Cowabunga System Daily Update: Wednesday, 03/10/2010

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 down the entire day.

Today I only looked for short trades.

News events to watch for today :

  • 4:30am EST- UK Manufacturing Production m/m

Today’s Surf

12:00am EST- 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 1.4965 with a stop at the most recent swing high at 1.4977. Since I was 15 pips away from the nearest 50 or 00 level, I decided to put my initial target at 1.4950.

Entry: Short at 1.4965 Stop: 1.4977 Target: 1.4950

12:30am EST- Unfortunately I was stopped out of my trade.

1:30am EST- 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 1.4962 with a stop at the most recent swing high at 1.4981. Since I was only 12 pips away from the nearest 50 or 00 level (1.4950) I decided to go for the same amount of pips I was risking on the trade, which in this case was 19. This put my initial target at 1.4943.

Entry: Short at 1.4962 Stop: 1.4981 Target: 1.4943

2:00am EST- My target was hit. Price made a clean break so I moved my stop to 1.4943 and set my next target for 1.4900.

2:45am EST- My 2nd target was hit. Price made a clean break so I moved my stop to 1.4900 and set my next target for 1.4850.

3:00am EST- Unfortunately I got stopped out at 1.4900.

entry2

Trade Result: -12 +62= +50 pips (NOT INCLUDING SPREAD) R-Multiple:-1.00; 3.26

News events to watch for Thursday:

  • 8:30am EST- US Trade Balance

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.

  • gabriel888

    Hi Pip Surfer,
    I understand 1 of e rules for a valid entry is that stochastics must be trending down for a short trade/ trending up for a long trade.
    But must there be a crossover as well?
    i.e. A crossover between e % K line n’ e % D line.
    Thanks, Gabriel.

  • gabriel888

    Hi Pip Surfer,
    I understand 1 of e rules for a valid entry is that stochastics must be trending down for a short trade/ trending up for a long trade.
    But must there be a crossover as well?
    i.e. A crossover between e % K line n’ e % D line.
    Thanks, Gabriel.

  • PipSurfer

    Hi Gabriel- It can be a crossover or trending down/up

  • RMSTrader

    Hello pipsurfer. I have a question for you regarding trading around news candles. I know the system dictates not trading any news candle or the candle before it, but you will frequently have a trend change candle coincide with a news candle. My question is: do you think it is ok to enter on the candle AFTER a news candle (on the 15 Min chart)if our other indicators say go? In other words, is 15 minutes enough time for the market to digest most news and find a direction?

    Thanks for all you do!

    RMSTrader

  • PipSurfer

    Hi Gabriel- It can be a crossover or trending down/up

  • RMSTrader

    Hello pipsurfer. I have a question for you regarding trading around news candles. I know the system dictates not trading any news candle or the candle before it, but you will frequently have a trend change candle coincide with a news candle. My question is: do you think it is ok to enter on the candle AFTER a news candle (on the 15 Min chart)if our other indicators say go? In other words, is 15 minutes enough time for the market to digest most news and find a direction?

    Thanks for all you do!

    RMSTrader