Tony's Two Candle trading system

Hi Tony, we have almost the same idea...
long time ago I create a method name "SK Mode"...
but it use daily candlestick and assume if previous daily candlestick is bear, then the next candlestick is bear too..
but my entry is fix and only trade after 00:30 candlestick time using TF m30 for viewing..

anyway, I like your idea...

I just found this thread yesterday, read through it all and I'm demoing right now.

I'm going to start off with a simple 10TP and 20SL using Tony's rules, I'll adjust if need be later and I'll report back my findings.

Hi Tony do you alll use the one hour time frame?

Hey Tony thanks I just like to acknowledge you for share a simple systems that reminds us that this business can be as simple or as complex as one choose to makes it. This is a Jewel.

For the man who never make mistakes usually work for the man who do.

I recently found this thread and I like the simplicity of it. It's a shame that the thread has died because, this seems to be one of the better systems.

Does anybody use Tony's template, on the 1 min chart, with the 1 hour overlay? If so, does it slow your PC down quite a lot? It does with mine. Regardless of that it seems to work quite well.

Many thanks Tony for your generosity in providing this simple and hopefully profitable method of trading. I'm still rereading this thread and still putting together what the consensus or verdict is as to whether this is a consistent winning strategy. I sincerely wish it has proven to be and request others to please keep this thread alive with your feedback, especially if you have been using this method. Thank you in advance for any replies.
John

Oddly, pennfx this system seems to work, if you are very careful. If a one hour bar moves fairly strongly, it stands to reason that there should be sufficient momentum to continue another 10 20 pips, unless of course, a support, resistace level or pivot gets in the way.

I have been trading this system live for a week or so, about 10 winners, and only one loss.

Shakey

How big SL do you guys use?
thanks

Thanks Shakey for your reply and glad to hear you've had good initial results. Do you use other indicators or tweaked this system other then what Tony has outlined, for instance do you use one minute chart to see momentum, and do you enter at 5 pips or wait a little longer? Appreciate it and best wishes to you.

hey, hoichoi

At the time of candle close, I set pending entry for 4 pips above/below close price (if it is long, add the spread, since trade will open at the ask line)

I start at 20 pip stop, but that is only temporary to avoid disaster. If I am in front of the screen and trade opens, I start moving the stop down a few pips at a time as the price moves in my favor.

I set target at 20, but if in front of screen, usually close trade myself if price seems to stall anywhere along the way.

often, begin to manually trail stop when profit reaches 8-10 pips but usually only score a few pips that way.

The big problem with this way is this. . . taking so many tiny profits, will almost inevitably cause loss of all profits with just one or two 20 pip losses. Even a success rate of 90% will be mostly wiped out with one 15 or 20 pip loss

One GOOD thing about this system: many of your losers NEVER EVEN OPEN, thus avoid loss.

Sometimes the best trade is to not trade at all.

Shakey

The minute chart has always been too quick for me to digest. I mostly flip back to the 5 min. There will possibly be up to 12 5 min candles during your trade period.

Pretty much watch to see if POSSIBLE reversal candle is happing, like a hammer/shooting star forming, or possible higher high, lower low.

This is dicey, because you will have to close trade before complete pattern is formed, and therefore, might leave a lot of money on the table/

IT MAY BE JUST AS WELL TO SET UP THE TRADE, LET IT OPEN, IGNORE IT, CLOSE IT AFTER AN HOUR (if it hasn't stopped or reached it's target already) AND TAKE YOUR PROFIT/LOSS.

Despite early success, I have doubts about the system, and whether a person can be consistent enough with having to manipulate so much for so long.

I do use a couple of filters, which I can tell you about later when have time.

Shakey

Hi all

Why not trading only the first H1 Candle of the European or US market open?

The European session starts with the Frankfurt open, 1 hour befor London opens.

Thanks again Shakey for your review. It does seem like a tough way to grind out some pips and it appears the risk to reward is not too great if shooting for 10-20 pips.

I would greatly appreciate you posting what filters you use and then I'll give it a try and post my results here.

Be well.

Have a look at this guys, might be of interest to you, clear entry and exit rules at the end.

Gez

Here is a sample pic, Sorry, I didn't have a sample of actual trade, so I admit that this example is cherry picked.

I like the basic concept of this system. Tony has put a lot of time and study into this system, and appreciate him putting out there for us

Basically, I have had some success adding these indicators, though I am usually not an idicator junkie.

The pivots and currency meter can be found http://www.forexfactory.com/showthread.php?t=219398 , or at least links to them.

A word about the currency meter: I will not discuss this meter, nor include a link directly to it. You can find a discussion of it at the link provided above.

1. add 5 moving average to chart. The signal candle should cut across the 5 ma. Usually, the price will challenge the 5 ma, at some point, before continuing the long/short move.

2. Add the 34 MA to chart. If price is above 34, take only long, below only short (Ignore the fact that in my example, the trade happens on an MA cross, This is just a coincidence) (It just now dawned on me that an MA cross might be a good additional filter).

3. Note that signal candle has short wick. May indicate good momentum. Also a pinbar makes a good signal candle.

4. I have been moving stop to break even at 6 pips profit.

5. Nearby Pivots and round numbers make good targets, if you are insecure about the 10 or 20 pip targes that are recommended.

6. on currency meter, Note that USD is stronger than JPY.

I have also had some luck with this on the AU and UCad pairs during the european session.

If profits taken are too small, one 20 pip stoploss can wipe out a day's work in a flash. I have made a little profit from it over all, but I have a tendency to micro manage.

Hope some of this helps, and hope Tony doesn't feel I have screwed up his system.

Shakey

Hi all,

I am about to test live the following which is very similar to tonys system with a few changes, take a look (unable to upload pics at present so will discribe the best i can.

1/ open up a 15min chart with candles only. (get rid of all clutter eg graph lines )

2/ add a 5 / 8ma crossover indicator with alert (change 5 & 8 to 1 & 2) (search FF and you will find )this will only add directional arrows no lines)

And there you have it - go back in history and just LOOK !!!

My Additions are :

Entry = instantly as new bar opens.
Exit = ATR or close of next candle.
SL = High or low of last candle.

I think you should be able to make an average of 15 pips per trade with a better win lose ratio.

I also think using the 1hr Time frame tonys is using could be more profitable if using the ATR as above.

Thanks
Hope this helps !!!!!!!!!!

Thanks, nightpipper. This looks very promising.

Can you post the 5/8 ma crossover indicator that you use?

Thanks, in anticipation.

here ya go....remember to set ma`s to 1/2

WOW !! Thanks for your very fast and helpful response, cjd.

You're a star .....

no real need for the crossover indicator. I've put it on my 15min EURUSD chart and it just put's arrows on nearly every bar, a lot of them wrong.