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The perfect trading system

  • #121
  • Sep 13, 2010 11:04am Sep 13, 2010 11:04am
Quoting forex_winner
Usually how do you decide when to take the profit?? Do you wait for the RSI to reach 50 level in H4?? or you set a target like 50 or 100 pips??

I have tried to set in term of pips like 100 pips but it is very difficult to hit and usually it will turn into loss if the position is not closed!

Sorry I coudn't respond until now. I have been very busy with other things. Now to your question. Firstly, remember you use H4 together with M15. H4 for direction and M15 for entry and exit. The three methods for taking profit are as follows:

a) The safest method is to monitor RSI 50 level on M15 chart. You can realise your profit through taking or locking your profit by either using trailing stop, shifting your stop loss to cover the profit already made or closing your trade. Your profit might be lower here, but you can realise your profit more quickly.

b) The better method is to wait for M15 to reach 30 if you sell at around 70 or 70 if you buy at 30.

c) The best method is to wait for H4 to either reach the 50 mark or 30/70 depending whether you buy or sell. To follow this option, you might need a little patience.

The first and second methods are recommended for a trader is just learning this method. The last method is for those who are a familiar with the trading method or where the daily and H4 charts gave the same signal.

I hope it is clearer now.
  • #122
  • Sep 15, 2010 7:16pm Sep 15, 2010 7:16pm
Yesterday the BOJ intervened, all JPY pairs was up and break the RSI 70 level and remain at this level until now.

Is this action applicable to your system? Will you still short the JPY? Or stand on the side line?
  • #123
  • Sep 15, 2010 7:30pm Sep 15, 2010 7:30pm
Quoting forex_winner
Yesterday the BOJ intervened, all JPY pairs was up and break the RSI 70 level and remain at this level until now.

Is this action applicable to your system? Will you still short the JPY? Or stand on the side line?
Let the truth be known that when intervention or unanticipated events occur model trading is completely useless.
Price gapping occurs, liquidity shrinks and some brokers have been know to turn off machines.
Unless you are at the forefront of flows you are pissin in the wind.
Yesterdays events with intervention were probably not known to the market generally for a little while.
Why? because Central banks intervene through selected counterparties and perhaps wholesale brokers (not retail) and those relationships arent obliged to disclose. You hear it second hand and are second guessing the amounts.
  • #124
  • Edited Sep 23, 2010 4:35am Sep 22, 2010 12:54pm | Edited Sep 23, 2010 4:35am
Quoting lasty
Let the truth be known that when intervention or unanticipated events occur model trading is completely useless.
Price gapping occurs, liquidity shrinks and some brokers have been know to turn off machines.
Unless you are at the forefront of flows you are pissin in the wind.
Yesterdays events with intervention were probably not known to the market generally for a little while.
Why? because Central banks intervene through selected counterparties and perhaps wholesale brokers (not retail) and those relationships arent obliged to disclose. You hear...

I was not able to respond earlier due to some other commitments. lasty, I totally agree with you as your response was spot. The intervention by the Japenese Government was an extra-ordinary event. However, if your look closely at the two H4 charts below for GBBJPY and USDJPY you will clearly see that the H4 was on a bullish move, when the intervention occurred. H4 clearly explose the move so also the current retrace. USDJPY was even more exact to the point at the point of intervention and the retrace.

On how to place a trade whenever there is a reversal, I have explained earlier that you don't place a trade simply because H4 is around 70. What you look out for is a reveral candle i.e. a bearish candle after 6-8 bullish candles or a bullish candle after 6-8 bearish candle. Look at the areas I highlighted in reds and blue circles. Look at the chart carefully and see H4 signals shown by reversal candles. The RSI is to guide you not to enter a trade in the middle of the channel. If you miss a move, wait for it to reverse.

I hope you will find the explanation useful.
Attached Image (click to enlarge)
Click to Enlarge Name: a-h4 government intervention.gif Size: 18 KB
  • #125
  • Sep 22, 2010 1:00pm Sep 22, 2010 1:00pm
I have earlier explained the benefit of daily box system. The strategy is simple, draw the box on the daily chart and go down to H4 for trend and M15 for entry. Using this system, you will be able to see price movement clearly. We now have another 200 pips box.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: a-daily box gbpusd.gif Size: 16 KB
Click to Enlarge Name: a-h4 box gbpusd.gif Size: 20 KB
Click to Enlarge Name: a-h1 box gbpusd.gif Size: 23 KB
Click to Enlarge Name: a-m15 box gbpusd.gif Size: 20 KB
  • #126
  • Sep 23, 2010 4:38am Sep 23, 2010 4:38am
The intervention by the Japenese Government was an extra-ordinary event. However, if your look closely at the two H4 charts below for GBBJPY and USDJPY you will clearly see that the H4 was on a bullish move, when the intervention occurred. H4 clearly explose the move so also the current retrace. USDJPY was even more exact to the point at the point of intervention and the retrace.




I hope you will find the explanation useful.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: aaaaa-usdjpyh4 government intervention.gif Size: 18 KB
Click to Enlarge Name: a-h4 government intervention.gif Size: 18 KB
  • #127
  • Sep 23, 2010 5:00am Sep 23, 2010 5:00am
Your box trading boxes don't seem to follow convention. How much "wick" do you allow into the box? When I box out a range I don't include the wicks - I just box out the closing prices. What significance does the box have in relation to support and resistance?
Gone to a better place
  • #128
  • Sep 23, 2010 8:18am Sep 23, 2010 8:18am
Do these intervetions of the bank of japan happen often? or is it something what only happens once every x years?
  • #129
  • Sep 24, 2010 3:07am Sep 24, 2010 3:07am
Quoting smikester
Your box trading boxes don't seem to follow convention. How much "wick" do you allow into the box? When I box out a range I don't include the wicks - I just box out the closing prices. What significance does the box have in relation to support and resistance?

My box system is a combination of the both the daily and H4 charts. Let me give a discription of how I determine the box.

1. I use two new daily candles to determine if has formed broken out of a
range to a new range. I will expand the box as more daily candles close
within the box.
2. I use the closing prices on H4 candles within the new range to
determine the bound of the box. At that point the wicks of the daily
doesn't count as long as daily prices close within the box.
3. A new box or range will only be drawn whenever the daily candles close
below or above the current box.
4. The closing prices on H4 determine are usually the historical support and
resistance areas.
5. I also use trend line on the daily chart to

You should realise that the box, support/resistance areas and trendlines on charts are not exact sciences but an effective guide. What I realise in trading is that you need develop your own system and continusly search for improvement. H4 candles in conjuction with the daily has far proved effective
for my trades in the lower time frames.
  • #130
  • Sep 24, 2010 3:10am Sep 24, 2010 3:10am
Quoting Chunnel
Do these intervetions of the bank of japan happen often? or is it something what only happens once every x years?
The interventions are not predictable. Read USDJPY thread regularly to information on this. Most of the time, the interventions usually comes as rumour.

I hope this helps.
  • #131
  • Sep 25, 2010 9:29am Sep 25, 2010 9:29am
Quoting Articulate
I have earlier explained the benefit of daily box system. The strategy is simple, draw the box on the daily chart and go down to H4 for trend and M15 for entry. Using this system, you will be able to see price movement clearly. We now have another 200 pips box.
.

Cable has broken out of the 200 pips box and appears to be heading toward the next box. Price movement is simply a matter of habits. History keeps repeating itself over and over again.

Look at the candle between between 1.57147 and 1.58534 both on the way up and down. I single H4 candle. Also look at the candle on the way down from 1.60000 which closed on 1.56396 and the current candle which took which close outside the box.

If we break the resistance at 1.58535 our next destination is most likely the next zone between 1.58535 - 1.60000. If the resistance hold however, we have landing where the candle took of from i.e. 1.57000 - 1-55000
  • #132
  • Sep 27, 2010 3:56am Sep 27, 2010 3:56am
The charts for the above post.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 111-gbbd1 box.gif Size: 16 KB
Click to Enlarge Name: 111-gbbd4 box.gif Size: 18 KB
  • #133
  • Sep 28, 2010 7:38am Sep 28, 2010 7:38am
instead of RSI (14) can i use RSI (7)?
  • #134
  • Sep 28, 2010 7:39am Sep 28, 2010 7:39am
Quoting forex_winner
instead of RSI (14) can i use RSI (7)?
They're both very effective.
  • #135
  • Sep 28, 2010 8:51am Sep 28, 2010 8:51am
Quoting lasty
Let the truth be known that when intervention or unanticipated events occur model trading is completely useless.
Price gapping occurs, liquidity shrinks and some brokers have been know to turn off machines.
Unless you are at the forefront of flows you are pissin in the wind.
And yet it's amazing how many people will argue, in hindsight, that profiting off the BOJ intervention was possible. All you had to do was...xxx or yyy...and you would have made a bundle.

The reality is that when shit like that happens, if you happened to be positioned correctly, then you're a lucky bastard. If you happened to be positioned incorrectly, then you're an unlucky bastard.
  • #136
  • Sep 28, 2010 11:19am Sep 28, 2010 11:19am
I posted the charts earlier. I re-post again it to show that the analysis is still valid until the range between 1.60000 to 1-53214 is broken either way

For now price will only move to the next level if the daily closed above the resistance line at around 1.58535 or move back to where it came and close below 1.57147.

It is always better to trade within established concrete zones. That way, you will be insulated from the noisy signals all around you.

That is how I trade. The daily shows me the trend, H4 gives the signal and I use M15 to enter my trades. If you trade this way you might miss some trades, but you will only take first class trades.
Attached Thumbnailshttp://cdn.forexfactory.com/attachme...1&d=1285689537 http://cdn.forexfactory.com/attachme...1&d=1285689537 http://cdn.forexfactory.com/attachme...1&d=1285689615
  • #137
  • Sep 29, 2010 6:02am Sep 29, 2010 6:02am
This is the larger picture for AUDUSD. The next target for the bull is 0.98400 before a retrace is expected.

I don't trade AUDUSD regularly, but that is where I am watching for a long term trade. As you can see, I have a sell order waiting at 0.99990. I don't expect it to get there, but would be a pleasant surprise if it does. 0.98400 - 0.99000 is the area I will be willing to pull the trigger manually, if I see a sell signal on the weekly. At that point AUD will damn too expensive against the dollars.

These areas are obvious in the daily and weekly charts attached.

Happy trading!
Attached Thumbnailshttp://cdn.forexfactory.com/attachme...1&d=1285757847
  • #138
  • Sep 29, 2010 6:04am Sep 29, 2010 6:04am
This is the larger picture for AUDUSD. The next target for the bull is 0.98400 before a retrace is expected.

I don't trade AUDUSD regularly, but that is where I am watching for a long term trade. As you can see, I have a sell order waiting at 0.99990. I don't expect it to get there, but would be a pleasant surprise if it does. 0.98400 - 0.99000 is the area I will be willing to pull the trigger manually, if I see a sell signal on the weekly. At that point AUD will damn too expensive against the dollars.

These areas are obvious in the daily and weekly charts attached.

Happy trading!

Attached Thumbnails
Attached Image(s) (click to enlarge)
Click to Enlarge Name: audusd - weeklyytrend.gif Size: 18 KB
Click to Enlarge Name: audusd -dailytrend.gif Size: 17 KB
  • #139
  • Sep 29, 2010 7:48am Sep 29, 2010 7:48am
Do you trade USDCHF?? It has been oversold...and at the low!
  • #140
  • Sep 29, 2010 7:50am Sep 29, 2010 7:50am
GBPJPY..do you still hold your buy limit at 118? It remains at 132 hardly drop below 125
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