Cowabunga System Daily Update: 01/24/07

Main Trend

Current Trend= Up until 3:00am ET; Down the rest of the day

Today I only looked for long trades until 3:00 am ET, and then I only looked for short trades after 3:00 am ET

Today’s Surf

6:15 pm ET-Cowabunga signal generated. RSI > 50, Stochastics trending up, and MACD was negative and gaining value. The entry was at 9819 with a stop at the most recent swing low which was at 9800. Since the signal came before midnight I set my target for the same amount of pips I was risking which in this case was 19 pips. This put my target at 9838.

12:30 am ET- There is a signal for a short trade. However, at this point our trend is still up so we do not do anything. Plus, we are already in a trade on the opposite side.

1:00 am ET- Unfortunately I am stopped out of my trade at 9800.

3:00 am ET- On the 4hr chart I now have a completed trend change candle. The MAs crossed on the short side which effectively changed the trend from UP to DOWN. From this point forward I was only looking for short trades.

6:00 am ET- There is a MA crossover for the shortside but MACD is negative so it voids our signal. Remember, for short trades our MACD must be positive and losing value.

Trade Result: -19 pips.

You look at the chart and say, "Wow, look at all those pips we missed!" I know it sucks, but it’s all a part of trading a system diligently…even if you miss out on some good opportunities. Be proud of yourself if you followed the rules correctly. There will always be another opportunity in the future.

  • mwong78814

    Whose chart are you using to post the system signals? I use MT4 and sometimes the signals came a bar after you said a signal was given.

  • bigpippin

    I’m using Xtick. They get a feed from FXCM. Keep in mind my charts show the start time of candles so when I say there is a signal at 6:15 pm ET, it means that the signal candle is the 6:15 candle. The actual close of the candle is at 6:30 and that is when I actually enter the trade. I know some charting packages show the end time of a candle. So for example, your 6:15 candle is what time the candle closed, whereas on mine, the 6:15 candle is the time my candle opened. Hope that helps.

  • pipinator

    i did a trade on the 6:15 candle on the investoolsct.com charts (java) Which was actually 6:30. I went by the system rules of looking at the 4 hr chart and decided to go short, then i looked at the 15 minute chart. I noticed at 4 am eastern time that the ex mov avg was going to cross which they did at the 6:15 candle. My rsi was under 50, my stochastic was overbought and turning down, my macd chart has the settings at 12,26,9, on the histogram it started turning over, but my lines were still heading up, and my profit target was at 1.9724 at the minor support of the candles that took that dip at around 1am to 3am. Even though i made a profit,was i wrong to place the trade because the macd lines were still heading up? Also what are your macd settings and my stocastics and set at (full 10,3,3,) and those the same as yours?

  • n00bie

    Hi BigPippin

    I notice that you only used the system on GBP/USD. does this system work on any other pairs? say EUR/USD?
    secondly how did you setup that automatic different candle colouring on crossing? That’s so helpful I dun have to stare my eyes at the screen just to see that esp when the lines are bunching close together hehehe.

    Cheers…

  • mwong78814

    Whose chart are you using to post the system signals? I use MT4 and sometimes the signals came a bar after you said a signal was given.

  • bigpippin

    I’m using Xtick. They get a feed from FXCM. Keep in mind my charts show the start time of candles so when I say there is a signal at 6:15 pm ET, it means that the signal candle is the 6:15 candle. The actual close of the candle is at 6:30 and that is when I actually enter the trade. I know some charting packages show the end time of a candle. So for example, your 6:15 candle is what time the candle closed, whereas on mine, the 6:15 candle is the time my candle opened. Hope that helps.

  • pipinator

    i did a trade on the 6:15 candle on the investoolsct.com charts (java) Which was actually 6:30. I went by the system rules of looking at the 4 hr chart and decided to go short, then i looked at the 15 minute chart. I noticed at 4 am eastern time that the ex mov avg was going to cross which they did at the 6:15 candle. My rsi was under 50, my stochastic was overbought and turning down, my macd chart has the settings at 12,26,9, on the histogram it started turning over, but my lines were still heading up, and my profit target was at 1.9724 at the minor support of the candles that took that dip at around 1am to 3am. Even though i made a profit,was i wrong to place the trade because the macd lines were still heading up? Also what are your macd settings and my stocastics and set at (full 10,3,3,) and those the same as yours?

  • bigpippin

    pipinator- From my charts there shouldn’t have been an entry at 4am. If you notice the MACD histogram, it was negative throughout most of the session. Whenever you are looking for a short trade, the MACD histogram must be POSITIVE and starting to lose value. If the MACD is negative when you are trying to go short, then that voids the signal. This was the reason why I didn’t take the trade at 6am ET. If you still have questions about the rules, click on the “read me first link” under the “About” section of this blog. It explains the rules in greater detail. Hope this helps!

    N00bie- The system only works on the Cable. The other pairs don’t move the same way that the Cable does which is why I only trade this pair. I’ve backtested a few other pairs and it doesn’t seem to work as well. I also intend this blog to be for brand new traders and I’m a firm believer that they should stick to one pair when first starting out. So for educational purposes, this system will only be traded on the Cable. Feel free to test and tweak it. You may find something better :) Happy trading!

  • n00bie

    Hi BigPippin

    I notice that you only used the system on GBP/USD. does this system work on any other pairs? say EUR/USD?
    secondly how did you setup that automatic different candle colouring on crossing? That’s so helpful I dun have to stare my eyes at the screen just to see that esp when the lines are bunching close together hehehe.

    Cheers…

  • foricks

    Cowabunga…Gettin’ back on the board after the first wipeout of the week…Question on the timing of entry into the bid: What are your rules on entering a position several ‘sticks past the ideal entry point? Thoughts on both sides of the entry amount. I hate to miss a good wave for the sake of a few pips.
    BTW, thank you for a great forum for us rookies.

  • bigpippin

    pipinator- From my charts there shouldn’t have been an entry at 4am. If you notice the MACD histogram, it was negative throughout most of the session. Whenever you are looking for a short trade, the MACD histogram must be POSITIVE and starting to lose value. If the MACD is negative when you are trying to go short, then that voids the signal. This was the reason why I didn’t take the trade at 6am ET. If you still have questions about the rules, click on the “read me first link” under the “About” section of this blog. It explains the rules in greater detail. Hope this helps!

    N00bie- The system only works on the Cable. The other pairs don’t move the same way that the Cable does which is why I only trade this pair. I’ve backtested a few other pairs and it doesn’t seem to work as well. I also intend this blog to be for brand new traders and I’m a firm believer that they should stick to one pair when first starting out. So for educational purposes, this system will only be traded on the Cable. Feel free to test and tweak it. You may find something better :) Happy trading!

  • foricks

    Cowabunga…Gettin’ back on the board after the first wipeout of the week…Question on the timing of entry into the bid: What are your rules on entering a position several ‘sticks past the ideal entry point? Thoughts on both sides of the entry amount. I hate to miss a good wave for the sake of a few pips.
    BTW, thank you for a great forum for us rookies.

  • bigpippin

    Foricks- Late entry is entirely up to you. Just remember that in some cases that means you will be risking more, but on other times, you may actually be risking less if you’re entering on a retracement. Just keep your stops and targets the same as if you entered at the correct time.

  • pinetree

    BP – a challenge I have with your system is one has to be up all night to follow it — since the signals are more active past midnight ET — till the early morning.

  • bigpippin

    Yes, the system can’t accomodate everyone, especially for people living on the EST time zone. But then again, the most active time to trade is during the Euro session which would make any intraday system tough to trade if you live in EST. I recommend finding a swing trading system or a system where you can set limit orders so that you don’t have to be in front of the charts to trade. It’s either that or never sleep :)

  • bigpippin

    Foricks- Late entry is entirely up to you. Just remember that in some cases that means you will be risking more, but on other times, you may actually be risking less if you’re entering on a retracement. Just keep your stops and targets the same as if you entered at the correct time.

  • pinetree

    BP – a challenge I have with your system is one has to be up all night to follow it — since the signals are more active past midnight ET — till the early morning.

  • bigpippin

    Yes, the system can’t accomodate everyone, especially for people living on the EST time zone. But then again, the most active time to trade is during the Euro session which would make any intraday system tough to trade if you live in EST. I recommend finding a swing trading system or a system where you can set limit orders so that you don’t have to be in front of the charts to trade. It’s either that or never sleep :)