harpoon - it is a matter of perspective. Certainly looking at the daily t.f. is not a bad thing, however, it is entirely dependent upon your trading philosophy. If for example you are an intraday trader, and the current pressures are up - even following a daily candle that is down - what do you do ? or on the other hand- if pressures are up - and directly into a daily resistance, what do you do?
I believe those are questions you need to answer for yourself.
I think 3 Ducks works best, with the 4h, 1h, and 5m charts, for 24 hour trades. I guess for a longer timeframe you could shift to longer time charts, 1d, 4h, and 1h perhaps.
I would leave it be in all honesty. This system is MAJORLY based on catching the big move trades. Like you will have many loses but that big 200 pip trade will take it all home and knock those losers out. Addin the daily chart to it will only complicate things in a unnecessary way. The way it is set up is to grab those big moves in 24 hours, daily charts are for very large moves like more than 200 pips. So in short the daily chart could be used as a confirmation for the4h chart yes, but i would leave it be for now in my honest opinion.
as specified in the Duckās document, the stop loss one picks determines whether they are short term or positional trader. if you use 4h swing points for the stop loss, then youāre a positional trader. if you use 1h stop loss points, then youāre a shorter term trader. sounds like you people are using 5 min charts . i wonder if that leads to making zany amounts of moneyā¦ iāve been playing with the 1h charts (using 1h stop loss). i canāt stay up late so might have to get into a trade, go sleep, wake up and move the stop loss (i might use swing points for stops, as you set them after they occur e.g. after when i wake up :).
regards my main question, the system aligns all target trades with a higher time frame (e.g. 1h trades are aligned with higher 4h timeframe), but not the 4h frame. perhaps, this timeframe is a longer timeframe so itās not as essential to have it aligned to the higher (daily) timeframe. an example would be the recent aud/usd down move. if one took a 4h trade here, and waited for the daily timeframe to become aligned, they would have missed out on much of the move. it depends of course what you mean by aligning the daily timeframe. for me, itās when i can see at least 3 target timeframe moves. so if i aligned the daily timeframe, iād need a down 4h move, counter 4h move, another down 4h move. then iād have both daily and 4h timeframes in same direction. (sorry to complicate things, this stuff can get complicatedā¦).
Howdy Harpoon, you sound like youāre getting stuck in, well done!
I put a note on page 4 of the free 3 Ducks eBook, check it out again, you might have missed it the first time around.
Chat soon,
[B]Andy
Captain Currency[/B]
Step 1 - First Duck
The first thing we need to do is look at our largest time-frame (4hr chart)
Read more: 301 Moved Permanently
wrong 4 hour chart means nothing at minum is daily chART
Step 2 - Second Duck
The second thing we need to do is drop down to our 1hr chart.
Read more: 301 Moved Permanently
WRONG AGAIN 1 hour chart is even worse
Step 3 - Third Duck
From step 1 and 2, current prices need to be below their 60 smaās on each chart.
Read more: 301 Moved Permanently
wrong again
try better aud usd should be about moving average and usdcad below
this all is just loosing money
wake up its all about corrilation an pair above sma means nothing if the opposite is not below
and anyway its weighted moving average (using ctrader) would be bette for your system any eway, sma is more for eur usd and midweek more monthly
It says āā¦ the 240 min chart will also let me see if there is a change in sentiment QUICKER THAN A DAILY CHARTā
ok then. i probably wonāt bother needing a daily timeframe to be already established in the same direction when taking 4h trends. although if there is a daily timeframe going the other way, i might skip it.
if i look for a higher aligned daily timeframe , seems like i would miss out on lots of nice 4h trends, coming in much later on and getting little profitā¦ might have to manually backtest this idea. hopefully i donāt get into too many trend less environments. i was just thinking the babypips way - align with a higher timeframe.
thanks again (and the duck doc is really funnyā¦)
Hello thefisherman - Iām not 100% sure of what your getting at with your 3 different comments? This āsystemā has always and originally not meant to be a āsystemā but rather, a framework, for you to create your own view of the market, and your own āsystemā. Likely this style wonāt fit everyones eye, but I certainly get a great deal of positive info from it.
a question : what about dealing with correlation, as correlated trades can increase risk? nothing on this is mentioned in the duck doc. should we wait till a trade gets to break even before opening up another one (takes away correlation risk) ? but that would mean missing out on opportunities while we wait, especially if itās a 4h (longer timeframe) trade.
Iāve been thinking about this a bit recently. I have only had a maximum of three trades open simultaneously, but of course thereās a correlation question whenever you have more than one open. My solution for now is to just make sure I check a correlation table before opening a second trade, to see how it relates to my first one. If itās doubling my risk, then I will probably reassess the whole idea. So itās just another step in considering the trade; the same as checking the calendar and using the position calculator.
I found a great correlation table at Oanda.
So if you have 2 or 3 pairs that are ācorrelatedā positively and the ADR on 2 pair is 66, and the ADR on the third is 210, which pair would you pick?
@harpoon & @Shojin: If you follow Andyās method, you should not be getting correlation problems, due to the fact that you should be pitting the strongest currency against the weakest currency as he instructed.
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[li]Original post: Improve Your Trading By Looking For Clues In The Market
[/li][li]Video: Euro Pound Correlation | Question and Tip | 3 Ducks
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For example, assuming USD is strong (or weak) and EUR or GBP are weak (or strong), then before trading EUR/USD or GBP/USD (which are correlated), one should first look at EUR/GBP to see which is the better choice so as to trade ONLY the EUR/USD or ONLY the GBP/USD (but not both).
There is also a PDF entitled ā[B][I]How to Search the Market for Profitable Clues[/I][/B]ā about this but I donāt know the link.
hey gang
remember that theres nothing wrong with using forex currency correlation to your advantage ā¦but you have to think smart to ensure you are going with the flow ā¦generally the best approach is to seek out the individual currecy that is steering / dominating the G8 plays
get it in your pairs and wait for the ducks to line up
Ive been a big fan of andy for many many years and post regularly on his thread at Trade2win when I can
I drop my FXCorrelator indicator on the posts to show how the currencies are stacking IN SUPPORT of Andys calls ā¦
the 3 ducks is an excellent trading Framework ā¦so I would recommend people look at it
regards
N
try loading a simple FXCorrelator (or any strengthmeter) up to see where the currencies in question are stacking ?
N
Perhaps, if your total risk for 3 trades is only say 1%, perhaps you open each trade @ 0.33%. hence the risk factor could be managed better ?
Yes, I do that when there is an overlapping currency in the pair, but the other day I had a EURGBP and a USDCHF trade open at the same time. No overlapping currency there, but the correlation table does indicate some correlations at certain timeframes. As it turned out they both went the wrong way at the same time in this case.
You could, but it would be preferable to actually understand how the risk is stacking and put 1% in the right place, rather than spread across three possibilities. Identifying which one of the potential trades is the best set-up is probably a better idea. I believe Andy rarely has more than one trade open at a time. I do not have the experience, yet, to readily identify the best choice every time.
I looked that up; I hadnāt heard of it before. Looks interesting, but would involve more indicators. Itās very tempting to add more indicators to 3 Ducks, as itās such a simple system, but Iām trying my best to resist this as much as possible. Iām trying to follow it as it is so I can make a fair evaluation of whether it works for me or not. Changing timeframes or adding indicators means Iām no longer following this system.