Cowabunga System Daily Update: Tuesday, 06/15/2010

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 up the entire day.

Today I only looked for long trades.

News events to watch for today :

  • 4:30am EST- UK CPI
  • 8:30am EST- US Empire State Survey
  • 9:00am EST- US Treasury International Capital System 

Today’s Surf

3:45am EST- There was a valid signal here but because it was right before the 4:30am EST news event, I did not enter.

5:45am EST- There was a moving average crossover for a long trade. RSI was greater than 50, stochastics were trending up and MACD went from negative to positive. This was a valid entry.

The entry was at the close of the candle at 1.4526 with a stop at the most recent swing low at 1.4448. Since I was 24 pips away from the nearest 50 or 00 level, I decided to put my intial stop at 1.4550.

Entry: Long at 1.4756 Stop: 1.4682 Target: 1.4800

8:15am EST- My target wasn’t hit by this time. Since news was coming out at 8:30am EST, I went ahead and closed out my trade at 1.4744.

entry2

Trade Result: -12 Pips (NOT INCLUDING SPREAD) R-Multiple: -0.16

News events to watch for Wednesday:

  • 4:30am EST- UK Claimant Count
  • 8:30am EST- US PPI
  • 9:15am EST- US Industrial production

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.

14 comments

  1. PIPhanger

    I am in the EST zone and work during the day. Would it be possible to use this system on a higher time frame to have a trade before I got to work and close it after I get home. If so which two charts work I change the 15m and 4h out for. Also how would you take news into effect if holding a position all day. With the higher TF charts would I still use the same settings for the indicators. If anyone could help with this or if anything has tested this please let me know. Thanks

    Reply
  2. PIPhanger

    I am in the EST zone and work during the day. Would it be possible to use this system on a higher time frame to have a trade before I got to work and close it after I get home. If so which two charts work I change the 15m and 4h out for. Also how would you take news into effect if holding a position all day. With the higher TF charts would I still use the same settings for the indicators. If anyone could help with this or if anything has tested this please let me know. Thanks

    Reply
  3. pg2007

    I’m confused!
    Entry: Long at 1.4756 Stop: 1.4682 Target: 1.4800

    The stop loss for this trade is 74 and the target profit is 44. I thought that if the target profit is less than the potential loss that you set the target to the same differential as the stop loss?

    Reply
  4. MEHung

    Hi,

    With regards to your rule about not taking trades close to news reports, how close is too close? Do you have a specific amount of time you use? I’ve been using “No trade entry less than 45 minutes before major news”. So if the 3:45am signal this morning had come at 3:30am (i.e. 3:45am entry), then I would have taken it. Do you think that’s still too close?…. Mike

    Reply
  5. MEHung

    Hello again… one more question… Do you use 4 decimal places or 5 decimal places for determining a valid crossover? The MT4 which I used for actual trading is 5 decimals, but I use eSignal as my primary charting platform which is 4 decimals. So I sometimes get a crossover signal on MT4 (fractions of a pip), but eSignal shows 5 EMA & 10 EMA equal to each other. I’ve noticed a couple times you’ve taken trades that I haven’t do to this issue.

    Reply
  6. pg2007

    I’m confused!
    Entry: Long at 1.4756 Stop: 1.4682 Target: 1.4800

    The stop loss for this trade is 74 and the target profit is 44. I thought that if the target profit is less than the potential loss that you set the target to the same differential as the stop loss?

    Reply
  7. MEHung

    Hi,

    With regards to your rule about not taking trades close to news reports, how close is too close? Do you have a specific amount of time you use? I’ve been using “No trade entry less than 45 minutes before major news”. So if the 3:45am signal this morning had come at 3:30am (i.e. 3:45am entry), then I would have taken it. Do you think that’s still too close?…. Mike

    Reply
  8. MEHung

    Hello again… one more question… Do you use 4 decimal places or 5 decimal places for determining a valid crossover? The MT4 which I used for actual trading is 5 decimals, but I use eSignal as my primary charting platform which is 4 decimals. So I sometimes get a crossover signal on MT4 (fractions of a pip), but eSignal shows 5 EMA & 10 EMA equal to each other. I’ve noticed a couple times you’ve taken trades that I haven’t do to this issue.

    Reply
  9. vedant

    Hey, how are you? I was wondering, I am using xtick and i noticed that you had a trend change candle indicating to go LONG for the 8:15-8:30 candle, but for me that was not a trend change candle, instead I had a LONG trend change candle for 8:30-8:45 candle…Also, my 1:45 to 2:00 candle was also a trend change candle to go LONG while you didn’t have one. The indicators lined up and i entered, but I ended up getting stopped out, losing pips. You have any idea why my trend change candles seem to be off compared to yours? Thanks a lot!

    Reply
  10. vedant

    Hey, how are you? I was wondering, I am using xtick and i noticed that you had a trend change candle indicating to go LONG for the 8:15-8:30 candle, but for me that was not a trend change candle, instead I had a LONG trend change candle for 8:30-8:45 candle…Also, my 1:45 to 2:00 candle was also a trend change candle to go LONG while you didn’t have one. The indicators lined up and i entered, but I ended up getting stopped out, losing pips. You have any idea why my trend change candles seem to be off compared to yours? Thanks a lot!

    Reply
  11. agapetos

    Hi. I am following your blog for some time and would like to thank you for the work that you do and to encourage you to continue on.
    When I looked at description of your system, I was that when you are determining the main trend, you consider the stochastics and RSI, but in videos i can’s remember that I’ve heard you mention them (for the main trend).
    Since I am also testing your indicator for MT4 atm, I’ve also noticed that there is an option if I would like to use the “Strict_4h_Trend”.
    I was wondering, how much weight do you give other indicators in determining the main trend, besides the MA crossover?
    Thank you!

    Reply
  12. agapetos

    Just a correction: In the last post – 3rd line: “… , I saw that when you are determining…”

    And also one more question. If you use stochastics for determining of the main trend, do you use the slower one (10) or the faster (5) or some combination?
    tx

    Reply
  13. agapetos

    Hi. I am following your blog for some time and would like to thank you for the work that you do and to encourage you to continue on.
    When I looked at description of your system, I was that when you are determining the main trend, you consider the stochastics and RSI, but in videos i can’s remember that I’ve heard you mention them (for the main trend).
    Since I am also testing your indicator for MT4 atm, I’ve also noticed that there is an option if I would like to use the “Strict_4h_Trend”.
    I was wondering, how much weight do you give other indicators in determining the main trend, besides the MA crossover?
    Thank you!

    Reply
  14. agapetos

    Just a correction: In the last post – 3rd line: “… , I saw that when you are determining…”

    And also one more question. If you use stochastics for determining of the main trend, do you use the slower one (10) or the faster (5) or some combination?
    tx

    Reply

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