The Z Pattern

Kasravi · July 31, 2014, 5:55am

doubleu:

Hi Kasravi,

I’ve been following this thread and familiarizing myself with the concept and rules. Questions I have at this point are in regards to trades triggerring during the unfavourable trading times and I’ll use the recent AUD/CAD H4 short as an example.

This setup was initially triggered during asian session so we wouldn’t enter as this is an unfavourable time. However, by the time the europe/london came around price had retraced up and gave the opportunity to set an order at the original entry price.

As it has basically given us a second opportunity would we set this entry given that it had already triggered in asian session or do we just pass on it?

If the answer is no due to already being triggered then I would I take it that we would set the order if it had not been triggered during asian session and was still valid. Is that correct?

I’m currently in this trade on demo of course so would like to clarify this point.

Thanks

Hi doubleu,

Sorry I couldn’t chip in yesterday as 200kg of flat packed furniture arrived yesterday from our latest shopping frenzy in Ikea!

As a rule of thumb, I always re evaluate a position in the morning. If it’s still valid and looking good then I go for it.

The Aud/Cad as I mentioned yesterday was a good opportunity. Turned out to be a killer trade so far.

Best

roni25 · July 31, 2014, 7:32am

Another Z pattern I spotted on the gpbusd 1hr chart this morning.

Looks like it going to bite the dust… Seriously losing faith.

doubleu · July 31, 2014, 8:12am

Hi roni,

I checked gbpusd H1 chart on two brokers and neither one fits the rules. Make sure the chart is on max zoom (as large as possible) and check if yours fails for the same reasons as mine does.

Firstly, the middle line of the Z goes outside the channel. Secondly, the last part of the Z pattern (final bar’s close) is also outside of the channel so doesnt match the top size which means no trade for me as it fails the criteria.

Please re-check you chart and post fully zoomed in one so we can compare.

Cheers

Sparatacus · July 31, 2014, 8:27am

4hr set-up on USD.JPY - only problem is major news due out shortly.

I like it for a lot of reasons though. 103.00 major psych level, shooting star, overbought CCI and price has shot away from the averages. Hopefully price is overextended and due for a correction.

Update on News: US unemployment claims 302k vs 303k forecast. Not ideal but I might just ride this trade out and see what happens. Cheers

Kasravi · July 31, 2014, 9:30am

Strangely I don’t see this Setup, but I like to see a retrace too.

I traded the 4h eur/usd ZP today. Short and sweet trade.

Best

Sparatacus · July 31, 2014, 5:06pm

Could be using different platform with slightly different close times on candles etc. Think my one is based on U.K time.

Cheers

Sparatacus · August 1, 2014, 7:22am

Starting to get nervous with the USD.JPY trade. With the big news event (USD NF employment change and unemployment rate) today the price will no doubt spike both ways and take out any close stops! Going into damage control mode…

Sparatacus · August 1, 2014, 8:50am

USD Non-Farm Employment Change 209K actual vs forecast 231K
USD Unemployment Rate 6.2% actual vs forecast 6.1%

Well the economic data today works in favour of trade however seems to be underlying yen weakness or US dollar strength at the moment (or combo) and after a brief dip to 102.80 has gone back to 102.90 region… waiting game again

roni25 · August 1, 2014, 10:07am

What if the trades placed within the trading times allocated run onto the new york session or out of trading times, is that ok or do we close Kasravi?

roni25 · August 1, 2014, 12:27pm

2 trades, both within trading times:

EURNZD- 1hr chart, nearly hit TP but didnt quite make it so closed trade at break even.
AUDNZD- 30min chart, TP just about hit, managed about 10-15pips, Profit target was at 16pips.

Kasravi · August 1, 2014, 3:41pm

If I see a trade is playing up and risking to run into the next trading session or important news releases. I do protect capital at all cost. Not giving a quarter away.

Best

Sparatacus · August 1, 2014, 9:21pm

Quite happy with the 4hr USD.JPY trade. Was fortunate that the big news favoured the direction of trade. I ended up jumping out at 102.54 as had a 20pip trailing stop and gained 32 pips. Also happy to be out of market over weekend. Hopefully more juicy ‘z-pattern’ set-ups next week!

Cheers

Kasravi · August 2, 2014, 4:51pm

You the Man!

Best

Kasravi · August 5, 2014, 2:46pm

Eur/Nzd 1h

Currently stalking this Z Pattern Setup.

Best

roni25 · August 6, 2014, 12:01pm

Was also watching this setup, however it broke out of the Z pattern later…

RTrading · August 7, 2014, 2:29am

Hello Miad,

First time I appear on your forum (on any forum actually!).

First, thank you for participating in so many forums + your blog, from what I can read you are one of the seniors contributors whose posts are helpful.

Second: please do not take my question as a trick, but I come from a mathematical background and I am a fierce defender of statistical studies!
Concerning you Z-pattern methodology, which by the way makes sense: have you thoroughly backtested it among all the pairs you trade, or have you set up your trading plan “by hand” (I mean have you tested the methodology live for X months/years to be able to have enough confidence in it)?
If you did make backtests, could you please share the results in order to support it (without revealing any proprietary information)?

Again, I do not want to be mean or trick you, but I found that sometimes strategies that make sense “in the brain” do not pass the test of statistical historical studies (and time after time this is destabilizing), hence my question.

Thanks a lot for your time,

RTrading

Kasravi · August 7, 2014, 5:35am

Yeah a shame it looked juicy!

Best

Kasravi · August 7, 2014, 5:46am

RTrading:

Hello Miad,

First time I appear on your forum (on any forum actually!).

First, thank you for participating in so many forums + your blog, from what I can read you are one of the seniors contributors whose posts are helpful.

Second: please do not take my question as a trick, but I come from a mathematical background and I am a fierce defender of statistical studies!
Concerning you Z-pattern methodology, which by the way makes sense: have you thoroughly backtested it among all the pairs you trade, or have you set up your trading plan “by hand” (I mean have you tested the methodology live for X months/years to be able to have enough confidence in it)?
If you did make backtests, could you please share the results in order to support it (without revealing any proprietary information)?

Again, I do not want to be mean or trick you, but I found that sometimes strategies that make sense “in the brain” do not pass the test of statistical historical studies (and time after time this is destabilizing), hence my question.

Thanks a lot for your time,

RTrading

Hi RTrading!

Very warm welcome.Thanks for the kind words.

I have an article about how to boost winrate and Live trading results on my page.
Which could give you some statistical insight.

Historical wise, I discovered the pattern many years ago. But I didn’t really know how to unleash it’s full potential until I had confidence to go full time in '12.

The best way to make profit from Z Patterns is to trade it inline with your anticipation. For instance, if price on the chart pulled back and you believe it could go up again. Then a Z Pattern is your entry signal.
I try to cover as much about anticipation as possible. Share how I read the market and where I trigger my trades from. And will continue to do so.

Hope I made sense. Fire away if you got anymore Qs.

Best

roni25 · August 7, 2014, 7:38am

Not many Z pattern trades this week!

roni25 · August 11, 2014, 10:29am

No comments since the 7th of August… Come on guys lets not allow this forum to get dead like all the others! I have some faith in this strategy!