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Powerful Fib Based System - by DAZfx

  • #201
  • Mar 27, 2008 12:30pm Mar 27, 2008 12:30pm
Quoting Dazfx
On EURGBP, Target 1 (FE 50) at 0.7868 reached.

The AUDUSD is looking good (tested the 78.6 level). Current 1hr candle might test the low again, so still have a few hours before considering an entry.
Thanks Daz.
I don't think I've got the fib extension levels sorted. I'm up 43 at the moment with 1 std lot. Would you take 50% off the table now and let the rest run? If so, what's the 2nd target on your chart?

(That'll teach me to sort my fibs extensions out for the next trade!!!)
  • #202
  • Mar 27, 2008 12:36pm Mar 27, 2008 12:36pm
Hey Daz,Great thread.I'm in the eur/gbp as well. This one could go for some pips.The daily is showing a reversal candle as of now. Tex
  • #203
  • Mar 27, 2008 12:43pm Mar 27, 2008 12:43pm
Quoting priceaction
Thanks Daz.
I don't think I've got the fib extension levels sorted. I'm up 43 at the moment with 1 std lot. Would you take 50% off the table now and let the rest run? If so, what's the 2nd target on your chart?

(That'll teach me to sort my fibs extensions out for the next trade!!!)
..if you're using MT4 for charting, this is a Daz template i'm currently using. Might help you with the fib targets etc. Delete/ignore the MA's, as they're not part of Daz's method.
Attached File(s)
File Type: tpl gbp fibs.tpl   2 KB | 1,204 downloads
  • #204
  • Mar 27, 2008 12:46pm Mar 27, 2008 12:46pm
Quoting priceaction
Thanks Daz.
I don't think I've got the fib extension levels sorted. I'm up 43 at the moment with 1 std lot. Would you take 50% off the table now and let the rest run? If so, what's the 2nd target on your chart?

(That'll teach me to sort my fibs extensions out for the next trade!!!)
The key Fib Expansion levels are FE 50, FE 61.8, FE 78.6 and FE 100

Mostly, I follow the Exit Strategy outlined in my first post. So, I split my position into 3 and take out my first one at FE 50 (if it is larger than the amount I risked) otherwise, at FE 61.8. I will take out the second position at the next FE level and move my stop to B/E. THe last lot will be taken off at the 3rd FE level.

To answer your question, the second target is FE 61.8 = 0.7882
  • #205
  • Mar 27, 2008 12:48pm Mar 27, 2008 12:48pm
Daz & Chow ...

Cheers guys. I appreciate it.
  • #206
  • Mar 27, 2008 1:16pm Mar 27, 2008 1:16pm
Great thread!

You wrote you are trading for 4 years and that you only trade 6 pairs. Can you tell us what are those pairs?

Cheers.
  • #207
  • Mar 27, 2008 1:16pm Mar 27, 2008 1:16pm
Quoting Dazfx
The AUDUSD is looking good (tested the 78.6 level). Current 1hr candle might test the low again, so still have a few hours before considering an entry.
I've a 'light' order in 2 pips (+ spread) above the inside hrly, to test a long from these levels, which isn't too far away from the 5SMA. Stoch beginning to hook.
  • #208
  • Mar 27, 2008 1:29pm Mar 27, 2008 1:29pm
Quoting Xplorer
Great thread!

You wrote you are trading for 4 years and that you only trade 6 pairs. Can you tell us what are those pairs?

Cheers.
Thanks for the compliments Xplorer.

I scratching my head trying to figure out where I mentioned the fact that I trade 6 pairs. Can you please direct me to that post? I may have favourite pairs, but I trade when I see a good opportunity regardless of the currency pair.
  • #209
  • Mar 27, 2008 1:36pm Mar 27, 2008 1:36pm
...i think the confusion here arose from someone who posted which pairs he/she traded, thinking the question was directed at them, not yourself (Dazfx)....hmm that reads well, have another beer.
  • #210
  • Mar 27, 2008 1:42pm Mar 27, 2008 1:42pm
Interesting to note that USD/CAD has set up (Daz style) from it's 2 day swing highs/lows. GBP/USD looks to be moving along the same lines atm.
  • #211
  • Mar 27, 2008 1:45pm Mar 27, 2008 1:45pm
Quoting Dazfx
Thanks for the compliments Xplorer.

I scratching my head trying to figure out where I mentioned the fact that I trade 6 pairs. Can you please direct me to that post? I may have favourite pairs, but I trade when I see a good opportunity regardless of the currency pair.
Sorry Daz. I am reading too many threads
Probably you never wrote that you trade only 6 pairs. My mistake.

Anyway, can you tell us what are those favourite pairs?

Thanks again.
  • #212
  • Mar 27, 2008 2:05pm Mar 27, 2008 2:05pm
Quoting Pipsforall
EUR/GBP is looking a possible setup.
Pipsforall ...well spotted and thanks for sharing. I hope you've banked some.

Daz ...thanks for the thread and sharing your experience.

I have to head out and have closed the whole trade for 41 pips.

I'm letting GBP/USD just run (currently up 66). That was a Daz entry off the 4 hr, using it as a trigger for my longer term sentiment of a bearish cable based on the weekly chart.
  • #213
  • Mar 27, 2008 2:33pm Mar 27, 2008 2:33pm
Quoting ChowClown
I've a 'light' order in 2 pips (+ spread) above the inside hrly, to test a long from these levels, which isn't too far away from the 5SMA. Stoch beginning to hook.
Attached Image (click to enlarge)
Click to Enlarge Name: abcdnew1.gif Size: 18 KB


Stochs never crossed, and hence no trade. Also, notice how that mini trendline breakout worked nicely, and how the price couldn't break the resistance at 0.9207.

Sorry about the trade though, I can see you might have got stopped out.
  • #214
  • Mar 27, 2008 3:30pm Mar 27, 2008 3:30pm
Anyone like the USD/JPY? Looks like the stachastic on the 4 hr is about to turnover.
Yay! Pips for everyone!
  • #215
  • Mar 27, 2008 3:44pm Mar 27, 2008 3:44pm
Quoting Dazfx
Attachment

Stochs never crossed, and hence no trade. Also, notice how that mini trendline breakout worked nicely, and how the price couldn't break the resistance at 0.9207.

Sorry about the trade though, I can see you might have got stopped out.
No worries - order wasn't filled and i cancelled on the break down.
  • #216
  • Edited 8:41pm Mar 27, 2008 6:40pm | Edited 8:41pm
DazFX, great system, beautiful in its simplicity. Great to see that exit is also being addressed in such unambiguous fashion. Many thanks for sharing.

A few questions, if I may (in blue typeface):

Quoting Dazfx
.........
Long
Generally, you are buying in an uptrend, when the AB impulse wave retraces to the 61.8 or 78.6 level.
Q1. How near to the 61.8 or 78.6 level does the retrace need to be? For example, is it valid to trade a retrace that reverses half way between the two levels? Or beyond the 78.6?

..........
2) On the Stochastic Oscillator window, the fast stoch (blue line) has already crossed or is crossing the slow stoch (red dotted line) and hooking up
Q2. On some of your illustrative charts, the stochastic hasn't crossed its signal line by the time the confirmation candle has completed. So by "is crossing" do you mean it's valid to enter when the stochastic looks like it might be about to cross?

.........
INVALID SETUPS
A setup is considered invalid:
2) If the confirmation candle moves so much that the stop loss is widened to a point where the Risk/Reward ratio is no longer 1:1.5.
Q3. Risk is obviously the distance between entry and the stoploss. Is Reward the distance from entry to target 1, 2 or 3?

.........
EXIT STRATEGY

Carrying on from the previous example, I would exit my first lot at Target 1. If price does reach Target 2, I will take out the second lot, and move my stop loss to Break Even (Entry point).
Q4. Just to confirm: if price reaches only as far as Target 1 and then reverses to the (original) stoploss point, you are happy to take an overall loss on the trade?
.........
[Edit] Q5. Could you give a ballpark idea as to what percentage of trades have been winners? (By a win, I mean a net positive gain across all three components of a trade).

Many thanks in advance for your answers.

David
  • #217
  • Edited 9:01pm Mar 27, 2008 8:39pm | Edited 9:01pm
Quoting hanover
DazFX, great system, beautiful in its simplicity. Great to see that exit is also being addressed in such unambiguous fashion. Many thanks for sharing.

A few questions, if I may (in blue typeface):

Many thanks in advance for your answers.

David
Hi David,

Its 12:33am here in the UK, but I will try my best to answer your questions.

1) The ideal setup is when the levels are touched to the pip, or when they are tested (candle close inside the levels). Then you have the setups where the candle is a few pips short of the levels. If you keep your AB waves short (4-10 candles) by moving to the appropriate TFs, you will be surprised at how often price respects these levels, especially when its moving with the longer term trend. Price could go beyond 78.6, but it should close below the level.

2) Yes, the hook up/down should happen either in the Confirmation Candle or the Entry Candle.

3) Looking back at my initial post, I can see I haven't made it very clear. Its Target 3.

4) When I first came up with this strategy, I moved stop to b/e upon hitting target 1. The problem with that is price will hit my entry point and continue moving in my direction taking out the other targets. This happens much frequently than price reversing at target 1.

5) 15/20 winning trades. 3/20 hit stop. 2/20 hit stop after hitting Target 1. All based on trades taken on the hourly time frame and mostly following the rules.

As you quite nicely said, this is just a ballpark idea, I don't want to mislead anyone.

Having said all this, the Entry, Exit rules are what I follow (My emotions do get the better of me sometimes) and not a requirement for this system to work effectively. I am sure there are better entry/exit strategies out there.

I hope I have answered your questions to your satisfaction.

-DAZ-
  • #218
  • Mar 28, 2008 1:45am Mar 28, 2008 1:45am
Morning all ...

I'm looking at USD/JPY as a potential short.
- 61.8 fib breached
- stochs are trying to cross over
- current 1hr candle has crossed 5ema
- awaiting support at daily pivot to be broken

Any thoughts?
Rob
  • #219
  • Mar 28, 2008 1:57am Mar 28, 2008 1:57am
Quoting priceaction
Morning all ...

I'm looking at USD/JPY as a potential short.
- 61.8 fib breached
- stochs are trying to cross over
- current 1hr candle has crossed 5ema
- awaiting support at daily pivot to be broken

Any thoughts?
Rob
Morning, yes i noticed UJ on the 4hr as a potential short today.

I'm still long EG from yesterday. 2 lots now closed (at FE 50 & 61.8) and the remainder at b/e.
  • #220
  • Edited 2:03am Mar 28, 2008 1:59am | Edited 2:03am
Quoting ChowClown
Morning, yes i noticed UJ on the 4hr as a potential short today.

I'm still long EG from yesterday. 2 lots now closed (at FE 50 & 61.8) and the remainder at b/e.
Nice discipline on the EG trade Chow.

I did at least hold my GU trade overnight, up 108 ...(20 are thanks to the poor UK houses price news just out)
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