The Texas Forex System (TFS)

Beginner Questions
1

I am a newbie- I have been learning forex from past 4 months. I am an engineer by profession-and to solve a problem, I often rely on reverse engineering. I dont have much time to explain what that is, but I have used that, the Cowbunga system (found on this forum), tips on the school of pipsology, and some posts by an member B[/B] to design this system. This system gives no entry signals, no exit signals. It just does one thing- generate 20-50 pips for me every day that I trade. This may not make you a successful trader in forex. This may not make you a millionaire. This may not be a perfect system that works 101% times- but this system will work more than enough to make you get a decent profit without wiping out your account-

For the record, I will never have a daily blog detailing my profits, never have any screenshots or videos showing my system. In fact I am sharing this because I feel that I need to give something back to the site and the people that has taught me so much - I hope it can help us all to achieve our goals, humble and mighty-

  1. It should work on any pair but I use it usually for the European pairs with USD

  2. In theory, It should work on any time frame, but I use only 12 AM EST

  3. Setting a stop loss is a good idea for many- but I have many variants of this system, and based on the thoughts I get from those systems, I may or may not set a s/l. If I do, then I set my stop loss usually between 80-120.

  4. I take my profit when I feel the system is telling me (this part will not be covered here) But for all trades I usually put an initial t/p of 20 Pips

  5. I use 5 indicators: 8 EMA, 12 EMA, Linear Regression Line (LRL), CCI and stochastic.

  6. I long when the 8 EMA is above 12 EMA, the LRL crosses 8 EMA from bottom, and both CCI and Stochastic are headed up.

  7. I short when the 8 EMA is below 12 EMA, LRL crosses 8 EMA from top, and both CCI and Stochastic are headed down.

This system is a powerhouse that will never fail you if you apply some money management and keep the greed & fear in check.

I am thankful to all of you who put up this site and made forex less of a beast!!

Peace!

2

Ahem…I see there seems to be no hush hush, praise, brickbats on the introduction of my brand new forex system–the one that has a high winning possibilities.

Why??I ask Why??:smiley:

I better change the name and make it more trite…something hip, something easy …I name it umm…zzzz…well i name is laddo…who knows what is means–it just sticks. the “laddo system” for lack of a better name :slight_smile:

3

Hey Tex…

Not really sure what to make of it…lol

No entry or exit signals? S/L is a variant if used? T/P whenever you feel like it (how to tell will not be covered here?), but recommend 20? No examples? Any time frame…is 12am EST a timeframe? 5 indicators with no settings mentioned? :confused:

And the last line “[I]This system is a powerhouse that will never fail you if you apply some money management and keep the greed & fear in check[/I]”…pretty much applies to any system.

I suppose one needs to go read all those other threads to figure out the blanks…lol

…but thanks for sharing!..:slight_smile:

4

sweet pips-
thanks for the quick review- yeah agree it is reallly not a system in its own right-does not automate --and requires quite a bit of manual effort- but when I designed it I did not had those things in mind- I wanted some technical base to my buy/sell decisions- my goal- about 20-30 pips a day.

And I have been doing that consistently from last about 10 days. I trade about 2-3 times a day. Usually evening (nights) when I am back from work.

So I guess it works for some one with goals similar to mine- ie 20 pips every day–ad infinitum…Lol :smiley:

5

although sweetpips will never talk to me, even though im a friend of TRO’s, its taken me some time to figure how to post this correctly.

while i understand some of what sweetpips is saying, i believe i understand what youre saying also, and 20 pips seems to be the magic number !

FIRST — this is a moving average X-OVER method, and all ma x-over methods WORK, but having said that, there are SOME reservations !

most useful in a TRENDING market or intraday trend, they tend to fail in a ranging market or WHEN THE MARKET REVERSES FROM ITS UPTREND, producing LATE results as exit signals — OK, while they are late, you will still have made money on the uptrend if following the entry signal (the x-over) but because of the lagging nature of the moving averages AFTER a strong uptrend, you will be giving pips BACK before you get a clean exit signal IF YOU DEPEND ON THE MOVING AVERAGES !

with your modest choice of 20 pips, I would say you should have NO problems achieving that goal — its when you want more that care enters the equation !

a moving average x-over system depends on the values you assigne to the moving averages — the lower values work well in the lower timeframes and higher values for higher timeframes — i work with 4 moving averages and a macd for divergence, although its really a backup to my own feelings about a price, but it tends to get me in and out of a trade earlier and then gives me time to see if the trade is going to make the HIGHER ma’s cross, thus telling me theres more to go past the lower numbers.

I will NEVER trade without support and resistance overlays or else i am driving blind — not knowing WHERE the price is going, but once again, when taking only 20 pips, that is not a major problem unless you want MORE !

all in all a ma x-over is a good learning system, and can be tweaked to an inch of its life to return fairly good results over long periods, but its not the end all and be all of systems and as long as one realizes that, stays within their self imposed profit levels, then it should definitely deliver good results !

enjoy and trade well

mp

6

MP- Thanks a lot for your post.

Yup, that is why I added in fine print that this system will work better (a lot better) only in current conditions (with heavy trending, volatility yada yada).

I wish to continue the forex learning well into next year or so, as I feel that what I have learned so far has been certainly influenced by the way market is doing in the recession–I will be 100% committed to forex when I have seen a couple of other situations, like ranges. Until then I want to have modest rewards, may be I want to open a mini and get about 300-400 $$$ on my modest 5000 some investment. And I was looking for s system to just do that- and it does just that :slight_smile:

I understand where you coming from on the overlays- I realize how useful they are- but the thing that irks me most about them is that I am struggling to figure how market reverses suddenly. I want to capture some hints before the trend reverses on an intra day basis. To his point- yeah I may lose a lost, if I have wider s/l or not have one at all. May be lost it all. But to counter that I do put s/l , at about 80-120 pips. And then to the argument that my R/R ratio sucks at about 1/6, I want to say that my win to lose trade ratio is good- about 8/10 or 9/10, so that is countered. So every couple of days I do lose a trade but the 120 that I lose are compensated by about the 160 that I get in my favor.

Btw, if you can help me with it, I downloaded the linear regression line file in mql format, and pasted in the indicators directory. But when I insert that into a chart, nothing. Any idea how a indicator is added to the MT4?

Thanks

7

disregard the end of my previsious post-- I got the LR Line. I just had to magnify :slight_smile:

8

Mp–

Here is how I draw my LRC. Do I drag it through the middle of the range? What is the correct way to get the LRC drawn?

Thanks in advance


9

That’s not true…lol…where’d that come from?

10

oh golly gosh — NOT the linear LINE, but the channels, which is hidden from mere mortals like texans under the name SHI_Channel_true

get that one, put it on your charts and your mouth will drop open in amazement

bubbala — i wouldnt sell you bad pastrami !

mp

11

DEEP within the recesses of my alleged mind !

CANT you see where a natural ?

LOL

mp

12

Holy…Nice. I did that, found the code for the LRC and added to my charts–after that, what I saw, I liked that :slight_smile: M, you are the shepherd of many a forex <sheep should i say>?? So the cells on left hemisphere tell me below–can you confirm that I am in the right direction:

  1. When the price is above the upper line or near approaching it, I should sell the pair.

  2. When the price is approaching the lower limit or better breaks it, I should Buy the pair.

  3. Can you throw some pearls on what should I do when it is near the middle?

Thanks

My channel is attached.

LRC.jpg700×426 59 KB

13

so the Linear Regression Channel gives me my support and resistance? Right?

14

so the linear regression channel gives me my support and resistance !!!

LOL

lets see, that only took a week or so to get you to look at it !

now theres only 2.78 million MORE newbs to work on !

ok, it does give s+r for the timeframe you are working in, so you can check OTHER timeframes (like the higher ones) to see which direction the sucker is moving in !

there are a number of systems based on these channels, but the gist of all of them is to SELL when you reach the top channel and BUY when you reach the lower channel !

set your tp for the midpoint, and this is where the systems begin to differ.

“USUALLY” (unless the momentum is REALLY HIGH that day such as news driven) the price will move from one of the outside channels TO THE MID POINT, where it will usually consolidate for varying amounts of time, usually approaching a week (but news CAN and will change that time period).

as trading at the midpoint requires stop losses and those sort of things i know NOTHING about, i “usually” just let it go unless i identify the range its moving in, at which time i “may” trade it !

Normally, i simply go look for another currency thats at the top or bottom or even half way through a move to the midpoint, and hop on that also, leaving my original trade to make up its mind where its going to go !

If my life is really dull, and my brain is screaming to see LARGE drawdowns, i might actually trade a bounce from one channel and set my tp at the opposite outside channel and give it a week or two to get there — mostly ill do that if there is no dominatrix handy and i require a bit of pain those days !

essentially, thats it but remember that the price can BREAK OUT of the channel, which is “usually” 10% above or so UNLESS its a real down to earth, oh my golly gosh breakout, which you hop on with all your might (and you could identify from the HIGHER timeframes, like the DAILY, for instance) !

indicators and experience will show when those things are happening, but you will not go broke playing an outer channel to its midpoint !

mp

15

Lol. Are you not a bit proud of my accomplishment? 2 weeks ago I used to a “feel” based trading- and here I am now- doing what I should be doing-making my targets daily. Whatever, you say-I like your style. If there is such a thing as a mentor, when I make it big, I will name it M.

:slight_smile:

I am set now to go ride this beast and snatch my pips daily–but I am REAL apprehensive of the time that will come and the markets will be range bound, and then I shall come back–and earn more wisdoms of pearl from the great M. :cool:

16

So, is there a particular time frame for the above deed, or can I pretty much set it up any time. I am thinking of 3-4 pairs: EUR/USD, GBP/USD, USD/CHF, EUR/JPY…And planning to trap these babies into the vicious cycle of this LRC at about 12 AM EST (Newyork ok!!). Also, I plan to introduce another spin on to this- seems like what EUR/USD, AND GBP/USD does, bad guy USD/CHF likes to go against that…

Ahh life is easy tonight. It is still 8, and the night is yet to develop into a merciful dominatrix lol. where the heck is my crown royal on the rocks :wink:

17

ANY timeframe works as long as you remember that the HIGHER the timeframe, the GREATER the drawdowns on its way to the tp point.

there are many pairs that run counter to each other and they make a swell hedge trade (well its not really a “pure” hedge, but dont know another word for it) that will keep your margin stable as one keeps dropping and the other keeps moving up — they just balance each others margin requirements out !

mp

18

okay, one last thing on this guy, do you advice that I should “Close” the trade if the price is outside of the extreme channels for more than 2-3 periods (If I am trading H1 charts???) For example I sell EUR/USD at price x when the price was near the Upper Channel, moving towards center, but rather than progressively move towards the center–it started staying above the upper channel and it has been in that state now for 3 hours. Does it indicate that there is going to be a upward breakout??? A reversal? Is there an indicator that worsk well here? MACD? I know now that the LRC + EMA = a great combo. Do you suggest something in addition?

19

Quite nice system. Please keep posting…

20

Ichigo-do keep posting, if this system helps you get some pippies :slight_smile: