Need help improving my trend following model

Hi all,

I am experiencing some difficulty in improving my hourly trend-following model. It isn’t technically a swing system or an intraday system, but it does use price pivots to get into new trends, thereafter adding on new price pivots as the trend continues. It is discretionary and flexible, but I think the risk management could use some work – in fact, the entire model may need to be revamped because the of the risk management. The core logic may be flawed and right now I can’t see the forest for the trees. All comments are appreciated.

**Please, I do not want to subscribe to any signals or systems. This will either work or it won’t. On topic comments are very much appreciated. If we can work together to get this model profitable (vs. optimized), we can prosper together.

Tuesday 19 June 2007

Start of the Week of June 17 has shown some good opportunities on the majors, but profits to date have been somewhat truncated by sudden reversals. The envelope and signal line have provided good trading opportunities on USDJPY, EURUSD and EURJPY in particular.

Today, Tuesday, is reversal day watch. And the hourly reversal bar at 0900 GMT on the EURUSD certainly makes me think this scenario might play out. I am currently short below the 1.34 handle at 1.3399, targeting 75. If this target is hit, I will take 1/2 off and trail. The breakdown of EURGBP from 0.6760 suggest EUR will be a relative strength loser today, so I’m a little nervous I am trading the wrong pair.

From this point in EURUSD, we have a cluster of Fib levels that could provoke traders to buy the dip for a retest of this week’s high (coincidentally made today around 1.3435). Extension studies suggest a new high could target 1.3450 and, longer term, 1.35. With today’s smaller daily ranges and mixed econ and fin data, medium term swing trades simply need more time to work themselves out.

Should price move up beyond 1.3420, I will look to exit and reverse at a more favorable price point. Should price break through 75, I expect a slow grind down toward the 1.33 handle.

EURUSD trades at 1.2285. Time will tell.

Profit taken at 90 on EURUSD trade, with no follow through. Reversed on the break back up above the handle and took profit again at the high (35). Currently long again from 20.

Also traded long on Cable from the swing at 35. Currently holding, after having taken half off at 75. Stopped out of the EURJPY trade at the daily pivot for a small profit (entering on Monday’s swing from the signal line). currently looking to go short on a retest of the envelopes. Short USDJPY from 35 on the second test of the signal line today, and currently holding. Took half off at 15.

I’m expecting some retracement from GBPJPY, but will hold off from any additional trades to avoid overexposure.

Closed EURUSD at 23 for three pips. There is simply no follow through for this pair right now. The cable long from 9835 is still active, with half taken off earlier at 75. Protective stop was raised to 9895, but will move stops closer to market as the NY open approaches. Shorted EURJPY at 68, but closed shortly thereafter at 78 when it became clear there would be no trend on the hourly charts before the NY open. The second half of the USDJPY short from 35 was stopped out at breakeven on the bounce from the 15/10 area.

Okay, last post on this method. I’ve removed all the files for lack of participation. Just wanted to say that for all the views this thread rec’d during the two or three days it was active, I’m very disappointed that NONE of the viewers felt the desire to engage in any kind of discussion whatsoever. I’ve read some of the other threads on this forum, where other traders were generous enough to share their ideas, and it seems the vast majority of participants there were only concerned about taking, rather than participating. I find this quite offputting. Honestly, I thought this site would be different.

Cheers all, and good luck.