Must tell you I’m looking at AUDUSD actually. Nowhere near to a signal from this system but I reckon if we get RSI(14) below 30 and then above 30 then it may be a nice trade. Main reason it appeals to me is because it’s also forming a double bottom of sorts (I look for those things more often than not for another system). And as much as FOREX ain’t my thing this could tempt me for sure.
Good point though: AUDUSD was a good trade for this system if you took half your profits as per the original system. Depends on how you want to manage those stops of course.
So USDCHF has hit the 200 SMA and bounced back up yesterday. Same today. Currently up 105 pips.
New support perhaps at the 200?
I’m going to reread some of the examples in the book to see if there’s mention of adding to the position when you’re up, or even moving the stop further up to lock in more profits. I don’t remember reading anything like that, but then again, the rules were a bit vague, so maybe there’s more to be found in the examples.
Also a note, watching EURGBP. It’s been oversold for some time now. Waiting for that candle to close below. It’s starting the day off in the right direction.
GBPUSD also something to watch, but maybe it’s best to stay away from this one this week.
GBPCAD looks interesting. Is there a pattern here??
GBPCHF is already above RSI(14) 30 level. Best to not come in early, right?
AUDCHF, I could maybe go in on this now. Thoughts anyone?
AUDCAD looks nice too.
AUDJPY ready too.
I missed NZDCHF it appears. 60 pip move today.
NZDJPY could be another trade to take. Can I take what’s happen with NZDCHF today as supporting evidence to take a trade here? I’ll keep watching.
There’s nothing in the standard rules that would have you add to a profitable position (pyramiding in). But there’s also nothing stopping you from doing so. Point is based on what would you be adding to the position (as opposed to just jumping in because you feel like it type of thing). I would say it’s fine as long as either your stop an ALL open positions is at break even OR you’ve locked in those original profits made when you closed out half of the position. One think that Ms. Lien & Co. are very clear and adamant about is to never let a winner turn to a loser (although that’s system dependent e.g. my core system sits on losses most of the time before profits come along so I couldn’t implement the idea but for this system I’d say it’s the way to go).
Dunno which broker you’re with but does your platform has something called “Fractals”??? If it does could be the way to add to profitable positions. Let me know and I’ll show you if you like. (Can be done manually i.e. without and indicator but check first as it makes things easier).
Nope. Fractals is an indicator developed by Bill Williams. Nothing special though (as he would have you believe anyway) i.e. merely an indicator that makes it easier to see high and low swing points.
There are five bar Fractals and three bar Fractals. A five bar Fractal requires that you have two successive lower highs or higher lows to the left and to the right of the signal bar. A three bar Fractal requires that you have one lower high or higher low to the left and to the right of the signal bar. But as noted: not rocket science here as you can see this on a chart anyway i.e. without the indicator (especially if your charting platform doesn’t have the indicator).
Anyway and the LONG reason I’m giving you all of this fluff:
You were mentioning the possibility of adding further positions as the trade moved in your favor and my question to you was well on what basis would you decide as to when to do this. So this just came to mind at the time. The basic idea in my head: you would add to the position (in this case i.e. USDCHF) you’d only be looking to be going long obviously. So once a Fractal has formed: you’d place a stop buy just above the Fractal and keep going. And so on and so forth. But managing your stops and risk on the ENTIRE trade is important. I’ve not thought about that but maybe it’s something you can work on. Bill Williams’ Fractal based system would have you enter at a Fractal and your initial stop would the FARTHER of the two previous Fractals. You would trail your stop based on this i.e. each time a new Fractal is formed, you’d add to the position, but then move your stops top the FARTHER of the two previous Fractals. This is a perfectly valid trading system (trend following system) in and of itself of course. But maybe an idea to combine to two???
Anyways. Just an idea for you.
The chart below is a MT4 chart of USDCHF Daily showing three bar Fractals (I don’t have Fractals on my main broker’s platform). They’re the little arrows or triangles in Silver/Grey.
As noted: using Fractals is a perfectly valid trend following trading system in and of itself and is detailed in his first book (he uses alternate methods of confirmation for the trend though). Its shortcoming (as always): doesn’t really work in a choppy market and therein lies its downfall. This being said: as long as stops etc. are implemented then not a problem.
Haha, that’s the only thing that came up when I searched it, an indicator. Goes to show you what I know!
But I’m in luck. Oanda’s web platform uses TradingView, which offers “Williams Fractal”. Sweet! The full blown TradingView charts has 10 or 15 “Fractal” related indicators including “Williams Fractal”.
But that’s an interesting idea. I’ve added to my chart and will read up on it a bit more.
Oh, and I was away during the Fed speech. Of course my USDCHF trade started to nose dive immediately. Closed it out with +45 pips. Not the +90 pips it was at, but a win is a win. So both positions on the USDCHF closed with +45 pip gains. Not too shabby.
Like I said: just an idea. Maybe you can run with it. Kind of make the system your own given that you now know the basic or core idea.
Was looking at EURGBP earlier (on your behalf!!! LOL!!!). Just a small reality check: on that pair this thing seems to have failed three times on the way up. And it also seems to have failed on the long trades before this last run up. Just trace the trades through backwards and you’ll see what I mean. Just something to be aware of.
Well your trade is good as per the system. Just pointed out that this system didn’t do too great on this pair. I don’t even think those losing trades even managed to hit the first TP so they were outright losses of 1% or whatever you are risking.
Yeh. You may find ti’s better on certain pairs than others. Cannot really help you there.
Not sure if this still applies nowadays but I seem to remember that exotics used to trend better than the majors. Also far less stop hunting shenanigans. But you need to be able to stomach the spreads is all. But for long terms trades such as what this system should result in then it shouldn’t be a problem.
Still active on +29 pips. I’ve been checking it throughout the day.
I’ve come to realize the more I check these trades, the more I’m tempted to touch them. Even with positive pip trades, I want to lock in the profits, and with the losing trade, I wanted to close it before it hit the SL and minimize the loses But I have to remember to stick to the plan. The SL is there for a reason.
EURCAD - moving down to 30
EURGBP - moving up to 70
EURNZD - Moving down
GBPAUD - Moving down to 30
GBPCAD - below 30
GBPCHF - above 30 but moving down
GBPJPY - moving down to 30
GBPNZD - right at 30
GBPZAR - slightly above 30
USDCAD - slightly above 30
USdHKD - below 30
USDTRY - slightly above 30
Open trades:
GBPJPY Long @135.548
It’s about to get stopped out, 10 pips to go!
I’m in need of a trade review, as I’ve lost my last 5 trades.
I appreciate what you’re trying to do and I admire any TA approach that relies on objective chart features and data. I mean it, despite the lack of progress with this so far.
But your experience is reminding me of when I was trading stocks - can’t count the number of times I lost money because I bought a good share on a good signal but lost money. The reason was simply the market was falling. This was happening to me for years until I stepped back and saw the whole wood, not just the tree I was fascinated by at the time.
Not wishing to pick on you but maybe another filter for trade targets might be an idea here?
For example, your long GBP/JPY. All 7 leading GBP-based pair charts have shown GBP to be about the weakest major currency and this has been going on for months. The reverse is true for JPY. JPY has been a leader against all the other significant currencies for so long (except the CHF, which is just another safe haven currency like JPY). For GBP/JPY to go seriously positive would have required all GBP pairs to reverse simultaneously as well as all JPY pairs: and for JPY to be sold off, that would have required the big players to be buying EUR, USD and GBP - never looked likely.
This trading system is detailed in Ms. Lien’s book. But again we come to this thing of spot FOREX vs. Equities and Commodities. While she and her chum Boris there detailed this trading system in a book specifically written for spot FOREX trading: I’m really still of the opinion (and even that dude from NO NONSENSE backs this up) that RSI has no place when it comes to FOREX pairs. There’s just no such thing as overbought and oversold in FOREX. And once again: the likes of Bloomberg and CNBC watch RSI(14) but only as it pertains to Equities and Commodities and it therefore does become a self fulfilling prophecy. I don’t ever recall seeing a Bloomberg Bombshell (although there are none left anymore it would seem) noting that EUR/USD is oversold because RSI(14) is below 30. And I can show you 101 RSI Rollercoaster trades that were profitable on Equities and Commodities. Spot FOREX: sorry. Use at your peril.
