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Odds are with a 4hr KISS

  • #41
  • Mar 22, 2010 8:40pm Mar 22, 2010 8:40pm
Quoting jackdaniel
Hi Tw0Eleven,

Thanks for sharing your strategy.
Is this a valid entry on this USDCHF chart? I entered just below the crossover of the 5 and 20mas.

Thanks.

PS.: Added the image as an attachment. Hope it works.
Hi Jack Daniel,

To be honest, I've never traded this method on the USDCHF pair. So I'm not sure how well it works on that pair. But as far as your analysis...it looks pretty good. You had a nice bearish engulfing candles where price touched/bounced off the 200ma. And the 5/20ma crossed down AND you spotted Divergence on the macd histogram. So nice work on that. However, there are a couple things that stick out to me: 1) that bearish engulfing candle is nearly 100pips big...so right away you are risking a lot on that trade...I hope you traded a little lighter than normal. 2) price is technically still trending up because it's making HigherHighs and HigherLows...so you'll want to watch this carefully. Perhaps draw a trendline in there.

All in all...not a bad trade. I just see a couple things that could cause price to go up as well as down. So just keep monitorin it...if price closes back above the ma's and/or the ma's cross back up and/or macd starts going higher again...perhaps get out of the trade? Goodluck and thanks for posting your chart!
  • #42
  • Mar 22, 2010 8:45pm Mar 22, 2010 8:45pm
Quoting TheGreatMilenko
I apologise if this question has already been answered, but what do you use the 200ema for?
Good question, no one has asked it so far. I basically keep the 200ema on my charts to see possible turning points on price action. I can't recall off the top of my head exactly, but I believe the 200ma was voted the most useful indicator in forex. Gives a good idea of which way price is trending overall. Also, you'll see a lot of times price likes to go up to and touch or get close to the 200 only to be rejected pretty well. Could help you look to get into a trade if you see the other entry criteria as well. Also, if I see price hanging around the 200ma...and/or the 5&20 ma going up and down around the 200...i tend to stay away from the market because it's usually choppy. I like to see price moving away from the 200 usually meaning we are getting into a trend again...which is very helpful and profitable with this method.

Hope that clears up things and let me know if you have any more questions.
  • #43
  • Mar 22, 2010 8:47pm Mar 22, 2010 8:47pm
Quoting Tw0eleven
Good question, no one has asked it so far....
Yes that clears it up. Thank you for taking the time to answer.
  • #44
  • Mar 22, 2010 9:48pm Mar 22, 2010 9:48pm
Quoting Tw0eleven
...Also, you have a couple things workin in your favor: 1) the price would have to reverse against the currnet trend which isn't always easy 2) price would have to fight it's way back through the Movings Averages, also not always easy to do and 3) Since you are trading the 4hr charts, it usually takes a while for macd to turn around...another not so easy thing to do.
You know, when I first read about your strategy, the "scary" part was about money management - target 50 pips but with an emergency stop of 200 pips and manual exit upon a candle in the opposite direction. Yet this is also pretty innovative and is something which I haven't quite heard about before.

I can see the advantages of this exit method - avoid being stopped out prematurely because of market noise or stop hunting.

Now after reading the above comments you made in post #31, it appears to me that this strategy is not so scary after all.
  • #45
  • Mar 23, 2010 1:04am Mar 23, 2010 1:04am
Quoting TheGreatMilenko
Yes that clears it up. Thank you for taking the time to answer.
Anytime...Happy Trading!!!


Quoting fthingf
You know, when I first read about your strategy, the "scary" part was about money management - target 50 pips but with an emergency stop of 200 pips and manual exit upon a candle in the opposite direction. Yet this is also pretty innovative and is something which I haven't quite heard about before.

I can see the advantages of this exit method - avoid being stopped out prematurely because of market noise or stop hunting.

Now after reading the above comments you made in post #31, it appears to me that this strategy is not so scary after all....
Yes, the 200pip emergency stoploss is scary to most. But imho, it rarely gets hit if you 1) follow the guidelines of this system and 2) definitely don't trade during major news releases like NonFarmPayroll or Interest Rates, etc... If you see you entered a bad trade or get out of a good trade when it goes against you, then your actual loss is typically 50pips or less. Cheers!
  • #46
  • Mar 23, 2010 7:39am Mar 23, 2010 7:39am
Quoting jackdaniel
Hi Tw0Eleven,

Thanks for sharing your strategy.
Is this a valid entry on this USDCHF chart? I entered just below the crossover of the 5 and 20mas.

Thanks.

PS.: Added the image as an attachment. Hope it works.
Good morning sir,

I just wanted to follow up on your trade. I just looked at the charts and it appear that price did go higher and close above the 5&20ma's. So hopefully you closed and took the small loss. I say small, bc it looks like your entry should have been about 1.0580 and exit about 1.0605 plus spread...net loss of about 25-30pips. Not too big...1 winning trade could easily make that up.

Although it was a loss, hopefully you got some experience out of it! Cheers!
  • #47
  • Mar 23, 2010 10:45am Mar 23, 2010 10:45am
Quoting Tw0eleven
Good morning sir,

I just wanted to follow up on your trade. I just looked at the charts and it appear that price did go higher and close above the 5&20ma's. So hopefully you closed and took the small loss. I say small, bc it looks like your entry should have been about 1.0580 and exit about 1.0605 plus spread...net loss of about 25-30pips. Not too big...1 winning trade could easily make that up.

Although it was a loss, hopefully you got some experience out of it! Cheers!
Hi Tw0Eleven,

It was a demo account so no worries there. I closed it as soon as you said to close if the price had closed above the averages. Thanks for the input.
  • #48
  • Mar 23, 2010 11:04am Mar 23, 2010 11:04am
Quoting jackdaniel
Hi Tw0Eleven,

It was a demo account so no worries there. I closed it as soon as you said to close if the price had closed above the averages. Thanks for the input.

Cool...glad to see you testing a new system out on a demo first. No need to risk money on any type of system if it's new to you.

Also, for anyone else reading this thread...I only look at/trade this method on GU, EU, EJ, GJ, AU, UCad.
  • #49
  • Mar 23, 2010 8:53pm Mar 23, 2010 8:53pm
Not much going on at the beginning of this week...maybe they are saving it for the second half. Time to practice some patience...let the trades come to you!
  • #50
  • Mar 23, 2010 11:47pm Mar 23, 2010 11:47pm
Hi Tw0eleven, I actaully found an entry signal on AUD/USD. Not sure if my reasonings are correct:

1. Price is making higher low and higher high
2. A bullish pin bar closed above both 5 and 20 ema
3. 5 ema has just crossed the 20
4. MACD is sloping up to flat

However I was sleeping when the signal candle appeared, so I wait until the close of the next candle. Although it's a bearish candle, it still closed
above both the 5 and 20 ema and best part is it gave me a better entry (around 0.9183)!

The price seems not going anywhere since then. Will see how it goes...
Attached Image (click to enlarge)
Click to Enlarge Name: audusd_h4.jpg Size: 101 KB
  • #51
  • Mar 24, 2010 6:18am Mar 24, 2010 6:18am
Quoting fthingf
Hi Tw0eleven, I actaully found an entry signal on AUD/USD. Not sure if my reasonings are correct:

1. Price is making higher low and higher high
2. A bullish pin bar closed above both 5 and 20 ema
3. 5 ema has just crossed the 20
4. MACD is sloping up to flat

However I was sleeping when the signal candle appeared, so I wait until the close of the next candle. Although it's a bearish candle, it still closed
above both the 5 and 20 ema and best part is it gave me a better entry (around 0.9183)!

The price seems not going anywhere since then. Will...

Nice chart and yes, it seems to fit all the guidelines. Unfortunately some report come out last night where Portugal had it's credit rating downgraded and that killed the Euro...and brought down some other pairs as well( Dollar strength). So I'm assuming you exited your trade about 2 candles later when price closed below 5&20ma and the 5/20 were crossing back down. Looks like you may have lost about 20-25pips??? Not the profit we were looking for...but also not a big loss either! Good work on the chart reading...too bad some unexpected news may have ruined the trade
  • #52
  • Mar 24, 2010 7:49am Mar 24, 2010 7:49am
Quoting Tw0eleven
Nice chart and yes, it seems to fit all the guidelines. Unfortunately some report come out last night where Portugal had it's credit rating downgraded and that killed the Euro...and brought down some other pairs as well( Dollar strength). So I'm assuming you exited your trade about 2 candles later when price closed below 5&20ma and the 5/20 were crossing back down. Looks like you may have lost about 20-25pips??? Not the profit we were looking for...but also not a big loss either! Good work on the chart reading...too bad some unexpected news may...
Yes I exited at 0800 GMT as you mentioned, for a loss of 18 pips. A good practicing exercise though. Well unexpected things do happen, will just look for the next opportunity!
  • #53
  • Mar 24, 2010 7:56am Mar 24, 2010 7:56am
fthingf,

that's normally what i do, i wait for the next bar to pull back to the ma's, i use 21, but no biggie. it appears to do it most of the time. if it doesn't, the move is suspect to me.

it also minimizes the risk when i exit on the close on the wrong side. here again, if it doesn't break the low of the close on the wrong side, i exit on the touch of the ma's and if it looks like a reversal, i'll reverse.

Scottie
  • #54
  • Mar 24, 2010 8:01am Mar 24, 2010 8:01am
ok, guys,

here is a possible trade setup on ej, have to see where it closes in 3 hours and then i'll wait for the pullback.

the other reason i'm interested in this is the eu looks like capitulation to me and could bounce a bit, pushing ej higher.

i'll reanalize this in 3 hours. this is a very slow system, with h4. keep in mind the other pairs have to give you a reason to take the trade or its a no go.

if i decide to pull the trigger, though, i do not hesitate.

Scottie
  • #55
  • Mar 24, 2010 8:15am Mar 24, 2010 8:15am
Quoting fthingf
Yes I exited at 0800 GMT as you mentioned, for a loss of 18 pips. A good practicing exercise though. Well unexpected things do happen, will just look for the next opportunity!
Exactly! The sooner traders can understand that they will have losses, nothing is 100% in forex and how to deal with the losses...the sooner they are to their goals! Cheers!
  • #56
  • Mar 24, 2010 9:14am Mar 24, 2010 9:14am
Hi Scottie, just want to clarify your points.

Quoting Scottie
fthingf,

that's normally what i do, i wait for the next bar to pull back to the ma's, i use 21, but no biggie. it appears to do it most of the time. if it doesn't, the move is suspect to me.
Are you referring to entry here? I'm assuming that once there's an entry signal, you'll not enter at the opening price of the next candle, but wait for price to pull back to the 21 first?

Quote
it also minimizes the risk when i exit on the close on the wrong side. here again, if it doesn't break the low of the close on the wrong side, i exit on the touch of the ma's and if it looks like a reversal, i'll reverse.

Do you mean when there's an exit signal, you'll again wait for price to pull back to the 21 instead of closing right away? Thanks.
  • #57
  • Mar 24, 2010 9:29am Mar 24, 2010 9:29am
Quoting fthingf
Hi Scottie, just want to clarify your points.



Are you referring to entry here? I'm assuming that once there's an entry signal, you'll not enter at the opening price of the next candle, but wait for price to pull back to the 21 first?



Do you mean when there's an exit signal, you'll again wait for price to pull back to the 21 instead of closing right away? Thanks.
yes to both,

if i get a signal long here on ej, i will wait for the pullback and then pounce.

but on the exit, if i can wait to the ma's i will but its not always possible
  • #58
  • Mar 24, 2010 1:46pm Mar 24, 2010 1:46pm
apparently, i missed the pullback since my charts now close at 11 central instead of 10 central. will wait for next one.
it will happen no matter what time it is just that if i like to trade the us session, i'd prefer if my charts shifted with the time change.
  • #59
  • Mar 25, 2010 6:18am Mar 25, 2010 6:18am
Quoting Scottie
apparently, i missed the pullback since my charts now close at 11 central instead of 10 central. will wait for next one.
it will happen no matter what time it is just that if i like to trade the us session, i'd prefer if my charts shifted with the time change.
Hey Scottie,

Did you happen to enter on the EJ pullback last night? I see it went right to the 20ma, stalled and then went up over 80pips so far!!! Easily was a low risk, 50pip winning trade! Hope you got it.
  • #60
  • Mar 25, 2010 8:12am Mar 25, 2010 8:12am
Quoting Tw0eleven
Hey Scottie,

Did you happen to enter on the EJ pullback last night? I see it went right to the 20ma, stalled and then went up over 80pips so far!!! Easily was a low risk, 50pip winning trade! Hope you got it.
Hi Tw0eleven, I saw that pullback too. But at the same time the 5ema was crossing back to the 20 and the MACD was sloping down, so I decided to skip.

I was thinking to enter after the last bullish candle, but again the candle size seems a bit large (>60 pips)....
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