New Weapon On Trial Stage

Masa weekend aku baca FF, mencari ilmu. Aku tertarik dengan satu trading system oleh DazFx. Selepas aku baca semua post; ia sedikit sebanyak memberi input tentang trading konsep yang aku trade sekarang... Aku baca konsep trading nie dari sebuah buku.. masa tu munculnya konsep harmonic patterns dsb.. Aku rasa konsep nie apply dalam ABCD harmonic patterns.. Apapun yang penting bukan siapa yang mencipta trading method kerana yang penting selagi ia sesuai dengan jiwa anda dan anda make green pips dengan method tu.. just gunakannya... Apapun aku dah modified sikit jer dari trading method tu... dan selama nie aku guna tanpa proper paper documentation... So hari nie aku documentkan apa yang patut... Inilah hasilnya... Bila ada set up nanti aku akan post dalam bentuk chart...

Inilah methodnya....

Catch The Impulse Wave Retracement - Trading Strategy on ABCD Patterns

I wouldn’t call this an entirely mechanical system, as you need to use some discretion. I will be outlining some of the important factors that may need consideration before entering a trade based on this system.

Name of system: Catch The Impulse Wave Retracement

Timeframe: 1Hr or 4Hr.
Pair: G$, E$, $J, $Chf, GJ, EJ, &AUS$
Indicator(s):
Fibonacci Retracement 61.8% & 78.6%

Fibonacci Expansion E 50%, E 61.8% & E 78.6%

Stochastic Oscillator (8,3,3)
5 SMA

Set Up Requirements:-

Set up only exists where the fibbo retracement of an impulse wave is 61.8% or 78.6%. The idea behind this simple trading method is that provided AB Impulse Wave to retrace by 61.8% or 78.6%, it should equal the next CD Wave.

Only look for setups that are in the direction of the Primary Trend.

How to determine a Primary Trend?

Trend is determine by looking at the wave of higher high, higher low or lower high, lower low.

The uptrend is intact as long as I see the low is getting higher in higher high, higher low wave.

The downtrend is intact as long as I see the high is getting lower in lower high, lower low wave.

What I mean by Primary Trend?

Primary trend is a timeframes that is 5x bigger of your entry timeframes. Seems that I only want to look for trading opportunity pending on 1hr impulse wave retracement or 4hr impulse wave retracement – so my primary trend for 1hr impulse wave retracement is 4hr tf and my primary trend for 4hr impulse wave retracement is daily tf…

Entry Requirements…

Long entry…

Primary trend must be in uptrend. If you see impulse wave in 1hr, 4hr trend must be uptrend & if you see impulse wave in 4hr, daily trend must be uptrend.

When the AB impulse wave retraces to the 61.8 or 78.6 levels, before pinpointing a precise entry, you wait for the next candle (confirmation candle) to form. This must not exceed the low made by the retracement and has to be a bullish reversal candle (ie, Harami, Doji, Bullish Maribozu, Bullish Belt hold, etc).

At the precise entry point:

1. The new candle following the Confirmation Candle is on or near the 5 SMA.
2. On the Stochastic Oscillator window, the fast stoch (blue line) has already crossed or is crossing the slow stoch (red dotted line) and hooking up. This cross should not happen in the overbought region (80 or above).

Short

Primary trend must be in downtrend. If you see impulse wave in 1hr, 4hr trend must be uptrend & if you see impulse wave in 4hr, daily trend must be uptrend.

When the AB impulse wave retraces to the 61.8 or 78.6 levels, before pinpointing a precise entry, you wait for the next candle (confirmation candle) to form. This must not exceed the high made by the retracement and has to be a bearish reversal candle (ie, Harami, Doji, Bearish Maribozu, Bearish Belt hold, etc).

At the precise entry point:

1. The new candle following the Confirmation Candle is on or near the 5 SMA.
2. On the Stochastic Oscillator window, the fast stoch (blue line) has already crossed or is crossing the slow stoch (red dotted line) and hooking down. This cross should not happenoversold region (20 or below).

Valid Impulse Wave

We only looking for Impulse Wave with candle less than 10 (4 – 10 candles); and after price retrace to 68.2% to 78.6 %; price will reach last TP (Targets 3) within same number of candles.

If we see 1Hr Impulse Wave is more than 10 candles; I will move to 4hr tf – If both 1Hr & 4Hr impulse wave have more than 10 candles – No trade for the setups.

Invalid Setups

A setup is considered invalid:

• If there is a RED news release within 15-30mins.
• Stop loss @ C to a point projected Target 2 you see the Risk/Reward is less than 1:1.5.
• If there is a major psychological support/resistance (ie, 2.0000 for Cable, 1.5000 for EURUSD, etc) before the first profit level (Target 1).
• If the setup is against the PRIMARY TREND
  

Stop Loss

Stop Loss should be placed where the first impulse wave starts (Point C on the charts). Only take a trade if the stop loss is smaller than your projected Target 2.

Money Management

Risk only 1% of your account.

Established the stop loss level (C point) on each trade and calculate the position size.
There are three profit taking levels, so you should divide the lots into three equal lots and enter all of them at the same price (entry point). You will enter at the same price buy you will exit each lot at the different target levels, if they are not stopped out first.

Exit Strategy

General Rule: I would exit my first lot at Target 1. If price does reach Target 2, I will take out the second lot, and move my stop loss to Break Even (Entry point). I will then take out my last lot when Target 3 is reached.

All targets level can be calculated using the Fibonacci Expansion tool.

-When the confirmation candle is a Harami (Inside bar), use FE 50.0 as Target 1, FE 61.8 as Target 2 and FE 78.6 as Target 3.

-When the 'AB' wave consists of more than 10 candles, use FE 50.0 as Target 1, FE 61.8 as Target 2 and FE 78.6 as Target 3.

-When the confirmation candle is quite large, use FE 61.8 as Target 1, FE 78.6 as Target 2 and FE 100.0 as Target 3.

Strategy ni walaupun 90% diambil di FF, tapi saya telah modified sedikit memandagkan DAZFx mempunyai konsep trading yang sama; yang telah disedia guna oleh saya.

UPADATE: 29 June 2008..

Advanced entry rules are stated below

1. Pull back to 38 or 50 fibo area
2. confirmation candle formed at either of the fibo number
3. sma(5) to give u good entry
4. stoch has crossed as usual
5. hidden divergence seen on stoch(hidden divergence indicates trend continuation)