waterskiguy Posted January 2, 2011 Author Report Share Posted January 2, 2011 (edited) Trend determination - Weekly - look for the last 3,4,5 candles to all be in the same direction, each one making new highs for longs or new lows for shorts. Daily - after you find the weekly chart go down to the daily make sure it "looks" right, most of the time it will trending just like the weekly. On the daily chart you want to make sure that the last 15 - 25 trading days are moving in one constant direction, generally speaking. You want the trend to be smooth, smooth price action. Yes there will prob be a few retracements on this time frame but they will be small in size over all. 4hr - this is where we are hunting for a trade. We are looking/ waiting for pull back and a signal to trigger into the direction of the daily, weekly. Stops should be placed 3 pips outside of last swing low for longs or last swing high for shorts. People kind in mind that YOU don't determine your pip value or stop placement THE MARKET does. Risk no more then 2.5% of your account value. So if you have 1000$ micro account your risk per trade starting out until it is built up will be 25$. If your stop is 25 pips away then your pip value generally speaking on us pairs will be around $1 per pip. If you stop is 100 pips away then your pip value will be 25 cents. Your stop amount in terms of pips will change with every trade just like your pip value what will not change is how much you risk on each trade .... always stays the same 2.5 % READ THE BELOW OVER UNTIL IT SINKS IN .... it took me a long time to wrap my mind, head, thinking around the statement. ------> YOU don't determine your pip value or stop placement THE MARKET does and the size of your account. When you are starting out it's not about making money, that ONLY comes with experience, it's about getting good at acquiring pips. Once you get good at acquiring pips only then can you start to think about the $$. Start small ie: micro account - if you can't trade penny or dime size pips to profitabilty then you certainly won't be able to trade larger size. Edited January 2, 2011 by waterskiguy forgot to add something be_berlin, civicsi411, KENG and 26 others 29 Quote Link to comment Share on other sites More sharing options...
soundfx Posted January 2, 2011 Report Share Posted January 2, 2011 Thanks for the additional info. waterskiguy. I've been looking at various charts thinking about optimum exits. Of course, we could determine our own exits from S/R levels on the Weekly/Daily or run a trailing stop or scale-out 1/2 of the trade, move stop to b/e and let the rest run with a trailing stop etc. Those sorts of exits can be tricky for beginners as they require some discretion. From what I've seen, if we enter in the direction of the main trend (which we should ensure by checking the Daily and Weekly as you mentioned above), then there will normally be a good bit of price movement before it starts to turn noticeably against our trade. I think that we could use the appearance of the arrow in the opposite direction to give a more mechanical exit. Admittedly this exit isn't optimum, however it does give a solid exit rule which can easily be followed. Placing stops at the last swing high/low looks to work very nicely nearly all the time. These are trends which can typically last several days which we're looking to profit from. If price should go beyond the last swing high/low then the odds are that the trend is changing and our trade is no longer valid. Quote Link to comment Share on other sites More sharing options...
waterskiguy Posted January 2, 2011 Author Report Share Posted January 2, 2011 If I may make a suggestion for those of you who are new or not that fluent at drawing trend lines this is a skill you will HAVE to learn regardless of your trading being indicator based or price action based. Go to http://stikky.com/0003-stockcharts/0003-fulldetails.htm This is a work book that teaches you how to draw trend lines properly. It's big print and looks like it's written with a crayon so when I came across it I knew it would suit me perfectly :-) Plus even though it's many pages, 200 plus I was able to go through all of it in about 2,3 hrs. It's a actual little book you will get in the mail or you can buy from a large book store IT IS NOT pdf file you will find online. I think I paid about 7$ for it from amazon in the used section. This is one of those rare gems that the value I received from it was 100 times the investment I made in it. The examples in the work book are made on stocks but it all applies to any instrument one chooses to trade. flover, ismael360, coffee99 and 1 other 4 Quote Link to comment Share on other sites More sharing options...
waterskiguy Posted January 2, 2011 Author Report Share Posted January 2, 2011 soundfx skype me if you can waterskiguy bnbb2004 1 Quote Link to comment Share on other sites More sharing options...
pippimp Posted January 2, 2011 Report Share Posted January 2, 2011 (edited) Friends, Something also to consider and while i would not really want to alter this great system. But what I have found from some other good systems is that after we are in the trade. we may decide to use a Bollinger Band with standard settings and once price hits the middle band on the next lower timeframe (ie. middle band on the 1 hour if we are trading the 4HR)and scale out with take profit on half the order and or move to break even. Take the remaining profit when price hits on the furthest extreme band on the 1hr chart. Just a suggestion. Theo Edited January 2, 2011 by pippimp spelling forex.pathfinder 1 Quote Link to comment Share on other sites More sharing options...
alright Posted January 2, 2011 Report Share Posted January 2, 2011 If I may make a suggestion for those of you who are new or not that fluent at drawing trend lines this is a skill you will HAVE to learn regardless of your trading being indicator based or price action based. Go to http://stikky.com/0003-stockcharts/0003-fulldetails.htm This is a work book that teaches you how to draw trend lines properly. It's big print and looks like it's written with a crayon so when I came across it I knew it would suit me perfectly :-) Plus even though it's many pages, 200 plus I was able to go through all of it in about 2,3 hrs. It's a actual little book you will get in the mail or you can buy from a large book store IT IS NOT pdf file you will find online. I think I paid about 7$ for it from amazon in the used section. This is one of those rare gems that the value I received from it was 100 times the investment I made in it. The examples in the work book are made on stocks but it all applies to any instrument one chooses to trade. Sorry to correct you here, my friend. Found it!:) http://www.4shared.com/document/boerdDHl/stikky_stock_charts.htm By the way, thanks for your added comments. Thread becoming more and more interesting;) ismael360, piporo, coffee99 and 27 others 30 Quote Link to comment Share on other sites More sharing options...
waterskiguy Posted January 2, 2011 Author Report Share Posted January 2, 2011 Perfect ... even better ... free ... that's the one. Download it print it off and then do the "assignments" to get the real benefit from the book. Reading it is one thing but applying as you go through it takes it to a whole other level. Great stuff for finding this alright!!! civicsi411 1 Quote Link to comment Share on other sites More sharing options...
shabz Posted January 2, 2011 Report Share Posted January 2, 2011 Drawing trendlines is also an art that can only be learnt from experience, there are indicators that will do it for you, play about with andrews pitchfork, built in tool in MT4. As long as you can click on 3 points, it draws the TL for you. http://www.youtube.com/watch?v=ozHSXjtSCQs gctex, edw123 and heisamit 3 Quote Link to comment Share on other sites More sharing options...
soundfx Posted January 3, 2011 Report Share Posted January 3, 2011 Hi Guys, I've just had a chat with waterski guy - many thanks to him for giving up his time to run through his system :) Here are some additional points on trading the system which I gleaned: 1. Always wait for the 4H candle with an arrow on to close before considering entering a trade. 2. Never enter trades at market price, instead place orders to be triggered: Shorts: Place a sell stop order 3 pips below the low of the closed 4H candle with a down arrow. Longs: Place a buy stop order 3 pips above the high of the closed 4H candle with an up arrow. 3. Always set stops at swing high or swing low points from the 4H chart. Targets can be set at the outer levels of channels, or support and resistance levels. However, sometimes when price is entering new territory we won't know where to set the target, in this case set target 1 at the same distance as your stop to give a 1:1 risk/reward. 4. It is possible to set two targets, in which case you could close half of the trade when target 1 is hit and then let the rest run moving the stop to say breakeven+10 pips. How long you leave the trade running is up to you, however waterskiguy doesn't like too many trades running at the same time, so will close out most trades if they reach say 120 pips. An average target for a good trade using this system will be around 80 pips. 5. Only a handful of pairs will be trending enough to give us high probability entries, so it's worth going through all pairs in market watch first checking Weekly, then Daily for trends and if trends look good then checking 4H for a possible entry. 6. When you place a trade, resist the temptation to manually exit early - just let the trade run to your target or stop. 7. Waterskiguy checks his charts twice a day for opportunities - once in the morning and once before going to bed. This makes the system ideal for anyone who has a day job. It will take around 30 mins each time you check for opportunties, after then if you identify high probability trades you can place your "buy stop" or "sell stop" orders with associated targets and stops and leave the trades to run - a great "set and forget" system for busy folks looking to grow their account. edw123, heisamit, hawe and 16 others 19 Quote Link to comment Share on other sites More sharing options...
alright Posted January 3, 2011 Report Share Posted January 3, 2011 Great add-ons, soundfx, thanks. Now I would have a couple of questions. It happens frequently that the arrow bar doesn't meet the criteria on either both or one of the RSI indis. Shall we just discard that signal or wait for the RSI to agree and then enter if the high/low of the signal bar hasn't been broken yet? Also, what about re-entries with the trend when a trade is already open (or it's been closed) and a new arrow appears with the same trend? Trade it or not trade it? Thanks Quote Link to comment Share on other sites More sharing options...
humz_0607 Posted January 3, 2011 Report Share Posted January 3, 2011 (edited) Hi all, once you have dowloaded the win.rar and extracted the indicator and template files, what is the way to install them all correctly on mt4 please?? The way i am doing it seems to miss some indicators. Am a complete newbie just staring off like everyone else once did and would greatly apperciate any kind of assistance or link to help me on the way. P.S. Thanks alot waterski guy - for sharing something you didn't have to..! Thanks Edited January 3, 2011 by humz_0607 Quote Link to comment Share on other sites More sharing options...
soundfx Posted January 3, 2011 Report Share Posted January 3, 2011 No probs alright, Trading with the trend is the main aim of this system. Waterskiguy even mentioned experimenting with looking at the trend on the Weekly and Daily and if both are strongly short then enter with a sell at any point on the 4H chart. Simply trading with the main trend will ensure an "edge", however it's even better if we can optimise our entries to minimise unnecessary drawdown. My view is that we should only enter orders when all indicators line up - i.e. both RSI's and an arrow on the most recent closed 4H candle. This will ensure that we're only trading signals with the highest probability. The alternative...if the trend is strong and we have an arrow on the 4H though both RSIs aren't lined up, then we should wait for all to line up to have the highest chance of getting a successful trade. If the trend is still intact and price is still going in the direction of the arrow then we could place a market order in the direction of the trend as soon as all indicators line up. I think re-entries are safe to trade. What we're effectively doing with a re-entry trade is waiting for price on the 4H to retrace slightly (probably giving an opposite arrow), then for price to return to the main trend direction confiming that with an arrow change back to the trend on the next closed 4H candle. If we're in a trade and get an opposite arrow then I'd want to be out of that trade at that point. jtrader and spidermaher 2 Quote Link to comment Share on other sites More sharing options...
soundfx Posted January 3, 2011 Report Share Posted January 3, 2011 humz, Extract all files into the following directory: C:\Program Files\<Your MT4 Broker Directory>\experts\indicators Now go to that directory and cut 'n' paste the template file mtf rsi arrows clock.tpl into the directory: C:\Program Files\<Your MT4 Broker Directory>\templates Open a 4H chart and right click on the chart screen and select Template -> Load template You should be able to load mtf rsi arrows clock.tpl from there which will automatically set up your screen and load all the indicators you need :) swordfish, hawe, CiDER and 3 others 6 Quote Link to comment Share on other sites More sharing options...
humz_0607 Posted January 3, 2011 Report Share Posted January 3, 2011 soundfx - thank you verry much... much appreciated! Quote Link to comment Share on other sites More sharing options...
waterskiguy Posted January 4, 2011 Author Report Share Posted January 4, 2011 (edited) soundfx has it right on the money or in this case "the trade", make sure ALL line up. Example: of short trade A. weekly has minimum 3 or 4 bars all making lower lows B. go to daily make sure it all looks good - smooth def down trend - chances are it will be c. go to 4hr chart look for pull back and arrow for short - YOU MUST wait for 4 hr candle to close and it prints. we enter 2,3 pips BELOW the 4hr candle that just closed and printed the arrow. Use sell stop order - never market order - we want the market to come through our order and fill us. If the 4hr candle closes with arrow and we just enter at market and the market farts off the opposite direction then we are in losing trade. Always make the market come to us to fill our trade /order. d. both rsi indicators must be red, with white line below the black line Now .... even though this is a good method/system it is just a tool to trade/ enter the market. How much you know in general about trading will determine how successful you are with this tool. Things like how fluent are you at drawing trend line? Do you know your support/ resistance zones? Do you REALLY see the correlation between the 4hr chart, daily, weekly? How they line up, the flow and ebbs within each time frame? Do you understand the relationship between whole numbers and how the market moves towards and from them? Not to complicate things BUT the above mention are just some of the very core principles that will provide a frame work from which a person should be trading from. Edited January 4, 2011 by waterskiguy mistake in type of order oopps forex.pathfinder, jtrader, CiDER and 6 others 9 Quote Link to comment Share on other sites More sharing options...
alright Posted January 4, 2011 Report Share Posted January 4, 2011 Thanks for clarifying even more, my friend. About the targets, apart from S/R levels, have you ever checked Fibonacci extensions? Quote Link to comment Share on other sites More sharing options...
soundfx Posted January 4, 2011 Report Share Posted January 4, 2011 Glad I'm on the right track waterskiboy :) One thing I'm going to do is first work out when each 4H candle closes in my local time on the different brokers I use. Then I'll know when to be looking for possible signals. As we talked about, it's worth noting certain pairs that are not yet ready to give a signal though could do soon, to give us a "heads up" as to what may happen next. This is where your trendlines come in handy folks. If the overall trend is down and price is in middle of a channel then the next time you should be looking for an entry short is when the price nudges the upper trendline. It's worth keeping a note of these potential trades in a trade journal, so that we know good opportunities when they arrive, even if we've subsequently deleted the trendlines - also keeping a journal of actual trades and the reason why you took them or are planning to take them is very good discipline and allows you to see your trading more as a profit making business rather than a "crap shoot". For those of you not familiar with setting orders in MT4 here's a brief summary: In the "New Order" window select Type as "Pending Order" rather than the default "Instant Execution". In the pending order section there are 4 types: Buy Limit: This means that as soon as price drops to X, you want to Buy it Sell Limit: This means that as soon as price rises to X, you want to Sell it Buy Stop: This means that as soon as price rises to X, you want to Buy it Sell Stop: This means that as soon as price drops to X, you want to Sell it In our case we're trend following, so we're always using either Buy Stop orders or Sell Stop orders. Limit orders are used to trade against the previous price movement. e.g. if price zooms up to a very strong resistance level, you may want to place a Sell Limit order to sell at that point. When entering your order, you enter the price at which you want the order to be triggered, and you can also enter your stop and target at the same time. civicsi411 and hawe 2 Quote Link to comment Share on other sites More sharing options...
humz_0607 Posted January 4, 2011 Report Share Posted January 4, 2011 waterskiguy - just out of interest, how long do you generally stay in trades for trading these longer time frames...? I no there is no rule of thumb. But, on average how long does it take for you to hit your profit targets, provided you hit them. i.e. scalpers would stay in trades for very small periods of times.... Thanks Quote Link to comment Share on other sites More sharing options...
waterskiguy Posted January 4, 2011 Author Report Share Posted January 4, 2011 Certainly there are all kinds of ways to come up with profit targets. Previous highs or lows, trend lines/ s/r levels/ fibs, what ever a person is comfortable with. Personally I like s/r zones or trendlines/ previous swings or "sticking points" in market, whole numbers. Quote Link to comment Share on other sites More sharing options...
waterskiguy Posted January 4, 2011 Author Report Share Posted January 4, 2011 Glad I'm on the right track waterskiboy :) One thing I'm going to do is first work out when each 4H candle closes in my local time on the different brokers I use. Then I'll know when to be looking for possible signals. As we talked about, it's worth noting certain pairs that are not yet ready to give a signal though could do soon, to give us a "heads up" as to what may happen next. This is where your trendlines come in handy folks. If the overall trend is down and price is in middle of a channel then the next time you should be looking for an entry short is when the price nudges the upper trendline. It's worth keeping a note of these potential trades in a trade journal, so that we know good opportunities when they arrive, even if we've subsequently deleted the trendlines - also keeping a journal of actual trades and the reason why you took them or are planning to take them is very good discipline and allows you to see your trading more as a profit making business rather than a "crap shoot". For those of you not familiar with setting orders in MT4 here's a brief summary: In the "New Order" window select Type as "Pending Order" rather than the default "Instant Execution". In the pending order section there are 4 types: Buy Limit: This means that as soon as price drops to X, you want to Buy it Sell Limit: This means that as soon as price rises to X, you want to Sell it Buy Stop: This means that as soon as price rises to X, you want to Buy it Sell Stop: This means that as soon as price drops to X, you want to Sell it In our case we're trend following, so we're always using either Buy Stop orders or Sell Stop orders. Limit orders are used to trade against the previous price movement. e.g. if price zooms up to a very strong resistance level, you may want to place a Sell Limit order to sell at that point. When entering your order, you enter the price at which you want the order to be triggered, and you can also enter your stop and target at the same time. Follow this guy he knows what he is doing :-) Made a mistake in the type of order I recommended for short trade - lol oopps I have corrected it now. Quote Link to comment Share on other sites More sharing options...
waterskiguy Posted January 4, 2011 Author Report Share Posted January 4, 2011 waterskiguy - just out of interest, how long do you generally stay in trades for trading these longer time frames...? I no there is no rule of thumb. But, on average how long does it take for you to hit your profit targets, provided you hit them. i.e. scalpers would stay in trades for very small periods of times.... Thanks Well there is no hard fast rule for this. For those of you who trade a real account and are profitable maybe you could jump in and provide your own "take" on this subject as well. There is a certain amount of trading and how we act in our trading that will be based on our skill set. Traders intuition. What works for me may or may not work for the next guy. Personally I always risk the same amount 2.5% on every trade. So if the stop is 25 pips away or 125 pips away if I get stopped out and when I get stopped out I lose 2.5%, that never changes. I figure if I have enough confidence in my analysis to put the trade on then I just leave it and let it do what it's gonna do. I don't run scared if the trade starts to go against me and I don't close a trade early UNLESS news is coming around the corner for the pair that I am in. One of the things that used to really burn me was closing a trade early because it went against me some pips or the indicator did something that did not look right or too much time had passed only to find out had I left it - it would have gone on to my profit level. I find when I close a trade early UNLESS it's because of news it affects my bottom line. So on every trade I either take a full stop out or profit 1 and 2 are reach. When I used to close trades before a full stop out or profit level was reached I found I would end up creating losers. So now I just leave them and let them work. (now having said the above .... 2 weeks before xmas I had a trade that was a "top trade" or so I thought it was. Well 48 hrs later when the trade had done nothing in this rare instance I did close it out simply because I had another trade that I wanted to put on. I ended up taking about a 10 pip loss on it.) Sometimes I can be in a trade for 4-8 hrs and sometimes it can be 1,2,3 days all depends on the market. Keep in mind this is what works for me, some of the other traders in this forum will have other methods of governing their trades and how they like to manage them. forex.pathfinder, spidermaher and humz_0607 3 Quote Link to comment Share on other sites More sharing options...
conglo Posted January 4, 2011 Report Share Posted January 4, 2011 The indicators are apparently very resource-intensive. My older desktop PC chokes even with only 1 chart with minimum charting and history bars. Quote Link to comment Share on other sites More sharing options...
alansim Posted January 4, 2011 Report Share Posted January 4, 2011 Looks like need a powerful speed to use the indicators. I am running other software too meanwhile. Quote Link to comment Share on other sites More sharing options...
alright Posted January 4, 2011 Report Share Posted January 4, 2011 Only a handful of pairs will be trending enough to give us high probability entries, so it's worth going through all pairs in market watch first checking Weekly, then Daily for trends and if trends look good then checking 4H for a possible entry. Sorry for my stupid question, but do you guys actually watch all pairs? Quote Link to comment Share on other sites More sharing options...
soundfx Posted January 4, 2011 Report Share Posted January 4, 2011 alright, The beauty of 4H candle trading is that we can only check the charts every 4 hours because we can only get confirmed entries when a 4H candle closes. It's up to you when you look for opportunities to trade. Waterskiguy checks all pairs in the morning in his timezone and he also checks them at night. Checking once a day would still highlight opportunities to trade, though not as many as checking twice. The more pairs you scan through each day, the better your chance of finding a pair which is strongly trending and a good candidate for a trade. Because we're longer term trading we're not too concerned about spread, so we can trade some of the less popular pairs if they're trending nicely. With FxPro I have 20 pairs in my market watch list from EURUSD to AUDCAD. Set up all these pairs on 4H charts and load the template. When checking pairs go through the market watch list methodically changing the timeframe to weekly first. If there's no obvious trend on the weekly, then move onto the next pair. If weekly is trending, then change the timefream to daily, and if daily isn't trending in the same direction as weekly then move on to the next pair. If both weekly and daily are trending nicely, then look at the 4h chart and see if there's an arrow with the trend and both RSI indicators are lined up. It sounds a lot to check, though should take 20-30 mins max. and is worth the effort if we're looking at making good consistent pips each week :) anton1713006147, bnbb2004, alright and 3 others 6 Quote Link to comment Share on other sites More sharing options...
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