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Odds are with a 4hr KISS

  • #61
  • Mar 25, 2010 6:31am Mar 25, 2010 6:31am
Quoting fthingf
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)....
Well, definitely nothing wrong with skipping a trade(can't hurt your account). It's a shame MACD was sloping down or it would have been a Great Setup! Here's one of those situations where some traders would take the trade and some skip it...and that's my main reason for not posting any results on my account! My account means nothing to all other traders because we all take/skip trades for our own reasons.

I also agree with you skipping entering the trade after the big bullish candle...way too much risk! Not until a trader gets REALLY comfortable with their trading style and method should you consider taking trades on bigger candles...and IF you do, at a smaller lot size.

Keep up the good work fthingf...seems like you are doing great! I hope we get some more traders like you in here so we can have more discussions. Also hope we get some good action next week since this week was REALLy slow!
  • #62
  • Mar 29, 2010 3:21am Mar 29, 2010 3:21am
Tw0eleven, just got my first successful trade on EUR/USD! The signal appeared at 0400 GMT. It's a small bullish pin, with 5ema cross above 20ema and MACD sloping up. Exit at the very next candle with 50 pips. A good start for the week!
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  • #63
  • Mar 29, 2010 4:45am Mar 29, 2010 4:45am
Quoting fthingf
Tw0eleven, just got my first successful trade on EUR/USD! The signal appeared at 0400 GMT. It's a small bullish pin, with 5ema cross above 20ema and MACD sloping up. Exit at the very next candle with 50 pips. A good start for the week!
Way to go fthingf! I was just about to post this trade and then saw your comment. Congrats!!!! Just try to remember to be patient and wait for setups like this...skip the marginal ones and avoid trading because you get bored! 90% mental trading is! Keep up the good work!
  • #64
  • Mar 29, 2010 4:49am Mar 29, 2010 4:49am
Well, the trades don't get much better than this! Not only did we have our 1-2-3 guidelines met...there were some bonus reasons for this long trade on EU. So lets go over them:
1) PA gave us a pinbar
2) 5/20 ma had just crossed
3) Macd histogram was sloping up
4) Macd Histo was also going above the zero line(makes the trade that much better)
5) Macd moving average lines(Number 4 in the chart) were crossing up...another bonus
6) You can see 2 trendlines I drew(yellow lines) were broken to the upside
7) We opened this week with a Gap that filled nicely down to the 20ma and got rejected to form our pinbar.

How many more reasons do you need to go long????
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  • #65
  • Mar 29, 2010 5:12pm Mar 29, 2010 5:12pm
Hello to the 4 Hour KISS gang --

I am a fellow H4 trader. I have been using a somewhat similar system, but there are several nice things here, so especially to 211 a hearty 'THANKS.'

I have read the full forum but am still doing some digesting. Could I take fthingf's recent post 62? I am wondering about your entry. Could you have come in a little sooner or were you waiting for the (small) pullback to the line? I think I see the 1-2-3 we're looking for a bar or two sooner. Perhaps I am not being demanding enough with the shape of the PA. (it wouldn't be the first time. . . )

I imagine several of you could field this question (above) for me.

Also, for Forum Czar 211, I see you would like to get a couple of good 50 pip trades a week, and, of course, each week is different. I suppose my question is over your 6 months of trading the H4 KISS I would have guessed you would have found more than two good set-ups a week. It may be that number shrinks with your preference to GU, EU and EJ. I would suspect other pairs will/do work quite well with this system, though.

I hope to go along on the ride with you all. Thanks for your sharing to this point, and every success in your trading.

Forest
  • #66
  • Mar 29, 2010 6:22pm Mar 29, 2010 6:22pm
Quoting Forest-Sea
Hello to the 4 Hour KISS gang --

I am a fellow H4 trader. I have been using a somewhat similar system, but there are several nice things here, so especially to 211 a hearty 'THANKS.'

I have read the full forum but am still doing some digesting. Could I take fthingf's recent post 62? I am wondering about your entry. Could you have come in a little sooner or were you waiting for the (small) pullback to the line? I think I see the 1-2-3 we're looking for a bar or two sooner. Perhaps I am not being demanding enough with the shape of the PA. (it...
Welcome aboard Forest-Sea!

I'm sure fthingf will have to answer your first question...but I'm guessing he entered right when the candle closed to form the PB(pinbar) since there was no signal prior to that. In my opinion, since the PB candle was only 30pips big, I would have entered right away and NOT waited for the pullback. However, if the PB candle was bigger than 50-60pips...waiting for price to pullback would be the better option in order to reduce your risk on the trade.(and a side note...if price didn't pullback for you...then OH WELL...you missed a trade and move on to the next).

As for your second question. Sometimes there are more than 2 setups a week...maybe 4,5,6 on a really good week. The choice is up to you on how much you trade. Personally, my goal is about 100pips a week. Sometimes I get it, sometimes I don't. I do place a limit on myself...if I ever reach 200pips(and I have on occasion)...I stop trading for the week and take some extra time off! I think it's important not to overtrade and take some time to yourself away from the chart to go do some fun things!

Let me know if you have any more questions and hope you enjoy the h4 method! Please post some charts some time.
  • #67
  • Mar 29, 2010 7:00pm Mar 29, 2010 7:00pm
Quoting Tw0eleven
I'm sure fthingf will have to answer your first question...but I'm guessing he entered right when the candle closed to form the PB(pinbar) since there was no signal prior to that.
Your guess is spot on!

Forest-Sea, that pin bar is the first valid PA bar that I see after the MAs cross and the MACD signal. I wasn't waiting for pullback to the 5ema (not sure if that's what your were referring to?)
  • #68
  • Edited 10:23pm Mar 29, 2010 10:03pm | Edited 10:23pm
OK, thanks to you both. I think my problem must be what qualifies as an appropriate (PA) bar?

Are we saying it must be the list presented in post #1 exclusively? That is, a bar we can specifically put a name on, say BUOB (whatever), that is consistent with the trade direction we are considering? For instance, a marching up line of let's say small candles might not specifically qualify . . . is this right? (although they might be providing HHs and HLs, for instance)

I admit when I saw the MACD bars rising and the 5 X 20 in a clear uptrend, I would have jumped in long but evidently prematurely using your more rigorous qualifying standards.

Set me straight.

With appreciation in advance for your thinking,

Forest
  • #69
  • Mar 29, 2010 10:53pm Mar 29, 2010 10:53pm
All right KISS stars. What do you think about the U.Cd tonight?

* 5 has X 20 down and we are trading with the 200 sloping down

* MACD bars are stepping down AND the signal line is in agreement

* Price Action . . . well, we have had a little pullback up to the 20, and all is now resting well into the Asian session awaiting European trading. However, there may not be the explicit confirming PA you want. Is that about right? This lack of clarity probably spells "do not take entry."

I admit I do not like the recent long wick down, either.

Let me know your thoughts, please.

Best to you, Forest
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  • #70
  • Mar 30, 2010 7:12am Mar 30, 2010 7:12am
Quoting Forest-Sea
All right KISS stars. What do you think about the U.Cd tonight?...
Hi Forest-Sea, I personally do not track U/CAD but I'll try to offer my view. I would have taken short at one of the candles highlighted in below chart, as to me they are bearish pin bars (although small ones). Both pins cannot close above the 20ema (and actually the top of the candle are confined by the 20 as well).

On the other hand I notice that the ascending trendline starting form Mar 17 has just been broken, adding to my confidence to go short.

As Tw0eleven has said, take the trades that you can find multiple reasons to support your view.
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  • #71
  • Mar 30, 2010 7:52am Mar 30, 2010 7:52am
Thanks, fthingf.

As it turned out, it was an acceptable trade. It continued down just under 50 pips from my first observation prior to a bounce up.

Stochastics were quite low, well under 20, at that point and I would have exited on that weakness.

I think your observation to find multiple reasons to take or decline a trade is quite helpful. The weight of evidence here probably said it was an acceptable risk.

I also see that 211 sees his plan more as guidelines to "put the odds on your side." In that spirit, I could have taken this trade.

Best to you, Forest
  • #72
  • Mar 30, 2010 7:54am Mar 30, 2010 7:54am
Quoting Forest-Sea
OK, thanks to you both. I think my problem must be what qualifies as an appropriate (PA) bar?

Are we saying it must be the list presented in post #1 exclusively? That is, a bar we can specifically put a name on, say BUOB (whatever), that is consistent with the trade direction we are considering? For instance, a marching up line of let's say small candles might not specifically qualify . . . is this right? (although they might be providing HHs and HLs, for instance)

I admit when I saw the MACD bars rising and the 5 X 20 in a clear uptrend,...
Hi Forest,

Personally, I do prefer to look for 3 main candle patterns(PA). 1) Pinbar 2) Engulfing Candle or 3) Tweezers/RailRoad Tracks. There are a lot of other candle patterns out there...but I find these the most useful. Of course you can trade anything you want...however, I try to put the odds in my favor of a successful trade. That's why I look for the 1-2-3 guidelines to line up before entering. If you have some other things that you have experienced as a trader and they are consistantly profitable for you...by all means use them! The main thing we want is High Probability Trades with Minimum Risk!
  • #73
  • Mar 30, 2010 8:02am Mar 30, 2010 8:02am
Quoting fthingf
Hi Forest-Sea, I personally do not track U/CAD but I'll try to offer my view. I would have taken short at one of the candles highlighted in below chart, as to me they are bearish pin bars (although small ones). Both pins cannot close above the 20ema (and actually the top of the candle are confined by the 20 as well).

On the other hand I notice that the ascending trendline starting form Mar 17 has just been broken, adding to my confidence to go short.

As Tw0eleven has said, take the trades that you can find multiple reasons to support your view....

Forest, I'd have to agree with with fthingf said above. Get the odds in your favor...multiple reasons for shorts. Also, look at the other side of things...what reasons do you have to go long??? As long as the list for shorts is bigger than the list for longs...and the PA, MA's, MACD all line up...that's your best chance at a winning trade. I don't usually trade U/Cad, but I do have the chart up just to watch.

One more thing...typically GU, EJ, GJ are good moving pairs...they move over 100pips a day on average. While EU, AU, UCAD are typically lower. Initially I mentioned setting a 50pip target price on all the pairs. But with EU, AU, UCAD if you change that to 30pips and your success rate will go up a lot more. Just remember since you are only taking 30pips profit you want to make sure your entry only has an initial risk around 50pips or less otherwise the moneymanagement aspect goes out the window!

Cheers!
  • #74
  • Mar 30, 2010 8:17am Mar 30, 2010 8:17am
I have previously done pretty serious looks at daily range figures for numerous pairs, and, of course, you are absolutely correct. Trading the U.Cd or other smaller ranging pair demands reducing your TP to something like the 30 you suggest. Excellent advice. That would have worked very well on the trade we are post-mortem analyzing.

Second, I do appreciate your considered opinion on the most reliable PA candle patterns you note. I am not as good on these as I should be and will definitely use your guidance.

Thank you, again, for sharing your earned wisdom and experience.
  • #75
  • Mar 30, 2010 8:17am Mar 30, 2010 8:17am
I have just been looking and toying with the idea of possibly letting trades run a little longer instead of taking the standard 50pip profit target. The idea is simple...once you find a trade to enter into, let the trade run until price closes opposite side of the 5ma that you entered on. Examples will be shown below.

***The risk on this though(besides the fact I have tested it....just been looking over the charts)...you could miss out on some good 50pip trades or see your profitable trades turn into breakeven or even small loss trades. For now, it's just an idea I'm throwing out there and if anyone has input...please let me know****


there could be a lot of variations on this...such as taking a max profit of 150pips. Or if you make it to 50pips profit, move your stoploss to breakeven and just let the trade run. Or at 50pips profit set your s/l to -50 so you don't have any more than a 50pip loss...and when you reach 100pips profit move stoploss to breakeven. Guess it would be up to each individual trader.

I'll be looking forward to some feedback! Happy Trading!
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  • #76
  • Edited 8:51am Mar 30, 2010 8:41am | Edited 8:51am
Quoting Forest-Sea
I have previously done pretty serious looks at daily range figures for numerous pairs, and, of course, you are absolutely correct. Trading the U.Cd or other smaller ranging pair demands reducing your TP to something like the 30 you suggest. Excellent advice. That would have worked very well on the trade we are post-mortem analyzing.

Second, I do appreciate your considered opinion on the most reliable PA candle patterns you note. I am not as good on these as I should be and will definitely use your guidance.

Thank you, again, for sharing...
Hi Forest,

Here is a link that has some definitions and examples of candle patterns that might help you. http://stockcharts.com/school/doku.p...estick_pattern

And here is one on some chart patterns: http://stockcharts.com/school/doku.p...chart_patterns


Cheers!
  • #77
  • Mar 30, 2010 9:07am Mar 30, 2010 9:07am
This could be a possible trade...but we NEED a retrace first to the 20ma to reduce our risk!!!

1) Tweezers at the top before this big bearish candle
2) 5/20 about to cross down
3) MACD sloping down
4) Trendline broken down
5) Overall trend is still down(we just had a short term pullback/uptrend)
6) If you look left...price retrace to prior support area around 1.3500-3550
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  • #78
  • Mar 30, 2010 9:22am Mar 30, 2010 9:22am
and we would need to wait for a close of bar following the EU retrace (if it comes)?
  • #79
  • Edited 11:03am Mar 30, 2010 9:30am | Edited 11:03am
Quoting Forest-Sea
and we would need to wait for a close of bar following the EU retrace (if it comes)?
Nope, basically if eu retraces to 1.3440-50 area that would give you about 50pips risk(top of the big bearish candle). Your entry should be around 20ma. That way, one of two things will happen: 1) price will stay belo the 20ma and continue down thus giving you profit or 2) price will go back above the 20ma and close above...thus you exit for a smaller loss than if you entered down around 1.3400-20.

Wanted to add that you don't always get a retest/touch of the ma to the exact pip...sometimes it will stop 10-15pips shy...so set an alarm(if you aren't watching the charts) for about 15-20pips prior to the ma...then you can watch PA for a little bit and see if price is stalling before the ma and you want to enter.
  • #80
  • Mar 30, 2010 11:50am Mar 30, 2010 11:50am
Helpful!

Thanks, 211
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