This is my new system. Please go to page 40 as the first 40 pages are discussing the old system which was an 8, 13, 100, 200 ema crossover system. Here is the new..
Surfing The Barrel Method
So here it is, my new method. I would like to say I developed it but I didn’t, there are similar methods out there and this method is only a collection of a few different systems placed into one. So I will give credit where credit is due. First and foremost I would like to thank Bobokus and his fib tool, that thing is great and quite scary how accurate it can be when placed in the right locations. Second I would like to thank Peter Crowns and his DIBS method another great source of valuable information. And also Phil Newton and his breakout strategy, Vegas and his tunnel system. And last but not least James and his PA. I will explain how all of these fit together later, so now that the shouts are out of the way, lets get to the good stuff.
Before I teach you to surf the barrel I thought I should point out that technical analysis like trend lines, chart patterns and price action needs to be implemented in order to filter out the bad trades. This method is not the holy grail but if you use the filters correctly you will be able to lower your risk by not entering into bad trades and avoiding false signals. I don‘t need to go into money management as that is your responsibility. And last but not least cut your losses short and let your profits run.
I should note that the larger the time frame the more pips you will make but at the same time you will enter less trades. In short this method works for both scalpers on the 5 min. charts or the daily trader. From what I have found is you get more false signals on the lower time frames. Me personally I feel this works best on the 4hr and 1hr charts. But that doesn‘t mean that I won‘t scalp the 15 min. and 5 min charts when the daily is ranging. This method allows you to adapt to market conditions. It also allows you to either be an aggressive scalper or a conservative day trader. Any pair, any time frame, any market condition. SWEEEET!
Rules There are no rules, just guidelines allowing you to use this method to fit your trading style, your personality and your time schedule.
Here is what you need for your charts.
1) Fib Tool. Make sure you have these fib levels on your fib tool. Especially the target levels.
T4 2.618
T3 2.382
T2 1.618
T1 1.382
HIGH 1
R1 0.809
LONG 0.618
PIVOT 0.5
SHORT 0.382
S1 0.191
LOW 0
T1 -0.382
T2 -0.618
T3 -1.382
T4 -1.618
2) EMA‘s Plot these on your charts, all of them are exponential HLC/3
13, 100, 200
What we are looking for is consolidation or range bound price to be in the barrel (between the 100 and 200) you are also looking for the “squeeze“ that is when the 13, 100 and 200 and the price are squeezing together or only a few pips away from each other. The closer together they are the bigger the breakout and the lower the risk, this is the best setup. Trade the breakout on the same side of the 100. If you go the opposite way you are increasing your risk and should monitor your position carefully. Same thing applies when price is in the barrel but nothing is squeezing together, this is when you will get the choppy fake signals, again you can trade the breakout but you are increasing your risk. Other tradable situations is when price retests the 100 or 200 and then continues with the trend, use the fib tool to measure the retracement. That’s it, it‘s that simple. Of course, to lower your risk and to make sure you are only getting into the best trades it‘s good to use a few filters.
Here is how I analyze my charts with the filters.
Look at the monthly, where is the 100 and 200? Look for patterns and P.A.
Weekly, same thing but now you want to put a fib on the last swing High/Low. This will give you support/resistance areas, typically if price violates a fib level it has a high probability of going to the next fib level which on the weekly can be hundreds of pips away. (beware of false violations, you want to make sure that a candle closes on the other side of the level either on the 4hr, daily or weekly candle will do but keep checking to make sure the weekly candle closes on the other side)
Daily. Same as above, look for support/ resistance areas, maybe draw a fib just to see where certain levels are and then delete the fib if its trending. ( I only like to have one fib on the weekly at all times, two max. I use the second fib to measure retracements) Also here is where you implement the DIBS method and Phil’s method together, zoom into the daily and place a line on yesterdays High, Low and one on the Close of yesterday candle. The close should be around 0600 GMT. This should define the overnight range from the Asia session. Now you look at the 4hr, 1hr or the 15 min charts to see if price is in the barrel and if you have the squeeze. Also look to see where price is in relation to yesterdays high and low, typically if you are thinking of going short you want price to be on the bottom third of the range, top third for longs. This is not a rule only a filter and there are exceptions. Same as the intra bar, it does lower your risk but you don’t need it because I have seen many breakouts that had no intra bar. Another filter is waiting for a pull back after the high or low from the range is broken, this will save you from a fake breakout but at the same time you may miss the whole movement if there is no pull back, so you have to use common sense and if you are trading with the trend and not against it then you will have momentum on your side. So those are the filters along with chart patterns, price action and possible wave counts. As far as Elliot Wave is concerned after intensive studies is that it really is not that reliable the main thing is being able to identify the difference between impulsive and corrective waves and the shape of the waves. However if it makes an all too obvious 5 wave, ABC pattern then pay attention because they do happen, sometimes.
Stop losses, This is an art that I cannot teach you, there is no magic place to place a stop loss other than the max amount of money you are willing to lose for one trade. I say that because I have seen stop losses taken out so many times only for price to go in your original direction. I usually place my stop loss around 100 pips and then monitor the trade until I am in profit. If I am wrong then I will exit the trade with a small loss before my stop loss is hit depending on what the price is doing.
Take profit. This is another art form, but it’s a fun art. Putting money in the bank is fun and if it’s not fun then you shouldn’t be trading. Your TP area should be determined by the time frame you are trading. Typically I go by the targets on the fib tool from the last swing high or low from the T.F I am trading. If its with the trend then close out half or 1/3 of the position and then move your stop loss on the rest up to +10 pips and let the rest ride. (I never understood why people move their stop loss to break even, I mean if your in profit then why would you give it all back? Keep at least 10 pips that way you just covered the spread for the next few trades.) Now wait for a retracement (bounce off the 100 or 200) or the next range and add more, and so on and so on. Again this method allows you to be as creative as you want on any time frame with any pair. One interesting T.P method is the Vegas method which is the fib count of the movement itself. Here are the numbers, 55, 89 144, 233, 377. You measure it by counting the pips from the bottom of the movement (or top) and take profit when it has advanced 55 pips from the low and then again when it reaches 89, 144 so on and so on. It all depends on your trading style, the aggressive scalpers will go for the 55 and 89 targets and the day traders will go for the higher numbers. What’s weird is when you measure movements you can see that they stop or consolidate around these numbers.
So there it is the Surfing the Barrel Method. I hope I made it clear as I am not good at explaining things when I have to type, so if you have any questions please feel free to ask.
Now grab your board and go catch some nice waves.
Surfing The Barrel Method
So here it is, my new method. I would like to say I developed it but I didn’t, there are similar methods out there and this method is only a collection of a few different systems placed into one. So I will give credit where credit is due. First and foremost I would like to thank Bobokus and his fib tool, that thing is great and quite scary how accurate it can be when placed in the right locations. Second I would like to thank Peter Crowns and his DIBS method another great source of valuable information. And also Phil Newton and his breakout strategy, Vegas and his tunnel system. And last but not least James and his PA. I will explain how all of these fit together later, so now that the shouts are out of the way, lets get to the good stuff.
Before I teach you to surf the barrel I thought I should point out that technical analysis like trend lines, chart patterns and price action needs to be implemented in order to filter out the bad trades. This method is not the holy grail but if you use the filters correctly you will be able to lower your risk by not entering into bad trades and avoiding false signals. I don‘t need to go into money management as that is your responsibility. And last but not least cut your losses short and let your profits run.
I should note that the larger the time frame the more pips you will make but at the same time you will enter less trades. In short this method works for both scalpers on the 5 min. charts or the daily trader. From what I have found is you get more false signals on the lower time frames. Me personally I feel this works best on the 4hr and 1hr charts. But that doesn‘t mean that I won‘t scalp the 15 min. and 5 min charts when the daily is ranging. This method allows you to adapt to market conditions. It also allows you to either be an aggressive scalper or a conservative day trader. Any pair, any time frame, any market condition. SWEEEET!
Rules There are no rules, just guidelines allowing you to use this method to fit your trading style, your personality and your time schedule.
Here is what you need for your charts.
1) Fib Tool. Make sure you have these fib levels on your fib tool. Especially the target levels.
T4 2.618
T3 2.382
T2 1.618
T1 1.382
HIGH 1
R1 0.809
LONG 0.618
PIVOT 0.5
SHORT 0.382
S1 0.191
LOW 0
T1 -0.382
T2 -0.618
T3 -1.382
T4 -1.618
2) EMA‘s Plot these on your charts, all of them are exponential HLC/3
13, 100, 200
What we are looking for is consolidation or range bound price to be in the barrel (between the 100 and 200) you are also looking for the “squeeze“ that is when the 13, 100 and 200 and the price are squeezing together or only a few pips away from each other. The closer together they are the bigger the breakout and the lower the risk, this is the best setup. Trade the breakout on the same side of the 100. If you go the opposite way you are increasing your risk and should monitor your position carefully. Same thing applies when price is in the barrel but nothing is squeezing together, this is when you will get the choppy fake signals, again you can trade the breakout but you are increasing your risk. Other tradable situations is when price retests the 100 or 200 and then continues with the trend, use the fib tool to measure the retracement. That’s it, it‘s that simple. Of course, to lower your risk and to make sure you are only getting into the best trades it‘s good to use a few filters.
Here is how I analyze my charts with the filters.
Look at the monthly, where is the 100 and 200? Look for patterns and P.A.
Weekly, same thing but now you want to put a fib on the last swing High/Low. This will give you support/resistance areas, typically if price violates a fib level it has a high probability of going to the next fib level which on the weekly can be hundreds of pips away. (beware of false violations, you want to make sure that a candle closes on the other side of the level either on the 4hr, daily or weekly candle will do but keep checking to make sure the weekly candle closes on the other side)
Daily. Same as above, look for support/ resistance areas, maybe draw a fib just to see where certain levels are and then delete the fib if its trending. ( I only like to have one fib on the weekly at all times, two max. I use the second fib to measure retracements) Also here is where you implement the DIBS method and Phil’s method together, zoom into the daily and place a line on yesterdays High, Low and one on the Close of yesterday candle. The close should be around 0600 GMT. This should define the overnight range from the Asia session. Now you look at the 4hr, 1hr or the 15 min charts to see if price is in the barrel and if you have the squeeze. Also look to see where price is in relation to yesterdays high and low, typically if you are thinking of going short you want price to be on the bottom third of the range, top third for longs. This is not a rule only a filter and there are exceptions. Same as the intra bar, it does lower your risk but you don’t need it because I have seen many breakouts that had no intra bar. Another filter is waiting for a pull back after the high or low from the range is broken, this will save you from a fake breakout but at the same time you may miss the whole movement if there is no pull back, so you have to use common sense and if you are trading with the trend and not against it then you will have momentum on your side. So those are the filters along with chart patterns, price action and possible wave counts. As far as Elliot Wave is concerned after intensive studies is that it really is not that reliable the main thing is being able to identify the difference between impulsive and corrective waves and the shape of the waves. However if it makes an all too obvious 5 wave, ABC pattern then pay attention because they do happen, sometimes.
Stop losses, This is an art that I cannot teach you, there is no magic place to place a stop loss other than the max amount of money you are willing to lose for one trade. I say that because I have seen stop losses taken out so many times only for price to go in your original direction. I usually place my stop loss around 100 pips and then monitor the trade until I am in profit. If I am wrong then I will exit the trade with a small loss before my stop loss is hit depending on what the price is doing.
Take profit. This is another art form, but it’s a fun art. Putting money in the bank is fun and if it’s not fun then you shouldn’t be trading. Your TP area should be determined by the time frame you are trading. Typically I go by the targets on the fib tool from the last swing high or low from the T.F I am trading. If its with the trend then close out half or 1/3 of the position and then move your stop loss on the rest up to +10 pips and let the rest ride. (I never understood why people move their stop loss to break even, I mean if your in profit then why would you give it all back? Keep at least 10 pips that way you just covered the spread for the next few trades.) Now wait for a retracement (bounce off the 100 or 200) or the next range and add more, and so on and so on. Again this method allows you to be as creative as you want on any time frame with any pair. One interesting T.P method is the Vegas method which is the fib count of the movement itself. Here are the numbers, 55, 89 144, 233, 377. You measure it by counting the pips from the bottom of the movement (or top) and take profit when it has advanced 55 pips from the low and then again when it reaches 89, 144 so on and so on. It all depends on your trading style, the aggressive scalpers will go for the 55 and 89 targets and the day traders will go for the higher numbers. What’s weird is when you measure movements you can see that they stop or consolidate around these numbers.
So there it is the Surfing the Barrel Method. I hope I made it clear as I am not good at explaining things when I have to type, so if you have any questions please feel free to ask.
Now grab your board and go catch some nice waves.
Just Trade It
