Trading is as simple as ABCD

GBP and EUR heading South again, just like the Scots....

Just taken 2 sell entries on this GBPAUD both stopped out at BE and its not surprising really is it??? Lets face it , its been going down now for over 200 pips its madness to keep selling it so I'm not taking any more sell entries, sure it might go down but the higher probability now is its going to go up sometime soon...

And as we've just had a higher high ,higher low I've placed a buy stop above this little range see if it breaks to the high side get to BE super quick and see what happens?? Could be the best entry ever....

Hi Clive

Is it just me or does your nonlag ma give looooads of false signals. Getting hordes of buys for EURCAD and GBPCAD and of course they are dropping like a stone and ma no where close to turn.

A coloured ma with an alert would work just as well so I'll try tracking one down.

The sideways/or marginal HL's pa pre US open. Have often put forward the idea of weak pre/early US CT signals only for US to fall back into Londons direction.

Hi Mr V

I've changed it now as I found it slowed my platform down if I had too many charts open. But I didn't have too many false signals but I'm not so sure about the latest one though as I seem to be getting some strange signals or is that the one you mean?? the MA_Slope Alert one???

GBPAUD has just gone down and down since I mentioned I wasn't going to sell it anymore.... Strange isn't it whenever I decide enough is enough they just keep going?? I think I've got to stop thinking about it so much and just take the signals as they come. For instance a good signal is a clear drive down clearing the last drive then take the resulting pullback as long as it doesn't come back beyond A point.

Thats the bottom line with measuring the strength of a trend, if its last drive clearly takes out the last low/high then take the following BC move as long as it doesn't take out point A. If it falters around point B then close it out as its coming back for another go, if it easily goes past point B then move to BE and hold. Judge the next push/drive and how strong it is. Its the only way to access the strength of these trends.

I'm entering well on a regular basis with the trend and hardly have a losing entry. The only time I lose is when I try to enter on break outs. I have an absolute golden rule to always buy at bottom of waves and only sell at tops of waves, identified by the CCI going over +/-100 levels. Usually the trend will help me out and take me to BE sooner than later. I'm learning that sometimes the trend just goes without a pullback which I need to just accept as I can't catch every move going just have to realise that and stick to what we're doing here. Trend trading the 1 minute trends until they end.

Only really bad trades I have are due to poor discipline when I get bored, think the current trends gone on too long and start looking for reversals way before they actually happen. Theres enough strong trends to trade every day just have to have the patience and discipline to wait for them to develop.

Aren't the charts amazing that we're trading?? They are text book trends that any trainer would be proud to draw by hand!!!! The difference is they actually happen here on a regular basis, I still find it hard to believe how clear they are which in itself is a problem as I sometimes don't take an ejntry becos its just too good to be true!!!!

Just look at this GBPAUD chart now why am I not catching all those entries?? Its been top of the TTindy nearly all morning, just seems too good to be true sometimes doesn't it?? I keep thinking nope can't take it its too obvious its gotta reverse soon, 5 waves finished etc etc



Its a mental game more than anything else as I'm sure you know, problem is I take one that doesn't work then think , there you go doesn't work!!! Its such a funny old game this trading lark for sure... But I'm getting there everyday is different from the last so just got to learn to take each day as it comes.

Take yesterdays GBPJPY trade now I was very pleased with myself there as I got 80 pips out of it but if I'd of held it on 5 min MA it went 320 pips!!! Just plays with your head all the time doesn't it????

Sorry to ramble on but you're one of the few guys that post here on a regular basis so its nice to vent off sometimes....

Do you know I think its a bit like golf, you have to take one shot at a time and just play that shot on its own and accept the outcome whatever it is, good or bad. At the end of the round you add up your shots and thats your score for the day.

Forex is the same just take each entry on its own as an individual trade and react to the following price action, bank some that falter hold if they break point B. At the end of the trend add up your score simple as that. Don't think ahead, don't think this trend will end just trade it until it does. never assume anything.

Just thinking out loud the best way would be to trade Pres78's way, bank half as it falters at B then move other half to paper BE and see if it survives entry retest. On days like today you'd be building a nice position half at a time and banking several winners. and on rangy days you would be banking half...

Right now I feel I'm in a good place with the entries etc but not my trade management side thats where I need my discipline...

Ok had enough for one week will move onto next week and see how it goes.

If you find a good one let me know...

Here is one you can try. I have tried to use these color coded MAs for a long time. I will try them, then just go back to regular MAs. I find the color biases my opinion to much and keeps me from seeing the structure of price. That is how my brain processes it anyway.

Here is my current chart. I am using your idea Clive in concert with the ideas of Mongolian. In this market, with such strong movement, it is great! There will be tweaking, but only as we lose action and move into tight ranges. With ADR's over 100 though, this is a great way to trade. This EURUSD is a textbook trade! Kudos!

Thanks capstone but it doesn't have any alerts which is a shame other than that its great, has anyone got one with alerts on slope change that doesn't grind your computer down??

Thanks glad its helping, I see you're trading EURUSD which rarely comes up on my TTindy without the atr setting. I've struggled to trade it myself becaudse of its constant toing and throwing I like the gbpjpy and GBP pairs that zoom around everywhere especially around the LO.

I'm not catching these trends at the mo but I'm sure thats just a mindset thing as they are there nearly everyday just got to develop the discipline to trade what I see not what I think I see....

Also thinking of just placing my trades and not moving to BE until after I've banked half then move to paper BE as per Pres78s idea.

Hi Guys. Been following this thread with great interest for sometime. Personally don't trade 1M charts but you guys may persuade me to the contrary as you both seem to do really well. Whilst I don't have a MA in colour with alert I have attached a couple of coloured MA indicators which may help in the short term. Have a good weekend. Cheers Gavin

Hi Gavin

Thanks for posting its nice to have some new posters here, would be cool if some of you guys tried it out on demo and posted some charts it would be interesting to see how everyone gets on with it. I'm convinced theres some really good stuff here just need to get myself under control a little better and stop playing around when I get bored. Seriously considering using real money again shortly as it might calm me down a bit and keep me on track better...

Some simple rules for this system would be...

 

1. Only trade the top 4 trenders.
2. Only trade in direction of the trend, no counter trend trades until price crosses the MA's and the MA's have changed colour.
3. Enter on qualifying ABCD moves only when CCI +/-100 level
4. only buy bottom of waves -100 CCI only sell tops of waves +100 CCI signals
5. Bank half if price falters at point B move other half to BE and hold.
6. Trade the trend until it ends, either by market structure broken or MA colour change.
7. Trail stops down LH's in a downtrend and up behind HL's in an uptrend until stopped out.
8. Don't play around with crazy none system entries when bored!!!!

Some extra tips to help make it work could be enter on break and retests of key levels eg 25 levels all previous S and R, daily high,low and close. Entering on break and retest of key levels also means we can get our 10 pip stops behind a key level to protect it.

A qualifying ABCD move must be proceeded by a strong AB move clearly clearing previous low or high eg the trend is strong and continuing.

The rules are more for me than anyone else.

Hi Clive I think it will be good to put some charts up, I 'm off to Cyprus for Holiday and will be back 8th Oct so I will check in with you after then, .. have some catching up to do no doubt look forward to it, in the meantime need to dig my case out.

Hi Clive

Thanks for the info. I will have a look next week though right now I only trade 1H plus charts
so would find 1Min a bit intimidating. Could well look at, say, 15M using the same technique
on a demo account.

Let me ponder it on over the next couple of days.

Have a great weekend.

Cheers

Gavin

Its been an interesting week with some really positive moments and a few darker ones that I prefer not to mention.... Thats something I want to work on going forward I think I need to show my bad trades just as much as my good ones, afterall we can learn as much, if not more, from bad trades as opposed to our good trades. Also of course it lends itself to honesty and openness which is absolutely paramount here on my thread as in my life.

The other enormous advantage for me of course is it makes me answerable to you all and helps me to develop my discipline to follow my plan. Therefore from next week I am going to post my explorer again so you can all see exactly what I'm doing and if I lose my discipline and trade outside my strategy then shout loud and clear "Oii!! What the **** are you doing????" This I'm hoping will keep me on track.

As my regular followers know I'm forever sharing my thoughts here good or bad, happy or sad just as they come. It helps me to clarify my ideas and hopefully helps others with their trading too. Its good to know we are all on the same journey...

Well my last week has taught me something for sure, even when I identify strong trending pairs I still fail one way or another to trade the trend until it ends. I'm constantly thinking "this trend can't go on too much longer" and stop taking entries with the trend but even worst start to look for reversal signals way before its happened which invariably leads to the vast majority of my losers.

You see its paramount to trade with the trend, even bad entries become good as the trend takes over and moves your trades into profit. However trading against the trend or counter trend trading is the exact opposite and the trend will take over and wipe you out!!! So from now on I'm not counter trend trading or trying to catch reversals before they actually happen.

OK so if thats what I've learnt this week how can I adapt my trading plan to suit.

First of all, always trade with the trend, how do we define trend well thats simple its the colour of our MA if its red we're selling if its green we're buying. Job done.

Ok so first things first we know when a new trend is beginning don't we?? Thats right when our MA changes colour eg slope. Thats because every trend starts with a reversal. Its the end of the proceeding trend and the start of a new one. Now just for clarity I'm going to state my favourite statement regarding trading which always gets me a new PM almost immediately I state it.

"Trading is simple price can only go up or down"

Please don't complicate it, its not rocket science, just look at a chart and decide if its going up or down, am I a buyer or a seller??? If you don't know then look at another chart where you do know at a glance whats going on.

Ok so to identify our trend we say the 100lwma is our trend if its going down we sell if its going up we buy and just for those of you who can't see a slope we've coloured the MA red for down green for up, wouldn't want to complicate it too much would we???

Now we don't leave it at that, we also only want to trade the pairs that are moving strongly up or down as then our momentum indicators work great 70% of the time and when they fail the strong trend will help you out and put it right for you. How do we do that?? We measure the slope of the 100lwma and rank them in steepness so we can identify the strongest trending pairs,thats the job of our TTindy so we only trade the top 4 trenders, with me so far???

Ok so now we know which pairs we're trading and in which direction, now when should we be doing this??? What time of the day should we be trading???

Thats easy too, when the money comes to the table as its the money that causes these strong moves so when does that happen?? Yep you've got it, market opens!! Trade an hour or two before and an hour or two after the market opens.

OK so now we know which pairs to trade, which direction and when. Last piece of the jig-saw how and when do we enter???

Thats as simple as it gets we use simple ABCD entries. Watch for a strong AB move then wait for the retracement BC move and enter at C. Basically wait for a pullback and jump on board. How do we identify a pullback, again its simple I use an 8 CCI and enter when it goes overbought +100 in a downtrend or oversold -100 in an uptrend.

Here's a little chart showing you just how simple it can be. One sell trade followed by a buy trade. Please don't complicate it...




Notice how after the MA changes colour and the first CCI entry works well and the 2nd even 3rd too? Close out when trend changes MA colour change back to green. Notice the quick reversal MA colour change and then the first 2nd and 3rd CCI signals work fine close out on MA colour change back to red.

Well thats it folks thats how simple it can be......

Notice I said "simple" not "easy".......

Now I started this post talking about how could we follow a trend to the end so lets quickly look at this simple chart to see if there's any clues that could help us on our journey..

Notice how price is actually below MA for the sell and above for the buy. We could make this a condition for our entries, however I'm a firm believer in market structure so will pay attention to the price relative to the MA but market structure will dictate to me on entries as follows.

Take note of the market structure on this chart and how it is maintained perfectly, the LHLL structure in the down move. Notice how each good entry pullback was proceeded by a clear drive lower(AB leg) than the last one. These are the signs of a strong trend in place, become suspicious if you see failed drives as your trend could be about to end so therefore you should be focusing on closing for maximium profit rather than taking a new entry with the trend.

Notice how on each +100 CCI signal how the resulting high is lower than the last high this is a quick and easy check for market structure, I want to see that the CCI signal I'm entering on is lower than the previous one. However we do sometimes get little reverse abcd moves against the trend so I will consider a CCI turn higher than a previous one as long as its lower than the last drive down started from and under the 100lwma and/or at a key level. Look forlevels where there has been a very strong move from as this denotes a key support level for the move.

Notice also how the LH's are turning at the previous drive down using it as resistance?? This is a clear sign the trend is continuing, once you start to get overlapping waves then the trend is weakening. For confirmation of this look how the last LH was a double top practically in other words this upwave overlapped the previous wave down. Its a sure sign the trend could be ending as in fact it does after the next wave down. This overlapping or consolidation as some call it is a warning that the trend is faltering. Now it doesn't mean its ending for sure but should put you on awareness that it could. Quite often the trend will consolidate for a while then push on further down.

The best way to deal with this overlapping or consolidation periods is to move your stops down above the consolidation area if it does continue down you're fine and still holding good positions . However if it does turn into a full reversal then you're out with some profit hopefully.

Notice also that price did break above the MA just before it reverses so again another warning sign that the trend could be about to end. If you're wanting to close out on maximium profits then after a sign of a weakening trend like this watch the next drive down, if it fails then exit immediately for maximium profit. To help with this observe the opposite CCI signals going oversold and if it turns and produces a HL then close out immediately, in other words use the CCI to exit as you would to enter a buy trade.

Come to think about it thats exactly what we could of done here, notice the buy entry would also be the perfect exit for the sell trade??? Hmmm food for thought there for sure, how cool would that be to close out your sell trade and simultaneously enter a new buy trade??? Awesome would be the word for that I guess....Mind you I would only consider it after a strong move one way first before taking a reversal...

OK so that all sounds fine and dandy in theory but how do we apply it to our trading??? Well first of all lets look at a realtime example from last Friday and see how we could of applied some of our guidelines for trading the trend. But before I do that lets just write them out very clearly as bullet points.

 

1. Price must be below MA when red and above when green.
2. It must be a +/-100 CCI signal
3. It must be level or lower than the last CCI signal. (DT or LH in down trend, DB or HL in an uptrend) or A point cannot be exceeded. The only exception to this is after a strong move down as quite often you will get a small abcd move counter trend. In these instances its ok to take a turn as long as its still below that key level where it last got support for the strong move. If in any doubt let it go until the trend resumes with a LH back with the trend.
4. Must be proceeded by a clear drive down or up clearly past its last low or high.
5. Strong trends do not overlap the last wave down/up this is a sure sign its weakening don't take anymore entries with the trend.

Just a quick note here too that if this is a strong trender running it will be top of the 5 min TTindy and in the top 4 of the 1 min TTindy too. I'm considering saying it must be in the top 4 of the 5 min TTindy before taking any signals but as yet I'm not sure that is a wise move, maybe just not sure yet.

As for reversals well from now on I'm not even thinking about a reversal until price has crossed our MA and obviously the MA has changed colour.

Heres an example of a trend continuation trade followed by reversal signal. Its a good one because its the GBPAUD trade from Friday which I am going to use to demonstrate identifying a strong trend and also how to recognise a reversal. Its a great example because the best reversals occur after a strong move one way like this move on Friday.

First of all it kept going down about 200 pips then it reversed and went up 75 pips so a great example to look at for trend trading and trading the reversal.

First lets look at following the trend till the end. I reckon this is one of the hardest things to do in trading. Sure it looks easy enough when we attend those trading courses and the instructors pull up chart after chart of nice little trends and how simple it is to trade them, but the harsh reality of trading them "live" is a different kettle of fish altogether as I've been finding out. I get trend after trends to trade thanks to my TTindy but still miss entry after entry so I'm going to spend some serious time around this issue because catching and trading these strong trenders is where we can make some serious money if we get it right.

The problem of course is we don't know at the start of the trend which ones are going to go on to become massive 100 plus pip runners and which ones are going to fizzle out and end after just one or two waves. We have to develop our system that will make money or at least not lose too much money in either case. So it has to deal with rangy days and pairs but also give us the chance to hold when it turns into a runner.

Well lets have a look at our GBPAUD chart and see what we can make of it with our new giudelines on trend trading...

Lets walk through the entries from left to right, the first one is red because its in fresh air clear space , theres not a level that its turning at so let it go. The 2nd one is now higher than the first and again not at any sensible level where we could expect support for the move. Also notice these first 2 CCI signals are just above the BRN 1.8200 so another reason to be wary of taking these entries. I like to think its taking a few steps back before running full steam at a big level like this. Its not unusual for it to come back about 25 pips before charging back and straight through.

Now the third one is questionable because its a HH however there are some qualifying points about it,firstly its a typical step back from a BRN as mentioned above back to the 25 level and it gives you a nice place to put your stopbehind the 25 level. Its also taking resistance from last drive down, yellow line, its at yesterdays high yellow horizontal line, also its bouncing off the 100lwma, lastly the CCI is very overbought at +235 and finally there is a very strong move down which it has not gotten anywhere near the start of. However all that said you could let it go because its a HH and wait for the next CCI signal to be a LH before entering.

The first green arrow here is very subjective but the only thing against it is its a HH other than that it qualifies on 3 or 4 reasons to take it. But bottom line if you don't take it fine then take the next one and if you do take it and it loses fine 10 pips gone so what better luck next time. Just move on.

Next green entry is perfect on all areas, its a LH its proceeded by a strong move down (AB leg) it takes resistance off last drive down no overlapping the trend is in good shape. Next 2 green arrows qualify as again proceeded by strong move down (AB leg) use last LL for resistance, bouncing off 100lwma, all good to go. Next one again strong move down, its under the last LL, again its not as clear as others but what does help with this one is you can see continue hammering at the 1.8250 level so this is one time I might use a pending order below this level for entry. Quite often 25 levels especially 50 and 00 levels are good breakout entries. I will only use break out entries in very strong trending pairs and as the last push down was nice and strong we can assume there's a strong trend in place.

If we just take a look at the chart here ignoring whats happening to the right we can see that this trend is still very strong with very clear strong moves down every step of the way. There's very little faltering price action or failed drives so we should make the assumption this is going to continue trending down strongly until we see evidence to the contrary.

Ok so far so good and we have one final 50 point drive down to the 1.8200 level. Now we should always be aware of these BRN as they nearly always cause a halt to a strong move or at least a pause. Look back at the last BRN 1.8300 it hit that hard and bounced up 25 points at least. But it took a 25 pip step back to get a clear run at the BRN and then just smashed its way straight through. Will it do the same thing here??? Maybe we don't know do we but we need to proceed with caution thats for sure as we are now holding some good positions on our way down. First thing I would do here after that last 50 pip run down is bring my stops down to just above the last 25 level, remember last time it took a 25 pip run up at the BRN???

The first +100 CCI signal is nothing its not at a level and its not going to smash through from there. However if by chance it does don't panic, wait for the inevitable break and retest and enter on the retest. No need to ever panic on the 1 minute charts if you think you've missed an entry as 9 times out of 10 it will give you a 2nd chance with break and retests entries.

Ok so we don't take the first one which by the way even if you were thinking of taking it , it didn't qualify anyway as no red candles were taken out by 2 pips. now the next CCI signal is worth a go as its taken a few steps back and its coming off of the 100lwma so qualifies quite nicely but with the BRN right in your face take no chances and get to BE before it hits the BRN, if it doesn't give you enough room to manouvre to BE don't take it, don't forget if it does go through without you you can catch the break and retest.

Next one comes back and gives you another entry but I would now be very very suspicious, we've had 3 goes at that BRN with no luck so I'm not holding my breath on it succeeding this time either. Now this is where it all becomes a little bit subjective or does it???? Shouldn't we just look at this entry on its own merits under our giudelines does it qualify????

Is the trend still strong? Did the last drive down clearly take out the last drive? NO!!! Nor did it the 3 previous drives before that. We clearly don't have a strong trend in place any longer so at very least move all stops down above last LH ready for a reversal to take us out and close out all our positions.

That last CCI signal the last green arrow is a qualifier in that its a LH and its under the 100lwma and there has been a fairly nice drive down before it so you could take it but again go to BE very quickly.

Now if we look at this price action without knowing whats going to happen to the right of this picture we could say this is price consolidation and maybe price is going to go sideways a bit before going on with the trend and trust me that happens more often than not. Now what I would do is trail my stops to 5 pips above the last 25 level in this case the 1.8225 level and if price takes me out so be it or wait for the 100lwma to go green them close out all positions whichever happens first.

OK lets have a look at what happened next now remember we've trailed down our entries to above the last consolidation period at 1.8230 in case the market reverses on us and takes us out. Heres a chart continuing the price action from previous chart.



Ok the first thing that happens is the MA changes slope so we close out all our sell trades and we start looking for CCI buy signals.

This is our basic reversal setup, the price has crossed over the MA and the MA has changed colour therefore we are looking for buy signals only and qualifying CCI signals.

I have marked the very first 2 CCI signals that happen immediately after the MA slope changes colour with yellow crosses, now I wouldn't take those signals even though they plainly worked. Why??? Because as i've stated before I like to see market structure confirm my MA and CCI signals and to me that doesn't happen until price takes out its old LH's from the previous move down. That doesn't happen for me until the 1st clear HH that I've marked on the chart now I'm waiting for my first 2 pullbacks and CCI signals.

I just want to spend a bit of time here talking about those first 2 CCI signals because its very important to understand why I wouldn't take them. Its very simple to me, I love my indicators like my CCI and my coloured MA's and my TTindy but the bottom line for me is price action and market structure, they are the real deal. Just because an indicator screams buy, I want to see the price scream buy too!!! I know these 2 signals worked out fine but the market structure was still saying down as the last LH had not been taken out at that point.

Remember indicators are exactly as their name says "Indicators" they only indicate something that price confirms...

Ok enough said so there you have a reversal signal, MA changes colour price crosses over take the next 2 qualifying CCI signals, hold until either market structure fails or MA changes colour.

Well thats about it guys hope that helps, it certainly helps me to write it all out and see it clearly myself exactly what we are after. Of course its one thing to show it all here on hindsight charts but to be fair until we see it clearly here how can we know what we are looking for on the charts trading "live".

I hope no one considers me a hindsight trader like all those forex gurus who can't trade so teach instead... In fact that is a concern of mine that I'm always posting these past charts to explain myself but I hope you recognise I also post charts live whilst I'm trading and they are the same beautiful trending charts but "live".

Right well must be going if you've got any questions or thoughts please share and feel free to post any charts whenever you feel up to it, don't worry about posting bad charts or asking silly questions its all part of trading...

Hi Gavin

You can trade this system on any timeframe you wish its about trading the strong trenders on the timeframe you like, thats all I'm doing but on 1 min charts but its just the same on say 15 min or even hourly for that matter. Just have to wait a bit longer for your entries thats all.

The secret to me is only trading strong trending pairs no matter what timeframe you trade. I feel traders come unstuck when they are looking for signals in pairs that are going sideways its either got to be clearly going up or down, if when you open your chart you're not sure which way its going , look at another chart where it is obvious.

All the best Clive..

Hey there clive! Hope your trading is going well! I have a system fairly close to this that I'll eventually post on here. Been a member here since April but been reading for a couple years and today just started posting so I cant but anyways! I have a few more rules on the minor trends and when to trade them and use this on the 5m chart and it does well. I particularly use this on the EUR/GBP during the Asian/European sessions. Thursday and Friday I earned about 60 pips using this could have been more if I was paying more attention but I am more than ok with 60!

GLT

Hi silentcoast

Sounds good to me not a great fan of EURGBP, didn't think it went 60 pips in a year??? Bit like watching paint dry but then I guess its the old Tortoise and Hare fable isn't it???

Well its the start of another week and things are starting to get interesting with my strategy soon be time to start using real money. When I do I will start with a fairly small balance of £200 so in preparation for that I'm going to trade my demo from $200 to get use to the numbers etc and to see how I get on. Going to change my risk and stop size too as some of the pairs I trade are a bit too volitile for my 10 pip stop.

I'm going to use 5% across a 20 pips stop. My 20 pips is more an emergency stop which I hope will hardly ever get hit as I will close out long before that if my market structure gets broken. I'm also trading strong trenders so hopefully with the larger stop even my bad entries will be swept into profit with the trend.

The plan is to see just how well my strategy works if I keep my discipline and only take my setups. Hopefully my demo will grow nicely over the next couple of weeks then I will move onto a real account and see if I can repeat it.

Well thats the plan lets see how it goes if my discipline holds up????

Will post an explorer for all to see shortly...

These are the current 4 Top trenders but looks like I'm too late as usual but lets see what sets up off of my 25 level like on GBPAUD belows???