I don’t know if that title will get me in trouble or not but this method is directly from BigPippin’s Cowabunga System, so everyone knows the primary source.
Moving on, I had looked at the Cowabunga system the other night and plotted all the required indicators on my screens and just kept looking at it. Then I deleted this and that and added this and that…and then the light bulb went on.
In my opinion, the hardest part of trading is getting the trend right and then the entry, exits are much easier for me. The beauty of the Cowabunga system is how BigPippin determined the trend. He used two moving averages (EMA’s), a 5 and a 10 EMA on the 4 hr chart.
What a thing of beauty! When the 5 is over the 10, the trend is up and when the 10 is over the 5 the trend is down. Sometimes the trend will be up but then a correction happens and the candles pullback to the moving averages…I’ll show an example in a minute.
Let’s take a look at a 4 hr chart…this is the simplest way to determine our trend that we will use for trading.
Clearly this trend is up…
So, staying with the rules outlined in the original Cowabunga system, we will now switch to a 15 min chart and only take long trades since the trend is going long. Remember, the trend is our friend and it’s a friend with benefits.
Now here is where the “little brother” part comes in…we will keep the 5 and 10 EMA’s on the chart but no other indicators. In our example of going long, we will only take trades when the 5 is over the 10 on the 15 min chart…it will mirror the 4 hr chart.
Easy right? But there’s gonna be one more addition for the sake of being safe in our trade. SHow you in a minute after I post a chart…
But what about all that choppy garbage just before the real breakout occurred?
Here’s how you will forever know when it really is time to enter a trade…
We will draw a trend line on the 15 min chart and when it breaks that line AND the 5 crosses the 10 EMA (which it will), we enter a very safe trade.
2 charts below, one will show the chop and the other will show you when to enter correctly.
What about your stop loss? In this case, our most recent swing low on the 15 min chart…
This method isn’t gonna be perfect but I’ll guarantee you it will hit over 80% easily.
I have looked for something this simple for 3 years and this one is solid.
A huge thank you goes to BigPippin! I know dude, I tweaked your system but I bet you can buy a Vette with this gem.
thanks for sharing! In your chart, i think there was a sell trigger when you put a trendline below which i think was a lose.How do you filter such fake move?
Hey Mario, thanks for looking.
In this case, the 4 hr chart was bullish so I would be looking for going long on my 15 min chart. When I’m going long I only place a diagonal trend line on the high points angling down…I want the candles to break out above it.
Going short when the trend tells me to go long makes for a very frustrating night of trading. Why? Because you can never tell where the price is gonna reverse to go with the trend.
There were some nice plays tonight on the GBPUSD and the EURUSD. Both happened before I got home.
I’m so glad I found this. I’m still new to for ex and have improved dramatically this week since using the Cowabunga system. I too was thinking that if the trends both aligned then it would be a good time to enter so I’ll give this a shot next week. It’s nice and simple which I like.
