a week backtesting some profit target ideas using Trend Lines and s/r.

Hey Beachbum, never thought I would see onther surfer on FF, Im Living in the Caribbean at the moment so the surfs up most days on the windward side of the island

I have a couple of questions that I would be greatful if anyone could answer.

1. How exactly do you plot the s/l on the chart using the ATR? do you overlay it?

2. Because there are so many changes to the system could you tell me what type of 8 ma is being used right now is it a ema or a smoothed ma?

Many Thanks

DD
  • #528
  • Oct 22, 2006 9:40am Oct 22, 2006 9:40am
Quoting cisco
I show a cross occurring on 10/19. It would be a long trade according to my chart.
Yup - sorry for the confusion. I was getting the Bollinger Band criterion wrong. I thought RSI had to be above middle BB for long and below middle BB for short but it's the other way round.

I'd be interested to follow this long as my first attempt at this strategy (only demo for now of course).

What time periods does this strategy work on best? Daily? 4 hourly? 1 hourly?
  • #529
  • Oct 22, 2006 10:02am Oct 22, 2006 10:02am
Londoner,


It has been stated on this thread that the daily is what was intended per Fozzy but others may have tried different timeframes. I guess the first question you should ask yourself is what kind of trades to I want to be involved in? Scalping, shortterm, swingtrading,positional? you need to evaluate your lifestyle, hours available to trade,temperament, capital available etc. Hope this help...it helped me when I asked similar questions in the great forum!
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  • #530
  • Oct 22, 2006 11:12am Oct 22, 2006 11:12am
Quoting wwwin
I think Fozzy has stated that he uses EMA
Greetings. You are correct in your statement, and in my post #508 i stated why i chose to remain with the sMA; 1) John Bollinger uses simple math in this BBs and in articles written by him has strong support for sMA use in conjuction with BBs and even states many, many forward test with eMAs and found for his BBs the Simple MA is best fit. 2) My Mentor uses a Simple MA as a signal line on the RSI because it has a lagging smoothng effect which he finds deisreable.

In my post #508 I stated that the RSI/Signal cross was ONLY a heads up for me to come and look at the chart. There are other criteria that i use with this indicator to validate an entry. But this is best suited for discussion over at the AltFozzy thread. That any of us wish to take a master/creator's idea (John Bollinger on Bollinger Bands) and apply a tweak is wonderful...that is what makes the world go around ! I've just chosen, to continue to pruposfully use a more smoother fitting moving average as a signal line on my RSIs per J.B. and my Mentor (who's been using the RSI set up for nearly 15 years in Commodities, Futures, and Forex). . . and that is why i call him my "Mentor", He is the Master, I am just a grasshopper.

Let me state also at this point that my trading style includes the idea of finding as many reasons as i can to stay out of a trade before entering in order to preserve my capitol. And that in a nutshell is why i prefer to incorporate some lagging/smoothing indicators along side my use of more aggressive indicators and price action.

Cheers,
Thom
  • #531
  • Oct 22, 2006 11:36am Oct 22, 2006 11:36am
Quoting 4rex
Londoner,


It has been stated on this thread that the daily is what was intended per Fozzy but others may have tried different timeframes. I guess the first question you should ask yourself is what kind of trades to I want to be involved in? Scalping, shortterm, swingtrading,positional? you need to evaluate your lifestyle, hours available to trade,temperament, capital available etc. Hope this help...it helped me when I asked similar questions in the great forum!
Yes - since I have a fairly busy lifestyle myself I would probably start off with a daily timeframe too

I would be interested to know if anyone has studied any of the following questions I have about this system:

1) Does this strategy give many false signals? i.e. it gives a long or short signal only for the price to go opposite way.

2) Does this strategy miss many opportunities? i.e. sit fails to pick up sudden change in trend

3) Does this strategy provide reliable exit points? i.e. if I am long and price has gone up I now want to know when to sell. I suppose the strategy will automatically provide reliable exit points if the above two criterion are satisfied since it will give a signal which is reliable in it's nature and also it will not miss the change in direction.

Anyway - apologies again if these are naive questions but I am just trying to think things through intuitively.

Thanks again for all your help and best of luck!

Londoner
  • #532
  • Oct 22, 2006 11:50am Oct 22, 2006 11:50am
Londoner,


They are legit question but I would respectfully suggest to you that you read this whole thread. I believe that will help with your questions. It has been my experience that there a lot will depend on assimilating information and using your own discretion for your decisions.


Good Luck!
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  • #533
  • Oct 22, 2006 12:00pm Oct 22, 2006 12:00pm
Accrete,


I was comparing the sma/ema's with the daily charts for the eur/usd pair and it seems to me that the BB middle band with the sma in place tend to fluctuate more away from the RSI 50 than with the ema. Do you know why?

Thanks
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  • #534
  • Oct 22, 2006 1:00pm Oct 22, 2006 1:00pm
Quoting 4rex
Accrete,I was comparing the sma/ema's with the daily charts for the eur/usd pair and it seems to me that the BB middle band with the sma in place tend to fluctuate more away from the RSI 50 than with the ema. Do you know why? Thanks
Greetings 4rex, great Q. My short answer? Don't know exactly why the sma would fluctuate greater than the ema. My long answer? I'm wondering if it is the SMA's lagginess that has the MA continuing in say an uptrend a bit longer than the EMA so there might be more of a gentle arch and the top, and valley at the bottom? Also, maybe i'm just reading your post wrong? But the RSI is set to 8, and there is a middle moving average of the Bollinger Bands that one might call the 50% line, but in John's book he suggests not using the 30/50/70 horizontal lines in conjuction to his BBs.

Good trading,
Thom
  • #535
  • Oct 22, 2006 1:11pm Oct 22, 2006 1:11pm
Well said!



Quoting 4rex
Londoner,


They are legit question but I would respectfully suggest to you that you read this whole thread. I believe that will help with your questions. It has been my experience that there a lot will depend on assimilating information and using your own discretion for your decisions.


Good Luck!
  • #536
  • Oct 22, 2006 1:42pm Oct 22, 2006 1:42pm
Thurs-Fri 10/12-13
eur/usd.....................still open (currently -49)...............closed +63
gbp/usd....................still open (currently -29)................closed +114
usd/chf.....................still open (currently -49)................closed -44
usd/jpy(F).................still open (currently -31)................closed +100
aud/usd(F)................still open (currently even)...............closed +30
usd/cad(F)................still open (currently -36).................closed -70
nzd/usd(F)................still open (currently -34).................closed +30

Sun-Mon 10/15-16
eur/gbp..................................+30

Mon-Tues 10/16-17
eusr/usd.................................+88
gbp/usd..................................+90
usd/chf..................................+24
usd/jpy..................................+68

Tues-Wed 10/17-18
gbp/jpy...................................B/E
aud/jpy...................................still open (cuurently -58)
eur/chf...................................still open (currently +25)

Wed-Thurs 10/18-19
usd/cad..................................still open (currently +117)
eur/cad..................................still open (currently +46)

Thurs-Fri 10/19-20
gbp/jpy...................................-110
aud/jpy...................................still open (currently -34)
aud/nzd..................................still open (currently even)
aud/cad..................................still open (currently +20)
cad/jpy...................................still open (currently +67)
chf/jpy....................................still open (currently +35)
eur/aud...................................still open (curently even)
gbp/chf...................................+25

Total booked this week..............+438
Still open from this week............+218

Week ending 9/30.................+202
Week ending 10/6.................+462
Week ending 10/13...............+132
Week ending 10/20...............+438
Currently open.....................+218

The trades left open from the week ending 10/13 closed out nicely this week, and this week's performance was excellent.

As a recap: I take all trades when the RSI crosses the MA, ignoring the BB center line rule. I use ATR(10) plus broker spread for my initial S/L, move the S/L as the price moves in my favor and make T/P decisions using the Vegas Daily tunnel and fib levels (I've explained all this in previous posts) The "fozzy" method is that simple for me. The results are outstanding! One more time: Thank you very much fozzy.......
  • #537
  • Oct 22, 2006 2:04pm Oct 22, 2006 2:04pm
Accrete,


Thanks for your reply. I have been questioning in my head the purpose of the 30/50/70 levels on the RSI indicator with the Fozzy since the BB bands seem to me to serve the same purpose. Correct me if I am wrong on this. I have kept the 50 level on the RSI indicator as a visual aid. I tend to focus in finding confirmation by looking at the gap of the previous open/close daily bar,the crosses per Fozzy and I put the MT4 fractal indicator to help recognize bars that are sticking above/below their neighboring bars. By the way, I am sold on the Fozzy method but I can not help to question/investigate in the hope that it makes sense to me at a deeper personal level.


Thanks again
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  • #538
  • Oct 22, 2006 2:06pm Oct 22, 2006 2:06pm
Recently there have been a few questions about this indicator. The following definition is from Metatader's "Help" section. Early on I suggested using this value as a basis for setting the S/L (see my previous post which explains my thinking). An ATR(10) provides the daily range for the previous 10 trading days, IMO a nice value to work from. It's easy to put on your charts (if you don't know how, the same "Help" section in Metatrader will explain it for you) and so far it has worked well. The "fozzy" EA (prepared by stockwell & tradeigel) uses it effectively.


Average True Range

Average True Range Technical Indicator (ATR) is an indicator that shows volatility of the market. It was introduced by Welles Wilder in his book "New concepts in technical trading systems". This indicator has been used as a component of numerous other indicators and trading systems ever since.

Average True Range can often reach a high value at the bottom of the market after a sheer fall in prices occasioned by panic selling. Low values of the indicator are typical for the periods of sideways movement of long duration which happen at the top of the market and during consolidation. Average True Range can be interpreted according to the same principles as other volatility indicators. The principle of forecasting based on this indicator can be worded the following way: the higher the value of the indicator, the higher the probability of a trend change; the lower the indicator’s value, the weaker the trend’s movement is.

Calculation

True Range is the greatest of the following three values:

  1. difference between the current maximum and minimum (high and low);
  2. difference between the previous closing price and the current maximum;
  3. difference between the previous closing price and the current minimum.

The indicator of Average True Range is a moving average of values of the true range.

  • #539
  • Oct 22, 2006 2:26pm Oct 22, 2006 2:26pm
BB,


Wonderful results! The next best thing would be if you are getting these results as you hang out at some beach preferably in Thailand(my personal choice).
Could you be so kind as to explain in more detail how you determine your S/L using ATR(10). I placed one in a chart and I can see the values that you speak of but how do you determine the price for your S/L. I'll read the help section in Meta as well. Oh, by the way, have you noticed that the fractal indicator coincides the high/low values in the ATR? Is this correct or am I seeing ghosts?

Thanks
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  • #540
  • Oct 22, 2006 2:30pm Oct 22, 2006 2:30pm
BB,
Thanks for the results. I know it's not that far along yet, but have you been keeping track of how the individual pairs are doing with regard to profit and loss? In other words, are some pairs better suited for this method than others?

Steve
Hi, my name is Barry and you can keep your doctor...
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