blizard, thanks for the tip about the 1hr. I shall try to regain my enthusiasm and stick to the 4hr. I have about $1500 left from my $100,000 demo account I opened in May!
I completely agree with you, doubling up is always the worst thing anyone can do, and specially with this type of strategies, when there is nice days and terrible days, if you keep doubling in 1 day you will blown your account or lose what you have earned the previous month. However that doesnt means we should keep the same lot size all time, I use to change the lot size depend of the quality of the setup and the market, you can agree that there are setups and perfect setups, if you add lots at these “perfect” setups, wich are not very common, you dont need to end the month with a positive amount of pips to stay in profit.
I think that the key is the market profile recognition, the 70% wins is awesome but only works when the market is ready for this strategy. It seems to work well on ranging and weak trending markets and fail on strong trending, so probably trading only on the right direction when we are on a trending day will help putting probabilities on our side and taking as less trades as posible in this type of market condicions.
We can also use the fibo retracement as we used to in the “simple and almost naked” to add reliability to our entries on trending days. What makes the diference in forex is not the quantity, is the quality of the trades. Is better to take only 3 solid pullback trades during 1 trending market week; losing one and winning 2, than 53 trades on both directions, losing 26 and winning 27.
Just to get the thread going again, has anyone tried this method with a ‘center of gravity’ indicator instead of bollinger bands? I’m having success with the ZZ, COG, and an RSI indicator on the 1 hour time frame.
Hi,
What is the Center of Gravity indi? Cud u gv some screenshots/how to use n provide a link to obtain it?
Also pls adv what settings are used on the H1 RSI, tks.
Works as a ‘Center of Gravity’ (blue line) and price is always going to revolve around it. The red lines at the top indicate overbought areas much like the top of a Bollinger band, and the green is the opposite.
How I trade this is when a red ZZ dot is in-between the red lines I sell, and opposite for the green zz dot/lines.
I usually wait to the close of the candle (with a zz dot in the COG sell/buy areas) to put in an order and I set my stop loss to a couple pips outside the ZZ dot.
I havent really figured out a TP yet so I’m just closing the trade as price gets to overbought/oversold conditions of the RSI-type indicator I have on my chart.
On my chart indicated by the arrows and horizontal lines is where I entered a position and closed for a 22 pip gain on the 1HR GBP/USD yesterday.
On the chart, the ZZ dot that I entered on isn’t within the Green COG lines anymore because COG repaints constantly when the price moves, however it does not stop the legitimacy of the trade. As long as you enter when the dots are in the COG buy/sell lines, you will be fine.
EDIT: This also means that you can’t backtest this strategy because the COG only goes back so many bars, and the whole thing repaints when price moves.
This is beautiful indicator, looks like it will tell you everything you want about price action; however:
Warning, this indicator, like the rest, will completely repaint itself to match the price action. It can be indicating the price will flow down, then when the price moves up instad, the indicator repaints to curve the direction of the price.
Hi MitchellFx,
Tks for yr Chart n post, understand how it’s used. Tks again.
H’ever hope u can also adv what settings u use for the RSI n how is it applied in coordination with ZZ Dots n COG, tks.
The RSI that I’m using is sort of a confirmation indicator, if the ZZ dots and COG give me a buy/sell signal, ill look to see if the RSI is overbought or sold if so, ill take the trade.
Im also using it to close trade at the moment, if I see the price indicating over bought or sold positions on my RSI ill close the trade. I don’t really have any good strategy for closing trades at the moment, so thats what im using.
Exactly, like I indicated in my lengthy post about it, COG repaints heavily and can only be forward tested. However I’ve found that the repainting of the COG is rarely affected on higher time frames (hence why im trading this on a 1HR time frame).
On 5 minute time frames, the repainting of the COG can wreck you because of how quickly it can repaint, but on higher time frames, if my buy/sell signal happens only a huge news event can affect the price drastically enough to place you in a terrible trade.
MItchell, Thanks for the insight re: timeframes. I only briefly fooled around with the indi in the past, and it was most likely 15M timeframe (don’t remember) and on backtest, like you said, rapid repaints, so I dismissed it before researching it’s better use. Good luck.
