Very nice thread, thanks for sharing. I think if you step back ( zoom out ) and think about the simple question " where does price want to go REALLY, despite all of the deceptive wicks and fake moves by the MM ? ", that it helps enormously.
Thanks for sharing, I`m subscribed !
BTW : what kind of moving averages do you use ? A trader friend of mine recommend the 60 sma or ema on the 4h, but then this of course looks different depending on your time zone and MT4 server time used. Others just have their 20 ema, or combos of 50 and 200 sma. Any comment very much appreciated.
Glad you like the thread. I came to the conclusion this sytem is great based on a excel spreadsheet I did. I took trades and saw how they played out based on diferent variables like where the SL is and TP, what MA’s I used.
I used 6 MA’s and the two that work at least on EUR USD are 50ema and 100sma. Price bounces of these amasingly well.
Odd that ur friend uses 60ema. Very close to my 50ema.
This thread is us observing price action. Hopefully were all learning.
What have I learnt?
Not to rely just on the 4hr chart. Need to utilize the daily and 1hr for signals also to get you back into trade and spot fibs the 4hr doesnt show.
2)Each trade is different. You cannot make money with a fixed rule system. (up trend from ranged market vs joining in an already formed uptrend)
We can see the step by step process here. Taking us higher and higher up the trend for more RR. I think this is key. Take as few trades as possible but get maximum profits. This up trend could have easily been multiple trades which half we may have lost!
This tool is great because as long as the trend line remains you need to try and stay in the trade bcos new signals may not show.It presents the perfect setups. So trying to get in a trade without it is dangerous. Imagin trying to run multiple trades all the way up for say 1:2 RR. Do we really think we will nail all of them for profits? You might come out the top of the trend with break even…
3)Need to use logic as a key tool in trading. (set the SL but watch out for the retrace) this kind of thing…
As im observing these trades I see they are not all so simple and can easily catch you out. Buy im not here to say this system is full proof. But to learn it enough so that it is full proof. Only because our experience will make it so. Not the system!
The great thing about this method is that is is kind of 50/50. The tool gives you the great trading opportunities and the rest is down to you!
And as I see it, this is the way to succeed. 95% lose at FX because they dont go 50/50… they do what there system tells them. There system is to robotic. But each and every trade is different. A robotic system cannot detect the difference. Im afraid we all have to use experience and logic for the other 50%.
Another great thing about this method is the potential for massive RR and with much fewer trades.
The trend toll gives us the ability to make small SL’s and the trade can go 1:5, 1:10, 1:20… if we do what were learning here… We have seen it in some of the trades right?
And if a trade doesnt run, no problem at most you will get stopped out so losing your initial investment or you may get stopped out on a retrace where you placed your SL at 90% the fib. You only need one of these 1:5 , 1:10 or 1:20 trades to come along for many of your losing trades to be meaningless…
I know it seem easy in hindsight but lets keep observing…
Thanks for the quick reply. So just to make sure, which levels do you use for the extensions ? I see that you leave out the 0 and 100 and basically just use the 38.2, 50.0 and 61.8 as " inside fibs ". As extensions there have been so many different fib recommendations in courses that it makes me dizzy…lol.
Maybe 1.382, then 1.61.8 or even higher, like 4.236 ? I do see that they seem to be quite exact targets on your charts.
Please continue, great charts and later today I`ll set up my charts exactly like yours and I can post always with chart examples.
Let’s see you put this in action. Get a fresh pair, and use current only.
That’s where the rubber meets the road.
Some pitfalls I see is using a ZigZag. They tend to repaint, rendering your latest swing high/low useless.
Fibs do the same thing, especially if you are trying to use them while the candles are still forming.
My advice is to stop using “hindsight” charts, and get up to date, and check your theories against current price action. Nothing less will give them validity. This game is played in the “now”. The best place to practice is “now”, and the ONLY place to make money is “now”. Chasing price on an old chart never paid me a dime;)
Good job so far. Regardless of how it turns out, you’ve shown you’re willing to put in the effort for yourself. That’s where it’s got to start to succeed at this.
Yes I should start with the “now”. Guesss I just needed to make myself feel confident in this method before doing so. I only class the zig zag trend line as accepted once the next dot has appeared. So the two dots being used cannot repaint.
I beleive its better to use the 1hr TF instead of the 4hr, but set the zigzap tool setting to 4 instead of 2. They way you get a very similar zigzag to the 4hr but with more candles to get a better entry.
I will search the pairs tonight and look for some good setups. Will take one on demo trade and see how it goes. Will post Screen shots.
I cant quite get myself confident with this system mainly because i’m making it myself. Which zigzag settings to use. Which Tf, where to place SL etc etc etc…
I stumbled acrossa VSA thread here on Babypips and think it might be a better way to go for me. Volume, SnR and Fibs.
We will see.
The turn off for this method I have posted is that the setups only come along on reversals… with a higher Tf you can literally wait a hell of a long time for the trend line to be crossed.
Perhaps good for only scalping like Blizards thread on “free systems”
I’ve added this to a system I was using before and its been working wonders in the past week. Obviously this isn’t an indication of a good system but for the week I’ve had it, its been doing very well. I’ve been using it on the 1hr and 4 hr charts so just saying that its been working for me.
