gbp/jpy Strength Indicator strategy Back Testing

Awsome Flame!,

I'm glad you are able to tweak this system to trade your style of trading. That's what this is all about. I have always liked the E/U because of the low spread/lower risk usually.

Keep me posted on how your strategy is working out and I might like to try it sometime.

-Kevin

Sure. I uploaded the template to post #1 and you can learn how to set it up on post #27 and #29. I would also encourage you to visit Auslanco's 1h/4h thread to get a better idea where the basis for this system is.

Good luck Nathan.

-Kevin

Thanks a lot man. You are the man

I just exited my demo U/J trade @ +3 pips since I didn't like the price action and because I missed my first confirmed exit. When that trade 1st set up it dropped to +38 pips. I am looking for lots of pips on these trades, but when the reasons for getting into a trade disappear I get out before it hits my stop loss. I am happy to get +3 pips on that trade just to be out of it when news comes around. You can see how the 4h is still bearish but the 1h is now bullish. These contradictions mean EXIT. Keep in mind this system is disigned to be used for longer term trades on the P/J...This U/J trade was just an experiment.

There is a lot of important news today that may move the market huge, so be carful today guys. Some real big news @ 5:00EST to watch out for that will effect the P/J.

Here is my exit:

Possible G/C Sell setting up that I might take just to see if it works with this strategy. Everything is right for this G/C trade but the candle moved so fast I missed the entry... Looking for a pull back to the 1h 5sma to enter a sell. I will look for an entry between 2.0156 and 2.0183 for a demo sell trade. Based on the rules I also see a U/J trade that needs to retace back closer to the 5sma to enter. The area I will look to demo sell the U/J from is around 99.69. Goodness look at this thing go. P/J is in the same boat big ol bear. These currencies all moved to fast for me to catch the move.. Now they are way to far from the 5sma it would be dangerous to enter here. Need at least a 50% fibo retrace plotted on the big 1h candles that have formed. Best entry at the 5sma. I am entering pending sell limit orders between the 50% fibo and the 5sma on the G/C P/J and A/U. It's hard for the old me to watch this market and not enter a trade. I love the volitility, but I need to use common sense to stay out of entering at the tops and bottoms of big moves.

I have entered my pending P/J sell limit @ 199.65 @ 1 mini lot. I may enter 1 more mini if it goes up higher.

I have a pending sell limit order open for the A/J if it ever gets back up to 91.21.

I am adjusting my pending sell limit entries down as the 50% fibo moves down.

A/J entry getting close.

These are all demo trades guys... this is a new strategy I am testing.

A/J sell filled @ 91.23 for a sell...Keep in mind this strategy is for the P/j so I don't know how it will work with the A/J. One thing that concerns me about this trade is the 4h momentum is not as bearish as I usually want it right now.

Possible G/U sell setting up.

Pending U/J sell @ 99.55

I jumped the gun on the A/J a little bit since the 4h QQE has not technically crossed in bear trend, but it's on the doorstep. Now the momentum is flat. I will put a 30 pip trailing stop when I see 40 pips profit on this A/J trade. Part of the reason I entered this A/J trade is we are right at the 50 ema and I am expecting a bounce down from here. Usually the bounce happens right away, but the volitility just is not here any more. While the other currencies dropped this one has stayed stagnant...wierd

This A/J trade the 4H Gann has not turned bearish yet and the 4h QQE never crossed... My stop loss is @ 91.63

I see the 4h A/J 4 gann line finally starting to turn down now.

4h QQE starting to turn bearish. Momentum still flat.

I have a pending P/J sell limit @ 199.00.

If the 4h Gann and QQE had actually crossed into a bearish trend I would be adding another 1 mini lot sell here @ 91.45 but I made the mistake of getting into this trade too early... holding it for now...

I am going to be completely honest with all the trades I take with this system because I want the real results. No stat padding. I took a bad demo trade and here it is.

Stopped out @ 91.63

-40 pips

I took a bad trade(human error)

With such a big move that was predicted by many without knowing the direction the market would go It might be interesting to mess around with openeing a hedge trade for demo purposes in the future and then close one of the trades once a huge move has a determined direction.

Nice Technic,i look for more confirmation from your Technic the 4h and daily Pivot and simple Trendlines,look on my Chart short: 199,90 TP: Daily S1.
Best regards.

Best regards

I see a nice setup finally forming on the GBP/USD... I am in now @ 1.9938 for a sell. This trade hit Stop Loss @ -50 pips.

Again I don't know how well this will work with this curency pair, but the 4h just turned strong bearish signal and the 1h is strong bear as well. Also the best entry on this trade was @ the 1h 5sma which I am below quite a bit right now. The only thing that scares me a little is the USD news about home sales coming out in 50 min. If they are bad which they most likely will be the dollar will be weaker and the pound will shoot up. I may enter another position if this goes up higher towards the 1h 5sma. I want to be out of this trade before the USD news if possible.

I will stay in this trade during this USD news and have my finger on the button to exit if the news is really bad. Usually I don't like trading during the news, but these demo trades are all a leraning experince here. The trades that I will take really seriously are the P/J trades since that is what this strategy is for.

I just posted a 3rd chart and on it you can see the time is after the charts to the right of it. You can also see the Gann has opened back up now which would void this trade as a good trade according to my rules. So my conclusion is that from now on before I trade this system I will have to wait till the 4h candle closes before confirming my 4h trend. Does that sound right to you guys? Anyone have some insight into what is happening here. It's frustrating. This new insight would make my back testing I have done so far incorrect. I will have to go back and watch each trade on the strategy tester and see what happens with the 4h Gann formation.

This may be what happened with this last U/J trade as well.

http://www.fileden.com/files/2006/7/.../gu-short6.gif

Hi November,

What is that indicator "ZLS"?

MASH

Here is the Zerolagstoch.Its working fine for me.
Best regards

Thanks mate!
Looks interesting.

MASH

I need to figure out what is happening in post 48. I was basing this system off the 4H Gann and QQE crossing into a bearish trend and then going to confirm this trend on the 1h chart before entering a trade. My last two demo trades I took live here were negative trades. The setup was there on both trades and the setup unfolded on both trades when the 4h Gann crossed confirming the bearish trend and then opening back up into a bullish pattern before the 4h candle closed, which would void those trades according to my rules.

On both trades I made the mistake of staying in the trade when the reasons for getting into the trade disappeared. This is one of my own rules I broke. I also think once I figure this thing out I will only be trading this system with the pair it was meant to be traded with the GBP/JPY.

Here is a setup I missed since I am not taking trades right now.:

http://www.fileden.com/files/2006/7/...326/missed.gif

OK OK OK, so I am figuring things out now. This system seems quite complicated on the surface but as long as you know the rules and follow them I still think this trading style can be profitable. The next post I will explain where my logic was flawed in my previous posts.

Hi Kev, i have a little question,

why are you using the Gann (10 when CCI is (31), they are not equal together, and i would give the advice to change 5 SMA to 3 EMA, the 3 EMA is more corelate to price action, and can be visual when candle cross the Gann...

so at first 3 Ema cross Gann, plus Momentum and QQE, and CCI for exit when reverse at 100 or 200%, this can be traded from 15min and higher timeframes.

thanks

Refer to the picture above for what I am talking about in this post:

It seems like using this 4h chart to confirm the 1h chart in order to enter a long or short position is more work than it's worth, but I still believe this is the safest way to trade this system.

What I mean by this is if you look at the chart above it looks like there are plenty of places to enter a buy or sell on both the 1h and 4h chart. If the only rule was to wait for the cross of the 5sma line up past the Gann line and the close of at least 1 candle below the Gann line to confirm a sell trade then there would be lots of trades to take.

The main lesson I have learned from my last 2 trades is to wait for the close of the 4h candle on the 4h chart or the 1h candle on the 1h chart to confirm that the cross of the Gann line and 5sma is going to stick.

If I had entered the trade @ 198.50 I would be at +60 pips right now. I will monitor this trade and post what the results would have been had I followed the rules I follow to get out of a trade which are:

I exit a trade when 1 of 2 things happen. I exit when my Stop Loss is hit or when the 1h QQE crosses back over the purple dotted line to signal the start of a possible trend reversal.

So now I am faced with the question of do I exit the trade if on a 1h chart the time is 6:01 or wait for the close @ 6:59. I think it will depend on my personal analysis of the CCI, momentum, and Stochastics on the 1h and lesser time frames. I will be updating the rules on post #1 to reflect this new info.

Thanks for the info Water,

I will try the things you mentioned. I'm still trying to get used to how the market moves with the indicators I curently use, but eventually I will try this. I might end up putting the 3ema on my smaller time frames like the 15m and 30m for now. I'm glad you got out of that E/U trade yesturday with 40 pips...that was a perfect exit before that thing shot to the moon.

"why are you using the Gann (10 when CCI is (31), they are not equal together, and i would give the advice to change 5 SMA to 3 EMA, the 3 EMA is more corelate to price action, and can be visual when candle cross the Gann..."

The Gann figures I am using I got from Auslanco's thread. The CCI I use in combination with the momentum and stochastics to determine what the price might do. From my experience when a 31 CCI crosses the zero line the price almost always drops and when it is below the zero line short positions are favored and vice versa for the longs. When the momentum, stochastics and CCI are all steeply down and the CCI is pushing through the zero line the chances for a short position to continue in that dirrection are good.

From my understanding the ema's interact with price by putting more weight on the more recent price action while the sma reacts the same to old and new price action for a smoother average. What time frame do you use the most with your 3ema? Based on the charactoristics of the ema I would think a small ema would be best used on a smaller time frame, but I could be wrong.

"so at first 3 Ema cross Gann, plus Momentum and QQE, and CCI for exit when reverse at 100 or 200%, this can be traded from 15min and higher timeframes."

Does this method work on all time frames the same or does it work better on the 15 min?

Thanks flame I will try this method soon... Are there any threads on this method on FF you can point me to?

Thanks again

-Kevin

PS..anyone reading this post I think if the P/J gets back up to the 5sma around 198.50 it would be a good sell area for a demo trade with this system.

The Gann is like a SMA, same crossing timing etc, why i mentioned the variable difference between the Gann and the CCI, is because CCI crossing 0 line, will mean that also price cross the sma, if they are both have the same variable number... test it in a new chart and take 34 SMA, with a CCI (34), than you can see eaxt entry points of CCI crossing 0 line and price crossing SMA

thats my system i use

entry is 0 line crossing, stop loss is reversed 0 line crossing, target are fall backs of CCI 100% and 200%

current trend entries are gives from CCI 100% , same for exits again...

i usually trade just with CCI, and i have the 34 SMA with price action for visual charting confirmation and some other technics ( Support-Resistance , Fibs etc...)

Why i mentioned the 3EMA, its because its more nearer the price action, not too sloppy to give false confirmation, and not as far like the 5 SMA for a late entry.

http://www.abload.de/img/nowbjv.gif

i was amused by the Momentum and QQE, the Gann too

This is a great system you have here. Thank you so much for sharing. I put this thread together 1 day after reading Auslanco's thread and since then I have been struggling to gain more understanding. Your insights are invaluble and your system looks like a real winner... I should be asking you questions on your thread! I really appreciate the insight. I will be making a new template tonight to try your strategy out.

-Kevin

Man this trading thing is a lot harder than I thought it would be. This noob is on his way to becoming less of a noob.

PS: I found that if you add an image using the paperclip attachment tab up top you can post your huge charts and have it show up as a thumbnail in here linking to the larger image. You must have a nice 24" flat screen. I also think anyone with a 800x600 resolution is in the dark ages and needs to upgrade...

my pleasure Kevin , FF is for traders like you and me, we learn from each, PM me everytime

ps : One Grows Tall After Walking Through A Forest Of Tall Trees."

demo trade...selling P/J @ 198.51 filled @ 198.43 My stop loss is 100pips+8 spread above my entry @199.51

Some levels I see it may go up to before dropping:

198.60= 1h Gann line
198.80= 4h 5sma / 1h 100sma
199.00=1h 50ema
199.30=1h 200ema / 4h 50ema / daily pivot /50% fibo If it hit's this level I will sell demo again. Based on my 1h chart it will continue up from the current price of 198.52.

These are all strong resistance levels. It would take a pretty big move to break all these.

Just got stopped out.. ***-108 pips*** Well this system doesn't seem to be working too well..

I have come to the conclusion that trading during these wierd times in the economy is it best to shorten stop losses and when in profit even if only a small profit it is beneficial to set your stop loss @ +1. When you get back into bigger profits you can set a larger trailing stop to let the currency range on it's way up or down. I will be trying this with the next P/J trade I demo. If you do get stoped out with -20 pips for examnple you can always get back in if it is indeed a good trade. Trading this way will make the actual entry all the more important. This means I will be extremely picky about where I enter the market.

I am also rethinking my no hedging unless in profit rule. Hedging in this type of market just might turn out to be a good thing. With a hedge you can let the market freely move until it determines it's true course. When it does you just exit one hedge and if the trend continues you will have to make up double the spread. This method on the P/J for me would mean I would have to eat a 16 pip spread. I will get more opinions before I try hedging.

keep a look on this kev


http://www.forexfactory.com/showthread.php?t=77850