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The Daily Fozzy Method

  • #1,381
  • Dec 20, 2006 1:00pm Dec 20, 2006 1:00pm
Quoting poekmeister
Fozzy, BB, other experts,
What are your views on recent trade in GPDUSD. See the file I have attached. Clean entry with the trend ...70% ATR...not hit at this moment though -55pip loss open...

My concerns:
= entry candle was large bullish candle
= followed by a retracement candle and countertrend signal....
= the candle of today may end doji potentially hinting on reversal down to fib / tunnel

Should I stay or should I go?

Thanks for your wisdom

Poekmeister
I took this trade also. Nothing wrong with the trade. All the signals where there.

Personally I will let it run. If it gets stopped out then so be it. There are plenty more trades that will make up for it.
  • #1,382
  • Dec 20, 2006 1:15pm Dec 20, 2006 1:15pm
Quoting poekmeister
Fozzy, BB, other experts,
What are your views on recent trade in GPDUSD. See the file I have attached. Clean entry with the trend ...70% ATR...not hit at this moment though -55pip loss open...

My concerns:
= entry candle was large bullish candle
= followed by a retracement candle and countertrend signal....
= the candle of today may end doji potentially hinting on reversal down to fib / tunnel

Should I stay or should I go?

Thanks for your wisdom

Poekmeister
All the signals were there, but the open was right at a resistance level which made me think it might bounce back down - which it has. At the moment it's just riding between a tight support and resistance level... I think I'd wait for a confirmed break out in one direction first.

Jason
Attached Image
  • #1,383
  • Dec 20, 2006 1:30pm Dec 20, 2006 1:30pm
The answer to your question lies in the answer to THIS question: What are YOUR rules for fozzy trading? Break the rules and you are asking for trouble. Do it once and it will be easier every time after that. Loose once by breaking the rules and you'll make a habit of it. If you're not sure about your rules, go back to the very beginning of this thread and trade using the original rules explained by fozzy. THAT simple method is a winner in the long run!

Quoting poekmeister
Should I stay or should I go?

Thanks for your wisdom

Poekmeister
  • #1,384
  • Dec 20, 2006 1:35pm Dec 20, 2006 1:35pm
Wilff, jlowder, thanks for the input. Interesting to compare views!

For now I will stay in the trade (plan the trade, trade the plan), but will a note to go back some months of history on several pairs to combine long entry bars into resistance.

Let's see what tomorrow brings.

btw, I am in a similar trade for EURUSD as well...
  • #1,385
  • Dec 20, 2006 1:37pm Dec 20, 2006 1:37pm
Hi BB, I guess our posts have crossed. YES I decided to stick to my rules and the plan...so I am not doomed yet.

btw I have applied MM and so I am not risking more than 1% for this trade.


Quoting BeachBum
The answer to your question lies in the answer to THIS question: What are YOUR rules for fozzy trading? Break the rules and you are asking for trouble. Do it once and it will be easier every time after that. Loose once by breaking the rules and you'll make a habit of it. If you're not sure about your rules, go back to the very beginning of this thread and trade using the original rules explained by fozzy. THAT simple method is a winner in the long run!
  • #1,386
  • Dec 20, 2006 2:23pm Dec 20, 2006 2:23pm
Poekmeister,

You're not alone. I too entered long last night on GBPUSD and EURUSD. I am also following the suggestions of earlier posts. Knowing that, I am also down in the trades. As BeachBum had stated, though, if you follow your rules and use good money management; have faith in the system and ride the wave.

Jace
  • #1,387
  • Dec 20, 2006 3:14pm Dec 20, 2006 3:14pm
This is why I did not take long on GBP, image speeks for itself
Attached Image
  • #1,388
  • Dec 20, 2006 3:29pm Dec 20, 2006 3:29pm
However, if price breaks throu than our next stop is mark with red.
Attached Image
  • #1,389
  • Dec 20, 2006 3:53pm Dec 20, 2006 3:53pm
Quoting dkfx
However, if price breaks throu than our next stop is mark with red.
That's what I reckoned. Hence my TP at the next two fibs.
Attached Image
  • #1,390
  • Dec 20, 2006 4:15pm Dec 20, 2006 4:15pm
dud trades forced me to set a very tight exit for such trades, ie: trades which are against the trend or are with the trend, but at the top of the fibs.. my tp is 1/5 th of ATR, strictly...which in the case of gbpusd and eurusd is about 20-25 pips..

better +25 pips than a loss of 70 pips (which wld be 70% ATR approx)

i wish i applied my own rules to the yen trades i took on tuesday !





Quoting poekmeister
Wilff, jlowder, thanks for the input. Interesting to compare views!

For now I will stay in the trade (plan the trade, trade the plan), but will a note to go back some months of history on several pairs to combine long entry bars into resistance.

Let's see what tomorrow brings.

btw, I am in a similar trade for EURUSD as well...
  • #1,391
  • Edited 6:44pm Dec 20, 2006 5:59pm | Edited 6:44pm
I forgot to attach screenshot of trade.
Attached Image
  • #1,392
  • Dec 20, 2006 6:29pm Dec 20, 2006 6:29pm
Question to anyone who can help,

I'm looking to try the Fozzy Method, but am having trouble setting up the indicator - bringing all three together. I currently use Visual Trader (CMSFX). I don't care if I can create it there or on another platform which will allow me to open an account without depositing money. Thanks in advance.

Mike.
Taking Life One Pip At A Time I officially have my own opinion.
  • #1,393
  • Dec 21, 2006 12:21am Dec 21, 2006 12:21am
Quoting MikeC
Question to anyone who can help,

I'm looking to try the Fozzy Method, but am having trouble setting up the indicator - bringing all three together. I currently use Visual Trader (CMSFX). I don't care if I can create it there or on another platform which will allow me to open an account without depositing money. Thanks in advance.

Mike.
You should open a demo with IBFX... use MT, and do a search in this thread for the indicator... add it to your indicator folder and apply it to your chart... you're done.
Mr. Trend
  • #1,394
  • Dec 21, 2006 1:06am Dec 21, 2006 1:06am
There is a indicator built into the VT platform named something like moving avg of rsi- it's just like the fozzy here

Quoting MikeC
Question to anyone who can help,

I'm looking to try the Fozzy Method, but am having trouble setting up the indicator - bringing all three together. I currently use Visual Trader (CMSFX). I don't care if I can create it there or on another platform which will allow me to open an account without depositing money. Thanks in advance.

Mike.
Trade what you see - Not what you think
  • #1,395
  • Dec 21, 2006 8:08am Dec 21, 2006 8:08am
Is it just me or is this the second incorrect buy signal the Fozzy method has generated on the GBP/USD this month?
The first signal was on Dec 13th and now one yesterday on Dec 20th...
Is it just me or has the system been failing lately?
Or am I not following the system correctly?
Any responses would be appreciated.
Regards
  • #1,396
  • Dec 21, 2006 8:23am Dec 21, 2006 8:23am
Quoting JUMPP_FX15
Is it just me or is this the second incorrect buy signal the Fozzy method has generated on the GBP/USD this month?
The first signal was on Dec 13th and now one yesterday on Dec 20th...
Is it just me or has the system been failing lately?
Or am I not following the system correctly?
Any responses would be appreciated.
Regards
You MUST be willing to accept losing trades as part of the process.. not just one or two of them either. You're looking for a longer time success rate of wins over losses with your wins brining in more pips than your losses (ie, your money management skills). Many people just starting to look at systems have the impression they should always work. That's simply not the case. NO system will have 100% winners.

Now, that being said, there is a descretionary art to this. If you'll notice my post up above - I didn't take this last trade. Why? Because it was trapped between some obvious support and resistance lines which made me hesitant, and for good reason. There are other things to look for as well. BB introduced the use of the Vegas Daily indicator to this system - the 24/28 MA's act as S/R lines as well. You want to be careful in taking a trade thats really close to those lines and heading in to them. It's ok not to take all crosses. There will be another just down the line. Look for the ones that you are most comfortable with taking.

Just pick a pair and watch it for awhile. See if you can detect patterns. Support and Resistance lines are enormous in trading. Learn how to spot those and go from there..

Jason
  • #1,397
  • Dec 21, 2006 8:45am Dec 21, 2006 8:45am
jlowder, thanks for your response, much obliged....
  • #1,398
  • Dec 21, 2006 9:50am Dec 21, 2006 9:50am
Jlowder,

I appreciate your insight into why you didn't take the trade. I have been pretty concrete in my application of the Fozzy rules. I understand no system is 100% reliable, and I have no problem with that. My question is this: How 'discretionary' should someone be? The reason I ask is this. I've repeatedly heard that one of the main reasons for many a traders downfall is to let their 'emotions' affect trade decisions or to fail to apply the system the same way each and every time. Proper risk management is essential too.

I was just curious what your thoughts are on this since you seem to be applying the discretionary theme successfully. Thanks again for explaining why you didn't take the trade. On a sidenote, my cable trade was stopped out, the EURUSD trade is still open but I wouldn't be surprised if it is stopped out too.
  • #1,399
  • Dec 21, 2006 10:06am Dec 21, 2006 10:06am
Quoting MedEvac
Jlowder,

I appreciate your insight into why you didn't take the trade. I have been pretty concrete in my application of the Fozzy rules. I understand no system is 100% reliable, and I have no problem with that. My question is this: How 'discretionary' should someone be? The reason I ask is this. I've repeatedly heard that one of the main reasons for many a traders downfall is to let their 'emotions' affect trade decisions or to fail to apply the system the same way each and every time. Proper risk management is essential too.

I was just curious what your thoughts are on this since you seem to be applying the discretionary theme successfully. Thanks again for explaining why you didn't take the trade. On a sidenote, my cable trade was stopped out, the EURUSD trade is still open but I wouldn't be surprised if it is stopped out too.
To me a system is the base for which you determine how you will ultimately trade. Once you have that system you then need to determine if that alone is good enough for you, or if your trading style requires modifications before you will be comfortable in taking those trades.

For me, I see the fozzy method as a great way to determine when a new direction will start, but there are often false starts to this. I know that support and resistance lines have an enormous impact on price movements so I try to use those in conjunction with the basic trade rules. I also know that when trends (short or long term) change, they often range a little bit before moving in the new direction. During this time you can often be stopped out so I added one more filter to the charts to help me determine my entry points. Sometimes I'll get in later as a result, but that's ok.

So to me, the discretion is really nothing more than two extra set of rules that I added to the system to make me comfortable with taking a trade. Everyone is different. Emotion doesn't play a role as I stick to specific rules. You should always follow your system and never trade on emotion..

Jason
  • #1,400
  • Dec 21, 2006 1:02pm Dec 21, 2006 1:02pm
I looked at the signals you referred to. Maybe my take will help some. First I like to run Keltner Channels on my charts. When price is high out of the KC it will return. Coordinating that with your other indicators will keep you in sync.That said, look at 12-5, I traded it during that day but the following day would have been a good signal too.Trade held for 3 days and ended at the bottom KC band. Now the signal you took on the 13th was on the exact bounce off the .618 fib retrace of that 12-5 down signal. If it's a new down trend the .618 is key reversal spot to continue the trend.Watch those Fibs especially the .618. On the 20th, that signal day ended at the top Keltner Channel. For me I've got to watch for a continuation. Looking at that day, it had a straight run from post to post. No tail on the candle, an example of "too much too soon". An addage I learned from an S&P trader several years ago.When a bar covers that much ground in a short time, look for a pull back even if it's temporary. The following bar(s) will often go against the strong one for a small amount. AMOF, it retraced and bounced off the .618 (the Fib of that day) today according to my chart. We may see the continuation now.That was a 240 pip day, a "run" of 319 pips if you count the low and high of the adjacent bars.
I also run a 5-3-3 Stochastic. Look at it and you can see how it's crossover is a strong indicator that needs confirmation from the Fozzy to enter a trade.Finally, before you enter your trade switch over to the one hour time frame and trade from a signal on it that goes the way you are trading the daily. It can give you a head start in the right direction.
All things considered there will be misses and losses. It's part of the business. If it was too easy everyone would make money, not just us 10% people.

Quoting JUMPP_FX15
Is it just me or is this the second incorrect buy signal the Fozzy method has generated on the GBP/USD this month?
The first signal was on Dec 13th and now one yesterday on Dec 20th...
Is it just me or has the system been failing lately?
Or am I not following the system correctly?
Any responses would be appreciated.
Regards
"Though this be madness, yet there is method in it." -Hamlet Act II
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