Ok as you can see on the daily chart we are still in an uptrend. The last few days have only been a correction as illustrated by the fibs level that was hit.
So gbp/usd is still in an uptrend in my opinion. So i will prefer long trades and look for 40-100 pips per trade.
On the corrections (short trades) i will look for 10-20 pips and nothing more because i dont like trading against the trend. I will also only play half the lots i use for long trades
Thanks for the clarification and your patience 
no problem:)
This looks very good to me and I want to demo it. What is the Stoch settings? as I can’t quite make them out on your charts. Thank you for the time and effort and I’m happy that this is a strategy that you have worked with and has some history to it.
I am using 5,3,3 setting on stochastics.
…on the daily chart, when would trend change be signalled for you?
On daily chart longterm trend would change once important trendline or support/resistance level is broken
Short term trend would change once the V-formation is in place
Chuck
How do you deal with inside/outside bars ? For example you could look at an outside bar from both perspectives - say candle 1 is ‘normal’, candle 2 is an outside bar, candle 3 has higher high - are we now in an uptrend looking for a lower high to start the v-formation off and sell, or are we now trading the breakout of candle 3 against candle 2, and are already long?
Inside and outside bars give me confirmation on the v-formation. Normally the inside bar would be candle number 2 in the v-formation.
But i only pull the trigger on the 3rd bar
Ok
The inside bar could be a candle 2. Eg in an uptrend, it is the first candle to make a lower high, and thus the candle whose low we will look at.
But what about an outside bar. In an uptrend, the outside bar gives us another higher high (along with a lower low). Does this mean you consider the trend still intact or do you consider the lower low to have broken the trend, and thus look to sell a breakout below the OB low.
Thanks again
In an uptrend the outside bar (bullish engulfment) is confirmation that the uptrend is still in place.
In a downtrend the outside bar (bearish engulfment) is confirmation that the downtrend is still in place.
In a uptrend the outside bar (bearish engulfment) is signal of potential reversal but i would wait for another candle to form making a lower high and then i will sell when the 3rd candle that forms break this candle
In a downtrend the outside bar (bullish engulfment) is signal of potetial reversal but i would wait for another candle to form making higher high and then i will buy when the 3rd candle that forms break this candle.
So at anytime i will wait for a 3 candle set up.
Uptrend:1st candle makes high. 2nd candle makes lower high. 3rd candle is entry candle when it breaks low of 2nd candle.
Downtrend: 1st candle makes low. 2nd candle makes higher low. 3rd candle is entry candle when it breaks high of 2nd candle
Forgive the newbie questions but I assume the Stoch’s setting is “Slow”? And do you have a pip guideline for candle #2 ie does the lower high or higher low have to be more than one pip, 2, 3? Thanks for posting this strategy and spending time with us. d.
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stoch seeting is 5,3,3
I have traded only this strategy this week and so far have had good results - still demoing and I find the visual aspect of the 3 candles easy to see and follow. There are several candlestick patterns one can follow but IMO this the easiest and offers several opportunities to trade during the NY session. Either I am too tired or this strategy is not quite as effective during the Asian so I stick with NY. Thanks again, d.
Yes i agree. Stick to London and NY sessions because that is where the volume are. Asian session is too weak.
I know I should not be trading this week or next due to low volume and the upcoming holidays. Of course I have and it hasn’t been good. If I understand your trend analysis you trade off the one hr chart using the daily chart trend, correct? And if the 1hr is against the trend then assume it is a pullback or reversal, is that a correct statement? Do you just ignore the 4hr (3hr on Oanda)? Also I have trouble placing a 10 pip SL above/below the 1st candle as sometimes this amounts to 30 or 40 pips - do you still stick to that rule regardless of the SL size? Thank you, d. Sorry for all the questions but i find this strategy visually easy to follow, just need to get in profit.
Apparently no one is using/following this strategy but I have had some success on a demo platform. What I was wondering is if anyone has tried this on a very short TF -5M? I trade another strategy that is based on the 5M and I see several “V” setups from time to time but don’t know what TP’s or SL’s to use. I would like to hear any input you all might have. d
trading this on smaller time frames like 5min, 15min, 30mins is very risky. you might get some good waves but also run the risk of getting hammered by the market.
I recommend you use 1hr, 4 hr, daily and weekly charts
i have tried the weekly charts for a while now and lat week i caught gbp/jpy for almost 1000 pips, usd/chf for almost 200 pips, usd/jpy for almost 500 pips, eur/gbp for almost 100 pips.
I know of one guru who trades and recommends this setup on 3 min TF - albeit on dax and only trading the direction of the trend.
Thanks to Chuck for bringing the Morningstars and Eveningstars to our attention.
Baby24
