Trading market extremes: The Guaranteed Pips

[rannoch]

How are you going with your AUD/USD trade Topchess.My indicators are not at 80 yet but its getting there, aussie is well bid today.

[topchess]

I am in total agreement with you, the TP thing is the problem. Trailing stop would solve it, but Oanda does not allow them. Cause yes, you are right. It never tells you "exit now.. this is enough".

rannoch

Which platform you use? My RSI is about 82.50 on AUDUSD are you getting the same?

[topchess]

Because NZDUSD d1 and w1 far from RSI 80. and AUDUSD here is showing 82.x on daily

Anyway, I had previously entered 2,500 units at 0.8800 lets enter 2.500 againt at 0.8830

Avg price 0.8815 5,000 units = $0.50 pip

[rannoch]

I use CMC Market Maker Australia. NZD is 80 and AUD is 78 on the daily.

[rannoch]

I have a demo account with oanda Topchess and some indicators dont always match with each other.

[rannoch]

I think if NZ dont raise interest rates this week we coulld see some profit taking.

[Benjimang]

Hey people, be careful with the Aussie. I live in Bris and the AUD/USD is the pair I follow most closely because of the sheer amount of news available to me. All the the cheif analysts from all of our major banks here don't see the aussie tumbling for quite some time. You might see small retracements (maybe around 40-50 pips), but there looks to be a strong bullish trend that may see us gow well over the 90cent mark. Our fundamentals are just too strong. Econ is in a boom, US econ is blowing out, and Yen backed carry trades are preventing any large retracements from occuring. Also the govenor of our reserve bank stated that he doesn't see any reason to contain the Aussie as it's keeping our inflation rate down while not impacting too harshly on our trade balance.

I have noticed that strong trends are the achilles heel for this system. Basically, with only small retracements on offer, the price may move too high to recover before the retracement kicks in. But seeing as though strong trends are rare, I definately like this system. Maybe someone can implement the ADX to spot trends?

[willsucceed]

Good post Topchess. I agree with you on keeping it simple and i tried trading this briefly a little while ago. I failed simply because my demo only permitted me to buy full lots (my balance was 5k) so that when the price kept going more extreme i went into big drawdown. However like you say if you keep you trades small, say 1/10th of a lot on a 5k account this system would probably be quite profitable as long as you were not greedy on the profit taking.

My question is what about chart time periods? YOu seem to change to weekly, daily and 4hour. So you don't just use one period? Do you use different time periods to back up your trade? I would have thought you would be receiving mixed signals by looking at the RSI on different time periods.

[willsucceed]

Also i was wondering about making an EA for this. For example the parameters could be buy at 23 sell at 77 can tp would be 10 or 15 pip with a wide stopless.

That way one would not have to watch the charts all the time for a basic signal.

What do you guys think?

[topchess]

Ok guys, for those who would have followed carefully our AUDUSD.

I had my trades at 30 pips increment.

0.8800
0.8830
0.8860
87
So what did It do next when it touch .8860 and extreme 85 reading on RSI

If you hold from 0.8860 you benefit 70+ pips as it dropped to 0.8787.
Another +40 pips from 0.8830 and finally +10 from 0.8800

SO if we took all pips .. around 120 pips. but surely this does not happen, even if we took half of them 60pips, or quarter.. 30pips.. this is what we need,

and what I've been calling safe and guaranteed pips! It just needs small lots and little patience.

A correction has to play in place sometime in an extreme market.

So even if you sold at 0.8800 and sold again at my secnod entry 0.8830 you profit good when it dropped below .88 before reversing again.

Now what?

It gave a sell opportunity again by moving towards 0.8870.. but be careful when a pair corrects and consolidates it will likely make a new high and the rsi will be lower than previous. (Divergence) even better signal