The Daily Fozzy Method

I continue to be fascinated when I see how different traders develop their own personal Fozzy-style trading method, apply a few different parameters and acheive very good results. Your approach to viewing the cross of the MA and the RSI Metalhawk, is indeed unique, and you have used S/L and T/P values that I have not seen in this thread before to produce results quite similar to those in my earlier posts (2245 & 2332). I believe results like this underscore the robust nature of using the basic MA and RSI cross as a trade signal, regardless of the final form it may take.

Lesson for all: backtest a strategy, follow the rules of a 'proven' method no matter what happens and earn money!

We'll enjoy learning more from you, as time permits.

Where is the line that stick to "dot" ?

I wonder if anyone can help me with the ATR Channels indicator? I believe I originally downloaded if from a link on this thread, which is why I'm posting my question here.

My problem is, the indicator allows the ATR channels to be formed around a central moving average which seems to be based on HLC/3 rather than the close. Does anyone know if there's any way of basing these channels on the closing price itself?

So far as I understand Fozzy, entries depend on the close, so I would have thought any use of ATR Channels would, too. I'm beginning to think I'm either too thick to understand how to change this, I got the indicator from somewhere else, or I've got the wrong version of the indicator.

I don't use ATR channels, so can't help. Have you searched the FF Forum for this indicator?

Hello BB,

Thanks for replying. Yes, I did a search, but found nothing. However, I've now discovered (by accident) a link to an indicator, ATR Channels2, on this thread, in post 1709, by Willf, which seems to operate differently to my ATR Channels. It still doesn't do what I want, being based on the open rather than the close; but maybe I just need to scout around for version 3 or 4!

BB,

Sorry - the search I did must have been different to the one you suggested. Doing yours seems to have thrown up some positive looking results.

Many thanks,

Excellent......................

are u avoiding news (big news) ? or just going through it?

I avoid NFP only; good day for me to take off and go surfing..............

I've just switched over to the Daily Fozzy method this week, and I think it may be the answer to the major problem that I have with Forex - that I try to do too much fooling around with my trades. I really needed a system that forces me to keep my hands off things and let them develop, and a daily chart system does this for me. Also, I really like how there are many clear cut opportunities which are defined by the crosses, but I do believe not every cross should be traded. I'm still honing in on which crosses to trade, anyway you can't trade everything all the time without blowing your bankroll. I am following the simplest S/L and T/P method, which is to just use 70% of ATR(20) for now, and move S/L up each day. I have already seen better results this week by switching from another system which was based on 4H charts.

Still very new at this, so I'm expecting some losses along the way, but so far I'm up several hundred pips on two trades, which is very good results indeed.

I have just completed over the weekend much larger tests on the EURUSD pair. As I mentionned elsewhere, I would take a trade if the RSI crosses with its average and the difference at the close of the candle is 5 points or more. There is absolutely no subjectivity in the decision. If it's a Fozzy cross (no BB used) and it crosses by enough, the trade is taken.

I tested on the data from the past 4+ years (May 2003) using both the 1 lot and 2 lots strategies. No trailing stop used. A fixed Stop Loss and a fixed Take Profit(s). With 2 lots, once the first Profit is reached, the second lot's Stop Loss is moved to breakeven.

There are 3 results possible for the 1 lot method: winning trade, losing trade, and ambiguous candle. This last one means that the daily candle touched both the Stop Loss and Take Profit, and in order to verify which was reached first, a look at smaller time frames would be necessary, which is beyond the scope of my little program. Besides, the only time this happend with any regularity is with small T/P and S/L, which don't usually produce good results anyway.

What I did was test starting in May 2003 -> end of July 2007. Then I removed the oldest 6 months worth of trades (May 2003 -> October 2003) and tested again. Removed 6 months, and so on until October 2006, at which point I removed only 3 months and did the last test from February 2007 to July 2007.

Here are the optimal results for each time period using 1 lot:

2003.05.15 - 2007.07.26
S/L = 120
T/P = 195
Losingtrades: 95
Winning trades: 70
Ambiguous trades: 0
Total Pips: 2250

2003.11.10 - 2007.07.26
S/L = 120
T/P = 195
Losing trades: 86
Winning trades: 61
Ambiguous trades: 0
Total Pips: 1575

2004.05.10 - 2007.07.26
S/L = 120
T/P = 195
Losing trades: 74
Winning trades: 55
Ambiguous trades: 0
Total Pips: 1845

2004.11.02 - 2007.07.26
S/L = 120
T/P = 195
Losing trades: 60
Winning trades: 49
Ambiguous trades: 0
Total Pips: 2355

2005.05.05 - 2007.07.26
S/L = 95
T/P = 195
Losing trades: 52
Winning trades: 36
Ambiguous trades: 0
Total Pips: 2080

2005.11.01 - 2007.07.26
S/L = 120
T/P = 195
Losing trades: 32
Winning trades: 32
Ambiguous trades: 0
Total Pips: 2400

2006.05.16 - 2007.07.26
S/L = 90
T/P = 195
Losing trades: 25
Winning trades: 20
Ambiguous trades: 0
Total Pips: 1650

2006.11.06 - 2007.07.26
S/L = 120
T/P = 250
Losing trades: 13
Winning trades: 13
Ambiguous trades: 0
Total Pips: 1690

2007.02.01 - 2007.07.26
S/L = 120
T/P = 250
Losing trades: 9
Winning trades: 9
Ambiguous trades: 0
Total Pips: 1170

Looking at some of the averages shows that it may be better to look at a much shorter term average. For instance, 2250 pips over 51 months is barely 40 pips per month on average. While the last 6 months by themselves is an average of 195 pips per month. Interesting results nonetheless. I will post the 2 lots another day, when I have more time.

The next step I intend to add to my program is a test that would calculate the optimal S/L and T/P for a determined time period (6 months, for instance) and applies the result to the following month, then moves forward one month, calculates for (6) months and applies it to the following month. I think that's where the better results may lie.

Let me be the first to thank Metalhawk for his recent testing work as just posted above! Great job and excellent results.

And not to minimize his efforts in any way...............but his results demonstrate what many of us already know; the basic Fozzy trading strategy is very powerful when properly applied and when combined with sound RR and MM is profitable too!

We'll be looking forward to your next post.....................

Dear beechbum
kindly , what do u mean by RR& MM(at your last post)
thanx

RR = Risk, Reward Ratio

MM = Money Management

Let me be the second to congratulate MH on his efforts. A sound piece. On the subject of multiple lots with the fozzy method, I find it is the best way to trade it. However I take a different line to TP than most. To explain this I offer this current chart. Whenever I think of taking a fozzy trade I first look at potential exits. This will determine how many lots I trade or even if I pass on it altogether. Since I use only fibo for this purpose I assess how far the price may potentially go. Currently I am long with 3 lots. TP 1st target, 2nd and 3rd to BE. In this way I am able to bank a small profit should the trade then reverse. Of course if the trade goes against me straight away my loss is also multiplied. However I am prepared to accept such a R to R as this way I am able to cover any losses with the large moves that I do catch.

More excellent insight on Fozzy-style trading. pf1966, I now find it absolutely imperative to do some studying and learn more about the use of Fib levels. Thanks for the push in that direction..........

I have also started to use Fib retracement levels as TP indicators. But I think they may also be helpful to decide whether to make a trade at all. If by the time the Fozzy cross has occurred, we have already reached the first or second fib, then this lessens the possible strength of the trade. I am still using 70% ATR for my S/L for now.

170 PAGES!!!......Wow! What a reading experience.

yea... it's a good system in my opinion...
maybe we have to make a summary and post it in an ebook format...
so newbie can download it someday...
regards,

Can I please be that newbie?

I'm only 40 pages into James16, and like 20 into Linux Troll scalping, and then a few other multi page threads here and there... Is there any updated summaries on a recent page I could be cordially or sincerely guided to?