75 pips plus daily using 1 min chart (not scalping)

Thanks Romex!

I will implement the changes to my chart.

Kurt

Hi Romex,

Thank you very much for the thorough explanation and additional information!

A couple of hours ago I made another bad trade using the system. I wonder how you would have analysed the situation?

Note: my chart displays gmt time. In the first chart in the attachment there was what I believe to be a 30+ pip price movement; Is this correct or shouldn't there have been a retracement? (Sorry, might be a dumb question.. I'm still quite new at forex ). During this movement there was a possibility to take a trade but I didn't take it because there weren't any 30+ movements before during the Tokyo session.

However, a couple of minutes later all signals were in place again, adr seemed OK and there has been a -the before mentioned- 30+ pip movement. gbp/usd also seemed to be going up at the same time. There also wasn't any news around 7gmt; However.. news was expected at 8gmt, maybe that could have been a problem? (Didn't really think about it when I took the trade). The situation is shown in the second chart and it shows that the setup failed.

It should also be noted that the one 30+ pip movement I mentioned was only just about 31-32 pips; So actually, no real significant moves happened during the Tokyo session before.

Also.. wouldn't some kind of volume indicator be helpful to measure the strength of the momentum?

Thanks!

let me answer your last question first.

There is no such thing as a Volume indicator in Forex. Unlike a stock exchange, where all trades go through the exchange, volume indicators are available. Many FF forum users have asked for a volume indicator and everyone gets the same answer, and that's because the Forex market is an International market and no particular exchange is solely responsible . You can verify my answer by doing a search at FF.

Now concerning the charts and a trade you made today. I hope what I say now does NOT offend you. It seems, from the questions you have thus far asked, you seem to be too dependent on indicators. Over 90% of Forex traders fail and this fixation with indicators is the main culprit. Someone once wrote in this Forum that all indicators should be made illegal, as they cause more harm than good. Although I do not agree with him completely, I do see his point. If your trading is completely indicator based let me tell you that you are guaranteed to fail in a Forex career. The most important factor in Forex Trading are the intangibles. When I talk about intangibles, I am talking about matters that the charts dont show, and things that you will only learn from experience.

From what what I see about the trade you took, you took the trade soon after the European session open. Now in answer to a previous question by you, in slow days, you must try and find an answer to why the market is behaving this way, before you can even think of entering the trading arena. Looking only in the business calender is NOT the complete answer. For example yesterday was a very big moving day for EUR/USD and GBP/USD, and this was because the EU yesterday made a major decision about settling the debt crisis in Greece.

Now nearly always after a big moving day the next trading day is usually very slow. I pointed out to you, in an earlier post to you (post 59), that indicators are unreliable on slow days. Thus you should not even think of trading until you find an answer to the slowness Secondly, although the Forex calender did not show this, today the US senate were going to vote on the US debt crisis. The debt crisis is a very hot topic all over the world This is a possible reason for the slowness and thus you should have waited for the US market to open before you started trading.

Finally look at post 56. Here is a tangible I warned about. That is "do NOT trade in the direction of the high or low of the day at the start of a session".
Read that post again and again. You entered into a trade where the high of the day was only a few pips away. Another tangible One click of the mouse on the 5 min chart and by changing it to a 15min. you will see what the MACD BB is doing on the 15 min. You would never entered into an uptrade if you see what the MACD BBs were doing, they were going DOWN sharply!! Go back and check for yourself. It takes no more than 10 seconds to change the timeframe of a chart to the next higher time frame and then change it back. These are all things that do not show on your charts and you must learn to do these kind of things as a course of habit

Finally you said that you are new to Forex. You can make a good living from Forex alone, provided that you have the knowledge and the experience. But these two attributes take time to develop, so do not be in a hurry. Keep trading in DEMO till you have both the experience and the confidence. If you still want to make money and get the necessary experience at the same time, it may be worth your while to get someone to trade for you and you watch and keep asking questions, on your computer screen, and let the confidence build. The System itself is not important.

Good luck

Romex

Thanks for the advice and the tips Romex, I appreciate it. I reread all of your posts and will keep applying your system while also keeping the fundamentals (news etc) in mind. Btw, what other sources than the forex calendar on ff do you use to find relevant economic data that might affect currencies? (You mentioned relevant news that was not on the forex calendar in a previous post).

I have also ordered some books on forex, hopefully that will speed up the learning process for me

I would also find it very interesting to see some examples/analysis of setups that you encountered yourself while using the system. Maybe you could post some if you find the time?

And another question: How do you feel about the usage of this system on other correlating pairs like AUD/USD and NZD/USD?

Thanks!

Hi,

I have some additional questions.

Do you also take long trades -when all long signals are present- when price is (almost) above the R3 level and/or high of the day? I notice that in many cases price falls back before reaching the TP in this situation. Vice versa for shorts.

And do you also use other methods of trading (eg a ranging strategy) when there are slower days? Or do you not place trades on those days?

Thx

Long waiting between your posts Romex, also always with the knowledge in the back of my mind that you can say no i dont use that or that at all i was just foolong you ........


best regards

Thanks for sharing your ideas and knowledge.
Please could you post more charts to demonstrate your entry techniques.
I know you had posted a few before now, but we would appreciate more charts at different premises to allow this potentially great method to sink in better.

Thank you very much for your time, though. We appreciate your analysis.

Thanks.

Ikeo.

Explanation follows on my next post

All right folks I am presenting an alternative way of trading. This is in its experimental stage, but I will explain the charts and perhaps people can tell me what they think.

But first a bit of back ground information.

As I said we are are using support and resistance, mainly pivot points.

Now if you do a Google search you will find that there are 2 types of pivot point traders. The first group, I myself included thus far, will only look for long trades when price is trading above the pivot, and visa versa for short trades. The second group treats the pivot points as reversal points and trade only reversals regardless whether it is above or below the pivot. I must admit that the second group is the majority. After all the English definition of "pivot" is "turning point" These traders buy at Support and sell at Resistance. This is what you are supposed to do under normal conditions. Now I have looked at the statistics for EUR/USD and found out that reversals generally take place (52%) at S/R just above or below S1 or R1. Mid level pivots are included in that range. This is why, for safe trading it is never a good idea to enter long when you are close to the top or short when close to a bottom.

Now no size fits all, the system I have been trading is basically a trend following system, so you expect to do well when in a trending market, and not so well in a ranging market. However Forex trading is generally a ranging market and that's what I am examining right now. Of course Trending and ranging also depends on the time frame you are dealing with. Take the chart that I just posted. This is today's charts. If you traded like I suggested before you would have missed the short trades in the early eur/UK open sessions, as they occurred when in the wrong side of the pivot. This happens typically when there are no large trends around and also during the Summer months.

On the experimental charts I posted notice first of all that I have now added a third chart to a currency pair. This chart shows only the BBs for the 15 min chart. Notice how strongly BBs are going down for the whole morning session, The 15 min should tell you to only take short trades. This is the only direction you should be trading, regardless what the EMAs tell you or whether you are above or below the pivot. Also disregard the 5min BBs if they are moving in the opposite direction to the 15 mins. Basically you are trading in the direction of the larger time frame, which just about everybody recommends.

So why do I have a 5min chart and a 1min chart? The 5min chart is fine if the 15 min is flat or if the 15min BBS are between the upper and lower and upper Bollinger bands and NOT moving up or down sharply.

What are those arrows on the 5 min charts and what are those EMAs set to. These are the 20 and 100 EMAs. The arrows are alerts for the 1EMA(or 2 EMA - not much difference between the two) cutting the 100 EMA(yellow) and 20 EMA (aqua). Now I have put the alerts on the 5 min instead of the 1 min. Because on the 1 min you get so many alerts that after a while you stop paying any attention to those alerts. On the 5 min you get far less alerts and now you can focus on the alerts. Notice there is no need to see candle information on the 5 min or the 15 min, that information is limited for the 1 min.

on the 1 min chart the sole focus is the crossing of price either at the 100 ema or the 20 EMA. Now you will find that all good trades start when price first crosses one of these EMAs. Now a word about EMAs. EMAS are averages, and as averages they will always return to the zero point, ie the actual EMA line. The EMAs also act as support and resistance lines. When price is too far away from any of these EMAs, nearly always a retracement to one of these lines will happen. So do NOT enter a trade when you are too far away from one of these lines. Instead wait for a retracement. I would rather have the alerts on the 1 min, but try sitting through a a 8 hour session and have these dings going off every few minutes, its enough to drive you crazy. Now a 5 min candle is equivalent to five 1 min candles. The problem with having an alert on the 5 min, is that if the 5 min candle is a long candle, as will happen with news announcements, you will be too far way from the 20 or 100 EMA.

So here is how I am training myself with this enhancement. I first look at the 15 min for the right direction to trade in, then I wait for the ding from the 5 min, If the ding appears to be close to the 20 or 100 EMA I will take the trade right away, otherwise I will wait for a retracement to one of these EMAs and then make an entry. Provided of course there is no conflict between the 5 min and 15 min MAcd bbS. lOOKING AT A COMPUTER SCREEN CONSTANTLY for 8 eyes gets very hard on my eyes. Now I usually read a book or go out and have a smoke and have the alerts tell me when to enter. I find this method more relaxing.

Please do not try this method in live trading till you have actually seen all this happening, now you should be clear what to look for. Also forget the 20 EMA being above or below the 100 EMA.

One final thing I want to say, is that I am glad the moderators have moved this thread from the Trading Systems forum. As starter of the thread I feel that I am responsible for answering all questions. This thread is more educational than anything else and I do not think I could cope with all the questions if this went onto another more popular forum.

So folks play around with the current enhancement and tell me what you think. Perhaps I too can get some more insight.

Good lock

Romex

Thanks for your post, Romex.

I'll be trying out the new system soon.
If I understand correctly you now just ignore which side of the pivot the price is on, if the 15m bb's are pointing in the opposite direction? Do you still wait for the 5m bb's to cross the upper/lower SD lines before you take a trade or do you immediately pull the trigger when both 15m and 5m's are alligned (and ema's are also lined up correctly)?

I'm also looking forward to hear what you came up with for the ranging market conditions.

Thx!

I am new to Forex so please forgive me it I seem to miss a point or the logic behind it, but I did have a thought about ROMEX's last post. If EMS is giving historical information (as opposed to predictive) then adjusting the Alarm from the 1 EMA to the 5 EMA is going to provide older information. Being older means it provided less value as to the current conditions. Further, 5 minutes is a very long time if one is trying to grab 5-30 pips. In fact 5 minutes seems to be huge. Any thoughts on this?

Hello Romex and others . . .

I more freq. trade H4 or even D1 TFs but having now read this entire thread over the weekend, set up my charts and reviewed past action, this is a great contribution to my other trading activity.

I particularly like the enhancement settings.

This is a pretty unique set-up, Romex, and really nice. Creative. Just when you think there is nothing new . . . And, of course, all trends start on M1 . . . just a little hard for most to pick up early.

This can be and should be a pip harvester.

I'll try to post a trade tomorrow when I intend to go live. For me, that will be around NY open. May not be as good on NY as London, but it's available to me. We'll see.

Best regards to all and thanks to Romex, big time, for his imaginative development here.

Forest

.

Imagine sitting in front of your computer, and getting an alert every minute or so from the 1 min charts, remember I trade two currencies at the same time. You soon start ignoring the alerts, so loses its effect hence the change to 5 min. Secondly, THIS IS NOT A 5 PIP PROFIT system. Wherever did you get that idea, the minimum I shoot for is 25 pips.

Regards

Romex

I find a couple of questions need clarification from Romex . . .

1. Following enhancements, do you still only take positions on the correct side of the D-PP? (for shorts, price < PP, etc)

2. What if the EMA arrow appears prior to a turn on the BB-MACD? This seems to happen more often than I originally realized. Do we wait for the MACD dots to change color prior to entry as confirmation?

In your #70 it seems you would plunge in: 1)ck M15 for direction, 2) wait for ding on M5 cross, 3) take entry if close to 20 or 100.

We're really just using the BB-MACD for direction, not any entry use, right?

Thanks, Forest

Hello all.

I am getting several questions on exactly what are the conditions for entry, also several questions concerning "above the pivot or below the pivot"

What this post is going to deal with is something that I should have clearly pointed out in my first post. Sorry, but it's never too late.

People are not too sure what this thread is all about. So I will deal with some of these questions.

Many people think this is a scalping system even with the enhancements. Well it is not. There are numerous times that I get 15-20 pips profit. I do not take the profit, an in most such occasions, I will be stopped out at Break even. Someone once said "Break even is a good trade, and hitting your profit target is an excellent one" I prefer to go for excellence, as opportunities on a daily basis are numerous.

OK now lets talk about what I should have mentioned earlier. But one more thing. I must point out that this is an educational thread. Just posting a system on the thread is not doing the serious reader justice. So throughout this thread I am intentionally leaving out the good trades and concentrating on the bad. As mentioned before to make money in this business you need to put in the effort to know exactly what you doing, and deal effectively with the problems. Getting to know the ins and outs of the system thoroughly is what is going to make you a good trader, even though you may decide that what I describe is NOT for you.

Most questions deal with entries and working with the various indicators. The system is designed for swing trading for 25 plus pips. Let me illustrate this with some charts from today. Get the idea of swing Trading clearly established in your mind. Above the pivot trades, deal with one direction trades only. The other half of available trades are ignored because they rely on reversals. I have tried the enhancement the last 3 days and was pleasantly surprised how well it worked - but more about that later.

On the 5 min chart the vertical dotted lines represent the daily open, the European open, the US open and the European close. When I start trading for the day all that is visible is whats on the left of the blue line. If you started your trading at the start of the US open you would have noticed the European and UK sessions were quite choppy and in hindsight no one in their right mind would trade the European and British sessions. Now look at the European session only, this time on the 1min chart and you should be able to recognize at least 6 opportunities, on the combined EUR/USD and GBP/USD charts. The really great trades started after the US open, but I had already made my daily profit target so there was no need to trade any further.

You must be able to spot these opportunities when they come up and if you cannot then back test as much as you possibly can to gain that expertise. I have already described what the S/R should be. Start looking for reversals at these points. They will nearly always occur at a high or a low FOR THAT SESSION. That is why it is never a good idea to take a trade in the direction of the high or the low, if that high/close is close to your entry point. Use the S/R with the MACD BB to pinpoint those levels.

What I do is to to use another computer where I have the full session available to view at all times. No need for any indicators. If you shrink the 1 min. charts such that you cannot tell whether you are looking at a bar chart or a candlestick, now the highs and lows stand out clearly plus you get a good overview of the whole session and can tell at a glance what happened previously at the same S/R point. Make this a course of habit, regardless what system you use, you have everything to gain and nothing to loose.

Talking about habits. It is a also a sound idea to look at the news for financial news. CNN.COM, BBC.com all have a Financial section. It does not take long too long to read this prior to or during your trading day. You may get some information that may prove to very useful. The last week was one of those weeks, where the EURO debt situation and the US debt situation caused great upheaval for the Euro and the US dollar. Forex factory does NOT show ALL the major News issues.

Someone, Emailed me the other day, saying that looking at 15 min and often 5 min charts, may help you to stay OUT of bad trades, but will also hinder you from taking some good trades. He says that for our purposes the 5 min and the 15 min is slow, if all we are is looking for is 25 pips. My investigations do show that he is correct especially if you base your entry point based largely on what the MACD BB indicator is telling you. The MACD BB is a great indicator, but its main flaw it is more lagging than other oscillators, such as stochastics and RSI. So in my next post I am going to show you how to make the MACD even faster, some of you are really going to love this, there is no need to add more indicators, in fact on the contrary I am am actually reducing the indicators for the next enhancement.

Till next time

Romex

Romex,
great thread. Please keep on going...

I like how you reduce the indicators (and charts) and maybe a multi-timeframe BBmacd could be usefull, therefore I attach one.

Great very anxious to see your new ideas!
Q

It seems the guy that started this thread had gone AWOL.
Wherever he or she is, I hope he or she is okay.
Forex Factory is a serious place for traders and newbies alike, and you should not start a thread just for the fun of it and then disappear without attending to your thread. You don't have to start one if you don't want to, but when you do try to do justice to it for human sake, and that is what is making forex factory thick.

I have not gone AWOL as suggested, I am not going to keep posting if I have nothing new to say, when I do I will post.

It seems that with all this talk about "above or below the Point", "where do we actually make an entry using the MACD BBs", "enhancements" etc, I may have unintentionally confused a number of readers, so now I am going to start again using a completely different approach.

The first thing I wish to point out to the reader is. What is the actual point about the system, in other words what is the logic behind the system? Now I was at the point of completing an essay on the logic of the system, when it occurred to me that someone else may have already written an article based on the subjects that I have already dealt with; so I started doing a Google search. After searching and searching with different key word searches I finally found an excellent video. Now Forex rules prohibit me to actually post links to web sites. Please do a Google search on "Craig Harris Natural Flow of the Forex market" Watch the video. Let me know what you think. If there is sufficient interest I will continue further.

Good luck

Romex