^eagle^'s trading method

hello! I've been a long time lurker at Forex Factory, I have been trading part time for five years. I recently have collected my thoughts together and have started trading with some consistency. As of this writing I am up 58% in less than four months. I wanted to get my ideas down in writing and thought i would start a thread.


First off, This is a method and not a system. A system has a certain set of ground rules that must be followed. I have found such systems may actually hinder your performance. A method is more complex in that it also incorporates a basic understanding of the fundamental nature of forex. Systems are Tech heavy and are usually pretty easy to implement. A method is more based on fundamentals and is a little harder. This is one of the underlying reasons I believe that most traders fail. they rely too heavily on the next gadget to slap onto their charts. And most of these gadgets rely on past price movement.

Now there are certain places in the past that price movement is important but most of these gadgets rely on the previous succession of bars. These oscillators in my opinion are completely worthless. After many failures of trying oscillator based systems I came to the conclusion they are all junk. I won't go into detail about this as it is a long and complicated story. All I have to say is that they are utter junk.

Methods On the other hand are based on price action and the underlying reasons why the market moves up and down. There are several factors that cause price action to move up and down as price travels through time. Price can only move up and down as it travels forward through time. The previous bars have little to do with the current price action. Methods utilize more price action in the moment and the underlying reasons why the price is moving. I will as best I can describe my trading method.

Ok first the easy tech stuff, I try to get as much information I need on one screen to avoid switching timeframes. I time my entries on the five minute chart but zoom out to hourly and four hour charts to look for technical areas of support and resistance that I would not see while zoomed in. I cannot explain my exact entry method yet as it involves some simple fundamental analysis.

Also I only trade the E/U as My time is limited. If I had more time I would trade more pairs but To keep things simple it is better t stick with one currency only adding additional currencies as time permits. This method will work on any currency but its best to stick with pairs with very tight spreads.

Attached below are the indicators that I do use.

Now I believe if there are tools that can do a job better than a human you should use them. I would rather use a chain saw to chop a tree down than use an axe. So for order management purposes I use an EA and a few scripts to make my trading life easier. attached below is the EA I use for initial order management. The two subsequent items are scripts I use after The EA has done its initial job. You must disable he EA for the scripts to work else the EA will override the script.


The final two scripts are used to place pending orders by dragging and dropping them onto the chart. When you place the buy script above the current price it will set up a buy stop. when you place the buy script below the current price it will place a buy limit. Vice versa for the sell script .


Im not going to explain what item goes into what folder. If I have to do that you aren't ready. Go learn the basics of mt4 and babypips stuff. Please do not clutter the tread with install questions.

I do not understand this system, so why not ?

And finally the template....

This is for the m5 chart. You can zoom out or change timeframes to see the bigger picture but the JMA slope will disappear above the h1.


This is my template. you may choose to raise or lower anything dealing with money management. I am not responsible for your use of this template. If you use this on a live account. It is your responsibility to understand what each input is for. Do not trade this method if you do not know which folder to put this into. Go learn some more.

Because I havent explained the method. This is more complex than buy or sell when indicator X is up and indicator Y is down. This is a method. Not a system, Crooks sell systems, traders trade methods.

A word about screentime

I hear traders over and over again explain how screentime is important. However I feel that very few traders explain why it is important. To understand price action we must understand why the candles form the way they do. I'm going to do my very best to explain price action at the lower timeframes.

First you have to understand how brokers work. Because forex is not a centralized market brokers make up their own prices. Now as a general rule they are all around the same ball park figure most of the time. usually within a pip or three. This is because of two things. One is their liquidity providers. That is which banks they are feeding from. the second is what is known as Price "leaning" Mt4 has gadgets on the broker side to manipulate the price and the spread. Usually a broker will lean price so that when they exchange your money they get an extra pip or two difference in their favor. this is in addition to any spread or fees you may get. The broker leans the price their way and fills it at the price you see on your screen. this may be a pip different than the actual feed.

More importantly is the job of market makers. Their job is to provide liquidity to the market. When you trade there has to be a buyer and a seller. If there is no buyer for what you are selling the broker then takes the opposite side of your trade. Bucket shops that deal with the small time trader trading under full standard lots Bundle all the trades they collect in a "bucket" then if they need to provide liquidity they will first pour the bucket out into the trade field then take the opposite positon once the bucket fills up to a quantity that the banks actually want to trade with. thats why you see price go up a few pippettes then go back down. It's this buying and selling of the market makers that frustrate the scalpers out there..

then there is the actual conduction of business. Corporations exchange currencies all the time. Billions of dollars in some instances. You will see this most evident on the m1 chart with a large spike upward or downward of 5 to ten pips followed by a "flag" of slower congestion then another spike. they slowly feed money into the system so as not to spike the system all that much and get better fills.

Then there are the movers and the shakers, these are the big sharks that are the real players in the market, The central banks and the sovereigns and the large hedge fund managers. These guys trade more in options and futures than retail forex . their methods are beyond the scope of this thread. Just know they set up barriers to protect their option or futures interest.

all of these trades moving around simultaneous create the price action we see on our screens. This is very important to know so you can trade forex consistently.

attached below is the anatomy of a trade I just took while writing this. My stop is already at break even and my TP is a little higher above the top edge.

Can you see why I entered where I did?

And Ijust took profit and added 8.58% to my account. Going to bed now. So play around and have fun. I'll try to make it back for the Frankfort open!


http://video.nationalgeographic.com/...learly-now-wm/

eagle, you look like a smart fellow.

uhm, what are you doing here?

Well done!
Your concept is very fresh.It seems will work .Look forward to your news posts as I still can't quite understand your method.

on breakout through resistance + a few pips?

The Indicators....

S_R Barry-Eli_ MultiTF --- This little gem uses Fractals and extends a line out from them. It monitors up to four timeframes. It's set up to monitor the 15m, h1, h4 and daily fractals. the are significant turning points that occurred on these time frames. they reveal areas of support and resistance. Sometimes they do not extend far enough so its important to zoom out and get an ^eagle^ eyed perspective either on full zoom out or switching timeframes

#OHLC HA --- This is a modified Heiken ashi. It allows you to see the candle formations which I will talk about later why that is important. The color change allows you to clearly see retraces

ferroFX-multi-infor+light chart--- This indicator has a lot of bells and whistles but I only use a couple of them. The daily rannge gives me different ranges of the pair like the previous day, the average of the previous week etc. This gives me an idea of volatility of the pair. How many pips I can squeeze out depending the range when the order is placed. In the top left corner you will see some money management numbers. I will spend a whole post just talking about this.

Price alert_--- this gives off a signal when price reaches a significant level

JMAslope MTF___ this gives me a general idea of the direction of the overall trend. The higher the histogram the steeper the slope and the stronger the trend. It is set to the h1 TF

market-hours-indicator-market-profile__ this one creates boxes of importance. Each box represents a session, NY,Asia,Europe with news boxes nested inside them. The overlaps are also shown. It has a reference to time in a separate window But It's not as important as the boxes.You may have to adjust the boxes start and stop times to match your broker's time. There is a bug in this in that the Asian box has to end at 23:59. Otherwise the boxes will not be correct. If you do not understand how to adjust this to your broker's time you are not ready to trade this method. Go learn about the difference between broker time vs. your timezone.

There is also a bug in the Ferrufx indicator. Its searching for the wattah adder MTF indicator and slows down the CPU, If a coder would be so kind and has an interest one could take a look at these two indicators? I know how to tinker with code but debugging is not my expertise.

Thats one entry yes. I will get to entries in a bit.

The fundamentals

This is often the missing piece I see in so many systems out there. The fundamentals are what drive price in a particular direction. It's important to get an overall "feeling" of news and the general bias of the market. I look at a couple of things. I don't know If I am allowed so I won't post links but I use the free RTT news aggregator and forex live as my news sources.

I also look at the S&P 500 as it coincides nicely with the e/u

By reading the headlines as they pop up and scanning through the news at forex live plus using the h1 s&P 500 I get a general feel of the mood of the market. the fear and the Greed.

This is the subjective analysis. Banks have super computers that scan through the headlines and trade on keywords associated with those headlines. I use my brain in the same way.

I find if I miss the news for more tan a day and try to trade my trading gets sloppy. I loose the general bias of the market. By training my brain to scan through these headlines I become my own supercomputer and have in depth knowledge of how the market operates.

Don't be intimidated if you do not understand something that you read. do a little research on it if you do not understand it. soon you will get a new perspective on the market you did not have before and realize that the market is not random. It's fairly predictable.

What Goes on in my head is often like the show "the price is right" The news aggregator and headlines screams out "Buy Usd!" or "sell Euro!" read enough headlines and you will get a general idea of the market sentiment.

I think this concept here separates traders. This is more of a right brained activity. The left brain is all rational and logical. the right brain is spatial, and emotional. there is emotion involved in the markets. And when everything lines up you pull the trigger.

It looks an interesting system but I can't see where you have uploaded the S_R Barry-Eli_ MultiTFm indicator and also to use the JMA_Slope MTF I think its necessary to have the regular JMA_Slope in the indicators folder as well or it won't work.

Here is a trade I missed and cancelled out. I set up a buy limit an hour or so before NY open. Just after that congestion peruiod before the NY open. By the looks of the price action of the candles I thought that price might dip down below 1.3300. It did but just missed my entry by one PIP! I didn't expect more than 20 on this one because of MLK day in the US. It sucks when this happen but it is better to be out of a good trade than into a bad one.

Well I have to run off to work for a couple of hours. Damn job keeps getting in the way of making money. Ill be full time soon enough though.

remember I have done this in my spare time. I work 50+ hours a week. No excuses! Going into money management, Psychology, next. Then entries and exits. But I will post my trades after I complete them. Im not a signal service.

I thought you are not relying on any gadget? But it seems a winner method anyway and thanks for sharing

I appreciate your comment. Everyone is looking for the next easy money system when they should be studying the market itself. I only trade what I have learned. not what I was taught. big difference.

I just have found that oscilators are pretty much useless,.