Cable Riding

Riding the Cable (GBPUSD) to Millions

Step 1: I close out or hide all my other charts.

Step 2: I open a chart for the GBPUSD on the M15 TF.

Step 3: I add the EMA 50 in white.

Step 4: I add the EMA 20 in lime.

Step 5: I attach the MACD with settings 3, 9, 1

Step 6: I add the RSI and these are thse settings.
Period: 5
Fix Minimum: 0
Fix Maximum: 100
Levels: Both @ 50

I have made some other amendments to this plan which start on page 7. Happy trading!!!!

Here are the entry rules that I use to enter a trade. Feel free to use these rules or you may find a strategy that fits your trading style better.

First things first

Step 1: I determine the trend. If the EMA 20 is below the EMA 50 you are in a downtrend and would only take short positions. If the EMA 20 is abobe the EMA50 you are in an uptrend and would only take long positions.

I never enter a trade against the trend.

Entering the trade

There are two scenarios in which I would enter the trade for either a downtrend or an uptrend.

1. Downtrend
   1. I enter a short trade at the excact moment the blue line of the QQE touches or crosses beneath the smoothing line (dotted line) and when the RSI is below the 50 line. If both of these are not true, I wait until they are true before entering the trade.
   2. I enter a short trade after the EMA20 has crossed under the EMA 50 with no mind as to where the other indicators are at.

2. Uptrend
   1. I enter a long trade at the exact moment the blue line of the QQE touches or crosses above the smoothing line (dotted line) and when the RSI is above the 50 line. If both of these are not true, I wait until they are true before entering the trade.
   2. I enter a long trade after the EMA 20 has crossed above the EMA 50 with no mind as to where the other indicators are at.

Entering after the EMA 20 crosses either above or below the EMA 50 is the riskier of the two trades because many times this can happen during a very fast breakout and can immediately reverse directions and head the other direction before you know what happened. However, many times there are some very nice pips to take here as well.

Exiting a trade is always the hardest thing to determine because in order to do it exactly perfect you would need to be able to predict where the price is going to go next.

Just remember that becasue we are trading on the M15 TF and we are always with the trend. It is very likely that another enter point will establish itself within the next hour or two or less. You will have ample opportunity to take pips, so....just don't let your green trade go to red.

Remember that becasue we are with the trend we expect the price to continue in the direction in which we enter, so get out if things turn bad and go to the next trade.

Rules to Trading

Step 1: I only enter a trade when I have ample time to to watch it develop and to adjust my stops along the way. After it developes, I can take a break from the screen if I want to.

Step 2: I use a pre-determined s/l of 35 pips including the spread. I don't necessarily add it to the trade, but will manually execute it if it gets that low. It is important when manually executing trade chages, etc. that you follow your rules. It is too easy to say I'll just let it go a few more pips and before you know it something bad happens.

Because I always trade with the trend, very rarely is my s/l hit and because I monitor my open trades with a set of rules very rarely do I not take a profit or at least BE.

Taking Profit Rules

1. Set a pre-determined s/l limit. I set mine at -35 pips including the spread.

2. I set a trailing stop of 30 and a take profit of 80. (Though many times I will adjust this or delete it based upon market conditions and what the market is doing.)

3. When my trade gets to:

1. +15 pips I move my s/l to break even.
2. +25 pips I move my s/l to +5
3. +35 pips I move my s/l to +10
4. +40 pips I move my s/l to +15
5. I let the trailing stop take over from here and sometimes I will make other adjustments along the way.

I have found though that if the trade recedes in this manor it is either going to go the other way or it will bounce back in an hour or so which will give you another entry position to take more profit. I always like to take profit now!

Other Profit Taking Rules

1. Another strategy that I look at is by pulling up the M5 TF chart with the same indicators on it. After I am up 30 pips or so I will watch the QQE of the M5 TF and when it hits or crosses over the smothing line against my trade I will exit and go back to the M15 TF and start looking for another re-entry. This can get you out too early or it can save you a bunch of pips from the 30 pip trailing stop above. It works either way. The most important thing is that you take a profit.

2. I can also read candlesticks.

1. How to candlestick a short position exit
   1. After I am +30 pips or so, I continue moving my s/l down to the high of the previous candlestick as long as that candlestick closed lower than the previous candlestick did. If it closed higher, I leave my s/l where it is at. I do not move my s/l lower again until a candlestick closes lower than the one where everything become fixed.

2. How to candlestick a long position exit
   1. After I am +30 pips or so, I continue moving my s/l up to the low of the previous candlestick as long as that candlestick closed higher than the previous candlestick. If it closed lower, I leave my s/l where it is at. I do not move my s/l up again until a candlestick closes higher than the one where everything become fixed.

Money management is a very important aspect to being a successful trader. So is a strategy that wins many more times than it loses which is what we have here. If done right, you will find that you will very rarely take any loses... although this does depend on what the market is doing and how you trade.

Should I paper trade first?

Personally I hate paper trading. I think you are better off trading with .01 lots (mini account) so the most you will lose is $0.35. This way you have a personal stake in winning and losing and will make a better effort to win and you will become a better trader.

How mush should I risk per trade?

This is just what I would do. Please make good decisions for yourself.

I suggest that you risk .01 lots (mini account) for at least a week or two until you get comfortable with everything. After that I suggest you calculate how much you would lose if you risked 10%. For example, if you had a balance of $2000, 10% would be $200.

Then I suggest that you calculate how much you would lose if you risked 3%. If you had a balance of $2000, 3% would be $60.

Then I would risk 3% of my account balance until I was up $400. At that time I would start risiking 10%.

That is it. A very simple strategy for taking profit Riding the Cable.

It is possible that if you like other pairs better that this system will work for that as well, but the cable works fine for me.

Enjoy the strategy if it is right for you and I hope to see you around the forum. I will make any corrections to the first few posts of the thread.

God bless and have a great day!

Good looking system, Damon.

I have a few questions:

Do you enter only on the close of a candle?

Do you trade only during specific times?

Do you avoid news?

Thank you

Hello Billbss,

For the most part I don't wait until the close of the candlestick. If that crossover occurs at the start of the stick, I'm on it.

For the most part I trade when I am at my computer or close to it. It works in any time frames, but as always you can get stuck at the a quick breakout and reversal at the open of the European and the NY market.

I avoid news like the plague. Remember that I trade with the trend so the news only gives me entry points without knowing what the outcome of the news event is. Bottom line is I will profit from it without knowing it. Sometimes, the first Friday of the month which is when the non-farm payroll report comes out I can get stuck for -35 pips, but other times I can catch it right and get over 100 so it all depends.

I got one: have you backtested it? In case yes, what are the results?

It would be almost impossible to manually backtest, since he enters in mid candle. You can't look back on a chart and know when that would have been.

doesnt QQE have repaint problems ?

how long have you been using this system ? and performance ?

I don't think QQE repaints if set to current time frame, which it is in this case.

Here is what your chart should look like starting out the for the week of 10/14/07. We are currently in an uptrend and so we are looking for long trades only. I will be waiting for the market to make a first move before I counter with an entry position.

If I can figure out how to put arrows on the charts, I will upload a new chart tomorrow showing what entry points I can on the screen.

Good luck and have fun trading today!

P.S. The pink vertical line is just a moveable marker I use to line up indicators and the red dotted line is a SAR based upon the daily charts although in most cases it has no effect on the way I place an order. Only if it has been bouncing around for a while, but if you don't make the trade you might miss the breakout. It is more just used as a point of reference.

http://www.freedomreallyrocks.com/images/10-14-07.gif

Does the QQE line cross have to happen on the same candle as the RSI 50 level cross or is there some tolerance between the two events?

And is there any way to easily view the levels of indicators by moving the vertical cursor bar along the chart, the way the current time/date of the candle is shown at the bottom of the chart for the current position? I am finding I have to guess if the indicators are at the proper levels unless I move the cursor right on the line of the indicator and wait for the pop up to read it out, which is tedious. I'm new to MT4 so I don't know if this is just something we have to live with.

Hi Damon

Nice looking strategy here.....

I presume you trade this live...How long have you traded this particular strategy?

Thanks for your post and all the very best to you.

Regards

Angie

could you plz send me the name of your platform which has the current time frame ??????thanks in advance ...........i will try it

Hello,

The crossovers do not have to happen simultaneously. If one is lagging and one has crossed. Wait for the second one to cross and then take it for a ride.

If you go to insert in your MT4 charts, you can insert a vertical line. Then you should right click on the screen and select 'objects'. Then place a click in the box next to that vertical line and you will be able to move it around the screen. This should help you see when indicators are aligned.

My wife and I are currently and seriously considering that I quit my job so I can stay home ond just trade....and finish the house, and do my chores, and take lots of vacations. It is no longer idle chit chat but a very serious reality.

I am afraid I am not sure what you mean. I use interbankfx.com as my platform. Is that what you mean?

Looking at this setup during the downtrend of Oct 11, within the valid London/US trading times there were two or 3 entries shown (the last one is a bit beyond mid day Friday EST, normally not a preferred trading time, and although it was a bit quirky it did seem like a valid signal).

Looking at fib retracement from the low to high movement between Oct 9 and 10, Oct 11 was retracing toward the 38.2 fib, and the QQE/RSI crossovers to the downside seemed to give an extra confidence that the price was going to enter that zone and thus give targets of 0.5 or 61.8.

I wonder if this was a coincidence or if the nature of this system could make it a poor man's Fib cheat sheet...

I'll keep watching this in forward testing. I'm trying to learn to use Fibs so I relate everything else to them and hope to find something that pairs up.

Good to here your doing well with the method

I tend to trade on a larger tf but use 15m and 30m as my entry signal but with H4 as main chart..

How do you deal with whipsaw when on smaller tf..as this is one of the reasons i dont trade it there..

Also this 20/50 cross seems a very popular method at the moment...very similar to effilangs thread 25/50 ...a very good read also

these levels are great to get you on the trend train !!!!

have attached a chart

hope you can understand my thinking ...but i guage trend from D1 after 50 cross, then confirm on my trading chart and in this instance entered on M30(1.9848)

and exit was on M30 when all 3 ma's crossed (1.9668)

my exits are rule based on P.A, stoch cross or M.A cross (ish)


take care

Rye