Explanation of Bollinger bands:
Bollinger bands are probably easiest to understand of indicators used in system , straightforward and quite reliable if you know signal strenght given by this indicator. Since i am mostly no longer trading m1 time frame and entries are not as agressive as they were with system version 1, you can still use this approach to gather more frequent pips if you are doing full time trading. Basically Bollinger bands can help you with this by adding 3 different bollinger bands versions on your charts. This system can work just as well with having used three bollinger bands but it will make charts more chugged. I am using only 1 bollinger band indicator with settings that are somehow balanced between signal frequency and strenght (giving strong signals but are not too rare).
Signal strenght of Bollinger bands is important becouse not every signal should be jumped on emidently and there are signals that you can use as entry and there are signals that should only help with finding exits. For entry you need strong signal that is quite reliable for that you should only look where PA closes as Pinbar outside of Bollinger bands (it doesnt have to fully close outside, just closing 1 or 2 pips of pinbars wick outside is enough), but mind that to get really strong signal this should happen after a rally or fall, if you enter on such signal in consolidation or in non determined move you still might get in wrong position. So what you basically do is count how many pips of a fall or breaktrough has been on m5 time frame since latest low or high. Lets say that you see 100 pips fall on EJ M5 and pinbar closes outside of bands, this could signal good potential for reversal.
Signals that are good for exits are usually anywhere where PA closes out of Bollinger bands, for example if you are in long trade and PA closes above upper band this could signal bounce to down side and signal exit.
Explanation of Ichimoku:
Ichimoku can help us determine start of trends and their ending. For Ichimoku we do not use anything else besides Kijun and Kumo (cloud). You can paint Tankain sen and Chinoku span into background color. Overall Ichimoku is being used different that most traders use it. We are not looking for breakouts with ichimoku (or at least we arent trading them), but rather look reversals with it. No matter what Ichimoku settings you use you will always get fake breakouts and you will always be late into catching most of them. Reversals can be cought with very little delay and are more reliable. Ichimoku is a bit different than most indicators becouse it is purelly visually based indicator and there are no oversold or overbought values displayed so you have to gather all informations from its position related to Price action. If you watch charts closely you will find that even that it seems quite dynamic and unique indicator there are repeatative formations formed trough historical charts.
Here are the basic ones:
1.Price action after bullish trend went bellow trend, it consolidated a bit and then Kijun suddenly starts to turn down. This indicates trend reversal:
2.Price broken from Kumo way before than Kijun did and the distance from PA to Kijun is huge, this is bad breakout most of the move already happened no point of chasing the trend here, more likely look for reversal:
Explanation of PA:
Price action is the strongest part of system without the doubt. With Price action we are looking for three things:
1.Patterns (not as much chart patterns but only candle patterns such as pinbar, hanging man, evening star…)
2.Rallys and dumps (strong movement with PA not making any significant lows or highs but only heading towards one dirrection. Its important that PA has not been making any significant pullbacks yet, this defines good strenght and bigger chance for strong reversal. The stronger the PA heads towards one dirrection the stronger the pullback. )Any rally or dump has to be measured in pips, for this you will need to follow rules that every currency pair has different avarage strenght in movement for which you use as reference. For example on AU pair 80 pips move without pullbacks is already considered our possible entry condition while on EJ this distane is above 100 pips as JPY pairs tend to move more.
3.Distances from kijun, distance of PA and Ichimokus Kijun line is always important it gives you overall information how much could price still drop quickly. If you see strong downtrend and PA is still quite close to kijun (eg M5 EJ 15 pips) this still has a lot potential to go even further down. If you see distance like 80 pips on M5 EJ this would mean that its very low chance for price to countiniue going with trend WITHOUT having any decent pullback.
Importance of “big picture” explained bellow. To decrease potential draw down in trades with pullback entries (again main trend) it is important that you always follow where your current pullback entry is in relation to main trend. If the trend has just started (eg 50 pips drop after rally) then any long you are placing are in danger of suffering DD or being wrong trades as price could move further away to correct the move before. Always count the pips since last tops or bottoms for the treds. Also keep in mind this ratio:
EJ, GJ, AJ 1,5 vs 1 EU, GU, EG, AU
This means that any rally or fall on JPY pairs should be 1,5 times bigger to be considered huge comparing to other major pair, as most JPY pairs tend to move more.
If you have questions regarding new system please let me know. To check more detailed explanation of trading with system please download videos attached bellow (will be uploaded tomorrow).
Just wanted to add that new system V2 is completly suitable to use on ANY TF, as long as you keep “the big picture” in mind, which means always checking three time frames above your traded TF. If you are trading with new system please keep other members posted on trades you take, if you can - live trades.
Very interesting, much different than your first strategy. I feel that this is more focused on trading what you “see” which I like. How would you describe your risk management though? Do you usually put stop loss the high/low of pin bars? Or do you use visual stop? If you do, When do you decide that the trade hasn’t gone your way and cut your losses short?
As i mentioned before there are already few EAs made based on some rules of current system however they are still in development process.
Very interesting, much different than your first strategy. I feel that this is more focused on trading what you “see” which I like. How would you describe your risk management though? Do you usually put stop loss the high/low of pin bars? Or do you use visual stop? If you do, When do you decide that the trade hasn’t gone your way and cut your losses short?
Yes that is correct, it is less focused into OS or OB numbers of indicators and rather more focused on what you see on Ichimoku and PA, aswell as what has happened and how much over certain peroid of time. This is all basing on that forex markets are moving in circles and patterns.
As for SL yes usually putting it above pins highs and lows is good idea, however if you are picking entries correctly after sharp retracements or rallys this is not needed. What i do is i use visual stop and even if trade moves 20 pips against me i will add another same position if entry with pinbar is spawned bit further, for example if i see rally on about 150-200 pips i will start placing shorts on each pinbar formed that could signal retracement, and use BE SL as soon as possible on 50% of opened positions. Then few positions are closed after first retracement is completed and the rest positions are closed after full retracement of rally (about 50%) has been done. Good example was GJ retracement at 18:00 PM after it finished and formed first pinbar i added first short, then it moved abit more up and formed few pinbars signaled top then i added 2 lots of shorts and they all hit TP. This was very good example of perfect entry for this system as it was really strong M5 retracement in just few m5 candles it traveled more than 100 pips. SL in such case could be placed above wicks of pinbars but really in normal market conditions that are not impacted by heavy fundamentals such tops hold.
First of all, thank you very much for sharing your system with us.
Have you been live trading with V2 for some time? Do you do it manually or thought a robot? What are your results?
Could you please post some trading results like you did for V1?
can you provide any resource for studying price action ???
Sure i will post videos, descriptions and screenshots in future.
@founaud Yes i do trade it live on 10k account (800 eur profits have been withdrawn already and made in 2 days with it), EA for this system is in the works but i cant say yet if it will be for public share. I did post some results of it on page 12, pretty much all winners for that day, basically only 1 stupid trade i did this week which was not fault of system but rather fault of mind as i was a bit scared and took position with trend on the end of trend which took away some profits but overall it still ended all well as i traded pullback well. Its just better if you are certain in your analysis that you place trade, SL and TP and go away. I will post more trading results over next two weeks along with videos and explanations.
thanks for the system but you tried the v1 and v2 of hybrid what is your opinion which one of both is better? and can we use the v1 or you will trade with v2?
hope to you more profit and i will see your posts to learn about the new system
Hisokahunter I will only be trading v2 from now on as this system is more reliable. It doesnt means that v1 does not produce profits, it just means that v2 system is not as agressive it requires less trades per day to achieve the same results as v1. It is a little bit more difficult for beginner to learn but its worth it.
V2 can be traded on any pair but it is recommended that the pairs you trade are having enough liquidity and “power”. JPY pairs for sure are always on table but some other pairs could be little less recommended such as EU or GU which could be a bit sleepy on times. But in general i would recommended to trade (sorted by priority): EJ, GJ, AU, GU, EU and NU.
For time frames you always need to check higher time frames for general picture of what is going on, never follow rules only by single time frame. But generally any time frame is good enough to pick signals from.
Hello Janpec, Thanks for the insight and as I mentioned before, I love this new method as it relies more on PA and can potentially teach the traders “how to trade” and develop a long term skill, instead of making traders simply follow enter/exit signals and learn nothing and not look at the market in an objective way. I attached the picture of USD/JPY of last friday, let me know what you think. Also, since I think proper risk management is the long term way to success, if I accidentally entered on the (Too early kijun still steep) which point would be the valid stop loss point that I admit I was wrong and exit?
Use IMG code for image and upload it to some image uploading site. For example i use Shrani.si - Brezplačna spletna shramba za vaše slike , upload image then use second link with IMG code for forums and just paste it here. It gives 100% size of picture that way.
As for entries you marked it well. Both second and third long are good entries, pinbars went outside BB quite a lot distance from Kijun to PA was also big on both of them. Both exits are also good, usually 25 or 50% of move before is good exit rule, or when PA reaches kijun this should be considered last exit point. Kijun is usually natural bounce to whereever PA is comming from as it acts like support and resistance.
First entry would be defenetly too quick, kijun is still in sharp mode and PA is very close to it.
Thanks, I think I have a good grasp of this concept. I will test it extensively this upcoming week with multiple pairs during the London to New York Trading hours and upload pictures for other people too so they can understand it.
