Cowabunga System Daily Update: Tuesday, 01/15/08

If this is your first time visiting this blog, read this first!

Main Trend

trend2

Current Trend= The trend remained down until 7am EDT. From 3am EDT – 7am EDT, a new trend change candle formed and changed the trend from down to UP. After 7am EDT, the trend remained up the rest of the day.

Today I only looked for short trades until 3am EDT. After 3am EDT I only looked for long trades.

Today’s Surf

2:15am EDT- There was a moving average crossover for a long trade. RSI was greater than 50, stochastics were trending down, but MACD was already negative. This cancelled out the signal and I did not enter.

entry2

Trade Result: +0 pips; R-Multiple: N/A

News events to watch for Monday :
Questions? Read the Cowabunga FAQ.
Want to discuss the Cowabunga System? Visit our Forums.
  • cacou

    Hello,

    Why you did not go for a short trade today @ 2:15 am EDT?

    Here are your rules:
    * 5 EMA must cross below the 10 EMA – YES
    * RSI must be less than 50 – YES
    * Stochastics must be headed down and not in oversold territory – YES
    * MACD histogram must go from positive to negative OR be positive and start to decrease in value – YES MACD went from positive to negative, no????

    Thank you for your help.

    Cacou

  • jsc

    I have the same comment/question on the MACD histogram, though my chart looks a little different, the crossover was a fraction earlier (on the long red candle) and I took the trade on the following candle. When the signal was generated the histogram bar was slightly negative, but it was the first negative one. I call it a valid entry even though the trade failed and I took a loss (it did touch the ’50′ for me, but I’d set my target the same distance as my stop as I was slightly late in entering so missed the best price. I would had made a profit at the 50 if my entry had been a few pips better and only missed a profit by 3 pips).

    Looking at the chart above, perhaps where things line up the histogram bar is the second negative bar, so I’d say ‘no entry’ based on Pip Surfer’s chart even though my own chart signalled an entry. It is a little hard to read the values on the screen shot posted, but that is my take on this one.

    Everyone’s data is slightly different. It hasn’t happened yet, but I expect I’ll win a trade or avoid a trade that Pip Server takes a loss on at some stage due to the data difference. At the moment its been a couple of losses for me that he has avoided or even taken a profit. On reviewing these losses I’m happy I stuck to the system and didn’t make a mistake. It only been five weeks since I found this system so hope it balances out.

  • cacou

    Hello,

    Why you did not go for a short trade today @ 2:15 am EDT?

    Here are your rules:
    * 5 EMA must cross below the 10 EMA – YES
    * RSI must be less than 50 – YES
    * Stochastics must be headed down and not in oversold territory – YES
    * MACD histogram must go from positive to negative OR be positive and start to decrease in value – YES MACD went from positive to negative, no????

    Thank you for your help.

    Cacou

  • stcary

    How do i find the answer to the above comments?, as i to found the same problem . noting that a similar set up happened on the 9th and a entry was made.
    Thankyou

  • mondavie

    Hi BP, It’s easier to apply CB when the strong trend (main trend) had performed in H4. When the main trend keep changing in the short period seem like CB shows some weakness.
    Is it possible to add some formula to determine weather the main trend is really going to change the direction or just testing around?, thanks

  • jsc

    I have the same comment/question on the MACD histogram, though my chart looks a little different, the crossover was a fraction earlier (on the long red candle) and I took the trade on the following candle. When the signal was generated the histogram bar was slightly negative, but it was the first negative one. I call it a valid entry even though the trade failed and I took a loss (it did touch the ’50′ for me, but I’d set my target the same distance as my stop as I was slightly late in entering so missed the best price. I would had made a profit at the 50 if my entry had been a few pips better and only missed a profit by 3 pips).

    Looking at the chart above, perhaps where things line up the histogram bar is the second negative bar, so I’d say ‘no entry’ based on Pip Surfer’s chart even though my own chart signalled an entry. It is a little hard to read the values on the screen shot posted, but that is my take on this one.

    Everyone’s data is slightly different. It hasn’t happened yet, but I expect I’ll win a trade or avoid a trade that Pip Server takes a loss on at some stage due to the data difference. At the moment its been a couple of losses for me that he has avoided or even taken a profit. On reviewing these losses I’m happy I stuck to the system and didn’t make a mistake. It only been five weeks since I found this system so hope it balances out.

  • jsd1004

    If it was a winning trade it might have fulfilled the criteria ;-)

  • stcary

    How do i find the answer to the above comments?, as i to found the same problem . noting that a similar set up happened on the 9th and a entry was made.
    Thankyou

  • mondavie

    Hi BP, It’s easier to apply CB when the strong trend (main trend) had performed in H4. When the main trend keep changing in the short period seem like CB shows some weakness.
    Is it possible to add some formula to determine weather the main trend is really going to change the direction or just testing around?, thanks

  • jsd1004

    If it was a winning trade it might have fulfilled the criteria ;-)

  • PipSurfer

    Cacou- If you look very close to the MACD lines during the candle before the signal occurred, you’ll see that the lines had already crossed down. On the histogram, this would produce a negative bar. Since it was negative, the next candle (our potential signal) was cancelled.

    jsc- did you wait for the signal candle to close to see if it was valid? I’m just wondering, because if the candle prior to the potential signal candle had already produced a negative MACD value then you should already know that even if a signal candle was produced, you would not enter because of the negative MACD caused by the previous candle. Does that make sense? I’m glad you are really making an effort to stick to the rules. That is the most important thing to follow!

    stcary- Hopefully my above comment helps :)

    Mondavie- You have to remember that this system was not just thrown together overnight. Before I even started posting results a year ago, the system had been thoroughly back tested and forward tested. The set rules are tested to produce positive results and if you follow them closely you should also produce positive results. Adding more filters, may complicate things and therefore may also keep you out of good trades, therefore making your potential for negative results greater. This is not to say that the system cannot be improved. I encourage you to play around with it and tailor it to fit your style. I just want you to know that the system “as is” is good enough to give you positive pips.

    jsd1004- I resent that :)

    Happy trading everyone!

  • PipSurfer

    Cacou- If you look very close to the MACD lines during the candle before the signal occurred, you’ll see that the lines had already crossed down. On the histogram, this would produce a negative bar. Since it was negative, the next candle (our potential signal) was cancelled.

    jsc- did you wait for the signal candle to close to see if it was valid? I’m just wondering, because if the candle prior to the potential signal candle had already produced a negative MACD value then you should already know that even if a signal candle was produced, you would not enter because of the negative MACD caused by the previous candle. Does that make sense? I’m glad you are really making an effort to stick to the rules. That is the most important thing to follow!

    stcary- Hopefully my above comment helps :)

    Mondavie- You have to remember that this system was not just thrown together overnight. Before I even started posting results a year ago, the system had been thoroughly back tested and forward tested. The set rules are tested to produce positive results and if you follow them closely you should also produce positive results. Adding more filters, may complicate things and therefore may also keep you out of good trades, therefore making your potential for negative results greater. This is not to say that the system cannot be improved. I encourage you to play around with it and tailor it to fit your style. I just want you to know that the system “as is” is good enough to give you positive pips.

    jsd1004- I resent that :)

    Happy trading everyone!