The all-powerfull five bar reversal (5BR) system

[Freddie]

Ladies and gentlemen of Indo-Investasi, for some time I have been looking for the best, most reliable trading system available.

 

Through the good offices of this wonderful site and its generous members, I have been able to examine and test a wealth of systems, listen to the advice of many mentors and gurus, read many, many good books.

 

I have come to the conclusion that the simplest is best. I have found 5BR. This is a Price Action ****** - what would be the word? Perhaps INDICATOR? although indicator usually means an oscillator or similar.

 

I would like to demonstrate that it is the basis of many 'commercial' systems and also that it could be used in place of many others.

 

Tomorrow, if I have reliable internet, I shall post my first comparison. A look at good old ..... ah! but that must wait upon the morrow!

 

Your comments would be most welcome.

 

Freddie

Edited July 15, 2010 by Freddie
Grammar

[gluconD]

Look forward to your system mate, love price action !!

[jayjas]

yes, lets get to bussiness...price it king...

[dudjom1109]

Wow ! Great ! looking forward to this.Price action is really the way to trade

[Eldiablo54]

Im listening! Knowledge is power.

[Freddie]

Wow, so many keen people. Hope that this does not disappoint!!

 

Had to come into town so here goes:

 

Before continuing this thread I should tell you my way of refering to the system.

I hold up my hand and see that as the five bars in question.

In the raised position it represents an entry for a sell:

My thumb is bar one, a move to the upside contued up the first finger, bar two.

The middle finger is the furthest that the price goes and becomes the pivot for the price.

The ring finger is bar four and is the reversal bar

This is confirmed by the little finger and we place a sell order when the fifth bar 's price passes the forth bar's lowest price.

 

For a buy signal, simply use the reverse with your hand pointing down.

 

You can find videos of this on Lance Beggs "Your trading coach" site.

 

My first comparison is with good old Karl Dittman's - The World’s Simplest “10 pips anytime your want – secret” (English is not his first language or maybe he simply didn't check the wording)

 

His instructions are:

Open a 5 min or 15 min chart and find the “first candle”. “The First Candle” is between two candles, and it is the highest or the lowest of those three candles.This system based on the 3rd candle.

 

So, first commercial system that is just 5BR.

 

It works on all time frames, just have a look at a few charts. See what you think.

Don't try to jump the gun, wait for the trigger candle to close.

 

This is not the "HG" but works a lot.

 

Tomorrow we talk about Craig Harris and his 'Natural Price Movement'

 

BTW, I am in Bulgaria at the moment so I am five hours out from you,

 

Freddie

[Guest raw]

Price Action? Yeah, look here too: hxxp://[email protected]/

[⭐ fscrp]

Freddie,

 

Your hand analogy is probably the best description of candles without having an actual picture I have ever read!

[toddanderson]

is thier a indicator that marks this, so you could easily do a visual back test

[soundfx]

Todd,

 

Google "Indicator 5 bar reversal v1[real][1].5 mq4" and you'll find an indicator which seems to be quite a good one.

[kraven]

here it is here, plus a few other nice indi's

 

http://www.35pip.com/metatrader-indicators/5-bar-reversal-v011-5-mq4/

 

however i'm not a fan of the 5 bars indi as they have obviously already happened for it to show them. infact i'm not a fan of 5bar.

[Eldiablo54]

This indi is not what Freddie explained his system is. Infact from what I understand and what this indi does the indi arrow comes 2 bars to late because it counts 5 from the highest or lowest point and not 2 bars after the highest or lowest bar. Freddie am I right when I say this? /actually just had a look at the charts and the way freddie explained it makes better sence than old Karl coz it helps eliminating alot of bad trades which you would get through the Karl way! I just had a quick look. It works well for me on 5min. Can our guru's not make a indi that follow these rules and alert you to let you know when its the start of that 5th candle then you can apply the rules yourself to see if it is a valid candle. Edited July 15, 2010 by Eldiablo54

[Freddie]

@ Raw... Thanks for the Asian Mentors link. I will be looking at that in due course. I don't want to be ungrateful or heavy handed but I do not wish to discuss other Price Action methods in this thread - not even pin bars or inside bars since I have not found them to be of benefit.

Having said that, there is mention of IBs on the CH thread on FF so maybe someone would like to start a thread to discuss the 5BR and IBs.

 

@ Todanderson ... Yes there is an indicator, Fractals. I believe that they appear after bar five has closed. Actually they appear earlier but may repaint since it is only when bar five has closed that they can be fixed. I don't use them, they arrive too late even though I can only make my mind up on bar five. I just don't like distractions.

 

@ Kraven ... I could be a smart-arse and remind you that even the price at a tick is in the past but I know what you mean. Maybe you will come to love the 5BR.

 

@ Eldiablo54... The fractal and presumably any other will only come two bars after the pivot. In fact your own eye is better because you will have been contemplating what will happen. You will know if you will trade and why.

 

Hopefully I can put up some pictures. It is a learning curve. I have discovered how to save the pics as JPEGs and I believe that I can use 'shutterby' to process them with a URL. Any help would be welcome!!

 

 

Today's comparison is with Craig Harris and his Natural Flow. He says that one day he had a 'life changing moment' when he discovered that the market went up and down in short swings throughout the day. He discovered that the ends and beginnings of those swings were 5 bar reversals but didn't use that term. He concentrated on the pivot, confirmation and trigger bars. He also stipulates that either the pivot or the confirmation bars should have changed colour.

 

He states that if one just traded these swings one would make money. He trades the London open plus some later time and his charts are awash with indicators for sessions, support and resistance, fractals and the king pin of his system, the stochastic oscillator.

 

Since I am only talking about the 5BR I will not comment further about his system. There is a download on this site and if that is not enough then Forex Factory has a thread together with all the indicators that you could want to follow the method.

 

I have some minor disagreement with the scheme in that it almost totally dis-regards the Asian Session by saying that there must be a 40 pip swing before one should trade that time of day. I suppose that he, as a system seller must point his buyers in the direction of more pips so choses to play down the harder to trade and less profitable times. None the less people want to trade at those times.

 

Tomorrow it is Lindencourt.

 

Freddie

[Freddie]

I had prepared a picture of the £$ daily with fractals. Unfortunately 'shutterfly' does not offer a way to put it here.

 

Trying elsewhere.

 

Freddie

[Freddie]

http://i914.photobucket.com/albums/ac341/freddieforII/DailywithFractals.jpg

 

Trying a pic here. UK, so that worked!

 

Now, for all the people interested in indies, can you not see how the bars progress before the little arrow appears. When trading we are at the 'hard right edge'. Look at the blue bars just before the edge: There are three down pinks then a blue,(pivot), then another blue(confirmation).

By this time you would have decided your action, second blue is entry, third is profit!!

 

Freddie

Edited July 17, 2010 by Freddie
Checking pic is there.

[Freddie]

To celebrate my finding out how to post pictures, here is an hourly:http://i914.photobucket.com/albums/ac341/freddieforII/HourlywithFractals.jpg

 

If you compare with the daily you will see the same shapes, same patterns. This applies to all time frames. They all look the same.

The main differences are (1) the amount of cash you need to put at risk for the stop loss. A couple of hundred pips at daily down to perhaps ten on the 1M chart and (2) the speed of your reaction required.

 

Craig Harris uses the 15M, as is Karl Dittman, Lindencourt is daily.

 

I don't use fractals but left them there for those who need them.

 

Mark Macrea (Sure Fire Trading) is giving away a trading system that is based on them. Put trendlines on upper and/or lower fractals and trade from a break. It came about 22nd in his competition. ( link available if you want it)

 

5BR gets you more trades, more quickly!

 

Freddie

[metalriff]

more charts with entries please. thanks !

[Freddie]

more charts with entries please. thanks !

 

Hi Metalriff, please bear in mind that trading is a bit of a leap in the dark so the entry is always two candles going our way and we Buy stop or sell limit (I have trouble sorting those out) on the price passing a value.

 

My contention in all this is that you don't need little arrows or crossing lines to get your entries.

 

Here is a chart from the TrendRider thread showing the entry. I would get in the same place!

 

Lost the internet, I will post the pic when I can: Here it is http://i914.photobucket.com/albums/ac341/freddieforII/TR1.jpg

Edited July 18, 2010 by Freddie
lost Internet/ found internet

[rob123]

Hi Freddie, Good work on the charts buddy. Do you have the system from Mark McRae or is it allready here in the forum ? Thanks,Rob

[Freddie]

Hi Freddie, Good work on the charts buddy. Do you have the system from Mark McRae or is it allready here in the forum ? Thanks,Rob

 

Here is the link Rob, it offers two systems, you watch the video, one is the 'fractal Trend line Break' but I forget about the second:

http://www.surefiretradingchallenge.com/winners-wall.php

 

Freddie

[Freddie]

Lindencourt

The Lindencourt system is worked on a daily chart and uses the stochastic indicator for its

trigger.

The chart shows the result of 2008/9's signals. If you were using 5BR look at where your

entries would have been.

 

http://i914.photobucket.com/albums/ac341/freddieforII/Lindencourtdailyx2.gif

 

Not very clear. If you want I will try to upload a larger one but you can see the places where we would enter.

Edited July 18, 2010 by Freddie
comment

[Freddie]

Fozzy, another daily, also available free, just google.

The indie is RSI and a SMA trade at the crosses.

 

Here is the picture

http://i914.photobucket.com/albums/ac341/freddieforII/Fozzyvs5BR.jpg

 

Look where we might enter

 

Freddie

[metalriff]

If you are having trouble posting pics try http://www.jetscreenshot.com/ .

[Freddie]

Thanks Metalriff, I will try that. Photobucket seems fine, it is mostly my poor internet here.

When I go into town - my wife teaches yoga and I am the driver so I must wait in the cafe- I get the good internet and can post without problem.

I think that the Lindencourt problem was changing it to a .gif

 

Thanks for the help.

Freddie

[sillykiddo]

Hi Freddie so will you post the 5BR method once you get a good internet..