Trading is as simple as ABCD

Sorry I have been silently lurking as of late but when I say I have been extra busy that is quite an understatement...

I am on vacation as of this Friday until the 30th so trying to get things cleaned up at work has been very time consuming. That said a vacation is well overdue and getting away from the hustle and the phone and the computers will be refreshing and engergizing. My nights have been equally busy and I continue to backtest some new things related to this method... Jamb in my part time live trading of this and my personal method and well my plate is running over just a tad so posting has been sacrificed.

I am very excited about how my new round of testing is going and where I see this tweaked version of this method is headed so that is great news. Not sure just yet when and how I will reveal this as I do not want to take away from the great work done here thus far as the basic method works. I may do a new thread, may share here or I may just keep my mouth shut... really not sure just yet.

Van and I (and Clive as of late once he jumped on the follow the rules bus ) have shown over the past while that the basic bones work day in and day out so take what has been laid out for rules here and you will find success if you follow those rules to a T.

Hi Pres78I wondered where you'd been. Thought I might of upset you???Would be good if you shared your new ideas when you feel the times right.

Would also be cool if you hung around here rather than started a new thread, but thats your call obviously whatever suits you best.

Hope to see you posting here again soon.

Haven't traded this morning feeling a bit with some or other flu thingie and I don't think I will be either.

The red lines show the breakout of what was previously the immediate range, retest and of course where cci 210 -100 hit. Lurkers can judge for themselves where the trades are, looking for 200 retrace on cci 14 scale or to +100, pa below ma's with angle and/or separation.

I also have gu and ga next to gc and gj so it was obvious that gbp was weak across the board.

Anyway Clive consistently getting those first trades after break out and retest of the immediate range will be a significant step forward.

Good morning Mr V.

Yep I agree.

Is that a 50 lWMA you're using as it shows the swing down quite clearly maybe we should change the 1 min TT to 50lwma instead of 100lwma. Will make it more sensitive to these quick moves, breaks of ranges etc?? Will look into that.

But that aside for a minute I think the first thing to do is to clearly identify the goal of this strategy then the method needed here to achieve it will become clearer.

The Goal of the strategy.

The goal is to identify where "the money" is going during market opens then jump on board and hold for as long as possible.

The How.

Identify strong trending pairs on the 1 minute timeframe with clear trends HLHH's or LHLL's durring the market open times then trade the trend until it ends.

The Trading Strategy.

Identify the strongest trender by the TT indy which measures the slope of the 100 LWMA (maybe we could adjust this to Mr V's 50 for more sensitivity) then enter by way of qualifying ABCD setups at point C the pullback. A qualifying pullback is fairly simple as per chart below. Must be proceeded by strong move down(red arrows) the pullback must go overbought on 1 min CCI, must be a LH or a DT, should be a clean move.

Add on every qualifying ABCD as long as market structure in place eg LHLL's.

For exit we have a choice, either close out when 100LWMA slope changes(colour change) or trail down LH's until stopped out or use the 210 CCI zero cross.

Now what I've just described above will cause the 15 min CCI to most of the time be below the -100 level and that is how "The System Trade" has come about but we always need to confirm the trades trend is in place with the above price action criteria and market structure throughout the trade.

The example today below of GBPAUD is a great example in fact I'd say perfect as the market structure is still in place even now 50 pips later, with LHLL's all the way down.

So the big question is how do we find these perfect trades??? How do we know that its going to trend like that??? And most importantly how do we identify the London Breakout???

Well i'm afraid the simple answer to that is quite simply, we can't!!! And we never will!! If we only knew what was going to happen to the right of our chart cursor we would all be millionaires twice over!! So what can we do???

Well I'm not sure but I guess the million dollar question is, when we get a weak currency like GBP this morning can we pick the most likely to go the furthest?? This morning it was GBPAUD now is it a coincidence that AUD is one of the strongest daily currencies right now??? Could we use that or should we take a position in each GBP pair and trade their trends until they end and see what we get??

Well for this morning fortunately I have the power of hindsight so lets have a look what happened to our GBP pairs. Measuring from top to bottom of move, GBPCAD 43 pips, GBPCHF 49 pips,GBPUSD 49 pips,GBPJPY 60 pips GBPNZD 63 pips, but GBPAUD a clear winner with a whopping 87 pips and its not over yet with a staggering 105 pip move so far!!

So that would suggest the best option would be to trade the trend on all 4 of the the top trenders of the GBP pairs. I guess we would of got 100 pip plus from them all and they haven't finished yet either. Later on I will try to work out how much we could of got from all 4 this morning using the method I'm going to outline below.

Ok so with the power of hindsight lets have a look at our best London Breakout trade this morning GBPAUD. Lets have a look at that as a typical London breakout trade we're trying to catch and try to identify its characteristics that we need to be looking for going forward and how to trade it.

Lets look at this mornings GBPAUD chart and lock into our minds its characteristics and the conditions surrounding it so when we see them developing in the future so we can capture as many pips as we can from just such a move. These 1 minute trends appear at least half a dozen times a week so all we've got to do is identify them and catch them. We even know the approximate time they are going to occur, around market opens. We can even identify which currency is weak or strong in the morning from our TT indy so it shouldn't be that hard should it???

I've identified some important characteristics with yellow and red arrows on the chart below which we need to be looking for going forward. I will discuss them going from left to right.

Top Trender Indy (TT indy)

Firstly GBPAUD is in top 4 1 min trenders it will appear in 1 min top 8 for sure as our first filter,(especially if we change it to the 50LWMA) I only look at the top 4 myself. Also if it then later appears in the 5 min its an indication that you could be on the London breakout trade of the day. Also take note if one currency is dominating the 1 min TT's thats a sure fire sign that the money is going to that currency. Like today Mr V. identified that GBP was weak so it was no surprise it would be GBP pair that broke out.

Now we can either take a guess at which ones going to go the furthest or we could take any qualifying setups in all 4 top trenders, which would be my preference.
Oh yea sure I hear you cry trade four 1 minute charts at a time!!! You're stark raving mad!!!

But don't worry my good friend Ted has got it covered for us, he's written an EA that will do it all for us , all we've got to do is select the pairs to drop it on. Its called The Auto wave trader and it will just keep taking qualifying 14 CCI signals as long as the 100 lwma is sloping down and will close out when the 100lwma turns back up again, whenever that is. Means once you've carefully chosen your 4 pairs in the morning you can shoot off for the day and enjoy yourself whilst the good old wave trader does all the work for you, all you have to do is come home and check your bank account!! Clever old stick my mate Ted.

Tell you what I'll do I will run it on strategy tester later see what it would of made today on our GBP pairs. Hmmm thats gonna be interesting.

Anyway enough about that lets get on to identifying the pairs to drop it on.

Just one warning about using the TT indy, when you first look at the Top trenders identify exactly where we are in the Elliot Wave move eg wave 1 , 3 or 5 and if its done the 5 waves be wary. Also look at the ATR if its close to its ATR again tread warily. And lastly if its looking like its done its ATR and its Elliot waves are done then it could be a reversal candidate, but reversal trades are another thing all together, thats for another time.

100LWMA cross.

We want to be catching our moves as early as possible just after a 100LWMA cross like todays GBPAUD trade. We want to see a clear move across the 100LWMA and if possible take the first pullback. Notice how this coincides with the 210 CCI crossing its zero line another early filter to look for and lastly like Mr V. has quite rightly pointed out its a break of the overnight upward trendline a very good sign. Make sure its a positive cross that will swing the slope of the 100LWMA down nicely to put it in the TT top 4.

First Pullback is the best.

Ok so we all know the first pullback (wave 2) is the best place to get into the new trend, but the question here is, do we mean the very first pullback or the first qualifying pullback once our 210 CCI has gone over the -100 level?? Well lets have a look at our chart. We can see the first pullback which doesn't actually qualify on the 14 CCI as it doesn't go overbought to +100 but it qualifies on several other accounts, eg proceeded by a strong move down(red arrow) the 210 CCI is to all intents and purposes, below -100. The 14 CCI has moved back from -200 to zero so a qualifying 200 move. Its a LH than the last one. At the end of the day probably gets you in about 7 pips better than the 2nd pullback so is it worth it for the extra risk?? Thats up to the individual trader.

But what we do need to be doing is getting into these trades as soon as possible after its crossed the 100LWMA. This is the start of the move so will lead to bigger RRs but we need to be aware there is a bit more risk associated with it as sometimes the 15 min CCI won't be below its 100 level, MR V. and Pres78 I'm sure will say wait for the 210 CCI to go over their 100 levels and then take the next qualifying pullback.

Qualifying the ABCD move.

There are some brilliant examples on this chart of qualifying ABCD's , for me its about the previous push down the AB leg, it must be a clear push down nice and clean and clearly take out last drive. Be very careful about taking any pullback proceeded by a failed drive down. The pullback or BC leg should be over +100 on 14CCI or at least come back 200 points. I personally like to see it come back away from the last drive down the last LL so that I have time to get to BE if the next drive falters.

If the BC leg goes above point A then its a non qualifying ABCD and all bets are off, as possible reversal on cards. Basically I'm saying it must be a LH or DT, look back at last 14 CCI signal for confirmation, is it lower or level with the last CCI signal??

Lastly look for key levels for the pullback to react to like the 2nd one is reacting to the 1.8300 BRN level. I've found previous most recent S & R most effective.

Entry

Entry for me is always the same watch for the 14 CCI to start to turn down, wait for a red HA candle and place pending stop order 1 pip below it. If hit carrying on if not wait for next HA candle change and repeat until hit or if point A passed then its a non qualifying ABCD move all bets off!!

Exit.

Three choices if we're going to trade the trend as described above

1) Trail all entries down the LH's until stopped out, follow the market structure.

2) Wait for the 100LWMA slope to turn up or change colour.

3) wait for 210 CCI to cross zero.

GBPAUD below has moved about 70 pips today and all 3 would of been quite effective in fact the 210 CCI has still not given a zero cross yet.

Lastly coming back to Mr V.'s point about the break and retest of a range I'm hoping that the break as its turned down the 100lwma slope quite steeply would of brought GBPAUD to top of TT's and then its down to us the trader to decipher the chart and assess its a break of a range and therefore a good setup. I think its fair to say the TT will only bring the pair to your attention its then down to the trader to check its chart to identify where the pair is in the trend and whether there is a viable setup to trade or not.

Very lastly I have included a chart showing that one market open will frequently reverse the previous sessions move and this was the case today so again the first part of our morning analysis is to see what was strong/weak overnight as its quite possible it will be reversed during the current market open. This will most likely appear as a trendline break as per MR V,'s post.

I wander if GBPAUD will do that today in NYO session??? Will it reverse or continue on down for the day???

But hey we don't "predict" the market here, no need to, we just watch and follow so here's what we're do, going forward, wait for the TT indy to give us our setups then we look at our charts to decipher just what we're looking at , start of move possible continuation trade, end of move possible reversal setup, previous markets top trender then go from there.

One very last observation from today. There was no red news releases in the LO so I noticed the GBPAUD move started quite early about 5.30 my time but yesterday with GBP news releases the move started after the news, so maybe we could use this to our advantage??

I will check this out with some more visual backtesting and let you know what I find out.

Well thats how I'm going forward with this strategy, everyday it seems to be getting clearer and clearer what has to be done.

Guess its just a simple matter of trading it now.

Catch you all later.

Will take some time to read that.

First question yes I'm using 50 and 100 lwma's on chart.

I have in TT indi TF1 1 min with 50lwma and 5 min TF2 to 20lwma (to approximate the 1 min 100lwma).

Yep good idea and are you finding its getting you to the charts in time to evaluate whether theres a trade setup or not?

Basically like this mornings GBP trades it was the initial breakdownwards that I would want the TT indy to bring it to the top so we are in time to catch the first pullback system or otherwise??? That means the 50lwma would be sloping steeply which it looks like it to me looking at your charts this morning. I know it would bring us to some charts too early but I see that as the traders skill to assess the chart and decide whether its a tradable setup or not??

This is getting close very very close to a really good strategy, trust me Mr V. this is getting very very close......

GBPCAD (there were other system trades between FO/LO today also...

Chart 1 a LO long...



Chart 2 a "test" advanced short...

Yes I do find that its getting trades a little quicker. For example the gbpaud sell just after LO had 1 min and 5 min at the very top.

Clive we are not close to a good strategy we have a good strategy.

GBPCAD short did well... my entry fib stopped at 10:1 but as you can see price is well below that (thanks to some CAD news)...

Ended up closing at 8300 (well over ADR, hitting major CCI reading spikes) for 90 pip gain. 6 pips risked for 15:1. Not bad for 1 trade. May drop some more but I won't worry. Friday, end of week, vacation next week. All good.

Nice trades pres78. What is the first thing you look at to pick the highest probability pair to trade? Can you share your adr, awr, amr indie? tnx.

Not yet Mr V. as we are getting in too late and selling oversold markets and buying overbought markets , that's a strategy wrought with risk which will probably go wrong far more often than it will go right as 70% of the time an overbought or oversold market will reverse on us

But I like what pres78 is doing by taking the entries much sooner eg using the 5 min CCI to get in, but the best entries are the first pullbacks and thats where we need to be going with this strategy, looking for an entry shortly after the 15 min CCI goes overbought then comes back down, thats where we should be looking for an entry. We need to be trading from an overbought 15min CCI right across to the oversold 15 min CCI condition and vice versa. This will maximise our RR's and allow us to add at least once if not twice if we time it correctly.

We need to be entering on at least wave 3 whereas we are catching waves 5 if we're lucky. In fact I am working on a trade plan where we will be entering on wave 1 a lot more so catching the new trend as early as possible and getting much larger RR's as per pres78s entries.

I am working on an incredibly profitable trading system based around the 15 CCI and strong trending pairs(steepest sloping 100LWMAs) where we will be looking at where we are on the market structure using a combination of 15 min momentum, Elliot Wave , gartley patterns etc. It will lead to high probability entries and very precise trade management to close out for maximium profit.

It will be usable on all time frames and I am looking with Ted to semi automate it on lower timeframes (1 min etc) and hopefully fully automate on higher timeframes.

Anyway thats what I meant by "close" as we're by no means finished here. Yes we have a "good" system but I want a "really" good system that we can rely on to bring in profits day in day out. We are "close" and getting closer everyday but we're not there yet. No sir not by a long shot!!

Sounds interesting. How do you know it is or will be incredibly profitable?

One small piece of the puzzle is the 70 CCI... it's the trade rules I am building giving a variety of entry styles that each come with their own entry and MM rules. Essentially it let's me get in and out quickly if I don't catch a runner and add on / build positions if it does. What we need to recognize is that trends on a 1 min chart are fleeting as we are limited by the daily ADR and the swings within the higher TF trends.

Here you go... since the 600 build change it works but freezes at times. If you see it freeze just delete and reload the indi...

Can expect a quiet day as no major news releases all day today, so will watch the TT's for one currency or the other to dominate.

Theres 2 distinct setups I'm looking for. Our "System trade" looking for continuation trades and for me "The reversal trade" where I'm looking to sell the overbought and buy the oversold 15 min CCI's. Basically I'm looking at the 5 min TT's for the reversals and the 1 min TT's for the continuation trades.

Looking at overnight action, the 5 min TT's , we had some NZD,JPY strength and USD, AUD weakness so a reversal of the overnight moves may be relevant as markets quite often reverse the prior markets trends. To that end I'm monitoring the 5 min TTs that have been strong over night with the idea that maybe they will provide a nice trendline break and reversal??? Basically selling any overbought move and buying any oversold move on the 15 min CCI.

Also watching the 1 min TTs for any continuation trade setups as per the "System trade setup" .Will just wait to see what currency strengthens through the open.

GBP weakness developing already missed 2 entries gbpusd and gbpaud but early days yet

I'm starting to get a feel that these early moves are just setting up the LO real trades the other way???

I just feel that the markets falling into the bank traders arms building liquidity for their real aims to drive it the other way, thats why I'm thinking its better to wait till the LO has finished and see who comes out the gate the strongest.

But having said that shouldn't we just take the setups as they come???

Early days but we're get there....

GBPUSD setting up for a sell??? Wave 5 at best??? If I take it will just grab whatever it gives me.

Justgrabbed a couple there as I didn't like it, don't really like these 5th wave trades plus there was 15 min support at 1.7081 not really a good setup but hey ho 2.5 pips is better than nothing!!