oby Journal

This is gonna be the trading journal for my two daily strategies I started to trade:

1. SUN Method
2. MOON Method

The strategies are very easy to follow and can be traded 100% mechanically. I call it SUN and MOON method because the SUN method is more profitable in a trending market and the MOON method in a ranging market, hence completing each other quite nicely. Frankly, I did not come up with this methods and I'm in the stage of testing these strategies for profitability. So please do not follow any of my trades with a real account. Whenever possible, I will post a chart showing the trades I took emerging to nice winners - hopefully ! We will see!

Please feel free to post to my journal for questions or comments!

SUN Method:

1. Daily Chart
2. GBP/USD
3. 200 Period SMA
4. Slow Stochastic with 15/5/5 settings
5. 1 lot

Buy Trade Entry:

1. Price must be above the 200 SMA AND the Slow Stochastic %K line crossed above the %D line while both lines are below the 20 level
2. Set stop at the latest swing low
3. Exit when Slow Stochastic line crosses back below the %D line

Vice Versa for a Sell Trade Entry!

MOON Method:

1. GBP/USD
2. Daily
3. EMA 50
4. Slow Stochastic with 14/3/3 settings
5. 1 lot

Buy Trade Entry:

1. Candle needs to close above EMA 50 AND Slow Stochastic %K line must have been below 20 within the last 3 candles
2. Stop at the low of the previous candle (low of the candle appearing before the candle that closed above EMA 50)
3. Exit when Slow Stochastic %K line reaches 80

Vice Versa for Sell Trade Entry!

SUN Method - Trade Examples:

Attached a chart showing the latest SUN trades (price > SMA 200 => only BUY trades) in GBP/USD:

MOON Method - Trade Examples:

Attached a chart showing the latest MOON trades in GBP/USD:

In our recent MOON trade (refer to post #5), we can see a nice symmetrical triangle setup (apparently you need two touches of the trendlines), which has just been broken to the upside. As the trend before the occurrence of a symmtrical triangle is key, I assume that the recent triangle formation is showing the final of a consolidation in the cable and the uptrend is going to continue. Hence, I expect that for this current MOON trade, we hopefully reach our target (Slow Stochastic %K line reaches 80). But as nothing is a 100% predictable in the market, we will see what happens. Have fun in your life!

how far were you able to backtest it? which trading platform do you use?

Hi Jimmywa,

First of all, thank you very much for posting to my trading journal and your interest in these strategies.

Frankly, I haven't had time to backtest these two strategies very thouroughly due to my demanding day job. That's why I would like to start forward testing these strategies with this trading journal.

Regarding the SUN Method, I backtested it starting in Jan. 2005 up to now. Based on a daily chart, I counted 12 trades since Jan 2005. Out of these 12 trades, I would say 6 are clear winners and 6 are losers. I think the problem of the SUN method is the exit strategy, because some of the 6 losers were winners first and turned back to a loss as the exit signal came too late. IMHO, a trailing stop or partial profit taking would bring this method a huge step forward. In general, the SUN method makes sense to me as it is a trend following approach designed to find those times when the market moves temporarily against the prevailing trend (defined by the 200 SMA and the current price). So the SUN method tries to buy pullbacks in an uptrend and to sell rallies in a downtrend. The method should work starting on a 2h chart, so I will also start to backtest it on a 4h chart to get more signals and confidence in the profitability of this strategy.

Regarding the MOON method, I also started to backtest it from Jan 2005 up to now. I counted 7 winners and 4 losers (and 1 pending trade). Again, this strategy should also work on lower time frames (starting on 2h charts). In general, I think fresh closes above or below the 50 EMA are very interesting entry points and I'm thinking of entering trades if a close above or below the 50 EMA occurs regardless of our filter, the Slow Stochastic, and apply the stop as described in post # 3. But as stated for the SUN method, I think the exit strategy should be modified resp. improved too.

In conclusion, I think the strategies make sense to me and can be profitable but I'm working on some modifications to the entry and exit rules stated in posts # 2 and 3. Please let me know in case you have hints to improve the strategies. Every post is very much appreciated!

I use MetaTrader [from MIGfx] as my trading platform because there is a mobile version of MetaTrader which I can use on my PDA.

Again, thank's for your questions and let me know in case of further questions or comments !

Finally, I'm able to update my trading journal, which is great !!!

In the last couple of weeks, we had two MOON trades:

BUY Entry February 14, 2007:
As we had a breakout of a triangle formation in GBP/USD, I expected a nice upward movement, which would bring us to the 80 level in the Slow Stochastic indicator. But, as you all know, nothing is a 100% predictable in Forex. GBP/USD lingered at around 1.9640 when it reached the 80 level of the Stochastic and we exited the trade with no profit but hey, also with no loss (which is more important in my opinion). And, another chance was just around the corner... :

SELL Entry March 1, 2007:
The entry point of this short trade was at 1.9579 (EMA 50 = 1.9580 -> wow (!) that was tight ) and the Slow Stochastic was above the 80 level within the last three candles. The stop would have been at around 1.9672 as this was the latest swing high. We had a very nice ride down to 1.9189 (close on March 5, 2007) when we reached the 20 level, which is our exit signal and gives as a profit of 390 pips . Not bad in three trading days.

So far, it seems to me that these two strategies are complementing each other quite nicely as GBP/USD is currently in a sideways mode (which started at the beginning of 2007). In Q4 2006, we had good SUN trades as GBP/USD was trending higher.

The future is bright...!!!

As the SUN and MOON trades do not show up on a regular basis, I'm also gonna use this trading journal for keeping track of my Blackcomb Strategy trades (I love to invent names for strategies . The strategy is based on knowledge gathered from this wonderful place called forexfactory.com!!! I love you guys and thank you so much!!!

The Blackcomb Strategy contains following systems/indicators (or part of it):

1. Vegas Tunnel Trading (used for TP or resistance/support levels)
2. SHI_Channel (used for resistance/support levels)
3. True Strength Index (TSI 7,3,3) (used for entry/exit)
4. ATR (20) (used for SL)

The True Strength Index entries (with the setting mentioned above) coincide with crossings from the wonderful Daily Fozzy Method. I attached a chart in order to show how I combine the indicators.

I will post my entries and exits starting today. Any comments or questions are highly appreciated!!!

No updates on SUN or MOON trades. But we have a new entry signal for the Blackcomb Strategy:

Buy Entry at 1.9317. SL at 1.9218 (ATR based). TP at around 1.9475 (Tunnel) -> (please also check out the nice TBL at around 1.9180/84 which is also the touch of the SHI channel):

Blackcomb Strategy: The Tunnel (where the exit signal for the recent trade is) has been almost reached today. I suggest to apply a split of the TP levels i.e. take 1 lot (or whatever) at 40 Pips as suggested by the original Daily Fozzy Method and let the other lot hit the TP according to the Tunnel Method (i.e Tunnel or Extreme Fibs). If the 40 Pips TP is hit, take the SL to BE. That might be a little bit too conservative to still get an adequate risk:reward ratio but these kind of days like today can be quite annoying. Let me know what you think...

In case someone would like to have the TSI Osc Indicator I use for my Blackcomb Strategy... here we go:

I will start applying the SUN and MOON methods on 4 hour charts (ccy: GBP/USD). I created a pip summary to track the PnL of the trades (incl. Blackcomb trades) and will update it EOD (if any trades occurred). Have fun!

As I switched to H4 charts for the SUN and MOON trading strategies, I attached the current MOON trade for this shorter time frame (Entry: 1.9329; SL: 1.9218; Lot: 0.2). As soon as this trade is closed (close of candle > 80 level of Slow Stochastic), I will update the Pip Summary for the first time ! No SUN trade today!

The MOON trade as described in post #15 was closed on 03/15 at 1.9364 as the 80 level was reached. This trade gained +35 Pips, which results in a PnL of $70. I'm waiting for another MOON trade to take.

There is a sell signal according to the SUN method in GBP/USD at 1.9417. According to the rules, the SL is at 1.9503 (recent swing high). I take 0.2 lots to be in line with 2% risk of our equity ($ 10'000).

Attached the recent Pip Summary version (03/18/07). Have fun !

We were stopped out of our Blackcomb trade on March 14. However, the TSI indicator kept us in the trade quite nicely and we reached the tunnel on March 16. For the next trade, I will take profit at 40 Pips (and take SL to BE) and let the other half of the position run to the level based on the Tunnel resp. Extreme levels.

Attached the recent Pip Summary version (03/23/07). We were stopped out of our SUN trade: -86 Pips. Have fun ...