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The Daily Fozzy Method

  • #961
  • Nov 17, 2006 6:35am Nov 17, 2006 6:35am
Try manual backtesting this idea as follows:

Choose a pair and go back on your daily chart for a year. Look at all trade signals and make a record of how much the price retraced from the open before it progressed in the direction of the trade. You can then decide "on average" just how much you want the price to retrace before you enter a second order. And you could use this data to calculate an appropriate S/L for that pair. I've done some of this with very interesting results.


Quoting GridTrader
Near the beginning of this thread it was mentioned about using 2 lots. I have not heard anymore response regarding this. Here is what I'm thinking...

Very often I've read that the trade will go negative for a while before going into profit...stuff like we must be patient and so on.

So what I am suggesting is to cut our lot size in half and divide it into two trades. Let's say the signal is to go long and on the next candle we place our buy at the open let's just say it's 1.2000. So the first half of our order goes there and the second half further down let's say 25 pips at 1.1975.

Now we keep our S/L for both at the same price. So if S/L is say 100 pips our stop being hit would be a loss of 80% or so instead of the full 100% (since 2nd half of order is 25 pips below entry). If the signal turned out to be good and our orders go positive... by doing this we have gained some "extra pips". The only time I see this not being useful is when the candle's open is equal to it's high/low which from my observations does happen but seems to be pretty rare. Any thoughts?

GT
  • #962
  • Nov 17, 2006 7:38am Nov 17, 2006 7:38am
fozzy,

very good to see you posting now.. and thanks a lot for your response... i did two trades today : overnight actually since i am in UK and stayed awake till 11 pm to place my entries , one on the usdchf and the other on the euraud.. on both together i made 50 pips and exited as they came near vegas (beach thanks for this).

so yes, i too will adopt this system.. this week has been my 1st week of consistent trading on fozzys and am up 70 pips for the whole week with all trades closed out.. given that i am a beginner, i am happy with that.

in a few days time i think beach might post his trades for the week and make me feel very humble (i subscribe to the philosophy that peeps who havent achieved much have a lot to be humble about )

beach & fozzy and all you seasoned guys out there, you are aspirational role models for beginners like me.

there was a recent post from someone who wanted fozzy's update on fozzy.. to that poster my suggestion is to read this thread end to end.you will learn a lot..

and lastly fozzy - next week onwards i might find it easier to place trades.. cause i'll be watching the cricket at night.. you know, we might, we just might beat you again this time
  • #963
  • Nov 17, 2006 8:23am Nov 17, 2006 8:23am
Fozzy,

Two questions for you:

1) Which are the parameters that you use for MA's for the Vegas tunnel?

2) Do you still set your stops at thehigh/low of the previous candle?
  • #964
  • Nov 17, 2006 8:39am Nov 17, 2006 8:39am
I already have the answer for the MA's. But I am still wondering about the stops.
  • #965
  • Nov 17, 2006 9:33am Nov 17, 2006 9:33am
coolshades....................great results for the week, you should be very pleased with your acomplishment! Earning 70 pips in a week is excellent. Keep up the good work!

Quoting coolshades
so yes, i too will adopt this system.. this week has been my 1st week of consistent trading on fozzys and am up 70 pips for the whole week with all trades closed out.. given that i am a beginner, i am happy with that.

in a few days time i think beach might post his trades for the week and make me feel very humble (i subscribe to the philosophy that peeps who havent achieved much have a lot to be humble about )

beach & fozzy and all you seasoned guys out there, you are aspirational role models for beginners like me.
  • #966
  • Nov 17, 2006 10:06am Nov 17, 2006 10:06am
only took the gbp/usd on the fozzy this week (on real account) and got out near the tunnel for 102 pips. Will spend some of the weekend backtesting, hope more people are and will post their thoughts, this is turning into a great thread.
  • #967
  • Nov 17, 2006 10:07am Nov 17, 2006 10:07am
coupla qs for you.

1) is this the only system you trade given that you trade ft?
2) do you take fozzy trades over the weekend too? (i think you do going by the trades you post)

thks
  • #968
  • Nov 17, 2006 10:29am Nov 17, 2006 10:29am
Guys,

I'm kind of puzzled by all of these good trades this week. My EA showed a nasty week this last week. Here are the trades (format: Date : Direction Currency: Lot 1 / Lot 2)

  1. 11/14: Sell GBPUSD: 40/50
  2. 11/14: Buy USDCHF: -57
  3. 11/15: Sell EURUSD: -52
  4. 11/15: Sell USDJPY: -59
  5. 11/15: Sell EURJPY: -48
  6. 11/16: Buy USDCHF: 40/53
  7. 11/17: Sell EURUSD: -48
  8. 11/17: Sell EURJPY: 40/open

I'm using the normal entry settings with ATR 70% as the SL. I also move to B/E at 40 pips and trail at 65 with a 25 pip trail. I'm wondering if the ATR SL is too tight. But, looking at the charts, I would have been stopped out on many of these even if I had used the previous bar as the SL.

I monitor all fozzy entries to make sure they also visually line up with the indicator. The entries are dead on with the EA. The account is an FXDD demo account.

Any thoughts on this week's action? Any advice on tweaking the settings?

Thanks.

stockwet

  • #969
  • Nov 17, 2006 11:17am Nov 17, 2006 11:17am
Quoting stockwet
Guys,

I'm kind of puzzled by all of these good trades this week. My EA showed a nasty week this last week. Here are the trades (format: Date : Direction Currency: Lot 1 / Lot 2)

 

  1. 11/14: Sell GBPUSD: 40/50
  2. 11/14: Buy USDCHF: -57
  3. 11/15: Sell EURUSD: -52
  4. 11/15: Sell USDJPY: -59
  5. 11/15: Sell EURJPY: -48
  6. 11/16: Buy USDCHF: 40/53
  7. 11/17: Sell EURUSD: -48
  8. 11/17: Sell EURJPY: 40/open

I'm using the normal entry settings with ATR 70% as the SL. I also move to B/E at 40 pips and trail at 65 with a 25 pip trail. I'm wondering if the ATR SL is too tight. But, looking at the charts, I would have been stopped out on many of these even if I had used the previous bar as the SL.

I monitor all fozzy entries to make sure they also visually line up with the indicator. The entries are dead on with the EA. The account is an FXDD demo account.

Any thoughts on this week's action? Any advice on tweaking the settings?

Thanks.

stockwet

I was able to fare a little better than you because I've been using entry orders to try and get better entry prices. Most of the currencies will retrace during the day. This usually allows for a better entry price than the open price. There have been a few times when they didn't retrace and I was shut out of a winning trade.
Hi, my name is Barry and you can keep your doctor...
  • #970
  • Nov 17, 2006 11:21am Nov 17, 2006 11:21am
How do you guys handle a situation when there's a valid cross and it causes you to place a trade where on one pair you're long the dollar, and another pair where it calls for you to short the dollar? That situation has been happening a lot and it makes me uncomfortable to enter these situations. I'd appreciate hearing some viewpoints on the subject.
Hi, my name is Barry and you can keep your doctor...
  • #971
  • Nov 18, 2006 4:17am Nov 18, 2006 4:17am
stock,

why dont you post a chart for any one currency and lets see.. are you using pure fozzy or tweaked fozzy?

you very rarely get two signals a week for the same pair. at least not since the time i have been watching the charts.. also see fozzy's post previously.. once he gets out a pair he does not enter it unless there is a separate valid signal

on the eurjpy there was only one short signal on the gmt charts on the 14th and the eurjpy was loss making for me
  • #972
  • Edited 10:51am Nov 18, 2006 5:01am | Edited 10:51am
Quoting cisco
How do you guys handle a situation when there's a valid cross and it causes you to place a trade where on one pair you're long the dollar, and another pair where it calls for you to short the dollar? That situation has been happening a lot and it makes me uncomfortable to enter these situations. I'd appreciate hearing some viewpoints on the subject.
It's a good question, cisco. My view is to only have one of the highly correlated dollar pairs on at any one time and in one direction. However, I would take a USDCAD trade, long or short as signalled, at the same time as one out of GBPUSD, EURUSD or USDCHF.

I have a preference for GBPUSD over the other two because of the greater daily range; however, I would take whichever pair set up clearly first. My favoured group of currencies at present is :

GBPUSD 109
USDJPY 80
USDCAD 77
CHFJPY 41
EURAUD 88
(figure in brackets is average daily range over last 100 days or so)

So whilst I monitor all 15 pairs that I have available, my present intention is to limit open trades to five max.

An ongoing work in progress, as always, and I am also considering :

* Pure Fozzy, filtered Fozzy (various filtering possibilities, inc Vegas) or All Fozzy (ie. without centre ma line rule) ?
* Stop and exit methodology - most important factor of all imho.
* Entry parameters : enter position on % of average initial retrace or at bar open (see BB post # 964)?
* Start time of daily bar : I live in Amsterdam, ie. GMT+1, and I have set up two alternative bars : NY forex close, which is 11pm CET, and 0900CET, which is when I get back from taking my daughter to school; so I am checking out if this later bar is "too late" or actually advantageous (it's certainly much more convenient). On Monday I am going to set up a third start of day at 8pm CET, to see if entering trades at the equivalent of 2pm in New York is disadvantageous in any way. I think this third timeframe would be manageable lifestyle-wise : entering trades betwen 11pm and midnight is not ! Btw, I do all this bar time manipulation in TradeStation, where it's easy to set up custom timeframes.

All the above has a clear aim of making it as simple, methodical & practically tradeable as possible. I am doing this all as a live forward test, which only started 2 weeks ago.

J.
  • #973
  • Nov 18, 2006 8:16am Nov 18, 2006 8:16am
This is an excellent post with quality observations and comments. My time is limited right now, but later this weekend I want to add some thoughts as well as respond to stockwet's weekly results. There are some really good things happening with this trading method and the posting reflects that. (Take a few minutes and Google "fozzy forex trade". On one blog, this method is called the "new Vegas"......interesting!).

jtrade.....I definitely like your approach to testing and I'm looking forward to learning from you. Thanks for sharing with us!


Quoting jtrade
It's a good question, cisco. My view is to only have one of the highly correlated dollar pairs on at any one time and in one direction. However, I would take a USDCAD trade, long or short as signalled, at the same time as one out of GBPUSD, EURUSD or USDCHF.

I have a preference for GBPUSD over the other two because of the greater daily range; however, I would take whichever pair set up clearly first. My favoured group of currencies at present is :

GBPUSD 109
USDJPY 80
USDCAD 77
CHFJPY 41
EURAUD 88
(figure in brackets is average daily range over last 100 days or so)

So whilst I monitor all 15 pairs that I have available, my present intention is to limit open trades to five max.

An ongoing work in progress, as always, and I am also considering :

* Pure Fozzy, filtered Fozzy (various filtering possibilities, inc Vegas) or All Fozzy (ie. without centreline rule) ?
* Stop and exit methodology - most important factor of all imho.
* Entry parameters : enter position on % of average initial retrace or at bar open (see BB post # 964)?
* Start time of daily bar : I live in Amsterdam, ie. GMT+1, and I have set up two alternative bars : NY forex close, which is 11pm CET, and 0900CET, which is when I get back from taking my daughter to school; so I am checking out if this later bar is "too late" or actually advantageous (it's certainly much more convenient). On Monday I am going to set up a third start of day at 8pm CET, to see if entering trades at the equivalent of 2pm in New York is disadvantageous in any way. I think this third timeframe would be manageable lifestyle-wise : entering trades betwen 11pm and midnight is not ! Btw, I do all this bar time manipulation in TradeStation, where it's easy to set up custom timeframes.

All the above has a clear aim of making it as simple, methodical & practically tradeable as possible. I am doing this all as a live forward test, which only started 2 weeks ago.

J.
  • #974
  • Nov 18, 2006 10:35am Nov 18, 2006 10:35am
Here's an example for the EURUSD. You can also see the other trades that were triggered. As I mentioned, I use original fozzy entry rules with ATR 70% (per BeachBum) as the SL. The EA is highly accurate.

http://www.pipinion.com/misc/fozzy2-1-nov-14-18.gif

I don't have an issue about the system. I'm just wondering why some people had a good week. This last week did not seem to be a great week for Fozzy and I'm wondering why my results would be different.

Quoting coolshades
stock,

why dont you post a chart for any one currency and lets see.. are you using pure fozzy or tweaked fozzy?

you very rarely get two signals a week for the same pair. at least not since the time i have been watching the charts.. also see fozzy's post previously.. once he gets out a pair he does not enter it unless there is a separate valid signal

on the eurjpy there was only one short signal on the gmt charts on the 14th and the eurjpy was loss making for me
  • #975
  • Nov 18, 2006 2:23pm Nov 18, 2006 2:23pm
stock my comments shd be taken under advisement

i think the second signal was a bit flaky. atleast i thought so.. i only took the first one.. i entered the trade at the candle indicated.. last week i burnt my fingers on similar signals as the second cross here and now i am taking only clean crosses..

my charts are gmt so there will be some difference compared to yours.
Attached Image
  • #976
  • Nov 18, 2006 8:00pm Nov 18, 2006 8:00pm
Hey coolshades,

Thanks. As an EA, this thing is designed to take all the appropriate crosses. I realize that trading is a judgement call a lot of times, but, there's also value in following rules as they stand. From a judgement perspective, I would have actually taken both trades anyway. I would have taken the first trade because it was a valid fozzy signal. I would also have taken the second trade because I would have expected EUR weakness given that a fozzy sell signal was generated a couple days previous. So, this was probably a rare event and it was definitely a difficult week. I'm thinking next week will be much better.

stockwet



Quoting coolshades
stock my comments shd be taken under advisement

i think the second signal was a bit flaky. atleast i thought so.. i only took the first one.. i entered the trade at the candle indicated.. last week i burnt my fingers on similar signals as the second cross here and now i am taking only clean crosses..

my charts are gmt so there will be some difference compared to yours.
  • #977
  • Nov 18, 2006 8:02pm Nov 18, 2006 8:02pm
G'day folks,

Up until a month or so I was demo trading the original Bago method, with good results. However, a "little thing" known as a full-time job made it very difficult to keep track of trade setups whilst at work. At disappointing as it was, I had to move onto something that was easier to manage. And that's when I started to read the Fozzy thread, which I'd not bothered with since I was already trading a system that worked for me. To cut a long story short, the Fozzy method with Vegas fibs as TP's appears to test well. For all those undecided about how to take profits please consider the Vegas fibs. They are not magical. They simply work.

There are some great posts throughout this entire thread. BeachBum, Paul2 and stockwet's work with the EA really stand out. If you like what you read on page 1 and you're thinking it's too much to read 49 pages, well, in options you can set it to view 40 posts per page and that'll make it only 25 pages you have to read.

Cheers,
Art...
  • #978
  • Nov 20, 2006 1:35am Nov 20, 2006 1:35am
G'day all,

I'm going to do a forward test of the EA (v2.2 with default settings) and the original Fozzy system (SL set at previous bars H/L plus spread) with Vegas fibs at TP points.

In an effort to not clutter this thread with trades, I'll post all trades in my Journal.

Cheers,
Art...
  • #979
  • Nov 20, 2006 7:28am Nov 20, 2006 7:28am
Sun-Mon 11/12-13

EUR/USD(F) buy................................+40
USD/CAD buy...................................+60
CAD/JPY sell.....................................+60

Mon-Tues 11/13-14

GBP/USD(F) sell................................+56
USD/JPY(F) buy................................B/E
AUD/NZD buy...................................B/E

Tues-Wed 11/14-15..............No Trades

Wed-Thurs 11/15-16

USD/CHF(F) buy...............................+30
EUR/CHF buy...................................+20

Thurs-Fri 11/16-17

AUD/JPY(F) buy...............................still open (currently +20)
AUD/CAD(F) buy..............................still open (currently +50)
NZD/USD(F) buy..............................still open (currently +30)

Total booked this week......................+266 pips

Sorry for the delay in posting, comments in the next post.
  • #980
  • Nov 20, 2006 7:42am Nov 20, 2006 7:42am
after beach's post, such a pleasure to say 'i told you so'

ok day for me today.. 25 pips in all on the eurchf and audusd..
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