The Daily Fozzy Method

Always nice to wake up to 270 green pips especially so on a Monday.

As per Fozzy method I entered the following trades early this morning when the markets opened (01:00 am my time / 11pm GMT) and this is what I woke up to:

usd/jpy S 93.39 - +42
usd/chf S 1.1572 +50
usd/cad S 1.2506 +51
nzd/usd S 0.5087 -31
gbp/usd B 1.4412 +89
gbp/jpy B 134.65 + 12
eur/usd B 1.2820 +58
eur/gbp B 0.8905 -22
aud/usd B 0.6461 +21

Total + 270 pips

Reason for posting this is because I received quite a number of requests to share my results with this method. Please note that is a once off post. I believe the Fozzy method has proven itself over and over already.

If you need results to proof the system without even trying it then I personally think that you have already lost half the battle.

Regards and great fozzy pipping to all.

hi mike
what makes u close your trades, i mean how you fix the tp and sl . i usualy use ATR .
and have you entered using the daily or 4 h method
thanks

hi again
and please could you explain how u took the gj trade. the cross we had it a few days ago on the 17 /2/2009 so we had the long entry on the 18 /2/2009 as per chart attached .
and more than that the long gj after this cross is not valid as per original fozzy method because we had to had the cross under the middle line of the bolliger band . am i missing something ??? for example the cross before the last one was a valid short
im surprised you enter now and u get only 12 pip using fozzy ! could u please if you dont mind explain .
thanks

Hi Samer,

Most of the times I will let the trades ride with the stop set at 70% of the daily ATR set at 10. Other times I will close out my trades before news or when I do not feel comfortably to let them ride or if I see price action that tells me to get out. So yes, there is some discretion involved.

For TP's I make use of the Vegas daily fib lines as used by BB. I do however also look for other factors i.e. take today....London opens in about an hour and a half with the Asian session closing in a while. I will most probably close out before then but that is because I have a busy day today and will not be able to watch my charts until late this afternoon.

My weekly target is a very conservative 150 pips so I'm really picky when it comes to trades and I'm never ever scared or to greedy not to bank what I have got on the table. There is always another day.

I'm currently up just over 400 pips so I will take that and start all over tomorrow morning again. Hope this helps. I know many will say that it always come down to some form of discretion but unfortuanetly that is how the markets are. I do not think there is one clear cut method to guarantee success.

Entries are also very discretionary. Yes I do try and follow the Fozzy method to the letter but I have gotten to the point where I trust and understand the fozzy setups.

I'm usually in bed when the new daily candle opens and enter my trades on my mobile phone where I only have the RSI/MA combo as indicators. This morning all I looked for was whether the rsi was above it's MA or not and entered accordingly. I was not looking for whether it crossed on Friday etc.. as per fozzy method.

Once again...discretion. I know the pairs I trade and have been watching them the whole of last week so I had an idea of what to expect this week. For me it is all about probabilities. The probability of it going further up if the rsi is above the ma is larger than the probability of it going down thus I entered long if the rsi was above the ma.

I do not make use of the Bolinger Bands when placing an entry. When I looked at the gj chart this morning the RSI was above the MA so I went long. It is currently standing on + 62 pips.

thanks for your reply mike

I closed out all my trades. As mentioned earlier, I have quite a busy day today and will not be able to see my charts until late this afternoon and will most probably not trade again until Wednesday. My weekly target is only around 150 pips so I'm not greedy and take my profits when the market gives them.

Following is how the trades turned out:

usdjpy S 93.39-93.08 +31
usdchf S 1.1572-1.1531 +41
usdcad S 1.2506- 1.2442 +64
nzdusd S 0.5087-0.5144 -57
gbpusd B 1.4412-1.4543 +131
gbpjpy B 134.65-135.31 +66
eurusd B 1.2820-1.2920 +100
eurgbp B 0.8905-0.8880 -25
audusd B 0.6461-0.6512 +51

Total 402 pips for today.

Cheers and good trading to all.

can u post ur template.pls

Please find template and indicators attached as requested.

Your chart should look like the attached picture.

Well done Mike............

In the past I have received PMs from people who tell me this method does not work; they claim my posted results are not real. Your recent work should be inspirational to people who want a simple daily system that produces good results.............

Mike85,

IMHO taking profits so early (31-131 pips) is road to nowhere. I was trading Fozzy for a while and I do not think that the ratio of winners/losers in this system is much more than 50%.
What is your SL? I use 70 pips SL for majors (I trade only 4 pairs). So I do not close my trade if it is less than 140 or better 210 or more pips in plus (BE after 50 points). Actually I do not close my trade on a first day unless it is in green more than 210 pips.
I trade on dailies so I do not have to watch monitor/phone all the time (actually I am doing this but usually not taking any actions - discipline)

140-210 pips gives me Risk/Reward ratio 1/2; 1/3.

This is my edge and a reason to believe that it is possible to make money in this business in long term.

Good Luck

*I am still using Fozzy indicator – but I wouldn’t call my current way of trading Fozzy style.

Betterave,

Not to disagree with you but taking pips of 31-131 is definitely not a road to nowhere. With the right money management any amount of pips will contribute to the growth of your account. If you have a look at the chart I posted you will see two lines just to the right of the last candle. This is an EA I wrote that constantly calculates my risk reward ratio as well as the maximum amount of risk I'm allowed to take in order to stay within my MM plan. The EA handles all MM aspects of each trade and brings the risk down as quickly as possible by moving of stops, averaging etc..

Just for interest...the stop on the GBPUSD trade was entered at 40 pips with a TP of 180. When I took the trade out I already had a RR of 1:3.
Some of the others were closer to 1:1 but as explained I decided not to leave trades in the markets as I could not monitor them, because it is a Monday and because it is a banking holiday in the US. For those reason I decided to take what was on the table and exit for the day. The total RR for all those trades (risk vs. profit) was 1:1.6. Not quite 2 but nearly there .

Yes I do trade on the daily as well but when I enter a trade I check it at least every 4 hours. If I cannot I don't trade. Preservation of capital is number one. Just because I have a stop in place or an EA managing positions is not enough for me . This is just personal choice.

So yes I agree with you on having a positive RR of at least 2 plus as this will ensure long-term success. My average for the past month has been over 1:5. However it is also important to remember that RR is only a part of proper money management. Just watching your RR will not always ensure growth as you might not always hit yout TP's. To calculate RR when a trade is entered is fine and well but there is no assurance that you will reach the TP so ongoing money and position management is just as critical a part of money management as setting proper RR ratio's.

You mention that you use a BE of 50 pips. What will happen if your BE gets hit a couple of times in a row ? Then you sit with an average RR of 1.4 Risk for 1 reward (1.4:1). Have you done some calculations to see how much it would take to get that average back up to 1:2 or 1:3 ?

My appoligies if this comes accross a bit sarcastic or vain, I can assure you that is not the intention. I agree 100% with what you have to say but wish to point out that you might want to look into this a bit deeper. Just RR on its own will not do it unless you are guaranteed to hit the TP each and everytime.

Regarding my stops. My stops are hardly ever the same. All depends on nearest support & resistance areas. So whether it is 20 or 200 pips does not really matter as the risk will be the same because of proper position sizing as well as other risk factors taken into account.

Regarding the winning ratio. My current winning ratio is quite a bit higher than 50% but my MM is such that I can drop down to around 33% winners and still come out tops albeit over a longer time period.

I also do a mix of trading. I do use Fozzy according to the entry rules on both the daily as well as on the 15/30 min. if I'm infront of the monitors during the day. I do however also make use of other trading strategies and they all compliment each other to a certain extent.

Sorry for chomping away here, hope that my position is a bit more clear.

Best of luck to you in your trading and most important thing to remeber...if it works for you stick to it.

EDIT: Betterave - Attached an image of the EA with a trade I currently have on gu. See how it manages to bring the risk down. It was initially higher when entered but the EA moves the stop and TP around depending on inputs received. This trade currently has an RR of 1:3.4

To all,

Sorry for my previous post being so long. I only saw how long it was after posting....here I go again .

Attached is an image of an indicator I'm working on for Fozzy. It shows the various currencies (more to be added) together with the status of Fozzy as well as some other indicators. The squares below each currency is the time frames with the 15 min on the left and the weekly on the right.

If green it indicates that the RSI has crossed to the upside and red for downside. The other indicators indicate a zero cross etc...

Still quite a bit of work to be done i.e. adding of alerts etc...

Will post when done.

Outstanding..................I'm really looking forward to this !!!

Guess great minds think alike

Someone else did something similiar

http://i44.tinypic.com/2q04zdg.gif

Just a couple of pot shots taken from indi within last two hours. All small trades in direction of probabilities as shown.

That's me for the day.

Is your Fozzy calculating on different chart periods?

Yes. Each little square represents a time frame. See blow.

Thanks for the idea.

http://i41.tinypic.com/2ed5a9y.gif

So number of green boxes / 24 = probability.

Simple yet effective...

Are you going to add weighting so longer chart periods count more?