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The Daily Fozzy Method

  • #1,481
  • Jan 3, 2007 2:59pm Jan 3, 2007 2:59pm
Quoting jlowder
I too have issues with how the take profits will be actually performed. It's nice to have the targets set, but if you can't monitor the trades during the day and make adjustments, how do we go about taking partial profits at the fib lines? MT4 doesn't have some built in mechanism for this sort of thing does it? It kind of sounds like we need an EA just for profit taking associated with the Vegas Daily...

Jason
You don't need an EA to take profit. You can set this in metatrader when you place your trade.
  • #1,482
  • Jan 3, 2007 3:28pm Jan 3, 2007 3:28pm
Willf, thank you for writing this out. Excellent!

Quoting willf
11. Did trade 1 hit it's profit level. If so it will have automatically closed itself. Now adjust second trade to break even.
One final last question . What if the second trade is in loss after trade 1 closed at profit level. Do you close at loss or leave the orginal S-L...

Thanks a million, Poek
  • #1,483
  • Jan 3, 2007 3:38pm Jan 3, 2007 3:38pm
Quoting poekmeister
Willf, thank you for writing this out. Excellent!



One final last question . What if the second trade is in loss after trade 1 closed at profit level. Do you close at loss or leave the orginal S-L...

Thanks a million, Poek
If that happens I close out the second trade for a loss.

In general the second losing trade never ate much into the profit of the first trade and still resulted in the whole trade being profitable.
  • #1,484
  • Jan 3, 2007 3:40pm Jan 3, 2007 3:40pm
Quoting willf
You don't need an EA to take profit. You can set this in metatrader when you place your trade.
Willf,

I hadn't even thought of entering two trades... I was thinking 2 lots and trying to manage that.

Thanks. :-)

J
  • #1,485
  • Jan 3, 2007 4:11pm Jan 3, 2007 4:11pm
will, this is interesting thanks.

i presume you take a trade ONLY IF ma and rsi cross AND rsi crosses above/below 50. i suppose you wouldnt take a trade if only one of the above two happened.

thanks.



[quote=willf]No. All trades, stop adjustment etc are only done once a day at the end of your brokers day. That's the concept behind the 'Daily Fozzy Method'.

Heres's what happens :

1. Study chart at end of day and realise a signal has occured.
2. New candle forms.
3. Enter two Trades.
4. Set first trade with a stop loss at previous days high or low. And set a take profit level at the first fib line.
5. Set second trade with a stop loss at previous days high or low. And set take profit level at the second fib line.
6. Turn off PC and go away for 24 hours.
7. Return next day. Study trade.
8. Did either trade 1 or trade 2 hit their take profit levels?
9. If both hit. Nothing more to do. Profit was automatically taken and trades closed.
10. Did both trades get stopped out? If so, too bad, try again.
11. Did trade 1 hit it's profit level. If so it will have automatically closed itself. Now adjust second trade to break even.
12. Did neither trade hit it's profit level? Leave trade alone until next day and repeat process.

[quote=poekmeister]Last question. Did you do more analysis on the impressive list of backtesting? I mean, have you constructed e.g. equity curve of backtesting, # of loosing weeks, avg gain vs avg loss. I am not sure if you want to share some of this and would respect your position not to, but hey I needed to ask
Quoting poekmeister

No. Too much work, not enough time. I am forward testing the system and it appears to be working as well as the backtest.
  • #1,486
  • Jan 3, 2007 4:27pm Jan 3, 2007 4:27pm
Quoting coolshades
will, this is interesting thanks.

i presume you take a trade ONLY IF ma and rsi cross AND rsi crosses above/below 50. i suppose you wouldnt take a trade if only one of the above two happened.

thanks.
That's right. The RSI has to cross the MA in the direction of the trade. I then only trade if the RSI is above or below the 50 level (above for long, below for short).

I see the RSI crossing the MA as a signal that a change in direction is happening, or going to happen. Once the RSI has also crossed the 50 level I see that as a confirmation of a continuing trend.

I think there is lots of ways to vary the fozzy system mine is just one of them. I would suggest others do some backtests of their own and see what they think.
  • #1,487
  • Jan 3, 2007 5:03pm Jan 3, 2007 5:03pm
Hi Willf could you please tell us what Vegas risk modles fib levels you used on the minor pairs please i am familiar with most the majors that Vegas uses this ,this would help a great deal ,execllent effort with the back testing could really be on to somethink here.

David-T
Quoting willf
That's right. The RSI has to cross the MA in the direction of the trade. I then only trade if the RSI is above or below the 50 level (above for long, below for short).

I see the RSI crossing the MA as a signal that a change in direction is happening, or going to happen. Once the RSI has also crossed the 50 level I see that as a confirmation of a continuing trend.

I think there is lots of ways to vary the fozzy system mine is just one of them. I would suggest others do some backtests of their own and see what they think.
  • #1,488
  • Jan 3, 2007 5:20pm Jan 3, 2007 5:20pm
Quoting David-T
Hi Willf could you please tell us what Vegas risk modles fib levels you used on the minor pairs please i am familiar with most the majors that Vegas uses this ,this would help a great deal ,execllent effort with the back testing could really be on to somethink here.

David-T
I posted this earlier. But here you go

All pairs are set up as model 1&3 with the exception of EURCHF & EURGBP.

The movement on these two pairs is too low so I modified the vegas indicator to give a model 0 which gives fibs at 34,55 & 89. EURCHF & EURGBP now use models 0,1&3.

You may want to experiment with different settings though. This is just what I was happy with.

Here's the modified Vegas indicator
Attached File(s)
File Type: zip Vegas Daily.zip   1 KB | 655 downloads
  • #1,489
  • Jan 3, 2007 5:34pm Jan 3, 2007 5:34pm
[quote=willf]I posted this earlier. But here you go



All pairs are set up as model 1&3 with the exception of EURCHF & EURGBP.

The movement on these two pairs is too low so I modified the vegas indicator to give a model 0 which gives fibs at 34,55 & 89. EURCHF & EURGBP now use models 0,1&3.

You may want to experiment with different settings though. This is just what I was happy with.

Here's the modified Vegas indicator[/QUOTE

Hi willf that was quick thanks very much
  • #1,490
  • Jan 3, 2007 7:18pm Jan 3, 2007 7:18pm
Very helpful couple of pages. In order to ensure that I am 'in tune' with the methodology, I wonder if people could kindly direct me to:

1) a MT4 provider who has all the '20 major' pairs, I have stratfx, mig & pfg as providers, (all demo) but for the life of me don't seem to be able to find GBP/CAD, for example. Would like to be able to see the setup example referred to in the text on my own PC, before trundling off into the wide blue yonder!! Plenty of other exotic pairs, including TWD, SGD IDR etc, and plenty I haven't heard of, let alone want to trade!! Perhaps you only get some of the more unusual majors with a live account?

2) Is anybody making/posting live(ish) trade calls anywhere? At this early stage in my learning curve, it would be handy just to check that I am reading the runes in at least approximately the right way. Appreciate that there are going to be time differences etc, (I am GMT), but just want to see that my interpretation of chart patterns and signals is at least along the right lines.

Many thanks

Pete
  • #1,491
  • Jan 3, 2007 9:04pm Jan 3, 2007 9:04pm
Quoting willf
Ok here's the results of my backtest as promised.

The test was done manually (metatrader, pen, paper & calculator) so it's not 100% perfect but close enough. Yes it took ages. About 10 days to do.

The time period was Jan 06 until Nov 21 (before the big increases over thanksgiving).

The basic Fozzy setup was done without the bollinger bands. A 50 level was set on the RSI.

If the RSI crossed above the MA and the RSI was above the 50 level I went long.

If the RSI crossed below the MA and the RSI was below the 50 level I went short.

If the RSI crossed the MA but did not cross the 50 level I allowed two bars (two days) for it to do so if it crossed after that it was not traded.

Stops were placed at the previous days high or low.

Two trades were taken at the same time. The first trade was set at the nearest Vegas fib level. The second trade was set at the second Vegas fib level.

Once the first trade was hit the second trade was set to break even and allowed to continue until it hit it's target or was stopped out.

I tried to back test this as mechanically as possible without any discretion.

Maybe better results could be achieved with discretion. But on the other hand some trades that looked over/over sold worked out anyway. So maybe it's swings and roundabouts.
Great work Will. In your back test results, can you please explain how you handled getting a signal in the opposite direction before you SL or TP1 was hit. For example you get a long signal. Then you get a short signal, and neither your SL or TP1 has been hit yet. Did you take the short or stay with the long. An example is USD/CHF from 9/26/06 - 10/4/06. Just wondering if you took every signal.

Thanks again!

Trade Well....
Brent
  • #1,492
  • Jan 3, 2007 9:12pm Jan 3, 2007 9:12pm
Can any one help me? I use SBFX and have a problem with incorrect price data in two pairs; NZD/USD and CHF/JPY. I have tried manually changing the bad data in one pair but it keeps coming back everytime I restart MT4 or a new price tick comes in.

How can I correct this frustrating problem???? Thanks,

Bill
  • #1,493
  • Jan 4, 2007 9:57am Jan 4, 2007 9:57am
Quoting TraderBill
Can any one help me? I use SBFX and have a problem with incorrect price data in two pairs; NZD/USD and CHF/JPY. I have tried manually changing the bad data in one pair but it keeps coming back everytime I restart MT4 or a new price tick comes in.

How can I correct this frustrating problem???? Thanks,

Bill
Bill,

I'm not familiar with this issue. How did it first occur and what are you doing when you say you manually change the data?

Jason
  • #1,494
  • Jan 4, 2007 12:11pm Jan 4, 2007 12:11pm
Quoting TraderBill
Can any one help me? I use SBFX and have a problem with incorrect price data in two pairs; NZD/USD and CHF/JPY. I have tried manually changing the bad data in one pair but it keeps coming back everytime I restart MT4 or a new price tick comes in.

How can I correct this frustrating problem???? Thanks,

Bill
Try downloading and installing a new copy but save it to a different location on you PC. eg metatrader 2 or similar.

If this works ok just copy and paste your info (templates, indicators etc) from the old version to the new.
  • #1,495
  • Jan 6, 2007 4:08am Jan 6, 2007 4:08am
Dear Willf,
You are a lot cleverer than I and ask whether you can squeeze an angle out of this indicator setup ....following your nifty vegas contribution.

Setup
Fozzy daily but on hour chart
gbp/usd cross, 1 hour chart , 1hour vegas fibs as per willf, altered rsi package indicator to
rsi 56, sma 12 , bollinger 40 , set level band to 45-55 , not 50.

Visually
it seems to have features that might be able to be alertable to pick up all clean major moves, id's major retracements when the moves are clean.

As you came up with the 2 trade idea, I would like to pass it to you to see if there is an angle for handling the drooppy moves. (major trends are outside of Vegas band).
best
john
jsh
aust
  • #1,496
  • Jan 6, 2007 5:05am Jan 6, 2007 5:05am
Quoting jsh01
Dear Willf,
You are a lot cleverer than I and ask whether you can squeeze an angle out of this indicator setup ....following your nifty vegas contribution.

Setup
Fozzy daily but on hour chart
gbp/usd cross, 1 hour chart , 1hour vegas fibs as per willf, altered rsi package indicator to
rsi 56, sma 12 , bollinger 40 , set level band to 45-55 , not 50.

Visually
it seems to have features that might be able to be alertable to pick up all clean major moves, id's major retracements when the moves are clean.

As you came up with the 2 trade idea, I would like to pass it to you to see if there is an angle for handling the drooppy moves. (major trends are outside of Vegas band).
best
john
jsh
aust
I can't see how these RSI/MA settings give a clear signal. Personally I would use the same RSI/MA settings on the hourly as I would on the daily. But use the Vegas 1 hour fibs, not the daily one.

Here's the indicator for the vegas 1 hour setup. GBP/USD looks good using model 1&3
Attached File(s)
File Type: mq4 Vegas 1 hr.mq4   6 KB | 491 downloads
  • #1,497
  • Jan 6, 2007 9:33am Jan 6, 2007 9:33am
Willf,
Just wanted to check something with you.
On your backtest rules list you said you used the basic Fozzy setup without bollinger bands.
The indicator you appear to have used is the Fozzy Signal which in fact produces signals using the bollinger band filter.
The FozzyAll gives signals without the bollinger band filter.
Just wanted to confirm that a mistake has not been made here so I am comparing like with like??

Fantastic work you did by the way

Mungo
  • #1,498
  • Jan 6, 2007 10:27am Jan 6, 2007 10:27am
Quoting mungo
Willf,
Just wanted to check something with you.
On your backtest rules list you said you used the basic Fozzy setup without bollinger bands.
The indicator you appear to have used is the Fozzy Signal which in fact produces signals using the bollinger band filter.
The FozzyAll gives signals without the bollinger band filter.
Just wanted to confirm that a mistake has not been made here so I am comparing like with like??

Fantastic work you did by the way

Mungo
I don't use the AO_FozzySignal (the all in one) because it uses the bollinger bands.

All I use is the RSI8 with a EMA8 applied to it. On the RSI I have a 50 level set.

I did post a copy of the AO_FozzySignal for someone because they requested it. But I don't use it personally.
  • #1,499
  • Jan 7, 2007 7:15am Jan 7, 2007 7:15am
Quoting willf

Heres's what happens :

1. Study chart at end of day and realise a signal has occured.
2. New candle forms.
3. Enter two Trades.
4. Set first trade with a stop loss at previous days high or low. And set a take profit level at the first fib line.
5. Set second trade with a stop loss at previous days high or low. And set take profit level at the second fib line.
Hi Willf!

Thanks for sharing your variant of Daily Fozzy!

Just one questions. What do you do if the first fib line is very close to the daily open (say less than 20 pips). Would you then set the take profit level to the next fib line or would you still take the first fib line?
  • #1,500
  • Jan 7, 2007 7:30am Jan 7, 2007 7:30am
Quoting parabolic
Hi Willf!

Thanks for sharing your variant of Daily Fozzy!

Just one questions. What do you do if the first fib line is very close to the daily open (say less than 20 pips). Would you then set the take profit level to the next fib line or would you still take the first fib line?
Actually 20 pips was my minimum for the first TP level. If it was less then yes, I used the next fib line.
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