Jacko's System (KISS)

Trading Systems Free Forex Trading Systems
1

If there isn’t a thread that is discussing setups for using Jacko’s simple system - in other words it is a mid-term (a few trades a week) based on price action and following the trend (to oversimplify) I’d like to get one started here. I feel more comfortable for some reason on babypips.com than forexfactory and the Jacko thread over there is huge, lots of ‘noise’, lots of day traders trying to apply his strategy.

If there’s a similar system already being discussed please point me to it. Otherwise I’d like to use this thread to get feedback to see if I’m using his system correctly and maybe discuss a few simple “add-ons” to improve it.

I’m just starting out using it and am a newbie Forex trader so please bare with me.

I want to avoid adding too much technical analysis (as the point of his system is to avoid too much of that) so if anyone is interested in discussing setups, I think we need to refrain from talking about MACD, RSI, Stochastics, etc. Just want to discuss where to enter and where to put the stop at. He primarily uses price action, 50% fib and whole numbers. His hedge strategy is very interesting about placing an order where you were stopped out once you go 50 pips past.

Out of all the relatively simple systems I’ve studied, his sounds the most logical/intelligent/promising so I’m going to give it a try.

2

it IS one of the simplest and best systems around, and part of my arsenal of pointy weapons, although i add a few things like averaging up and down, no stop losses and a healthy account to handle all of this.

remember to remind that the situation requires VERY GOOD money management, because the length of the trade invariably suffers thru some deep drawdowns but can return some very nice pippage for those who dont want or cant be daytrading like mad !

enjoy and trade well

mp

[B][I]Within the great hall at Elfinore stands a wondrous coffer, precisely four cubits square and securely latched against the outside world. Inside that repository, shut away from impertinent eyes, abides many an intriquing trading secret garnered from around the world and over the ages !

As a child, i used to watch from the darkness as the secrets were debated and annotated by the elders. No one there held a single thought of my presence – BUT I KNOW WHERE THEY HID THE KEY !! [/I][/B]

3

I’ve been with Jacko for just over a year now, and some things you’ll doubtlessly find that patience is all with this method. Overtrade this and you’ll burn your account, but it’s solid and robust if you stay steady. Good luck!

4

I have been using Jacko’s system successfully, too. Really not so much a system, as it is more common sense.

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I also use BRV’s No Brainer’s system.

But rather than plot support and resistance lines, I watch what price is doing. The price line is the only line I need because I can which way price is moving. The indicator just tells me how far it moved. Kind of like an odometer on a car.

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Jacko’s system right now may be a bit risky since it is a “trade in direction of trend” only system. I see as of recent that some of his followers have had a much higher percentage of losers recently as the USD could be in the beginning of a trend reversal as economic news gets more grim, relatively worse than Eurozone.

It seems that is the risk in his “system” in that you could lose pretty bad going through a trend reversal, especially one that takes a while - in other words, its weaker in a ranging market I think and really weak in a ranging market that eventually turns into a trend reversal.

Seems like as of recent, if you are trading longer timeframes and not a daytrader, now might be a good time to stay out of the market or switch to a system that works better in a ranging market.

The way I look at it, if you the trend is reversing, then you are trading counter-trend without knowing it. If you switch to a swing price action system that trade the swings within the range so you are going long sometimes and short other times, then at least you have a 50% chance (assuming you traded 50% long and 50% short) of catching the new trend if it reverses. With Jacko’s system, you may have to get burned pretty bad before the new trend is widely acknowledged to the point you stop going counter-trend (long) and start going with the new trend (short).

Seems at times like this, when the USD has somewhat shrugged off fundamentals the past 90 days, watching the fundamentals is key to try to determine if a trend reversal is occurring. If the fundamentals continue to worsen for the U.S. economy, the dollar has got to finally start losing ground. After all the root of it, the mortgage crisis, was primarily a U.S. problem. I think we are lucky that investors have looked to the dollar as a ‘safe haven’ the past couple months amongst mounting negative fundamentals. Granted the recession is global - but I think other countries will have a bit less of a recession than the U.S. in the mid-long term.

Couldn’t you use the same strategies of Jacko but just throw out the trade in the direction of the trend part and trade both long and short based on Fib 50% and whole number support AND resistance looking at price action? I know trading with the trend is sort of a cornerstone of Jacko’s system, but when the trend is in question, I’d also put that requirement in question.

7

On a daily chart, if you look at the Fib for 9/20 (high of 4865) to the low on 10/28 of 2328, then the 50% Fib retracement is 3588. Wouldn’t people using Jacko’s system have took 3600 to be a good resistant level being a whole number very close to the 50% Fib retracment? If so they would have lost today with a high at 3702, that is just enough to have stopped everyone out with 100 pip stops (which is supposedly what he uses these days?) Looks like the next resistance would be at 3900, very close to the 61.8% Fib. But Jacko doesn’t use 61.8 he uses 50.

If the number passes a 50% resistance point, wouldn’t it be best to reduce the trailing stop amount to guard against the trend reversal?

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if you use the LRC on your charts, you see in a highly visual manner, if you are near full trend reversal point or not !

mp

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From what I understand, drawing a “correct” LRC isn’t a piece of cake. You want to post a chart with some insight on how you draw your LRC?

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your understanding is wrongo -------

first there is a chart overlay available for MT4 charts by name of “SHI_Channel_true” ---- this will produce the MAJOR trend on multi time frames, and then the instructions for setting and using the LRC tool in MT4 is contained on my own site - - - - - http://forums.babypips.com/newbie-island/18177-mp-some-my-non-secret-secrets.html

enclosed chart is only to show the MULTIPLE moves contained within the major trend that are playable — once can draw as many or as few as they feel they are comfortable trading, which is the joy !

the GREEN lines are the SHI channel (which is simply one version of the LRC — i think its called rolphs channel, the other channels contained within the green lines are the handrawn channels using the tool supplied by MT4.

since forex TRENDS wonderfully, even though news will knock if off track for a day or 3, if the price hits the bottom channel, one can be pretty danged sure the price will travel UP to the top channel, and if all is working correctly, will then head back to the bottom channel ---- during these moves, the price tends (unless it was a tremendously momentum driven move) to STOP at the midpoint of the channel and wander around there for a week or so — some real traders even have a name for this phenomenon ---- Consolidation !

While the longer term LRC’s are really nothing more or less than support and resistance areas based on history, the banks are well aware of where these points lie, and so move the currencies accordingly.

while the LRC WILL show you the highly suggested trading area, only indicators will tell you if there will be a BREAKOUT, or BREAKDOWN going past the lines. The price OFTEN breaks PAST the lines, but “USUALLY” only for about 5%, at which time they tend to always reverse, heading back down towards the bottom !

another thing to keep in mind is that the price move will “usually” move from the top or bottom lines to the MIDPOINT, but at that point NEWS can alter the movement and push the currency BACK DOWN to the lower line to form a dbl bottom, which will then make its way to your first station stop and TP point, the midpoint !

my thoughts on the LRC, along with others who show how this can be made into a system of trading, exist on my site, so take a look and see if you like it !

think of the LRC as defining the “orbit” of the currency pair at that time in history - - - - -

enjoy and trade well

mp

[B][I]Within the great hall at Elfinore stands a wondrous coffer, precisely four cubits square and securely latched against the outside world. Inside that repository, shut away from impertinent eyes, abides many an intriquing trading secret garnered from around the world and over the ages !

As a child, i used to watch from the darkness as the secrets were debated and annotated by the elders. No one there held a single thought of my presence – BUT I KNOW WHERE THEY HID THE KEY !! [/I][/B]

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Please post the indicators and your template. I would like to see this.

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the channel is available at pretty much anyplace – google will provide it easily.

my template is of no use to you, as its “complication factor” is of the highest order — it often takes me a while to remember WHY i put something in there, that interracts with another “something”, that needs an external feed from somewhere else - - - - -

and after all that, i still dont know if the price is moving up or down !

and anyway, you didnt say “please” and you didnt kiss the ring !

enjoy and trade well

mp

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I said “PLEASE POST…”

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There was some talk about Jacko’s system not working on the EURUSD…

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Friends the systems which we see brokers or some sites provide us which would help you to understand the market. Must be used only to take help of and not for trading. Always use your strategy while trading.

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Man, how on earth do you learn everything so quick?! Took me a lot longer than that to get my head around it.
OK, the majority of people posting on that thread are overtrading and in the nicest possibly way, it’s the blind leading the blind most of the time. During a ranging period throughout November if you kept on trading it, you will wipe out your account. So you stop.
The fundies are important, but the reaction to them is more important. As you rightly say, the safe haven reaction is crumbling, and now we’re seeing people selling off dollars in reaction to bad US news. And the interest rate cut has sent the pair even higher.
The long-term trend is what makes the system profitable. It is a trending system. You say swap for a ranging system - it’s so simple with that system you just need to change the way to take profit. Trailing stops work well in trends, otherwise use TP orders instead. But be warned, it’s not always easy to discern when ranging will end and trending begins. That’s the trade off.

Enough talk, what about now? I believe the long-term trend has changed, so I’m looking to go long at any decent retrace. 1.3306 would be lovely, but I don’t think it’ll get down anywhere near that far given the crazy move in the past 24 hrs. I’ve got my eye on 1.3795 and 1.3892. If it moves fast, the former, slower, the latter. I don’t use round numbers like Jacko, but you get the drift.

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as i have so often repeated, any good system is a good system, but NO one system covers all bases, which is why a good human will beat a good EA every time – simply because they can adjust from trending to ranging. Now if someone comes up with true artificial intelligence, real traders can sit back and go fishing, letting their cray supercomputers trade for them !

the BEST system there is, given absolutely proper money management and NOT overtradding, is a TRENDING system, as the market wants to trend far more than it wants to move sideways.

even in a whippy market, such as we have now, FOLLOWING THE TREND will keep you on the right side — theres simply too much evidence that it works.

BUT one MUST use proper money management to avoid problems, and properly used hedges will cover the whippiness, AS LONG AS YOU CAN TELL WHATS HAPPENING !

I still make very good money on the overnite trades, because I simply follow the trend, even when it hardly moves overnite because everyone waiting on news !

trading is a developed skill set, BUT it can be developed in those of normal intelligence (being right brained helps !) in a fairly routine, watchfull and learning manner !

if you can pick a trend, stick with it till you reach a tp point, and NOT overtrade because of impatience, you will find trend trading to be one of the best of the simple systems out there — its simply based on too many realistic factors and is what drives the prices from the bottom of the LRC to the TOP of the LRC — the banks KNOW where they want the price to go, and they make it go there, by hook or by crook !

I personally use every trick in the book that ive learned over the years, but without trend trading I would be a simple bum, living in the street, begging for alms and drinking Thunderbird. With trend trading, I have 3 125’ yachts, 27 homes all on desert islands, a trophy wife and a few consorts that react to my every word !

why would i stop trend trading ???

LOL

enjoy and trade well

mp

[B][I]Within the great hall at Elfinore stands a wondrous coffer, precisely four cubits square and securely latched against the outside world. Inside that repository, shut away from impertinent eyes, abides many an intriquing trading secret garnered from around the world and over the ages !

As a child, i used to watch from the darkness as the secrets were debated and annotated by the elders. No one there held a single thought of my presence – BUT I KNOW WHERE THEY HID THE KEY !! [/I][/B]

18

MP, if only you would post your template then we could join you.

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So is it true this method doesn’t work on EUR/USD pair?

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It works just fine on each and every pair.