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Cornflower Hourly System

  • #801
  • Aug 14, 2007 2:56pm Aug 14, 2007 2:56pm
Ok, I got it.. pip_hunter.. New here and so I'll just watch you guys from the sidelines.. I felt the risk was worth a stab and yes I may have taken 70 points, but I'm very happy with 27 for this da.

Have a nice day..
Check Mate GAME OVER
  • #802
  • Aug 14, 2007 3:25pm Aug 14, 2007 3:25pm
Nice system. It's a typical MA pullback system, and if done right will get results.

But, I must say, you'll never succeed in the long run taking only 10 pips...? Why take 10 when you can let it run and make 100? Age-old wisdom says "let your winners run, cut your losses" ... you're cutting your winners by getting out at 10 pips.
  • #803
  • Aug 14, 2007 3:42pm Aug 14, 2007 3:42pm
Quoting JoshDance
Nice system. It's a typical MA pullback system, and if done right will get results.

But, I must say, you'll never succeed in the long run taking only 10 pips...? Why take 10 when you can let it run and make 100? Age-old wisdom says "let your winners run, cut your losses" ... you're cutting your winners by getting out at 10 pips.

Your incorrect with this line of thinking IMO
Check Mate GAME OVER
  • #804
  • Aug 14, 2007 3:43pm Aug 14, 2007 3:43pm
Quoting JoshDance
But, I must say, you'll never succeed in the long run taking only 10 pips...? Why take 10 when you can let it run and make 100? Age-old wisdom says "let your winners run, cut your losses" ... you're cutting your winners by getting out at 10 pips.
Hi All,
I read this thread everyday and I too thought like JoshDance when I got into trading. BUT, after running across LEVER70's Trade Rules, (author of this sytem and thread) it really opened my eyes to componding. Don't get me wrong, if I am in a trade and it's running like a scared jack rabbit, I'm not getting out till it pivots.

I would like to share One rule from Felicia's rule book:

RULE: Always stick to a small daily profit target

Again, small daily wins are the key to success. This may be the second most important rule after rule #1. The chain of events that justify this rule generally follows this chronological pattern:

  1. 1. After a string of losses, you calm down, screw you head back on, and finally start to see the market clearly. You make one or two trades and meet your daily target.
  2. 2. Relieved that you have been able to do this, you start to see good trades regularly. You take some of these trades for wins, and you realize that your target is well within your reach, several times a day.
  3. 3. At this point, trading starts to seem easy and you are making money left and right. Overconfidence and greed sets in. Long before this happens, you may have already been overtrading.
  4. 4. You begin to lose and eventually give back all of your profits.

At this point, one of two things happens:

  1. You stop trading and assess what happened (which is, in fact, what led this author to write this rulebook). Having calmed yourself down, eaten a nice meal, etc., you return to step one above. You finish the week in profit, only to realize that you would havemade the same amount of money all along if you had only stuck to your small daily target! Think about the time that you could have spent doing other things!
  2. You get desperate and lose even more money, so much that you are FORCED to stop and assess what happened. If you are a beginning trader, that this will happen at least once. In fact, it will probably happen multiple times. Ah, you say "oh, not me!" Yes, you too.

If you end up making the same money overtrading as you do when trading minimally for a small profit target, why overtrade? If we always acted with our heads, this question would never arise. The compounding that can be realized by fulfilling and sticking to a small daily target is mind-boggling.

For example, let’s say you have $2,000 in your account. You resolve not to lose either 5% of your equity or 20 pips on every single trade that you make. In other words, a 20 pip loss would mean a decrease in equity of 5%. And this would be a worst-case scenario; ideally you would exit much earlier. To size your position, you would first divide your account size by the risk percentage (.05) to get the capital amount to be risked. Then you take that number and divide it by the maximum pip loss. The result, which you always round down to a whole number, is the dollar amount per pip that you are allowed to trade, regardless of the leverage offered by your broker.

To illustrate: $2,000 * .05 = $100 / 20 = $5 per pip. $5 per pip means that you can trade 5 mini-lots. Only a mini account will give you the flexibility to trade the exact number of lots appropriate to your account size, and some brokers are less flexible than others. Now, for the compounding realized by fulfilling a 5 pip daily target:

  1. After two months of trading (40 days), your original $2,000 has become $3,170. At this point, you are now trading $7 lots.
  2. After six months, you account is now worth $9,300, more than 4 times its original size. You are trading $24 lots.
  3. After a year, you have $46,945 to trade with. Your account has increased twentyfold, and you are trading $114 lots.
  4. After 18 months, your account is up to $233,035. You are trading $568 lots. Holy crap!

Now, you will have had to pay taxes once by this point, decreasing the overall amount. But you get the picture. After a mere 18 months, you have earned enough money to quit your job and live off your trading income.

The high leverage offered to forex traders is what makes this kind of compounding possible. In no other market can you trade for this little, yet walk away with so much. What’s more, if your greed gets the best of you and you screw it all up (which I have done), it does not take all that much time to recover your losses. This is why forex is the best market for the small trader, as opposed to equities or even futures, where the leverage is much less. Keep your goals realistic, stay disciplined, and financial freedom is within your grasp.

Something to think about!!

MG

  • #805
  • Aug 14, 2007 3:50pm Aug 14, 2007 3:50pm
Very nice post.. Home runs do not win the games for it could be the little base hits. Why do posters on forums boast about the zillions of pips they make? Funny....ooppps moving to the sidelines...
Check Mate GAME OVER
  • #806
  • Aug 14, 2007 6:08pm Aug 14, 2007 6:08pm
Quoting Matrixxdg
Hi All,
I read this thread everyday and I too thought like JoshDance when I got into trading. BUT, after running across LEVER70's Trade Rules, (author of this sytem and thread) it really opened my eyes to componding. Don't get me wrong, if I am in a trade and it's running like a scared jack rabbit, I'm not getting out till it pivots.

I would like to share One rule from Felicia's rule book:

RULE: Always stick to a small daily profit target

Again, small daily wins are the key to success. This may be the second most important rule after rule #1. The chain of events that justify this rule generally follows this chronological pattern:

  1. 1. After a string of losses, you calm down, screw you head back on, and finally start to see the market clearly. You make one or two trades and meet your daily target.
  2. 2. Relieved that you have been able to do this, you start to see good trades regularly. You take some of these trades for wins, and you realize that your target is well within your reach, several times a day.
  3. 3. At this point, trading starts to seem easy and you are making money left and right. Overconfidence and greed sets in. Long before this happens, you may have already been overtrading.
  4. 4. You begin to lose and eventually give back all of your profits.

At this point, one of two things happens:


  1. You stop trading and assess what happened (which is, in fact, what led this author to write this rulebook). Having calmed yourself down, eaten a nice meal, etc., you return to step one above. You finish the week in profit, only to realize that you would havemade the same amount of money all along if you had only stuck to your small daily target! Think about the time that you could have spent doing other things!
  2. You get desperate and lose even more money, so much that you are FORCED to stop and assess what happened. If you are a beginning trader, that this will happen at least once. In fact, it will probably happen multiple times. Ah, you say "oh, not me!" Yes, you too.

If you end up making the same money overtrading as you do when trading minimally for a small profit target, why overtrade? If we always acted with our heads, this question would never arise. The compounding that can be realized by fulfilling and sticking to a small daily target is mind-boggling.

For example, let’s say you have $2,000 in your account. You resolve not to lose either 5% of your equity or 20 pips on every single trade that you make. In other words, a 20 pip loss would mean a decrease in equity of 5%. And this would be a worst-case scenario; ideally you would exit much earlier. To size your position, you would first divide your account size by the risk percentage (.05) to get the capital amount to be risked. Then you take that number and divide it by the maximum pip loss. The result, which you always round down to a whole number, is the dollar amount per pip that you are allowed to trade, regardless of the leverage offered by your broker.

To illustrate: $2,000 * .05 = $100 / 20 = $5 per pip. $5 per pip means that you can trade 5 mini-lots. Only a mini account will give you the flexibility to trade the exact number of lots appropriate to your account size, and some brokers are less flexible than others. Now, for the compounding realized by fulfilling a 5 pip daily target:

  1. After two months of trading (40 days), your original $2,000 has become $3,170. At this point, you are now trading $7 lots.
  2. After six months, you account is now worth $9,300, more than 4 times its original size. You are trading $24 lots.
  3. After a year, you have $46,945 to trade with. Your account has increased twentyfold, and you are trading $114 lots.
  4. After 18 months, your account is up to $233,035. You are trading $568 lots. Holy crap!

Now, you will have had to pay taxes once by this point, decreasing the overall amount. But you get the picture. After a mere 18 months, you have earned enough money to quit your job and live off your trading income.

The high leverage offered to forex traders is what makes this kind of compounding possible. In no other market can you trade for this little, yet walk away with so much. What’s more, if your greed gets the best of you and you screw it all up (which I have done), it does not take all that much time to recover your losses. This is why forex is the best market for the small trader, as opposed to equities or even futures, where the leverage is much less. Keep your goals realistic, stay disciplined, and financial freedom is within your grasp.

Something to think about!!

MG

Amen to that greed will kill your account,nothing that everlast grows fast!!!!!
  • #807
  • Aug 14, 2007 6:14pm Aug 14, 2007 6:14pm
Thanks Matrixxdg. Terrific post - one that should be printed-out and placed where it can be seen and reviewed every day.
  • #808
  • Aug 14, 2007 9:22pm Aug 14, 2007 9:22pm
Quoting Rialto
Thanks Matrixxdg. Terrific post - one that should be printed-out and placed where it can be seen and reviewed every day.
Hi All,
I wish I could say I came up with this straight forward truth about trading, but I didn't. We owe it all to Felicia (Lever70). If you have not read the entire 20++ page rulebook she wrote, get it here.

http://www.forexfactory.com/attachme...6&d=1177166291

Happy Trading....slow but sure and retire early.

MG
  • #809
  • Aug 14, 2007 10:21pm Aug 14, 2007 10:21pm
Quoting bunton
Very nice post.. Home runs do not win the games for it could be the little base hits. Why do posters on forums boast about the zillions of pips they make? Funny....ooppps moving to the sidelines...
Most people who post their trade results in this forum do so with the intent of sharing the experience to help others,and learn from others, like yourself. Sometimes they share a bad trade in order to get feed back on what they did wrong and how to correct the errors made. Other times they share good trades which resulted in a goodly number of pips being banked.

I look to learn from others results both positive and negative and their methods. If someone has banked 70 plus pips on a trade,...I want to know how they did it. If it is a setup I am not familiar with, then I want to examine it and see if integrating a system might better my trading style.

I started trading commodities part time in 2001, but I never really enjoyed trading in that venue. When I discovered forex in 2003, I switched and went full time in the Forex market in late 2004. My philosophy has always been to take small profits and when able increase the amount of lots traded. (Slow but steady.)

I have been following this thread since Lever started it. I have back tested it, then and forward tested it until I was satisfied it fit my style of trading. Once I have decided which currency pair to trade for the day, I use the four TF Cornflower system to decide when to enter the trade.

I live on the West Coast of the U.S. and trade both the Asian and London sessions. This morning during the London session, I determined that the GBP/JPY was going to continue on it's South bound journey. Using Cornflower I placed a sell at 236.72. The run started to end at 236.20. By the time I decided it was ending, I closed with a profit of 40 pips (my initial goal was only 20 pips.)

Upon preparing to trade the Asian session this afternoon, I was surprised to find the GBP/JPY had dropped to 234.12. While I was happy with the 40 pip profit from the earlier trade, my first thought was, is there anything I could have done to have banked some of the 220 pips I left on the table. After careful thought (and several cups of coffee) I saw where I could improve my results.

Firstly, when I closed the trade, it was quite apparent that price had begun an upward climb on the 5M chart. Instead of closing the trade, I should have noticed my option to use my trading station's close and reverse option and banked some of the pips on the retracement (it finally topped out at 237.14.)

Second, I had focused my attention on the 5M chart ONLY (a habit left over from my scalping days.) Because price was choppy on the 5M chart, I decided another trade would not be viable. If I had looked at the H, 30M, and 15M charts, I would have seen the trend was intact and my choppy 5M chart was only price taking a breather.

Third, If I had looked at the other charts, I could have placed another sell order with a trailing stop and gone to bed secure in the knowledge that I had already banked pips for the day, and the trade was covered by the stop. An observation I will not miss again.

I decided to share this trade not to boast of my 40 pip profit, but to share my mistakes in analyzing the charts. Hopefully it will prevent someone else from missing an opportunity like the one I missed today.

The venerable Peter Bain has said trading the Forex Market is like going to war. It's you against the other guy, and he more than likely has more experience, is better informed,....and wants your lunch! I am happy I banked those 40 pips and that my errors in evaluating the market only cost me unrealized profits (for those interested, I now trade 25 lots at $.84 per lot, or approximately $21.00 per pip) and not the hard earned money in the trading account.

Trading the Forex is a great business. However, it is terribly unforgiving of any ignorance, carelessness or neglect, (the same mantra I have when I fly an aircraft). Learning from other people's mistakes and successes will help to shorten the learning curve.

While the object of trading is to make money,....It's not how much money you make,....but what you do with the money after you make it that counts. Family, Passion, and Live Well.

Clansman
  • #810
  • Aug 15, 2007 12:34am Aug 15, 2007 12:34am
Quoting bunton
Your incorrect with this line of thinking IMO
If I may suggest...

In a ranging market, small, frequent targets are fine, but in a clear trending market as we have now, you can afford to extend your targets to S&R levels and take a few more pips. Yesterday I took 288 pips with 2 trades on aud/usd and nzd/usd still open and floating +363 between them. All Cornflower goodness!

So, if the volume is there with a nice, strong move, and a clear CF trend, why not go for 30 or 40 instead of 20?
  • #811
  • Aug 15, 2007 6:07am Aug 15, 2007 6:07am
Quoting Clansman
Most people who post their trade results in this forum do so with the intent of sharing the experience to help others,and learn from others, like yourself...........
Very nice post Clansman. You are so right. I have the same problem breaking my 5 min chart habit from the equities world. My makeup as a trader is such that when I have money on the table, it's hard to walk away and protect my stops, but I'm getting better. Thanks for the post.

Good job...from a MacGregor Clansman to you.
  • #812
  • Aug 15, 2007 6:22am Aug 15, 2007 6:22am
Quoting Clansman
Firstly, when I closed the trade, it was quite apparent that price had begun an upward climb on the 5M chart. Instead of closing the trade, I should have noticed my option to use my trading station's close and reverse option and banked some of the pips on the retracement (it finally topped out at 237.14.)

Second, I had focused my attention on the 5M chart ONLY (a habit left over from my scalping days.) Because price was choppy on the 5M chart, I decided another trade would not be viable. If I had looked at the H, 30M, and 15M charts, I would have seen the trend was intact and my choppy 5M chart was only price taking a breather.

Third, If I had looked at the other charts, I could have placed another sell order with a trailing stop and gone to bed secure in the knowledge that I had already banked pips for the day, and the trade was covered by the stop. An observation I will not miss again.

OK All...... How does one protect there profit when letting a trade on a 30 min chart run overnight. I usually wait until I have bagged 10 pips or so and then move my stop to one pip under breakeven. (if it reverses, I have at least enough for a cup of coffe )

If I am away from the computer, (ie. sleep, work, etc) how do I keep taking the profits. Do I use a trailing stop? I think the that would be dangerous because I am not sure where to set the stop. To tight, I make nothing, to loose I go in the red. Red makes me a an unhappy camper.

Thoughts anyone?

MG
  • #813
  • Aug 15, 2007 10:53am Aug 15, 2007 10:53am
Limit hit on EUR/CHF off 30 min signal for 20. Looking at GBP/USD, USD/CAD
Check Mate GAME OVER
  • #814
  • Aug 15, 2007 11:51am Aug 15, 2007 11:51am
Quoting bunton
Limit hit on EUR/CHF off 30 min signal for 20. Looking at GBP/USD, USD/CAD
12 hit on usd/cad done for the day..
Check Mate GAME OVER
  • #815
  • Aug 15, 2007 12:41pm Aug 15, 2007 12:41pm
Quoting Matrixxdg
OK All...... How does one protect there profit when letting a trade on a 30 min chart run overnight. I usually wait until I have bagged 10 pips or so and then move my stop to one pip under breakeven. (if it reverses, I have at least enough for a cup of coffe )

If I am away from the computer, (ie. sleep, work, etc) how do I keep taking the profits. Do I use a trailing stop? I think the that would be dangerous because I am not sure where to set the stop. To tight, I make nothing, to loose I go in the red. Red makes me a an unhappy camper.

Thoughts anyone?

MG
I just use a limit and take it off the table. I'm not greedy and I'm happy with a 10 pip move. Just me though. Today I entered a trade minutes before going to work and when I got home tgt was hit. Sure the pair might run 100 pips but you can get in on a p/b if you wish.

I'm beginning to think the JPY pairs might be heading for 30 min signals. Anyone else noticing this?
Check Mate GAME OVER
  • #816
  • Aug 15, 2007 2:37pm Aug 15, 2007 2:37pm
Quoting bunton
I'm beginning to think the JPY pairs might be heading for 30 min signals. Anyone else noticing this?
I just took 52 on AUD/JPY and 36 on GBP/JPY. They have been going down almost every day for last week or so starting between 13:30 and 14:30 EST.

Not sure why...if any one can shed light on that I would like to know. No news releases.... Asian market not open yet. But....if all I squeek out is my 10 pips a day, I'm happy. But if I have a couple of runners, I let them run till they get tired.

MG
  • #817
  • Aug 15, 2007 5:29pm Aug 15, 2007 5:29pm
Felicia, a million pips to you for your insights that you have so generously shared! Not only is Cornflower one of the most astute observations about the workings of the forex marketplace, but your Rules for trading are simply astounding. You have given us all a most powerful tool for trading with Cornflower. Yes, one must be aware of Support, Resistance and the Weekly Trendline, but Cornflower is where it's at! I look forward to the continued insights and additions that will continue to be added to this thread as the year goes on.

One thing I've noticed and may be of help is that there are many occasions where you look at the hourly and it's trending so fast that there isn't the slightest hint of a pullback to even the 8 EMA. You then drop to the 30M chart and again, no pullbacks. Not only are there no pullbacks, but there's DISTANCE between the high or low of the bar and the 8 EMA. Drop to the 15M and it's still a runaway Piptrain. No pullbacks in sight, how to take advantage of this moneymaker? Well, I've found that in these times there is no reason to not be making money in an obvious market move. Just drop down to the 5M and 1M charts in those circumstances and play those timeframes Cornflower style exactly the same as if they were the 1H chart. What I'm saying is that there is always a timeframe to play Cornflower on in a trending market. Just find the one that has shown a couple pullbacks to the 12/24 area and then wait for the next opportunity to get in. You have to keep a vigilant eye on your stops, as always, but as long as you do, you've got an 80% chance of winning which is HUGE.

Hope this helps. Let me know if I wasn't clear...
  • #818
  • Aug 15, 2007 7:43pm Aug 15, 2007 7:43pm
Quoting Repipula
Felicia, a million pips to you for your insights that you have so generously shared! Not only is Cornflower one of the most astute observations about the workings of the forex marketplace, but your Rules for trading are simply astounding. You have given us all a most powerful tool for trading with Cornflower. Yes, one must be aware of Support, Resistance and the Weekly Trendline, but Cornflower is where it's at! I look forward to the continued insights and additions that will continue to be added to this thread as the year goes on.

One thing I've noticed and may be of help is that there are many occasions where you look at the hourly and it's trending so fast that there isn't the slightest hint of a pullback to even the 8 EMA. You then drop to the 30M chart and again, no pullbacks. Not only are there no pullbacks, but there's DISTANCE between the high or low of the bar and the 8 EMA. Drop to the 15M and it's still a runaway Piptrain. No pullbacks in sight, how to take advantage of this moneymaker? Well, I've found that in these times there is no reason to not be making money in an obvious market move. Just drop down to the 5M and 1M charts in those circumstances and play those timeframes Cornflower style exactly the same as if they were the 1H chart. What I'm saying is that there is always a timeframe to play Cornflower on in a trending market. Just find the one that has shown a couple pullbacks to the 12/24 area and then wait for the next opportunity to get in. You have to keep a vigilant eye on your stops, as always, but as long as you do, you've got an 80% chance of winning which is HUGE.

Hope this helps. Let me know if I wasn't clear...
Thank you for that last paragraph, mate. Although Cornflower is a wonderful system (Thank you again, Felicia), I've always been a bit unsure as to how to use the different TF's. I'm sure that Felicia said to play the pull-backs on the 1H, but only break-outs on the 30min charts. That's fair enough, but I've looked at 1H, 30min, 15min and 5min charts, and like you said, there always seems to be opportunities to play pull-back trades on at least ONE of those charts, and sometimes ALL of them. A couple of days ago, I was trying a scalping method on the 5min, and it was remarkably successful. I was trying out small trend lines here and there, and I found that they narrowed down the entry points for me in a lot of cases. Basically, my thoughts are that Felicia has provided a wonderful method that each of us can utilise in our own different ways, while still respecting the essential fundamentals that she developed.

Any other thoughts on this out there, I wonder?

Cheers
  • #819
  • Aug 15, 2007 8:54pm Aug 15, 2007 8:54pm
Quoting Matrixxdg
Very nice post Clansman. You are so right. I have the same problem breaking my 5 min chart habit from the equities world. My makeup as a trader is such that when I have money on the table, it's hard to walk away and protect my stops, but I'm getting better. Thanks for the post.

Good job...from a MacGregor Clansman to you.
Thanks Matrixxdg.

I understand, it is especially frustrating when your stop is hit and price then turns around and proceeds to move another 20 to 30 pips before finally stalling out. I prefer to keep my stop line in my head while I am trading (I find it allows for more flexibility when price starts to fluctuate.) If there is a strong trend and price is moving well, I keep a 30 pip margin in my head. If it is ranging, I use 20 pips on either side of the channel. I follow the 5M and 15M charts when it is ranging. I use pivot points and support and resistance lines, and I watch carefully around those areas (it is amazing how often a Cornflower pullback happens around those areas.)

If I have a trade that is in the positive and I am going to be away from the computer, I set my stop half way between where price is and my break even point, assuring some profit. When I use a trailing stop, I set it anywhere between 30 pips and 100 pips behind price (depends on the particular currency and the movement at the time.) If I am sure price will continue on a trend, but I can't gauge where it might retrace to before continuing, I will set a higher trailing stop. Unfortunately, trading is part art and part science....more art than science.

I hope the above is useful.

BTW,....I am MacGregor as well!!!

Clansman
  • #820
  • Aug 15, 2007 9:03pm Aug 15, 2007 9:03pm
Nice work Bunton. 32 pips between the EUR/CHF and USD/CAD. Sounds like you had a good day.

Clansman
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