Stairstep trading using the SQ dynamic indicator

Current Eur asia open

Here is current GBP chart for Asia open I am still long Can you see the new CZ forming?

Ok so We have another 30 pip CZ forming on the current long trade. I am filled on that trade at 1.5884. The fib for the day puts the 61.8 down at 1.5865 There is also a trendline forming on the 15 minute chart. Which runs there as well/

I am putting my stop at 1.5854 below the trendline and 61.8 fib. It also is below the projected 30 pip CZ break, so if this new CZ breaks downward I am not stopped out on just a whim. I will continue to play the CZ's and look for a break higher on the current one.

Thats about it

Thanks

There is also a nice up channel forming on the 1 hour chart. My stop is below that as well

Previous mentiones zone now broke just short of its projected run

I was stopped out on my long trade for a 20 pip gain I was unable to get short on this latest freefall in GBP (mainly because I was sleeping). The indicator failed to draw any CZ's after the one now seen on the bottom of the chart. The settings for the indicator are the default mentioned earlier 22/15/30/true.

Changing the setting to 22/15/30/false seems to get better results. So I will now change to that.

Price has also run its course to the bottom of the 4 hour channel that was mentioned in the previous trade plan. It was also rejected at the top of that same 4 hour channel. It did try and get thru but failed toi sustain any type of push.

The 4hour channel is a 100 pip channel and we seem to be getting a bounce. The daily uptrend line is just below at 1.5785. The risk on a long off this channel bottom is a bit pricey with that trendline coming in at at 1.5758, and currently price sitting at 1.5837. With Tipp data and wholesale inventories up today I am sidelined from this trade. Its possible we could get an emotional break (news reaction) of the 4 hour channel sending price to that trendline. So lets see what happens.

Chart with SQ at 22/15/30/false

I have the feeling that the determination of the height of the consolidation box is purely empirical in this system.

I mean that this approach could not be robust in all market conditions. Do People should test mainly this pair on 15 min TF before being convinced that 22 pips is the ideal height ? What if they decide to focus on 1H or 4H TF because they could not stand in front of the charts all the day.

What if market momentum change and 22 pips does not make any sense ? (I'm saying 22 pips but it could be 30 or whatever). I have no clue how to be sure, because false breakouts will happen if the height is not right. And I don't speak about other pairs people want to trade !!!!
So not truly robust as an approach

The height of the box doesn't matter at all. All you are doing is trading a breakout from a period of low volatility. As long as the height the indicator finds, or the manual box you draw, represents low volatility for that pair then it's fine. Or you could make life easy for yourself and just trade H4 inside bars. They are virtually the same thing.

You will get a lot of whipsaws/false-breakouts with any system like this. That's why it needs to be combined with understanding the other pieces of the puzzle such as support and resistance areas, pivots, higher time frame trends etc. Hopefully this thread will define some of those pieces better and create a real strategy.

Or you could just martingale like the OP on the original thread recommends! ;-)

PB

I cant say that I disagree with you. I am not sure that the indicator itself will work in reagrds to finding the channels ( CZ zones). It missed one last night that we spotted by ourselves. None the less I will continue to try and trade this for a bit longer.

I have been getting a number of PM's asking me questions etc about the settings of the indicator and its starting to look like if we put 10 traders in 10 seperate rooms and had each set the indicator we would get 10 different results. That's not a good thing.

In the end it might be best to look for zones on each time frame suited to the TF that fits your style best. I tried to do this with the 4 hour charts and the channel I pointed out.

I am sorry but I trade full time and just dont have the time to explore every aspect of this indicator. I am just trying to see if we can get a standard setting that helps.

With that said I should probably apoligize because I have not focused all that much on the indicator itself and have been more or less posting my individual trade planes based of zones. I will try and do a better job.

As for all market conditions I do think that a zone system based on PA would be the most effective. If a market is trending it allows you to catch the trend at any point whennthe market pauses and consolidates gains or losses. In a range bound market one knows the range (like the one on the 4hr charts) and would be able to play that range accordingly or sit it out till a trend developed.

The latter of which if you had played that 4hr this morning you made a very healthy 80 pips after a huge sell off on a bounce.

Thats the reason I am trying to incorporate fibs into this method. If you used them today for example and had bought the bounce off the 4hr chart bottom. The price bounced and retraced that channel top rejection to just short of the 61.8 and is now falling again.

The bottom line there is not an easy WOW look at this system anywhere in forex it takes work to make money like anything else.

Thanks for the reply I hope this didnt come off as rude and please if you have ideas let me know I am not by any means an expert and can always appreciate another point of view

Thanks

Calstar

Please some post it here or point me where I can find this...
THX

Here you go

NOTE : this is not my indicator it was obtained thru this public forum. The indi was developed by Squailor

Thanks Pixel a very good point. I have 2 main rules that I try and trade by they are:

Is it logical

If my "professinal money manager" was going to do this with my money would I kill him.

If you wouldn't allow someone else to do what you are about to do why would you do it.

Getting back to this method and thats what it is I have some ideas that I am playing with but need some time to work it all out. Rome was not built in a day.

Nice one Calstar - let's see if we can come up with something useful.

PB

I have placed a long trade on the AUD/USD. Filled at 1.0253. This is counter trend to the 4hr and daily trends. So the risk is half that of my normal. I risk $1.00 per thousand normally. So for this trade I am at .50 per lot per 1000

The pair broke the down trendline and has entered into the CZ after running the course for the projected breakout of 30 pips. There is a double bottom that has also formed on the 4 hour chart.

I am targeting the 61 fib retracement point which would coincide with a a break to the topside and the projected run from the top side break of 30 pips. My stop is placed below the current low for the session and at 1.0217

I currently have 23 pips on this trade. but am moving stop to even. The top of this box coincides with the 38 fib. I knew that going in but decided to take the risk. No reason to risk a loss on this one. It is after all a counter trend trade and the trend is your friend.

I have closed the overnight trade for a total of 42 pips. So the stats since we actually started trading this are as follows

3 trades Total Pips Gained 39


Trend Trades Trades Wins Losses Pips Biggest Loss Biggest Win
1 1 20 20



Counter Trend Trades Wins Losses Pips Biggest Loss Biggest Win
2 1 1 19 -23 42


I think I have finally decide on a complete set of rules for the method as well as MM. I will try and update the first post today. I will be sidelined untill after the Beige Book. Which really should be much ado about nothing since the Fed is pretty transparent. What most will be looking for is signs of more QE which would be dollar negative.

This is the start of the current NZD/USD trade. We will call It trade#4

The trade was taken long during the US session. The trade was taken beciase of the uptrend. That moved price thru the CZ

Oh and one morething Did you se ethis Favorite. A realllllll realllll good reason to close that long.

How about a triple top on the 4 hr chart if it doenst get thru I amk out with 49 pips

Trade number 4

I will post this chart later because I want to give people a chance to look at what I am seeing. I am a believer that the longer the time frame the more signifigant the S/R etc.

So take a look at the 4hr NZD/USD chart and zoom out so you can see at least 30 days. I think you can see we may have something developing.

I am out till this evening Thanks all

If anyone does see what I see please post it