Monster Muncher Manual Trading Discussion: Compliments SH

Short usdcad from 1.0430 with 25 s.l. and 75 t.p.

Hi All,

I got burned good on that EJ trade. I have a suggestion that could help. How about waiting until the RSI crosses the 70/30 and recrosses, then take the trade at the close of the candle? Any comments or other ideas?

pipsacker

Thats a good spot Poocher-but right now I'm not trading against the Dollar or the Yen for the time being. The markets are too strong-this is major stuff happening, people are running for cover for some reason.

You could try that pipstacker. I lost the one EJ trade, and now I'm stepping back to see signs of recovery in the Eur. When the markets as a whole are running this strong its better to step back and take it easy with the retrace. Or use further methods of confirmation for reversal.

Glad you think it was a good looking set-up under normal conditions Stevefx.

The FOMC statement had things looking goofy for a while.

I'm demo-ing trying to get a hang of the lines and appreciate your feedback.

No problem Poocher-

Monster Muncher is built on looking at price averages. In weeks of extreme activity H1 retraces will take a beating. I'm looking at modifying the trading methods to handle these situations. Will post some more about this soon but need to test a little first.

For now though, just to say that there is no reason to lose more than 1 retrace trade in a week. Usually if one pair is exceeding its weekly limit, then most of the rest are going to do the same. So, if I lose a retrace trade on H1 I'm done for the week.

I am holding UCAD Short right now myself. For some other reasons. I'll post a chart.

Hi stevefx,

The lines on all my H1 charts, except AUD/USD, have been redrawn. Is this because they have fallen so far from the retrace lines?

pipsacker

They should not redraw til next week. Of course you know about the bug that makes them redraw each new bar. Just refresh the template and it will go back. Aside from that bug, there is no reason it should redraw til Monday.

Hi stevefx,

You were correct. Have not traded it in several days, forgot to refresh.

pipsacker

Hi folks,

I just want to caution against taking retrace trades this week, as we might be in for some more frenzied selling.

GU and EU are going to be testing important Daily trendlines. If these get broken then they could sell off another 300 to 400 points without too much trouble.

Green lines are likely low targets if the trendlines get broken. My own bias is that they will break, but will be waiting for confirmation and bounce before I do any selling.

Will be posting more later about using MM to do trend following instead of retrace.

Charts below.

Thanks for the heads-up.

Any buyers?

Hi Poocher, try using I-trend. This is one of the indis I'm considering adding to the template. Wait til green is on top of red to confirm your long position. Or red is on top of green to confirm a short. Or if you want to be more aggressive, just wait til they draw very close to each other. This should keep people out of trouble entering too early on retrace trades.

I'll check it out.

Your UCAD long is real close Poocher. Stuck under the 19.1 fibo for the moment but I think its going to go. I'm going to wait for a clean bullish cross on I-trend, then give it a go.

Hi Steve

I really enjoy using your system. I went back and reread the 1st post and I had not been refreshing the chart hourly or whatever. As a result, I am getting a large DD - I don't know if that's the cause or not. I can be up 100 or 200 pips and give it all back with 1 or 2 bad trades.

I was wondering if it's still necessary to refresh the chart?

Thanks for your help.

Hi Mr Chips,

Yes the chart must be refreshed each hour if you are trading on the 1 hour TF. That won't change unless someone fixes the code. I think what its doing when it shifts is taking into account new data, and instead of getting the first 18 bars of the week you get 2-19, or 3-20, or something like that. Anyway this will throw the projections way off.

That said, sometimes stuff just draws down. The UCAD drew down 50 points before it finally came through. The GU this week barely drew down anything, and it delivered a nice 150 point trade. The UJ drew down 13 points, and delivered 100.

So try to think of Monster Muncher as a tool that will show you a likely place where price is going reverse-its not magic-any other skills you have a trader will help evaluate a potential position-use other tools with it, pivot points, fibos, good money management, and etc... Hope that is helpful!

Hi Steve

Thanks for your quick reply. Good job with the system.

Sure thing Mr Chips.

Here is another tool which may be helpful for finding retrace targets.

First add these extension levels to your fib tool on MT4. How to do this:

1) put a set of fibs on a chart.
2) double click the dotted red line so it gets highlighted.
3) right click the dotted red line.
4) select fibo properties. the fibo box will pop up.
5) select fibo levels. then select add.
6) fill in the level box with -0.3409.
7) double click the description box and enter -34.09.
8) press OK, then add again.
9) fill in the level box with 1.34. double click description, enter 134.
10) press OK

This will add the extension levels -34.09 and 134. These are important extension levels.

If you fib from the high of the week to the point where price hits the green line, it will show you the likely target if there is going to be a drawdown.

Or if price is moving up, fib from the low of the week to the point where price hits the blue line.

The charts below show how well this works. All of these charts are from this week.

If you want to add further extension levels. The next levels to add are
-0.55 and 1.55. I would say that if price is moving past these
-55/155 extension levels you have a runaway, and forget about it.

Hi All-

I'm going to go through a series of three examples which I thought were good trading opportunities this week.

In each of these examples I am incorporating Fibonacci levels to complete the trading strategy for Retrace trades.

A more complete entry and stop loss system is required-this I see. So I am using Fibo extension levels to complete the picture, and to provide an exact trading method.

To work with this, add the Fibo extension levels. I showed how to do this in the previous post.

Add: -0.3409, 1.34, -0.55, 1.55, -0.786, 0.191, 0.809

===========================================

In the chart below is example #1, the USD/JPY trade. This was a short opportunity.

1) If price is moving down to the green line from above-place the fibs from the high of the week to the point of first contact with the green line, 100 to 0.

High of week = 100%, point of contact with green line = 0%.

2) If the price is moving up from below to the blue line, place the fibs from the low of the week, 100%, to the point of first contact with blue line, 0%.

Low of week = 100%, point of contact with blue line = 0%.

==================================================

In the case of the UJ trade price is moving from below to the blue line, so I placed the 100% at the low of the week, and the 0% at the point of first contact with the blue line.

In this case, when price hit the blue line I had no RSI Overbought reading-so there was no trade at that time.

However, later in the week price hit my first extension target the -34.09% fibo extension. When it hit that extension level I did get an Overbought signal on the RSI.

So thats my signal to sell.

Once the sell order is placed, my strategy is to place my SL behind the next extension level, the -55% fibo extension level.

Once the price hits the next level and I am in profit-in this case the 0% fib line, I want to move my SL to Break Even.

After that just let it run. TP on the UJ Retrace is usually around 100 points. In this case you can see that the 134% fibo extension level was a perfect take profit area.