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The Daily Fozzy Method

  • #1,001
  • Nov 20, 2006 3:33pm Nov 20, 2006 3:33pm
Thanks fozzy..............being a little late for the party is better than not attending at all! And as long as you're not late when it's time to take pips, then you're golden. There are many of us who will keep the "fozzy" flag flying!

Quoting fozzy
I stepped away from computer for a few minutes and missed out. Too slow again.....

I am staggered that this thread has got to this milestone. I originally posted this to try and help anybody who was looking for a relatively simple way to trade that did not requrie staring at charts all day. For it to reach 1000 posts is a reflection of the quality of posters. The way this thread has developed is a testament to the posters who have generously donated their time to help others.

I take my hat off to everyone who has contributed. There have been some major contributions by some very astute traders and I am grateful for their insight and willingness to share. In particular, BeachBum's contribution to this thread has been enormous and, I'm sure, very much appreciated by all. I know I have learned much from his posts and I hope that he continues to contribute.

Good trading to all who have stumbled across this method. Long may your successes last.

Thanks

Fozzy
(I've received several PM's from people who find it hard to believe that posts #994 and 999 were ignored.......go figure!)
  • #1,002
  • Nov 20, 2006 3:35pm Nov 20, 2006 3:35pm
jason,

i think beach devised ATR originally for s/l but here you are using it for t/p..what wld you use for s/l here?



Quoting jlowder
This is for taking profits, not the stop loss points. I just made this observation and haven't considered what, if any, changes would be made to the SL.

When fozzy gives a signal against the main trend, it's likely a retracement if the trend is still showing a strong bias in one direction. Typically the profitablity of those trades is far less. So if you take the 10 day ATR, which is say 90 for GBP, I would take 1/3rd, which is 30 and then take it down some to like 25. By doing this, it appears as if you are much more likely to make a profit on those trades instead of just staying out completely. For normal crosses with the trend or at the start of a new one (especially off s/r lines) the daily ATR has been a good profit point. If you wanted to be safe, I guess you could just take 1/3rd for all trades. No reason not to. In fact, I think you'll have far more profitable trades percentage wise, but maybe not as much pip wise.

Jason
  • #1,003
  • Edited 7:49pm Nov 20, 2006 4:00pm | Edited 7:49pm
Hello Fozziers!

It is a honor to have posted #1000. If I may, I would like to start by thanking those that keep this forum running efficiently and orderly. Merlin and Co. To Fozzy, BB and many others that have given us the fishing line, the hook and bait and even pointed to the fishing spot a thousands thanks. It is priceless to find people such as you who give of themselves unconditionally in order to help your brothers and sisters in this forum. Our road to success has, without a doubt, been enhanced by your generous contribution. Sorry if this sounds a bit touchy feely, usually I carry with me a touch of cynicism but people in this forum demonstrate that there is still a lot of good will
in our world.


P.S I HAD NO IDEA THAT A SUGGESTION WAS MADE TO RESERVE #1000 FOR MR. FOZZY. I APOLOGIZE.
All 4 1 and 1 4 All
  • #1,004
  • Nov 20, 2006 4:56pm Nov 20, 2006 4:56pm
Quoting coolshades
jason,

i think beach devised ATR originally for s/l but here you are using it for t/p..what wld you use for s/l here?
It occured to me that if fozzy was indicating a change in direction, why not use the daily range as a take profit point as well? Typically I use the ATR as the stop loss up to 50 pips, but thats just because I'm demoing on an account with just 2k. From what I understand though, if it hits 50 it's likely to go further anyway.

As for the 1/3rd take profit, it almost appears as if you would need to stick to the daily ATR for your stop loss. If you look at the attached image, the first circle would have easily taken the 1/3rd profits, but only after ranging the full 50 pips the other way. The second circle never materialized into profits. I'm kind of inclined to simply skip any crosses that go against the histogram as they are fighting the trend. Why take the risk..?

Jason
Attached Image
  • #1,005
  • Edited 10:27pm Nov 20, 2006 10:08pm | Edited 10:27pm
Using the ATR as a basis for taking profit is something I have been working on for a while, so let me add to Jason's excellent comments:

After a fozzy signal is received, we open a trade at the beginning of a new daily candle. Usually the price will retrace before moving in the direction of the trade. After the retrace, we can expect the price to move, on average, an amount equal to the ATR. Therefore, we could set our T/P at the price that is ATR plus the extreme retrace price. Or.....we could play it safe and use an amount that is equal to .7 times ATR, similar to the S/L that has been suggested. If trading multiple lots, the first T/P could be this price and then additional lots could be scaled out from here.

For example: I took the fozzy buy signal earlier on the GBP/USD at 1.8976. S/L is 1.8900 and my initial T/P is 1.9050. I like the looks of this trade and the T/P is between the first and second fib levels, a safe price level, I believe. I will manage this trade and move the T/P and the S/L higher if the trade develops nicely. (I think the price will go to the 1.9150 area). I didn't say anything yet about The Tunnel.......but it looks very good there too!


Quoting jlowder
It occured to me that if fozzy was indicating a change in direction, why not use the daily range as a take profit point as well? Typically I use the ATR as the stop loss up to 50 pips, but thats just because I'm demoing on an account with just 2k. From what I understand though, if it hits 50 it's likely to go further anyway.

As for the 1/3rd take profit, it almost appears as if you would need to stick to the daily ATR for your stop loss. If you look at the attached image, the first circle would have easily taken the 1/3rd profits, but only after ranging the full 50 pips the other way. The second circle never materialized into profits. I'm kind of inclined to simply skip any crosses that go against the histogram as they are fighting the trend. Why take the risk..?

Jason
Attached Image
  • #1,006
  • Nov 20, 2006 10:10pm Nov 20, 2006 10:10pm
Jason.....not everyone here may be familiar with "Solar Wind". You may want to comment on this indicator, how you use it and why. Perhaps even post the MT4 indicator. Just a suggestion.

Quoting jlowder
I have been using the solar wind to help me determine which trades to take or not. When there is a strong push in one direction, I don't take Fozzy trades that are counter to the indicator. BUT, I have noticed that if you were to take 1/3rd of the daily ATR and round down you would almost always end up with a profit for the signals. I'm thinking of implementing this for any trades that go against my solar indicator.


Jason
  • #1,007
  • Nov 20, 2006 10:15pm Nov 20, 2006 10:15pm
It has been suggested that a new thread be started which is devoted to modified "fozzy" methods, and this may be a good thing, but I'm not sure.

I wanted to add a poll here so we could vote on the idea, but I don't think that can be done. Perhaps by fozzy as the creator of this thread, but I'm not sure about that either.

Can we get some help from a moderator? I suspect that my old friend Scott is lurking around here somewhere...........can you help? What are our options?
  • #1,008
  • Nov 20, 2006 11:22pm Nov 20, 2006 11:22pm
Quoting BeachBum
Jason.....not everyone here may be familiar with "Solar Wind". You may want to comment on this indicator, how you use it and why. Perhaps even post the MT4 indicator. Just a suggestion.
This is an interesting indicator that a friend brought to my attention a little while ago. It's a histogram format that displays the strength of the trend. I copied it onto the fozzy indicator and use it to help determine the likely strength of the fozzy signal. When the Fozzy cross occurs against a large trend (tall red or blue bars) it means the trade is going against a trend that is still strongly in place. I tend to only take the trades that cross as the solar trend changes direction (say from long to short) and again when the cross happens in the same direction of a strong trend.

As an interesting side note, I've noticed that during strong trends once the solar bars drop below the RSI, such that the RSI is above (or below) the bars for the first time a good exit signal exists. Price tends to then move sideways a bit and drop off (or move up). Now if price picks back up again (after a retracement for example) the same thing happens... I don't know why this is, just that it seems to be incredibly reliable.

Now, for the negatives (perhaps). This indicator does redraw BUT only the current bar (which all MA indicators do) and the bar prior to it. The previous bar only changes when a new bar starts - it sort of readjusts the size a little. All others stay the same. I haven't found this to in anyway detract from the manner in which I use it.

Over all I'm finding that this can help to reduce bad trades. I've just spent the last two weeks testing this, and refining it... I'm starting to trade with it in earnest now..

Oh, one other thing. Trades coming off of S/R lines as displayed by the donchian channels are also great trades to take. When the price moves away from the lines, the fozzy crosses AND the solar starts to change direction - a really good move could be in hand then.

Jason
Attached File(s)
File Type: mq4 Solar Winds with alert.mq4   3 KB | 722 downloads
File Type: mq4 Donchian Channels.mq4   3 KB | 672 downloads
  • #1,009
  • Nov 21, 2006 12:27am Nov 21, 2006 12:27am
jason,
just wanted to say that this is excellent work. i don't know where you got the idea for solar and the channels, but it is very,very good stuff. i have been using fozzy on lower time frames and your ideas look very promising. hard to tell by eyeballing because of solar repaint, but it looks powerful.
there are a lot of brillant minds on this forum. you are certainly among them. i would like to thank you on behalf of all the not so smart lurkers like me.

thanks again.....vince
  • #1,010
  • Nov 21, 2006 1:07am Nov 21, 2006 1:07am
G'Day All,

BB thanks for the push in expanding my tech knowledge, have it all set up and hook line and sinker are in the tide and looks like a few nibbles.

To Fozzy, re post 1001 I have to have a chuckle at the not watching charts all day caus' instead I'm going through this thread all day......lol

Now for my limited 2 pips worth, I have used (and in an effort to remain mechanical) when you have the Fozzy set up, using a Baggo entry if available, and so far so good. It simply pays for my stop.

Was that a valid contibution??? ..........hope so......... I feel good..........

Regards

RBS
  • #1,011
  • Nov 21, 2006 1:32am Nov 21, 2006 1:32am
Hi Jason,

Can you explain how to use the channel?

Thank you in advance.
  • #1,012
  • Nov 21, 2006 1:36am Nov 21, 2006 1:36am
Quoting BeachBum
...Can we get some help from a moderator? I suspect that my old friend Scott is lurking around here somewhere..?
Sheesh, i thought you two were going for pink slips, haven't had the big race day yet ey?
http://accrete.com/emotiguy/eg-chuckle.jpg
Thom
  • #1,013
  • Nov 21, 2006 5:16am Nov 21, 2006 5:16am
G'day all,

Did any else get into this as a valid fozzy trade? Anyone get it using the EA?

To my understanding the cross was valid for cable A, and the trade should've been initiated at the Open of candle B.

Cheers,
Art...
Attached Image
  • #1,014
  • Edited 6:08am Nov 21, 2006 5:52am | Edited 6:08am
Yes, I can add a poll here. Just let me know what your questions are and your wish is my command... thanks Scott



Quoting BeachBum
It has been suggested that a new thread be started which is devoted to modified "fozzy" methods, and this may be a good thing, but I'm not sure.

I wanted to add a poll here so we could vote on the idea, but I don't think that can be done. Perhaps by fozzy as the creator of this thread, but I'm not sure about that either.

Can we get some help from a moderator? I suspect that my old friend Scott is lurking around here somewhere...........can you help? What are our options?
  • #1,015
  • Nov 21, 2006 6:47am Nov 21, 2006 6:47am
Quoting BeachBum
For example: I took the fozzy buy signal earlier on the GBP/USD at 1.8976. S/L is 1.8900 and my initial T/P is 1.9050. I like the looks of this trade and the T/P is between the first and second fib levels, a safe price level, I believe. I will manage this trade and move the T/P and the S/L higher if the trade develops nicely. (I think the price will go to the 1.9150 area). I didn't say anything yet about The Tunnel.......but it looks very good there too!

u might wanna check the volatility this week Mr Bum everyone says its going to be SUPER SUPER LOW, geez gbp has been ranginging within 40 pips now for 2 days how crappy huh....... I wouldnt do any swings till after the holiday but its a scalpers paradise IMO !!!
Ghost Swoopen in for my pips while no one is lookin !!
  • #1,016
  • Nov 21, 2006 6:52am Nov 21, 2006 6:52am
I took this trade manually (I don't use the EA) at 6PM ET on Nov 20.

Quoting Artamon
G'day all,
Did any else get into this as a valid fozzy trade? Anyone get it using the EA?
To my understanding the cross was valid for cable A, and the trade should've been initiated at the Open of candle B.
Cheers,
Art...
  • #1,017
  • Nov 21, 2006 7:01am Nov 21, 2006 7:01am
Quoting BeachBum
I took this trade manually (I don't use the EA) at 6PM ET on Nov 20.
As would have I, but, for this test I'm relying on the EA to trigger the trade when there's a valid setup and was just wondering why it didn't happen on this occassion. Stockwet, did you get you into this trade via the EA?

Cheers,
Art...
  • #1,018
  • Nov 21, 2006 7:05am Nov 21, 2006 7:05am
If yoou have your Boll Band test set to true, it would not have triggered this trade.. Mine triggered, but I have it set to false



Quoting Artamon
As would have I, but, for this test I'm relying on the EA to trigger the trade when there's a valid setup and was just wondering why it didn't happen on this occassion. Stockwet, did you get you into this trade via the EA?

Cheers,
Art...
  • #1,019
  • Nov 21, 2006 7:12am Nov 21, 2006 7:12am
Art,

I don't have the EURGBP setup to trade. But, it does look like a valid signal on my chart.

stockwet

Quoting Artamon
G'day all,

Did any else get into this as a valid fozzy trade? Anyone get it using the EA?

To my understanding the cross was valid for cable A, and the trade should've been initiated at the Open of candle B.

Cheers,
Art...
  • #1,020
  • Nov 21, 2006 7:14am Nov 21, 2006 7:14am
Very nice Jason................thanks!

Quoting jlowder
This is an interesting indicator that a friend brought to my attention a little while ago. It's a histogram format that displays the strength of the trend. I copied it onto the fozzy indicator and use it to help determine the likely strength of the fozzy signal. When the Fozzy cross occurs against a large trend (tall red or blue bars) it means the trade is going against a trend that is still strongly in place. I tend to only take the trades that cross as the solar trend changes direction (say from long to short) and again when the cross happens in the same direction of a strong trend.


As an interesting side note, I've noticed that during strong trends once the solar bars drop below the RSI, such that the RSI is above (or below) the bars for the first time a good exit signal exists. Price tends to then move sideways a bit and drop off (or move up). Now if price picks back up again (after a retracement for example) the same thing happens... I don't know why this is, just that it seems to be incredibly reliable.

Now, for the negatives (perhaps). This indicator does redraw BUT only the current bar (which all MA indicators do) and the bar prior to it. The previous bar only changes when a new bar starts - it sort of readjusts the size a little. All others stay the same. I haven't found this to in anyway detract from the manner in which I use it.

Over all I'm finding that this can help to reduce bad trades. I've just spent the last two weeks testing this, and refining it... I'm starting to trade with it in earnest now..

Oh, one other thing. Trades coming off of S/R lines as displayed by the donchian channels are also great trades to take. When the price moves away from the lines, the fozzy crosses AND the solar starts to change direction - a really good move could be in hand then.

Jason
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