Early London Workout System: Can I Follow My Charts?

Entry Hours: (6 -10 am London time)

Markets: EUR/USD and GBP/USD

Technical Chart: 5-minute

Method: Long or short will be based on a combination of a Lead Indicator, and two simple moving averages (SMA) of 10 or 20 sessions.

Trade setup:
1. When the Lead Indicator lights up (between 12 am -10am), it gives an alert to go long or short.
2. Enter after 6am when the 10SMA closes above 20SMA for long positions and when the 10SMA closes below 20SMA for short positions.
3. Exit when the price closes below or above the 20 SMA for long and short postiton respectively.
4. This strategy gives good results on EUR and GBP charts when the price momentum picks up after the opening of London market around 8 am.
5. Stops must be placed when the condition 2 disappears. Or use an inital stop loss of 50 pips when opening a position.

Examples:

Long EUR/USD: +25 pips

Short GBP/USD: +150 pips

Joining INO TV for the First Time

I have been writing about INO's Market Club for some time and always want to find out more about the Trade the Triangle method and other services.

After successfully 'automating' my forex daytrading technique, I find myself having some spare time to take advantage of the INO TV services, albeit spending most of my time on a challenging 9 - 5 job, pursuing my daily forex winning habits, trialling new forex techniques, and etc :-)

INO TV provides 11 great "Trading Channels" with a world of investment knowledge to improve trading skills in all arena. I hope to venture into other markets such as shares, commodities and options one day.

Now for the first time, I will be able to watch trading seminars (webinars) stream directly to my computer screen at anytime I like, most probably before bed time.

Tap here to browse through some top titles by INO TV and here to sneek peek inside members only site.

Get Started with the Forex Assassin Trading System

The Forex Assassin provides you with a spreadsheet with a 'secret' trading formula which helps you extract prices from the markets and then calculate the order entry prices. Every weekend, you will need to input some key numbers to complete the calculation process. Thus, the process is not quite automated as expected.

Like Forex Killer, I always want the keep my trading task as simple as possible. Therefore, I have converted the Forex Assassin trading formula into a custom metatrader indicator which helps me loading and calculating the key price levels that I need quickly. Moreover, the visualisation effects with this custom indicator (see Figure below) helps make Forex Assassin trading interesting and easy. I will know immediately from my charts when a trading action is near.

Figure: MT 4 Chart with "Forex Assassin" custom metatrader indicator

From this week, I will start trading the major currency pairs using the Forex Assassin method: GBP/USD, EUR/USD, AUD/USD, USD/CHF, USD/JPY & USD/CAD.

As suggested, I will be using a risk-reward ratio of 0.75:1 with a price target (TP) of 75 pips and a stop loss (SL) of 56 pips. The parachute stop loss is at 40% of TP, which is 30 pips. This means that if the trade went my way 30 pips, the parachute stop loss would be triggered. So as the price comes back to my entry, I will get out flat. I will also compare its end results if using a trailing stop loss of 30 pips.

Results will be updated throughout the week in a new blog: Weekend Forex Project.

Table : Week 1 (14 - 18 April) Results

Day Closed	Trades	Entry	Parachute Strategy	Total P/L	Trailing Strategy	Total P/L
Mon	EUR/USD	Short at 1.5711	0	0	+8	+8
Mon	GBP/USD	Long at 1.9788	+75	+75	+75	+83

I Just Bought Forex Assassin: What's Next?

Ouf of curiosity, I have just bought the Forex Assassin system ;-) I am set to follow its trading plan, have a website, and satisfy myself that I can do it.

>> Check out my new weekly Forex Blog : The Weekend Forex Project

I am going to review the system as well as to analyse all of my trades. I am going to do my post entries every week as part of my weekend forex project.

I shall start by having a trading plan as suggested.

Mission Statement
To become a net positive trader (1k - 2k a month with this system) no later than the end of the 3rd quarter of this year.
I will not be scared money.
I will follow my plan.
I will succeed.

Entries
Only take trades that fall under #1 and #2
Set my buy and sell stops early Monday morning for the pairs I plan to trade.
Double check entry calculations
Start with one contract

Exits
Look for 50+ pips
If X pips in the money and comes back to entry get out flat.
Trades usually go in my favor right away...if I have to wait too long…get out.
First trade is a 100pip trade…stop for the week

Stops
No more than 30 pip loss per trade, or
Max loss of $300 gross per trade

Record Keeping
All trades are recorded and kept in a binder
All trades are recorded in a spreadsheet to tabulate results and show sharp ratio, win/loss %
etc.

Add Contracts
Needs to be done slowly and carefully
When have 5-8 net winning trades in a row. And then only increase 1 contract at a time.

Related post:
Forex Assassin vs. Forex Killer

Simple Breakout System with 100 SMA

I've seen these price actions before. These chat patterns (as shown in the figures below) keep repeating from time to time. I need to log them properly this time round.

1. Trend following (failed breakout at 100 SMA scenario)
The price momentum was on the down side (heavy sell-off from overnight Asian Session to pre-London opening). Price briefly retraced up to 100 SMA (simple moving average) after London open, but failed to close above 100 SMA (see, Figure 1, horizontal line, 2) . It quickly resumed its underlying downward trend with another 100-pip sell off. Similar to "Nirvana" trade setup.

2. Slow breakout (successful breakout at 100 SMA scenario 1)
Price finally closed above 100 SMA after US market open (with new participants), but not enough forward momentum yet and did range bounding. Price closed above the 100 SMA for the second time. Breaching previous high (see Figure 1, horizontal line, 4) and now with strong upward move - another 100-pip move !

Fig. 1 USD/JPY 5-min chart; 100 SMA - red line

3. Fast breakout (successful breakout at 100 SMA scenario 2)
Price suddenly reversed course after US market open and breached the 100 SMA easily. Price retraced back to 100 SMA. But price continued to drag lower and there was further breakout (see Figure 2, horizontal line, 4) with another 100-pip sell off.

Fig. 2 EUR/USD 5-min chart; 100 SMA - red line

Have I Picked the JPY Bottom ?

My system picked up 5 long signals on the yen-crosses pairs in one session this morning ! I promptly issued them live on my member site. Checking on their current prices, all of them are currently yielding more profits in the post-session hours.

GBP/JPY long at 201.23; +60 pips; now at +120 pips !
EUR/JPY long at 160.89; +30 pips; now at +50 pips !
AUD/JPY long at 95.10; +20 pips; now at +40 pips !
CHF/JPY long 101.05; +15 pips; now at +20 pips !
USD/JPY long at 102.26; +30 pips; now at +45 pips !

The level of correlation seen within these yen-crosses 'signals' was unprecedented. Looking at the current outcomes, the additional 'info' brought out by the number of signals in the same direction could be used as an additional 'secret' gauge to diagnose high probability swing trade setups and so to further increase our targets/winnings ! I am sure I will do more homework on this :-)

Also check out yesterday Market Club (smart scan analysis)'s reading on USD/JPY market which informed us of a probable chance of a major trend change from current weak downtrend.

Day Trading Service @ ScoutForex dot Com: 8-Week Performance Review

(Originally posted on my daytrading blog)

A brief recap: Here are the live day trading results since the launch back in February. So far, I have great feeling and confidence about this day trading approach with the forex killer software.

Week 1: +105 pips
Week 2: +25 pips
Week 3: +235 pips
Week 4: +210 pips
Week 5: +225 pips
Week 6: -10 pips
Week 7: -60 pips
Week 8: +220 pips

The system only endured its first losses in week 6 and 7. During that period, the forex market was greatly affected by the collapse of Bearn Stearns and massive carry-trade liquidation in mid March. We easily steered clear of further price volatility traps.

Week 4 and week 8 are non-farm payrolls (NFP) week. During these weeks, the system performed particularly well (i.e. in exploiting the trends) by giving us good trading opportunities with gains over 200+ pips.

During these eight weeks, we scored a total of +950 pips from all live trade setups on member site. I appreciate your kind and positive comments which help to keep me motivated all this long.

Mixed Reactions After US March Non-Farm Payrolls

US (Non-farm Payrolls) Session
No. of signal recommendations: 3
End-of-session results: GBP/USD (+45 pips), EUR/USD (+5 pips) & USD/CHF (-45 pips)
Maximum potential: Over 140 pips !
Own P/L: -30

We went long on the US dollar. But then, the non-farm payrolls report was worse than feared. The reward-risk ratio was therefore dramatically altered after the news releases and everything became awkward since the news was against the system sentiment.

Read my early post on how to cope with poorer-than-expected news data.

The positions went to drawdown initially, became good winners and finally ended with mixed results. To my amazement, there were still 140 pips up for grabbed ?!! But the system eventually settled for +5 pips. Hey, a fair result despite the poor job numbers !

On the other hand, I was way too conservative and ended with a bad result. But I was glad that the the all-important non-farm payroll was finally over and my system still did OK !

The system gained +220 pips this week !

7 Market Lessons on 7 Whiteboard Videos

The Market Club Whiteboard Series has been getting a ton of hits.

The covered topics ranging from chart stops to money management and patterns to new elements that are driving today markets.

The videos are brought to you by Market Club and cost nothing for you to watch and learn from the content.


(Market Club Traders Blog)

Day Trading Service: Trading Report Mar' 08 (+455 pips)

Fact 1: Up +455 pips trading the major pairs
There were 21 trading days in March, with 9 up days, 7 non-tradable/rest (i.e. Easter) days and 5 down days. The biggest winning session was on 3 March (+130 pips) and the biggest losing session was on 19 March (-100 pips). Check out here on how we could still make profits in such a losing session.


Fact 2: 65% winning percentage
There were 22 winners out of 34. USD/JPY has a 100% win record (only 1 trade opened), followed by EUR/USD 80% (8 winners out of 10) and GBP/USD 67% (4 winners out of 6).

Fact 3: only AUD/USD yielded negative pips
March was an extremely choppy and volatile month for forex due to the collapse of Bear Stearns and the liquidation of carry trades. AUD/USD - a high-yielding currency pair - was obviously affected by the carry-trade situations in mid March.

For more info, please visit my day trading blog for the latest daily trading summary and signal performance.

Here are some members feedback I received so far about the day trading approach.

>> Feb' 08 Trading Report (+365 pips)