Cowabunga System Daily Update: 09/17/07

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Main Trend

Current Trend= The trend remained down the entire day.

Today I only looked for short trades.

Today’s Surf

1:15am ET- There was a moving average crossover for a short trade. RSI was less than 50, stochastics were trending down, and MACD went from positive to negative. This was a valid entry. The entry was at the close of the candle at 2.0073 with a stop at the most recent swing high at 2.0086. Since I was 23 pips away from the nearest 00 or 50 level I decided to put my target at 2.0050.

Entry: Short at 2.0073

Stop: 2.0086

Initial Target: 2.0050

2:15am ET- My target was hit! The price made a clean break of my target so I moved my stop to 2.0050 and set my next target for 2.0000.

2:45am ET- My 2nd target at 2.0000 was hit but the price did not make a clean break of that level so I took my final profit.

11:00am ET- There was a moving average crossover for a short trade. RSI was less than 50, stochastics were trending down, and MACD was positive and losing value. This was a valid entry. The entry was at the close of the candle at 1.9998 with a stop at the most recent swing high at 2.0026. Since I was 48 pips away from the nearest 00 or 50 level I decided to put my target at 1.9950.

Entry: Short at 1.9998

Stop: 2.0226

Initial Target:1.9950

11:45am ET- My target was hit. The price made a clean break of my target so I moved my stop to 1.9950 and set my next target for 1.9900.

12:45am ET- Unfortunately I was stopped out at my initial target at 1.9950.

Trade Result: +73 +48= +121 pips; R-Multiple: 5.61, 1.71

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  • ChowClown

    Hi, i’ve noticed that the 4hr RSI and Stoch filters are seldom used when determining trade direction for the day.

    When do you use the 4hr RSI/Stochs?….or could we just drop them off the chart?

    Great day for your method! The equity curve for the year to date looks re-assuringly stable too.

  • ChowClown

    Hi, i’ve noticed that the 4hr RSI and Stoch filters are seldom used when determining trade direction for the day.

    When do you use the 4hr RSI/Stochs?….or could we just drop them off the chart?

    Great day for your method! The equity curve for the year to date looks re-assuringly stable too.

  • pinetree

    PS, how do you get the closing price of the candle so accurately all the time? Do you wait for the candle to first close and then wait for a retracement on the next candle? That is what I have been doing. However, that does not work all the time like on 11:00am trade –short entry at 1.9998. There was no retracement on the next candle –so I decided to not enter the trade. How did you manage to enter at 1.9998 —cheers.

  • pinetree

    PS, how do you get the closing price of the candle so accurately all the time? Do you wait for the candle to first close and then wait for a retracement on the next candle? That is what I have been doing. However, that does not work all the time like on 11:00am trade –short entry at 1.9998. There was no retracement on the next candle –so I decided to not enter the trade. How did you manage to enter at 1.9998 —cheers.

  • PipSurfer

    ChowClown- I actually do use 4hr RSI and Stochastics as a filter. Notice that on the trend change candle, RSI was less than 50 and stochastics were trending down. That means the trend change candle was valid, and until a new trend change candle forms, the trend remains down.

    Pinetree- I usually get in right as the candle is about to close. Sometimes I may be a pip or 2 off if the market is moving extremely fast, but usually I can get it right on the nail. You just have to have a quick trigger finger :)

  • PipSurfer

    ChowClown- I actually do use 4hr RSI and Stochastics as a filter. Notice that on the trend change candle, RSI was less than 50 and stochastics were trending down. That means the trend change candle was valid, and until a new trend change candle forms, the trend remains down.

    Pinetree- I usually get in right as the candle is about to close. Sometimes I may be a pip or 2 off if the market is moving extremely fast, but usually I can get it right on the nail. You just have to have a quick trigger finger :)