Cowabunga System Daily Update: Wednesday, 05/05/2010

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 Purchasing Manager Index Construction
  • 8:15am EST- US ADP Employment Change
  • 10:00am EST- US ISM Non-Manufacutring Composite

Today’s Surf

12:15am 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 1.5124 with a stop at the most recent swing high at 1.5146. Since I was 24 pips away from th nearest 50 or 00 level, I decided to put my initial target at 1.5100.

Entry: Short at 1.5124 Stop: 1.5146 Target: 1.5100

1:45am EST- Unfortunately I got stopped out of my trade.

3:45am EST- There was a valid signal here but because it was close to a news event I did not enter.

7:15am EST- There was a moving average crossover for a short trade. RSI was less than 50, stochastics were trending down and MACD went from positive to negative. This was a valid entry.

The entry was at the close of the candle at 1.5145 with a stop at the most recent swing high at 1.5172. Since I was 45 pips away from the nearest 50 or 00 level, I decided to put my initial target at 1.5100.

Entry: Short at 1.5145 Stop: 1.5172 Target: 1.5100

8:00am EST- My target wasn’t hit by this time. Since news was coming out at 8:15am EST, I went ahead and closed out my trade. I exited at 1.5112.

entry2

Trade Result: -22 +33= +11 pips (NOT INCLUDING SPREAD) R-Multiple: -1.00; 1.22

News events to watch for Thursday:

  • 4:30am EST- UK Purchasing Manager Index Services
  • 8:30am EST- US Non-Farm Productivity
  • 9:30am EST- US Fed Chairman Ben Bernanke Speaks in Chicago; Illinois

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.

  • shortpipin

    pipsurfer, I’ve made pips and lost pips using this great system but, lately i’ve noticed that I’m losing pips when I take a trade and the 4 hour chart is overbought or oversold. The rules to the system say don’t enter a trade when stochastics is overbought or oversold this rule dose apply to the 4 hour chart as well as the 15 min chart, correct? thx

  • shortpipin

    pipsurfer, I’ve also noticed that when the 4 hour chart is overbought or oversold 15 min chart is ranging or sideways, just want to know should I pass up trades when this condition is met and all conditions on 15 min chart are met as valid entry conditions. I noticed you made pips today with those conditions in play. thx

  • morgandallen

    Hi there,
    Thanks for your videos – they are great learning tools. Quick question about the system. If you’ve answered this elsewhere, I apologize. Could you shed some light on how exactly this system is geared toward trading GBPUSD? I know you say it can be used on other pairs but that it works best with this one. Just wondering if you wouldn’t mind shedding some light on that.
    Thanks,
    Morgan

  • kulvadee

    I wonder if your system can apply to longer timeframe. If yes, can I replace;
    *4 hr chart by Daily chart and
    *15 min chart by 4 hour chart.
    All indicators settings are still the same?

    If no, do you have a trading system for longer timeframe?
    Thank you.

  • shortpipin

    pipsurfer, I’ve made pips and lost pips using this great system but, lately i’ve noticed that I’m losing pips when I take a trade and the 4 hour chart is overbought or oversold. The rules to the system say don’t enter a trade when stochastics is overbought or oversold this rule dose apply to the 4 hour chart as well as the 15 min chart, correct? thx

  • shortpipin

    pipsurfer, I’ve also noticed that when the 4 hour chart is overbought or oversold 15 min chart is ranging or sideways, just want to know should I pass up trades when this condition is met and all conditions on 15 min chart are met as valid entry conditions. I noticed you made pips today with those conditions in play. thx

  • morgandallen

    Hi there,
    Thanks for your videos – they are great learning tools. Quick question about the system. If you’ve answered this elsewhere, I apologize. Could you shed some light on how exactly this system is geared toward trading GBPUSD? I know you say it can be used on other pairs but that it works best with this one. Just wondering if you wouldn’t mind shedding some light on that.
    Thanks,
    Morgan

  • luchozappal

    do you know if i can use xstick profesional on the iphone .. thanks!

  • kulvadee

    I wonder if your system can apply to longer timeframe. If yes, can I replace;
    *4 hr chart by Daily chart and
    *15 min chart by 4 hour chart.
    All indicators settings are still the same?

    If no, do you have a trading system for longer timeframe?
    Thank you.

  • luchozappal

    do you know if i can use xstick profesional on the iphone .. thanks!

  • PipSurfer

    shortpippin- the rule does NOT apply to the 4hr chart. The only time we use indicators on the 4hr chart is if we have a possible trend change candle. After a trend change candle is confirmed we take trades on the 15 minute chart in that same direction, regardless of what the 4hr chart indicators are doing. I’ve done thorough testing with this and have found that the indicators don’t have a profound effect on the trades we take on the 15 minute chart because the movement is very “micro” compared to the long term data of the 4hr chart. Hope that makes sense.

    Morgandallen- It works with the GBP/USD because of its volatility and relatively low spread. I have had mixed results on other pairs and can only vouch for the GBP/USD because of the thorough research on this pair.

    kulvadee- Again, I’ve never tested it myself but I don’t see why not. Just remember that your stops will be much larger so be sure you practice good money management.

    luchozappal- To my knowledge, there is no trading platform that works on the iPhone yet. Correct me if I’m wrong!

  • PipSurfer

    shortpippin- the rule does NOT apply to the 4hr chart. The only time we use indicators on the 4hr chart is if we have a possible trend change candle. After a trend change candle is confirmed we take trades on the 15 minute chart in that same direction, regardless of what the 4hr chart indicators are doing. I’ve done thorough testing with this and have found that the indicators don’t have a profound effect on the trades we take on the 15 minute chart because the movement is very “micro” compared to the long term data of the 4hr chart. Hope that makes sense.

    Morgandallen- It works with the GBP/USD because of its volatility and relatively low spread. I have had mixed results on other pairs and can only vouch for the GBP/USD because of the thorough research on this pair.

    kulvadee- Again, I’ve never tested it myself but I don’t see why not. Just remember that your stops will be much larger so be sure you practice good money management.

    luchozappal- To my knowledge, there is no trading platform that works on the iPhone yet. Correct me if I’m wrong!

  • shortpipin

    Pipsurfer, thanks for clearing my head on that one, good lookin cawabonga dude thx

  • shortpipin

    Pipsurfer, thanks for clearing my head on that one, good lookin cawabonga dude thx