4H (Fozzy) Trading Devolopment Journal

Hey Guys,
its Marc from Germany!


I just needed to start this thread now, as I am quite stuck with my trading.

First of all, I am just demoing all of this trades!
Second, PLEASE PLEASE, if you post into this thread, than do it positively (not something like: I am better, you are wrong!)
Third, I am trying to tune up my strategy because I want to filter out wrong signals.
And finally, this is an all technical strategy. Fundamentals are not considered (except major news -> I stay aside)


Okay, let me start with explaining the strategy. I derived it from the Fozzy Daily Method (BIG BIG Thanks to Fozzy!)

Chart Setup:

RSI8 with MA8 over it.
50 SMA (as Trend Indicator)

on a 4h chart
Pairs: GBP/USD, EUR/USD, GBP/JPY,

Thats it. Actually this is the initial situation.

Buy Signal: RSI crosses the MA upward
Sell Signal: RSI corsses MA downward

aditionally, major support&resistance lines (horizontally) and fibonaccis (derived from MAJOR swings from daily/weekly charts) help me to identify reversals (to stay out of trades)


Alone with this, I dobubled one 5k demo account. Problem: I guess it was luck (I am from pessimistical nature)


PROBLEM:
I use this (4h!) method only to grab about 40 pips (if I want or not). In 70% this is achieved easily and sometimes it goes further.
Mostly, the next 1-2 bars after the cross are going into my direction (90%) and turn around afterwards. BUT sometimes it goes on in my direction)

As I am very engaged in getting a higher percentage I need one or maximal two more indicators, which help me to identify bad trades.


I tried the following:

Trade in direction of the trend: Nope, did not work out for me. Actually, the trend is not MY friend

Sell only when Stochastics have been overbought and vice versa: Ran quite well, but too few trades ( I want about 5-8 trades per week)

Buy only when candles are above bollinger bands middle (and vice versa): Nope, again it did not work.

Parabolic SAR (buy when below price and vice versa): I thought this is good... but I was not very satisfied wit hsome trades (maybe adjustable when entering after a RSI/MA cross..we´ll see)



Exit: S/L on 5% of account with 1 lot (with 5k account)
or/and at fibo/supp&resistance levels
or sometimes when RSI/MA cross in the other direction


Okay, what has to be adjusted?
1.) filter for bad trades

this is where YOU come into play. maybe you can help me to find a fitting indicator that matches my strategy (maybe something with volume or cycles)

2.) EXIT! I guess I have to rely on trendlines, fibos etc





Current activity:
Trying as filter: ADX14: +DI line above -DI -> only buy
and when -DI above +DI -Y-> only sell

and asking myself: waiting for next candle to open or entering trade immediately after cross
-> guess when situation is unclear, waiting is better. but when volume and strenght is high one can join a trade when rsi/ma cross


I will further post my trades, and why I did it. Additionally, I will post my opinion about sup/res lines and fibos.


______
The picture was made quickly. Just showing how recent action looks. The thing in the upper richt corner is a signal bar indicator found in this forum.

first improvement:

deleting ADX and adding volumes.

entering a trade ONLY when volume is above 5000 or something (still backtesting)

further with an example: seeing gbp/usd heading to 1.5 and waiting for a reversal there (for at least some bars) -> bounce

volume seems to help.. I´ll see..

kep in mind, that there are not S/R and fibos on the chart... therefore not 100% correct

E/U showed a downward cross

but the following kept me out (listed by priority)

1. .50 fibo
2. low volume
3. price above Parabolic SAR
4. flat trend (can be interpreted as small reversal, too)


I think volume is a quite good filter. Also, price action comes into play not only when setting S/L and T/P levels.

I hope I find out some more later on...

edit:
now I joined E/U short. just because macd (which I added as filter) confirmed.
I am still unsure because RSI and MA are so close together.

however, in the money for now...

edit:

closed with +8 pips ^^

volume is out and I think it kind of correlated to the news 45minutes ago...

GBP/USD short trade for 30 pips.

reason: RSI/MA cross, 1.5 level bounce

did not consider: sms50trend and atr(14)


exit due to fibo level



added atr14 for momentum...wait what it brings

EUR/USD short for 40 pips

see chart


SL and TP set at the round numbers 1.23000 and 1.24000

Entry because:

- RSI/MA cross
- trendbars have been red for shorter timeframes
- had some more confidence due to crossing the 50sma and a bounce off from the round number 1.24000 a time ago


-> was a more agressive way due to low volatility (atr is down) and flat 50sma (for the longer trend)
-> no parabolic sar support (this indicator means less and less to me) BUT it could have indicated to stay in the trend



here is again the exit problem. I could have stayed in the trend still now, because the e/u is still going south, but i am out because of a fibo resistance (which was actually no resistance because it did not retraced there...) (*idea: move stop to BE and/or take 50% of the trade out to be in the money)

I guess I´ll spend the next hours finding good exit parameters.. someone may have an idea?