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Trend Cycle Entry

  • #161
  • Feb 16, 2022 10:41am Feb 16, 2022 10:41am
Quoting MyProfit
{quote} {quote} Which one???, What is supposed to be the first cross... after the trend changed direction? Or.... a "new' arrow? Or... {image}Thanks
Review this post: https://www.forexfactory.com/thread/...6#post13890076

It shows a perfect set-up and reviews the rules.

Secondly, My system has only been used consistently on EURUSD, AUDUSD and occasionally USDJPY. I have not used it consistently on any other pair. If you are trying to employ this system on CADJPY (your chart), you are in unchartered territory and in my opinion, risking the unknown.
  • #162
  • Feb 16, 2022 11:04am Feb 16, 2022 11:04am
Quoting erlas7
Thank you WickedDaddy! What pairs would you recommend with your system? What pairs do you you trade yourself? Thank you
I only trade 3 pairs: EURUSD, AUDUSD and occasionally USDJPY. I have chosen the first two for ease of pip value calculation and trade volume. 1 pip at 1 lot = $10 US. Easy. (I'm in the US). I trade EU when the US dollar is strong (short EU) for the carry. I trade AU when the dollar is weak (long AU) for the carry. I occasionally look for long trades in UJ, also to capture the positive carry when dollar is strong.

Why not get paid to hold a trade open?

It is important to build focused expertise. Trading a dozen different pairs does not build that level of expertise on any one of them. I know professional stock traders that are in and out of the same one company. They have learned the flow of money in that one company so well that it's damn near like insider trading. That's the level of focused expertise you want to achieve.

My system may not work that well on other, minor pairs or exotics. I wouldn't know for sure. It has failed on GBPUSD during the Brexit debacle and every now and then GU gets wild swings for unknown reasons. So I stopped trading it years ago.

You don't need to trade everything. You need one, maybe two instruments that you learn and know deeply. You can make a good living this way. There is a reason neurosurgeons make more money than general practitioners. They specialize. They don't give flu shots and diagnose runny noses while also trying to diagnose and fix other ailments. Neurosurgeons fix brains and that's it. I choose to specialize.
  • #163
  • Feb 16, 2022 1:03pm Feb 16, 2022 1:03pm
Quoting WickedDaddy
{quote} I only trade 3 pairs: EURUSD, AUDUSD and occasionally USDJPY. I have chosen the first two for ease of pip value calculation and trade volume. 1 pip at 1 lot = $10 US. Easy. (I'm in the US). I trade EU when the US dollar is strong (short EU) for the carry. I trade AU when the dollar is weak (long AU) for the carry. I occasionally look for long trades in UJ, also to capture the positive carry when dollar is strong. Why not get paid to hold a trade open? It is important to build focused expertise. Trading a dozen different pairs does not build...
Thank you for such a detailed answer!
  • #164
  • Feb 17, 2022 4:39am Feb 17, 2022 4:39am
Quoting WickedDaddy
{quote} I only trade 3 pairs: EURUSD, AUDUSD and occasionally USDJPY. I have chosen the first two for ease of pip value calculation and trade volume. 1 pip at 1 lot = $10 US. Easy. (I'm in the US). I trade EU when the US dollar is strong (short EU) for the carry. I trade AU when the dollar is weak (long AU) for the carry. I occasionally look for long trades in UJ, also to capture the positive carry when dollar is strong. Why not get paid to hold a trade open? It is important to build focused expertise. Trading a dozen different pairs does not build...
Agree GBP pairs get some crazy swings, probably perfect for scalpers, but intraday should stick to calmer pairs like EU and AU, I also like NZD/USD sometimes when is stronger or weaker than AUD, it makes some crazy dips.
  • #165
  • Feb 17, 2022 5:00am Feb 17, 2022 5:00am
WickedDaddy, thank you for answering same questions again and again. Though questions are similar and you seem to say the same things over and over again, you often add details and important angles, which contribute to a better understanding.

For me, it was important that you remarked that StochRSI also needs to have the 1st cycle for the setup to be most reliable (although I see from your examples it's not always the case). The way I see it, it is no less important than for the BB to have only the 1st touch to proceed with the rest of conditions.
  • #166
  • Feb 17, 2022 8:34am Feb 17, 2022 8:34am
Quoting Blazed
{quote} Agree GBP pairs get some crazy swings, probably perfect for scalpers, but intraday should stick to calmer pairs like EU and AU, I also like NZD/USD sometimes when is stronger or weaker than AUD, it makes some crazy dips.
Agreed on NZDUSD. I have traded it during times of geopolitical mayhem, such as what is happening with Ukraine. NZD seems unaffected and most likely due to it being too small and insignificant on the world stage for anyone to be concerned about it being affected by war. I'm watching it but have not traded it recently.
  • #167
  • Feb 17, 2022 8:46am Feb 17, 2022 8:46am
Quoting oohoo
WickedDaddy, thank you for answering same questions again and again. Though questions are similar and you seem to say the same things over and over again, you often add details and important angles, which contribute to a better understanding. For me, it was important that you remarked that StochRSI also needs to have the 1st cycle for the setup to be most reliable (although I see from your examples it's not always the case). The way I see it, it is no less important than for the BB to have only the 1st touch to proceed with the rest of conditions....
Ha ha... yes, it seems the same questions keep popping up but in slightly different context. And yes, the answers are similar because the rules are the rules. I have said before that I occasionally bend my rules. But that is due to my familiarity and comfort with my system as well as my risk tolerance. Anytime a trader begins to work a system that is new to them, he/she should stick like glue to the rules. Over time, they will become familiar with them so well that they will "see" when a trade is good, even if one of the rules is not exactly met, but close.

Look back on my post that displays the perfect trade (post 108). This is what you want and you don't need that many of them to see your account grow.
  • #168
  • Feb 17, 2022 9:27am Feb 17, 2022 9:27am
NO STOP LOSS ORDERS

Some of you may have read in 1 or 2 of my posts that I don't use stops. To be clear, I don't use stops that would result in a loss to my trade.

When I first started trading, I traded stock options (20+years ago). I used stops. Option prices can be very volatile and as a result, my stops were hit more often than not. So of course I made them wider. They would still get hit. I think most traders can relate to this: you create or follow a method, everything looks great to enter an order so you pull the trigger, set your stop, and watch it like a dog watching its master prepare its meal. Then the trade becomes profitable and your excitement builds. Then the trade reverses, hits your stop, and you've lost money only to watch it reverse again and become what would have been a profitable trade. There you sit, frustrated to the point of absolute madness. I have been there. I have smashed coffee cups, thrown my chair across the room, screamed at God, cried, and blamed the evil institutions for stop hunting my trade. And of course... changed methods a hundred times in my search for trading nirvana.

I bet some of you are laughing at this because you know exactly what I'm talking about.

At one point I resolved that I needed to figure out how to trade without using stops. I decided that the only solution was a lot of what I have been talking about in previous posts:

  1. Develop a system and TEST THE HELL OUT IT (scroll way back on a chart, mark every instance, count up winners and losers of at least 100 trades)
  2. Document how often it results in a good trade and a bad trade - document the percentage of success
  3. Look at every losing trade to determine what factors played a role - build the repetitive factors into the rule base - Test again, repeat, test again
  4. Test what you think is your final system against different instruments to see which one produces the most consistent results - why does it win more on one than the other?
  5. Test different time frames for the same reason
  6. During all this, simplify, simplify, simplify

Obviously this took a lot of time and effort. But what is worse; losing money in mere minutes or investing your time to become proficient at making money?

I became satisfied with my system and I traded without stops as way to force my discipline. At first, it was nerve wracking. But I knew my system (at the time) had an 87% success rate at becoming profitable. I had also documented the conditions that resulted in losses the other 13% of the trades. So I felt in control. Over time, I have become comfortable with "no stop" trading.

I tell this story to qualify my personal choice to trade without stops. My choice was mainly to satisfy my psychological need to pressure myself into creating a system that I believe so strongly in and know so well that using stops would be introducing a fear that I should not have. It's more about my confidence than some reckless approach to trading. It's a mindset. I don't suggest it for everyone and especially not for new traders. But if you want to force yourself to trade as disciplined and diligently as truly successful trading requires, I challenge you figure out what that trigger is for you and work it into your mindset.

I've not thrown a coffee cup at the wall since 2014.

  • #169
  • Feb 17, 2022 9:51am Feb 17, 2022 9:51am
Quoting WickedDaddy
{quote} Agreed on NZDUSD. I have traded it during times of geopolitical mayhem, such as what is happening with Ukraine. NZD seems unaffected and most likely due to it being too small and insignificant on the world stage for anyone to be concerned about it being affected by war. I'm watching it but have not traded it recently.
Lol loved the part when you said too small or insifnificant, I mean its true thats why I love trading it, now that US seems really week is a good time to find a trade there.
  • #170
  • Edited Feb 18, 2022 1:01am Feb 17, 2022 1:31pm | Edited Feb 18, 2022 1:01am
Quoting WickedDaddy
losses the other 13% of the trades
How did you locked those 13% without SL? Manual closing?
And what about a high volatility moments (like first COVID monthes in 2020 and, sorry for this example, something like 11sep2001)?
Just an opinion. Based on research
  • #171
  • Feb 17, 2022 9:00pm Feb 17, 2022 9:00pm
Quote
Quoting Degolep
Quote
What we need is an alert system or even backtesting arrows like you said and we will see how profitable it is. You didn't say which tf do you trade? But I think its D1 right?

Quote
I have an alert set in Trading View that tells me when the 15 has crossed the 50. Sends me a text. I have other alerts that tell me when the candles have disengaged from the BB, HA color change, etc. These allow me to know what is going on without having to be in front of charts.

Thank You for all your effort to enlighten us , great thread, I'm going to use this "system' in the lower timeframes, polishing it a little, but following most of the rules, using Mt4, and interested in your indicator that ". I have other alerts that tell me when the candles have disengaged from the BB", could you tell us about it?, where we can get it", if somebody have it?(Mt4), can you share it?

Thank You again..
"Great Men are not born great, They Grow Great."
  • #172
  • Feb 18, 2022 1:30pm Feb 18, 2022 1:30pm
Quoting since80808
{quote} How did you locked those 13% without SL? Manual closing? And what about a high volatility moments (like first COVID monthes in 2020 and, sorry for this example, something like 11sep2001)?
The percentages were established through manual back testing. (review my post) I scroll way back on the chart and then mark each place where a trade would be entered as well as observe whether that entry would result in a profitable trade. I logged each one into a spreadsheet and analyzed them accordingly.

Trading View has a useful tool for this called "Replay". It allows you to set a place in history and then replay the chart from that point and at a speed you set. you can stop it and restart it at your own pace. It's great for not only only testing methods but also enables you to practice trade historical price action.

As far as events like covid: I did not trade until trends were established. I stopped trading Forex at the beginning of February 2020. That said, I did place a rather large short on the S&P 500 just prior to its crash due to covid. A big part of trading is keeping abreast of influential events. We were hearing about covid in China at least a few weeks before the first cases hit the U.S.. China is a huge supplier of goods to the US. I deduced that an epidemic in China that was already shutting down factories and shipping ports would have a ripple effect on the U.S. economy due to supply chain interruptions. The S&P was at all time highs and there was a weakening of buying volume that was happening even before covid became a pandemic. So I shorted it with futures contracts. I was right and about a week later, the first covid cases hit the U.S. west coast, China was in full lockdown and the stock market went off the cliff. It turned out to be an incredible trade. But I stayed out of Forex until mid April of 2020.
  • #173
  • Feb 18, 2022 2:35pm Feb 18, 2022 2:35pm
Quoting MyProfit
[url="https://www.forexfactory.com/thread/post/13869436#post13869436"]{quote} {quote} Thank You for all your effort to enlighten us , great thread, I'm going to use this "system' in the lower timeframes, polishing it a little, but following most of the rules, using Mt4, and interested in your indicator that ". I have other alerts that tell me when the candles have disengaged from the BB", could you tell us about it?, where we can get it", if somebody have it?(Mt4), can you share it? Thank You again..
Alerts can be set in Trading View for almost any kind of condition. Have you heard of, seen Trading View? There is a free subscription but the better tools are in the paid version. Still, it's inexpensive and a very good tool. I don't use MT4 so I don't know how to set that up. Perhaps someone here that is an MT4 wizard can help with that.
  • #174
  • Feb 18, 2022 8:21pm Feb 18, 2022 8:21pm
Quoting WickedDaddy
{quote} Trading View has a useful tool for this called "Replay". It allows you to set a place in history and then replay the chart from that point and at a speed you set. you can stop it and restart it at your own pace. It's great for not only only testing methods but also enables you to practice trade historical price action.
I know that you use Heiken Ashi candle (HA). But Bar Replay is not available for this chart type.
"Successful investing takes time, discipline and patience."-Warren Buffet
  • #175
  • Feb 19, 2022 2:41am Feb 19, 2022 2:41am
Nice long example on Gold daily chart. Very profitable looking trade!
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  • #176
  • Feb 19, 2022 2:53am Feb 19, 2022 2:53am
Do you reckon this could of been a potential losing trade WD? I know you said AUDUSD was one of your main trading pairs so thought you might have an opinion on this setup. Just wondering if there was anything that would of made you avoid taking this?
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  • #177
  • Feb 19, 2022 7:24am Feb 19, 2022 7:24am
Quoting WickedDaddy
Here is a trade I took yesterday at 0900 Central Time (U.S.) on a 1 HR chart. It is "Textbook" perfect. Let's review: 1. 15 EMA crosses 50 SMA up (first arrow) 2. Price retraces and touches the BB (second arrow) 3. StochasticRSI cycles down below 20% 4. Candle following the red candle that touches the BB is green and is NOT touching the BB (set-up) 5. Enter on next candle (white crosshair) Added bonuses: good separation of the 15 over the 50 Price has broken above the 100 SMA and is bouncing on it for support StochasticRSI is rising I held this...
Hello WD, my observation is regarding your entry from the stochasticRSI emanating from the oversold region with all conditions satisfied for a buy trade. The "entry point" seems to be the Second cycle of the stochRsi which negates your rule. I see the entry as BB entry( bounced as explained) in unison with the second cycle cos the 1st cycle was half completed before going to the oversold region for the next one you chose as your point of entry. Pls clarify, thanks.
  • #178
  • Feb 19, 2022 8:53am Feb 19, 2022 8:53am
Quoting clayton89
Do you reckon this could of been a potential losing trade WD? I know you said AUDUSD was one of your main trading pairs so thought you might have an opinion on this setup. Just wondering if there was anything that would of made you avoid taking this? {image}
I am sorry, according to WD's rules, I dont even see a sell trade set up here at your red arrow because candles did not breach or disengage from the top BBands, which is the first rule in his set ups.
  • #179
  • Feb 19, 2022 10:44am Feb 19, 2022 10:44am
Quoting pipsquick16
{quote} I am sorry, according to WD's rules, I dont even see a sell trade set up here at your red arrow because candles did not breach or disengage from the top BBands, which is the first rule in his set ups.
That's because I'm asking if it would of been a buy, not a sell.

MA's at the time of candles were still a buy, had touched and disengaged bottom of BB, stochrsi moving up from below 20 zone and the HA candles had changed to a buy also.

Ticked all the boxes for a buy which is why I'm curious whether he would of took the trade or not.
  • #180
  • Feb 19, 2022 12:45pm Feb 19, 2022 12:45pm
Quoting clayton89
{quote} That's because I'm asking if it would of been a buy, not a sell. MA's at the time of candles were still a buy, had touched and disengaged bottom of BB, stochrsi moving up from below 20 zone and the HA candles had changed to a buy also. Ticked all the boxes for a buy which is why I'm curious whether he would of took the trade or not.
Sorry, shown example is not a WD setup
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