Benny3's Trading jounal

Here is a question that was posted in my trading journal, since it is directly related to this system it would make sense to keep the information and answers here for all to view.

 

sky1kz, thanks for your post. I am also looking forward to your next post.

 

I know you have tried a lot playing around with system and regularly posting your thoughts on setups. I know you have had a crack on the powerband system - you said there is a serious lack of A setups. How badly does the A setup comes - frequency? Couldn't multiple currency search would enable you to get more A setups? I dont understand your comment regarding powerband's Risk:Reward less than 1:1 - what do you mean? Why would that happen? Did you end up being profitable on the powerband system? Kindly explain further

 

When i said a serious lack of A setups i meant just that. A descent A setup requires multiple things to match up so it can be considered A or 5 stars if you like. In this example i am going to assume we want to short or sell whatever pair. The manual and/or cheat sheets state that you want price to be at the top BB with some confluence of some sort. The confluence only need to be round number resistance or channel support for example. This is not enough for me personally. I WANT more confluence and so should you since you are here to not loose money right? When i say i want more i want AT LEAST price hitting top BB, stochastics divergence, MA resistance, round number resistance. That is good enough for me to short, anything shy of this is still an A setup and valid according to the system. So i guess i am being overly picky and do not like to trade anything that might be ok. This is subjective and i will give you an example below of something i would ignore that would still turn a profit. Rather than scrolling back i will use a recent setup as i normally would.

 

Ok so here is a nice recent setup i certainly would of missed. We have great confluence here with MA resistance, top BB, Round number resistance and then an engulfing bearish CS formation to top it off, but i don't see any divergence present on stochastics so i would be looking for a new high to short which never happened, so i would of missed a perfectly valid A setup here simply because i like to see and trade divergence. the trade was a winner but it did not meet my rules or criteria to enter. You may think well now you being to picky and i would agree, i am being really really picky and that's the way i intent to seriously trade large volumes in the future. This is what i meant when i see a serious lack of A setups, a serious lack of ones that meet my criteria anyway. Check just about any trade i took in this thread and you will see more often than not they have divergence present, sometimes there is no valid A setup that has formed but i have entered anyway using a lower time frame. This is not part of the system so cannot be taken into consideration when visually back testing A setups.

 

http://img266.imageshack.us/img266/6089/gbpcad.gif

 

Since you have asked for frequency i can only say every day i see valid A setups according to the system, maybe once of twice a week i see valid A setups according to my rules. If you look at 15 pairs or so and trade every signal that comes along you will be trading many times every day

 

Risk:reward less than 1 should be obvious i would of though. Lets take an imaginary trade for a second and see what needs to happen to get the same amount of profit as we risk, pips do not concern us here and i will show you why below. This is not a cherry picked trade it is a common event with most trades and its hard to find good trades without a bad risk:reward scenario.

 

http://img141.imageshack.us/img141/6969/audnzd.gif

 

In the above example we are trading full lots to keep this simple. So we risked 100pips with 1 lot or $1000 give or take, Then we banked 40pips and took say 80% off the table which would be 0.8 of a lot or $8 @ 40pips = $320 profit. So we now need to get another $680 just to break even on our risk:reward. How do we get another $680 when we are now down to 0.2 of a lot left open ? thats $2 a pip so we need 340pips more just to break even on R:R. This is less than desirable in my view. This is what i meant when i said less than 1:1 risk:reward.

 

I never went live with the powerband technique but on demo i was fairly consistent with my trades and certainly won more than i lost, but since the risk:reward wasent great a few loosing positions some times dwarfed the winners but i was generally picky enough to only take 1:1 or greater, So in short i guess no i was not profitable since i never risked anything on it, but yes i was profitable on it by not risking money on it, if you get my drift...

 

 

Here's the way i trade this, you might of said the MA's were broken up meaning the bulls were in charge but quickly reversed, but how would you know it reversed at that point in time? Wouldn't you be thinking well they broke up its probably going higher? I would be. What about in example 2? looks more solid to me after seeing the Ma's break and reverse previously. Maybe you disagree? trading is subjective

 

http://img703.imageshack.us/img703/7977/eurnzd.gif

Edited January 2, 2011 by syk1kz

sky1kz thanks for your detailed response. You are right that risk:reward in the powerband isnt that great and waiting for ideal A setups can take lots of screen time - which isnt worth it. You have just opened my eyes.. damn! I was excited that I found a solid easy system but doesnt look easy.

http://img703.imageshack.us/img703/5249/nzdchf.gif

 

NZDCHF needs to show me some divergence

as expected

 

http://img20.imageshack.us/img20/5249/nzdchf.gif

stop to break even now in free trade mode

 

http://img51.imageshack.us/img51/5249/nzdchf.gif

bailed last trade for 20pips or something.

 

http://img837.imageshack.us/img837/1373/eurgbp.gif

still waiting here...

 

http://img337.imageshack.us/img337/1373/eurgbp.gif

Is Benny3 trying to refine this profitable system or it's still traded as it is according to the original rules. Thanks!!

Hi Vinpal

 

I'm still keeping an eye on it,but not as much as i use to because of the fact that to me it just doesn't produce enough signals for my liking.

Hi Vinpal

 

I'm still keeping an eye on it,but not as much as i use to because of the fact that to me it just doesn't produce enough signals for my liking.

 

OK man. Thanks for the reply. I understand. Good hunting my friend. Even if it doesn't come up with that many signals it's still a pretty good system. Well at least one of the better ones out there (millions of junk)... I'll keep it on the radar...

All the best to you to Vicpal,

 

Regards Benny3

Benny if you're on the lookout for a system with more signals you could check out the dance over at ff, traded on the 15 min tf one trader has done exceptionally well with it right from its introduction in march last year and under his guidance others are picking it up very well :)

Benny if you're on the lookout for a system with more signals you could check out the dance over at ff, traded on the 15 min tf one trader has done exceptionally well with it right from its introduction in march last year and under his guidance others are picking it up very well :)

 

I appreciate that hermanhess,i'm not too keen on the 15min timeframe,i was thinking more like 4hr with more signals :).

Hi, are there any updates about this journal for this year please? I was trying to create a survey on which strategy works and which doesn't.

I like it simple...