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Engulfing bars

  • #61
  • Apr 27, 2011 8:37am Apr 27, 2011 8:37am
Quoting Location
Hi Darren:

There are two things that would have kept me out of this trade: 1) It's countertrend. Maybe, when I get good at the original method, I will begin to explore CT trading. 2) You were trading right into the 1.45 BRN. Did you enter after it crossed 1. 45? I can't read the numbers on your chart.

If not, it looks risky to me. Glad it worked out for you.

Location
yeah all valid reasons to be cautious, i am a bit gung ho with my trading, another one of my flaws...

more than anything it was the reaction of price last time it was at this level that gave me the get go to trade it...
  • #62
  • Apr 27, 2011 8:41am Apr 27, 2011 8:41am
Quoting tradestar1
There are suckers born every minute that would throw their money at that bogus training.
I want to point out that in no way am I proposing anyone should consider taking the training course, i just thought it was an interesting webinar on the engulfing pattern... dont really think its fair to call it bogus either, unless someone has completed the course anyway...

The best training you will ever get is a pen and paper, some simple rules and backtesting, record keeping and a positive attitude.... just my opinion
  • #63
  • Apr 27, 2011 10:05am Apr 27, 2011 10:05am
OK, I closed this morning the trade for +19 pips. Not much but I've learned a lesson.

When the Australian CPI came out better than expected (1.6% vs 1.2%) my buy stop was hit and in a few minutes it went up about 50 pips. That's when I got greedy. I didn't take profit (at least partially) but let it ride. In a couple of hours it was back at +3 pips. I left it overnight thinking that during London session it will pick up again. So this morning it was at +19 pips and I closed it.

That made me think. Why did it go to +50 in a few minutes and then back to +3 pips? And then it dawned on me. Because it was during the Sydney/Tokyo session.

Yes, I was trading AUD and the news were better than expected regarding the Australian economy and that gave it a boost, but the money volume was not there to support it since during this session there is not a lot of volume. So, many took their profit and closed their position. That pushed the price down.

So the lesson is that if you get a nice Price action setup and enter a trade while it gets a boost from some news then take profit as soon as you see a reversal if it's NOT the London/NY session.

BTW, I closed the trade this morning (CST zone) because of the first ever FED press conference today. The markets can become quite erratic and I don't want to have open positions. Otherwise, I'd have kept the position until the end of the day before I decide what I would do.


Quoting FusionF
Here's a trade I just entered.
AUD/CAD
Buy stop: 1.0280
SL: 1.0186
TP: 1.0374

Also keep in mind that the Australian CPI is coming out. If the news are good it'll explode...
  • #64
  • Apr 27, 2011 8:55pm Apr 27, 2011 8:55pm
Took 2 new trades last night on Daily charts .

EUR/USD - currently +123 pips

AUD/USD - currently +73 pips

Also, had USD/JPY losing trade of -79 pips from previous day .

Overall , still up over 100 pips .


Best of trades ,

EZ
" Master Your Set-Up , Master Yourself "
  • #65
  • Apr 27, 2011 10:28pm Apr 27, 2011 10:28pm
I have started an EA for this. I know that some people don't want this kind of talk so if anyone is interested in helping me finish, then please PM me. I don't have coding expertise but I have the base and just need some finishing touches.
  • #66
  • Apr 28, 2011 4:19am Apr 28, 2011 4:19am
Quoting EZTrades
Took 2 new trades last night on Daily charts .

EUR/USD - currently +123 pips

AUD/USD - currently +73 pips

Also, had USD/JPY losing trade of -79 pips from previous day .

Overall , still up over 100 pips .


Best of trades ,

EZ
  • #67
  • Apr 29, 2011 2:39am Apr 29, 2011 2:39am
i just wanted to post an example of another pattern i trade that is highly reliable on the 4hr and daily tf.

its called a kangaroo tail.. here's the rules

1. the body must be in the lower third of the candle

2. it must be at a level of s/r

3. the body of the set up candle needs to be within the range the high and low of the previous candle

4. ideally you want to see some space on the chart to the left of the set up candle

entry, stops and exits the same as the engulfing

heres one on uchf, go back test it, stick to the rules on the longer tf's and this will be easy reliable pips for you

you should be able to see 4 on this chart, 2 fit the rules and both would hit tp... 2 dont quite fit the rules and 1 could of been a loser... try and stick to the rules, because if i dont its usually when i lose!!!


http://i1222.photobucket.com/albums/...29at083235.png
  • #68
  • Apr 29, 2011 4:21am Apr 29, 2011 4:21am
GU trade today...

nothing great but some easy pips to TP1

http://i1222.photobucket.com/albums/...29at101909.png
  • #69
  • Apr 29, 2011 2:55pm Apr 29, 2011 2:55pm
Quoting darrenlittle
GU trade today...

nothing great but some easy pips to TP1

http://i1222.photobucket.com/albums/...29at101909.png
what time frame is this ?
Set /Forget /Let
  • #70
  • Apr 29, 2011 3:07pm Apr 29, 2011 3:07pm
Quoting FusionF
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.
you said :"My TP is usually the same as the SL so that I have 1:1 Reward:Risk.:

with OC is not 3:1 the norm?
can you make money in the forex at 1:1?
Set /Forget /Let
  • #71
  • Apr 29, 2011 10:39pm Apr 29, 2011 10:39pm
Quoting cjt
you said :"My TP is usually the same as the SL so that I have 1:1 Reward:Risk.:

with OC is not 3:1 the norm?
can you make money in the forex at 1:1?
Hi cjt,

That's a good question. I think money and risk management is something personal. It depends on the trader's risk tolerance. You can set it whatever you feel comfortable with.

Now, when you set the Reward:Risk 1:1 or 2:1 it doesn't mean that you'll get that at the end. This is just the expected R:R or how much you are willing to risk. The real R:R can be calculated only after you close the trade.

The 1:1 can become 2:1, 3:1 or 10:1 before you close the trade. When I see that there is strong trend then I remove my TP and keep moving my SL at the Low of the previous candle until I get stopped out. That can give you really big R:R.

Hope that helps.
  • #72
  • Apr 30, 2011 8:42am Apr 30, 2011 8:42am
Darren:

How many trades did you take this past week?

I took three trades: 2 Daily and 1 H4. One of the daily trades was a bad idea. I shouldn't have taken it, and my 2% stop loss was hit. The H4 trade was a breakeven trade, and I am currently up about 4-5% on my Daily A/U trade.

Anyone else have success with this method this week?
  • #73
  • Apr 30, 2011 8:54am Apr 30, 2011 8:54am
I closed the week +8% about average, slightly above... that was trading engulfing and kangaroo tails, and the final pattern i trade that i haven't posted about it here yet because i didnt want to get away from the thread starters topic...
  • #74
  • Apr 30, 2011 9:05am Apr 30, 2011 9:05am
Quoting darrenlittle
I closed the week +8% about average, slightly above... that was trading engulfing and kangaroo tails, and the final pattern i trade that i haven't posted about it here yet because i didnt want to get away from the thread starters topic...
Sounds like a good week to me. I have read through your Kangaroo Tail rules a few times. I cannot distinguish between Kangaroo Tails and good Pinocchio Bars (Pinbars). Are they the same? Or am I missing something? Lastly, does the 50 SMA play any part in this trade?

P.S. I am interested in your third approach. Even though you didn't start the thread, since you've brought it back to life, it only seems appropriate
  • #75
  • Apr 30, 2011 9:27am Apr 30, 2011 9:27am
the important bit with kagaroo tails is that the body of the set up candle must be within the high and low of the previous candle... what you are in fact ensuring is that the close price of the kangaroo tail is below the close of the previous candle... if you are looking to short and you have a pin bar where the close is higher than the previous candle it is much more likely to fail....

the 50 sma is a really soild trend meter, but im not only a trend trader, im happy to take countertrend trades too, so it acts as an excellent visual aid to me, it shouts 'ok thats a valid short signal, but you are against the main trend on this tf...' then i can decide wether i have other confluence that will support my trade
  • #76
  • Apr 30, 2011 9:36am Apr 30, 2011 9:36am
ok third pattern is called a 'flying buddah'...

(can i just say, none of these are my ideas, they come from great traders, far better than me... but i will say that i have tested them extensively and they work..)

This pattern has a low win rate, sometimes less than 50% so its not for everyone....

the secret to these is small losses and very big wins...

the set up is a candle the has no part touching a 5 period ema set to the close...

if you want to make the most of these, find one on weekly, daily or 4hr then enter on a lower tf... have a look at your charts and see what i mean

EU daily... bearing in mind what we know about the trend on eu can you spot some excellent set ups recently..
http://i1222.photobucket.com/albums/...30at153109.png
  • #77
  • Apr 30, 2011 9:42am Apr 30, 2011 9:42am
Quoting darrenlittle
ok third pattern is called a 'flying buddah'...
I recognize this pattern from graeme's thread. I, too, have found his ideas to be beneficial.

I know he trades flying buddah's on the M5 charts. I like your idea of looking for them on higher timeframes, but what's your strategy for entering on the lower ones? After finding a flying buddah on the H4 do you then look for one on the M15? Sorry for all of the questions.
  • #78
  • Apr 30, 2011 10:00am Apr 30, 2011 10:00am
Quoting Location
I recognize this pattern from graeme's thread. I, too, have found his ideas to be beneficial.

I know he trades flying buddah's on the M5 charts. I like your idea of looking for them on higher timeframes, but what's your strategy for entering on the lower ones? After finding a flying buddah on the H4 do you then look for one on the M15? Sorry for all of the questions.
exactly, one of the best threads on here for sure...!

ok this is a real example of an eu short at the end of friday, we had multiple flying buddahs on 4hr 1hr tf, so i dropped to 5m chart knowing im looking for possible momentum move short

heres what i saw on 5m
http://i1222.photobucket.com/albums/...30at155422.png

price had stalled in this tight range so im looking for it to break the support with my stop at the top of the range, risk was 18pips for an 87 pip move... based off a signal on 4hr chart...

i will also use basic price action, engulfings etc and look at wicks, if im looking to short i want to see the wicks above... have a practice in demo or strat tester.. but you can often get into moves of hundreds of pips with less than 20 pips risk

EDIT: just noticed also that after the price broke south out of the consolidation it came back to test the support and printed a pin bar, another good entry...
  • #79
  • Apr 30, 2011 10:25am Apr 30, 2011 10:25am
Quoting Location
Darren:

How many trades did you take this past week?

I took three trades: 2 Daily and 1 H4. One of the daily trades was a bad idea. I shouldn't have taken it, and my 2% stop loss was hit. The H4 trade was a breakeven trade, and I am currently up about 4-5% on my Daily A/U trade.

Anyone else have success with this method this week?
My biggest win this week was when I shorted GBP/CHF for 145.9 pips according to the rules of the this method.

Darrenlittle, thank you for the two setups you've shared with us. I'll check them out.

Cheers
Attached Image (click to enlarge)
Click to Enlarge Name: gbpchf_4262011.gif Size: 14 KB
  • #80
  • Apr 30, 2011 10:33am Apr 30, 2011 10:33am
Quoting FusionF
My biggest win this week was when I shorted GBP/CHF for 145.9 pips according to the rules of the this method.

Darrenlittle, thank you for the two setups you've shared with us. I'll check them out.

Cheers
cool fusion, thats a tasty win, also noticed from your chart that the engulfing broke the support that was holding price up for over a week...
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