The Most Profitable Trading Pattern You Will Ever Encounter

Wearethechamp · March 25, 2015, 10:15pm

Hi Philip,

I would like to ask when the 20 above 50, and stochastic has went from overbought to oversold and just little bit cross above signal line and enter, but it went down further and left the signal line again. is the trade still valid?

Dolar · March 25, 2015, 10:29pm

Looks like NZD/JPY is about to pop. AUD/USD also.

azz33 · March 25, 2015, 11:48pm

AUDJPY and NZDUSD

Collector51 · March 26, 2015, 4:19am

PhilipPirrip:

@Shuo: There is no shift to the EMA. Its applied to the close. For stop-loss, I use mental stops because its more comfortable that way. Those who like to place stops 10 pips above the high if its a sell and 10 pips below the low if I’m buying. So in the USDJPY sell signal I posted a picture of above, I’d place the initial stop loss 10 pips above the area I labeled “high point.” Something I wanted to stress to you; the distance between the entry and the stop loss is always worth 1% of my equity on 4HR, daily and weekly charts. If I’m in the mood for over trading and use the 1hr or 5 minute charts, my stop loss is only 0.2% of my balance. I use the baby pips position size calculator to know my lot size.

@Odds on: I agree with you that stochastic is one of the best entry indicators any trader will ever use. My strategy actually started as a moving average cross over system. But I started noticing that price moved against my entry quite powerfully before storming in my favor. I started to experiment with other indicators in search for a work around the retracement problem and I came across that pattern; whenever the 20 EMA and 50 EMA crossover, stochastic will be on the other side of the crossover. It only happens with the 20 and 50 ema, it was almost magical.
The Fib addition is really my legacy to trend following systems hahaha. I think I’m the first trend follower who buys the dip rather than the break out. But I also think my system offers a much more accurate exit strategy than almost every other system. Before introducing fibs I used to give up an average of 40% of my gains. Now I enter very early and leave out only 5-10% of my gains.

Tomorrow I will share two trades that didn’t work out, this is where the pattern gets really powerful.

Hi Philip

I look forward to your follow-up posts,

I am currently testing your system on AUDUSD (with standard stochastic settings) and it seems to be showing the trade set-up as you described, but on H1 rather than H4. Can you please comment?

Wearethechamp · March 26, 2015, 5:46am

Thank you for your strategy. Looking more pips~

Dolar · March 26, 2015, 7:49am

[QUOTE=“azz33;691575”] + AUDJPY and NZDUSD[/QUOTE]
Missed those ones.

Dolar · March 26, 2015, 9:19am

Looks like AUD/USD is about to pop again.

YamYam · March 26, 2015, 11:03am

Another set up coming on the EUR/JPY

pipalicous · March 26, 2015, 11:47am

Me too!, US SPX and US 30 both had good setups but i think it was the economic fundamentals that made them both bearish EMA 20 has now crossed below the 50 EMA - The US’s durable good orders for February came in at -1.4% rather than the consensus of 0.4% and last months 2%.

pipalicous · March 26, 2015, 11:49am

Im using CMC markets, there a spread betting provider in the UK, i’m not sure if they operate outside Great Britain and Northern Ireland you’ll have to check.

pipalicous · March 26, 2015, 12:13pm

Above posts in reference to darthtrader and meads posts - forgot to quote their posts.

ToengToeng · March 26, 2015, 11:40pm

Hi Wearethecamp, in those profit you’ve made, is the only successful one is the last one (the one which yielded 39.66 SGD) ?

How about the other 6 trades? are those failed patterns saved by not closing on the initial stoploss (Just like what Philip did in the 2nd page)? or are they valid but only for a short period?

ClarkFX · March 27, 2015, 2:20am

Nice strategy Philip! It’s interesting to see other traders using MA crossovers as a leading signal rather than lagging. The extra filter with stochastics works great as confluence for trading pullbacks.

All the best!

Wearethechamp · March 27, 2015, 2:32am

Hi ToengToeng,

As per what i understand from Philip, the only time we conclude a “failed patterns” is when the opposite signal is being formed.
Yes those pairs are currently in the losing end, but we only close trade only when the opposite signal is being formed.

Sorry im newbie too. Correct me if i’m wrong.

ToengToeng · March 27, 2015, 6:07am

So in conclusion, you close all 6 trades just before the pattern fails (opposite signal is formed), just like Philip did when a pattern fails ? Thanks for the response btw

ForexJer · March 27, 2015, 1:04pm

Guys, I’m a newbie here. I used Philip system and found that AUDUSD and EURUSD pop a buy signal while we are having a strong down trend for both pairs. Shall we ignore the setup or we just buy whatever we can see ?

Dosojin · March 28, 2015, 3:45am

Philip or anyone that can help. I’m having trouble with the fib extention. I’m using mt4 and its called fib expansion.

am I using the right tool?
can anyone share some details on setting it up correctly? ( I have scrolled through and found info Phil shared about it being 1.618,2,2.618,3 and so on but when I enter those figures and draw it as instructed it doesn’t seem to work for me.)
when speaking about the main line crosses over on the Stoch,are we talking about the main line -20 & +80 or the k Stoch line?

Any help would be great.

jw1981 · March 28, 2015, 3:51am

Trade what the system tells you. If in doubt, take a smaller/smallest position on such trades and see how it goes.

I’ve had two such losing trades that were recovered this week.

GBPUSD H4 Sell
and Brent H4 Sell, which overshot by a large margin only to reverse back. The trade is now close to my original sell entry.

Bobkat · March 28, 2015, 9:32am

How were this past two weeks for everyone’s closed trades? Previous week yielded +300 pips and +25pips respectively for me.

jw1981 · March 28, 2015, 9:58am

I started looking at my log since I began following this method since 17/03 in one of my accounts. Results are decent.

[B]Week 12 (16 - 20 March)[/B]
Total Pips: 1636.7
Excluding Gold from the equation it was -134.3 Pips on Fx

[B]Week 13 (23 - 27 March)[/B]
Total Pips: 641.6
Note: Did not trade on Friday, so that’s the tally for 4 days

Observations:

Money management is of utmost importance with this system. Even a slip for a moment into getting greedy is enough to rip your account apart.
Trade only the first signal and add to positions only if you are already in the trade. Use proper MM rules while adding to position
Recovery trades happen, but it takes their own sweet time (refer to point 1 about MM in this regards)
I enter a trade on the closing price of the Candle that signaled the trade. Price usually hovers around this level for 2 - 5 candles before moving.
I strictly buy only when Stochs cross up from 20 and sell when Stochs cross down from 80.
Points 4 & 5 have been especially helpful in the recovery aspect
Last but not the least, I split my trades to book partial profits at 100%, 127.2%, 161.8% and let the final trade run its length

Hope this helps others who are just getting started with this method.