My e-book for trading daily charts - have a read

[michaeldunbar]

I'm trying out a new idea (borrowed from "Jacko" on another forum) of a kind of "revenge trade". The basic idea is if your stop is hit, as mine was yesterday , AND if the price continues say 50 pips beyond the stop, to put an order in (in this case buy as that was my original position) at the point where your previous stop was.

By doing this, if the order is activated, you are getting back in the trade where you left it but you're also trading on the trend's momentum. Stopped out again? As long as technically the major trend is still intact (judge by your trendlines) then repeat the process.

In my case, for the GBPCHF I did this and am now back in the trade. There looks to be a cross forming again too.

[wackico]

Michael,
I just read through your system and it looks good, I am assuming this (maybe revised a little for yourself) is what you have been trading live??

I was glad to see that you can apply a moving average to RSI through metatrader, I was literally a few days away from making one for myself in MS excel...

I do have a question for you, in your book you stated a few different ways to exit the trade, which one generally do you use or which have you found to give you the best results??

-edit- Ohh and one more question, have you experimented at all with any lower time frames?? The biggest thing that draws me to this forex market is the ability to have trades happen for you quickly, and am curious to your results on say a 4h or maybe 1h chart.

Thanks for sharing your system, at this point in my forex "learning" i am very interested in understanding the reasons why people choose their systems...and you outlined yours very well and showed understandable examples. Thank you.

[michaeldunbar]

See in quote for answers.

Michael.

Originally Posted by wackico

Michael,
I just read through your system and it looks good, I am assuming this (maybe revised a little for yourself) is what you have been trading live?? Yes.

I was glad to see that you can apply a moving average to RSI through metatrader, I was literally a few days away from making one for myself in MS excel...

I do have a question for you, in your book you stated a few different ways to exit the trade, which one generally do you use or which have you found to give you the best results?? Every pair has a different personality. For GBPJPY for example I tend to use the ATR trail method as it trends a lot. I also use this for set ups which show convergence (candle patterns off supp/rest, fibs and 28EMA) For others I use a t/p, especially going against the trend.

-edit- Ohh and one more question, have you experimented at all with any lower time frames?? The biggest thing that draws me to this forex market is the ability to have trades happen for you quickly, and am curious to your results on say a 4h or maybe 1h chart. I don't touch the 1h. 4h is worth a look for earlier entries but it needs practice - demo first.

Thanks for sharing your system, at this point in my forex "learning" i am very interested in understanding the reasons why people choose their systems...and you outlined yours very well and showed understandable examples. Thank you. Glad it helps

[wackico]

Thanks for the reply, I have a few more questions for you -

How long does it take for your trades to develop, i.e. what is the average time you are in a trade??

How many trades do you make per week, or per month or year???

Thanks again for your answers...

[michaeldunbar]

Waciko,

Remember these numbers always depend on how selective the trader is, how many pairs are monitored and random market conditions.

I monitor 10-15 pairs but don't always enter a trade if two pairs are strongly correlated. I generally make 10-20 trades per week but average length of trade completely depends on if I use a t/p and of course the strength of a trend.

Just demo trade the method, find out your own numbers, get confidence in YOUR style of trading and then go live. Keep us updated on how you're doing.

All the best
Michael

[turnip15]

Originally Posted by michaeldunbar

I'm trying out a new idea (borrowed from "Jacko" on another forum) of a kind of "revenge trade". The basic idea is if your stop is hit, as mine was yesterday , AND if the price continues say 50 pips beyond the stop, to put an order in (in this case buy as that was my original position) at the point where your previous stop was.

By doing this, if the order is activated, you are getting back in the trade where you left it but you're also trading on the trend's momentum. Stopped out again? As long as technically the major trend is still intact (judge by your trendlines) then repeat the process.

In my case, for the GBPCHF I did this and am now back in the trade. There looks to be a cross forming again too.

Hi Michael,
I prefer explanations via a picture or two. Could you give an example marked out on a chart please.
Many thanks,

Neil

[wackico]

Originally Posted by michaeldunbar

Waciko,

Remember these numbers always depend on how selective the trader is, how many pairs are monitored and random market conditions.

I monitor 10-15 pairs but don't always enter a trade if two pairs are strongly correlated. I generally make 10-20 trades per week but average length of trade completely depends on if I use a t/p and of course the strength of a trend.

Just demo trade the method, find out your own numbers, get confidence in YOUR style of trading and then go live. Keep us updated on how you're doing.

All the best
Michael

Michael,
I have been backtesting your system here for the past few days only on the USD/JPY pair. I did modify it a little, Still using a 8 period RSI data, then applying a 8 period MA and also a 2 period MA to that, so whereas you use the RSI indicator for entering trades I have found less fakeouts on a 4h chart using the 2 period MA instead (obviously sometimes at the expense of a better entry, but still with positive results so far).

After I am done doing the pencil work for that I'll post the results I obtained, as well as what i found from the data analysis (an additional benefit of having an actuary for a wife ) which hopefully will help to show good points to change SL's to breakeven, or +1, and also good TP points with confidence.

*EDIT* One more thing, if you wouldnt mind posting what currency pairs you watch i would be interested in looking at the charts for each as well...I noticed in your post you stated that you sometimes dont trade pairs that are strongly correlated, why is that?? I would just think that if you had a profitable system that you would still have a better chance of making a profit than not, what is your reasoning behind that??

Thanks again for your insight, it is greatly appreciated

[michaeldunbar]

Looking at the daily charts of GBP/USD, AUD/USD and NZD/USD, you can really see how the ATR channel keeps us in the trend. It doesn't always work out like that of course but, when you're going with the major trend, it is a great tool to have.

For Wackiko, I trade EURUSD, GBPUSD, USDCHF, AUDUSD, NZDUSD, GBPJPY, EURJPY, USDJPY, CADJPY, GBPCHF, EURCAD.

For future trades, I'm keeping an eye on the USDCHF, will only get in on a short trade, looking for a cross AND a break of recent resistance at 1.1960 area. For GBPJPY, would love to see it spike to the 28EMA before heading back up but will probably take a long cross anyway. Not touching USDJPY at the moment.

Keep posting your own thoughts and keep enjoying the daily charts.

[Tess]

Hi Michael,

An ex-colleague of mine came across your 8&8 methodology a while back, so it was interesting to see you posting on here. I agree with others, it's a nice simple yet effective heads up. Good on ya for sharing it with folks

Anything which keeps the chart as clean as possible is always refreshing to see!!

Yeah, that GBPJPY would sure make an interesting watch if it did indeed slip to c247.0

Was a decent continuation signal on that pair back in early June, the last time it crossed swords with the 28ema. Interestingly, it bounced off a mov avg which I like to observe on that instrument (the 50sma), so both averages did their job on that pair!!

wackico: is it possible you could maybe haul up a chart or two with your configerations on the 240min frame please? I'd like to take a look at your revised template based on that timeframe.

It's a favorite of mine on FX pairs. Thanks!

[Tess]

wackico:

It's ok, one of the guy's just configered your settings on a few 240m frames across several pairs.

As expected, executing in line with the primary trend signalled in on pullbacks. Teaming them with a sensible (favorite) mov avg will also assist with ongoing management.