@traderjosh: More often than not it catches reversals so you can safely trade counter trend in all markets although if you want a way to filter it out you can place a pending order at the high of the candle body for a buy, and the low of the candle body for a sell, this will get you in a few pips later then you normally would but it is very good at weeding out bad trades
Just remember when it comes to your risk, yes your max risk is only 25 pips but when you are putting all of your margin on it a loss will be quite a lot
on a $1,000 account with 1:50 margin that means that on the average currency you would be risking 10% of your account on one trade, if you have 1:200 leverage you would be risking 40%
I think with some development it could be a great idea but again it would take lots of backtesting, different charts, different markets, different trailing stop settings, over a long period of time, atleast 6 months for an initial test
EDIT: are you saying you would trade on the 1 hour charts using the 3 previous candles as a direction filter?
I just wrote a post for traderjoshs idea and attached a chart but when I sent it I got the message that it has to be approved by a mod first and then I got redirected to the Forex system section of the thread.
Did I just try to open a new thread accidentally? Im confused.
Anyway, If i am not mistaken his methods idea is to apply our ic rules for every candle on the 1h chart.
Just take a look at smackos visual aid. Then start the week and compare the close of candle 1 to 4, 2 to 5, 3 to 6 and so on.
Let consecutive signals run or reenter if stopped out and cancel out the previous order if you get an opposing signal and trade that instead.
edit:
I dont know where my post went but here it is in a shorter version.
4 closes higher than 1? Buy!
4 closes lower than 1? Sell!
Wait 1h and check again.
5 closes higher than 2? Cancel previous Sell and Buy it / Let previous buy run.
5 closes lower than 2? Cancel previous Buy and Sell it / Let previous sell run.
Line and arrow of the same color = 1 trade
We look at 4 candle formations. Compare close of candle 1 to close of candle 4 and trade.
The beginning of a line is candle 1. The arrow is at candle 4 and indicated the direction. I marked only opposing signals.
If I didnt mark it that means that all signals had the same direction as the trade we already entered.
A line that keeps going beyond the arrow means thre were no opposing signals.
This is GJ 1h from Monday, last week.
@traderjosh, great idea, I thought if something with similar concept but cannot put it into a detailed system. Work well in a few months of back test? I
@niX1990 You are absolutely correct. In fact you explained it better than I did. You are in a trade about 95% of the week. The only time you are not in the market is if your trailing stop was hit and you are waiting for the current candle to close to get back in.
Good thoughts here SJ. You would not use all of the 3 previous candles, just the 3rd previous candle. (or 4th when the new hour has just opened) The same way we trade a pinbar, only we are doing this on every candle, pinbar or not.
It looks like an interesting idea, but I would worry about the spread eating up the profit in a ranging market where the signals might be changing frequently, even though the trade itself may not be losing many pips.
I have been trading for a few years now and I can see that your method/system has a lot going for it. I have been demo trading it for a few weeks - this week up 290 pips - ok I did trade within obvious ranges and agianst the rules but hey the markets are bad some weeks and the brain takes over.
Every system will be prey to such current market conditions - it’s all about knowing when to take a back seat. Although if you have many 1000+ pip weeks there is no problem in the odd losing week or two.
It’s the age old problem of trying a new method and it goes wrong one week and everyone wants to try and re-write it - no stick to your guns you know it works.
I will demo for 6 weeks - that’s the natural cycle to test market conditions, looking good so far though and thanks for sharing. It’s people like you that make others succesfull.
Guys I have updated post 1079. I have added a necessary filter to my idea. Further backtesting has revealed some flaws in my idea and I think this filter takes care of most of the problem. Take a look!!
sorry just want to double check my trade management is correct.
when a new trade comes along we adjust all the previous trades stop losses, half profits and full profits.
when the new trade hits half profit, all the previous trades take half profit too (50% close, stop to BE)
what if the previous trades have already hit half profit? we again close half and move the stop to the breakeven of the latest trade or do we just move the stop to breakeven of the latest trade?
@jawa: might be a good idea to add ignore indecision candle straight after a star formation to the checklist…
hello traders! @smacko,I strongly believe that it would be a matter of respect to those of us who believe a system cannot be discarded or condenm just because of a single week loss(I for one ended the week in positive), when we have not yet spend enough time TESTING IT.
The appropriate thing IMO is to look for ways to make this system alittle bit better n help filter off bad trades n not DISTRACTING others.
START your own THREAD, being a follower of this thread, all u need do is directing people who would be interested there, not discussibg a system here that you have ONLY tested for few days.
NO DISREPECT INTENDED HERE, BUT JUST MY ON VIEW ON HOW THINGS SHUD BE.
thanks
@medisoft: i have no idea what happens during DST, and although im sure it has been backtested during that period im not sure as in real life i am only aware of DST when my iphones time changes
Basicly it entails taking every single signal that we believe will go for atleast one more candle, all a pin bar is is a safer place in the market to enter rather than just a regular candle, that website actually has hundreds of great systems that helped me out too again i would backtest it more, if you want forward testing that idea might prove good too
@Gemmee: thank you very much it means a lot and i am happy to share, As i will mention in my @everyone post had we have traded it properly we still wouldn’t have had a losing week, but if you know how to properly optimize to market conditions by experience then you can definitely do it successfully, good luck with the paper trading!
@smacko: correct we move everything up to the new signal, and if the first trade has already reaached half tp then we dont take half tp again, aha yeah i will add it to the checklist
@everyone: i was informed by jonkie that had the system been traded to the letter we would have still had a profitable week last week, the fault lies entirely with us trying to mess with the system and for me personally doing that as well as missing a candle or two, by cutting the full take profits to the regular ATR we made it so our outnumbering losses overpowered our wins, our fault… This just goes to show A. I am not the emotionless trader i wish i was yet and B. We can’t let ourselves decide how the system should be used
@everyone: also in regards to the daily system i was working on, i had a stroke of inspiration the other day and stopped that project (which was going well) and went ENTIRELY the opposite way… i made a scalping system :P… well not per say a scalping system but it works off the five minutes, i am forward testing it this week along side this system (which is and will forever be my main trading method) and after this week i will post it on the forum for those of you who enjoy daytrading In regards to its profitability, for 6 hours of trading a day (starting from the NY open), backtested on 4 pairs over 6 months, it averages in % a day… A LOT i wont say here because im not posting conclusive proof of its results but in a properly leveraged account its pretty insane… anyways back to our 4 strategy! REMEMBER you must trade it to the letter, it hasnt let us down yet! the concepts are more than sound, hopefully this week wont be too rocky because of the Greek elections, i think it should be pretty trendy
Hmmmm…just so I’m clear, had I not traded only to the half TP for some of those trades, I would have been up with profit this last week, more than my $1?
That makes sense because everybody needs good risk/reward ratio…I will commit to trading this to every letter and part of the rules this week…I just want to make sure when I start trading that the signals reflect accurate sentiment…that was the whole problem with last week, the sentiment seemed to change 180* in the middle of the four hour period after indecision, which is against the relative norms of the market…in other words, It’s not so much about what Greece does, it matters whether the sentiment readings we use, tell the truth and stays that way through the given trade period of time.
What time does everybody usually start the weeks trading? I think that if there is a big gap over the weekend I would wait for some sort of correction first, a bit of a judgment call I guess. I’d say if the market flowed nicely from the weekend I would wait until the second or third candle of the week, and wait until the 5th candle at least to trade inside bars, what does everboy else think?
Oh and also I think i would close out positions on the close of the second to last candle of the week as I’m thinking the last 4 hours there wouldn’t be much trading going on, would probably be just traders closing out held positions in this time for the weekend?
Remember, last week, I made $90 just on that gap being filled, so I would pay more attention to what fundamentalists say about volatility bands, than anything else…we just want the sentiment readings in our signals to be accurate, like they were before last Tuesday.
Saying that pipcoumpounder, I guess it would make for a high probability trade to get in on the retracement? what do you mean by we want accurate sentiment readings? do you mean our direction from signals lining up with what the fundamentalists say? How much attention do you pay to fundamentals etc as this method doesn’t have anything to do with anything other than technical analysis ?
When we look at an indecision bar, and zoom in to see the direction we will trade, that direction shows the majority sentiment, where the market most likely will go…go a few pages back, and read a long post by SJ about the probabilities of this system.
When I say fundamentalists, it is somewhat separate from this strategy’s technical analysis, I’m only mentioning them because they explained why the market was so tough last week, and this strategy should go with the flow of news and still work for most news times, however the reason for last week’s weird trading was absolutely enormous! Many many traders sat out last week, hence the all over the place, undefined sentiment, or clear direction.
although if you want a way to filter it out you can place a pending order at the high of the candle body for a buy, and the low of the candle body for a sell, this will get you in a few pips later then you normally would but it is very good at weeding out bad trades 
again i would backtest it more, if you want forward testing that idea might prove good too