The System II (Yes with irony)

Hello,

Is this a new swing or a pullback followed by a continuation of the bullish swing? The market will let us know soon enough. It has been my experience that at around 11am est price action picks up.

Hello,

My trade was triggered by a fake move and ended up with a loss... the choppy monster lurks during slow periods... should have known better. This is one reason I prefer to trade at the start of a session... Wash and rinse.

I thank you for the quality of your posts, I have much progress with you.
you advise swings of 30 to 40 pips. for several weeks the volatility has increased, we can choose much bigger swings and wait for a retracement?
eg 40 è 70 pips?
trade swings you all, or only those who are in the same direction?
How many trades per session on average?

what is the great advantage of trailing stop?
Thanks for your help

Hello,

Well my trade was triggered and was able to almost recoup my previous loss.... had the opportunity but did not pull the trigger fast enough... things atm seem a bit choppy so I did not want to see a winner turn into a looser.

Take care. Stay healthy.

good traders are rare but those can put it into words are rarer. advices on hard stop & get out when in doubt, if its looking good let it run, trade the continuation, no mercy on the market etc are valuable advices for those (include me) who are willing to rethink and spend couple of minutes looking at it.

regards.

So I've been rereading the thread from the start, came across the rules again:
1) wait for the market to have a 30-40 ticks swing at any direction
2) Wait for a retracement
3) set 2 horizontal lines - 1 at the beginning of the swing and 1 at the last swing high/low
4) if the market resumes the swing, place a limit order 2-3 ticks above/ below the last swing

Have attached a chart of the Eur/USD in today's london morning session (approx 10am), with blue arrows indicating possible entry points.

My question is, does the current price movement qualify as a swing? A swing to me is the up, then a retrace, then up again movement, this is now not quite as simple as before each entry point for either the short or the long, there are previous price levels (red arrows) that could act as support/resistance. Does this qualify as a choppy market lacking direction-would people stay out? I hope that this is informative for everyone and not just myself, it seems that the opportunity to go long is clearer than the opportunity to go short?

Boots,

I'm no expert, but looking @ your chart the first arrow offered 20-25 pips & the third offered about the same. I'd say this is still choppy somewhat, but there was opportunities for these short term in & out trades.

The third blue arrow was a HIGHER LOW than the first RED ARROW. The second RED ARROW did offer pips as well, but the FIRST RED & the SECOND BLUE are the ones I would have focus on. They both are in the general direction of the move UP. Your understanding of the system seems to be spot on. Maybe FEB will weight in on this. Thanks for your chart & views.

These are just my views.

Good Trades To All.

My first trade of 2009

Took +9pips, could have taken 17 but I trailed it and closed it manually at the end.

Hi everyone,

It's my first post here. I want to thank feb for his sharing. It'd my first time trading without any indicators and I must say it's pretty cool...I don't have very good results for now but I keep on trading...Trying to adapt...reading the chart and listen to what the market has to say...

Anyway...thank you Feb !

Hope I'm not monopolising the questions here, and I hope that by posting the chart that it might be off help to others.
So my question is, would it be correct to enter this trade if the low, indicated by the red arrow, is broken. Is the blue arow indicationg a swing high, or is this too short a time period?

Hi Feb and All,
I will try to summarize few things which in my opinion are the key of the system. (Feb sorry for hijacking ). I am still at the middle of the thread reading…
1.This is essential of a “break out system”. One of my best friends and the best trader I know says “Only breakouts give pips”.
2.20/20 rule. It is not so important if the stop and target will be 21, 21, 22… The hint is that we are aiming small part of the 5m TF trend, if happen (don’t be greedy Lol). Also we are giving the market enough space to breathe (sound like guru’s bullshit but true). Everybody knows that! But where is the hint if the RR ratio=1? The hint is in trailing stop. Even in choppy market the breaks give pips. And the trial reduces the risk and increases the RR (magic ). Forex market is a Zero win game with RR=1. Only brokers are taking their spread from the traders. But the trailing is the key in this system.
3.Stop 20 target 21. First that came in my mind – “Why target is not 20?” Believe or not this one pip is the cherry of the cake. If you are full time trader you will make enormous amount of trades every month. When you earn with your 20p target it usually means you have a trend and the price gave additional 20, 50, 100p. (don’t be greedy again). So when we have a winner this pip is only for us as a gift (buy some new toys )
4.Experiment:
I made a small two day experiment on a demo assuming that I am a pro trader and I have to do more trades. Believe or not everything is based on statistics. So I opened few pairs, I took a short view and put the Skyline’s EA with individual settings for each – 20 stop for the slowest and 35 stop for the fast (e.g.GJ). If want to be more precise should base the settings on average daily range for every pair (my style). After that I am waiting for the swings, get the lot size from the EA and place the orders (ok I made few mistakes with the size first). I was not sticking hard to nothing (e.g. 30-40p. swing). Only looking for breakouts in both up and down. Also I didn’t care to enlarge the stop depending on the deepness of the pullback. It is only a short experiment right? Here attached is the result. The report says to me: THIS ONE IS WORKING.
Enjoy!
P.S.
Feb – great system! I admire you!
Skyline – The EA is working like a swiss watch J!
Moneda – I have the same trading simulator. Just saw you already posted it.
P.P.S
Sorry for the boring long post – this is the short version. Lol

Systray

Great Post!!

I think you hit the nail in the head.

Protecting your position from the get-go is very important for this system to work. If you get stopped due the trail, get on the next bus. Don't let the stop fool you guys, there's always another chance to get on board. Of course, that's up to your capital permits.

Kinda short in my view. Need more wiggle.

I'm glad that you enjoy my tiny EA

Happy pips
Skyline

Feb, the hit is yours. I only summarize
The experiment is the best illustration:
-Risk 3% (hard rule) on each trade
-Winning positions: 50% (as I mentioned zero win game).
-9 pairs traded - means I did not "analyze" anything. I even didn't wait of A+++ setups
-More than 10% earning in just 2 days

Impossible is nothing

Skyline, my experiment is half based on your EA. If I have to calculate everything for nine pairs - too hard.
Anyway I have a challenge for you:
I am messing around with forex for 6 years already (only hobby) and I know quite a lot about brokers. The broker is not your friend. One of the weak points of the system is that if you show the stop to your broker and the lot is big and few other people do the same, he will hunt you down. During these two days I saw this twice. The stop was hit 1 tick (~20p. tick Lol) after break out. The best way to protect this is to make the EA with hidden stops and targets. After that the problem will be that the EA will try to execute SL and TP with market order. The broker's weapon here is REQUOTE. Means the EA has to have slippage function on both TP&SL. I know this sounds pretty complicated but when all of you guys became very rich and trading with 100k live account and your orders will be HUGE you will face the broker on the battle field.
For me it is just a hobby
From now on I prommise I will stick to the main idea of the thread only!
Regards

It seems that the safest and most profitable moves take place after a STRONG surge in price, followed by a consolidation or pullback like these shown at the white arrows. Then the breakout is strong.

The ones that don't do so well are when the market is choppy or slowly trending -- and then breaks through.

From what I've seen so far, you better be ready with your finger on the "close" button real quickly after the breakout on those.

Example:

Notice the grey ellipse at the bottom. There were two small breaks to the downside that would get you a few pips but only if you got 'em and got out really really fast -- and did not get greedy.

Hold on for more than 5 or 6 pips and you were done on these.

The trick is to learn which ones to hold onto, and which ones will drag along then jump back in the opposite direction and cost you.

Personally, I'm out as soon as the price starts to move back against me even a few pips. It's too easy for it to turn on you.

The key to knowing what to expect after the breakout would seem to be the action immediately before the consolidation or pullback. Maybe.

Been whipsawed to death here... phew..

Yes the whip is still in motion thats for sure.

it seems for every 1 profitable trade, i get at least 4 whipsaws. Not even time to get out of the trade, gets you in and turns its tail. not having luck so far but will keep at it. Its a demo account so wont break me at least.