Strategy 10/20

Another on the USD/CAD 1H chart this time for 14 pips. It did bounce before hitting TP, but then came back down. I use the top channel as my SL.


ScottE,
Nice trade on the hour. Here is my current long trade on the hour chart.
GJ



Lost last trade for -25 pips
This 2 minute chart scalp was a winner.
6 pips
22 of 26
304 total
With the market being choppy I went to a two minute usd/cad and had good results.

9 pips
23 of 27
311 total
Back to the 15 minute chart. Took profit because usd/cad was rather oversold.
GJ



Current short set up on a 30 minute chart.
GJ


20 pips
24 of 28
331 total pips
Results of the previous posted trade. I find that the 30 minute chart offers the most consistent outcomes of the various time frames I have tried, 1, 5, 15, 30 minute as well as 1, 2 and 4 hour charts. Not a great week, about 30 pips. The previous three weeks had averaged about 100 pips a week.
GJ

18 pips
25 of 29
349 total pips

Although I usually stay away from Sunday night trades this 2 hour chart short met the set up rules so I took the trade for 18 pips.

GJ



Hi Greg, thanks for putting this on the forums. I’ve been exploring this strategy for several hours. It does seem to work based on the following premises; it is trend following (line of 50 sma) and buys on pullbacks, it uses support and resistances (50 min sma, 21 period donchian). Some questions have popped up, perhaps you could advice.

  1. If there was previously no RSI 5 period dips to the levels under 35 (for longs) or above 65 (for shorts), but if all else still exist; price above 50 sma and crossing of donchian mean for longs, and the reverse for shorts, would this still constitute as a buy signal? I noticed that this happens quite often especially with extended rallies.

  2. And because of point 1, I started looking at longer time frames, from 5 mins, to 10, 15, 30, and 60 minutes hoping to find a pair where all criterias can be met. Is this the right method? And if there is a chronological timeframe search for criterias to meet; longer to shorter, or shorter to longer timeframes?

  3. When a pair starts moving in reverse; say 15 mins timeframe where trend is supposedly long, where price breaks back down into the the 50 sma and past the donchian channel, would this still constitute as a short if RSI was overbought several bars back? In this scenario, the 50 sma would start tilting slightly down because of the price breaking under 50 sma, and donchian channel would previously be pointing up, and start pointing down.

  4. Further, if 50 sma was sideways, and donchian was also sideways, but if RSI criteria was met several bars before, would this be still a valid trade if there was enough room either up or down on the donchian?

  5. I see how the donchian can be used as a stop, but for targets I find it a little premature in cases where there are extended rallies, what’s your opinions on this?

My first post on babypips, lol and it’s a long one. Sorry Greg.

rayphua, Thanks for the comments. First if you have read may comments on this strategy you know that this strategy is only a guide, each trader must adapt and response to each new situation the market presents. Second, money management is often more critical than the trade itself.

A friend of mind uses this strategy by first surveying the 30 minute chart. If he sees a good trend he this will survey the 15 and 5 minute charts for a set up and entry. He then will stay in a trade until the RSI reaches oversold or overbought territory. I think this is a great adaption of the strategy. However for me I find the markets chaotic and random and I attempt to exploit opportunities more by what I observe at any given time. For example rather than survey from larger time frames to smaller often I will do the exact opposite.

  1. Yes, but the RSI being oversold and overbought brings a certain force to the movement kind of like a magnet in that the market if trending wants to return to the trend. I will take trades that do not meet all the rules, but know that the trade may not have the same chance to win. These days I trade less and have a higher winning percentage.

  2. I think I answered this in my opening. Both longer to shorter and shorter to longer. Too me I survey and then it comes to me like a punch. I know that I know. It is important not to try to make something out of a poor quality setup. The slope of the 50 sma is important too.

  3. I want to see all three donchian channels holding the same direction in this situation.

  4. I don’t think this would be a good set up. You might want to post a pic of this issue.

  5. Yes, good point. I don’t do as well with extended targets. My friend waits for the RSI to return to trend before exiting. My best trades are often within recent highs and lows.

Thanks for the comments. You know that this is not one of the more popular strategies here on Babypips. But it works for me. It is a grind, but the weekly totals are respectable for me. Prior to using this method my trading was up and down. With this method I get steady results.

Thanks,
GJ


I did not take these two trades, but they are example of good opportunities.
GJ

[QUOTE=Greg Jones;385055]rayphua, Thanks for the comments. First if you have read may comments on this strategy you know that this strategy is only a guide, each trader must adapt and response to each new situation the market presents. Second, money management is often more critical than the trade itself.

A friend of mind uses this strategy by first surveying the 30 minute chart. If he sees a good trend he this will survey the 15 and 5 minute charts for a set up and entry. He then will stay in a trade until the RSI reaches oversold or overbought territory. I think this is a great adaption of the strategy. However for me I find the markets chaotic and random and I attempt to exploit opportunities more by what I observe at any given time. For example rather than survey from larger time frames to smaller often I will do the exact opposite.

  1. Yes, but the RSI being oversold and overbought brings a certain force to the movement kind of like a magnet in that the market if trending wants to return to the trend. I will take trades that do not meet all the rules, but know that the trade may not have the same chance to win. These days I trade less and have a higher winning percentage.

  2. I think I answered this in my opening. Both longer to shorter and shorter to longer. Too me I survey and then it comes to me like a punch. I know that I know. It is important not to try to make something out of a poor quality setup. The slope of the 50 sma is important too.

  3. I want to see all three donchian channels holding the same direction in this situation.

  4. I don’t think this would be a good set up. You might want to post a pic of this issue.

  5. Yes, good point. I don’t do as well with extended targets. My friend waits for the RSI to return to trend before exiting. My best trades are often within recent highs and lows.

Thanks for the comments. You know that this is not one of the more popular strategies here on Babypips. But it works for me. It is a grind, but the weekly totals are respectable for me. Prior to using this method my trading was up and down. With this method I get steady results.

Thanks,
GJ[/QUOTE]

Hey Greg, thanks for putting in the time to reply to my earlier post. I’ve got more questions.

Previous 3. I assume when you say all three donchian channels, you mean the top, middle, and bottom Donchian lines?

New questions:

  1. In one of your early posts, you mentioned that it was also possible to use the 20 sma in replacement of the 50 sma. In the current approach we have the 50 sma which we use for trend direction, but if we are to use only the 20 sma, which is very similar to the 21 period donchian middle line, what would we then use for trend direction without the 50 sma? Would it work as good as it would with the 50?

  2. You also mentioned in one of your recent posts that you find the 30 min setups were better, could you please explain why.

Thanks again Greg.

Yes, in regard to the donchian channels.

  1. I intended to say that using the 20 sma with the 50 sma. So if the 50 is in a trend and the 20 sma hooks into the 50 sma that would be another way of looking at retracements. Now I have removed the 20 sma. I like a simple chart.
  2. I find the most good set ups on the 30 minute. There is a balance and the 30 perhaps offers the best balance is not so much static and also set ups that move enough for a decent trade.

I used to use many indicators, now I find peace and success with just the donchian channels, RSi and 50 sma. More is not better in my mind. Observing the price action is just as important.

Part of the aspect of this method is the faster RSI setting at 5 while the DC is at 20. So when we observe the divergence we see opportunity within the trend.

Good Luck!
GJ

18 pips
26 of 30
364 pips



This long too a long time to hit, got in a little early but it still hit with a profit.
GJ


The last trade was actually set up on the one hour chart. I had shifted view to the 15 minute during the trade period. The hour chart shows the set up much better.
GJ


1/1
21 pips
After a vacation I have been trading with longer time frames. One, two, three and 4 hour charts. Here is a winner from last night. I will start posting a new set of longer time frame trades. This is a 4 hour time frame.
GJ


Pending trade with a usd/jpy on 3 hour chart. Another chanage I have made is scanning other currencies beyond the eur/usd. I’m hopeful on this usd/jpy trade but not overly confident. I might have set my target too high.
GJ

Out of trade with 15 pip loss.
GJ


Current trade, short on aud/usd on a 3 hour chart.

GJ


25 pip win
2/3
32 total pips
Trade hitting support, bailed with a moderate profit.
GJ


29 pip win
3/4
61 pips
Day chart on the aud/usd for long win. The formation formed on the day chart so I took it and pop a nice win!
GJ