Follow the monthly candle and be profitable

Robinho do you made some test which pair are more profitable with this strategy....I mean which pair is more potencial to be positive...so we can weed out bad pair?

in this ea (thanks gvc) if you wait until the end of the month and take a snapshot of the screen you have all the pip counts (ie size of the candle real bodies) listed in order from highest to lowest on monthly, weekly, daily, h4 and h1 time frames. so you don't have to look through all the charts just pick the ones with the highest pips counts and/or that line up and trade those

Yes friend can see it. I believe that:

EURUSD.GBPUSD.EURJPY.GBPJPY.EURAUD.GBPAUD

eur, gbp, jpy usd and aud ... when are valued or devalued in most cases jogging equal with other peers. And these pairs has the largest ADR.

Closing day 1 had a few pairs with D1, W1 and MN in convergence. See the results

But robinho you didnt use the sweetspot for entry pending orders in all, but you tild us to always use the closest sweetspot

Good day, we can use the sweetspot with 05, 10 depends ... we can make a direct input with D1, W1 and MN. It depends on each one.

Robinho add me on skype fabio.fsds, Fabio (Brasil), Abraço.

Robinho I take this month on 1st October trade on USDCAD and was a loss, USDCHF win, GBPUSD win, EURUSD win.... ok nfp help us that go in the right direction but any way...1 loss and 3 win..

Friends like you are seeing, for my initial rule ... we lost a few pairs, with 100 and 60 pips STOP pipsTp. See that most pairs after a first day back to monthly candle, are following her on day 3. Success to all and we will continue to exchange information.

Following the monthly, weekly, daily candle direction, the following major currencies is in line for next week: Sell for EURUSD, GBPUSD, AUDUSD, NZDUSD, AUDJPY, NZDJPY. Buy for USDJPY, USDCHF, USDCAD.

Hello Robinho, thanks for sharing your system, as i read in your previous posts , the tp is set to 60 or 100 pips but in the picture above your tp is set to 10 pips! ( it is 100 pips in cent account) . What's your explanation about this?

Sorry Robinho, i found that you have two methods, 10 and 60 pips method , but in your 10 pips method you didn't set any SL , can you explain about having no SL with 10 pips TP?

are two methods ...
1st tp 60 pips and 100 pips stop post # 133
2nd tp 10 pips and 100 pips stop post # 162 # 136

Thanks ,
green pips.

Hello Robinho, can i start trading with your system now or i should wait until next month?

Good night, try to understand the system first ... pay attention ... see we can also operate the weekly candle only ... the idea is to always follow the trio as post 162, but if you do not have time ... wait Month run out

robinho, which means for the upcoming month (november), we'll only open trades that shows converge signals only?

Order: 20pips
TP: 60pips
SL: 100pips

Hello everyone,
I have been following this thread with interest since its inception, and in the spirit of the free exchange of ideas, I would like to share my thoughts, and hopefully promote some debate.

First and foremost, I would like to thank Robinho for taking the time to share his thoughts with us. We should all appreciate those who do this freely. Over the years I have gained much from sharing of ideas, and this process should never stop.

Now, to the specifics…. I was immediately drawn to this thread due to its simplicity. In my opinion traders generally over complicate things with fancy indicators and such, that really only serve to clutter a chart with pretty colours and bright lights. Unfortunately these things are generally useless in growing my account! I believe price action to be the “key” to trading successfully… and I welcome any method utilising it.

I have been using a very similar method to Robinho’s, based on daily highs and lows, with mixed success. It had periods of huge growth, but also drawdowns that became unbearable to my tolerance. These drawdowns were largely due to a few major factors/issues, which I believe are relevant to this thread, so I would like to share them. Please feel free to address any of the following, as I am not trying to be negative. My aim is to optimise and improve.

The 1st issue I see is conditional. We are all aware (or should be) of the correlation between major pairs. The degree can vary, but generally if you’re long EURAUD and GBPAUD , you’re effectively doubling your risk on the general bias. Nearly every time, if one loses, the other will also. Of course when they both win, you will not care about this, you will happily take the profits. But I believe this issue is real. The more correlating pairs you choose to trade, the more risk you are exposed to, and the likelihood is your losses will be substantial if, say a news event on the base currency whips the price against the general direction, taking out your SL’s.

The 2nd issue is ADR variances between the pairs. USDJPY has a far lower ADR than say GBPAUD. 100 pips on a monthly chart for GBPAUD is far less significant than it is on USDJPY, or even EURUSD. A GBPAUD entry could easily be stopped out with 100 pips retracement before resuming its trend. So, to me it does not seem wise to use a blanket value for SL and PT across all pairs. For the larger ADR, and frankly more trending pairs such as GBPAUD and EURAUD I believe different parameters should be applied to account for the larger movements.

The 3rd issue I encountered was a big one…execution. It doesn’t matter which broker you use, inevitably during high impact news events, you WILL encounter gaps/slippage/requotes/ platform freeze, and nearly every time, these will go against you. So, your pending order that is executed 20 pips above/below the level set will either cause you a 30% less profit (relative to your position size), or a 20% increased SL. Or even worse, the price gapped against you on SL by 10/20 pips. This will throw the whole profitability out, believe me…I experienced this 1st hand. There is little you can do to counter this…except delete pending orders close to major news events…but of course this defeats the whole minimalistic approach to the monthly workload. AUD and CNY related news has a huge effect on AUD crosses. This news happens often at unreasonable hours for most northern hemisphere traders….this will become a burden.
Also, bear in mind for back testing purposes this throws out the reliability. The candle you see a month ago on GBPAUD in Tokyo session that triggered the order order and took PT out in one 200pip movement may not have been executed as you hoped….this WILL cause discrepancies in your actual Vs. theoretical results, and unfortunately cannot be predicted.

The 4th issue involves the “bigger picture.” I noticed a few people draw attention to this in relation to monthly doji’s etc. Inevitably monthly candles will not always continue their direction. I know the hope of this system is that it only needs to continue for a relatively short distance, 60 pips (+20 for the order), but I have back tested this, and found myself saying in some cases:
“Why the hell would I go long/short here at resistance/support when the trend has already run “X” amount of pips and the trend is clearly reversing?!”
This leads to a fundamental question…do I mechanically apply the system and place orders blindly, or do I use some discretion and judgement, choosing to/not to place orders when I see potentially adverse scenarios.
This is the real sticking point for me. It’s thrown around a lot on trading forums, but the cliché goes “you should use a system that fits your personality. “ Personally, I am reluctant to go long after a 1500 pip rally on anything just because the previous month closed green. So, you have to then ask yourself, if I pick and choose entries based on discretion, is the current method of entry the best it can be? Could I see some other signal/pattern that could give me a higher probability of success?

I believe there is huge merit to using convergence in various time frames for relatively short PT’s. I am currently working to optimise such a method. But you have to be careful in your interpretation of convergence.
Robinho mentioned in post #162 using the previous months last W1 and D1 closes as a filter for entries. This is worth exploring, but I have doubts as to the validity. For such small distances relative to the MN candle, is the previous D1/W1 candle close really important? Is the fact that the previous candles closed in the same direction as the MN a sign of true direction, or is it trend exhaustion? I don’t believe it in any way influences whether the price will move 80 pips past the new MN open.
If this filter is valid, would it not be an idea to only use it at the start of every week, and ignore the MN idea? However the idea of aiming for 10pip PT is a little concerning. If you use 100pip SL, one loss takes you 10+ wins to recover. This is not good.

The math here is clear…due to the relatively unfavourable R:R ratio, the win % must be greater than 65% for this to be better than break even (not counting spreads/commissions/swaps/execution issues). 80% reliability is required to make 10% monthly gain (if 60pips yields 1%) with 27 pairs. The more filters you apply the less positions you will have that month. Of course ideally the filters reduce losses, but they will also inevitably filter out wins too.

There are a lot of coders out there…and the concept of this system is not a new one (with the greatest respect to Robinho).
If it were consistently profitable, it would already be in an EA for sale for a few hundred dollars on a web site. Despite my wish for this to work, I unfortunately believe that long term, this system is either not profitable, or not profitable enough in its current form, due to all the factors I listed above. Also, please remember, there is a world of difference in execution between demo and live. You will only see the true extent of the problems once you trade live, which can be costly.

I realize I took a long time to say what FXEmpire said in post #151! But I wanted to expand on some of the potential pitfalls of using a system like this. It is very appealing and simple. Logically, the principle makes sense, but I have experience with the same idea on different TF, and I can tell you that the tested performance is wildly different to the actual performance. My system ran mostly above 65% overall reliability over 2 years with 1:1 R:R ratio. It yielded good, real gains for months, but consecutive losses and execution issues pushed it into negative territory, and I came to the conclusion that "the edge" is missing. My system ignored general market analysis, which IMHO will lead to failure long term. I see no difference with this idea unfortunately. And given the low number of trades per year, I believe the months that are very bad will take a long time to recoup their losses. So, is this the best way to further your trading career? Of course you must decide.

One final thing to consider…in post #133 Robinho laid out the calculations for 10% monthly.
$1k account, 0.02 lots per trade on 27 pairs. Each month, you are exposed to 27 positions with 100 pips SL at 0.02 lots each. On a $1k account, you are risking more than half, $540 each month.
Each single currency appears approx. 6 times in the 27 pairs listed.
If you are in active positions for all say USD crosses, and a news event swings against you, it’s most likely you will lose all USD crosses, and also any pairs that are cross traded as hedging by the big players. Immediately you cannot afford to lose any more if you wish to achieve the required win %, and that’s only if there were no execution issues. So, in any given month, one major event on any single currency will kill that month’s result.
I’m pretty sure that in no given month all 27 positions will lose….but I have traded for enough years to never, say never. One global catastrophe, flash crash, war, tsunami…anything can happen. Sure, you may not jump off the nearest bridge losing $540. But, how about if the account is $100k? More? Sooner or later we will all encounter some freak event. With so many open positions running each month I fear you will be more exposed when such an event occurs. A friend of mine, an experienced trader of 10+years lost the $ equivalent of a reasonable sized boat a few years ago on just such an event. As he said, it is a lesson you only learn once! Over exposure is now something he avoids religiously and I tend to agree with him. Just food for thought.

Again, I mean no insult or disrespect; I am only sharing my experiences and thoughts. I will watch the thread with interest and I wish those who trade it success.

[quote=trader34;7789461]Hello everyone, I have been following this thread with interest since its inception,
Hi, it is true what you say, I could never get my head around blanket trading, but remember all trades are not triggered at same time so the method can be adapted, You did lose all credibility when you mentioned a guy who cannot trade successfully. Hopefully some of the people here will appreciate what you have written, Trade well

What do you mean? I mentioned a successful trader....he had a major loss, yes....I don't know a trader that hasn't. He has traded full time for more than 13 years, and has accumulated enough capital to be able to lose more money than most of us will have in our account, and still survive. How does this lose my credibility?

What's your point?