The perfect trading system

Articulate


As discussed previously 1000 pip circle completed at 120.00 from 130.00. Price went as low as 116.83 (117.00) to use a round number.


What is your view on price going to 117.00?

Do you see price going to 117.00 as an overshot on the 130-120 circle that is common on bear runs and the new circle began at 120 or do you see a new circle beginning at 117.00?

I believe it was an overshot and the new circle is from 120.

Also you posted that you believe that this bull run could possibly be a 1500-2000 pip run. Is it because the pair made a new all time low?

I would appreciate your thoughts.

Thanks

Skillwill

You will get better result when you use round figures. I have mentioned in one of my previous posts, the run to 117 on 22nd of September 2011 was to complete the second leg on the monthly chart which was printed on the 1st of January 2009. The support on monthly chart is now on 120. My view is that between 115-120 will form the support for a long-term bull run for the dragon on the monthly chart.

An overshoot by as much as 800 pips is not strange for the dragon. However, what happened last week was not an overshoot, but an extension of the bear run beyond 1000 pips largely due to the Euro crises. If it is an overshoot, the weekly candle would have closed above 120.

For the 1000 pips cycles, you need to rely on the weekly close to determine whether a movement is an overshoot or the beginning of another cycle. The circle from 130-120 was completed on 11th September, 2011. For an overshoot, the weekly candle needs to close above the circle. However, the next weekly candle closed at 117.00, the weekly candle for last week failed to break 120. If 115 is touched and 120 fails to break, our new cycle could be 120 to 110. Given the market sentiment for now and how long it will take to sort the problems with Greece, the new circle is a possibility. 120 is the obstacle to the bull for now.

How would I trade this set-up?

The weekly bottom for now is 117. A buy at 117 is a good buy, but I will be more comfortable with 115. My first buy at 117.50 was closed around 120 when the daily failed to break 120 for 3 consecutive days. I have pending buy at 115. I am currenly using 50 pips price action analysis on H4 to determine when to enter a long trade. If price did not touch 115 by Friday and H4 fails to break 117 between now and then, I will enter my first buy this week. Of course, I place my trades using M15 chart on a friendly chart (read by post about creating a friendly chart to understand this).

For any trade I take for now, my stop loss will be 100 pips away. Everybody is expecting an intervention by the Japanesse government but failure by the bull to break break 120 is a sign that the "big boys" might have started another cycle between 120-110.


I attach the monthly, h4 and M15 the above analysis

All the posts on this thread are all related and it is essential to read the entire post to fully the my trading strategy. What I have done here is compile the must read for the ease reference.

THE MINDSET OF A SUCCESSFUL TRADER!

For those who have been following this thread for quite a while, you should have by now be in a position to trade with confidence. That notwithstanding, I will today discuss the following specific stepson how to think, act and develop the mindset of a successful forex trader:

Step 1: Trade the Masterchart. It should be your No. 1 guide. The levels on the Masterchats I posted here are products of extensive research. What is happening in the forex market is that series of bad/good news (fundamental), manipulation/greed by the big players (banks, hedge funds etc) and most times fear/panic by the investing public will always push the price from one support/resistance level to another. The truth of the matter is that the world economy generally is in shambles that is why you will constantly see series of bad economic news followed by series of good news resulting in “bull+bear+bull+bear” usually repeated over and over again on your weekly chart.

Step 2: Trade in the direction of the weekly chart: The most reliable direction in the forex is the direction of the weekly. If the weekly is in a bear/bull mode it could stay that way for 4-10 weeks. Read the post on understanding trend to better understand how to see the bigger picture using the weekly chart.

Step 3: The best trading opportunities are in the weekly: To increase your chance of success, sell only the top of nN, mM and buy around the base of V, U and W on the weekly charts. To identify these level signs, open a weekly chart, look closely and you will begin to recognize them. This simple trick will make your trading live a lot easier. I will begin to post this signs on this thread.

Step 4: Use money management: Use my recommended money management lots/account size ratio as follows:

0.01 lot for $1000 Trading account (max of 5 open trades at the same time)
0.10 lots for $10000 trading account (max of 5 open trades at the same time trades), etc

If you gather more experience or make money regularly, you can gradually increase your lot sizes or open trades to double the recommended lot sizes.

Go through the early part of this thread for a better understanding of my views of money management.

Step 5: Trade the daily trade-friendly chart: The weekly is your guide and the daily is your main field of play. Trade the daily chart following the direction of the weekly. Study some of the daily charts I have on this thread for better understanding of the daily charts.


Step 6: Trade 1000+ Pips circle. Read and understand the 1000 pips price actions analysis. For the major pairs from the pin of a weekly candle expect 1000 and more before any major reversal. If the destination of 1000 pips PAA is closer to a major support/resistance on the master chart anticipate a touch of that level. Identifies expected levels in advance and you only monitor price reaction around such areas.

Step 7: Avoid thinking in terms of pips. Avoid thinking in terms of pips but in terms of actual currencies e.g. cent, pence, etc. If you think this way you will avoid the graveyard of most forex traders (i.e. chasing low pips (below 100 pip). If you think in terms of currency you will realize that a move 1000 pips move by GBPUSD move from 1.54000 to 1.64000 is a mere 10 cents. Further a 1000 pips move on GPBJPY from 130 to 120 is a merely 10 yen.

Step 8: Use H4 50 Pips Price Action Analysis. Utilise price movement on H4 candles within 50 pips range to determine where to enter a trade. If you do this you will realize that you can have up 16 hours and more to enter a trade. Trading this way you do not need to sit in monitor your chart endlessly to get trading opportunities. In the worst case scenario you only need to check the chart every 4 hours.

Step 9: Enter trades using only M15 trade-friendly chart: When the price get to your desired areas on the higher time, enter your trades at the best discounts by using M15 on a trade-friendly chart. If you need further explanation read my previous post about creating a trade-friendly chart.

Step 10: Understanding the importance of 50 point level on RSI: 50 point level on RSI on your trade-friendly chart is usually an area where price normally stalls, changes direction or continues on any time frame. Study how price react at this point for a better understanding of price action.

Step 11: Set concrete zone on H4 chart: Price usually trade for most major currency pairs within 250-400 pips over a period of time within a concrete zone. The concrete zone is a good guide on where to place stop losses. For your short term trade, place stop losses slightly above the concrete zone for your sell and slightly below for your buy. Read my previous posts on concrete zone for better understanding of the concrete zones.

Step 12: Stop loss: Most traders recommend that you should not risk more than 2% of your account per trade. This is a fair recommendation, but I do not support tight stop loss. With my maximum recommended lot size/account ratio 2% account risk per trade on $1000 account size trading 0.01 lots is $20 i.e. 200 pips (If you trade the maximum you increase your exposure to 10%). The important thing about stop loss is money management, if your lot size is small you can afford to increase you stop loss settings and give your trades room to breathe. Read my views of stop loss in some of my earlier posts.

Step 13: Take profit at pre-determined level: Set your take profit at pre-determined points depending on your expected returns. If you are trading the weekly chart anything less than 200 pips is a waste of efforts. You should be aiming for 200 pips and above.

I attach the monthly and weekly charts for a better understanding of this analysis.

My postings from this point going forward will firstly include specific guides on long term trade calls including some of my 1000 pips trades for those who are willing to follow these trades. Secondly, it will provide benefits for traders who have been patient enough to follow this thread with it started around two years even when I decided not to post trade calls.

Thank you very must articulate, i read your thread since september 2010, i am very interest with you medium and long term, now i have my own strategy to trading after look many threads in forex factory,especially your strategy. (sorry my english is not good)May God Bless You

articulate,GBPusd and GbPJPY for medium term ,can you tell me where you put your sell limit.????are u have pending order,sell limit???tq
your strategy is very good , somebody maybe not undestand all,focus CANDLE H4 , Not just RSI,that is my advice for others visitor, i am very busy that why i think medium and long term is suit for me, i read your thread maybe more than 10 times,i have miss undestood , because my english not good..he he he ...one more time,thank you very much..........................

Practical Trading – GBPUSD
What I will discuss today is practical trading GBPUSD. £1.53 is a strong support for now. Based on the weekly, the best strategy is to go long until £1.53 is broken. The first target is £1.63 and the second target is £1.60 but £1.60 needs to be broken first by the weekly candle. You can practically buy your way to about 1700 pips a long £1.53 is not broken by the weekly.

As usual, use H4 within 50 PAA chart to determine when to enter a trade and M15 to actually place your trades. The pins on H4 are your temporary resistance levels. If you did not join the train from £1.53 (the bargain prices for long) you can still buy when H4 candle sits (open and closed) on a previous pin. Draw a tiny rectangular box to identify these levels. Put your stop loss below the pin for long. If you are counter-trading i.e. against weekly trend, place your stop loss for sell above the pin. . REMEMBER COUNTER-TRADING AGAINST THE WEEKLY TREND COULD GET YOUR FINGERS BURNT.

I attach the weekly, daily, H4 charts and M15 as usual.

articulate ,can you help me to post master chart for GBPCAD, NZDUSD, GBPAUD,AUDNZD, your system trading is very good ,but i don't undestand ,why admin ff put your thread in rookies discussion not in the system trading??thanks for your posting (10 okt and 17 okt ),its very help me in my trading,its same with my analisis, thank you GBU

Hi Articulate,
Referring to your 50PPA use on GBP/USD weekly chart, where the lines are drawn 50pips apart, just like to know how you get the first line. For example, if the first line is at 1.5923, then the subseqently lines will be at 1.5973, 1.6023, 1.6073 and so on.

I am very thankful for your explanation of your trading method. I am about to start a Demo account where I shall look forward to using your advice. Kind regards AB

I am presently out of town on a trip. I will post the charts next week when I get back to base. I love the fact that the thread is listed under rookies discussion. This is because this allow me to develop my research over the last two years without distrations from those noisy traders who think they know it all. Furthermore, I actually started as a rookie and I am still loving the label. If you a looking for gold dig deep and try unusual places!

I wish you all the best. If you need any assistance, post your request here.

For 50PAA use round figures to get the best result e.g 1.53500, 1.54000, 1.54500. 1.55000 etc

If you benefit from this thread, give me a vouch! However, I don't know how a vouch is given. If anybody knows how it is done, post the process here for those who genuinely desire to give one.

Vouch or no vouch my ability is deeply rooted within me!

Hi All,
I have read Ref to the 'Cable'
Is this anything to do with the US$
Would a appreciate help with a definition.....
With thanks
Alan

Articulate, Thanks

anybody tell me how to post grafik?

http://screencast.com/t/5me8P0ykDyLP
http://screencast.com/t/IGHld3IiHO

This is an update on the above post. The price today touched £1.60 and the question whether it will hold as a resistance or not. To know whether it will hold or not these are the signs to look for:

1st sign: H4 candle will open and close above £1.60
2nd sign: daily candle will open and close above £1.60
3rd sign: Weekly candle will close above £1.60 (not a weekly pin)
Final sign: the weekly candle will sit (open and close) on £1.60

I cannot post any chart now, because I don't have access to my platform until I return to my base.

I will continue to update the practical trading for GBPUSD whenever a significant level is reached.

Practical Trading – GBPJPY
I will now discuss trading GBPJPY. ¥117 is a very strong historical support and also the second leg of the monthly candles. All things being equal, this long can push to ¥150-¥160 (4,400 pips) to form a small letter “w” on the monthly. Remember, this is a long term haul. For instance the bearish from ¥163 to ¥117 (4,500 pips) took over two year. As far as forex is concerned, it is usually one step at a time. Remember at least 1000 pips at a time
Bases on the weekly chart, the best strategy is to go long until ¥115 is broken by the weekly candle. The first target is at least ¥125 followed by ¥130, then ¥140 and possibly ¥160 to give us our monthly w. If a pullback from any of these levels fails to break ¥120 by the weekly or monthly candle, fails to break ¥120, the bullish run is still intact. In the final analysis as long as the monthly or weekly candle fails to break ¥117-¥115 then ¥160 is a very strong possibility. You can practically buy your way to about 4,400 pips a long ¥117 is not broken by the weekly. The break of ¥117 is continuation of the bearish run. If this happens, the next support is ¥115 and ¥110

As usual, use H4 within 50 PAA chart to determine when to enter a trade and M15 to actually place your trades. The pins on H4 are your temporary resistance levels. If you did not join the train from ¥117 you can still buy when H4 candle sits (open and closed) on a previous pin. Draw a tine rectangular box to identify these levels. Put your stop loss below the pin for long . If you are counter-trading i.e. against weekly trend, place your stop loss for sell above the pin. REMEMBER COUNTER-TRADING AGAINST THE WEEKLY TREND COULD GET YOUR FINGERS BURNT.

I attach the weekly, daily, H4 charts and M15 as usual.