10.4 A Complete System

[grimweasel]

Over on Strat's Forex Price Action thread we have been using the 20 and 63 emas for our trend signals for years. The 20 ema is used extensively by the big banks. We also use the 9 ema.

In essence the emas give very useful signals - the 20ema is great in a trend, but as you say Bob, useless in a ranging period. The simple answer is to stay out of pairs with a flat MA structure. Only trade pairs where the 9,20 and 63 are in the correct order.

A safer bet for 10.4 would also be for people to learn basic price action reversal bars, because, that is what this system is looking for. Price action beats any lagging indicator. I look to trade price action reversal bars when they appear on the daily chart in concert with a pullback into the 240 (h4) or 50(Daily) emas. If they appear on your Pivot levels this adds confluence. Combined with a fib level or 38, 50 or 61% you have a better chance of the trade working out.

Look at the chart below - usdyen. We had a valid 10.4 signal but for added confidence, we also had TWO Hammers off the pivots, with trend. It doesn't get better than this.

Look out for the main reversal bars - Hammer, Shooting Star, Bearish Engulfing, Bear' Outdside Bar, Bullish Engulfing and Bull' Outside bar. The Inside Bar is a very useful, lower risk, with-trend addition bar too. Learn to spot these bars, only take them with trend, combined with the 10.4 you have a killer system. Fewer trades, but you'll be stacking the casino edge in your favour...

[grimweasel]

Bob - not a valid 'Pin Bar' as you call it. A Pin Bar is either a Shooting Star (Bear) or Hammer (Bull). They need to have a very small head. It shows that price ran up or down thru a level but met with significant trading in the opposite direction; hence we get a large 'wick' and a very small candle body. See the above post for a Hammer. A quick internet search will yield all!

[grimweasel]

10.4 Daily orders and results thus far after 1 week. Demo account. I use £1 per pip as I would in the live environment. Account up 20% in one week. Impressive system!

[nanningbob]

Over on Strat's Forex Price Action thread we have been using the 20 and 63 emas for our trend signals for years. The 20 ema is used extensively by the big banks. We also use the 9 ema.

In essence the emas give very useful signals - the 20ema is great in a trend, but as you say Bob, useless in a ranging period. The simple answer is to stay out of pairs with a flat MA structure. Only trade pairs where the 9,20 and 63 are in the correct order.

A safer bet for 10.4 would also be for people to learn basic price action reversal bars, because, that is what this system is looking for. Price action beats any lagging indicator. I look to trade price action reversal bars when they appear on the daily chart in concert with a pullback into the 240 (h4) or 50(Daily) emas. If they appear on your Pivot levels this adds confluence. Combined with a fib level or 38, 50 or 61% you have a better chance of the trade working out.

Look at the chart below - usdyen. We had a valid 10.4 signal but for added confidence, we also had TWO Hammers off the pivots, with trend. It doesn't get better than this.

Look out for the main reversal bars - Hammer, Shooting Star, Bearish Engulfing, Bear' Outdside Bar, Bullish Engulfing and Bull' Outside bar. The Inside Bar is a very useful, lower risk, with-trend addition bar too. Learn to spot these bars, only take them with trend, combined with the 10.4 you have a killer system. Fewer trades, but you'll be stacking the casino edge in your favour...

First thanks for your post. Great instruction but I probably drive professional traders crazy. I am like the Poker player playing Texas Hold'em, I have two pair and one of them is a face card. I know the majority of time i am going to win and/or scare the rest of the table off with a high opening bet. Then I never risk my whole pot knowing the odds are on my side. Yes sometimes guys are dealt a straight, flush, or full house but most of the time I know I will win if I put my first bet properly on my two pair or I have a good high card in my pocket. MM works in poker too.

[nanningbob]

Bob - not a valid 'Pin Bar' as you call it. A Pin Bar is either a Shooting Star (Bear) or Hammer (Bull). They need to have a very small head. It shows that price ran up or down thru a level but met with significant trading in the opposite direction; hence we get a large 'wick' and a very small candle body. See the above post for a Hammer. A quick internet search will yield all!

OK should have known that. Not my usual trading style.

[grimweasel]

Haha Great Poker Play Bob!
Poker is too risky for me. I like to set daily orders and walk away. I find I meddle with stuff too much so even looking at the H4 is out for me. I pay heavy notice to the daily open/close as IMHO this shows all the actors playing that market, and their trace that they leave for the day. The bigger fund management guys but/sell out on the daily and weekly. It's only really the prop traders and hedge funds and Algos that bugger about on the sub daily time frames. The daily H/L acts as important Support or Resistance for those sub daily traders, hence why when daily levels break, momentum usually builds as the bigger TF guys step in. Then the daily breaks a weekly level and the Fund Management guys step in. We are all small fish that are fed off by the time frame above. Just know who your predator is. The guys that trade the M5 TF have my respect as they are minnows for all the higher TF sharks!!

[candletiger]

updated weekly pivot indicators (experimental)
/candletiger

Hi all,
I have opened a new thread for the historic daily/weekly/monthly pivot indicator:
http://www.stevehopwoodforex.com/phpBB3 ... 613#p45613

rosst, allisonmagic, eevra, I will answer your comments there.

regards
/candletiger

[Captain Jack]

10.4 TRADERS ignore this post but for Trader Jack I think this would be a quality Pin bar trade, if I understand your system properly. Then again maybe I dont.

That pin bar is one of the signs I follow Bob. I've been short in the pair. Many times, you will see price penetrate a level or pivot with a pin. This is the market maker tripping stops and enticing traders to take positions there. Many times they are false positions. The pin you refer to is where LONGS were trapped into there positions Friday, while SHORTS could have had their stops triggered, taking them out of a trade before it drops.

It's one of many repeat tricks they use every day. Price will range during Asian, then exit the range. Once price climbs or falls 25-50 pips beyond the range, as established in Asian session, a stop hunt will take place. The true direction of price will emerge after the stop hunt...Many times, price will rise for 2 days as it has here, then reverse on the third day...possibly during NY if not sooner.

You can watch this action on a 15m chart. I expect price to approach the pin high or exceed it a bit, due to spread widening, before the fall. I will set my stop 10-15 pips above the finale high pin after it has formed. Until then, it is a mental stop 25-50 pips above current high of the white pin.

I could have closed several trades Friday but chose to hold along with several others. I'm sure that the pins are above a pivot for all pairs. If you can't tell by now, I like to "pin" my orders. R:R value gets crazy high there.

CJ

[nanningbob]

Haha Great Poker Play Bob!
Poker is too risky for me. I like to set daily orders and walk away. I find I meddle with stuff too much so even looking at the H4 is out for me. I pay heavy notice to the daily open/close as IMHO this shows all the actors playing that market, and their trace that they leave for the day. The bigger fund management guys but/sell out on the daily and weekly. It's only really the prop traders and hedge funds and Algos that bugger about on the sub daily time frames. The daily H/L acts as important Support or Resistance for those sub daily traders, hence why when daily levels break, momentum usually builds as the bigger TF guys step in. Then the daily breaks a weekly level and the Fund Management guys step in. We are all small fish that are fed off by the time frame above. Just know who your predator is. The guys that trade the M5 TF have my respect as they are minnows for all the higher TF sharks!!

Thanks for the insights, my trading career can be summed up very quickly.
1. taught to trade news reports, suffered high pressure, cleaned out account in 2 weeks.
2. 15M chart using daily pivots/S/R got bled dry getting cut to death with small SL
3. 1H charts had some success but always ended up feeding the sharks.
4. 4H charts started having some success but not consitant.
5. 4H charts keeping eye on daily finally profitable most of the time
6. 4H charts keeping eye on weekly consistent profits but still not happy, still getting killed on occasion
7. 4H charts using monthly trend, now that is what I was looking for. Now I have to try to do is undo all my bad habits.

90/6 = 15 MA on the daily
15/5 = 3 MA on the weekly

adding the 90 MA adds the weekly trend to the monthly 240. That would work. Here is the 3MA on the weekly. That would be a 90 approximate on the 4H.

[Foreverforex]

set pending longs on AUDCAD