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Engulfing bars

  • #21
  • Edited 2:36pm Apr 25, 2011 8:59am | Edited 2:36pm
Darren:

Thanks for breathing life back into this thread.

To be honest, the simplicity of this method appeals to me. However, after studying threads with methods that apply 5 MAs, 2 oscillators, and 3 additional indicators on so many FF threads, can trading really be this simple? Of course, it can

As I understand it, this is how you trade:

1. Apply 50 SMA to any H4 chart.
2. Draw S/R levels based on the Daily chart.
3. Wait for engulfing bars. Only trade Buy bars above the 50, and Sell bars below the 50.
4. Use 1:1 R:R for conservative TP, or use Daily S/R to pinpoint exit.

I have a few questions:

1) Have I missed any of the factors that you use to trade?
2) Once you have identified a setup on H4, do you ever drop down to the M15 to look for an entry? If so, what method would you suggest?
3) Does this method working better during London, U.S. or Asian sessions? Or do you not take session details into account?
4) Approximately how many trades do you take per week with this method?

Location
  • #22
  • Apr 25, 2011 10:23am Apr 25, 2011 10:23am
Quoting Location
Darren:

Thanks for breathing life back into this thread....
spot on, thats exactly how i trade, although i will on occassion take trades against the 50sma, but they are more risky countertrend trades...

Im very impatient and sometimes take set ups that are not perfect, thats my failing....

i look for some confluence also, always worth looking at the bigger picture, but always to do with trend, s/r etc..

these trades tend to run for a day so i dont mind when i take them, most are with pending orders and tp, so i set and forget..

i will endeavour to post entries and results and see if we can get a nice group of price action traders going on the higher tf's
  • #23
  • Apr 25, 2011 10:48am Apr 25, 2011 10:48am
Quoting darrenlittle
ECHF 4hr short today, not a great engulfing , I like them a bit larger than that, but had over confluence, might be good for 60 pips..

http://i1222.photobucket.com/albums/...25at115935.png

ECHF trade update, took half profits at +44 shotting for next support with the rest, not bad on a day like today

http://i1222.photobucket.com/albums/...25at164628.png
  • #24
  • Apr 25, 2011 11:34am Apr 25, 2011 11:34am
Looks like some of these entries (engulfing + 50SMA) would be easy to code into an EA to test. Too bad I suck at coding. I might need to start learning. I hate paying for the EA only to find out that it sucks a$$.
  • #25
  • Apr 25, 2011 12:01pm Apr 25, 2011 12:01pm
Quoting newark18
Looks like some of these entries (engulfing + 50SMA) would be easy to code into an EA to test. Too bad I suck at coding. I might need to start learning. I hate paying for the EA only to find out that it sucks a$$.
hello again newark, or just pull up a chart and use your eyes, wouldnt take more than an hour or two
  • #26
  • Apr 25, 2011 12:40pm Apr 25, 2011 12:40pm
DL, we meet again.

I did eyeball it and it looks good to tell you the truth. But my eyes have been deceived before.
  • #27
  • Apr 25, 2011 12:54pm Apr 25, 2011 12:54pm
ALL EA's suck, every single one invented by man.

Quoting newark18
Looks like some of these entries (engulfing + 50SMA) would be easy to code into an EA to test. Too bad I suck at coding. I might need to start learning. I hate paying for the EA only to find out that it sucks a$$.
  • #28
  • Apr 25, 2011 12:55pm Apr 25, 2011 12:55pm
ahhaaha i know exactly what you mean... ive been backtesting this for some time, the 4hr tf and daily have always seemed to be an impossible goal for me, im just too impatient... but im getting there and the thought of making money whilst im free to do what i like is very appealing....

i will say though, theres good engulfing's and bad engulfing's ... so far it looks like using the 50sma rule will keep you in the winning trades, going against that rule i think you need to look for dark cloud cover... or whatever its called, where all of the candle is engulfed including the wicks...

anyhow im still testing this and i will post charts
  • #29
  • Apr 25, 2011 1:00pm Apr 25, 2011 1:00pm
Quoting Dreamliner
ALL EA's suck, every single one invented by man.
I cannot disagree with you...yet.
  • #30
  • Edited 3:36pm Apr 25, 2011 1:08pm | Edited 3:36pm
Quoting Dreamliner
ALL EA's suck, every single one invented by man.
I would like to co-sign Dreamliner's statement.

Besides, too many good threads and ideas have been ruined by trying to automate them.

Let's not let that happen here.
  • #31
  • Apr 25, 2011 1:28pm Apr 25, 2011 1:28pm
Of course. I guess I won't need to share it after I have one made.
  • #32
  • Apr 25, 2011 1:38pm Apr 25, 2011 1:38pm
Quoting darrenlittle
Here's a webinar worth watching if you like simple trading and consistent profits,

http://www.fxstreet.com/webinars/ses...a-7b44ff944b3a
And HUGE costs to be trained--sheesh, nearly 8,000.00 for Forex training.
  • #33
  • Apr 25, 2011 4:40pm Apr 25, 2011 4:40pm
Subscribed to this nice and simple thread. Please post entries and chart example.
Quoting darrenlittle
spot on, thats exactly how i trade, although i will on occassion take trades against the 50sma, but they are more risky countertrend trades...

Im very impatient and sometimes take set ups that are not perfect, thats my failing....

i look for some confluence also, always worth looking at the bigger picture, but always to do with trend, s/r etc..

these trades tend to run for a day so i dont mind when i take them, most are with pending orders and tp, so i set and forget..

i will endeavour to post entries and results and see if we can get a...
  • #34
  • Apr 25, 2011 4:51pm Apr 25, 2011 4:51pm
Quoting Dreamliner
And HUGE costs to be trained--sheesh, nearly 8,000.00 for Forex training.
The only thing that he doesn't share is the exit...

I am trading this system (50sma, engulfing bars) for the last 2 weeks and it's extremely profitable. I only trade the daily tf as I don't have much free time during the day.

So when I get back home it takes me about 20 minutes to go through all the pairs and decide if I'll put a trade or not. The only thing that I am careful about is when the engulfing bar is very close to a support/resistance line especially if it's a round number...
  • #35
  • Apr 25, 2011 6:24pm Apr 25, 2011 6:24pm
OK here is the question you will get asked the most whenever you trade anything:

What is your stop loss and what is your take profit?

Quoting FusionF
The only thing that he doesn't share is the exit...

I am trading this system (50sma, engulfing bars) for the last 2 weeks and it's extremely profitable. I only trade the daily tf as I don't have much free time during the day.

So when I get back home it takes me about 20 minutes to go through all the pairs and decide if I'll put a trade or not. The only thing that I am careful about is when the engulfing bar is very close to a support/resistance line especially if it's a round number...
  • #36
  • Apr 25, 2011 6:26pm Apr 25, 2011 6:26pm
Quoting FusionF
The only thing that he doesn't share is the exit...

I am trading this system (50sma, engulfing bars) for the last 2 weeks and it's extremely profitable. I only trade the daily tf as I don't have much free time during the day.

So when I get back home it takes me about 20 minutes to go through all the pairs and decide if I'll put a trade or not. The only thing that I am careful about is when the engulfing bar is very close to a support/resistance line especially if it's a round number...
There are 2 exits, 1 is equal to the length of the engulfing bar from wick to wick, this is the conservative trade.
  • #37
  • Apr 25, 2011 6:33pm Apr 25, 2011 6:33pm
Quoting darrenlittle
There are 2 exits, 1 is equal to the length of the engulfing bar from wick to wick, this is the conservative trade.
So in a long trade, add the length of the engulfing bar for the first target? How about stops?
  • #38
  • Apr 25, 2011 7:32pm Apr 25, 2011 7:32pm
Quoting Dreamliner
OK here is the question you will get asked the most whenever you trade anything:

What is your stop loss and what is your take profit?
My SL is 5 pips above/below the high/low of the engulfing bar. My TP is usually the same as the SL so that I have 1:1 Reward:Risk.

Also I never enter with a Market order. I use a buy stop for long or a sell stop for short 5 pips above/below the high/low of the engulfing bar. That actually filters out even more bad trades. So in combination with the 50sma the probability of a winning trade is very high.

The only "problem" with this system in the daily tf is that you must have a lot of patience. There are days that you won't have a setup.
  • #39
  • Apr 25, 2011 7:33pm Apr 25, 2011 7:33pm
Quoting darrenlittle
There are 2 exits, 1 is equal to the length of the engulfing bar from wick to wick, this is the conservative trade.
Thanks for that darrenlittle.
  • #40
  • Apr 25, 2011 8:18pm Apr 25, 2011 8:18pm
Quoting darrenlittle
There are 2 exits, 1 is equal to the length of the engulfing bar from wick to wick, this is the conservative trade.
Uhmm, am I the only one waiting for 2?
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