Trading is as simple as ABCD

Ok where do I start???? its been a long journey but I feel I'm close to the end of my journey to become a successful trader, yet to be proven on a live account, but thats to come shortly...

I'm going to break this post down into 3 main areas...

 

1. My personal philosophy about trading and what its all about.
2. My actual strategy or at least my very latest version.
3. Some practical pointers on how to actually trade it which I have learnt as I trade.

In fact I might even write it as three separate posts just in case I lose my internet or something wouldn't like to get three quarters of the way through and lose it all due to a blip on the internet...

And lastly I will then endeavour to trade it all next week and post as I go to demonstrate it as best as I can and if I get the time I will run some live webinars too..

OK next post will be my personal philosophy on trading....

great idea clivewhen you post your strategy etc place your template indicators etc in the post so anyone reading and wish to follow along can replicate your setup.talking of which maybe we should on a sunday nominate 1 pair for the week and trade it so all are on same page and can follow along

Watch "Slots v4" on YouTube


dam take a look at this video

My Personal Philosophy on Trading..

Price can only go up or down, its that simple. But it gets even simpler , that means you have ONE choice to make are you buying or selling the chart you're looking at...You have ONE choice to make, its not complicated is it??? Make your ONE choice and place your trade....

THIS IS NOT ROCKET SCIENCE!!! UP OR DOWN??? WE HAVE TO CHOOSE ONE!!!!

How complicated can that be?????

Seriously guys its very very simple, everything else we do just complicates a very simple choice....UP OR DOWN????

So the first thing we've got to do to keep it as simple and easy for us to get it right, more than we get it wrong, is to only look at charts that are clearly going UP or DOWN... This will give us a better than 50/50 chance of getting it right. Only trade charts which you absolutely know are going clearly UP or clearly DOWN...

If you look at a chart and you're not sure which way its going then change the chart, go and look at another chart where its painfully obvious which way its going.. If you're not sure which direction to trade , don't reach for your FIB retracement tools, don't start counting Elliot waves, don't reach for your crystal ball just reach for another chart...

Can't find one? Then don't trade, remember....

"If it ain't trending we ain't trading"

Always trade with the trend. Golden rule here we always trade with the trend, remember...

"The trend is your friend"

But not only that here we are going to not only trade with the trend, but only with the strongest trends, so remember....

"The strongest trend is your bestest friend"

OK so we've established the price only goes up or down so it should be simple enough to trade then shouldn't it?? But unfortunately it doesn't move in a straight line, it moves in waves. It waves up and it waves down. Now this waving appears to send us all into mad panic or mass hysteria, but it shouldn't, again its not complicated in fact its very simple to use to our advantage. But first lets look at a wave in its simplest form. The good old ABCD move.

Going up...



Going down....




Well the market is just a procession of ABCD patterns one after the other, its how the market works. I'm not going to go into why here, as I've covered it in earlier posts, http://www.forexfactory.com/showthre...94#post7494694 so lets just accept the fact it moves in waves ABCD.. Now these ABCD moves are particularly clear in strong trending markets and hence thats why we are going to be trading strong trending pairs.

So how do we trade the ABCD moves? Well we have a choice of entry either by breakout of point B or by pullback to point C, my preferred entry method.. The exit regardless of entry is at point D.



Now we are going to trade these waves in strong trending pairs by quite simply buying wave bottoms (point C) in uptrends and selling wave tops (point C) in downtrends. We are going to exit at point D.

So remember....

"We buy wave bottoms in an uptrend and we sell wave tops in a down trend"

So how do we identify our wave tops and bottoms??? Quite simply I use the CCI to indicate the wave tops and bottoms, -100 level being a wave bottom and +100 level being a wave top..

OK so the theorys great but how does this look on real charts. Heres a chart with the CCI showing the wave tops and bottoms of an ABCD move, very clearly...

Attached Image (click to enlarge)

Well thats it guys thats what my strategy is based around, I wanted to make sure you all understand the basis premise that I'm trading from, because if you understand this then the rest will be a piece of cake. Read this post until you completely understand where I'm coming from and the strategy will make perfect sense to you and you won't need exact signal levels or exact rules to trade.

Have a basic understanding of how the market works and moves with this simple ABCD move and the rest will fall into place.

Gonna spend some time with my family now so will do the other 2 posts about the exact strategy and how I trade it tomorrow...

thanks a lot clive forlet me know about poem...but your father was great to pick that gem and gave it to you and you al so shared this way or that way this poem is flying around the world ..it is really divine words to me..thanks again...

Hi Clive, I don't want to mess with you personal Philosophy, but what you say is not 100% accurate. Price can go up or go down or go sidways, what it dose 70% of the time. So being honest, we just have a 33,33% chance to be right.
Furtheremore we have to make one decision out of three possibilitys: Buy or Sell or staying out of it.

Hi GodsClown

See here

first I agree with Clive,but use TT indy to filter Ranging Market,I also found a problem,when it up or down,then the trend is end quickly，it was many people call ed “fake breakout”,So It can't be perfect,That is why we are here.
thx a lot.

Hi Clive and GodsClown,

Am new to Forex and am almost through reading your thread and at this point need your help great men. Kindly help me with the template and all indicators that i need to download and install for this great strategy.

many thanks.

One way to get around trends ending fast on pairs is to watch the TTindy, and when a pairs shows up in the 8th slot, stalk it, so to speak. Maybe an alert and be put in that allows the TTindy to tell us when a pair moves from one slot to the next. From the 8th to the 7th, and so on. I am not sure. But that is one way to avoid getting caught out. You folks have worked very hard on this, that is why I am chiming in.

Hi jmn

its what I want to say if we can make TT TTindy Histogram

thx a lot.

An interesting idea. Kind of like currency spaghetti but for pairs (for those who are familiar with the indicator).
It would need some thought about how to make the display intelligible and keep the processing load down

Hi honestknave

look this one

http://megatrendfx.com/additional-fo...eter-indicator




I hope it can help you.

thx a lot.

Thanks blueface,

That megatrend link is very much like currency spaghetti. That is definitely easier to do, because you are only dealing with 8 currencies.

On your screenshot, what would the colors represent? A heat scale for where the pair was on past bars?

Hi honestknave

top1-8 they even dont need the color,but just let us know which top1-8's pair



thx a lot

Hi GodsClown my good friend,

I'm afraid you have caught the dreaded lurky of forex trading... You simply don't believe it can be simple...

The charts I look at are never ranging ever!!! You should know that as I only use the TTindy automatically opened charts. If i look at the chart and I'm not sure which way to trade I forget it and look at the next one. If the top 4 aren't trending I don't trade simple as that so ranging charts are not an issue for me just UP or DOWN, not sure don't trade....

Of course the next thing you're going to say is, "Ahhh but what if you enter and then they start to range" , well first of all I go to BE around 3 pips so if thats a range then ok I'm guilty but also if it does range within 3 pips then I won't lose will I?? With my 10 pip stop so I just wait for it to range up to my entry point and close out for BE or as near as possible...

But trust me trading these TTindy top 4 on a one minute chart, it just doesn't happen. I either win, BE or lose end of story and by the way last Friday I took 16 trades and had one loser and I made 109 pips....Which is almost 11% account growth.

You see what you and everyone else out theres got to do is shake off thier old beliefs about trading, forget all the complicated crap and bullshite you've been taught or believed in in the past and just look at it for what it really is, up or down there is no sideways.......The only true sideways is parallel and like I say how can you lose if it just goes horizontal???

Ask yourself a question, "how often does price range less than 3 pips????" And when it does how can it hurt us????

Please don't take offence from this post GodsClown as you have been instrumental in turning my light on with the automated TTindy, before that I got involved in all sorts of trades driven by my personal trading beliefs that something was going to go up or down, but now thanks to you I spend my whole time trading just looking at strong trending pairs and thats the secret of trading. All the classrooms tell us about trading the trend etc etc and pull up chart after chart showing beautiful trends, 15 min , hrlys even daily charts trending beautifully wave after wave, but you try to find those charts yourself??? Impossible!!! but our TTindy on a 1 minute chart finds them all day everyday and thats what works...

Hang around GodsClown as I'm about to post my strategy and it will cut through all the crap thats out there and cuts it right down to what we have to do to make money trading Forex..

Hang on my friend we're almost there...

Was going to butt in and say basically the same thing Clive, but you beat me to it.

You've put in the hard yards and i really hope it pays off for you, your on the right track, i just hope you dont let people pollute your nice clean Price action system with useless indicators like so many other threads. Go for it man

Interesting concept. I'll give it some thought

@honestknave, Separate window with 8 divider box each contain the individual top 8 histogram for, say 10 bars.....possible ?

Hi Clive,Please can i have your version of CCI INDICATOR,thanks

This post is all about my system and how I trade it. I've been having some incredible success recently and want to share what I've been doing so hopefully many others will follow and enjoy trading Forex.

I did the previous post about my trading philosophy so that you will all understand where I'm coming from with my simple ABCD trading system...

Well here goes heres how I trade forex...

My Simple ABCD Trading System.

This is a stand alone 1 minute trading system but if you want you can take it to any timeframe you want just adjust the indicators accordingly. Its not that I don't think you can make money trading higher timeframes, its just that I don't think you need to. I risk 1% across 10 pips with an emergency stop set to 20 pips so the most I can lose per trade is 2% but I rarely do.

Therefore if I make 10 pips profit I make 1% of my account. Now as I see it its easier to find 10 pip winners than it is to find 100 pip winners as theres so many more of them everyday.

Lots of little ABCD moves...

So heres the strategy in its simplest form..

 

1. Time of day...
   
   This is absolutely crucial to this strategy you must trade just after market opens like, London Open, New York Open even the Asian open. Also I quite like the London close too around 17.00hrs GMT. We are basically following the new money as it comes or leaves the market and these are the best times to catch this money.. I guess you could say we're after the London or New York breakout trade but to be honest they don't have to be that bigger moves.
   
   
2. Find a Strong Trender..
   
   This whole strategy is based upon trading strong trending pairs only. The trend for me is defined by my 120HMA (use to use 120 FSMA but can't due to licensing issues) so we trade up when green and down when red. Now I'm sure you know how we find the strongest trenders by using our TTindy set to a 120HMA with the top 4 charts opened automatically for you so you're only looking at top trending charts.
   
   Its really important to allow the TTindy to open the charts for you as this means you won't be looking at none trending charts. Key to the success of this strategy.. Don't leave it to chance use the automatic chart opening feature.
   
   Heres my TTindy settings.
   
   
   
   Attached Image (click to enlarge)

   
   
   
   
   Set like this it will open the top 4 trending pairs so to view them select the tile window option and you will get a screen shot like this.
   
   
   Attached Image (click to enlarge)

   
   
   
   
   This is particularly good as we have GBP strength right across the board with three of the top four pairs being GBP pairs. Now just watch these pairs until you get an entry as described below.
   
   
3. The first two CCI signals are the Best..
   
   The best place to enter is as soon as possible after the price crosses the HMA so try to take the first 2 or 3 CCI signals after the slope change of the HMA. Think about where you would want to enter into a trend? The start, the middle or the end??? The sooner you can get an entry after a colour change the better, however most trend traders would say just take the middle of the trend and that is exactly where our TTindy will pull up your chart.
   
   
   Attached Image (click to enlarge)

   
   
   
   
   Remember.....
   
   "The trend is our friend until the end...."
   
   So try to get the earlier signals and leave the later ones as you risk getting your fingers burnt..
   
   
4. Let the CCI lead you into your trades
   
   Entry is the normal way wait for the CCI to signal then place a pending order 2 pips above/below the signal candle.
   
   
   Attached Image (click to enlarge)

   
   
   
   
   Another example of how we wait for the signal candle to be taken out by 2 pips and how it keeps us out of trouble..
   
   
   Attached Image (click to enlarge)

   
   
   
   
   Just want to quickly talk about how the CCI is a leading indicator, yes you read that right a leading indicator. The reason it leads is its a momentum indicator not a price related indicator. What I mean is it measures the rate of change not the actual price itself. So if price is slowing down as it approaches a level then even though its still heading towards it, it will be slowing down because its about to reverse. Therefore the CCI will turn over way before the price does in many instances and so gives us a heads up that price is about to reverse.
   
   Use this to your advantage and look for the CCI to lead you into a trade just like this example below which also explains exactly how I enter into a trade.
   
   Before I leave the subject of the CCI , I just want to say I think its about the best indicator there is on the planet, if you put it on your charts you will see time and time again how price reverses just after the CCI has gone overbought or oversold. Study these charts and start to see how clearly CCI indicates our wave tops and bottoms time after time, but especially in strong trending markets.
   
   Remember...
   
   " An oversold CCI in a strong uptrend and an overbought CCI in a strong downtrend are Gold Dust..."
   
   
5. Placing initial stops...
   
   I use a 20 pip stop as an emergency stop but I'm looking to close out around a 10 pip mark if price moves straight against me. I usually enter within 10 pips of a key level so if I see price close across my level then I manually close out my trade. Usually around 10 pips but sometimes a bit more if price moves fast. I risk 1% across 10 pips so my maximium loser of 20 pips equates to a 2% loss.
   
   If price starts going sideways and appears to be going nowhere then I look to get out as close to BE as I can.
   
   
6. Move to BE quickly...
   
   I'm a great believer in getting your risk off the table as soon as I possibly can. I'm not one for sitting through drawdowns if I can help it. Remember we're trading 1 minute charts if price comes back acrosss your entry then we want out and wait for the next entry, there will be another along in a few minutes so no need to sit there sweating through drawdown just accept theres gonna be a few BE's. Better to have a BE than a loss..
   
   I tend to wait for the price to move away from me once come back and retest my entry then when it moves away for the 2nd time I drag my stop up to BE.. If its a good entry with a strong trend it will fly away quickly, trust me..
   
   
7. Banking your Money..
   
   Now they do say that exits are more important than entries and I for one am not going to argue, but I'll give you two ways to bank your money. The first is very simple just trade the ABCD move and bank at point D. As soon as you see price falter then bank. Doesn't matter what size it is 5, 7,10 or 30 pips, just as soon as you feel its done its push bank it.
   
   We have come to affectionately call this "Orphan Grabbing or hugging" . Don't worry about what you might leave on the table just make sure you take some profit from every trade you get to BE.
   
   The other exit method I'm gonna recommend is to close half on the first push then move other half to BE and hold until the HMA changes colour or if you want to be more cautious bank as price closes across the HMA. With this method you can take each CCI signal and rinse and repeat until you close out all positions. This way you could take the first two CCI signals for instance and so bank a complete position and be holding another whole position (2 halves) until you get your close signal.
   
   ​Well thats about it for now, I'll load up the TTindy and some templates to use just gonna get this posted as I know some guys are waiting for it..

Just remember...

"Price can only go up or down, find a chart that's clearly going up or down, Identify the AB move enter at C get to BE quickly and bank at D... "

Simple as ABCD.....

EDIT: Just realised I've used some old charts for my examples and they aren't ideal but they do illustrate key points of the strategy but might have wrong MA's etc, but the message is right..

EDIT: Have just posted all indys and templates for new strategy in #post 5288 and #post 5289