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Tony's Two Candle trading system

  • #61
  • Jun 3, 2009 4:26am Jun 3, 2009 4:26am
How is it going dude? Any good news? When u have time come online to chat for a while!
  • #62
  • Jun 3, 2009 4:34am Jun 3, 2009 4:34am
A good short set up coming up 10:00 GMT+0 on usdjpy
  • #63
  • Jun 3, 2009 6:21am Jun 3, 2009 6:21am
I think we have to work whit this trade off:

1. Trade with high % winning trades but a bad rawal (average win / average loss) placing large stop losses
2. Trade with low % winning trades but good rawal placing small stop losses.

A solution could be to settle the stop and then calculate the target profit as: stop loss*Ratio (for instance 1.5).
In this way I will obtain a system with a good rawal and a stop that is not to small.
  • #64
  • Jun 3, 2009 6:42am Jun 3, 2009 6:42am
Quoting Alberto_Jazz
I think we have to work whit this trade off:

1. Trade with high % winning trades but a bad rawal (average win / average loss) placing large stop losses
2. Trade with low % winning trades but good rawal placing small stop losses.

A solution could be to settle the stop and then calculate the target profit as: stop loss*Ratio (for instance 1.5).
In this way I will obtain a system with a good rawal and a stop that is not to small.
Guess what ? This system has both install for you. According to tony, TP of 20 gives about 80% winning rate. Also, tony mention that we have to close the trade if it's 5 - 10 pips against us. With TP of 20 and SL of 5-10, we have both 80% chance of winning and a 2:1 RR. Fantastic isn't it ? Nothing can beat that.

  • #65
  • Jun 3, 2009 7:02am Jun 3, 2009 7:02am
Quoting forexisfx
Guess what ? This system has both install for you. According to tony, TP of 20 gives about 80% winning rate. Also, tony mention that we have to close the trade if it's 5 - 10 pips against us. With TP of 20 and SL of 5-10, we have both 80% chance of winning and a 2:1 RR. Fantastic isn't it ? Nothing can beat that.


Not so quick... I don't think you will get a 80% winning ratio with a stop as low as 5-10pips... you'll need a minimum of 20pips sl.

My suggestion on the stops: if you have a 1st candel of longer than 40 pips.. sl or exit point should be half the distance.

good luck to all.
  • #66
  • Jun 3, 2009 7:20am Jun 3, 2009 7:20am
Quoting fxachilies
Not so quick... I don't think you will get a 80% winning ratio with a stop as low as 5-10pips... you'll need a minimum of 20pips sl.
I agree. The stop is too tight to obtain 80% winning ratio.
  • #67
  • Jun 3, 2009 7:45am Jun 3, 2009 7:45am
I have just read the thread twice (short threads are great to get the gist of) and I have to say that the simplicity of this system could make it successful

Far to many of you are asking questions that have been answered. In comparison to alot of threads that involve rediculous indicators and rules to trade, this could be read, understood and traded by a teenager.

Re read the thread until you a perfectly clear on how it works Then try it for a while. It is a simple hour by hour trade that requires nothing more than a candle followed by another candle. If it is in the right direction trade, if not dont trade, if your not comfortable with it, get a cup of coffee, put your feet up and relax.

Far to many of you want answers before your prepared to look for them. The answers are on the first few pages.

Nice work BTW
  • #68
  • Jun 3, 2009 8:13am Jun 3, 2009 8:13am
Quoting Alberto_Jazz
I agree. The stop is too tight to obtain 80% winning ratio.
Whilst the SL is a little tight, it does also allow a trader to get better R/R returns. Im not going to pretend I trade this method, I just like it for its simplicity, however I trade IBs. Some of the best IBs (Inside Bars) have had a pip range of 8-16 pips. Sure there are times you get stopped out, thats part of trading, however the chances to run 1:1 are greater giving you choices to take partial profits and allow trades to run. Whether traders adopt some of there own thinking to these simple methods is up to them. So in that case if your SL is tight, sure 80% may be a bit rich, you wont know till youve tried it, but how you manage your trade is the key.

Win rate is only relative in situations where traders only take 1:1 or 1:2 R/R, if traders have patience and do string some 1:5s or better, then a lower Win rate can still equate to Positive growth.
  • #69
  • Jun 3, 2009 8:40am Jun 3, 2009 8:40am
TD,

Follow up question to this example. So we take a loss of say 10 pips. Then the price starting to go back into bull territory by 5 pips again beyond the previous candle, do we enter again? Or just wait for the next set up?

Quoting tony_dtrader
Lets take an example.

candle 1 is a bear, candle 2 is a bull... so we wait to see if candle 3 forms into a bull by 5pips. Then we enter the trade and it should start moving rightaway, if it doesn't and starts to move 5-10 pips against you, thats a alert that you may need to exit the trade since its not moving that well.

Vice versa for bear, candle...
  • #70
  • Jun 3, 2009 9:40am Jun 3, 2009 9:40am
Quoting SeaPip
TD,

Follow up question to this example. So we take a loss of say 10 pips. Then the price starting to go back into bull territory by 5 pips again beyond the previous candle, do we enter again? Or just wait for the next set up?
If the stop is tight I think it's better to enter again.
  • #71
  • Jun 3, 2009 10:06am Jun 3, 2009 10:06am
Hi all. new trader so be gentle, was just wondering would Helkin-Ashi candles be better for taking a trade off..

All the best from Ireland..
Danny.
  • #72
  • Jun 3, 2009 10:08am Jun 3, 2009 10:08am
Is there any indi to spot 2 different candle colors like with sound? i mean it forms a bull and a bear candle and it beeps and vice versa so we could leave the pc and come when it beeps...
  • #73
  • Jun 3, 2009 11:11am Jun 3, 2009 11:11am
hi,

we have a bull candle and the next candle moved up 5 pips. Does that mean

we have an entry to go long?
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  • #74
  • Jun 3, 2009 11:15am Jun 3, 2009 11:15am
Quoting tony_dtrader
I trade only the usdjpy mostly with this, sometimes eurjpy. Haven't tried it on other pairs since their too volatile and would move 20-30 pip against me many times, which is too risky for me.
Here is USDJPY with very simple rules and h1 (please confirm if I understood the first post correctly) I don't have long m1 data for usdjpy so this is not as reliable as it should be.

Bull candle: previous candle must be a "good" bull candle, open is at lower 25% of the candle and close is at upper 25% of the candle. Vice versa for bear candles.

I enter at new bar open + (- for shorts) 10 pips (with buy/sell stop) and target 20 pips (with tp). Stop loss is always at previous candle low.

Note that I don't use any indicators here, just the rules from the first post.

H1 Curve below:
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  • #75
  • Jun 3, 2009 11:17am Jun 3, 2009 11:17am
This version closes at the end of next candle

Note that this data is from short period (begin of 2008 to today) and therefore could be statistically irrelevant. Every trade is set to 2% risk.
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  • #76
  • Jun 3, 2009 11:24am Jun 3, 2009 11:24am
Quoting mikkom
Here is USDJPY with very simple rules and h1 (please confirm if I understood the first post correctly) I don't have long m1 data for usdjpy so this is not as reliable as it should be.

Bull candle: previous candle must be a "good" bull candle, open is at lower 25% of the candle and close is at upper 25% of the candle. Vice versa for bear candles.

I enter at new bar open + (- for shorts) 10 pips (with buy/sell stop) and target 20 pips (with tp). Stop loss is always at previous candle low.

Note that I don't use any indicators here,...
For me the rules were
for long:
-down candle
-then up candle (without 25% rule)
-next candle we enter if it goes up too

so we try to trade swings
  • #77
  • Jun 3, 2009 11:28am Jun 3, 2009 11:28am
Quoting Dezil
For me the rules were
for long:
-down candle
-then up candle (without 25% rule)
-next candle we enter if it goes up too

so we try to trade swings
The point of 25% rule was to target the "best" bull candles to see if there is potential in the "best" setups of this system.

Here are the results for the above rules (down candle, up candle, stop at +-5 from open and 20 pips tp)

If a tp is not hit during the candle, position is closed at the next candle open.
Attached Image (click to enlarge)
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  • #78
  • Jun 3, 2009 12:06pm Jun 3, 2009 12:06pm
Quoting rare
Is there any indi to spot 2 different candle colors like with sound? i mean it forms a bull and a bear candle and it beeps and vice versa so we could leave the pc and come when it beeps...
Everything readymade boss
  • #79
  • Jun 3, 2009 12:09pm Jun 3, 2009 12:09pm
Quoting mikkom
Here is USDJPY with very simple rules and h1 (please confirm if I understood the first post correctly) I don't have long m1 data for usdjpy so this is not as reliable as it should be.

Bull candle: previous candle must be a "good" bull candle, open is at lower 25% of the candle and close is at upper 25% of the candle. Vice versa for bear candles.

I enter at new bar open + (- for shorts) 10 pips (with buy/sell stop) and target 20 pips (with tp). Stop loss is always at previous candle low.

Note that I don't use any indicators here, just...
what u trying to prove? The man said no Ea's just use your wisdom
  • #80
  • Jun 3, 2009 12:45pm Jun 3, 2009 12:45pm
Quoting Razor_trader
I have just read the thread twice (short threads are great to get the gist of) and I have to say that the simplicity of this system could make it successful

Far to many of you are asking questions that have been answered. In comparison to alot of threads that involve rediculous indicators and rules to trade, this could be read, understood and traded by a teenager.

Re read the thread until you a perfectly clear on how it works Then try it for a while. It is a simple hour by hour trade that requires nothing more than a candle followed by another...

Razor you have to understand simple doesn't necessarily mean long term profitable. Sure its simple and its very large hearted of Tony to post it and yes I assume he's been profitable with it thats why he's posting it but for how long has he been trading it? To even consider trading a system its very important to back test to see how its done in the past more importantly the immediate past. How do you know its not a lucky streak?

I agree that far too many people want answers before they are prepared to look for them but unfortunately none of the answers we want are on the first few pages as the method hasn't been traded long term by tony.

I'm just trying to say simple doesn't necessarily mean long term profitable.
It has to be tested and even though I know its subjective. How can you say "simplicity of this sytem could make it successful" as far as I know there's no relationship between simplicity and success in the trading world. Complicated systems like fuzzy logic and neuroshell systems can be just as successful as simple breakout ones.
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