Cowabunga System Daily Update: 11/28/07

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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

2:00am EDT- 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 2.0655 with a stop at the most recent swing high at 2.0693. Since I was only 5 pips away from the nearest 50 or 00 level (2.0650) I decided to go for the same amount of pips I was risking on the trade, which in this case was 38. This put my initial target at 2.0617.

Entry: Short at 2.0655

Stop: 2.0693

Initial Target: 2.0617

2:30am EDT- My target was hit at 2.0617. Price made a clean break of my target so I moved my stop to 2.0617 and set my next target for 2.0600.

2:45am EDT- My 2nd target at 2.0600 was hit. This time, price did not make a clean break of my target so I took my final profit.

Trade Result: +55 pips; R-Multiple: 1.45

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  • andyk

    Hi
    I wondered if you could clarify the stops. Do you place the stop at the level of the swing high, or a couple of pips beyond it. Also do you allow for spread – eg todays short, would the stop have been 2.0693+Spread = 2.0697, or would it be 2.0693+Spread+2pips, or finally just 2.0693 (Ask) = 2.0689 (Bid) ? Thanks

  • andyk

    Hi
    I wondered if you could clarify the stops. Do you place the stop at the level of the swing high, or a couple of pips beyond it. Also do you allow for spread – eg todays short, would the stop have been 2.0693+Spread = 2.0697, or would it be 2.0693+Spread+2pips, or finally just 2.0693 (Ask) = 2.0689 (Bid) ? Thanks

  • Pipslinger

    I was looking at the charts when that 15 minute candle closed at 2:15. The 5 EMA had come down to the same value as the 10 EMA but had not moved below it. Since they had not technically “crossed” yet I decided to hold out, which turned out to cost me a profitable trade. My chart shows me EMA values in pips rather than tenths of a pip so maybe on yours they had crossed? Or do you normally consider it a signal when the two EMAs simply meet?

  • Pipslinger

    I was looking at the charts when that 15 minute candle closed at 2:15. The 5 EMA had come down to the same value as the 10 EMA but had not moved below it. Since they had not technically “crossed” yet I decided to hold out, which turned out to cost me a profitable trade. My chart shows me EMA values in pips rather than tenths of a pip so maybe on yours they had crossed? Or do you normally consider it a signal when the two EMAs simply meet?

  • Cowaboi

    …same here Pipslinger, I use FXCM’s ChartStation and that too didn’t technically measure a cross until the next candle. On balance these issues probably even themselves out over time, but to trade the same signals as PipSurfer demands use of xtick, rather than other charting.

  • Cowaboi

    …same here Pipslinger, I use FXCM’s ChartStation and that too didn’t technically measure a cross until the next candle. On balance these issues probably even themselves out over time, but to trade the same signals as PipSurfer demands use of xtick, rather than other charting.

  • PipSurfer

    andyk- Good question, I always factor in the spread when I set my actual stops and limits. So if my chart displays bid prices and I am going short, I always add the spread to my stops and limits. Hope that helps.

    Pipslinger and Cowaboi- In this situation it looks just like a difference between charting software. My EMAs actually did cross rather than just “touch”. Cowaboi is right in that these discrepancies will balance each other out in the long run. However, the most important thing to remember is to stay disciplined on your trading. Don’t get yourself down too much on missing a profitable trade. I missed a huge trade on Friday because the Cowabunga rules kept me out, but I am confident in knowing that this is just one trade missed out of a million more profitable trades to come. One more thing to consider- It’s always better to not win anything rather than taking a bad trade and losing it all. Hope that encourages you. Happy trading!

    PS

  • PipSurfer

    andyk- Good question, I always factor in the spread when I set my actual stops and limits. So if my chart displays bid prices and I am going short, I always add the spread to my stops and limits. Hope that helps.

    Pipslinger and Cowaboi- In this situation it looks just like a difference between charting software. My EMAs actually did cross rather than just “touch”. Cowaboi is right in that these discrepancies will balance each other out in the long run. However, the most important thing to remember is to stay disciplined on your trading. Don’t get yourself down too much on missing a profitable trade. I missed a huge trade on Friday because the Cowabunga rules kept me out, but I am confident in knowing that this is just one trade missed out of a million more profitable trades to come. One more thing to consider- It’s always better to not win anything rather than taking a bad trade and losing it all. Hope that encourages you. Happy trading!

    PS