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Attachments: Daily and H4 engulfing price action
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Daily and H4 engulfing price action

  • #41
  • Jun 3, 2013 11:38am Jun 3, 2013 11:38am
I have entered although no price action :
Attached Image
  • #42
  • Edited Jun 4, 2013 1:36pm Jun 3, 2013 2:03pm | Edited Jun 4, 2013 1:36pm
Quoting Red Herring
I have entered although no price action : {image}
Hello Red Herring, I'm not exactly sure where you entered or the direction of the trade but I am seeing the following on my MT4 platform (GMT+2). H4 USDJPY

There are a couple of things to notice.

Firstly, although the 28th May was an engulfing bar up, there was no buy action follow through i.e. there was no H4 bar closing above the Daily High of the grey rectangle.

Secondly, the H4 trigger bar did not appear for the Daily engulfing down of 23rd, until 30th May as indicated i.e. there was no H4 bar close below the Daily Low of the grey rectangle for 23rd until 30th.

I hope this makes sense - hopefully a picture will clarify.

AndyG
  • #43
  • Jun 3, 2013 4:22pm Jun 3, 2013 4:22pm
Perhaps a few pairs for us to watch. These have just had Daily engulfing bars (by my definition in first post) and could provide signals in the next few H4 bars. Now that I've stuck my neck out let's see what happens.

GBPUSD, EURUSD, USDCHF, USDCAD & GBPCHF

AndyG
  • #44
  • Jun 4, 2013 6:57am Jun 4, 2013 6:57am
Quoting Erebus
This price action method does have merits; in fact when you add a trend filter, perhaps Weekly EMA, and then watch for and enter a trade on retracement, you have the equivalent of a method that sells for thousands on the internet.

Hi Erebus, interesting how is the system called do you have a link?
thanks
  • #45
  • Jun 4, 2013 12:37pm Jun 4, 2013 12:37pm
Quoting AndyG68
{quote} Hello Red Herring, I'm not exactly sure where you entered or the direction of the trade but I am seeing the following on my MT4 platform (GMT+2). H4 USDJPY There are a couple of things to notice. Firstly, although the 28th May was an engulfing bar up, there was no buy action follow through i.e. there was no H4 bar closing above the Daily High of the grey rectangle. Secondly, the H4 trigger bar did not appear for the Daily engulfing down of 23rd, until 30th May as indicated i.e. there was no H4 bar close below the Daily Low of the grey rectangle...
I have entered at the upward arrow just after the long bearish candle and the green line is my TP and the orange is my SL
  • #46
  • Jun 4, 2013 1:06pm Jun 4, 2013 1:06pm
Quoting Red Herring
{quote} I have entered at the upward arrow just after the long bearish candle and the green line is my TP and the orange is my SL
Why? You may have got some pips out of this buy so far but I think the overall trend is down. Let me try and explain the method again. Please see the attached charts.

These two charts are USDJPY Daily (left) and H4 (right). On the Daily chart I have marked the recent engulfing bars 1 (engulfing down) and 2 (engulfing up). The grey rectangles represent the high and low of both candles and this is transposed onto the H4 chart. Grey area 1 we are looking for a sell opportunity (because the corresponding Daily engulfing bar was down) and the next H4 bar closing below the grey rectangle (1) level did not happen until 30th May indicated sell order.
As far as area 2 is concerned we are looking for a buy opportunity (because the corresponding Daily engulfing bar was up). As there was no H4 bar that closed above the grey rectangle (2) there was no buy order. That is why I wondered why you placed a buy order at the level you did.

Hope this explains a bit better.

AndyG
  • #47
  • Jun 4, 2013 1:40pm Jun 4, 2013 1:40pm
Attached Image (click to enlarge)
Click to Enlarge Name: usdjpy d1h4.jpg Size: 299 KB
  • #48
  • Jun 4, 2013 1:50pm Jun 4, 2013 1:50pm
Quoting AndyG68
{image}
Beautiful setup, however I have some things that I want to clear
-Do you initially always open 2 trades and set one with a TP and let the other run after setting it to BE?
-What have been your win ratio with this method?
-What, in your opinion, is the most suitable pair for this method?
Much thankful!
  • #49
  • Jun 4, 2013 2:07pm Jun 4, 2013 2:07pm
Quoting AhmadYt
{quote} Beautiful setup, however I have some things that I want to clear -Do you initially always open 2 trades and set one with a TP and let the other run after setting it to BE? -What have been your win ratio with this method? -What, in your opinion, is the most suitable pair for this method? Much thankful!
Hello AhmadYt, thank you for your comments.

I am at an early stage with this method and working on various exit strategies but looking back a number of months on the major pairs it would seem that entering 2 trades would have made some nice pips. I personally have not yet had the courage to open 2 trades (something I have to work on) but am trading it live and getting out of trades when I feel comfortable. Have a look back yourself at some charts and see what I mean. Because I'm just started this method I don't have a win ratio as yet or a most suitable pair. What I do like about it is that with the D1 and H4 combination and having to wait for an H4 close below or above the D1 low or high, tends to keep you out of potentially poor trades i.e. there is not enough momentum to carry the trade through and price action pulls back without triggering a trade.

AndyG
  • #50
  • Jun 4, 2013 2:13pm Jun 4, 2013 2:13pm
Quoting AndyG68
{quote} Hello AhmadYt, thank you for your comments. I am at an early stage with this method and working on various exit strategies but looking back a number of months on the major pairs it would seem that entering 2 trades would have made some nice pips.
I appreciate your detailed reply
I'll demo this method for a bit because it looks promising
One last thing, any preferred pairs for this? Looks like USDJPY and EURUSD are good bargains.
  • #51
  • Jun 4, 2013 3:39pm Jun 4, 2013 3:39pm
Quoting AhmadYt
{quote} I appreciate your detailed reply I'll demo this method for a bit because it looks promising One last thing, any preferred pairs for this? Looks like USDJPY and EURUSD are good bargains.
GBPUSD and USDCHF seem to be ok too.
  • #52
  • Jun 5, 2013 6:00am Jun 5, 2013 6:00am
You can also use good pins or long wick candles for the setup candle. You can also go from 4hr as your setup and drop down to 1hr for entry. Pretty flexible if you pick a good setup.
"Even if you fall down face first, you still went forward."
  • #53
  • Jun 5, 2013 9:28am Jun 5, 2013 9:28am
Quoting juicyt
You can also use good pins or long wick candles for the setup candle. You can also go from 4hr as your setup and drop down to 1hr for entry. Pretty flexible if you pick a good setup.
Thanks juicyt,

if the H4 H1 combo works for you then go for it. I tried it at one stage but just can't get the frequency to the charts that is needed. Let us know how you get on.
AndyG
  • #54
  • Jun 5, 2013 10:24am Jun 5, 2013 10:24am
Quoting AndyG68
{image}
I understand what you are showing but I have entered a day trading with a short/fast trading opportunity since do not have time to watch from May 21 to June 02 as you analyzing...
  • #55
  • Jun 8, 2013 11:52am Jun 8, 2013 11:52am
Hello all.

I just wanted to give a bit of an update.

Someone asked me earlier if I had any stats on this method and at that time I didn't. I have taken a bit of time to backtest 4 major pairs from January 2013 until last Friday.

The method used in the backtest is similar to that described in post 1 but for these purposes I have set the SL at the high/low of the Daily engulfing candle and made TP=SL so 1:1 R:R. For the 4 pairs tested (EURUSD, GBPUSD, USDCHF & USDJPY) the total pip count is approx. 5250 give or take, there has not been a loosing month so far and the win percentage ranges per pair from 60% to 73%. Please see the attached spreadsheet for the detail.
Attached File(s)
File Type: xlsx D1 & H4 PIP COUNT.xlsx   24 KB | 451 downloads
  • #56
  • Jun 8, 2013 3:42pm Jun 8, 2013 3:42pm
Quoting AndyG
Hello all. I just wanted to give a bit of an update. Someone asked me earlier if I had any stats on this method and at that time I didn't. I have taken a bit of time to backtest 4 major pairs from January 2013 until last Friday. The method used in the backtest is similar to that described in post 1 but for these purposes I have set the SL at the high/low of the Daily engulfing candle and made TP=SL so 1:1 R:R. For the 4 pairs tested (EURUSD, GBPUSD, USDCHF & USDJPY) the total pip count is approx. 5250 give or take, there has not been a loosing month...

Beautiful work sir
Count me in
  • #57
  • Edited 7:45pm Jun 8, 2013 7:24pm | Edited 7:45pm
Nice backtest AndyG, good work and thanks for the time you spent on it.
Looks like key is to diversify a little between pairs as well a dont risk a fixed % per trade. Keep the risk the same depending on account size regardless of what size the setup is.

jt
"Even if you fall down face first, you still went forward."
  • #58
  • Jun 8, 2013 7:53pm Jun 8, 2013 7:53pm
Do you think anyone could make a MTF candle indentifier to help do the backtests?
"Even if you fall down face first, you still went forward."
  • #59
  • Jun 9, 2013 4:07am Jun 9, 2013 4:07am
Quoting juicyt
Do you think anyone could make a MTF candle indentifier to help do the backtests?
It seems like an easy ea (simple algorithm), I'm sure any good programmer can do this, it would be of great help indeed
  • #60
  • Jun 9, 2013 5:08pm Jun 9, 2013 5:08pm
@AhmadYt and juicyt

Thank you for your comments. The bars in question are quite easy to identify manually but if you wanted to backtest a longer period it may be useful to have an EA to identify them for you - if some kind soul would oblige .

As a slight addition to my earlier spreadsheet I have backtested 4 other pairs (GBPJPY, AUSUSD, EURJPY & EURAUD) in the same manner and for the same period and the results are as follows.

Pair Pips win%
GBPJPY 2085 80
AUSUSD 107 50 (doesn't seem to suit this method - but still positive!)
EURJPY 1334 72.7
EURAUD 1039 68.8

This brings the total for the 8 pairs backtested to 9820 pips. I think that's ok if you were able to catch them all!!!!


AndyG
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