10.4 A Complete System

[mjws00]

AO is really really really late. You will lose more than two 4 hour candles every time. Since we are WAY OB/OS by then, the moves can be quick and violent. That is what makes the pendings so beautiful, gets us in at SR, without having to eyeball it. Also since there was a strong break of the pivot necessary to get us in there is a much higher probability the move will continue for a while.

I have hundreds of losing trades on this thing. Just upped the learning curve on the sim. People have only seen an easy week or two of trading. This is an elegant and simple system, but the benefits to developing 'feel' with it are dramatic.

Mike

[mjws00]

I'm gonna be naughty and enter GBPNZD short here. We may waffle around 1.8400 a bit but I need a nap. Bulls don't seem to have any momentum currently and we have major resistance here. I'll add at the pivot either above or below. H1 RSI hasn't gone overbought, and may not make it on this leg. I'm comfortable. AO has turned, but that isn't the trigger. WMR2 Baby. Reject and burn south .

[Bader]

In my mind AO is a confirmation. RSI is flattened and it changes colour then it adds to the aconfimation.

Bob also some way back talked about a reversing RSI (peak) that could be used to enter a trade. In this instance I would take more cognisance of the AO and possibly lower time frames.

What this strategy does is force you to accept an overall rule - trade with the trend. Then it helps in setting your stop loss and your take profit areas. You will not gain on every trade, but by removing emotion (applying rules) you have a better chance of at least being on the right side of the curve.

Remember the beauty of 10.4 is that it 'uses' retraces in a trend allowing you to continually enter along the way. This reduces stress as it does away with the anxiety of whether you have reached a turning point. For the first time (in a long time and many Dollars lighter) I have confidence to enter set and forget.

[Bader]

GPBNZD looks good to me
Flat RSI(2), Ao has changed to red
Resistance as above
Downside limited ito stoploss

[ronald123]

[...]

Moving on.

I can say that I have been doing something similar to you - i.e. RSI flat - set pending trades at nearest S/R/pivot. It seems maybe we need to give the setup a bit of room and wait for the RSI to start moving away from the extreme before the trade is triggered - OR in a practical sense - don't put the pending trade too close to the price as the RSI STARTS to flatten?

I am listening with an open mind cmeade.

Cheers,
Dave.

Hi Dave. Interesting point you make here. I'm trading this 10.4 system live for the last week or so and it looks pretty good. However, of course nothing in forex is full proof: I've been trading mostly with the trend, taking retraces now and then too, but sometimes what you think is a retracement turns out to be a reversal, or your order gets triggered and then price goes the other way - the market remains unpredictable. As a side note, yes, I'm aware of 'the news', but do I always include it in my preparations? Hell no

Anyway, the point you made, about waiting for confirmation from the RSI is a very good one, in my humble opinion, 'cause sometimes the RSI stays at the extreme top/bottom for a long time, while price continues to wiggle up/down - I had pending orders triggered in those situations too, as mentioned above

I've put an extra RSI on my charts now (period 14, with a 14 MA inserted), gonna do some back testing, to find out if this makes more sense than mechanically putting in pending orders when the RSI2 tops or bottoms out. Don't wanna start complicate things - seen enough of that in other threads - but, while simple is good, over simplifying might not be...

UPDATE: I got this idea (adding a RSI with included MA) from another cute little system, called 'Forex Power Pro', from Russ Horn - it's a free one - although he uses an RSI period 10 and 10 MA, which I'm also trying out on this system now, 'cause a 14 period might be a bit slow. What I like about this is that, while it might get you in a bit late, it also prevents you from getting in too soon. Just ignore me if you feel I'm only complicating things - I'm sorry then, don't mean to.

10_4_added_rsi_14_with_ma_14.gif

10_4_added_rsi_10_with_ma_10.gif

Will keep following this thread, very interesting stuff here and you guys are just great!

Regards,

Ronald

[spotdespot]

Anyway, the point you made, about waiting for confirmation from the RSI is a very good one, in my humble opinion, 'cause sometimes the RSI stays at the extreme top/bottom for a long time, while price continues to wiggle up/down - I had pending orders triggered in those situations too, as mentioned above

Hi Ronald - I think the biggest issue with 10.4 is getting over excited and rushing in as there are so many good looking setups. I can't take credit for the RSI confirmation/not entering too early idea as cmeade2 and others mentioned it. I like the idea as I have been burned in situations like the EURNZD one right now. I avoided this one but was burnt with GBPxxx shorts earlier in the week that I eventually bailed on.

I've put an extra RSI on my charts now (period 14, with a 14 MA inserted), gonna do some back testing, to find out if this makes more sense than mechanically putting in pending orders when the RSI2 tops or bottoms out. Don't wanna start complicate things - seen enough of that in other threads - but, while simple is good, over simplifying might not be...

Simple is good. If this addition works for you then that's great. I added a couple of things then removed them as I have a tendency to over complicate when I believe everything I need is already there.

Cheers,
Dave.

[ronald123]

Simple is good. If this addition works for you then that's great. I added a couple of things then removed them as I have a tendency to over complicate when I believe everything I need is already there.

Cheers,
Dave.

Gotcha. It's the 'been there, done that' phenomenon most traders 'go through' every now and then
I keep putting things on, just to take 'm off again soon after too... But it doesn't hurt, really, 'cause it means you're not complacent about your trading.

After all is said and done, 'KISS' is still the best, it really is. I might add that the 'Keep It Simple, Stupid' approach also reflex (and generates) more confidence and who's to say that in it's own isn't a decisive factor for your success or failure as a trader (and a human being).

Greetings,

Ronald

[lhDT]

I might add that the 'Keep It Simple, Stupid'

Well, start positive, replace the "Stupid" by "successful" and it should be ok.
Repeat after me : "Keep it simple and Successful" ... "Keep it simple and Successful" ...

On the other hand, I think Bob have tested that method for a long time. Give it a bit of room. You will have winners but losers too, part of the game.

[rostaus]

[...]

Moving on.

I can say that I have been doing something similar to you - i.e. RSI flat - set pending trades at nearest S/R/pivot. It seems maybe we need to give the setup a bit of room and wait for the RSI to start moving away from the extreme before the trade is triggered - OR in a practical sense - don't put the pending trade too close to the price as the RSI STARTS to flatten?

I am listening with an open mind cmeade.

Cheers,
Dave.

Hi Dave. Interesting point you make here. I'm trading this 10.4 system live for the last week or so and it looks pretty good. However, of course nothing in forex is full proof: I've been trading mostly with the trend, taking retraces now and then too, but sometimes what you think is a retracement turns out to be a reversal, or your order gets triggered and then price goes the other way - the market remains unpredictable. As a side note, yes, I'm aware of 'the news', but do I always include it in my preparations? Hell no

Anyway, the point you made, about waiting for confirmation from the RSI is a very good one, in my humble opinion, 'cause sometimes the RSI stays at the extreme top/bottom for a long time, while price continues to wiggle up/down - I had pending orders triggered in those situations too, as mentioned above

I've put an extra RSI on my charts now (period 14, with a 14 MA inserted), gonna do some back testing, to find out if this makes more sense than mechanically putting in pending orders when the RSI2 tops or bottoms out. Don't wanna start complicate things - seen enough of that in other threads - but, while simple is good, over simplifying might not be...

UPDATE: I got this idea (adding a RSI with included MA) from another cute little system, called 'Forex Power Pro', from Russ Horn - it's a free one - although he uses an RSI period 10 and 10 MA, which I'm also trying out on this system now, 'cause a 14 period might be a bit slow. What I like about this is that, while it might get you in a bit late, it also prevents you from getting in too soon. Just ignore me if you feel I'm only complicating things - I'm sorry then, don't mean to.

10_4_added_rsi_14_with_ma_14.gif

10_4_added_rsi_10_with_ma_10.gif

Will keep following this thread, very interesting stuff here and you guys are just great!

Regards,

Ronald

Thanks Ronald I found that useful.

[Gertje]

I'm gonna be naughty and enter GBPNZD short here. We may waffle around 1.8400 a bit but I need a nap. Bulls don't seem to have any momentum currently and we have major resistance here. I'll add at the pivot either above or below. H1 RSI hasn't gone overbought, and may not make it on this leg. I'm comfortable. AO has turned, but that isn't the trigger. WMR2 Baby. Reject and burn south .

R1 just triggered on my chart .....

EDIT: and even the AO changed colour, so this can't go bad... right?
[although I see higher high's and low's on the H4]