Three Bar, Inside Bar Setup…
July 1, 2009
For those of you that know me, you know that I like to trade inside bars. I believe that inside bars have an edge that can be traded to make money in the Forex market.
Recently, I read an article about a setup that used inside bars. The setup looked for three higher highs, three higher closes, and then an inside bar to trigger a long trade. When trading to the down side the set was the opposite, looking for three lower lows, three lower closes, and an inside bar.
We tested this idea on the day and four hour time frame. We looked at exiting the trades at the end of the session, using a sixty pip trailing stop, and exiting on the close of the fifth session after entry. Watch the video to see the results…
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Support/Resistance at the Pip Level…
October 30, 2008
Lately, I have been watching the tick/pip charts on the four major pairs. I noticed that there were times when price would move to a point and then hit support or resistance and then break through to move either higher or lower.
In the past I have done a lot of testing and trading using support and resistance levels and I wanted to see if there was an edge that could be used to make money on a tick/pip chart.
So, in this trading lab report we tested how many “hits” of support or resistance would it take to be significant enough to trade off of it when this level was broken.
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Over Extended Bars…
September 18, 2008
The original question came to me after seeing so many large range days over the past few months. The questions was, “Is there anything we can learn/gain from these very large range days?” Now, I have done testing of this sort in the past. I once did testing on large range bars where the close of the bar had to be within ten percent of the high or ten percent of the low. If this occurred I then looked at the next bar to see if there was any edge that could be gained from looking for this setup. Like with most of the testing I do, or anyone for that matter, the results were not good. There was no edge.
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Lines Scapling System
September 1, 2008
The trading system that we will be reviewing was taken from the futures market. The system is based on scalping intraday moves.
The original system was modified a bit to accommodate the lack of tick charts in Meta Trader 4. The original system was traded on a 500 tick chart. I have changed this to the 30 minute chart, which is the closest time chart to the 500 tick chart.
The system uses the previous day’s high, low, open, and close; as reference lines. The system requires that the trader let the first two hours of the new session go without trading. Then, the trader takes the support and resistance areas for the first two hours and uses them for two more reference lines.
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Moving Average Pivot Point Breakout System
July 11, 2008
The moving average pivot point breakout system takes the very common pivot point approach and gives it a twist. We took the pivot point and averaged it over three bars to get the direction of the market. If the previous session’s pivot point was lower than today’s session pivot, then we are looking to go long. If the previous session’s pivot point was lower than today’s session pivot, then we would look to go short.
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Moving Average Mania: Using Multiple Moving Averages with ADX to Trade
June 25, 2008
Have you ever snorted an unknown brown powder in a beer house in Germany?
Have you ever met someone that asks a lot of questions and then wants proof of the answers? That person that just has to find out on their own; to a large extent that is how I am. I wish I wasn’t, it would make my life a lot easier, not as exciting; but easier none the less.
I remember right after college when my roommate and I went backpacking through Europe. It’s a funny thing that people say “backpacking” across Europe. Yes we had backpacks but there was very little backpacking, mostly riding on trains. Anyway, I digress; we were sitting there in Munich, Germany, at the famous Hofbrauhaus (beer house) drinking a beer or two.
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Trading Bar Patterns: Profitable or not, that tis the question?
June 25, 2008
Recently while reading, I came across several bar groups that are used to predict short term direction of the market. Of course if you know the direction of the market, then you can use these bar groupings to make short term trades. This is no new idea, but the writer stated that these bar patterns would work in any market. That’s when I thought to myself: The Forex, we will see?
Bar groups or patterns use the inter-bar High, Low, Open, and Close relationship with each other. These relationships are supposes to paint a picture as to what the market is doing. For example, one pattern might signal that consolidation is occurring. Another bar group could be showing where resistance has come into the market. While yet another, could be displaying where support is in the market.
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Futures/Commodities Trading Systems: Do trading systems designed for the futures and/or commodities markets work in the Forex?
June 24, 2008
In the past, I have received several emails with the question “Will my futures/commodities trading system work in the Forex market?”. Recently while reading about a profitable pattern, at least in the E-Mini S&P, the question above came to mind. So, I thought I would test it to see how it preformed in the Forex market.
The trading system was based off of a three-bar pullback pattern. For a long signal to be triggered, the system called for the pullback to have three consecutive lower highs and then a higher high. A filter was added so that the higher high had to be above the close of ten days ago. Buy at the open of tomorrow.
Of course to obtain a sell short signal you would need to have three consecutive higher highs and then a lower high. The lower high would have to be lower than the close of ten days ago. Sell short at the open of tomorrow.
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Turtle Trading the Forex: Will This Legendary System Hold Up?
June 19, 2008
If you have been a trader for any length of time, chances are good you’ve at least heard of the “turtle experiment” and “Turtle Trading”, but here’s the story just in case…
Two famous commodities traders, Richard Dennis and William Eckhardt, were in a dispute over whether great traders were born or made. (The old nurture versus nature debate.) Richard believed that you could teach people to become great traders, while Bill thought traders were born.
To settle the disagreement, Richard and Bill decided to run a little experiment. So, they place an ad in the Wall Street Journal and the New York Times recruiting inexperienced traders into the business of professional trading.
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