10.4 A Complete System

[ross]

More questions on the euraud chart posted...

Ross,

I think you need to refresh that EUR AUD chart by changing between 4H to Daily and back again - your Weekly Pivot lines are not correct , looks like you week has started on 13th? They need to run between the vertical white period separator lines. I can post a picture of my chart if you don't see it.

As for the EUR AUD, EUR has been range bound waiting on news, AUD has been weak but fighting back - my theory is that it wants to retest the 240 MA before another drop; couple that with another burst of strength for the EUR, that will set off the desired movement of EUR AUD pair.

Cheers, John

Thank you John for the comments - I hadn't noticed my pivots were off - do they look right now? I think the entries are still basically correct, but you may also be correct - that price will need to retest the 240. Since price is now at Weekly Mid Support it would be time to place another entry. But I wonder if the entry would need to wait for the AO to turn green and the RSI needs to move along the bottom for a few bars. Would a V bottom on RSI be ok?
Thanks again for your response...
Ross

[ross]

This system looks amazing. Here is a pending trade I just placed--let's see how it works out. Let me know if I missed anything.

I just basically posted the same chart!
What I was also asking about this - is do you wait for the Ao to turn green? And if it does and price is still at WMS - make a market entry?

[Dewey McG]

Hi Guys,

I will post some possible setup and questions (I'm all in for a separate thread for this).

USD/JPY : In an uptrend, I got some green bars. Is this a good setup. I mean, we can manually enter when we have a AO color change right ?
EUR/AUD : RSI2 is going to be flat at the next bars. Same setup for EUR/CAD btw.
AUD/USD : In a downtrend, RSI2 is also going to be topping a bit
AUD/CAD : Downtrend, AO color change a couple of bars ago but price still remain in the range. Still time to enter even if the price is trading near the 240 (20-25 pips).

General question :
- as these type of trades are swing trade, it isn't a bit late to enter position on a Thursday ?
- When AO color change, you manually enters at the H4 bar close only ?
- For AO, you go long only when you have a red to green color change and above the "0" line or upticks (opposite for short) ? Or you don't car, you jump when there is a color change no matter how the bar is.

Thanks,
Lio

Just my opinion for what it's worth:

USDJPY: Yes, you can enter off the AO, but I would not go long here. Look how many times over the last several weeks price has hit the weekly mid resistance. if this had been crossing the weekly pivot ot would be a higher probability trade.

EURAUD and EURCAD. I think theya re both good setups but if you were picking one I would go witht eh EURAUD. AO is below the 0 line moving up.

AUDUSD. Agreed--also the AO is above the 0 line


AUDCAD I have a sell stop at the weekly pivot, though you probably could have placed a manual order to enter when the AO changed color.


Trades on Thursday? Bob mentioned some of the biggest moves happen now. AO trades? I think you can enter manually and you only need to care about trading with the trend and color change.

[Dewey McG]

This system looks amazing. Here is a pending trade I just placed--let's see how it works out. Let me know if I missed anything.

I just basically posted the same chart!
What I was also asking about this - is do you wait for the Ao to turn green? And if it does and price is still at WMS - make a market entry?

If the RSI has bottomed and you are going long you can use a pending order. I think if you see the AO chnage color no need to do a pending order you can just take the trade manually.

Bob might tell me I am wrong but that was my understanding.

[SteveHopwood]

Can anyone confirm that Steve's MPTM sets the stop at 240 line when a trade enters?

Yes.

[lhDT]

Current trades :

[Zool]

First: thank you Bob for this new system, and all the work you put into sharing it!

I attach some scripts to make it easier to put pending orders, and modify the stop losses take profits. These are drag'n'drop kind of scripts, that means you should drag the script onto the chart to the price level you want, and release the mouse button there.

If you drag the buy pending script above the current price it will set a buy stop order, if you drag it below the price it will open a buy limit order (opposite for the sell script).

The dragdrop_closeall script only close the orders of the chart it's dragged on.

The dragdrop_modify_TP and SL scripts will modify the stops and take profits of all orders of that pair to the level the script dragged on (easier to set the breakeven level on multiple open orders).

Please try these scripts first on a demo, if you plan to use it on a live account.

[shellsnail]

To illustrate my question better.
A few days back, GBPUSD, overall bearish.
entry at S1, but was a fake break, now moving towards stoploss.
How to handle upcoming additional signals?

thanks again,
Aristides.

2013-02-13_1825.png

Hi bob, can you answer this question please,

what happens when price keeps moving against you? Do you add more entries or do you just wait - in this case price keeps testing the broken pivot lines as support even though it's supposedly in a 'downtrend'

I will normally hold trades and look for a 2nd entrance. Sometimes the retrace is bigger than norm but we still have the trend. The issue becomes a MM issue. Let us say you trade 1% of your account, meaning you set your SL to affect 1% of your account. If you enter a 2nd position you are now risking 2%. That is no big deal. Now if you have several positions going and this would make your account got to a higher loss you have to think it through. This is how I do it:

1. I had a good day/week, more winners than losers, close everything and be done.
2. Close the ugly trades, like the eur/nzd when it didnt break the triangle I made the other day. I didnt wait for it to go all the way to the SL. I just closed it and reset up the trades. I am glad I did now because that thing dropped big time. You dont have to wait for the SL.
3. I know the long term fundies are with me and I know I cant lose. JPY weakness is deliberate govt. policty and will continue for a while so I dont worry about JPY trades going south for a while I will reenter them.
4. Too many ugly trades, close some out, dealing with all of them is not worth it.
5. Are some trade worth rescuing. Many times they are as long as you are always on the right side of the 240 line. Prices can run for months so your chance of it recovering are very good.
6. MM is the key to this decision. If I stay how much of my account am I risking and is it worth the risk with my other open positions going. If I already am having a good day, week, month, why risk it. Close out and trade another day. If my risk is low and my chances are good. Go for it.

For example, price is above 240, it retaces below the pivot. 1% loss if it hits SL but WP is a good entrance point and another 1% will not kill me. I take it.

Another, I am above R1 and AO has just turned orange, is it really worth waiting out? It could drop hundreds of pips. Better to close out now and look for a new signal.

These are the things you look for.

Hi Bob,

Thanks for the detailed response, it's very much appreciated.

When you say trail stop by the 240 MA, if you look at some of the charts, price finds very strong support at those areas, so what is the recommended distance we should trail the stops at?

Should it be exactly at the 240 MA or what's the rough amount of pips you use for each currency pair that you trade and how did you determine that number.

Thanks again for this brilliant invention.

[nanningbob]

The AO is almost exactly the same as the 20MA open LWMA. When it is going down the bar turns green when price hits the 20 MA and it turns orange when an open and close are both below. When price goes up it is green. When price touches it, it turns orange and when both open and close are above it turns green again. The weakness of the indi is if you wait for the green bar on the AO price can be well above the 20MA before it turns green again, the same with sells. So there is a delay going into the trend. The AO is great for letting you know the trend is ending but not as good for a trend is starting unless it is a good run. That is why in my booklet I emphasized it more for exits than entrances. For entrances it is good to let you know if the run maybe a strong when. When AO is below its 0 line and then it price goes back up into an UT again it usually is a good run. If AO is above in at DT and it goes back into the DT again it usually is a strong run and you play for more pips. I think that is what it is best for. The standard rule for AO is to enter when you see it turn green but you usually leave a lot of pips on the table on your entrances and if it not very strong move you can end up with a loser trade. The basic problem of all histograms. See pic below with 20MA and AO.

[nanningbob]

Hello, thanks Bob and all for the 10.4 ,
I wont be trading your system but I have enjoyed reading how you came to this point in trading.
I've stolen your MA and placed it on my charts as I was already a pivot and PA trader.

I hate it when people change systems without giving it a chance to work but as you are toying with ideas still I have a suggestion that you could implement. The indicator comes free with every Empty4 so new coding. It's the CCI indicator.

In uptrends I treat the falling below -100 as a reload and in down trends I treat the rise above 100 as a reload.

Hopefully the chart attaches ok to explain what i mean.
http://content.screencast.com/users/fol ... -chart.gif

The whole 10.0 series is one progression. It is taking each step and improving it. It started with 2MA on daily and 8MA smoothed which would have been a 10 MA open or 2 MA on the weekly. 10.1 we added S/R lines and 10.2 and 10.2a we added Weekly and Monthly pivots. 10.3 gave us a scalping system based on daily open with daily pivots. Then 10.4 I removed the monthly pivot and added the 2MA open. On the 4H screen it becomes the 240 MA and instead of being static it became dynamic. Add to that was a sound MM system. Each step of the 10.0 series was adding to our definitions which are so lacking in Forex trading. 10.0 started with following a definition of the weekly trend and progressed to the monthly trend which appears to be much easier to follow and more accurately predicts price movement. The AO is just a better indicator than the TMA true. If you place them side by side they match. The 240 is an easier read of strength and direction than the TMA normal. It is a progression not switching of systems. 10.4 is long term and 10.3 is for short term trading, they are not an abandonment they are a compliment depending on your trading style. I am not a scalper trader. I made money using it but it took a lot of my day to watch those kind of trades. That is why I know 10.4 is now a complete system from all angles. Doesnt mean you wont have losing days or weeks but it should be consistent enough over the long term to be successful. As soon as some of these traders experience multiple level profits and just single level losses they will be hooked. That took about 2 years to put together. Good luck.