Cowabunga System FAQ

Cowabunga Frequently Asked Questions

1. Do you have to be in front of the charts all day to wait for a signal?
2. Does the system only work with the Cable? Can you use it on other pairs?
3. Will the system work on any other time frame other than the 15 minute chart?
4. What Charting Software do you use?
5. What is your trading schedule like? Do you stay up all night to trade this system?
6. What do you mean by "Clean Break"?
7. Where do you trade from?
8. You mention that you don't hold trades during important news events. Which news events do you consider important?
9. Is there a custom indicator for Metatrader?
10. How do I set alerts on my chart so that it sends me an email to my phone when there is a signal?
11. How come my MACD histogram doesn't look like yours?

Do you have to be in front of the charts all day to wait for a signal?

It's true that a signal can come at any time in the day, I usually start looking for signals after 6pm ET. The best signals, however, usually come after midnight so if you just want to be safe then you can start looking then. In addition, my charting software allows me to set alerts which are sent to my phone. I find out my main trend using the 4hr chart and if the main trend is UP, then I set my software to alert me if there are any moving average crossovers for a long trade. If the main trend is DOWN then I set my software to alert me if there are any moving average crossovers for a short trade. Sometimes I'll get a false signal and I'll just reset my alert, but other times I'll actually have a valid entry. I live in the Eastern Time Zone so it's particularly hard for me to be in front of the charts at all times but the alerts save me from this road block.

Does the system only work with the Cable? Can you use it on other pairs?

The system was specifically tailored for the Cable. However, just eyeballing the charts, the system does seem to find good entry points on other pairs as well. You might just have to tweak the stop and target rules. If you're anxious to try it on other pairs I strongly recommend you demo trade it for a few months until you can come up with consistent and positive results.

Will the system work on any other time frame other than the 15 minute chart?

Moving any lower than a 15 minute chart is dangerous because you are basically just trading more "noise". For example, if you attempt to trade a 5 minute chart, you'll be getting signals left and right which may lead to some winning trades, but in the long run you will be whipsawed many times because of the knee jerk reactions that a shorter time frame will give you. I think that even 15 minute charts is borderline, but I've tested the system and it seems pretty well on this time frame. I highly recommend that you stick with a 15 minute chart or higher. I say higher because the longer the timeframe you use, the more reliable your indicators become. You'll get fewer signals but the ones you do get will be a more reliable. So if you want to try this system on a faster time frame, be sure to demo it first.

What charting software do you use?

I use Xtick because it's easy to make pictures with and it's fairly easy to use. I can also paint my candles when certain conditions are met. This why I have purple candles (for when the moving averages cross down) and black candles (for when the moving averages cross up). I'm also able to set alerts when these crossovers occur. So if my main trend is up, then I'll just set alerts for whenever the moving averages cross up, and vice versa. The alerts get sent to my phone so it saves me from being glued to the charts.

What is your trading schedule like? Do you stay up all night to trade this system?

The Cowabunga system is just one of the systems I trade in the Forex. I live on the Eastern Time Zone so many of the good trading opportunites happen when I am asleep. Because of this, most of my trades are swing trades where I hold positions for longer than a day. I am not what you would call a "day-trader". So you might be wondering how I catch these Cowabunga signals. Do I have to stay up all night in order to trade it?

The answer is "No". In fact I hardly spend time watching the charts for this system. I set up alerts with my charting package so that it lets me know when I might have a possible entry. Keep in mind though, that this effectively puts me "on call" the entire day as I will have to go to my computer whenever I get an alert. If you don't like having to be tied to your computer, then this may not be the system for you. Don't force it! There are longer term systems out there that may be better suited for your trading personality.

What do you mean when you say "Clean break"?

A clean break to me is when a candle can not only touch our target level, but break through it. The "Clean Break" rule is then solidified if the candle actually closes past our target level. When this happens I tend to move my stop to whatever our target level was and try to go for more pips because it indicates that there is some good momentum still left in the market.

Where do you trade from?

I am trading from the Eastern Time Zone.

You mention that you don't hold trades during important news events. Which news events do you consider important?

The only events I consistently stay away from are the NFP report and any interest rate decision for the Pound or Dollar. However, there will be times when a certain report may be getting alot of "hype" and if I see something that warrants a caution sign I'll include it in my post prior to the report.

Is there a custom indicator for this system for Metatrader?

Yes there is! Thanks to one of our members, ybop01, there is now an EA for the Cowabunga System if you use Metatrader. I haven't personally tested it myself but the users in our forums say it works great. You can download the indicator here.

How do I set alerts on my chart so that it sends me an email to my phone when there is a signal?

It all depends on what kind of charting software you have. I don't know how to set alerts on every single charting package out there. Here are the ones I do know how to set up alerts for:

1. Xtick
   1. Set up your charts and add all your indicators
   2. Right click on the chart and click "Painting Chart (xPaint)".
   3. Click "Add"
   4. Click the 5 moving average in the "1st condition study" box
   5. Under "Condition" click the drop down menu and click on "Crosses up 2nd study"
   6. Click the 10 moving average in the "2nd condition study" box
   7. On the right side, you can choose what color you want to paint the candle, as well as add an alert when this condition is met.
   8. Check the "alert" box and underneath it, check the "send email" box
   9. Click "Setup email" and add fill out the necessary information (you'll have to find out your SMTP server information on your own).
   10. To have the alert be sent to your phone put THIS in the "to" box.
   11. Now, everytime you have a crossover for a long trade, you will receive an alert on your phone. Repeat the steps again for a crossover for a short trade, except you'll have to adjust the conditions when you create a new xPaint candle.
2. Metatrader
   1. Download ybop01's custom MT4 Indicator
   2. Read this post
   3. Read this post
3. If anyone else knows how to do it on other software programs please post it in the Cowabunga System Discussion Forum.

How come my MACD indicator doesn't look like yours?

My MACD histogram is basically showing the difference between the 2 MACD lines. For some reason, some charting softwares don't display the histogram this way (this includes Metatrader 4). If you have MT4, there is an indicator created by one of the Cowabunga traders that seems to fix this problem. I can't guarantee it is 100% accurate but judging from other traders' posts, it seems to work just fine.

If you are using any other software other than Xtick, then try looking for different display options for your MACD histogram. See if you can display it so that the histogram displays the value of the difference between the 2 MACD lines.

Alternatively, you can scratch the histogram altogether. Since you know that it is simply displaying the value of the 2 MACD lines then you should know that if the fast line is below the slow line, then the histogram would be negative. Vice versa- If the fast line is above the slow line, then the histogram would be positive. From this, you can determine whether the MACD histogram is positive or negative at the time of a signal and go from there.

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