Cowabunga System Daily Update: Wednesday, 08/25/2010

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 was down the entire day.

Today I only looked for short trades.

News events to watch for today :

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 1.5421 with a stop at the most recent swing high at 1.5443. Since I was 21 pips away from the nearest 50 or 00 level I decided to put my initial target at 1.5400.

Entry: Short at 1.5421 Stop: 1.5443 Target: 1.5400.

3:15am EST- My target was hit. Price made a clean break so I moved my stop to 1.5400 and set my next target at 1.5350.

3:30am EST- Unfortunately I got stopped out at my initial target at 1.5400. (+21 pips)

5:30am 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 1.5402 with a stop at the most recent swing high at 1.5461. Since I was only 2 pips away from the nearest 50 or 00 level (1.5400), I decided to go for the same amount of pips I was risking on the trade, which in this case was 59 pips. This put my initial target at 1.5343.

Entry: Short at 1.5402 Stop: 1.5461 Target: 1.5343.

8:15am EST- My target wasn’t hit by this time. Since news was coming out at 8:30 I decided to manually exit my trade. I exited at 1.5404. (-2 pips)

10:45am 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 1.5424 with a stop at the most recent swing high at 1.5458. Since I was 24 pips away from the nearest 50 or 00 level I put my initial target at 1.5400.

Entry: Short at 1.5424 Stop: 1.5458 Target: 1.5400.

11:30am EST- Unfortunately I got stopped out of my trade. (-34 pips)

entry2

Trade Result: +21 -2 -34= -15 Pips (NOT INCLUDING SPREAD) R-Multiple: 0.95; -0.03; -1.00

News events to watch for Thursday:

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.

  • leelar

    Hi, I am a newbie and I have been researching a lot.
    I have been watching this system these couple of days, at night time EST. It seems like two days in a row it has long opportunities. I will keep my eyes on this.

    Thank you for the analysis and live action!

  • shortpipin

    AFTER FURTHER RESEARCH 00 AND 50 LEVELS EXCELLENT TAKE PROFIT TARGET LEVELS, LOTS OF TRADERS NORMALLY PLACE ORDERS JUST ABOVE OR BELOW THESE LEVELS, ALSO CALLED ROUND NUMBERS WHEN TRADING STOCKS, PSYCHOLOGICAL LEVELS INDEED. AM I UNDERSTANDING WHY YOU SET YOUR PROFIT TARGETS AT 00 AND 50 LEVELS NOW, PIPSURFER

    THX

    SHORTPIPIN

  • leelar

    Hi, I am a newbie and I have been researching a lot.
    I have been watching this system these couple of days, at night time EST. It seems like two days in a row it has long opportunities. I will keep my eyes on this.

    Thank you for the analysis and live action!

  • shortpipin

    AFTER FURTHER RESEARCH 00 AND 50 LEVELS EXCELLENT TAKE PROFIT TARGET LEVELS, LOTS OF TRADERS NORMALLY PLACE ORDERS JUST ABOVE OR BELOW THESE LEVELS, ALSO CALLED ROUND NUMBERS WHEN TRADING STOCKS, PSYCHOLOGICAL LEVELS INDEED. AM I UNDERSTANDING WHY YOU SET YOUR PROFIT TARGETS AT 00 AND 50 LEVELS NOW, PIPSURFER

    THX

    SHORTPIPIN

  • Spinal

    Thanks for the updates PS. Is it fair to say that this system works a lot better during strong trends on the 4HR chart? I’ve found it tough trading this system over the last few weeks when I enter while the 4HR trend is fairly flat.

  • Spinal

    Thanks for the updates PS. Is it fair to say that this system works a lot better during strong trends on the 4HR chart? I’ve found it tough trading this system over the last few weeks when I enter while the 4HR trend is fairly flat.

  • PipSurfer

    @leelar- Just make sure that the overall trend matches the trades you are looking for. Only take trades in the direction of the overall trend no matter how sexy they look :)

    @shortpippin- You are correct as to why I chose 50 and 00 levels as my targets. These are always psychological levels to watch out for so it makes good sense to place our targets there.

    @spinal- You are absolutely correct. Try to remember that during ranging times like these we are simply minimizing our losses. When the market begins to trend strongly again we will capitalize our profits and it will erase the few losses that we take during times like these. It’s hard to understand in the short term but over the long term it makes perfect sense :)

    Happy trading everyone!

  • PipSurfer

    @leelar- Just make sure that the overall trend matches the trades you are looking for. Only take trades in the direction of the overall trend no matter how sexy they look :)

    @shortpippin- You are correct as to why I chose 50 and 00 levels as my targets. These are always psychological levels to watch out for so it makes good sense to place our targets there.

    @spinal- You are absolutely correct. Try to remember that during ranging times like these we are simply minimizing our losses. When the market begins to trend strongly again we will capitalize our profits and it will erase the few losses that we take during times like these. It’s hard to understand in the short term but over the long term it makes perfect sense :)

    Happy trading everyone!