Cowabunga System Daily Update: Thursday, 03/04/2010

The CFTC may be changing the rules for retail traders in the US. This affects many of us in a negative way and we need your help getting our voices heard.

Read more of the details

I can not find better words to describe my position on all this than those from Andrei Pehar, Chief Currency Strategist at fxKnight.com.  

Andrei says: "I am not opposed to regulation nor regulatory agencies. But that regulation needs to be fair, transparent, and open to public input. Otherwise it becomes corrupt and self-serving. Sure high leverage can get you into trouble if used thoughtlessly. Sure hedging when not done properly turns one loss into two. But I believe the cure is EDUCATION, not restricting what people can and cannot do with their investment decisions. Guide, don’t dominate – government was invented to protect people and their property, not to limit their potential.

We at BabyPips.com disagree with the CFTC proposal.

If you disagree as well, you may submit your comments to secretary@cftc.gov.  

Include “Regulation of Retail Forex” in the subject line of the message and the identification number RIN 3038-AC61 in the body of the message. Please, help us to spread the word!

I think this is a very important matter that affects us all, and we should try our hardest to ensure that things will be done for the best of the trading community.

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

Main Trend

Current Trend

The trend stayed up the entire day.

Today I only looked for long trades.

News events to watch for today :

  • 4:00am EST- US Halifax House Price
  • 7:00am EST- UK Bank of England Interest Rate Decision
  • 8:30am EST- US Non-Farm Productivity
  • 10:00am EST- US Pending Home Sales

Today’s Surf

4:45am EST- There was a moving average crossover for a short trade. RSI was less than 50, stochastics were trending down but MACD was already negative from the previous candle. This cancelled out the signal and I did not enter.

entry2

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

News events to watch for Friday:

  • 4:30am EST- UK Producer Price Index Output
  • 8:30am EST- US Change in Non-Farm Payrolls

For a complete list of news events check out our Forex Economic Calendar.
Questions? Read the Cowabunga FAQ.

Want to discuss the Cowabunga System? Visit our Forex Forums.

  • markr

    Hi

    Thanks for the video- very helpful.

    Could I check the settings for the MACD please? Mine are 12,26,9 and show as negative still for the one long signal today?

    (I am not sure why there is a difference-I’m using MT4 on Alpari UK)

    Hope you can help

    Many thanks

    Mark

  • almann400

    I THINK FOR THE COWABUNGA SYSTEM YOU SHOULD USE 10,3,3 ON YOUR MACD

  • Heston83

    almann asked a question yesterday, and i have the same question. I dont think you quite got what we/I am asking. How are you defining a “trend change candle?” Is it the proportions? Shadow length? Im just trying to nail that one down, dont quite understand. I love the rest of the system though! Thanks for these updates!

  • markr

    Hi

    Thanks for the video- very helpful.

    Could I check the settings for the MACD please? Mine are 12,26,9 and show as negative still for the one long signal today?

    (I am not sure why there is a difference-I’m using MT4 on Alpari UK)

    Hope you can help

    Many thanks

    Mark

  • PipSurfer

    @markr- 12,26,9 is correct. My lines are exponential and my histogram simply shows the difference between the 2 lines. Make sure that information is correct and it should match up pretty close.

    @Heston- Hmmm…a trend change candle by definition is this: EMA crossover (up/down), RSI above/below 50, and stochastics trending up/down. It has nothing to do with proportions or shadow length. If all the above conditions are met, then that is considered a trend change candle. Does that answer the question? Let me know if I’m still not getting it :)

  • almann400

    I THINK FOR THE COWABUNGA SYSTEM YOU SHOULD USE 10,3,3 ON YOUR MACD

  • Heston83

    almann asked a question yesterday, and i have the same question. I dont think you quite got what we/I am asking. How are you defining a “trend change candle?” Is it the proportions? Shadow length? Im just trying to nail that one down, dont quite understand. I love the rest of the system though! Thanks for these updates!

  • PipSurfer

    @markr- 12,26,9 is correct. My lines are exponential and my histogram simply shows the difference between the 2 lines. Make sure that information is correct and it should match up pretty close.

    @Heston- Hmmm…a trend change candle by definition is this: EMA crossover (up/down), RSI above/below 50, and stochastics trending up/down. It has nothing to do with proportions or shadow length. If all the above conditions are met, then that is considered a trend change candle. Does that answer the question? Let me know if I’m still not getting it :)

  • Drumpip

    Hi
    Im backtesting the Cowabunga swing trade. Now, i see here your looking for trends on 4hr to trade on 15 min.
    Is there any where I could get the tragedy setup and rules for the one your using now.

  • Drumpip

    nevermind. found it. he he

  • Heston83

    @Pipsurfer, Ok! I read your previous answer saying that but wasnt sure if everyone was communicating clearly. So basically, your just applying the same strategy to the 4hr that you do on the 15min to dial in entries, right? I love it! I just needed to know how you id’d them, because just using candle shapes seems kinda arbitrary to me, your plan is solid. Thank you very much for your reply. Have a nice weekend!

  • Drumpip

    Hi
    Im backtesting the Cowabunga swing trade. Now, i see here your looking for trends on 4hr to trade on 15 min.
    Is there any where I could get the tragedy setup and rules for the one your using now.

  • Drumpip

    nevermind. found it. he he

  • Heston83

    @Pipsurfer, Ok! I read your previous answer saying that but wasnt sure if everyone was communicating clearly. So basically, your just applying the same strategy to the 4hr that you do on the 15min to dial in entries, right? I love it! I just needed to know how you id’d them, because just using candle shapes seems kinda arbitrary to me, your plan is solid. Thank you very much for your reply. Have a nice weekend!

  • worshipu

    I have a question concerning your target price and order type. I under stand that the target price is at a 100 or 50 level or equal to what is risked.
    You mention that when a candle closes beyond a target price that you keep the trade open and move the Stop Loss to the original target price. What type of order do you use for this? Or do you not place a target price order and just watch this manually?
    Options I’ve tried:
    1) I place an order to take profit at target price and if price closes beyond TP I open a new trade. This puts part of the original trades profits at risk.
    2) I place a Trailing stop to kick in 10 pip beyond original TP. This doesn’t lock in the profits from the original TP if the trigger is not hit.
    3) I manually watch for my TP to be exceeded or met. This once again leave the option that I close too late.

    I’m just curious what order process you take. I’m aware brokers can handle this differently.

    Thanks!

  • worshipu

    I have a question concerning your target price and order type. I under stand that the target price is at a 100 or 50 level or equal to what is risked.
    You mention that when a candle closes beyond a target price that you keep the trade open and move the Stop Loss to the original target price. What type of order do you use for this? Or do you not place a target price order and just watch this manually?
    Options I’ve tried:
    1) I place an order to take profit at target price and if price closes beyond TP I open a new trade. This puts part of the original trades profits at risk.
    2) I place a Trailing stop to kick in 10 pip beyond original TP. This doesn’t lock in the profits from the original TP if the trigger is not hit.
    3) I manually watch for my TP to be exceeded or met. This once again leave the option that I close too late.

    I’m just curious what order process you take. I’m aware brokers can handle this differently.

    Thanks!

  • dbrock178

    Hello Pipsurfer,
    I have a question about the about when to enter a trade. When you see a valid trading signal on the 15 minute chart, do you enter immediately or do you wait for the 15 minute candle to close before entering?

    Thank you.

  • dbrock178

    Hello Pipsurfer,
    I have a question about the about when to enter a trade. When you see a valid trading signal on the 15 minute chart, do you enter immediately or do you wait for the 15 minute candle to close before entering?

    Thank you.

  • mabidashraf

    @worshipu: Target price is not set in the platform rather this is a mental stop and you monitor the trade at a lower timeframe i.e. 5 minutes chart whether it has the potential to go further in your favour and if so you hold onto the trade. This does require some experience.

    @dbrock178: Trade is execute on the close of the 15 minute candle. Hope that helps.