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Bringing Down the Forex House

  • #61
  • Nov 23, 2009 6:32am Nov 23, 2009 6:32am
This pre NY open Eg trade paid 22 pips from entry from 21H down to the 00 psycho level where price has stalled before.

This stuff works!

Steve
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  • #62
  • Nov 23, 2009 8:21am Nov 23, 2009 8:21am
Quoting kostas1
Madness,

Can we focus on the with-trend trading a little more before moving to CT? I am still trying to figure out when to get in/out of the trades. Here's one idea that I would like your comments.

Example for short trade using your previous chart (look only the light blue color on top chart for my with-trend entry/exit)
1. BB turns red on 30m.
2. Waiting for 5m to close below MA-Low and enter on the open of the next 5m candle with SL at the BB
3. Exit when 5m closes above MA-High.

Kostas1,

I will be focusing much more on trend trading this week, just wanted to let everyone know that there was a CT as well as trend following with this strategy.

Looking over your example and your explanation, you seem to have it PERFECT! that is exactly how i trade this during a trend.

GREAT JOB!

MADNESS
  • #63
  • Nov 23, 2009 8:23am Nov 23, 2009 8:23am
Quoting Porkpie
Interesting method. Similar to Joe Ross Camel Back method (he uses 40ema tunnel).

I like the use of the two time frames which helps to filter out some of the noise. However, I think your entry would be more enhanced by considering using a Traders Trick entry (google Joe Ross Law of Charts -its free), as a lot of times in a strong trend price will not pull back to the ema tunnel (for multiple entries throughout a trade).

Deeper pull backs on the other hand, could be enhanced by placing your entries at the low of the cluster of candles at the...
Porkpie,

Thanks for sharing some of your expertise...i will be looking into the trade trick entry sometime this week, sounds very promising!

Thanks for the alert as well.

MADNESS
  • #64
  • Nov 23, 2009 8:56am Nov 23, 2009 8:56am
TREND TRADING!
Ok, here is an example of some good trend following trades in the EUR/USD today.

You will notice on the 30M chart that price was slowing and making higher highs and price was ranging between the HiLo MAs showing us that the downtrend was fading. Once we get a Green BBand on the 30M, lights should go off in our head that we can not short this market.

Now you should be looking at the 5M chart we will be looking for entries, usually waiting for the price action to enter the MAs before getting long. With these scalps i usually look for a decent move, usually 15+ pips on a trade, depending on my stop (if you happen to get stopped out twice, you should be able to tell that this trending market is very trendy and you should re-consider our sentiment).

Take a look at the chart for more details.

MADNESS

ps. you will see that there was really no price exhaustion in the EUR/USD on the 30M chart to have us exit our longs and be shorting off the 5M chart (counter trend).
Attached Image (click to enlarge)
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  • #65
  • Nov 23, 2009 9:08am Nov 23, 2009 9:08am
TREND TRADING (CONTD)!

There are two different ways that i usually trade with the trend:

1. Just like i posted above, just take 1 trade at a time for quick scalps off the 5M charts.

2. I scale into the position using the 5M chart for entries with my SL following the BBand on the 30M chart. I only usually do this if i believe a pair is more likely to retrace/trend a good amount (ex. when a pair shoots up about 1000+pips on the daily chart and i believe there is a great risk reward trade).

Both are great strategies, but withe the 30M chart you will have be able to check the chart around the clock and once the deck starts cooling you should start exiting some of the positions keeping the hard stop loss at the BBand.

MADNESS
  • #66
  • Nov 23, 2009 9:23am Nov 23, 2009 9:23am
TREND TRADING-PSYCHOLOGY (CONTD)!

There is 1 major flaw in every traders mentality when entering a trending market; fear. So in the case of trend following, most traders will not get into a market that is in a middle of a trend just bc they FEAR they will be getting in near the top of the market and take a major loss. This is perfectly normal for traders and it can be overcome by trading less units so they feel comfortable entering the trade. This is a great strategy but i've even had some problems clicking the mouse when the EUR/USD is making new highs to get long. But you must be able to do it, think logically without emotion!! This is a major part of why this strategy works, 90% of traders out there sitting at their computers will not be able to make the correct decision at the correct time bc of fear...once you know that, you should have the confidence to do it!

If you think your emotions are too wild, trade less or just take the counter trend trade when the deck starts cooling. My advice is to always know that 'you don't know where the market is heading, you are just playing the strategy...leave paranoia and fear out of your thinking.'

much easier said then done...

MADNESS
  • #67
  • Nov 23, 2009 10:01am Nov 23, 2009 10:01am
Quoting stevewide
This pre NY open Eg trade paid 22 pips from entry from 21H down to the 00 psycho level where price has stalled before.

This stuff works!

Steve
Steve,

Great to see your exploring ways to take down the forex house!



MADNESS
  • #68
  • Nov 23, 2009 10:08am Nov 23, 2009 10:08am
Madness,

thank you for sharing this strategy with us.

After reading all very carefully i am not sure where to put the SL.

Maybe i summarize in some words what i understand how the system works so far and you can correct it, if i am wrong.

-----

Long Setup (Short vice versa)

30 Min Chart:
Looking for a trend, is the deck getting hot? (Price abouve both SMA´s and heading upwards).

then:

5 Min Chart:
Entering the market when price moves to the middle of both SMA´s or the beginning of a Bollinger Band ??


SL: Trailing with the BB on the 5 Min Chart? Or maybe BB on 30 Min Chart if possibility of retracements and longer trading than scalping?


Keep on the good work!
j0ker
  • #69
  • Nov 23, 2009 10:59am Nov 23, 2009 10:59am
Hi Madness, I am trying to understand the significance of the BB bands and their use. I understand how you use them but sill can't find that they hold much value. I am not an indicator fan tbh especially when I don't know how they are claculated. Do you know? I googled it but found nothing.

Nice thread by the way. You sound like a well rounded trader.

Regards
PP
  • #70
  • Nov 23, 2009 11:55am Nov 23, 2009 11:55am
[quote=Porkpie;3254094]Hi Madness, I am trying to understand the significance of the BB bands and their use. I understand how you use them but sill can't find that they hold much value.
Porkpie:
Try Googling them again. There is all kinds of stuff on google on the bands.
  • #71
  • Nov 23, 2009 11:56am Nov 23, 2009 11:56am
Quoting Porkpie
Hi Madness, I am trying to understand the significance of the BB bands and their use. I understand how you use them but sill can't find that they hold much value. I am not an indicator fan tbh especially when I don't know how they are claculated. Do you know? I googled it but found nothing.

Nice thread by the way. You sound like a well rounded trader.

Regards
PP
A new signal of the BBands appears when price closes outside the other band of the Bollinger Bands indicator.
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  • #72
  • Nov 23, 2009 12:16pm Nov 23, 2009 12:16pm
Quoting Porkpie
Hi Madness, I am trying to understand the significance of the BB bands and their use. I understand how you use them but sill can't find that they hold much value. I am not an indicator fan tbh especially when I don't know how they are claculated. Do you know? I googled it but found nothing.

Nice thread by the way. You sound like a well rounded trader.

Regards
PP
It occurred to e after writing my last post that you might be asking about the BB Stop indicator found in this thread rather than the bands themselves. If you put a standard BB indicator on a chart (Included with all MT4) and then open the BB indicator found on this thread and set the period to 20 you will see both indicators coincide. The BB itself does not let you know other than visually when the price hits the opposite band but the indicator will by reversing. Hope this helps. This is a very handy tool.
  • #73
  • Nov 23, 2009 1:25pm Nov 23, 2009 1:25pm
[quote=Jollyroger;3254195]
Quoting Porkpie
Hi Madness, I am trying to understand the significance of the BB bands and their use. I understand how you use them but sill can't find that they hold much value.
Porkpie:
Try Googling them again. There is all kinds of stuff on google on the bands.
Thanks Jolly. Didn't realise they were part of the Bollinger family It lags so no use whatsoever especially when you already have the 21 ma tunnel! Just my opinion but if it works for you as a visual aid then that's great.
  • #74
  • Nov 23, 2009 5:34pm Nov 23, 2009 5:34pm
Hi,

I followed the rules for my last trade, but it didn't work out. I was quite confident because price was on the short side of low MA on the 30 min chart. I switched to 5 min and entered short on the signal of bband. Shortly after, a long signal of bband appeared, so I closed the trade with -8 pips loss. Maybe I should have stayed in the trade with the original stop loss at the first bband dot, I don't know. Next time I will wait till more volume is involved (Asian - Londin - NY sessions).

Chamane

http://i48.tinypic.com/2v9r9xg.gif
http://i46.tinypic.com/rcniw2.gif
  • #75
  • Nov 23, 2009 6:19pm Nov 23, 2009 6:19pm
Chamane:
With your stop loss behind the 30m Bband you'll be profitable now with this trade. So you had a good trade but bad stoploss.

been there, done that...we all have.

Steve
  • #76
  • Nov 23, 2009 6:32pm Nov 23, 2009 6:32pm
Quoting stevewide
Chamane:
With your stop loss behind the 30m Bband you'll be profitable now with this trade. So you had a good trade but bad stoploss.

been there, done that...we all have.

Steve
Yes, and even with the original bband stop loss on the 5 min chart, I would have made some pips. Price started to move with the opening of Asian session and increased volume. Another lesson for me.

Chamane
  • #77
  • Nov 24, 2009 9:13am Nov 24, 2009 9:13am
Lesson #2. Always check the news wich I didn't. My entry was good, but got stopped out.

http://i50.tinypic.com/2hs7qxy.gif
  • #78
  • Nov 24, 2009 10:04am Nov 24, 2009 10:04am
Yep you have to keep an eye on the news
  • #79
  • Nov 24, 2009 11:55am Nov 24, 2009 11:55am
Hi Madness,

What trades did you do today
  • #80
  • Nov 25, 2009 8:27am Nov 25, 2009 8:27am
Good morning traders,

Sorry for the delay in posting, busy week at my household...haven't traded much this week due to the holidays and me being quite busy. But i have been looking over charts, and some interesting stuff this week...especially yesterday, a completely sideways market.

i will be posting some more charts and explanations today.

MADNESS
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