The7 Trading System

Silat,You will be pleased to know that I took the short on audchf. Entered @98109. Got lucky.Paul, About to read your pm.gregben

@Silat50

I can't really share my system because i have learned that you should never ever give away your edge if you wanna survive in any business especially this business but i'll definitely share some ideas which i believe people who really wanna trade will understand immediately.

Entry : Nothing is better than price action nothing at all. I have entered 50+ times in the last 2 years (on daily charts scale in positions not included) using price action + my edge and have lost only 3 times
My other edge which i am willing to reveal because i literally stole it is Scaling in positions on 4 hour then 1 hour and finally 15 min charts when retracements occur but you have to be very intelligent because the positions i scale in also help me minimize losses on losers substantially .

In terms of price action what i do is enter near the levels of S/R and use Japanese Candle Sticks to read Supply and Demand at those levels + my edge which kinda filters quite a few fakeouts. The thing is some people like do trade patterns as well but i just like Japanese Candle Sticks because it fits perfectly with my edge and therefore i don' need to learn chart patterns and other stuff. Its like first my edge tells me there might be an entry signal and then i look if its happening near an support or resistance levels and finally use JCS to read demand and supply or whether bull/bears are ready to take control.

NOTE: I REALLY DON'T CARE WHAT YOU THINK OF MY SYSTEM OR ME AND I WILL NOT TELL YOU MY EDGE NO MATTER WHAT BECAUSE THIS IS LIKE ANY OTHER BUSINESS WE STEAL MONEY FROM THE STUPID SUCKERS WHO THINK THEY HAVE IT ALL FIGURED OUT.
LASTLY, YOU JUST GOTTA TRUST ME NOTHING FEELS BETTER THAN ACTUALLY KNOWING WHAT THE MARKET IS SHOWING YOU SO PLEASE ADOPT A SYSTEM THAT USES PRICE ACTION TO ENTER TRADES YOU WILL FINALLY ENJOY TRADING. WHOEVER SAYS TRADING IS SUPPOSED TO BE BORING IS A LYING SUCKER.

Paul,At the moment I am with Silat and think we should leave the integrity of the system as per the rules in this forum. The original author The7 and Silat50 have obviously had success by adhering to the simple rules of the system. No system is perfect and losing trades are the norm with any system and the relative short time I have been a part of this forum and studying the system, the more entrenched I am with this notion.I have used various indicators with the system in an attempt to filter entries and discarded most of them (Indicators are like systems, they give you good signals but they also give many false ones.) As stated in a previous post, the additional filters I use are supply/demand (only to show potential areas for correction), a MACD based indicator and an Oscilator that I purchased some time ago.I only enter trades as per the rules, and rely on the oscilators to select the best trades when as often happens, you get more signals than your account or margin can handle. I have also used them to get into a trade early ( before candle close) if their signal is strong and price action is supporting them.The only problem I see with the present rules - and you have posted on this before - is with a continuation of the trend after being closed out, without getting a new entry as per the rules. In my studies, I have seen numerous examples of this and your recent example of the euraud and moreso the eurcad, highlight this deficiency.I feel if we can come together to formulate a set of rules to cover this then we will indeed have the perfect system.I will pm you with a few thoughts and of course Silat would have the final say with any alterations.Gregben

Greg,
By no means Im not trying to change it, just trying to get a better read on it. Understand there will be losses just trying to minimize them. I like the simplicity of it, its great for entry and picking up trends early. Its the decision making that will help with if the trade is true and which is the best bang for the buck. Just to jump in on every pair that makes a signal will catch up and bite us in the ass. Like i said im new to this and self taught any input or help someone gives me Im all ears. Always looking to learn
Thanks
Paul
Now lets make some money. lol

Ok i've read every post in this thread and understand the system fairly well now. Just a one thing:

"Closing candle has to open outside the channel to become a valid signal. Let it run until you see opposite signal. Stop Loss is high/low from last candle."

Could anyone explain further the part in bold. I think i understand it, but need to be sure.

I'm still learning. : /

Nametaker np,
Ex: you have a up candle(green) opened outside the channel and closed inside the channel that's your signal candle. Now the trend continues. Now you get a down candle (red) opened outside and closed inside this would be your opposite signal and to close the trade. As for the stop and loss it is placed at the high or low of the signal candle and is moved to the next high or low of the next closed candle. And continues until you see a opposite signal or the trade gets stopped out.

Excellent, thank you. I understood the opposite signal but wasn't 100% sure, thanks for clearing the two points up.

Does anyone know how long i will be a junior member and not have to have my posts verified?

Have no idea???

What a shame that Maverick X cannot see his way to sharing his powerful and secret "edge."

Maverick, try to see this in perspective. In a four-trillion-dollar-per-day market, your "edge" would not represent a blip on blip on the back of a pipette. In fact, even if every trader on Forex Factory traded your edge, it would not register at all in the bigger scheme of things. Get real!

As for not caring what others (your fellow traders) think? Well, that is a subject another forum. Suffice to say that compared to the generous contributions of The7, Silat and in the spirit in Forex Factory in general, your miserliness serves only to dull your "edge."

Better to make no comment than to brag about your sad ethos. May we never see your "edge" lest someone get infected with Scrooge-itus.

___________

In regard to the system I have two small contributions that others might find useful.

Firstly, I have begun trading this system in its original form on 4hr charts, and right across the majors. When I see a setup, I use the PositionSize Calculator to calculate the percentage risk I should assign to my stop loss. I set my risk to 3% and I set my TP to twice (2 x) my risk. To recap, if my risk is 50 pips, my TP is 100 pips. My 50 pip risk is thus calculated to 3% of my equity. TP will therefore be 6% of my equity.

I spend 10 mins X 6 times a day scanning the setups each day. That is 1 hour of trading per day.

Apart from The7's origningal 5EMA setup, I do NOT use Fibs, Pivots, S/R lines or any other trend lines. I know this will cause conjecture, but in my experience, for every pivot/fib/00/ bounce, I have seen a breech -- meaning that when the market approaches one of these famous markers, you never know what it will do until its done. Plain and simple as that. Half the time it will bounce and half the time it will beach.

I therefore ignore them entirely. (I appreciate this is controversial, but all comments are welcome in the context of this trading system.)

I find trading 4hour charts affords many (six times) more opportunities to trade per day, and is as stable as daily charts. At the moment I am achieving a ratio 2:1 win/loss trades with a 2:1 risk/reward ratio. (newbies and not-so newbies, please understand what these terms means. Do your research and your math.) In addition, with more picks in a day, I find my eye is more tuned to good setups and I get to cherry-pick trades.

One negative, I have to get up once a night for 10 mins to do the 4pm shift! Sometimes I just miss it and curse when I see what a perfect setup it was.

I agree, anything less than 4hours will frazzle the mind and your equity will be eaten by spreads.

I have attached two items. (1) the MT4 position size calculator and (2) some light reading "Trading in the Zone" by Mark Douglas.

Tim.

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Thanks Tim, excellent post and for sharing your strategy!

Tim,
keep us updated with the 4hr timeframe, some maybe interested in it. Now with the calculator just input my entry and stop loss?

Thanks Tim,

I have been reading through a couple of Mark Douglas's books. Very informative.

Im new to all this but studying all the time.

Have i got this system right so far:

1. Look for a signal. Up candle (Blue) has to open outside and close inside.
2. Place a pending order (in MT4). Set the stop loss at the HIGH of the up candle (signal candle) or if down set at LOW of down candle (opposite signal candle).
Not sure about this part. Set buy limit/buy stop etc to current price of last signal candle. Not sure about what to do with take profit either.
3. Follow trend.
4. Close/Exit when see opposite signal (Opens outside, closes inside).

Correct on all accounts except Set part. Those go with pending orders. What you want to place is either buy stop or sell stop. then it will take the trade when it goes in that direction up for buy down for sell.

That tempting Eur/Usd trade:

Many of you consider the EUR/USD to be breaking out of a base right now on this bar. But its entry was already trigered. In my opinion those who love the Euro(I dont!) can take that trade and treat it as a new one. So, get in now at 1.3461 with a stop at1.3349. Dont worry, since it is not over extended yet, your computer wont tell the Forex factory cops you bent the system a bit. You are still risking one bar worth of pips to make many.

Disclaimer:This trade should not be done by persons with less than 3 months in this system as it definitely will lead to taking more and more trades on your own by bending the rules. If you are not a very seasoned traderass! I am a very experienced trader and I am passing.
I only mention this trade because so many of you follow this pair. R/R is reasonable. Again, I am not taking this trade but it should be fun to see if the Euro can really break out. Remember in stocks, 72% of breakouts fail. I am betting its about the same for Forex. Be careful.

Hey ur back feeling better. Staying away from eurusd killed me last week lol
Gbpusd long signaled Friday. Also keep eye on audnzd and cadchf long

Yes... only input your entry and stop loss and percentage you wish to risk. The value of this calculator forces you to think i percentage of equity at risk, rather than pips at risk. Percentage thinking makes for far better money management. Obvious but true.

Hello, just wanted to say hi, and thank you all for the great info. I have started trialling this system for myself and am finding all the posts incredibly helpful. I took (in my log only) USD/JPY on Friday. Am I correct in saying I shouldn't have, as the candle touched the 5ma on both the upper and lower side? Currently it is ok (by 40pips...), but waiting to see how it all progresses.
Once again, thank for all the helpful info.

Rules state if candle touches both emas then its a no trade. Now with that said some like that big candle others don't. It's up to your preference and how you trade. If you are going to adhere strictly to the rules then you shouldn't of entered the trade. If you saw something else on your charts that may of swayed you to take the trade then ok. It's all about learning and helping each one out. I think it's a very good entry system but I think there is room for improvement for when the trade swings against you and you get stopped out early. And continuation of a trend. Well good luck to you, also in trading discussion forum some other have been listing their choices and observations. 7methods signal thread.
Good luck
Paul

Tip of the day #4 CHART READING THE 7 SYSTEM.:


Guys and girls, Rememeber a couple of days ago when that nice size green bar popped thru the top band, I told you that you could take the EUR/USD LONG EVEN THOUGH IT TRIGGERED ALREADY? Well, lets look at what happened so far. If you took it it would be down a tiny few pips at this juncture. But what do you do about that bar to your left? How did those of you who took it, or take any trade that produces a tiny bar for that 1st day, how do you move your stop loss. The answer, which I dont believe to my knowledge 7 ever covered before he was abducted by Afghanni terrorists, is this: YOU IGNORE VERY SMALL BARS! That is the beauty of this system. It really gives your trade time, to move in your direction, and if tonights bar closes again small, ignore that too. Keep ypour stop under that nice fat green bar which got you in in the first place. When in doubt, dont move your stop.

I would also like to say that I apply that rule when I have so much profit that one 50 or 60 pip mpve would knock me out, i WILL IGNORE THE PREVIOUS BAR AS LONG AS ITS NOT A BIG ONE. But what if the bar before that is huge you may ask. Then you have to move your stop! Or, if you arent comfortable using a tiny stop or leaving a very big one on....close the trade, take your profits, smile and go to the next one.(But from experience I can tell you that while immediately satisfying, you will have those trades that run and run and run, and you will kick yourself. You cant have it both ways. Perfect example of ignoring "get out" bars is on the gbp/usd chart that I think could have been ignored on one or 2 bars or re-entered the next day as the profit was huge and the pair in a free-fall.

In fact, perfect lesson! If you ignored those 2 silly dojis which God gave you as a gift instead of a pullback, youd still be in the trade. Im sorry I cant post these charts but for some reason on marketscope, when I save a snapshot it does so as a cvs file and wont let me export it to FF. Anyone know how to fix that?

Paul and another couple of you that were in that gbp/usd, you should be kicking yourself. Its trades like that one that make your whole month. SILAT'S RULE OF FINANCE: When you can no longer lose money on the trade, do everything within normal activity to pile up those profits whether its adding 1 or 2 more positions, or....leaving the stop after like a 200 pip gail with a 100 pip locked in profit and dont even touch it until you are stopped for the 100 profit or you buy that new car you wanted.(almost. lol)

One last chart: NZD/CAD SHORT- This according to 7 is not a playable pair today after it closed red yesterday Why? No body touching the band. But even if it did......IT ISNT A GREAT PLAY. WHY? This pair is clearly in an uptrend and the best you can hope for is a tiny pullback and make your 50 or 60 pips. The chart just screams LONG! But as of todays open I get in short. Why? The candle opened flat and started heading down immediately so my thopught is, "Ok I have 2 candles of confirmation now, yesterdays, and todays,so far. Im not risking many pips,am I . So even though its reversed on me all night, Im only a 24 pip loser and I have a nice chance because its not exactly in demand or running with energy, if this thing tires, I can pop a nice 2-300 pip winner.
And, and,............and(is that enough and's?) and....................if I really, really loved this thing, say right now, some weird thing starts happening to all NZD PAIRS IN THE MARKET OR NEWS IS PENDING OR MY NOSE HURTS OR WHATEVER, i HAVE BEEN KNOWN TO MOVE THE STOP TO THE PREVIOUS BAR. That is another lesson but if the previous bar has a long wick, I will often place it there because the wick sometimes is just manipulation and even if Im m wrong, it could take 4 or 5 trading days to knock me out if you look at that setup. Look how toppy it is! So it sounds like Im contradicting myself by shorting something I dont even like but that wick gave me an itch and I have been beating this system to deat only taking plays because of a doji or wick. Ok let me make this short. Here is a really good tip for those of you that are not killing it with this system:

Only take trades where there is either a doji or a bar that gave back well over 50% of its gains and left you with a big wick or tail.
I'd BET MONEY THAT TIP ALONE WILL MAKE THE FEW OF YOU i SEE STRUGGLING INTO WINNING TRADERS.


By the way, I love bars that are touching both bands. You usually need 2 or 3,many times 4 days to knock you out of the trade if you are going to lose. How often do you see a big engulphing bar and then see a reverse color one come up next to it.Not often? Go with the odds! I dont recall 7 saying you cant play if the body,not just wicks and sticks and a non directional bar!) I mean a huge engulphing bar. I play those all day. And here is another piece of gold for you giys, if you you see a chart where the last 2 bars actually did have 2 big bars back to back ...........dont trade that for a few days. It almost always means there is an equal sided gang war about to abrupt, lots of chop and back and forth, and only the market makers and short term traders will get any money. Someone tell me Im wrong....(smile) Ok,thats enough lessons for the month. You guys not yet profitable should print this out and highlight the good stuff.

Paul,

Thank you for the confirmation. I really appreciate the feedback.

Everyone,

Are you working successfully with this system yourself, is anyone else? I am trying hard not to be a sceptic, as I would love to have this system work for me, but everything I have learnt this far has told me that there is not a one system fits all approach. As I say I am testing it and I really want to make sure I test correctly for myself to give this one a fair chance as a lot of people seem to be commenting on it and I assume using it.

I see lots of poeple also commenting on other indicators etc. that they use to confirm The7 approach and I assume that this is up to each individual. But will the system work, if I dont put my own twist on it and work with it purely as ascribed?

Sorry for the many questions and I hope I do not come across as wanting to challenge the system, but I would really like this to work and want to make sure I have all the tools at my disposal to make myself successful at it.

Lors

PS the gps/usd looks like it might be shaping up nicely if I am reading everything correctly. (comments appreciated)