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Trend Follower 5 Minute System

  • #2,701
  • Mar 1, 2009 5:21am Mar 1, 2009 5:21am
I never tried this system live but I am considering it seriously nowadays. My advice is the following:

1. Try a bigger timeframe such as the one hour.
2. After getting the signal inside that time frame you should switch to the smaler one, e.g., the 5M in order to monitor and get a confirmation siganl within this smaller time frame (kind of zooming in).

Counting on the 5M most likely will generate a good number of whipsaws, so one should not count on it solely.
  • #2,702
  • Mar 1, 2009 5:21am Mar 1, 2009 5:21am
I think I've missed this one in my last two replies. The first entry may be too soon after the Guppy red/green reposite themselves, but why the second signal is not vailid? Would it be an inevitable loser (I would not say there is big move prior to the 2nd signal)? Any opinion?
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Learning never stops...
  • #2,703
  • Edited 9:44am Mar 1, 2009 9:29am | Edited 9:44am
Quoting abc997
I think I've missed this one in my last two replies. The first entry may be too soon after the Guppy red/green reposite themselves, but why the second signal is not vailid? Would it be an inevitable loser (I would not say there is big move prior to the 2nd signal)? Any opinion?
Both signals are valid. Altghough it develop in loosing trade, but I would take that signal.
But, just one little remark. Look at picture, price could not break that level 3 times before our 2 signals occured. That is what I am talking about all the time in my posts. I would rather see that price rebound from that level, in this case resistance become support from which price would rebound. Rather that, then enter a trade on signal which occure after price hit some resistance and retrace a little and then signal occur. I will post examples when I find them.
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  • #2,704
  • Edited 10:22am Mar 1, 2009 10:09am | Edited 10:22am
Ok I found examples of what is important in analyzing good trade. This picture says thousand of words. On 23.february price could not break resitance and hit it 4 times. So that means that this level is strong resistance. On 24. early in the morning we had 1 signal to enter a long trade. This is risky enter because price has bigger chance to rebound from resistance 5th time than to break it. But, price break that strong resistnace. That means that this level previous strong resistance now can become strong support. And exactly that happen after 1signal. Price rebounded or retested that level where price found nice support. After rebound we get our 2 signal which is less risky then 1 one. See by yourself how far price went after 2 signal....
That is why I pay so much atention on finding good support or resistance levels. Because every system which is based on indicators is made or adapted on market situation when it was developed. IF market is similar to that conditions the system will produce same results, but if market conditions are different than market conditions when system is tested/developed we can have a lot of false signals. But support and resitance levels works all the time. So according to my little expirience support/resistance levels are keys to trade successfully. I write that once before: trading forex successfully is nothing else than sell resistance and buy support.
Conclusion: trading this system is not easy, but, is very powerful system if you have correct apporach to him, and if you use it with common sense.
P.S. All pivot points are removed intentionaly to get clear picture.
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  • #2,705
  • Mar 2, 2009 6:55am Mar 2, 2009 6:55am
Quoting pilatus
Ok I found examples of what is important in analyzing good trade. This picture says thousand of words. On 23.february price could not break resitance and hit it 4 times. So that means that this level is strong resistance. On 24. early in the morning we had 1 signal to enter a long trade. This is risky enter because price has bigger chance to rebound from resistance 5th time than to break it. But, price break that strong resistnace. That means that this level previous strong resistance now can become strong support. And exactly that happen after...
hi pilatus

i have enjoyed reading ur comments, however as a novice to this system i find it difficult in understanding what defines STEADY price movement and contraction of Guppy!! Please look at the 2 charts i have put up below.

The first chart is a trade i took on USD/JPY. The price seems steady in my opinion and the guppys are contracted. The only thing i can say is that price is very close to DS3, however this seems to be the case on a monday that all Support and Resistance points are bunched very close together.
Is this normal on a Monday? According to your statements this particular trade should go well, as there has not been massive price movement prior to the trade.

Now look at the result (2nd chart)

The lime green line is the Stop Loss, annoyingly HIT, and then the trade goes into action.

Is there a reason you would not take this trade in the first place? Or is this just a freak trade? Comments please, appreciated........
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  • #2,706
  • Mar 2, 2009 7:08am Mar 2, 2009 7:08am
Hi again Pilatus,

When you say that a certain price breaking and then becoming a strong support, this is not an example here is it? If I were to get a signal long later today below the thick brown line you would not take it because it is not strong support?

So if I get another long signal it will be risky? Is this correct?

Thanks again for your comments.
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  • #2,707
  • Mar 2, 2009 7:12am Mar 2, 2009 7:12am
With respect to the USD/JPY trade I took above, I got a signal to go short around 10 - 15 Minutes before it. However after it had also stop lossed it disappeared? I've not seen this before but the Red Arrow indicating a short signal just disappeared? Any reason for this.

Sorry for the bombardment of questions its been a tough morning! All replies appreciated!

Cheers
  • #2,708
  • Mar 2, 2009 7:25am Mar 2, 2009 7:25am
Quoting Pipinaintez
hi pilatus

i have enjoyed reading ur comments, however as a novice to this system i find it difficult in understanding what defines STEADY price movement and contraction of Guppy!! Please look at the 2 charts i have put up below.

The first chart is a trade i took on USD/JPY. The price seems steady in my opinion and the guppys are contracted. The only thing i can say is that price is very close to DS3, however this seems to be the case on a monday that all Support and Resistance points are bunched very close together.
Is this normal on a Monday?...
Ok buddy I see.
Listen, this is trade which you should took with caution. First, you must understand the stop loss rules, that means stop loss should be at least 5 pips+spread above recent high-your case, for short trade, and 5 pips+ spread below recent low, for long trade. Next, according to that you stop loss is higher than 20-25 pips so you should use proper MM(money managment) or less lots. Next, you must calculate and ask yourself if it is worth to enter a trade??
First that is signal against mayor trend on usd/jpy so you can not expect from price to move large. So if you can not expect from price to move a lot, you can conclude that price can go to first support. Which happen too. So your next question to yourself is if it risk/reward ratio is good according to your stop loss and target? If your stop loss is bigger than pips you can get if price hit first support this trade is not worth to enter a trade. Must ber at least 1:1 ratio.
Conclusion, you made a mistake with putting stop loss incorrect. It should be higher.
Guppy and other indy are good for signal, but as I told you, R/R is doubtful, and stop loss incorrect and against mayor trend.
  • #2,709
  • Mar 2, 2009 8:46am Mar 2, 2009 8:46am
Quoting pilatus
Ok buddy I see.
Listen, this is trade which you should took with caution. First, you must understand the stop loss rules, that means stop loss should be at least 5 pips+spread above recent high-your case, for short trade, and 5 pips+ spread below recent low, for long trade. Next, according to that you stop loss is higher than 20-25 pips so you should use proper MM(money managment) or less lots. Next, you must calculate and ask yourself if it is worth to enter a trade??
First that is signal against mayor trend on usd/jpy so you can not expect from...
Thanks Pilatus,

I was just using a generic stop loss that the wicker suggested of 20 Pips. Will this not do? i know about R/R ratio but why are the Resistance support lines so bunched together on Monday's? There would barely be any valid trade if I did not take them outside it?

Also trading in the direction of the major trend? I am not sure what this means. I have looked on the one hour USD/JPY chart (attached) and seen that there is a long trend? But what is it we are exactly looking for. Do we want to see a trend follower signal? when I looked i saw this picture i have attached. On the Bar i took the signal the trend was down for that hour. However clearly the whole thing is set up for a long buy but Laguerre and MACD are really high so i thought there might be a reversal? How exactly should we judge the long term trend?

Also do you trade live on a chatroom because it would be great if I could talk to an experienced head while making a judgement on a trade if not would you be ok to talk live somehow?

Again much appreciated this is all helping me towards understanding the system.
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  • #2,710
  • Mar 2, 2009 9:36am Mar 2, 2009 9:36am
Quoting Pipinaintez
Hi again Pilatus,

When you say that a certain price breaking and then becoming a strong support, this is not an example here is it? If I were to get a signal long later today below the thick brown line you would not take it because it is not strong support?

So if I get another long signal it will be risky? Is this correct?

Thanks again for your comments.
The best way to know good s/r is to follow for few weeks some pair and analyze it, I can not say just if I see picture, but yes correct this is signal which occur after price 3 times hit resistance. So, my opinion not good to open trade.
  • #2,711
  • Mar 2, 2009 9:43am Mar 2, 2009 9:43am
Quoting Pipinaintez
Thanks Pilatus,

I was just using a generic stop loss that the wicker suggested of 20 Pips. Will this not do? i know about R/R ratio but why are the Resistance support lines so bunched together on Monday's? There would barely be any valid trade if I did not take them outside it?

Also trading in the direction of the major trend? I am not sure what this means. I have looked on the one hour USD/JPY chart (attached) and seen that there is a long trend? But what is it we are exactly looking for. Do we want to see a trend follower signal? when I looked...
Do not look on higher time frame just like that, use some time and analyze trend, use trend lines, fib and whatever helps you to judge better. Of course that is long trend....look at my pic...
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  • #2,712
  • Mar 3, 2009 1:05am Mar 3, 2009 1:05am
Quoting pilatus
Do not look on higher time frame just like that, use some time and analyze trend, use trend lines, fib and whatever helps you to judge better. Of course that is long trend....look at my pic...

My Man Pilatus,

Thanks again for all the direction.

Question for this Morning, I trade 4 Currency pairs, EUR/USD, USD/CHF, GBP/USD and USD/JPY.

Now we already established that USD/JPY is in a long/Buy position in its major trend however the other three seem to be in a short, Long and short respectively in the major trend? Is that correct?

If so at the minute on the 5 Minute time frame they are all set up in the opposite manner. Therefore if say for example I get a long on EUR/USD or a long on GBP/USD should I be looking to avoid getting into the trade?

I would have thought so especially on GBP/USD which seems to be reacting to the fact that there is an expectation that UK interest rates will be cut on Thursday. Hence the big downward movemnt yesterday. (And yes I got in to that trade but because of the morning I was having I chickened out and took profit way to early..... bad trading).

Anyway, given your advice, I think that these three currencies are in the opposite to their long term trend? I wanted to confirm with you that is correct and that there hasn't been a change or something I should be looking at because I do not know how to use trend lines or what Fib is?

Thanks again Pilatus, great talking to you it has reinvigorated my interest in the system.

Cheers
  • #2,713
  • Mar 3, 2009 3:36am Mar 3, 2009 3:36am
Quoting Pipinaintez
My Man Pilatus,

Thanks again for all the direction.

Question for this Morning, I trade 4 Currency pairs, EUR/USD, USD/CHF, GBP/USD and USD/JPY.

Now we already established that USD/JPY is in a long/Buy position in its major trend however the other three seem to be in a short, Long and short respectively in the major trend? Is that correct?

If so at the minute on the 5 Minute time frame they are all set up in the opposite manner. Therefore if say for example I get a long on EUR/USD or a long on GBP/USD should I be looking to avoid getting...
Pay much atention to currency correlations. Generally eur/usd is opposite to usd/chf or in other words, they have negative correlation about 90% all the time. But that correlation change from time to time so it is best way to calculate it. It is simple and "google" correlation to find out how to do that. So, generally correlations goes this way, EUR/USD and GBP/USD long, USD/CHF and USD/JPY short, of course vice versa. IF both of pairs goes in same direction or if some of them stall (eur/usd and usd/chf), switch to EUR/CHF there must be good move. Same is with eur/usd and gbp/usd, mostly of time they go in same direction, but if they not, take a look at EUR/GBP and see what is going there. Ok, so much about correlations.
It is hard to say do you have to enter a both trade if you get two signals for E/U long for example and U/C short. That is your choice and best thing is to enter a trade on pair which you know better or which you analyze more. But, if you do not get signal for let say E/U because lagguere did not give you chance and you know that signal should occur because all happen on some good level, switch to U/C and look there for short signal.
According to me E/U and G/U are in short trend U/C is long and U/J dont sure in long run but now long too.
Well, you MUST learn how to use fib and trend lines. There is a plenty of free stuff to learn on internet. Just go there and google it and learn. Do not implement that in this system as part of the rules, but rather as help to judge better.
Arm yourself with patience. That is very important for this system.
  • #2,714
  • Mar 3, 2009 7:08am Mar 3, 2009 7:08am
to pilatus and all

see picture attatched below, GBPUSD about to go short (i think)
what is everyones thoughts? does it look good if it sets up would you take it and what would be the SL rules as DS1 is a good 150 pips away.
Thank you
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  • #2,715
  • Mar 3, 2009 7:32am Mar 3, 2009 7:32am
Quoting Pipinaintez
to pilatus and all

see picture attatched below, GBPUSD about to go short (i think)
what is everyones thoughts? does it look good if it sets up would you take it and what would be the SL rules as DS1 is a good 150 pips away.
Thank you
Stop loss by the rules, 5 pips+spread above recent high, but that trade is not the case any more...
  • #2,716
  • Mar 3, 2009 10:44am Mar 3, 2009 10:44am
Pilatus and all

Being Pre emptive again but would it be wise to get into this trade if it sets up.

3 Factors that make me think not are

1) Big price movement all day already

2) Time of day, with London closing will there be enough volume to carry the trade

3) The expanded Guppy.

However I might just be just be jumping into a trend, what do you think, that is established. Plus Economics tells us investors will be looking to put money into safe havens i.e. The Mighty US Dollar.

Comments much appreciated.

(Watch it probably won't even set up again! http://www.forexfactory.com/images/icons/icon10.gif)
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  • #2,717
  • Mar 3, 2009 10:27pm Mar 3, 2009 10:27pm
I think you can always use your judgment to take trades, but it is not following the system. Maybe you can do better than the system at this occasion but not sure next time. Many traders fail because of inconsistency, but there are always exception, I believe.
Learning never stops...
  • #2,718
  • Mar 4, 2009 12:42am Mar 4, 2009 12:42am
Quoting Pipinaintez
Pilatus and all

Being Pre emptive again but would it be wise to get into this trade if it sets up.

3 Factors that make me think not are

1) Big price movement all day already

2) Time of day, with London closing will there be enough volume to carry the trade

3) The expanded Guppy.

However I might just be just be jumping into a trend, what do you think, that is established....
Just missed out on setting up!
  • #2,719
  • Mar 4, 2009 1:02am Mar 4, 2009 1:02am
On EUR/USD, USD/CHF, GBP/USD, and USD/JPY all is moving in direction of major trends but guppy's are very spread out.

Risky trades to get in on but then again the dollar seems to be strengthening as oil continues to fall amd investors become uncertain.

May be best to sit out just yet? Or should we be jumping onto the trend as news continues to support a dollar strengthening?

Comments appreciated

Cheers
  • #2,720
  • Mar 4, 2009 6:54am Mar 4, 2009 6:54am
Quoting Pipinaintez
On EUR/USD, USD/CHF, GBP/USD, and USD/JPY all is moving in direction of major trends but guppy's are very spread out.

Risky trades to get in on but then again the dollar seems to be strengthening as oil continues to fall amd investors become uncertain.

May be best to sit out just yet? Or should we be jumping onto the trend as news continues to support a dollar strengthening?

Comments appreciated

Cheers
Sit and relax.
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