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Cornflower Hourly System

  • #1,641
  • Oct 26, 2008 8:18pm Oct 26, 2008 8:18pm
I saw these great setups earlier on GBP/USD for 36 (early exit), GBP/YEN for 85 (early exit), and USD/JPY 30 (early exit). All on the horuly time frame all I didnt want to leave pips on the board for a sunday and 151 total was plenty for me. But with as much as things have come down Im thinking a bottom is nearing and I do not want to leave positve pips on the board. So Time will tell if I jumped the gun or not but my target for the week is only 250 pips. C ya guys later.
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  • #1,642
  • Oct 26, 2008 10:13pm Oct 26, 2008 10:13pm
Good stuff Kod, at that rate you will need to switch off your charts on Tuesday because you will have hit your weekly target .... Nice
  • #1,643
  • Oct 27, 2008 1:50am Oct 27, 2008 1:50am
Kod,

I'm not realy into it, but whats the go with the PSAR on the chart you just posted?
  • #1,644
  • Oct 27, 2008 8:46am Oct 27, 2008 8:46am
Bob

Im just trying something new right now trying to find something that makes this more absolute and I just havent taken it off
  • #1,645
  • Edited Oct 28, 2008 12:22am Oct 27, 2008 11:47am | Edited Oct 28, 2008 12:22am
Quoting Repipula
This thread needs to be back up top because this is one of the most powerful threads in all of Forex Factory. Felicia is a brilliant woman with powerful insights into the market. This system is still pure gold, as laid out in post number one. The method is as powerful as it gets.
I agree! In my opinion this should be the top thread here. This is my favorite thread and favorite trading system here at Forex Factory. I closely follow 2 threads - this thread and the thread at the Talkgold forum concerning the 1-2-3 trade pattern. Both the Cornflower system and 1-2-3 pattern system are 2 of the most powerful, easy, & PROVEN systems you'll ever find! I'm looking into combining the 2 systems. I thinking of trying demo trades of entering on a 1-2-3 pattern after the price touches the 12, 24, or 72 ema. When a 1-2-3 pattern forms after the price pulls back to one of the CF lines, then that is potential confirmation to me that the price is about to bounce off that CF line and go in the direction of my trade.

Of course, this is necessarily the official way to trade the CF system, but it's a good way to combine this system and the 1-2-3 system.

Quote
Another huge thing is this... jump up to the 4HR chart and use the same EMA's as the 1HR and determine the 4HR trend. Your 1 HR Cornflower entries must match the 4HR trend! NO EXCEPTIONS!! If the 1HR says go long, but the 4HR is short, you have NO TRADE.

I also very much believe that the time-frame above your main trading time-frame needs to be trending at the same time (as your main trading time-frame). As in your example, the CF lines on the 4 hr chart should match the CF lines on your 1 hr main trading chart. If you are trading the 5 mn chart, then the 15 min chart needs to be trending in the same direction. In fact, it would probably be a good idea if the 1 hr was also trending in the same direction as well (for a 5 mn trade).

Let's keep this thread where it deserves to be... at the top!


Topgun
"Success is not a fantasy, it's a formula." - MTI
  • #1,646
  • Oct 27, 2008 11:58am Oct 27, 2008 11:58am
Quoting Repipula
Also, what I use for a stop is a visual one. I do not use a pre-set stop-loss (aka 'target for your broker to take out').
This is a statement made by traders which has always had me scratching my head. When I hear someone say they don't want to set a stop loss because the broker will see it and "take it out", does that mean the broker is watching every trade that is being made and then try to take out that stop loss? IF that is true, then what if there are 1000 traders making a trade within seconds of each other? Or even within 5 minutes of each other? Does that mean the broker is watching all 1000 traders at the same time, trying to hit the button over and over to take out each individual trade???

This just doesn't seem logical to me. Can someone explain this?


Topgun
"Success is not a fantasy, it's a formula." - MTI
  • #1,647
  • Oct 27, 2008 2:15pm Oct 27, 2008 2:15pm
it's not just brokers, topgun, it's the whole industry. it's obvious where some stops will be placed by the majority of traders, and the big fish in the sea will try to take those stops out.

When I say I use a visual stop it is this - If the 1 HR bar closes past the 72, it is a loser and I will close the trade manually, AT A LOSS, when it returns to the 24. I only acknowledge BAR CLOSES with this method. Go back and backtest and see how many wicks break the 72 without there being a close past it, or how many S/R levels are 'broken' only to have it return in the direction you planned on. I set Take Profits on every trade. I do not set stop losses. If my trade identifies itself as a loser, I move the Take Profit to the next reasonable exit area and let the trade close itself out. This is how I minimize my losses.

This is the most powerful realization of my last month - using the bar close past the 72 as my indicator that this trade is a loser. The other one is that I have finally dialed in the position size using my 100 pips = 2% rule. I rarely lose 100 pips, but this has been pure gold for me, I can handle the drawdown that occurs with this method.
  • #1,648
  • Oct 28, 2008 12:29am Oct 28, 2008 12:29am
Quoting Repipula
it's not just brokers, topgun, it's the whole industry. it's obvious where some stops will be placed by the majority of traders, and the big fish in the sea will try to take those stops out.

When I say I use a visual stop it is this - If the 1 HR bar closes past the 72, it is a loser and I will close the trade manually, AT A LOSS, when it returns to the 24.
You say you will close the trade manually, at a loss, when it returns to the 24? BUT, what if it doesn't return to the 24? Will you not suffer a bigger loss waiting for it to return to the 24 and then it doesn't? Wouldn't it be better to just close the trade asap after the bar closes past the 72?


Topgun
"Success is not a fantasy, it's a formula." - MTI
  • #1,649
  • Oct 28, 2008 2:12am Oct 28, 2008 2:12am
Here is a EUR trade i took yesterday, so far so good... I know kod said something about how low these prices will (or wont) go but i tend to block all that stuff out and just trade what I see.
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  • #1,650
  • Oct 28, 2008 8:38am Oct 28, 2008 8:38am
Quoting bob_inabottle
Here is a EUR trade i took yesterday, so far so good... I know kod said something about how low these prices will (or wont) go but i tend to block all that stuff out and just trade what I see.

No Bob I just said I think a bottom is nearing Im still trading with the trend that is put up on the charts looks good
  • #1,651
  • Oct 28, 2008 11:36am Oct 28, 2008 11:36am
Quoting bob_inabottle
Here is a EUR trade i took yesterday, so far so good... I know kod said something about how low these prices will (or wont) go but i tend to block all that stuff out and just trade what I see.
Yes we should trade what we see and not try to guess. However, I see that the euro formed a clear double bottom not long after you made your trade. The double bottom is a sign it may be headed back up. We'll see what happens.


Topgun
"Success is not a fantasy, it's a formula." - MTI
  • #1,652
  • Oct 28, 2008 8:56pm Oct 28, 2008 8:56pm
Now here is why Ive been looking at Psar and stochs and candles Im looking to go to a more of a swing type of trading style. Times are a bit tough right now so I need to go back to work. Now we almost have a touch on the 24 but the stochs are well above oversold also the psar supports a sell so we enter. The top blue line shows the high the close was about 45 pips below it. Now I have been taking profit at the bases of previous lows of runs that go or at least trying to. So we have the lower horizontal line where this candle runs also we have stochs supporting this exit. Normally I take 20-30 trades a week witha winning percentage of 60-70%. Ive taken 7 this week only losing one. Im trading less making a bit more but Im taking less chances because more things need to line up, also its only wednesday and I missed one which you can see on this chart which you can see at about 1600. Now this one could fall in line since it doesnt break the oversold but at that point we are ranging we also have a couple of hourly closes that cannot breach the 24 and turn it back down, and we have PSAR supporting a long. How many reasons do you need to take a trade. So in the end lets see if this our bottom or just a huge bounce.
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  • #1,653
  • Oct 28, 2008 11:51pm Oct 28, 2008 11:51pm
Quoting Topgun_1
You say you will close the trade manually, at a loss, when it returns to the 24? BUT, what if it doesn't return to the 24? Will you not suffer a bigger loss waiting for it to return to the 24 and then it doesn't? Wouldn't it be better to just close the trade asap after the bar closes past the 72?
this is something I am currently working on. I'm glad you brought it up. Yes, the most conservative thing to do is close the trade the moment the bar closes past the 72. I highly recommend this. It is the easiest way out and is emotionless and requires no thought. It closes past 72, IT'S A LOSER, close the trade!

However, if you have used Bollinger Bands, you will notice an inevitable return to the midline, which is a 20 SMA, which is very close to the 24 EMA in value. So when the bar closes past the 72 EMA and I know I have a stinker of a trade, I don't just panic and close it, I instead look to the midline Bollinger Band, aka the 24 EMA, and I set my Take Profit to be at that level (most likely closing out at a loss), and wait for price to make it's natural return there. Basically I am alway letting price come to me. Go and backtest and see that price ALWAYS returns to these averages. The averages may be higher/lower than you'd like when price finally gets there, but the fact is, price ALWAYS returns to it at some point. So you might as well just set your trades to close out at those levels. You control the trade, do not let it control you. Look, see and set limit orders and take profit levels, shut the computer off and walk away for a few hours, come back and reevaluate.

The reason I can trade this way is my POSITION SIZING. I trade with the right amount to handle the drawdown that occurs. My 2% of my account=100 pips rule is pretty golden, though slightly aggressive. 1%=100 pips is better for beginners I'd say.
  • #1,654
  • Oct 29, 2008 12:40am Oct 29, 2008 12:40am
Quoting Topgun_1
Yes we should trade what we see and not try to guess. However, I see that the euro formed a clear double bottom not long after you made your trade. The double bottom is a sign it may be headed back up. We'll see what happens.


Topgun
What happend was that it was stopped out for a b/e trade, darn right about the double bottom.... but thats also a part of trading what we see, it did make me feel bad about the trade but as it was already a "free trade" I was happy to let it run.

Bob
  • #1,655
  • Oct 29, 2008 2:00am Oct 29, 2008 2:00am
Whats this PSAR indicatior I see people using and how do you use it. All I see are a bunch of dots. If the dots are closer together does that mean something or if there at an angle? Any help on this would be appreciated.
  • #1,656
  • Oct 29, 2008 12:05pm Oct 29, 2008 12:05pm
Quoting morpheus305
Whats this PSAR indicatior I see people using and how do you use it. All I see are a bunch of dots. If the dots are closer together does that mean something or if there at an angle? Any help on this would be appreciated.
Morpheus this is not part of Cornflower just something Ive adopted. But in short when the dot is above you are looking for a short if it is below you are looking for a long. Its not the most accurate indicator and it is just something that I am using as a final indicator. So if I have 2-3 other signals saying get in and then I also have PSAR added to these then I would take it but if I have 2-3 other signals saying get in and the PSAR not agreeing I may still take it. All Im saying is it is not the most important thing on the screen but it helps me.

On the chart we Have the hourly touching the 24 with Rate cut news would have been a great trade but I passed on it.
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  • #1,657
  • Oct 30, 2008 12:03am Oct 30, 2008 12:03am
Ok thanks kod for answering that question. I'm also curious how you use the stoch with the momentum indicator in it. I understand the stoch part but what signals from the momentum are looking for. Is it when the momentum crosses the stoch or something like that?
  • #1,658
  • Oct 30, 2008 10:19am Oct 30, 2008 10:19am
I was trying to see if momentum would really add something but I havent really found that it does. Just experimenting with it at the moment but haven't had any repeatable results.
  • #1,659
  • Oct 30, 2008 1:29pm Oct 30, 2008 1:29pm
Here is an example of one of those first cross CF's that I talked about awhile back. I got a great entry on the TL at the 24 also and the first bounce off the 24 as well. Now the stochs were overbought in the current drive down in my opinion a great indication that it will continue. However during the hour it didnt seem to just go which all my good CF seem to just run away. So around the open of the next candle I exited. I had an original TP set at 2835 which was a few pips off the previous low but it didnt seem to want to go down there.
Entry: 1.2977
Exit: 1.29278
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  • #1,660
  • Edited 8:00pm Oct 31, 2008 7:36pm | Edited 8:00pm
Can someone explain me what "pullback" actually means?
Is touching and then resuming the trend considered a pullback as well?

Do the candles need to be clear of the EMA lines? Usually, the EMA lines run right through the middle of candles. Is that still good enough to be a candidate for pullback?
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