Cowabunga System Daily Update: 01/25/07

If this is your first time visiting this blog, read this first!

Main Trend

Current Trend= Trend remained down for the entire day.

Today I only looked for short trades.

Today’s Surf

9:30 pm ET-There was a moving average crossover for a short trade but MACD was negative which cancelled the signal. No entry.

11:45 pm ET- Another moving average crossover for a short trade but MACD was still negative which cancelled the signal. No entry.

5:00 am ET- There is a moving average crossover for a short trade. RSI<50, Stochastics are trending down, and MACD is positive while losing value. This is a valid entry. Entry was at the close of the candle which was at 9683 with a stop at the most recent swing high which was at 9733. Since I was 33 pips away from a 50 level I decided to target 9650 as my first target.

2:15 pm ET- My initial target is hit and the price actually makes a clean break and closes under 9650. Seeing this price action, I move my stop to 9650 and decide to go for my next target. What’s my next target? Well since I was initially risking 50 pips on this trade, why not go for a 50 pip profit? This effectively put my sights on 9633 as my next target.

2:30 pm ET- Price makes a clean break of 9633 and closes below it. Once again I decide to move my stop and capture more pips. This time my target is set for 9600.

2:45 pm ET- Unfortunately, the Cable was done moving and I was stopped out at 9633.

Trade Result:+50 pips. Initial R-Multiple= 0.66; Final R-Multiple= 1.00

Tomorrow we have Durable Goods and New Home Sales. If I am in a trade before then, I will exit before the news reports whether I’m positive or negative. Happy trading!

  • pixter

    Hello,
    I started to study with interest your posts and tks for sharing.
    Questions:
    1.Entry was at 9683…but I did not find this value on chart scale ;I see values around 1.96 GBP/USD ?
    2.charts are editable?is it possible to make notes draw lines direct on chart?
    3.I know the value of a pips but how much did is 1 pips on your trade?
    4.”There was a Cowabunga signal at 6:15 am ET” – how is this signals defined ,generated ?
    Sorry for these silly questions but I am looking around for answers and is not easy…

    All the best,

  • bigpippin

    Pixter-

    1. When I took a screenshot of my chart, it shows the values of the current price of the pair, moving averages, and any lines I draw.

    2. You can make notes on some charts but I take a screenshot of my chart and use a graphics program to put notes on it.

    3. It depends on what kind of account you are trading.

    4. Please read the “read me first” section under the “about” section of this blog.

    If I may make a suggestion. From the looks of it, you are very new to the Forex. I’m excited for you as you start this journey but I highly recommend that you read the entire “School of Pipsology” before following these blogs. The blogs are meant for traders that have a basic understanding of the Forex. You won’t gain much value by following the blogs blindly. Once you finish reading and re-reading the “School”, come back and I guarantee that you will find them much more interesting and helpful. Happy trading!

  • Topgun_68

    Yet another nice trade Big Pippin. Keep up the great work because I am learning a lot reading your Blog :

  • pixter

    Hello,
    I started to study with interest your posts and tks for sharing.
    Questions:
    1.Entry was at 9683…but I did not find this value on chart scale ;I see values around 1.96 GBP/USD ?
    2.charts are editable?is it possible to make notes draw lines direct on chart?
    3.I know the value of a pips but how much did is 1 pips on your trade?
    4.”There was a Cowabunga signal at 6:15 am ET” – how is this signals defined ,generated ?
    Sorry for these silly questions but I am looking around for answers and is not easy…

    All the best,

  • bigpippin

    For the main trend I look at a MA crossover and just make sure RSI is above 50 and stochastics is trending in my direction. I don’t even pay attention to MACD. I don’t even know why I have it up there. The main thing to look at though is the MA crossover. That is the biggest determinant of the trend. Usually when you have an MA cross, the RSI and Stochastics will almost always match up.

  • bigpippin

    Pixter-

    1. When I took a screenshot of my chart, it shows the values of the current price of the pair, moving averages, and any lines I draw.

    2. You can make notes on some charts but I take a screenshot of my chart and use a graphics program to put notes on it.

    3. It depends on what kind of account you are trading.

    4. Please read the “read me first” section under the “about” section of this blog.

    If I may make a suggestion. From the looks of it, you are very new to the Forex. I’m excited for you as you start this journey but I highly recommend that you read the entire “School of Pipsology” before following these blogs. The blogs are meant for traders that have a basic understanding of the Forex. You won’t gain much value by following the blogs blindly. Once you finish reading and re-reading the “School”, come back and I guarantee that you will find them much more interesting and helpful. Happy trading!

  • pinetree

    BP, your blog is fantastic. It really helps the forex learning process. My challenge as I said previous is keeping up with it after midnight when I need to go to sleep so to wake up in the morning for work. My question is since the Gbp/Usd follows the Euro/Usd quite closely, why would your system not work just as well on the Euro/Usd in its active hours which is usually between 8:00am – 12:00pm Est.

  • bigpippin

    The Cable has more volatility then the EUR/USD. The Cable has very nice up and down, wave-like movements most of the time. This is why I like trading it. I also trade the EUR/USD but I have a different approach. Each currency has their own style of movement and as a result I like to cater my systems to one specific pair.

    In fact, with a little tweaking you probably could get this system to work with the EUR/USD. I’m sure the crossovers +RSI+Stoch+MACD will give you good entry points, you just have to find suitable stops and targets since it does move different than the Cable. Try it out and demo it. You might find something that will better suit your trading availability, style, and personality.

  • Topgun_68

    Yet another nice trade Big Pippin. Keep up the great work because I am learning a lot reading your Blog :

    On that note, another question: When you determine your main trend to trade long or short, do you mainly just use the moving average crossing on the 4hr chart? How big of a part do RSI or Stoch play in determining the main trend? FOr instance it Stoch was in Oversold would you still trade short or sit on the sideline despite the moving average being spread apart and heading down. Thanks again!

    Topgun

  • bigpippin

    For the main trend I look at a MA crossover and just make sure RSI is above 50 and stochastics is trending in my direction. I don’t even pay attention to MACD. I don’t even know why I have it up there. The main thing to look at though is the MA crossover. That is the biggest determinant of the trend. Usually when you have an MA cross, the RSI and Stochastics will almost always match up.

  • pinetree

    BP, your blog is fantastic. It really helps the forex learning process. My challenge as I said previous is keeping up with it after midnight when I need to go to sleep so to wake up in the morning for work. My question is since the Gbp/Usd follows the Euro/Usd quite closely, why would your system not work just as well on the Euro/Usd in its active hours which is usually between 8:00am – 12:00pm Est.

  • bigpippin

    The Cable has more volatility then the EUR/USD. The Cable has very nice up and down, wave-like movements most of the time. This is why I like trading it. I also trade the EUR/USD but I have a different approach. Each currency has their own style of movement and as a result I like to cater my systems to one specific pair.

    In fact, with a little tweaking you probably could get this system to work with the EUR/USD. I’m sure the crossovers +RSI+Stoch+MACD will give you good entry points, you just have to find suitable stops and targets since it does move different than the Cable. Try it out and demo it. You might find something that will better suit your trading availability, style, and personality.