The Most Profitable Trading Pattern You Will Ever Encounter

SoulShaper2 · June 8, 2015, 5:00pm

Been taking time off to study and keep up revision for exams, man I come back and check Philip’s fx book and it’s gone up by a lot! Show’s it’s a good system. Must get back to this in the coming weeks!

Voony · June 9, 2015, 8:27am

Hi guys I’m kinda new to trading and philip’s system caught my eye. I spent the last hour or so to read through and try putting it to work. I just saw this the rules about to line up for this pair… Would like to find out if the conditions are actually right for a buy order in this case

PhilipPirrip · June 9, 2015, 10:52am

This pattern is clearly about to fail now, you should use the RSI filter. If you are in the trade, apply the failed pattern exit.

troparzum · June 9, 2015, 11:15am

hey i read in a post that you have some Youtube videos but i cant find them?

can u please post the links again?

Voony · June 9, 2015, 11:30am

Oh I see… I’m didnt put the trade since I’m not very good at telling whether the pattern would be successful or not. Guess I’m still lacking experience…

PhilipPirrip · June 9, 2015, 11:46am

Use the RSI its really is. When the buy signal is complete, RSI should be above 50. If its a sell signal RSI should be less than 50. That’s the basic idea.

PhilipPirrip · June 9, 2015, 11:55am

I don’t lol. May be someone asked for them but I don’t unfortunately.

chiniebwoy · June 9, 2015, 12:54pm

You can do that? I’m embarrassed to say that I didn’t know that. I learnt something new today.
Thanks.
David

Voony · June 10, 2015, 7:07am

Ok I tried putting in the RSI. I’m trying to get myself used to being able to identify the successful pattern… Not sure if I found one but it looks like this pair is lining up.

*edit erm… never mind the pattern looks like it failed shortly after i posted…

littlemay · June 10, 2015, 8:15am

PhilipPirrip:

Good work. Of course there are other trades that you didn’t mention such as EURJPY and EURGBP.
Another advice I can give is to always avoid that are manipulated by their governments, such as the Chinese Yuan for instance. At any moment the Chinese central bank can blow up your account by announcing they have appreciated or depreciated their currency. Of course that is to their benefit, but it may work against you.

The same applies to Swiss Franc, so you should steer away from it.

Then I also discussed an RSI signal. When a buy signal is complete you need to determine which range the RSI is in:
Above 60: A strong up trend.
Between 50 and 60: an intermediate uptrend.
Between 40 and 50: a weak uptrend.
Between 33.3 and 40: sideways trend that could break in either direction.
Below 33.3: The pattern will probably fail.

For a short signal:
Below 40: a very strong bearish trend.
Between 40 and 50: an intermediate bearish trend.
Between 50 and 60: a weak bearish trend.
Between 60 and 66.6: a weak bullish trend.
Above 66.6: The bearish pattern will probably fail.

A final piece of advice is to look at currencies against the bulk of other currencies rather than individual pair.
For example: Which currency is giving a buy signal against ALL other currencies? Which one is giving a sell signal against ALL signals? Then put those pairs on your watchlist and arrange them in order of their RSI ranges we discussed above.

Another useful idea, is that you want (as much as possible) to buy and sell all the currencies you trade, so that you can avoid a loss and win the difference between risk and reward.
For example, let’s say you decided to buy GBPAUD. Now rather than take all your lot size on that trade alone and risk losing, take only half. Then the other half buy AUDJPY which is giving a buy signal. The rational of that is if GBPAUD goes down, AUDJPY will go up. And if AUDJPY goes down, GBPAUD goes up and you would always win the difference between risk and reward.

Now the problem is if AUD goes above GBP, but JPY goes above AUD so you lose both trades (but the probability of losing both trades is lower than losing GBPAUD alone or AUDJPY alone.) So you need to look for a pair where you can buy JPY. In this case you can sell NZDJPY for instance.

So rather than 0.1 lots on GBPAUD long. You go 0.33 lots long GBPAUD, 0.33 long AUDJPY and 0.33 short NZDJPY.

I hope this isn’t too complicated.

what if there is only buying signal on GBPAUD, we haven’t seen any buying signals and selling signals from AUDJPY and NZDJPY, are you still going to execute three trades?

PhilipPirrip · June 10, 2015, 8:40am

Well if you go back to my original post. I said do not short the pattern if the RSI is above 50.

Now this is a short signal. What was the RSI value when the signal is complete?

PhilipPirrip · June 10, 2015, 8:45am

These were just examples.

Voony · June 10, 2015, 8:58am

Oh right so ema20 is above ema50 and stochastic was at 89.25 meaning overbought? But RSI showed 66.79 so i have to wait for it to go below 50 before putting in a market sell?

edit* oops sry philip my bad saw it wrongly yea… ema50 is above ema20… Uh i actually posted another question to confirm some doubts but the admins have not let it post yet…

chiniebwoy · June 10, 2015, 11:38am

Morning all,
did anyone take that long trade on the GBPAUD? I did. RSI between 50 and 60. Stochs heading up.

David

Voony · June 10, 2015, 1:08pm

I would like to clarify the conditions of placing the buy and sell order… Please let me know if I’ve misunderstood
Conditions for Buy entry

ema20 above ema50
Stoch number is low
RSI more than 50
Conditions for Sell entry
ema20 below ema50
Stoch number is high
RSI less than 50

PhilipPirrip · June 10, 2015, 2:08pm

No I’m confused now. I thought the 20 EMA was below the 50 EMA in the picture.

meads797 · June 10, 2015, 2:19pm

I am in this trade at the moment. There is some [B]very strong [/B]resistance at the 2.000 level. If that level breaks, we could be in for a strong move up.

chiniebwoy · June 10, 2015, 5:22pm

Meads797,
agreed re the resistance. that’s where I had my TP. Target was just hit.

David

chiniebwoy · June 10, 2015, 5:39pm

Afternoon guys,
I have a question that’s unrelated to this thread.
Just looked at my charts at 1600hrs/4pm (time zone R; I’m in Jamaica). 4pm or 9pm GMT is when my platform/broker starts a new trading ‘day’. So on the daily chart its when that candle for the day opens.
I’ve always heard of these ‘gap up’ and ‘gap down’ movements and, of course, I saw some significant gaps appearing on all the NZD pairs, in one direction or the other. Now I always thought this would normally occur at the start of the trading week. Never saw it before during the week. Can anyone provide me with a simple explanation? Did some announcement take place in a country?
Thanks
David

azz33 · June 10, 2015, 9:45pm

Yeah the RBNZ lowered their interest rates.