I’m not finding too much I like on the charts in the last 48 hours. The setups that are occurring are all near the 00 levels which frankly can go either way based on some news report that comes out.
The AUD/USD is perhaps the only one where I’m looking for a retrace to the 1.0445 PVSL level that seems to be holding up pretty well.
AUD/JPY is another short with a similar setup around the 78.98 PVSL’s Low. Anything else on the radar for anyone?
What timeframe do you trade on?
I trade predominantly on the H4 and look to D1 for confirmation of the direction I’m taking the trade in.
AUD/JPY triggered at 79.25 for a short. Going to keep an eye on this one and perhaps take profits @ 78.68.
Bank, I’m trying to refine the strategy a little more.
In terms of taking a trade that coincides with the daily charts, how many candles do you take into account to determine the trend. For example, the AUD/JPY Daily is showing an upward trend with the current day’s candle pointing south. Do you consider today’s candle as looking for trades that are selling or do you ignore it or go with the trend that has been establishing over the last few days?
What is your average TP (in terms of pips) with the 4hr chart…Also, what is win percentage of this system based on your experience?
Thanks in advance…
Good question. Per bankdapip’s rules, my TP varies with the magnitude of the previous swing. Recall that you fib the most recent high/low to the most recent low/high. The first TP is at the 89% level, and so the distance between that and the 11% level (or similarly, the low or high of a PVSH/L) may vary in pip- magnitude. Hope that helps.
Can you please make a youtube video? Sometimes, it’s easier to understand when we actually see how you do it…
Again, Thanks in advance.
All TP levels are reached in this example for +225 pips.
Bank,
I’ve made almost all the way though this entire thread…only like 15 pages to go. I have to say, this is an incredible method. I’ve been using it for the last couple of weeks and already enjoying some success. I spend my weekends backtesting as much as I can to try and clean up the mistakes I’m making. I do have two questions:
I think I recall your mentioning that there will be times when you’ll place limit orders, just in case a level is reached and you’re not at the screen. My question is, how you can place a limit order and be confident that the level you are hoping will hold, will indeed hold? Say for example, a PVSL has just formed in an uptrend, and you’re waiting for a retrace to the high of the PVSL candle, or the 11% level. If you put a limit order in at the 11% level, aren’t you are at all worried that your buy will get hit, but the price action will blow right through that support and it will no longer be valid?
When the market is trending really hard in one direction, it seems to me that you typically get more countertrend trade opportunities, than those that are with the trend. I’m referring to a trend where there is almost no retracement against the trend, like a downtrend that is almost straight down. In a situation like this, would you feel comfortable taking any BUY
opportunities that come along? Or, would you be looking for more confirmation from things like breaking old PVSHs? I’ve noticed that a lot of your charts are countertrend trades, and you’ve been extremely profitable. So, I’d like to know a little more about how you filter this CT trades.
Thanks so much…absolutely terrific thread
Hi amb,
I must apologize for taking such a long time to respond to your question. I have been tremendously busy for the past couple of weeks.
To answer your question, for the most part I ignore that candle pointing south and pay attention to the trend established for the past couple of days. The strong bearish candle however, cautions me to pay attention to possible areas where sellers may want to stop buying and begin reversing the trend, for example at the 11% fib level.
Hi Stupip,
The average TP on the H4 is +170-200pips, also refer to swallotail’s post and the win ratio that I have experienced is 70-78%.
Thanks JimmyBango!
With regards to your first question, I am comfortable placing limit orders on most setups based on the history of price behavior at particular levels, such as 11% fib level and PVSL/PVSH support and resistance.
75% of the times the levels hold. With a stop loss in place my risk is managed, so if I am stopped out 3 times and I win 3 times I am still ahead.
I like counter trend trades with this method because you are usually getting in on a strong retrace or trend reversal. However, my practice is to trade with the trend until such setups become obvious on the charts.
For counter trend trades I typically apply the rules under [B]Pivot Swing Reverse trades[/B] in POST #1.
Bank,
Thanks for the quick response!
That gives me a lot more confidence to start placing limit orders once the fractals have been developed. I’ve been a little hesitant to start using limit orders, but since I can’t watch the charts all the time, I think they’ll be a nice addition to this method.
I like your comment about waiting until it’s obvious. I think that using the rules laid out in the pivot swing reverse trades section in post #1 makes that a little easier, and helps to keep you from getting crushed buying in downtrends, or selling in uptrends.
One more thing, in post #1 you said that sometimes you will need to wait for the trend to develop in favor of the swing before you can fib. Does this occur when the market is trending really hard, and there really isn’t any clearly defined previous PVSH/SL? Say, the market is dropping quickly and forms a PVSH off a very small retrace. Is this a situation where you might sell this PVSH and wait until the selling continues before you fib your levels?
Does that question make sense? This is something I’m still trying to get a feel for…
No problem JimmyBango! I understand what you are asking. This section about waiting until a swing in the favor of the setup develops, specifically has to do with take profit levels.
Let us say for example, the market was selling, hit all TP levels and you are now anticipating a reversal. A PVSL forms and you took the buy setup. Where would you take profit? At this point there is no BUY SWING, since we were selling all along.
There are two approaches to be taken:
Man, that really helps a lot!!!
I’ve already come across more than a handful of situations where the market has been selling, forms a PVSL, and then looking to buy I fib from the current PVSL to the previous PVSH. The range is huge! The Return/risk is usually very nice, but since the market has been selling hard, and there’s no guarantee it will turn, I always feel a little uneasy putting in a buy order and even shooting for the early TP levels that are quite some distance away. I’ll definitely be employing this new strategy of waiting to fib on certain trend reversals.
Is there a certain return/risk level you look for when you’re scanning your setups? I ask because I’ve only been taking trades that offer a minimum of 1:1 return/risk when comparing the 89% TP level to my SL that is 8p away from the H/L of the PVSH/SL. I have found that requiring 1:1 causes me to miss out on some trades where the market is trending really hard, and doesn’t really retrace much before resuming its move in favor of the trend. This really compresses the distance between the 89% level and my entry price, so I end up discarding the trade. Should I focus more on the 100%, or even 144% levels?
I know you like to add to your positions on dips/peaks, but I’m not quite at that level yet. Still trying to keep things as simple as possible. How do you filter your trades from a R:R standpoint?
Bank…here’s another question I had.
I know you like to start with daily/4H TFs to scan your trades, and then move down to 1H and 30M charts for entries. Suppose you scanned the 4H chart, and found a nice PVSH that has formed, so you’re looking to sell. It makes sense to me that you would simply stay on the 4H chart, wait for a retrace to resistance, and then sell…all off of the 4H chart. How would moving down TFs help you with your entry?
I ask because I’m primarily trading off of the 30M charts, and I’m using the higher TFs to simply gauge general trade direction, nothing more. I’d like to know a little more about you combine the TFs to place your trades.
Thanks for the help!
Hi JB,
The minimum risk reward, particularly on 11% fib entries is 1:2, since your first point of major resistance/support after leaving the 11% level is the 55%.
Once the 11% fib level is holding I am in. If am I iffy about how far the market will go. I set my TP at the breakeven level.
Hi JB,
I only trade H4 charts now. Using that approach however, could help traders who are on the lower time frames. So I look at the trend on the Daily and trade corresponding setups on the H4.
When you say 1:2, which TP level are you using to determine your reward?
The 55% level.
Wow…that’s some serious filtering! What do you think about the following chart (I hope this works…first time using imageshack):
http://imageshack.us/photo/my-images/16/audex.gif/
In this downtrend, there are some clearly defined PVSHs, but given that there wasn’t much of a retracement to these PVSHs, your fib levels are pretty close together, so would these be some trades that you would pass on because the R:R isn’t good enough?
The first trade I’ve highlighted doesn’t retrace back to 11%, but 2 & 3 do on the very next candle…but it seems to me that the only way you’d enter these trades is if you placed an order before that candle closed. Would you have taken either 2 or 3 before the candle closed?
