Something a little different

I'm always on the lookout for different methods of trading FX and have come up with something a little different. It is a work in progress as I haven't worked out the finer points. I am currently playing with this on the 4hr and 15 min time frames. I'll discuss the 15 min set up only so as not to confuse the issue as there are some subtle differences.

Okay I use the MT4 charts. 15 min chart on GBP, EUR and EUR/JPY. Ijust use these charts for the set up but actually trade off Oanda. I am a EUR fan, but the other two pairs are probably better for this method due to their volatility.

Now I am a big believer in setting a target of say just 20 pips a day in total, and that will do me. If this is successful, then you have 100 pips for the week or 400 pips for the month, which is nothing to gripe about. But like a lot of traders, I too chase the big winners and go for a lot more. Sometimes it works, sometimes it doesn't.

Now to the set up. I use candles and magnify the chart right out. I also add the daily pivots just to give me an idea of potential profit targets/turning points. Not an exact science but handy all the same.

I add one indicator and it is expanded to take up about half the screen. It is the Stochastics where I use the settings of 8,4,4 and select the 'Linear Weighted' for the MA Method. I then set the colours, for the Main, I use a bright colour that is going to stand out, and for the Signal, I use a very thing dotted line the same colour as the background. I then add a bucket load of horizontal lines in intervals of '5' from 0 to 100, making the 20, 50 and 80 horizontal lines a different colour to the others. So now you should have an indicator with one single line that cuts up and down through a lot of horizontal lines.

Now I normally start trading just before London opens and call it quits about 8hrs later. This is normally ample time to catch some winners. When I start trading I check to see which way the stoch is heading. It is either up or down. If it is heading down, then I just wait for it to turn up, then I get ready to go long. When it has been going down, it has been cutting down through the horizontal lines. Eventually it will turn between two lines, and either cut up through a line or continue down through the next line down.

What I am looking for is a confirmed cut up through the next line up. I will wait until the 15 min candle has closed to confirm the change in direction, and will enter on the open of the new candle. The same applies if I was looking for a change to the downside.

Just some things to consider. It is probably a safer trade if the trend has changed from down to up, then I would prefer the stoch line to cross below the 50 horizontal line as it would have been in oversold territory. The opposite applies for a change from up to down, looking to be in the overbought area.

Now I can either set a profit target on the trade or just follow along with the stoch as long as it contiues heading in the same direction. This where I sometimes use the pivot lines for an idea of resistance/support. Or I can close half my position when a certain level is made and then follow up the remaining half with a trailing stop. Various ways to deal with the trade once I am in. Stop is normally set either 30-40 pips away or near a recent high or low on the 15 min chart.

I'll see if I can work out how to attach a chart to give a visual on this, but it is pretty obvious once you have the right set up. That's the basics of it all, so I hope I haven't confused anyone too much. I welcome any comments or ideas. Cheers.

Just to give you an idea of how the trades panned out today. I have taken the spread into consideration and have nominated the max potential profit. Not actual profit taken. All times in my local time which is Queensland, Australia. Right now it is just after 11pm here.

EUR Buy at 1.2619 at 4.45pm. +18
EUR Sell at 1.2570 at 6.15pm. Loss
EUR Buy at 1.2593 at 7.15pm. +88
EUR Sell at 1.2642 at 9pm. +20
EUR Buy at 1.2663 at 10.30pm. Still open at +36

GBP Buy at 1.4874 at 5pm. +24
GBP Sell at 1.4848 at 6.15pm. +59
GBP Buy at 1.4819 at 7.15pm. +53
GBP Sell at 1.4831 at 8.30pm. +51
GBP Buy at 1.4827 at 9.45pm. Still open at +160

E/JPY Buy at 117.55 at 4.45pm. +35
E/JPY Sell at 116.92 at 6.15pm. +32
E/JPY Buy at 117.13 at 7.15pm. +106
E/JPY Sell at 117.67 at 9pm. +12
E/JPY Buy at 117.97 at 10.15pm. Still open at +54

Pretty good night actually. Pity they weren't all like this. Local time now is 11.10pm. All prices taken off Oanda. Cheers.

Guys,

I also post in another forum that hasn't got as anywhere near as much traffic as this one. Systems here tend to get lost in the multitude of other systems. Anyway, I tracked my potential trades last night and below is what I reported to the other forum. Keep in mind these weren't called in real time, all after the fact, however the rules have been explained and it is a purely mechanical entry so I can't really fudge the figures.

"Wednesday Trades

The main problem I have at the moment is where to place a hard stop. I usually find that if the trade goes against me straight up, it rarely recovers. Obviously the stop would have to be different for the various pairs. GBP and EUR/JPY seem to have the better results, but boy can they move at times.

Here are todays trades so far.

EUR
Sell at 1.2678 at 4.45pm. Loss (max -22)
Buy at 1.2700 at 5.45pm. Loss (max -30)
Sell at 1.2670 at 6.30pm. +62 potential
Buy at 1.2623 at 8.15pm and still open.

GBP
Sell at 1.4866 at 4.45pm. Loss (max -16)
Buy at 1.4882 at 5.30pm. +37 potential
Sell at 1.4840 at 6.30pm and still open (just)

E/JPY
Buy at 118.48 at 4pm. +26 potential
Sell at 118.19 at 4.45pm. Loss (max -39) Only went to +11
Buy at 118.58 at 5.45pm. Loss (max -71 OUCH!!)
Sell at 117.87 at 6.30pm. +86 potential
Buy at 117.31 at 7.30pm and still open.

Plenty of potential for this method, especially if I just took my 20 pips for the day and then left it at that. Cheers."

This was followed by an update later in the evening.

" Trade updates.

Just waiting for midnight so I can reverse a couple of my 4hr chart trades so I thought I might as well finish of the night on the 15 min trades.

The EUR buy at 8.15pm went to a potential +41, followed by a sell at 1.2640 at 10pm which went to +37 before turning up.

The GBP sell at 6.30pm went to a potential +171. Not bad. This was followed by a buy at 1.4709 at 8.30pm which had a potential of +64. This was followed by a max loss of -15, and then back to a buy at 11pm which is looking a little poor at this moment. Actually it has gone short now.

The E/JPY buy at 7.30pm went to a potential +63. Followed by a max loss on a sell of -21, then a max loss on a buy of -22, and now short again at 10.45pm.

So there you have it for the night. Bit of a slow start, but soon took off well and truly in my favour. I'll give it another run tomorrow. Cheers."

Hi Folks,

I set the charts up yesterday for this system and studied it. Actually demo traded it today and made some pips. Not as many as Buff is showing, because I only traded E/J and I wasn't at the computer for all of the entries.

I feel really sure that one could easily get 20+ pips from it a day.

Carol

I've attempted to attach a chart of the 15 min EUR/JPY with the set up. If it works, it should give you an idea of how the stoch follows the trend pretty closely, and that the stoch line is fairly smooth. Cheers

The chart came up okay in the previous post however the 20, 50 and 80 horizontal lines didn't show up too well. I have these the colour red and are treated the same as every other horizontal line when it comes to the stoch line cutting through them. I just like to be aware of where the overbought/sold areas are. Cheers.

I just posted the below in another forum. Pretty good start to the day and if I was only after the 20 pips, I would have been well and truly done by now. Cheers.

"Thursday's Trades.

Just wanted to call the above EUR short on the turn of the 1/4 hour chart. So far today I have had the following signals.

EUR
Sell at 1.2670 at 4.30pm which went to +20 before turning.
Buy at 1.2663 at 5.30pm. Max of +8 only, and max loss of -6
Sell at 1.2658 at 5.45pm and still open.

GBP
Sell at 1.4722 at 5pm where it went nicely down to the S1 level before bouncing. Max so far of +64. That would do nicely. Still open as I type this.

E/JPY
Sell at 117.68 at 5pm. A good +43 potential there.
Buy at 117.63 at 5.45pm. Still open and pretty well a live call as price is below this as I type.

I'll update later. Cheers. "

Hi Friend
I like always to try somthing new..
I will tray it

I set this up and it looks good but for me it is better on the 4 hour chart. What differences do you use for the four hour chart? Thanks

Volcano,

Slightly different on the 4hr charts, where I use the stoch settings of 10,6,6. Everything else the same. You get some really big moves but it is difficult (for me anyway) to monitor the charts every 4hrs considering my bedtime is just when the US markets open. I am still trying to work out a decent stop strategy for it. I am also considering going out to the daily charts with it. Cheers.

Thursday's Potential Trades.

A little bit reporting but it has been the first chance I have had. A bit of a slow start to the day, but turned out pretty good.

People might complain that these trades are all called after the fact and hence may be a little manufactured. My rules have been laid out including which platform I use and the times I trade. It is a purely mechanical entry at the open of the confirmed 15 min candle. My only comment would be that the results I give are either the max loss you could take or the POTENTIAL max profit you could obtain. It would be very difficult (impossible) to nail these results exactly, but it should give you an idea of the size of the good runs when they occur. I do take the spread into consideration, and I will also make mention of any large drawdowns that happen before a decent profit is made. Enough rambling, here are last night's trades.

All times are in my local time, which is the same as Brisbane, Australia. I normally start trading at 4pm and finish by 2am, but a little earlier if possible. I normally consider anything under +20 a loss. This is the case most times, but if I can see something obvious on a chart, then this may not be the case.

EUR
Sold 1.2670 4.30pm. +20
Buy 1.2663 5.30pm. +8 (Max loss -5)
Sell 1.2658 5.45pm. +10 (max loss -5)
Buy 1.2653 6.15pm. +6 (max loss -16)
Sell 1.2638 6.30pm. +88 (Why keep on trading??)
Buy 1.2596 7.15pm. +29
Sell 1.2622 9.45pm. Pullback of -38 before +21
Buy 1.2638 12.15am. +210 (Jackpot!!)

GBP
Sell 1.4722 5pm. +64 (That would have done me)
Buy 1.4684 6.15pm. Loss (max -39)
Sell 1.4645 6.30pm. +174 (Jackpot!!)
Buy 1.4550 7.30pm. Loss (max -27)
Sell 1.4523 8.30pm. +7 (max loss -6)
Buy 1.4517 8.45pm. +157 (Life is looking good!!!)
Sell 1.4608 11.45pm. +28

EUR/JPY
Sell 117.68 5pm. +43 (That would have done me)
Buy 117.63 5.45pm. Loss (max -19)
Sell 117.44 6.30pm. +106 (Bingo!)
Buy 117.00 7.30pm. Loss (max -8)
Sell 116.92 9.45pm. Loss (max -36)
Buy 117.28 10.15pm. +26
Sell 117.09 11.15pm. +32
Buy 117.36 12.30am. +42

It is just after 3pm local here and after checking my FX news calendar, it maybe a quiet night up until 11.30pm as that is when US Unemployment Rate etc comes out. By that time on a Friday night, I am normally well and truly into beer o'clock time. Cheers.

Not sure why my thread was moved from Trading Systems to Trading Discussion?

Friday Trades.

As warned, the big news was going to cause a little havoc with the markets. This would have been a good day to sit out or get you profits early and then turn off the computer.

EUR
Sell 1.2780 5pm. Pullback of -22 before a +29
Buy 1.2776 7pm. +22
Sell 1.2759 8pm. Pullback of -24 before +81

GBP
Sell 1.4663 5.15pm. +12 only (max loss -32)
Buy 1.4695 6pm. +38
Sell 1.4726 7.15pm. Pullback of -18 before +89
Buy 1.4676 9.15pm. +33

EUR/JPY
Sell 117.94 5.45pm. +44
Buy 117.73 7pm. Max loss -29
Sell 117.44 8pm. Max loss -62
Buy 117.82 8.15pm. Max loss -51
Sell 117.31 9.15pm. +32

As you can see, I finished early due to the news, and even then the EUR/JPY took a bit of a flogging. As stated a good day to avoid or get the money and run. Cheers.

Received an email from moderator explaining why this thread was moved from 'Trading Systems' to 'Trading Discussion'.

Apparently I didn't explain the set up or the rules in the first post. I'm not sure what else I can do here. And the second reason was that I didn't give the system a name! 'Something a little different' doesn't qualify as a name, which I probably agree with.

Oh well, they are the rules. So now you have the basic set up and the basic rules of a system without a name, so feel free to play around with it and do with it what you can. Cheers.

Unhappy Buff...

I was also disappointed to see your thread moved. This is a very good system.

Buff, maybe you should copy and paste the first post, give it a name and repost it again in the Trading Systems section.

It really needs to be noticed and not buried deep in another section. Just my opinion.

carol

Your sistem is very interesting, thanks for posting it.

Is it possible you could post some charts with examples of taking signals of your system in 15 min ?

It would help to have a better idea how you start a trade and what are your considerations to do it.

Best regards

Dibanos,

If you have a look at the EUR/JPY chart I previously posted, it will give you a very good idea of what the set up should look like.

What I am looking for on entry, is a change of direction from long to short or vice versa. If the stoch line has been heading down, then I am looking for it to turn up and break through the next horizontal line. Once this break is confirmed, then I would take the long trade on the open of the candle that confirms it.

Hope that helps. I posted my trades live on another forum last week, where three of the days I just targeted 20 pips. Two of these days took 4 minutes in total, so it wasn't very exciting. I made some mistakes which cost me big time, but I ended the week at +128 pips. It was a pretty good result considering the amount of hours put in, which was only about 9 hrs for the entire week. Cheers.

Thank you for your response.

Hi Buff,

any reason why you don't use the %D trigger line?

KudzuFX,

No particular reason. Basically I just played around with various settings and went with what appeared to give me the earlier signal. Like a lot of indicators, the stoch lags price, but it is good for showing overbought/oversold areas. You can't always rely on this, but it does tip the odds slightly in your favour. Cheers.