It is extremely slow stress when you choose a relaxed time frame and use solid money management.
I was wondering which timeframe was your trade as I’m struggling to find the pattern. Its either your data is different or you didn’t wait for stochastic to go all the way to the oversold levels (which is also valid, although its better to take half a position in that case.)
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I took the trade on the AUDJPY 4h chart. Probably a little too enthusiastic to try the system as Stochastics only went into the Oversold area briefly. Still - trade is still going and in the money.
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Yeah its a valid trade well done. I think that we both operate on different time zones so we get slightly different data. Good luck, don’t forget to draw your fibs.
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Hi Phillip. Thanks for sharing your system.
Look at Bucketmans charts. They are big and clear. Are you able to get your charts clearer like that? Your charts are a little difficult to read in comparison. Thanks and keep up the gr8 work. G
I hope someone can help me with that, unfortunately this is the only way I know how to share images.
Now I want to move on to something that’s very important and very profitable.
We should now all have a clear idea what the pattern is; first an impulse move to the upside or the downside, identified by a crossover of the EMAs. Then stochastic being on the opposite extreme (if EMA cross up, stochastic is overbought, if down its oversold), telling us a pullback is near. Stochastic moves to the opposite extreme telling us pullback is almost over. Stochastic crosses over from extreme, telling us trend will continue.
So an alternative way to understand price movement is: EMAs cross over, we anticipate that stochastic will move to the other extreme (pullback). Then we hop on the trend when stochastic crosses over from other extreme (trend continuation).
This is a very valuable tool, because now we can analyze and predict what phase is price in, simply by looking on the weekly timeframe. Then using the lower timeframe (4HR) to capture huge moves.
Here is an example of how useful the pattern is in predicting price movements. Not all weekly charts will be this clean, but I thought it will be a nice educational example. You see that EMAs crossed to the downside, telling us gold will make strong down moves. Everytime stochastic got to overbought and crossed, we saw a massive multi-week fall in gold. So we were able to, quite accurately anticipate that a top was near everytime stochastic got to overbought. The most reliable signal is always the first, but the rest are valid as well. Let’s look at the most recent example.
You can see the same vertical line from the picture above (This is the one on the right in the Weekly chat image).
You can clearly see that during that time Gold has actually just given a buy signal And because this system is so great, entering long then would not have faked you out. You would have made massive profits entering at 1212 and exiting at 1256.
But what I want to focus on is the short signal we anticipated. I had a friend who used COT report to anticipate that same short. I provided him with the same weekly chart above to tell him that I though a decline was inevitable. However he entered and was stopped out. Using this system, you would have had the same bias and entered the same short (short at 1274). But instead, the worst thing that could happen is that the 4hr candle close above the 1.618 extension (1218) and you would have caught a $56 decline in gold in 12 days. This is assuming that gold will not fall down further, which seems the more likely scenario.
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I just wanted to thank you for sharing this system. Simple and easy to follow, and seems very profitable!
I’ve backtested 15 currencypairs from the end of 2014/beginning of 2015 and by mechanically following this system would’ve yielded around 7000 pips (included only 2 loosing trades with -106 pips) !!
Currently backtesting for 1H charts to see how this system does, but thanks alot for sharing! Looking forward to trade it in the coming weeks.
Chris
Hello Philip,
my chart may look a little different to yours as I use Oanda as my broker so the feed may be slightly different.
I use Snagit for all my screenshots - I like it because you can capture just a region of the screen - and use it to place arrows and text on the capture - you can find it here - Screen Capture Software for Windows, Mac, and Chrome | Snagit. I have also used Greenshot which is also good - and free - can be found here - Greenshot - a free and open source screenshot tool for productivity
HI Chris, which time frame were you testing? Thanks.
Hi philipp
Thanks for your strategy…i made 19% in 4 days with 3 trades…hope it will go on like this 
Fantastic results Forexmike - can I ask - how much % you risking per trade as 19% off three trades is quite a lot.
Also, which pairs did you trade.
the trades were with GBPCAD, GBPAUD and EURAUD…i trade with the minimum trade size (1k)…
i don’t expect that kind of growth to be sustainable…just some good trades and hopefully the strategy keeps being profitable overall…
I entered on GBPAUD the last friday, I think the conditions were fine for entering, according to this system, I’ll post a pic explaining it asap.
Hey Philip,
When the two EMAs crossover, what’s the maximum amount of time that you wait for the SO signal before entering a trade? Because sometimes it takes a week or more
4H timeframe. Sticking strictly to the rules (Trail SL at fib ext.levels and if the trend is turning, exit open positions only when the indication AND confirmation of the new trend is there - if haven’t hit SL yet)
Opened a new trade today when the markets opened on CHFJPY. EMA crossed from above 16.2.15 and got the stoch.confirmation 20.2.15. Opened a sell position @ 126,45 and currently in the money with 100 pips on my first “live” trade with this.
For as long as it takes Costa.
Hey Phillipp
Awesome system. Thanks for sharing. I’m a bit confused about th exit strategy though. Do you use both fib retracements and extensions? And I’m kinda new at this, how do you pick the high and the low to draw it from?
Thanks
awesome system…i used it on EURUSD,USDJPY and EURJPY…opened trade with lot 0.01 for the 1st time used… time frame 1H and 4H…to remind me, i wrote the key words as a background…haha…and here is my result as a newbie…
awesome system…i used it on EURUSD,USDJPY and EURJPY…opened trade with lot 0.01 for the 1st time used… time frame 1H and 4H…to remind me, i wrote the key words as a background…haha…and here is my result as a newbie…