Max's Simple Ride the Wave System

I saw this one too. A couple of options here. Yes it is a way from 20EMA and 3 short candles in a row means there may be support to go short.

So a safe option would be to place BUY order at high of the latest completed candle.

Agressive would be to enter now or place order at 1/2 way between close and high of last candle like in the rules.

Even safer would be to place order above the high of candle, say 20 pips or 1/4 of candle height again.

What you want to do is get a quick measure of risk as you spotted with the distance from 20EMA and look at entries based on that risk - normal, safe, aggressive or even safer or even not at all.

Thanks for the prompt reply... I'd wait a bit but compared to nzdusd I like the 1/2 candle entry for audusd as its comparitively closer to the 20ema..chart attached.

Yes but take a look at that massive pin bar. How would you know when that short candle collection is exhausting itself? I would wait to see what price action does when it gets to and beyond the 20EMA. If you really wanted to place a BUY order I would go top of 1.5 candles rather than the 1.

Thanks for posting this system

Hi

Just read your method and like it very much. Will demo it for a while. One question though --- after we get the clear candle, what if the signal candle (reverse candle) touches the EMA? Does it mean the clear candle is no more the trigger? Should we now look for another clear candle?

Not a problem mate.

The clear candle shows possible new trend. If the reversal candle following that reaches the 20EMA it would suggest that new trend is not so strong. I would keep an eye on it and wait for a new clear candle and enter of it's high or if aggressive enter off the high of that reversal candle.

WEDNESDAY 19 SEPT 2012

TRADES CLOSED:

GBPAUD triggered on 17/9 and quickly shot out of the blocks. In my attempt to identify support and resistance into this system, I found a major psychological level at 1.5600. It's a strong round number and also a few days prior it bounced from this line. Normally I leave my trades open from a profit point of view and just keep trailing the stop until the trade closes itself, but this time I decided that line could really annoy me so I placed a Close Order (Limit) about 20p below the 1.5600 line. Lucky I did because during the day, this pair rocketted up to that line, exited my trade and then reversed!
PROFIT OFF TRADE +153p
https://lh3.googleusercontent.com/-N...0120918GA2.jpg

Look what happened! Will it continue north? Unsure. Too risky.
https://lh6.googleusercontent.com/-q...-closed-GA.jpg

CURRENT TRADES:

GPBUSD: Small reversal candle yesterday. Almost a doji but does mean similar things. The trend is stalling. Time to tighten the stop. I moved it to 1.5 candle low instead of the normal 2 candle low increasing the guaranteed return from +160 to +180. Let's see what happens today.
https://lh6.googleusercontent.com/-5...current-GU.jpg

AUDNZD: this was the other trade triggered yesterday. Took a little while to move but then moved our way very well. All I did today was to move the stop to 1.5 candle high which just so happens to be break even thereby making this trade now a free trade.
https://lh5.googleusercontent.com/-A...current-AN.jpg

NEW TRADES:

EURAUD should have had an order placed after 13/9. it was a classic setup but after a few days of going nowhere, it could have gone anywhere so that is why I stayed out of it. Still it looks good.
https://lh4.googleusercontent.com/-X...919-new-EA.jpg

EURGBP is a nice situation. Double reverse candles (could be sign to go short.) closing close to the 20EMA. Risky but an order at 3/4 candle should be risk averse enough. I placed the order using 2 candle low for stop being -67p.
https://lh4.googleusercontent.com/-x...919-new-EG.jpg

USDCAD I've had an order in place for this pair for a few days. Today finished a small candle, not really going anywhere. This may mean the reversal is finished. So the entry order is adjusted. This time I followed the rules and moved the order to half way from close of candle to low. Stop is set to 80p because the last 4 or 5 candles are all at a similar high.
https://lh6.googleusercontent.com/-3...919-new-UC.jpg

Hi

Thanks for the previous reply.

Can I have some thoughts about USDCHF? Was it a valid entry or was the PA too far from the MA?

Have you backtested your system? If yes, how is the performance?

Can you post your chart?

I only went back 1 month on a couple of pairs but both made between 500 and 1000 pips for that month. Most of those were the examples I presented in the rules part of the thread. Once I thought it was good I decided to forward test instead.

Sorry for the delay in updates today.

THURSDAY 20 SEPT 2012

CLOSED TRADES:

GBPUSD was going nice and strong but bounced off the 1.6250 psychological line as predicted. It had bounced off that same line back in May so I kinda thought this would happen but kept the trade open without a target exit. I tightened the stop to 1 candle low and sure enough it bounced and stopped out for a profit of +220 pips.
PROFIT OFF TRADE +220p
https://lh3.googleusercontent.com/-l...-closed-GU.jpg

Let's see whether it hovers under that line for a while or pushes through or reverses altogether. Then we will look to get back in.

THURSDAY 20 SEPT 2012

CURRENT TRADES:

AUDNZD is still open but appears to be bouncing off a psychological line at 1.2600. This line was penetrated but only by a small amount back in May so I was not sure whether or not to set an exit slightly above the line or hang in and see if it pushes down through like it did in May. I left it open and closed up the stop to break even +1p
https://lh4.googleusercontent.com/-q...current-AN.jpg

THURSDAY 20 SEPT 2012

POTENTIAL TRADES

EURGBPis still reversing. It will be interesting to see if it attempts another breach of the 0.8100 line or continues down to a new short opportunity. I have gone aggressive here and placed an order at the high of previous candle with a 2 candle low stop of -67p.
https://lh3.googleusercontent.com/-1...current-EG.jpg

USDCAD has gone nowhere yesterday so I am keeping my order a the half way mark of the entry candle (the 2nd true long candle). The lack of movement over the past few days shows no one is really keen to go either way yet which means the trend is failing and either a new trend down will start or more likely a new trend up will appear. If this does not trigger today I will delete this and wait longer.
https://lh6.googleusercontent.com/-a...current-UC.jpg

EURAUD bounced off 1.2500 but only shallow so I kinda think it may test this again and succeed in punching through. I did place a cautious order at the top of previous candle. Let's see how it goes.
https://lh6.googleusercontent.com/-h...920-new-EA.jpg

EURUSD penetrated 1.3000 but bounced back to test it. I think it will bounce off it and upwards so I placed an order at top of most recent short candle to give it time to work it out.
https://lh4.googleusercontent.com/-6...920-new-EU.jpg

FRIDAY 21 SEPT 2012

CLOSED TRADES:

AUDNZD closed yesterday during the day. Yesterday I said it was approaching a psychological line and then I tightened the stop. Price action drove down, bounced up and hit the stop and then continued down to rest most of the day around the psych line. This was a case of being a little too cautious and I should have left the stop as was and let it do it's thing. Now it just comes down to seeing if price reverses for a new trend or punches south below the 1.2600 line.
PROFIT ON TRADE +1.5p
https://lh5.googleusercontent.com/-A...-closed-AN.jpg

FRIDAY 21 SEPT

CURRENT TRADES:

None

FRIDAY 21 SEPT

TRADE IDEAS:

GBPUSD bounced south off the 1.6250 line for a few days. With an almost doji yesterday it seems the market does not want to reverse too far so I think a new attempt to cross this line will occur soon. We need to wait for this and jump on board once it crosses and retests that crossing.

GBPAUD really wants to continue north and cross the 1.5600 line. We need to consider this the same as GBPUSD and wait for the cross and retest.

EURGBP has regressed a good distance from the 0.8100 that it could not cross. With a nice short candle yesterday that almost doubles the long candle the day before, we need to handle this with caution as it may suggest the market is ready for a run short. Stay out.

EURUSD has had a good short run off the top of a long run pin on the bottom of yesterdays candle and a doji the day before tells me there may not be as much steam as would suggest on 1st inspection. So, I have decided to follow the rules on this one and place an order half way along yesterday's candle (close to high) with a 2 candle low stop of -146p.
https://lh4.googleusercontent.com/-9...0120921-EU.jpg

EURAUD recently penetrated 1.2500 but could not hold above it and dropped. It had passed through this line quite a few times this year so really should not be that much of an issue. With that in mind, I have decided to follow the rules with a BUY order half way up yesterdays candle with 2 candle stop of -90p
https://lh3.googleusercontent.com/-k...0120921-EA.jpg

USDCAD is requiring something a little different here. There is a good solid downtrend here with a recent hold up. I believe it will continue down but when I don't know. So, I have done something a different here. You have to be able to adjust your rules sometimes based on the price action and what your gut feel is. With this pair I have decided to place a SELL order but not half down yesterday's long candle. I picked the 2 day low based on the idea that if I am right, price will move behind it's low from a few days ago rapidly to make it's point. For the stop I have used the most recent high giving me -87p which I can live with.
https://lh6.googleusercontent.com/-V...0120921-UC.jpg

AUDUSD looks really set for a resurgence of the long trend. Nice pin bar yesterday. It's only a new trend so I am keen to see this touch of 20EMA being a bounce and confirmation of trend. Order placed at top of last candle with stop of 2 candle low of -155p.
https://lh4.googleusercontent.com/-p...0120921-AU.jpg

AUDNZD closed yesterday below the 1.2600 line and today will retest that line. We need to see a successful retest before joining the downtrend again. Wait out!
https://lh4.googleusercontent.com/-U...0120921-AN.jpg

Very nice, thought out system/ methodology!
Question -
I use IBFX Metatrader which gives me a 4 hour Sunday candle.
It is always a small daily candle.
How would you handle this? Fold that Sunday price action candle into the Friday candle?

I am following the AudUsd Setup to give it a try.

Thanks