Hi Bob and thanks for your thoughts. The RSI is not actually part of the original method, I only added it myself and only use it as a kind of confirmatory signal, i.e. if the RSI happens to also be on the right side on 50 then it is shouting “Go for it!”. But you may well have a good point about time.
But I don’t understand what boxes are or how to use time as an indicator. I certainly do only use the method during the busy times of day but only in the sense that I watch for a good signal after London’s open and then one more after US open or after significant data releases. Normally, I look for maybe 2/3 good trades per day. (Otherwise I would go nuts looking at the screen every 15 mins all day long!
If you could give me a bit more detail about time indicators (sorry for being dumb) I’ll look at it
You were asking about trading on 5m TF? So I thought I would post today’s 5m chart as there are a number of interesting points here:
I mentioned somewhere that I usually only trade crossovers in a direction away from the daily Pivot (purple dashed) and avoid those crossing towards it unless the price is quite a long way away from it. All these points occured on this chart today!
In addition, this shows how sometimes the daily pivot and its resistance and support levels can be useful. The pivot was tested many times, as were two of the resistance levels.
Unfortunately, I was not trading today as there was a major event at the cabin with our Goldeneye sitting on her nesting box calling her chicks into the lake, There is one on the right…
Is this system same with basic of breakout system??
How’s good those trading system?
In liteforex broker, i using scalping hedging EA and work great there
I wouldn’t describe this as a breakout system. It works on multiple timeframes using the higher TF to identify the trend and the lower timeframe to select trade entries and exits.
This is a pretty cool system. I have seen similar systems before but this one actually makes sense. I went to look at it on my charts with fxcm but seems I cant setup the moving averages (or at least cant figure out how to).
The standard FXCM Marketscope 2.0 platform does not include the shift indicator as standard. It is available as a custom indicator (I can show you where if you want it).
However, you can create the same ribbon by using the (Bill Williams) “Alligator” indicator with the “Jaw” and “Teeth” periods set to (for example) “6” and “Shifting periods” set to “0” and “1” respectively. The smoothing method is then set to “MVA” if you want to use simple MA’s. You can hide the “Lips” line By entering “No line” in the “Line style”.
Sounds a bit complicated but is actually quite simple and you can set the settings to “Default” which actually makes it easier to add ribbons with one indicator rather than always setting the shift separately.
The question of which TFs to trade is raised regularly on various threads and, even though I doubt anyone else here actually uses the ribbons, I thought it might be useful to post these 4 recent charts of the EURGBP as an example of the difference in trading longer term TFs compared with shorter term TFs.
Most people agree that generally long TFs of 4H, Daily and beyond are usually more accurate and generate bigger profits, but that they also do demand greater stoploss distances. I think these 4 charts illustrate this rather well.
One of the great benefits of the Ribbon Method is its insistence on using multiple TFs. By following, for example, the Daily/4H/1H charts from top down not only does this produce good accuracy, it also reduces the stop loss requirement by only trading the 4H or 1H “chunks” out of the Daily move. Naturally this needs a good trend but whenever there is a decent ribbon on the Daily it usually means there is a trend.
The first chart is today’s 15M Eurgbp. Any hopes of day-trading a ribbon trade on that is doomed to disaster many times over!
The next chart is 1H and whilst the same intraday period appears less messy, it would have still resulted in some sad whipsaws after a few good trades.
Next is the 4H chart where there has been only one trade since the US elections and todays fuzzy range hardly even notices.
The last chart is the Daily which shows very smooth, long and accurate moves producing big gains, but would have needed a big stop (to above previous high) to have avoided the peak during the elections if the trade had been left open.
The same method on 4 different TFs - but producing very different trading conditions and outcomes.
Hello
Sorry for bringing up this old thread. I have only one question. When looking at the longer TF to find a possible trend, does the candlestick have to close before checking the shorter TF?
