[QUOTE=“jw1981;687184”] Nice catch leon. I have my set up for AUDNZD too. In fact all systems a go for this one. Daily shows a bullish continuation and weekly is a very nice bullish candlestick. I’m waiting for the stochs to pullback but also watching a retracement to 1.037ish levels. AUDJPY are shaping out for a short trade, and the same with GBPJPY too where a pullback is likely.[/QUOTE]
So u means AJ is risky for a long trade now?
I don’t believe all traders would be millionaires if there were a way to anticipate a consolidation. Just the ones who knew how would be millionaires. :54:
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I’m not sure what the question is. If it is “when a bullish crossover stochastic is below 80” then my answer would be not to trade that. It is very rare on higher timeframes though. The idea of the pattern is in a bullish crossover stochastic will be overbought and in a bearish crossover stochastic will be oversold. This is the pattern that I say is most profitable.
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Well what I don’t like about 14,3,3 is that overtime, what I saw is that it missed some entries that 14,3,1 didnt. For example if its a sell signal, the 14,3,3 sometimes misses an overbought signal that the 14,3,1 caught.
It is very strange, changing the values of EMAs also makes “bullish crossover, overbought” combination disappear. The pattern [B]works only on the values I mentioned[/B]. I tried all EMA combinations from 1-80 and stochastic from 14 to 30. The numbers I found were the only ones that saw that pattern, I got lucky in stumbling upon this system.
I hope this answers your questions.
Whoever is reading and trying to understand mechanism behind how it all works, we all got lucky :13:
There’re many possible long and short trades to be traded for the week ahead but no valid signals just yet.
Hi Philip, thank you for sharing this and spending the time to explain the strategy so thoroughly. I’m trying to make sure I understand the rules you are using and I wanted to ask about a specific (historical) example.
The image below shows the USD/JPY 4H candles for Oct 2nd to Oct 30 2014. The EMA 20 crosses below the EMA 50 on Oct 7th. At this time the stochastic is showing oversold and we enter when it is showing overbought on Oct 20th.
The EMA 20 then crosses above the EMA 50 on Oct 23rd. At this time the stochastic is overbought, however the stochastic doesn’t seem to reach oversold immediately and the trade begins moving away from us. In fact it doesn’t reach oversold until Nov 10th:
Please note that although my stochastic indicates (14,1,3), I think this is equivalent to your setting. If I use (14,3,1) I get a single line:
Have I followed the rules correctly in this case? What would you have done in this scenario?
Thanks again.
Guys I got two question.
- in this situation, will you guys enter the sell trade? Because the candle already goes above the EMAs which is higher than the crossover place, but still getting the signal from stock to sell, what will you guys do with it?
- this downtrend is still valid to enter the trade? Or wait for a new up trend better? Can I go for sell?
I suspect at the time of the entry short on the UJ around 20th October - the weekly would have been showing a long Bias - given the previous couple of months on the 4 hour shows a definite uptrend.
If this was the case I’m betting Philip would not have taken the trade short (sorry if I am speaking out of line here Philip).
If you had taken the trade short on the 20th - by the rules - well my understanding of the trade rules - you would have held onto this trade until you got a reverse signal to go long - at which time you would have exited - which was around October 27th. Exiting here would have got you out at less than half your initial Stop Loss.
Your charts don’t show Stochastics crossing into the oversold area on the 20th October - which is a problem as you wouldn’t have gotten the signal to exit the trade and your full Stop Loss would have been hit.
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Using 14,1,3 is definitely different than using 14,3,1.
Philip has gone to great lengths to make this system as precise as possible so why stray from his settings ?
What do you think about GBPAUD?
Just remember leonlee - Philip trades only the first signal after the EMA cross - not every subsequent signal.
Seems the first signal is the most powerful - and most likely to work out.
Is GBPNZD now a sell at the close if this 4H candle? It just crossed below overbought levels on MT4 charts
I think the explanation here is the order that different platforms show the stochastic settings -
On some platforms (MT4 included), it’s (K%, D%, Slowing) - 14,3,1
On cTrader that I use (& other ones) stochastic is shown as (K%, Slowing, D%), hence 14,1,3.
[QUOTE=“Bucketman;687317”]Just remember leonlee - Philip trades only the first signal after the EMA cross - not every subsequent signal. Seems the first signal is the most powerful - and most likely to work out.[/QUOTE]
Thanks man!
Leon .
Yes you definitely have. Although had you would have been terribly unlucky because had you been trading the signal before October, you would have caught USDJPY long @ 102, that short signal you would have still been long through it until price reached 120 and it would have been your best trade of 2014. I remember it because I was in and doubled my account with that trade.
Hi Philip,
GBPAUD is about to give a sell. However stochs hasn’t crossed to the downside just yet. I was wondering how exactly you’d make the entry. Would you enter short as soon as the stochs cross to the downside regardless of the candle that is being printed in shorter TFs ? say even if its against your direction ?
GBPJPY could show a signal soon too.
and AUDNZD as well?
AUDNZD we wait for stochs to reach oversold area as we’re looking to go long.
Yes for GBPCAD, that would be the first signal after the bearish cross. Same with GBPAUD. Bearish cross of EMA, now waiting for Stochs to be OB above 80 to enter short.