I’m trying out a new idea (borrowed from “Jacko” on another forum) of a kind of “revenge trade”. The basic idea is if your stop is hit, as mine was yesterday :rolleyes: , AND if the price continues say 50 pips beyond the stop, to put an order in (in this case buy as that was my original position) at the point where your previous stop was.
By doing this, if the order is activated, you are getting back in the trade where you left it but you’re also trading on the trend’s momentum. Stopped out again? As long as technically the major trend is still intact (judge by your trendlines) then repeat the process.
In my case, for the GBPCHF I did this and am now back in the trade. There looks to be a cross forming again too.
Michael,
I just read through your system and it looks good, I am assuming this (maybe revised a little for yourself) is what you have been trading live??
I was glad to see that you can apply a moving average to RSI through metatrader, I was literally a few days away from making one for myself in MS excel…
I do have a question for you, in your book you stated a few different ways to exit the trade, which one generally do you use or which have you found to give you the best results??
-edit- Ohh and one more question, have you experimented at all with any lower time frames?? The biggest thing that draws me to this forex market is the ability to have trades happen for you quickly, and am curious to your results on say a 4h or maybe 1h chart.
Thanks for sharing your system, at this point in my forex “learning” i am very interested in understanding the reasons why people choose their systems…and you outlined yours very well and showed understandable examples. Thank you.
Remember these numbers always depend on how selective the trader is, how many pairs are monitored and random market conditions.
I monitor 10-15 pairs but don’t always enter a trade if two pairs are strongly correlated. I generally make 10-20 trades per week but average length of trade completely depends on if I use a t/p and of course the strength of a trend.
Just demo trade the method, find out your own numbers, get confidence in YOUR style of trading and then go live. Keep us updated on how you’re doing.
Michael,
I have been backtesting your system here for the past few days only on the USD/JPY pair. I did modify it a little, Still using a 8 period RSI data, then applying a 8 period MA and also a 2 period MA to that, so whereas you use the RSI indicator for entering trades I have found less fakeouts on a 4h chart using the 2 period MA instead (obviously sometimes at the expense of a better entry, but still with positive results so far).
After I am done doing the pencil work for that I’ll post the results I obtained, as well as what i found from the data analysis (an additional benefit of having an actuary for a wife :D) which hopefully will help to show good points to change SL’s to breakeven, or +1, and also good TP points with confidence.
EDIT One more thing, if you wouldnt mind posting what currency pairs you watch i would be interested in looking at the charts for each as well…I noticed in your post you stated that you sometimes dont trade pairs that are strongly correlated, why is that?? I would just think that if you had a profitable system that you would still have a better chance of making a profit than not, what is your reasoning behind that??
Thanks again for your insight, it is greatly appreciated
Looking at the daily charts of GBP/USD, AUD/USD and NZD/USD, you can really see how the ATR channel keeps us in the trend. It doesn’t always work out like that of course but, when you’re going with the major trend, it is a great tool to have.
For Wackiko, I trade EURUSD, GBPUSD, USDCHF, AUDUSD, NZDUSD, GBPJPY, EURJPY, USDJPY, CADJPY, GBPCHF, EURCAD.
For future trades, I’m keeping an eye on the USDCHF, will only get in on a short trade, looking for a cross AND a break of recent resistance at 1.1960 area. For GBPJPY, would love to see it spike to the 28EMA before heading back up but will probably take a long cross anyway. Not touching USDJPY at the moment.
Keep posting your own thoughts and keep enjoying the daily charts.
whew! well, the GBPJPY did go down to 247 but forgot to stop! Still not convinced the overall trend has changed - could be just a clearing out of longs and profit-taking.
Would still look to get in on a long when the cross comes.
Tomorrow could present the first chance to get back long on the GBPJPY. Will take the cross if it happens at open of the day. If my stop is hit, will look to take a revenge trade - will update.
Since being introduced to Fozzy through Michael’s 8&8 e-Book, I have been practicing the system with a demo account since Sept 14.
With a $3k account I lost half getting used to things, and now am back square to $3k. I have been also using Fibs to determine S&R and possible exits (from reversals), but have been trying to be conservative and set TP. I will try out 70% ATR now and see how that works, as I had not been using that.
Does anyone have a live trading forum that we can all talk about the current trade while using this system? If not, how about possibly opening a PalTalk room dedicated to 8&8? I would be happy to assist if Michael and others would be interested in joining.
Hey Michael, cool system, looks like it is effective and I thank you for sharing it
I have a question, if the entry signal is obtained at Friday close, do we buy when market opens on Monday?
You don’t have to trade every signal, but when you do receive a signal, you have that choice of making the trade.
Saying that, many traders don’t trade Sundays/Mondays and Fridays because they are historically low-volume. You should find what works best for you and capitalize on that.
I personally take Fridays off only, and will take Monday signals. But I find I have to wait until the Asian Market opens to see if it’s successful or not (which is around 11 pm my time here in the States).
Scott, good luck with the paltalk room. I don’t have enough time to join myself but hope you get some in there. It’d be a good idea to have a set time every day for people to chat - like just before 5pm EST to talk about the next day’s trades.
To Shiwa, yes - always wait until the next day to take a trade.
Have a look at the GBP/JPY daily. There’s no way you should’ve taken the last short signal. Price is flip-flopping and there’s no strong movement. Would look to see a breakout with an 8and8 cross before trading this pair.
Thanks for posting your system. I’m in a progress of developing mine; however, your e-book has helped me a lot. I’m using Oanda and want to be sure I’m setting up your system correctly. You’re talking about not showing “Sunday candle” in charts - in Oanda daily candle opens at midnight - so according to your description, would it be correct to ignore (there’s such option called “ignore weekend data”) data starting Saturday Midnight (Sunday candle open time) till Sunday Midnight (Monday candle open time) therefore skipping Sunday candle?
Also, I�m wondering - on Saturday there also is zero-activity in the market � do we want this candle to be included in charts according to the system setup?
Your ebook is a well produced, clear and most excellent resource Michael. Many traders whether they choose to look at this system or not will gain benefit from your sensible discussion of price action and its interpretation. Your day by day example showing the reasoning behind trade execution or not makes it even more valuable as I think too often traders look at a system and blindly execute on every signal without any engagement of their grey matter. I stumbled on your thread by accident when I had a morning off and the market is quiet. I am constantly amazed at the quality of posts on bpips and the willingness of people like yourself to share what you have learned. Many thanks
