Use a Stochastic touch/cross in parallel with RSI to amplify the signal.
The Stochastic Indicator may cross several times in the duration of a trend or otherwise price movement. It can become confusing determining when to take advantage of the feedback.
To minimize this problem, when both Stochastic cross/touch and RSI hits either of its extremities (30/70) we accept the exit signal as one much more reliable.
The closer RSI is to one of its extremities when you have an Ex. Op. signal the stronger the signal.
[B]“Hi Effilang,
how do you cater for news announcements… any special precautions or tactics?
Thanks”
[/B]I prefer one of the following methods:
A: Tell news to kiss my butt.
B: Don’t trade until after the announcement
C: Spend an hour reading about market sentiment prior to the news. Then use S/R on H4 and place my buy/sell orders under/above those points based on expectation.
If i had to pick though, it would be B every time. I’m not a fundamental trader, so trading news releases is a big risk for me every time. I know however that after the release a new trade will appear, and another after that, and another after that, so it doesn’t bother me.
HOWEVER! - when you trade on D1 and H4 news isn’t always that much of a problem.
News in most cases won’t have nothing on you, since you would have halved your SL or moved to B/E prior to its release.
Losses are accepted in a situation like that.
If your question was whether we voluntarily terminate a trade due to an upcoming news announcement, the answer is normally “no”, considering of course that you’ve booked partial profits already meeting your initial target.
If you however just entered a trade 5 minutes before the news came out; you can either quit or assume that price is moving in the direction of market expectation prior to the release, defining your current entry as appropriate.
Really like this idea elang. I have seen several similar systems based on trading in line with the higher time frame, in fact babypips Cowabunga system is one. I shall certainly follow along in real time as GY is one of my favourite pairs at the moment
I have one question regarding risk:reward ratio. gbpjpy ATR on a 4Hr timeframe is normally over 100pips…so if we are risking anywhere from 150-200 pips in stoploss but primarily limiting for 50+ pips…very soon you will be playing catchup. What has your monthly pip record been?
Looking to see how this thread develops.
Thanks[/B]
Hello **********,
I am new to posting in this forum, but i have quite a record on Babypips.com and i’ve issued live trading signals on a day to day basis for over a month and two with several systems. The results have been well over 1000 Pips on a regular basis and i actually issue the signals before they appear.
Many tend to argue, but i’ve learnt in the years that you just need to look away, do your thing, keep moving forward and let them get smaller in the distance as you advance ahead. As they say; “a ripe rice plant, bows its head”
As for SL. The thing with the system is that you in almost all situations get a Signal in the other direction before you even hit 1 x’s ATR.
So if you were in one trade, locked in 50 or 100, but didn’t move to B/E, your position may move to negative 100 or 150 if the price reverses, but that will give you another entry signal and the opportunity to lock in another 50 or 100 pips as an initial target.
So you locked 100 takeaway 150 + another 50 or 100, which puts you on top with 50 or 0 -50. This will happen in cases of fake outs, it is expected. It can happen once, twice, thrice even a forth time if it is heavy consolidation, but once you break out. BOOM. You’re in the money.
My experience tells me that price will generally bounce off channel consolidation maybe 3 to 6 times before breaking out, so even in a worse case scenario things don’t get shady. Just make sure to keep to good management.
Effie - I am assuming that since this is a 4hr method this is the time frame for charts shown at 1, 3 and 4. Also with a return of 500-1000 pips per month and a stop of 2ATR (about 300 pips atm) we are looking at 3-6% ROE based on a 2% risk per trade?
Yes Effiong, sorry if it wasnt clear, Return on Equity but Rules of Engagement has a certain appropriate ring to it! Look forward to the ongoing development of this thread and to following the trades as they develop.
Only the paid System part of the forums and the FX Signals section will be paid for.
I’m eagerly waiting to update on the charts i posted with the 25|50 for GBP JPY.
I chart with MT4 and their server isn’t up yet, although my brokers charts are up they are the ugliest thing that exists so i won’t be posting until my MT4 server is up.
From the situation that played out though, i will be able to directly answer everyone who was asking about SLs and ATR.
First off, excuse the ugly charts, but my MT4 server is crap.
On Friday or Saturday we, said that if we have a cross on Stochastics on H4 we would long on M5 using the 2550 entry criteria.
Stochs, never crossed, but to show what would have happened lets take a look:
We would have have entered long at Point 1 with 2 x the ATR as our STOP.
We got did not get stopped out, but we got a signal in the opposite direction at point 2, so it must be taken.
The price dropped and your exit would have been at the Ex. Op.; Stochs had crossed and RSI was piercing its lower extremity, a perfect Exit Optimization signal.
The price retraced creating an area of Resistance at point 3. Note however that the price did not cross 25 EMA.
If you recall we can only reenter a trade in the same direction when the price moves beyond 25 EMA, maybe tests 50 then closes back below 25. The close below 25 after the retracement would be another reentry signal.
The way to tackle these situations is using RSI and Stochastics.
Note that at Point 3, Stochastics had an Ex. Op. signal, but it was not supported by RSI.
TIP: When RSI does not cross 50 BUT Stochastics produce a cross, you may consider Reentering the position in the same direction of your previous trade, despite the fact that price didn’t cross 25 and then come back to close below it.
The reentry in such cases, is based on a break of the low. After which the SL is placed at the high just created (READ the Manual Trading part of my system)
From here on ways, you just use Manual Trailing.
Thats that.
On H4 (Left Chart) - you will notice our first successful trade.
Entry at the H4 close >> 90 Pip pullback >> 163 drop in your direction.
