The Most Profitable Trading Pattern You Will Ever Encounter

[chiniebwoy]

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.

Thanks for this comprehensive response Philip. I did take the RSI into consideration; I just didn’t mention it. Great advice concerning the other pairs that I can buy as well as that concerning buying/selling all the currencies at first. After reading it the fifth time, it didn’t seem too complicated. Thanks again and seeing that I’ll be using the system for the first time, I’ll take it slow.

David

[chiniebwoy]

Morning all,
went long on both the EURUSD and EURGBP. All the indicators are lined up.

David

[PhilipPirrip]

Morning all,
went long on both the EURUSD and EURGBP. All the indicators are lined up.

David

I’m long EURGBP as well. But only with 60% of my lot size. The other 40% I’m keeping to use as a hedge with a EURUSD short on the 1 hour when the time is right.

[vasilis1961]

Dear Philip
You wrote <<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.>>

Do you mean that all the above couples anyway gave alerts long and short respectively?

[chiniebwoy]

I’m long EURGBP as well. But only with 60% of my lot size. The other 40% I’m keeping to use as a hedge with a EURUSD short on the 1 hour when the time is right.

Hi Philip,
my 100 pip TP target was reached on the EURUSD. I’m happy.

One question Philip, or for anyone who can assist: I didn’t use any fibs to determine my TP. I simply used a prominent resistance zone (1.12800/1.13000) as a TP level. The reason I did this is when I spread my fib tool (MT4 platform) from the low before the crossover, to the next high, I get retracement levels. If I spread it from the high to the crossover low, I get the extension levels (161.8, 261.8, 423.6). Is this correct? By not using the fib tool, I think I’m limiting myself to just a few pips. Although at this point, I could simply go long again as the signals are still strong.
What do you think?
Thanks.
David

[meads797]

Hi Philip,
my 100 pip TP target was reached on the EURUSD. I’m happy.

One question Philip, or for anyone who can assist: I didn’t use any fibs to determine my TP. I simply used a prominent resistance zone (1.12800/1.13000) as a TP level. The reason I did this is when I spread my fib tool (MT4 platform) from the low before the crossover, to the next high, I get retracement levels. If I spread it from the high to the crossover low, I get the extension levels (161.8, 261.8, 423.6). Is this correct? By not using the fib tool, I think I’m limiting myself to just a few pips. Although at this point, I could simply go long again as the signals are still strong.
What do you think?
Thanks.
David

Why not just open your fibonacci retracement properties window and add the desired levels?

[PhilipPirrip]

Dear Philip
You wrote <<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.>>

Do you mean that all the above couples anyway gave alerts long and short respectively?

No. This is just an example.

[PhilipPirrip]

Hi Philip,
my 100 pip TP target was reached on the EURUSD. I’m happy.

One question Philip, or for anyone who can assist: I didn’t use any fibs to determine my TP. I simply used a prominent resistance zone (1.12800/1.13000) as a TP level. The reason I did this is when I spread my fib tool (MT4 platform) from the low before the crossover, to the next high, I get retracement levels. If I spread it from the high to the crossover low, I get the extension levels (161.8, 261.8, 423.6). Is this correct? By not using the fib tool, I think I’m limiting myself to just a few pips. Although at this point, I could simply go long again as the signals are still strong.
What do you think?
Thanks.
David

Look no one can blame you for setting pre-determined targets. But I would aim for at least 250pips. The pair has already gone 90 pips higher and we are in day 1. You can try to take profits at the 127.2 extension level. You can set a profit of 3 ATR. You can also use the level of 20 and 50 EMA on weekly and monthly as targets. So many ways to experiment with.

The way you mentioned for drawing extensions is the correct one.

[SoulShaper2]

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]

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]

@Voony

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

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]

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]

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.

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]

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…

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]

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

can u please post the links again?

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

[chiniebwoy]

Why not just open your fibonacci retracement properties window and add the desired levels?

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

[Voony]

@PhilipPirrip

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.

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]

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]

@Voony

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…

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]

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?

These were just examples.