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Diary of a Mad Surfer

  • #581
  • Aug 8, 2008 5:21am Aug 8, 2008 5:21am
Quoting Ash
Thanks! I was thinking about that when I came back to make the correction. I've got about 11 metatraders running, hundreds of charts and trying to take care of other personal and business matters. My mind in not mine anymore.

Also, my 200 ema is at 1.5304 (due to differences in brokers)

Spot on with my 200

Why hundreds of charts? KISS

But I understand you, I look at charts all day long,
Keeping up with the whole market can be fun and stressful as well.
I need 6 monitors and then I will be happy, But my wife won't
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  • #582
  • Aug 8, 2008 5:26am Aug 8, 2008 5:26am
Quoting cesarnc
1.53 area is 5 months low. Hot hot hot area.

Were so on fire, were so on fire feeling HOT, HOT, HOT

Instead of catching a falling knife we can push it even further and then twist it at the end. 1.53 fell like a broken straw fence in the way of a train.
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  • #583
  • Aug 8, 2008 5:30am Aug 8, 2008 5:30am
Here is an interesting situation, USDJPY Monthly is retesting the trendline
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  • #584
  • Aug 8, 2008 5:33am Aug 8, 2008 5:33am
Quoting Big Wave Rider
Spot on with my 200

Why hundreds of charts? KISS

But I understand you, I look at charts all day long,
Keeping up with the whole market can be fun and stressful as well.
I need 6 monitors and then I will be happy, But my wife won't

I'm running 10+ different EA's, various TF's, etc along with MPP. It's almost narrowed down. Just need a little more time in testing and everything should be set.

I need 6+ monitors, three computers and a couple of laptops (just for the hell of it) but I don't have the space (not at the moment).
Humble Lifetime Member
  • #585
  • Aug 8, 2008 5:35am Aug 8, 2008 5:35am
If this is a strengthening of the $, do you think we'll see the low 1.4's in the EU?
Humble Lifetime Member
  • #586
  • Aug 8, 2008 5:41am Aug 8, 2008 5:41am
Quoting Ash
If this is a strengthening of the $, do you think we'll see the low 1.4's in the EU?

The first target is 1.4996 but lets round it up to 1.50 as a take profit area, depending on P.A in that area.
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  • #587
  • Aug 8, 2008 11:09am Aug 8, 2008 11:09am
Easy ride down from 1.5500 on the old 13/27/100 but then trend riding IS easy - its that darned constipation that frustrates us.

If the Monthly support of 1.5000ish doesn't hold, it looks like 1.4300ish is next.

Despite all this, the Long Term Monthly and Weekly UP trend lines are still both intact.
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  • #588
  • Aug 12, 2008 11:20am Aug 12, 2008 11:20am
Quoting Big Wave Rider
Here is an interesting situation, USDJPY Monthly is retesting the trendline

That trendline is providing some pretty damn strong resistance.
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  • #589
  • Aug 13, 2008 11:43am Aug 13, 2008 11:43am
Quoting Big Wave Rider
That trendline is providing some pretty damn strong resistance.

I decided what the hell and shorted it, nice 100 pip scalp, now USDJPY is finding support on the 4hr 100. This is my T.P area and will look for the next signal to go long, or short, or nothing at all. I think with this huge movement we have had this last week and a half I think it will range for awhile. Cable is going crazy.
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  • #590
  • Aug 14, 2008 5:01am Aug 14, 2008 5:01am
Quoting Big Wave Rider
I'm working on a trading plan that has rules, right now I'm working on the rules. As much as I'd love to share it with you I feel like I should complete it before I share it. It's very similar to the original system just on a smaller T.F plus a few more features. Hope to share it in the next week or two.

I'm getting close to being finished, I'm working on a few filters right now and backtesting them. Hopefully I should have it ready in the next few days. (no promises) So far the forward testing has been all positive
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  • #591
  • Edited 11:07am Aug 14, 2008 9:31am | Edited 11:07am
HERE IT IS!

SURFING THE BARREL METHOD


*Caution: Reading this document may lead to excessive pips


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, but this is a better place to add to a position rather than initiate a new one. Use the fib tool to measure the retrenchment. 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.





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  • #592
  • Aug 14, 2008 9:59am Aug 14, 2008 9:59am
Example A
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  • #593
  • Aug 14, 2008 10:09am Aug 14, 2008 10:09am
Example B "the squeeze"
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  • #594
  • Edited 10:48am Aug 14, 2008 10:24am | Edited 10:48am
Current live example of the daily range filter on EU.
The yellow lines are the High and Low and the red is the close on yesterdays candle. Right now it is in the lower 1/3 of the range and below the close so we would be looking to go short. Under normal conditons the 13 and 100 would be squeezing together right now but we all know how much and how fast euro has dropped.
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  • #595
  • Aug 14, 2008 10:29am Aug 14, 2008 10:29am
Example of the accuracy of the fibs. Cable monthly
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  • #596
  • Aug 14, 2008 10:33am Aug 14, 2008 10:33am
Since cable hit the 2nd target and dropped from there we would redraw the fib to include the new high, and then notice how it stopped on a dime on the short level fib. if you were short here is where you could of taken profit at the absolute bottom (for now) Failure to move pass this level may signal the long term trend still has a chance. If it goes past here then the trend is over.
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  • #597
  • Aug 14, 2008 10:46am Aug 14, 2008 10:46am
Drawing a fib from the other direction on the weekly we see that this was also the first target. A triple fib level. These are import areas that you must find.
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  • #598
  • Aug 14, 2008 10:58am Aug 14, 2008 10:58am
Another live example of price being in the barrel with the daily range filter. I also have and andrews pitchfork from a larger T.F (blue line) Price seems to respect the pitchfork for now. I was thinking of going short but the pitchfork saved me from a small loss. Regardless, this is what we are looking for. Price in Barrel, 13, 100 squeezing together, trade the breakout. Long for lower risk, short is higher risk considering the current trend is up. But we would also look at higher T.F's to see where the 100 and 200 might provide resistance since we also know that the long term trend is down.
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  • #599
  • Edited 11:17am Aug 14, 2008 11:12am | Edited 11:17am
Thanks for posting the system. Will be testing it out.

I have a ? What is your input on EU? For the past few days on the Daily TF, it has been hitting and bouncing off the 365 EMA, do you think it wants to break it? ...........Just crossed down the 365 EMA, lets see if it can close below that.
Humble Lifetime Member
  • #600
  • Aug 14, 2008 11:23am Aug 14, 2008 11:23am
Quoting Ash
Thanks for posting the system. Will be testing it out.

I have a ? What is your inpur on EU? For the poast few days on the Daily TF, it has been hitting and bouncing off the 365 EMA, do you think it wants to nreak it? ...........Just crossed down the 365 EMA, lets see if it can close below that.
I was watching that, Noticed it on the 365 from some other thread ( I don't use that EMA as it is only useful once every three years) Now being one.

Price broke out of the 15 min tunnel and then retested the 100 before dropping. If I wasn't busy posting my new method I would of caught it.

Don't worry still holding a few dollar longs.
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