Cowabunga System Daily Update: Thursday, 04/10/08

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Main Trend

Current Trend= The trend remained up the entire day.

Today I only looked for long trades.

News events to watch for today :
  • 7:00am EST- BOE Interest Rate Statement
  • 8:30am EST- US Trade Balance; Unemployment Claims

Today’s Surf

3:45am EST- There was a moving average crossover for a long trade. RSI was greater than 50, stochastics were trending up, and MACD was negative and gaining value. This was a valid entry. The entry was at the close of the candle at 1.9764 with a stop at the most recent swing low at 1.9722. Since I was 36 pips away from the nearest 50 or 00 level, I decided to put my initial target at 1.9800.

Entry: Long at 1.9764

Stop: 1.9722

Initial Target: 1.9800

5:00am EST- My target was hit. Even though price made a clean break I still took my final profit. (See video for explanation). I exited at 1.9822.

8:15am EST- There was a valid signal here but because it was right before news, I did not enter.

10:15am EST- There was almost a signal here but stochastics had not crossed up which cancelled out the signal. This actually saved us because this trade would’ve been a loser.

entry2

Trade Result: +58 pips: R-Multiple: 1.38

News events to watch for tomorrow :
  • None
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  • jsese

    Hey man..I want to talk about something that isn’t really addresed much here.Money management with this system. I have been trading it and realized the this works best with a set number of lots rather than a risk of 1% per trade.
    What I mean is this..if you change your lot amount based on the risk of the trade, it is my experiance that while you may have more profitable trade than losing ones, you actually can end up with a loss because alot of the time the risk is less in the losing trade so you trade more lots and in the end multiply the loss by more lots.
    Example: you trade one lot in the morning becuase the rik allows you to only risk that much. The trade generates 30 pip gain. The same day you enter another trade where you risk is only 20 pips so lets assume you can do 2 lots. This trade goes against us and so you have a 20 pip loss. Now on a trade per trade, with the same amount of lots, you would be up for the day 10 pips..which is better than a kick in the head right…NOPE..you actually close out the day with negative 10 pips. So if you measure by pips you are positive but $ (which is what really matters in the end…you are NEGATIVE.

    So, what I am saying is (again based on my experience) is that using this system the trader should set a standard lot amount (one that will allow for large stops..which are usualy no more than 40 pips with this system) and not base the amount of lots on the amount of risk.

    Any thoughts? How do you do it?

    Thanks as always for all your work man.

  • robotic

    Thanks for the video update. I’ve struggeled also with the target/clean brake thing… Should i close it, or should i wait a litlle bit longer. Eventually, after several different approaches, i came up with this solution that works best for me : When my target price is hit (at the 15M chart) i always wait for the end off that candlestick. If the price closes above my target (let’s assume 5 pips) i set a profitstop at about 5 to 10 pips of that closing price. If the price closes below my targetprice i push the sell or buy button immediately ;-) This kind of setup gave me 118 pips yesterday on the EUR#USD. (if you spot some language mistakes, please do forgive me, English is only my third language…;-)

  • jsese

    Hey man..I want to talk about something that isn’t really addresed much here.Money management with this system. I have been trading it and realized the this works best with a set number of lots rather than a risk of 1% per trade.
    What I mean is this..if you change your lot amount based on the risk of the trade, it is my experiance that while you may have more profitable trade than losing ones, you actually can end up with a loss because alot of the time the risk is less in the losing trade so you trade more lots and in the end multiply the loss by more lots.
    Example: you trade one lot in the morning becuase the rik allows you to only risk that much. The trade generates 30 pip gain. The same day you enter another trade where you risk is only 20 pips so lets assume you can do 2 lots. This trade goes against us and so you have a 20 pip loss. Now on a trade per trade, with the same amount of lots, you would be up for the day 10 pips..which is better than a kick in the head right…NOPE..you actually close out the day with negative 10 pips. So if you measure by pips you are positive but $ (which is what really matters in the end…you are NEGATIVE.

    So, what I am saying is (again based on my experience) is that using this system the trader should set a standard lot amount (one that will allow for large stops..which are usualy no more than 40 pips with this system) and not base the amount of lots on the amount of risk.

    Any thoughts? How do you do it?

    Thanks as always for all your work man.

  • robotic

    Thanks for the video update. I’ve struggeled also with the target/clean brake thing… Should i close it, or should i wait a litlle bit longer. Eventually, after several different approaches, i came up with this solution that works best for me : When my target price is hit (at the 15M chart) i always wait for the end off that candlestick. If the price closes above my target (let’s assume 5 pips) i set a profitstop at about 5 to 10 pips of that closing price. If the price closes below my targetprice i push the sell or buy button immediately ;-) This kind of setup gave me 118 pips yesterday on the EUR#USD. (if you spot some language mistakes, please do forgive me, English is only my third language…;-)