Hey is their anyone her trading Steve Primo strategy #5? Looks like a solid strategy and very logical, trend following and engulfing pattern. Would be interesting in hearing if anyone has been actively using this strategy and how profitable it is on the H4 timeframe.
You can use it successfully BUT… lots of whipsaws trading strictly as Primo suggests. The trick is:
- Find a strong uptrend
- Wait for a decent pullback with an engulfing bar setup.
- Let winners run and run and run to make up for the many, many, many stop-outs.
- Trade only in the direction of the larger timeframe (such as trading the 4 hr when it agrees with the daily).
It is not a bad little strategy. It is not as easy as taking any old engulfing bar above the 50 sma as Primo suggests. That will bleed you dry rather quickly. You will have many trading opportunities as engulfing bars appear quite often so learn to be rather selective.
There are a couple of threads at FF and another forum or two that are spin-offs of Primo’s #5 strat by a guy called 60 Minuteman. One thread is called “Buy/Sell Line” and the other “4 Hour Power,” I think.
If you are new to trading it is a good strategy to cut your teeth on. Just learn to be selective and let your winners run – no 1:1 or 2:1 or even 3:1 reward to risk. The strategy essentially lets you jump into what you hope is a major trend at a discount (the pullback).
Good luck!