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The 4 Hour Fozzy Method

  • #21
  • Edited 7:13pm Mar 26, 2007 10:56am | Edited 7:13pm
BB

I took a monitor and made a radar screen from this indicator as shown
Attached Image
T
  • #22
  • Mar 26, 2007 6:04pm Mar 26, 2007 6:04pm
Quoting JokersWild
Hi BB~

I think this is what you are after. I will try and locate the explanation and post.

Found it: http://www.forexfactory.com/showthread.php?t=21105
With this version you can change the settings considerably more..

Jason
Attached File(s)
File Type: ex4 #Signal_Bars_v4.ex4   64 KB | 1,352 downloads
  • #23
  • Mar 26, 2007 7:09pm Mar 26, 2007 7:09pm
Wayyyyy cool- Thanks jlowder
T
  • #24
  • Mar 26, 2007 8:28pm Mar 26, 2007 8:28pm
Anybody else having difficulty getting the Signals Bar indicator to transfer to MT4?
  • #25
  • Mar 27, 2007 12:17am Mar 27, 2007 12:17am
This thing looks great on the chart. Thanks for posting it here. Now I have to find a good use for it.
  • #26
  • Mar 27, 2007 9:17am Mar 27, 2007 9:17am
Thank you Jason!

Quoting jlowder
With this version you can change the settings considerably more..

Jason
  • #27
  • Mar 28, 2007 10:58am Mar 28, 2007 10:58am
Here's an observation I have made. It's not been tested and I don't recommend anyone trade this. But if you like the Fozzy and have a handle on the method, I think this warrants a look.

IMO successful Fozzy signals and trades on the Daily charts are preceeded by the same type of signal on the 4 hour chart, sometimes by as much as 36 hours. I take the same template I use for the Daily and put it on the 4 hour. When the RSI cleanly crosses the MA, take a look at the Daily. Is it setting itself up for a Fozzy signal? If so, then it MAY (emphasis on may) be possible to enter the trade earlier than usual. We all know that sometimes there is substantial price movement prior to getting the "official" Fozzy signal on the Daily. Some of this initial movement could be captured if what I am seeing on the 4 hour is reliable.

I suggest anyone interested in this "theory", do some backtesting. Keep it simple, just a Fozzy cross on the 4 hour and then see what happens next, on both the 4 hour and the Daily.

Later today I'll post some chart views to show everyone an example or two. Gotta go for now................
  • #28
  • Mar 28, 2007 3:13pm Mar 28, 2007 3:13pm
As a follow-up to my last post please consider this:

A Daily Fozzy signal was generated at the close of the Daily candle on 27 March at 1.6509. A buy would have been entered at the opening of the next Daily candle on 27 March at 1.6510. (5 PM EDT)

However: On 26 March on the 4 hour chart, a "Fozzy" signal was generated at the close of the 9 AM EDT candle (close time was 1 PM EDT). Price was 1.6464. At this time, a check of the Daily chart would have shown all indicators pointing towards an "approaching buy signal". This agreement of indicators plus the RSI/MA cross on the 4 hour chart "could" be used to enter a buy trade. This buy would have successfully preceeded the Fozzy signal on the Daily chart by approximately 45 pips. The attached image shows the two different chart signals.

If this "theory" interests you, please backtest and try it on a demo account before you consider going any further. That's what I am going to do......
Attached Image
  • #29
  • Mar 28, 2007 3:57pm Mar 28, 2007 3:57pm
Quoting BeachBum
If this "theory" interests you, please backtest and try it on a demo account before you consider going any further. That's what I am going to do......
Beach - just noticed this thread and wanted to comment before taking a looong hot bath (it's the end of the day here)...

Firstly, we must not forget that one of the strengths of the Daily Fozzy, which from one perspective is the only Fozzy, is that it operates on a close of bar basis. That keeps it simple & clear - moving into the 4 hr zone is taking a walk on the wild side, relatively speaking.

That said, I base all my entries, which I would no longer call Fozzy (not even "my" version) off the 4 hour chart. I do use the Fozzy RSI on a daily chart, with this indicator set to update every tick, ie. it can cross and uncross itself before it closes. I scan my Radarscreen every morning to see which pairs are starting to cross and then switch to the 4hr charts. Btw, I only do this once a day, as even though I spend (too many) hours a day in front of the computer, I am trading & investing in other areas. I don't care if I miss a trade (actually I do care a lot, but I don't care that I do care, if you can understand that apparently contradictory, but actually very simple thinking... ).

On the 4hr charts I am no longer interested in the Fozzy indicator, but I am looking for classic momentum / price divergence at support / resistance. Each trader will have his own favourite indicators & methods of "seeing" this. I use MTPredictor's Decision Point (for support / resistance & target areas) and STF (for momentum / trend strength) indicators as I have previously described elsewhere. If I was not an MTP subscriber, I would use something else, I just happen to like MTP.

'Should post a chart really... too tired, gotta soak in the tub.... maybe tomorrow.... oh & one more thing, when you look at charts this way, you really see how correlated the fx markets are, ie. the charts often look SO similar, there is no point putting on masses of different trades, which are basically the same trade... I'm beginninig to ramble, dear Beach, so I'll shut up...

A presto, fellow Floyd fan and Italy lover.



J.
  • #30
  • Mar 28, 2007 5:41pm Mar 28, 2007 5:41pm
Ah...........my good friend jt

I felt compelled to read this post several times because you really had a lot to say, in spite of the late hour.........always enjoy your observations and comments. And in this case I will spend some time digesting your trading style and indicators used..........there will always be room for improvement for me. (please be sure to post a chart when you are well-rested)

(on my recent return from Italy, I had an interesting, unexpected and very positive experience at the Amsterdam airport..........it's the kind of story best shared in person while enjoying a cappacino.....or better yet a Grappa!)

Quoting jtrade
Beach - just noticed this thread and wanted to comment before taking a looong hot bath (it's the end of the day here)...

Firstly, we must not forget that one of the strengths of the Daily Fozzy, which from one perspective is the only Fozzy, is that it operates on a close of bar basis. That keeps it simple & clear - moving into the 4 hr zone is taking a walk on the wild side, relatively speaking.

That said, I base all my entries, which I would no longer call Fozzy (not even "my" version) off the 4 hour chart. I do use the Fozzy RSI on a daily chart, with this indicator set to update every tick, ie. it can cross and uncross itself before it closes. I scan my Radarscreen every morning to see which pairs are starting to cross and then switch to the 4hr charts. Btw, I only do this once a day, as even though I spend (too many) hours a day in front of the computer, I am trading & investing in other areas. I don't care if I miss a trade (actually I do care a lot, but I don't care that I do care, if you can understand that apparently contradictory, but actually very simple thinking... ).

On the 4hr charts I am no longer interested in the Fozzy indicator, but I am looking for classic momentum / price divergence at support / resistance. Each trader will have his own favourite indicators & methods of "seeing" this. I use MTPredictor's Decision Point (for support / resistance & target areas) and STF (for momentum / trend strength) indicators as I have previously described elsewhere. If I was not an MTP subscriber, I would use something else, I just happen to like MTP.

'Should post a chart really... too tired, gotta soak in the tub.... maybe tomorrow.... oh & one more thing, when you look at charts this way, you really see how correlated the fx markets are, ie. the charts often look SO similar, there is no point putting on masses of different trades, which are basically the same trade... I'm beginninig to ramble, dear Beach, so I'll shut up...

A presto, fellow Floyd fan and Italy lover.



J.
  • #31
  • Edited 3:22am Mar 29, 2007 2:57am | Edited 3:22am
'Morning all.... I will attempt to show what I described in my post above, using today's GBPUSD (a potential set-up, but not a trigger/entry, at this point).

First, the daily chart shows a Fozzy cross down 2 days ago, but below the 80 level and above the 60 level, a no-entry zone for me. However, the 60 line is approaching, so it is a Daily set-up, meaning I will move to the 4hr chart. I will also have noted Decision Point ("DP") resistance on both the daily and weekly charts - I like this. The DP is the blue rectangle with red border.

I will show and comment on the 4hr chart in my next post, as I think 2 charts per post is the max.

J.

PS. I don't know why the charts on this post just show as attachments, whereas in my following post, the chart shows up fine...
Attached Images
  • #32
  • Edited 3:26am Mar 29, 2007 3:20am | Edited 3:26am
Here's the current 4 hour chart, showing me the following :

* DP resistance, making it triple timeframe DP resistance : no longs allowed for the time being !

* Momentum / trend divergence.

* The last bright red candle is an MTP reversal bar, so I would usually enter 1 tick below this at 1.9616... except on this chart I would like to see the channel broken and the key 1.9600 area taken out, so my entry will be at 1.9595. I appreciate that this will seem like no improvement on the daily chart - and in this case it isn't - but usually this approach will give both price improvement and high probability.

The question I am asking myself is "Why use the Daily chart at all ?" I can of course think of good answers, but as I will not enter unless the 4hr sets up right, I am wondering if it really makes any difference at all... time will tell...

Hope these posts provide food for thought. I am not saying that how I trade is any better than any Daily Fozzy method - maybe it's worse - but it's what I have become comfortable with.

J.

PS. The bright green dots are an ATR stop - there's something similar for MT4 on one of Team Aphid's threads.
Attached Image
  • #33
  • Apr 8, 2007 1:31pm Apr 8, 2007 1:31pm
First: thanks to everyone who has posted here already......

As the title suggests, I think it is possible to use the 4 hour chart with a simple Fozzy system template attached to "get a jump" on the Daily chart signal. Having spent some time backtesting and doing a "little" forward testing, this is the conclusion I will try to support with a few examples beginning this week. First I'm going to let the NFP dust settle; so it will probably be Tuesday before I post some additional observations and charts.

I hope some of you will follow along as well as contribute to this thread. My goal is to make the Fozzy method even better and more profitable. Join me for the journey and let's see what we can accomplish..............
  • #34
  • Apr 8, 2007 2:28pm Apr 8, 2007 2:28pm
Chris,

Sounds good, look forward to it.


~Harris C
  • #35
  • Apr 9, 2007 5:13am Apr 9, 2007 5:13am
Quoting BeachBum
First: thanks to everyone who has posted here already......

As the title suggests, I think it is possible to use the 4 hour chart with a simple Fozzy system template attached to "get a jump" on the Daily chart signal. Having spent some time backtesting and doing a "little" forward testing, this is the conclusion I will try to support with a few examples beginning this week. First I'm going to let the NFP dust settle; so it will probably be Tuesday before I post some additional observations and charts.

I hope some of you will follow along as well as contribute to this thread. My goal is to make the Fozzy method even better and more profitable. Join me for the journey and let's see what we can accomplish..............

BB,

I am looking forward to your posts.
  • #36
  • Apr 11, 2007 2:24pm Apr 11, 2007 2:24pm
First, let's take a look at a daily chart for my favorite fozzy pair, the CAD/JPY. I zoomed out and removed the Vegas Daily Tunnel but left the fib levels in place. It's not difficult to see how this pair trended between the outer second and third levels on the high side and the same levels on the low side for the past seven months. Only once did the price decline to the fourth level. (This kind of price action can be seen on numerous pairs, making them the best to trade with Fozzy. But that's not to say the other pairs can't be Fozzy traded successfully as well.)

Now let's add the cross of the RSI and MA. The indicator on my chart shows ALL crosses, ignoring the Bollinger Bands. I do not automatically accept the green arrow as a signal; I actually "look" at the cross as well as the corresponding values for the RSI and MA. I want a definite cross before seriously considering a trade; no weak (or almost crosses) for me!

OK.............let's go back and look at the green arrows and the corresponding Daily candle that generated the "complete" cross. Notice how often the Daily candle that generated the cross and paved the way for a successful Fozzy trade is a large candle? After these large "signal" candles, there may only be one or two smaller candles before the strength of the trade has been exhausted. Not always, but often times this is what happens.

Wouldn't it be nice (Beach Boys anyone?) if we could enter the trade confidently before the Daily candle and the Fozzy cross it generates are complete? If that day is a large price move, we should be able to capture "some" of that move by entering a trade during the day. In effect we would be "getting a jump" on the Fozzy Daily Trade. I believe that can be done safely and successfully. The next post will take us one step closer to that reality.
Attached Image
  • #37
  • Apr 11, 2007 2:36pm Apr 11, 2007 2:36pm
Here's a screenshot that takes us in closer on the same chart for the last three months. Take a few minutes and look for examples of what I referred to in the last post; that is, a large Daily candle generating a Fozzy cross signal.
Attached Image (click to enlarge)
Click to Enlarge Name: cad_jpy.jpg Size: 80 KB
  • #38
  • Apr 12, 2007 2:10pm Apr 12, 2007 2:10pm
Now I want to take a closer look at what was happening on Feb 20:

The screenshot shows the Daily chart at the end of the day (NY close). Half of the daily candle has been cut off to show the positions of the RSI and MA without any influence from price action from the next day's candle. This view is how it would have looked just before the candle for the next day opened. The RSI is below the MA and the '50' line in the RSI window. Price is in the middle of channel, at a point where the Tunnel would be had I not already removed it from the chart. With this setup we would be looking for a move "up" with a cross of the RSI over the MA. With the Daily Fozzy Method, this cross "might" be expected the following day; so we would be watching the chart very carefully. But..........can we "get a jump" on a potential Daily cross and signal?
Attached Image (click to enlarge)
Click to Enlarge Name: cad_jpy2.jpg Size: 43 KB
  • #39
  • Apr 12, 2007 2:21pm Apr 12, 2007 2:21pm
This screenshot shows what happened during the trading day that ended on 21 Feb: a very large upward price move generated a Daily Fozzy signal, with an opening price of 102.53, and a close of 104.24; an upward move of 171 pips. The next day's upward price action was much smaller, followed by a decline down from the second fib level.

The question: could we have captured some of that 171 pip upward price movement that occurred while the Fozzy signal was in the process of being generated?
Attached Image (click to enlarge)
Click to Enlarge Name: cad_jpy3.jpg Size: 43 KB
  • #40
  • Apr 12, 2007 2:35pm Apr 12, 2007 2:35pm
At the close of the 20 Feb daily candle, we now look at the 4 hour chart. The RSI is below the MA and the "50" line. This agrees with the Daily chart and provides a "small" indication that an upward price move is imminent.
Attached Image (click to enlarge)
Click to Enlarge Name: cad_jpy4.jpg Size: 168 KB
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